Document:

Ex 10.3 - Moulton Purchase and Sale Agreement March 22, 2013

		

			Execution Version (3-22-13)

		

		
			Exhibit 10.3
		

		
			PURCHASE AND SALE AGREEMENT
		

		
			by and between
		

		
			ZAZA ENERGY, LLC
		

		
			(SELLER)
		

		
			And
		

		
			BEP MOULTON, LLC
		

		
			(BUYER)
		

		
			Dated March 22, 2013
		

		
			Effective January 1, 2013
		

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		TABLE OF CONTENTS
		

		
			Article 1 - DEFINITIONS            1
		
		

			1.1“Accounting Dispute”....................................................................................................................................................1 
		

		
			1.2“Accounting Dispute Notice”.....................................................................................................................................1 
		

		
			1.3“Accounting Referee”...................................................................................................................................................1 
		

		
			1.4“Affiliate”............................................................................................................................................................................1 
		

		
			1.5“Defect Baskets”............................................................................................................................................................1 
		

		
			1.6“Agreement”......................................................................................................................................................................1 
		

		
			1.7“Allocated Value”.............................................................................................................................................................1 
		

		
			1.8“Arbitrators”.......................................................................................................................................................................1 
		

		
			1.9“Assets”..............................................................................................................................................................................1 
		

		
			1.10“Assumed Obligations”.................................................................................................................................................3 
		

		
			1.11“Business Day”...............................................................................................................................................................3 
		

		
			1.12“Buyer”................................................................................................................................................................................3 
		

		
			1.13“Buyer’s Indemnitees”..................................................................................................................................................3 
		

		
			1.14“Buyer’s Credits”............................................................................................................................................................3 
		

		
			1.15“Casualty Loss”..............................................................................................................................................................3 
		

		
			1.16“Claim Notice”..................................................................................................................................................................4 
		

		
			1.17“Claims”..............................................................................................................................................................................4 
		

		
			1.18“Closing”.............................................................................................................................................................................4 
		

		
			1.19“Closing Date”..................................................................................................................................................................4 
		

		
			1.20“Closing Deferred Property”......................................................................................................................................4 
		

		
			1.21“Confidentiality Agreement”......................................................................................................................................4 
		

		
			1.22“Code”..................................................................................................................................................................................4 
		

		
			1.23“Conveyance”..................................................................................................................................................................4 
		

		
			1.24“CPR”...................................................................................................................................................................................4 
		

		
			1.25“Cure Period”....................................................................................................................................................................4 
		

		
			1.26“Defect Value”..................................................................................................................................................................4 
		

		
			1.27“Defect Arbitrator”..........................................................................................................................................................4 
		

		
			1.28“Defensible Title”............................................................................................................................................................4 
		

		
			1.29“De Minimis Claim”........................................................................................................................................................4 
		

		
			1.30“Dispute”.............................................................................................................................................................................4 
		

		
			1.31“DTPA”.................................................................................................................................................................................4 
		

		
			1.32“Effective Date” or “Effective Time”....................................................................................................................4 
		

		
			1.33“Environmental Defect”...............................................................................................................................................4 
		

		
			1.34“Environmental Defect Notice Date”....................................................................................................................5 
		

		
			1.35“Environmental Law”.....................................................................................................................................................5 
		

		
			1.36“Environmental Obligations”......................................................................................................................................5 
		

		
			1.37“Excluded Assets”..........................................................................................................................................................6 
		

		
			1.38“Expiration Date”.............................................................................................................................................................7 
		

		
			1.39“Final Settlement,” “Final Settlement Date” and “Final Settlement Statement”.................................7 
		

		
			1.40“Governmental Entity”.................................................................................................................................................7 
		

		
			1.41“Hydrocarbons”...............................................................................................................................................................7 
		

		
			1.42“Indemnified Party”.......................................................................................................................................................7 
		

		
			1.43“Indemnifying Party”....................................................................................................................................................7 
		

		
			1.44“Indemnity Cap”..............................................................................................................................................................7 
		

		
			1.45“Indemnity Claim”..........................................................................................................................................................7 
		

		
			1.46“Indemnity Deductible”................................................................................................................................................7 
		

		
			1.47“Inventory Hydrocarbons”.........................................................................................................................................7 
		

		
			1.48“Knowledge”.......................................................................................................................................................................7 
		

		
			1.49“Laws” or “Law”................................................................................................................................................................7 
		

		
			1.50“Liability”.............................................................................................................................................................................7 
		

		
			1.51“Like-Kind Exchange Transaction”..........................................................................................................................8 
		

		
			1.52“Net Revenue Interest”...............................................................................................................................................8 
		

		
			1.53“NORM”...............................................................................................................................................................................8 
		

		
			1.54“Non-Compete Area”.........................................................................................................................................................8
		

		
			1.55“Party” or “Parties”.........................................................................................................................................................8 
		

		
			1.56 “Permitted Encumbrances”.......................................................................................................................................8 
		

		
			1.57“Person”..............................................................................................................................................................................8 
		

		
			1.58“Plugging and Abandonment Obligations”............................................................................................................8 
		

		
			1.59“Post-Closing Accounting and Reporting Agreement”...................................................................................9 
		

		
			1.60“Preferential Purchase Rights”.................................................................................................................................9 
		

		
			1.61“Preliminary Settlement Statement”......................................................................................................................9 
		

		
			1.62“Purchase Price”.............................................................................................................................................................9 
		

		
			1.63“Regulated Substances”..............................................................................................................................................9 
		

		
			1.64“Request Date”................................................................................................................................................................9 
		

		
			1.65“Retained Obligations”..................................................................................................................................................9 
		

		
			1.66“Rules”.................................................................................................................................................................................9 
		

		
			1.67“Seller”.................................................................................................................................................................................9 
		

		
			1.68“Seller Indemnitees”......................................................................................................................................................9 
		

		
			1.69“Seller’s Credits”.............................................................................................................................................................9 
		

		
			1.70“Seller’s Parties”..............................................................................................................................................................9 
		

		
			1.71“Survival Period”.............................................................................................................................................................9 
		

		
			1.72“Third Party Claim”......................................................................................................................................................10 
		

		
			1.73“Third Party Interests”...............................................................................................................................................10 
		

		
			1.74“Title Defect”..................................................................................................................................................................10 
		

		
			1.75“Title Defect Notice Date”.......................................................................................................................................10 
		

		
			1.76“Title Defect Property”..............................................................................................................................................10 
		

		
			1.77“Well” or “Wells”.............................................................................................................................................................10
		
		

			Article 2 - AGREEMENT TO PURCHASE AND SELL.........................................................................................................10 
		

		
			Article 3 - PURCHASE PRICE AND PAYMENT.....................................................................................................................10 
		

		
			3.1Purchase Price.............................................................................................................................................................10 
		

		
			3.2Purchase Price Adjustments..................................................................................................................................10 
		

		
			3.3Allocation of Purchase Price..................................................................................................................................13 
		

		
			Article 4 - SELLER’S REPRESENTATIONS AND WARRANTIES..................................................................................14 
		

		
			Article 5 - BUYER’S REPRESENTATIONS AND WARRANTIES...................................................................................16 
		

		
			Article 6 - ACCESS TO INFORMATION AND INSPECTIONS........................................................................................17 
		

		
			6.1Title Files.........................................................................................................................................................................17 
		

		
			6.2Other Files......................................................................................................................................................................17 
		

		
			6.3Copies..............................................................................................................................................................................18 
		

		
			6.4Confidentiality Agreement......................................................................................................................................18 
		

		
			6.5Inspections.....................................................................................................................................................................18 
		

		
			6.6No Warranty or Representation on Seller’s Information...........................................................................18 
		

		
			6.7Inspection Indemnity.................................................................................................................................................18 
		

		
			6.8Amendments to Exhibits and Schedules..........................................................................................................19 
		

		
			Article 7 - ENVIRONMENTAL MATTERS AND ADJUSTMENTS.....................................................................................19 
		

		
			7.1Environmental Defects Notice.............................................................................................................................19 
		

		
			7.2Waiver of Environmental Defects......................................................................................................................20 
		

		
			7.3Remedies for Environmental Defects..............................................................................................................20 
		

		
			7.4Defect Baskets............................................................................................................................................................20 
		

		
			7.5Purchase Price Adjustment for Environmental Defect.............................................................................21 
		

		
			Article 8 - TITLE DEFECTS AND ADJUSTMENTS...............................................................................................................21 
		

		
			8.1Seller’s Title....................................................................................................................................................................21 
		

		
			8.2Notice of Title Defects.............................................................................................................................................24 
		

		
			8.3Title Defect Adjustment...........................................................................................................................................25 
		

		
			8.4Environmental Defect and Title Defect Values.............................................................................................25 
		

		
			Article 9 - OPTION TO TERMINATE.............................................................................................................................................27 
		

		
			9.1Option to Terminate for Defects..........................................................................................................................27 
		

		
			9.2Option to Terminate for Defects and Other Matters...................................................................................27 
		

		
			9.3Dispute as to Defect Values..................................................................................................................................28 
		

		
			Article 10 - PREFERENTIAL PURCHASE RIGHTS AND CONSENTS OF THIRD PARTIES..........................28 
		

		
			10.1Actions and Consents...............................................................................................................................................28 
		

		
			Article 11 - COVENANTS..................................................................................................................................................................29 
		

		
			11.1Covenants of Seller Pending Closing................................................................................................................29 
		

		
			11.2Limitations on Seller’s Covenants Pending Closing....................................................................................30 
		

		
			11.3Notification of Breaches..........................................................................................................................................31 
		

		
			Article 12 - CLOSING CONDITIONS..........................................................................................................................................31 
		

		
			12.1Seller’s Closing Conditions.....................................................................................................................................31 
		

		
			12.2Buyer’s Closing Conditions....................................................................................................................................32 
		

		
			Article 13 - CLOSING.........................................................................................................................................................................32 
		

		
			13.1Closing.............................................................................................................................................................................32 
		

		
			13.2Seller’s Closing Obligations....................................................................................................................................33 
		

		
			13.3Buyer’s Closing Obligations...................................................................................................................................33 
		

		
			13.4Joint Closing Obligations.........................................................................................................................................34 
		

		
			Article 14 - LIMITATIONS ON WARRANTIES AND REMEDIES/DTPA WAIVER....................................................34 
		

		
			14.1Limitations on Warranties and Remedies........................................................................................................34 
		

		
			14.2Waiver of Trade Practices Act.............................................................................................................................35 
		

		
			Article 15 - CASUALTY LOSS AND CONDEMNATION......................................................................................................35 
		

		
			Article 16 - TERMINATION...............................................................................................................................................................36 
		

		
			16.1Termination.....................................................................................................................................................................36 
		

		
			16.2Effect of Termination................................................................................................................................................36 
		

		
			16.3Other Remedies...........................................................................................................................................................36 
		

		
			16.4Limitations on Damages..........................................................................................................................................36 
		

		
			Article 17 - ASSUMPTION AND INDEMNITY.........................................................................................................................37 
		

		
			17.1Assumed Obligations.................................................................................................................................................37 
		

		
			17.2Buyer’s  Indemnity.....................................................................................................................................................37 
		

		
			17.3Seller’s Indemnity........................................................................................................................................................37 
		

		
			17.4Stipulation Regarding Express Negligence and Fault.................................................................................38 
		

		
			17.5Broker or Finder’s Fee..............................................................................................................................................38 
		

		
			17.6Indemnification Procedures....................................................................................................................................38 
		

		
			17.7Liability Limitation.......................................................................................................................................................39 
		

		
			Article 18 - GAS IMBALANCES......................................................................................................................................................40 
		

		
			Article 19 - TRANSITION..................................................................................................................................................................41 
		

		
			19.1Post-Closing Accounting and Reporting...........................................................................................................41 
		

		
			Article 20 - MISCELLANEOUS.......................................................................................................................................................41 
		

		
			20.1Receivables and other Excluded Funds...........................................................................................................41 
		

		
			20.2Public Announcements.............................................................................................................................................41 
		

		
			20.3Filing and Recording of Assignments, etc......................................................................................................41 
		

		
			20.4Further Assurances and Records........................................................................................................................42 
		

		
			20.5Notices.............................................................................................................................................................................42 
		

		
			20.6Incidental Expenses...................................................................................................................................................43 
		

		
			20.7Waiver..............................................................................................................................................................................43 
		

		
			20.8Binding Effect; Assignment...................................................................................................................................44 
		

		
			20.9Taxes.................................................................................................................................................................................44 
		

		
			20.10Audits................................................................................................................................................................................44 
		

		
			20.11Like-Kind Exchanges.................................................................................................................................................44 
		

		
			20.12Governing Law and Arbitration..............................................................................................................................45 
		

		
			20.13Entire Agreement.........................................................................................................................................................48 
		

		
			20.14Severability....................................................................................................................................................................48 
		

		
			20.15Exhibits............................................................................................................................................................................48 
		

		
			20.16Suspended Funds.......................................................................................................................................................48 
		

		
			20.17Survival...........................................................................................................................................................................49 
		

		
			20.18Subsequent Adjustments.........................................................................................................................................49 
		

		
			20.19Counterparts..................................................................................................................................................................49 
		

		
			20.20Change of Name.........................................................................................................................................................50 
		

		
			20.21Non-Compete Provision...........................................................................................................................................50 
		

		
			20.22No Third-Party Beneficiaries..................................................................................................................................50 
		

		
			20.23Rules of Construction...............................................................................................................................................50 
		

		
			
		

		 
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		EXHIBITS
		

		
			Exhibit “A”Leases
		

		
			Exhibit “B”Wells
		

		
			Exhibit “C”Rights-of-Way, Easements and Surface Estates
		

		
			Exhibit “D”Contracts and Other Agreements
		

		
			Exhibit “E”Intentionally Deleted
		

		
			Exhibit “F”Allocated Values
		

		
			Exhibit “G”Conveyance, Assignment and Bill of Sale
		

		
			Exhibit “H”Litigation
		

		
			Exhibit “I”Payouts Balances
		

		
			Exhibit “J”Gas and Oil Imbalances
		

		
			Exhibit “K”Consents to Assign, Preferential Rights to Purchase and Burdens
		

		
			Exhibit “L”Non-Foreign Affidavit
		

		
			Exhibit “M”Assignments Due Seller
		

		
			Exhibit “N”Assignments Owed By Seller
		

		
			Exhibit “O”Mortgages, Liens and Encumbrances
		

		
			Exhibit “P”Post-Closing Accounting and Reporting Agreement
		

		
			Exhibit “Q”Preliminary Settlement Statement
		

		
			Exhibit “R”Non-Compete Area Map
		

		
			 
		

		

		

		 
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		PURCHASE AND SALE AGREEMENT
		

		
			This Purchase and Sale Agreement (“Agreement”), dated as of March 22, 2013, is by and between ZaZa Energy, LLC, a Texas limited liability company (hereinafter referred to as the “Seller”), and BEP Moulton, LLC, a Texas limited liability company (hereinafter referred to as the “Buyer”) Seller and Buyer are sometimes referred to herein individually as a “Party” or collectively as the “Parties.”
		

		
			R E C I T A L S
		

		
			WHEREAS, the Parties desire that Seller convey to Buyer, and Buyer acquire from Seller and undivided one hundred percent (100%) of Seller’s right, title and interest  in the Assets (but excluding the Excluded Assets ) (each as hereinafter defined).
		

		
			NOW, THEREFORE, for and in consideration of the mutual promises contained herein, the benefits to be derived by each Party hereunder, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree as follows:
		

			
			
				 Article 1
			

			
			
			- DEFINITIONS

“Accounting Dispute”
		
			 shall be as defined in Section 3.2(c).
		
“Accounting Dispute Notice”
		
			 shall be as defined in Section 3.2(c).
		
“Accounting Referee”
		
			 shall be as defined in Section 3.2(c).
		
“Affiliate”
			
			
				 (a)
			

			
			
			 shall mean with respect to any Person, a Person that directly or indirectly controls, is controlled by or is under common control with such Person, with control in such context (including, with its correlative meaning, “controlled by” and “under common control with”) meaning the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

“Defect Baskets”
		
			 shall be as defined in Section 7.4.
		
“Agreement”
		
			 shall mean this Purchase and Sale Agreement between Seller and Buyer.
		
“Allocated Value”
		
			 shall be as defined in Section 3.3 and as set forth on Exhibit “F.”
		
“Arbitrators”
		
			 shall be as defined in Section 20.12(e).
		
“Assets”
		
			 shall mean the following described assets and properties (except to the extent constituting Excluded Assets) and which are attributable to, appurtenant to, incidental to or used for the ownership or operation of the Leases or other Assets:
		

			
			
				 (b)
			

			
			
			an undivided one hundred percent (100%) of all rights, titles, claims and interests owned by Seller in and to the oil, gas and/or mineral leases set forth on Exhibit “A” or the lands covered 
		

		 

		

			-  1  -

		

 

		

			 

		

		by said leases, or in lands pooled or unitized with such leases (including all depths), or which Seller is entitled to receive by reason of any participation, joint venture, farmin, farmout, joint operating agreement, unitization agreement or other agreement, including all leasehold estates, royalty interests, overriding royalty interests, net revenue interests, executory interests, net profit interests, working interests, reversionary interests, mineral interests and any other interests of Seller in said oil, gas and/or mineral leases, or lands covered by said leases, it being the intent hereof that the leases, properties and interests and the legal descriptions set forth on Exhibit “A” or in instruments described in Exhibit “A” includes an undivided one hundred percent (100%) of all of Seller’s right, title and interest in said oil, gas and/or mineral leases, other than the Excluded Assets, including, but not limited to, those described on Exhibit “A” or in instruments described in Exhibit “A” even though such interests may be incorrectly described in Exhibit ”A” or omitted from Exhibit “A.” (collectively referred to as the “Leases”);

			
			
				 (c)
			

			
			
			an undivided one hundred percent (100%) of all rights, titles, claims and interests owned by Seller in and to all royalty, overriding royalty, net profits or other oil gas or mineral interests to the extent such interests cover the acreage and depths covered by the Leases or lands pooled or unitized therewith described in Exhibit “A” (except to the extent constituting Excluded Assets), it being the intent of the Parties that Buyer shall be conveyed a net revenue interest in the Leases that shall only be burdened by the lessor’s royalties and those certain overriding royalty interests which are of record as of the Effective Date, provided however, in no event shall the net revenue interest to be conveyed to the Buyer under the Leases ever be less than seventy-two percent of eight-eights (72% of 8/8ths) proportionately reduced to the mineral interest coved by the Leases or to Seller’s undivided interest in the Lease.

			
			
				 (d)
			

			
			
			an undivided one hundred percent (100%) of all rights, titles, claims and interests owned by Seller in and to all easements, rights-of-way, surface leases, permits, licenses, surface estate interests, surface use agreements or other similar rights or interests relating to Leases, Wells or related equipment, including, but not limited to, those described in Exhibit “C,” or in instruments described in Exhibit “C;”

			
			
				 (e)
			

			
			
			an undivided one hundred percent (100%) of all rights, titles, claims and interests owned by Seller in and to all equipment and other personal property, Wells, inventory, spare parts, tools, tubing, casing, pipe, fixtures, wellhead equipment, pumping units, tank batteries, gathering lines or systems, flowlines, production equipment, gas plants and facilities, treatment facilities, injection facilities, disposal facilities, dehydration facilities, radio towers, remote terminal units, SCADA equipment, appurtenances and improvements situated upon the Assets or lands pooled or unitized therewith as of or after the Effective Time or used or held for use in connection with the ownership, development or operation of the Assets or the production, treatment, storage, compression, processing or transportation of Hydrocarbons from or in the Wells or the lands covered by the Leases or lands pooled or unitized therewith;

			
			
				 (f)
			

			
			
			all contracts, agreements and instruments to the extent attributable to and affecting the Assets in existence as of or after the Effective Time, including all Hydrocarbon sales, purchase, gathering, transportation, treating, marketing, exchange, processing, disposal and fractionating contracts, all unit agreements, orders and decisions of Governmental Entities establishing units, participation agreements, exchange agreements, joint operating agreements, enhanced recovery and injection agreements, farmout agreements and farmin agreements, options, drilling 
		

		 

		

			-  2  -

		

 

		

			 

		

		agreements, exploration agreements, assignments of operating rights, working interests, or subleases, including, but not limited to, those described on Exhibit “D,” but excluding any contracts, agreements and/or instruments to the extent transfer is restricted by third-party agreement or applicable law and the necessary consents to transfer are not obtained pursuant to Article 10 and provided that the contracts, agreements and/or instruments shall not include the instruments constituting the Leases;

			
			
				 (g)
			

			
			
			all lease files, land files, right-of-way files, regulatory records, well files, production records, environmental records, division order files (including paysheets and supporting files), abstracts, title opinions and contract files, insofar as the same are directly related to the Assets, Seller shall provide to Buyer, to the extent that Seller has in its possession the originals of all documents set forth in this Section 1.9(f) and in Section 1.9(g) above; and

			
			
				 (h)
			

			
			
			the Inventory Hydrocarbons.

“Assumed Obligations”
		
			 shall mean with respect to the Assets:
		

			
			
				 (i)
			

			
			
			the Plugging and Abandonment Obligations occurring after the Effective Date;

			
			
				 (j)
			

			
			
			all Environmental Obligations, related to, attributable to or arising from events occurring before or after the Effective Date, except those specifically included in the definition of “Retained Obligations;”

			
			
				 (k)
			

			
			
			subject to Article 18, all obligations with respect to gas production, sales or processing imbalances with third Persons;

			
			
				 (l)
			

			
			
			except for the Retained Obligations , or as otherwise provided in this Agreement, all other Liabilities, Claims, duties and obligations that arise out of the ownership, operation or use of the Assets after the Effective Time, including, but not limited to, the payment of all royalties, operating expenses and capital expenditures relating to the Assets and all Liabilities, duties and obligations, express or implied, imposed upon Seller under the provisions of the Leases (including, without limitation, the payment of royalties) and any and all assignments, subleases, farmout agreements, participation agreements, joint venture agreements, assignments of overriding royalty, joint operating agreements, easements, rights-of-way and all other contracts, agreements and instruments affecting the Leases, or the premises covered thereby, whether recorded or unrecorded, whether listed or not on Exhibit “D,” and under all applicable Laws.

“Business Day”
		
			 shall mean any day that is not Saturday or Sunday or any other day on which commercial banks are required or authorized by Law to be closed in the City of Houston, Texas.
		
“Buyer”
		
			 shall be as defined in the Preamble.
		
“Buyer’s Indemnitees”
		
			 shall be as defined in Section 17.3.
		
“Buyer’s Credits”
		
			 shall be as defined in Section 3.2(a)(ii).
		
“Casualty Loss”
		
			 shall be as defined in Article 15.
		

		 

		

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“Claim Notice”
		
			 shall be defined in Section 17.6(b).
		
“Claims”
		
			 shall mean all claims, demands, losses, damages, costs, expenses, causes of action and judgments of any kind or character, including, without limitation, any interest, penalty, attorneys’ fees and other costs and expenses incurred in connection therewith or the defense thereof.
		
“Closing”
		
			 shall be as defined in Section 13.1.
		
“Closing Date”
		
			 shall be as defined in Section 13.1.
		
“Closing Deferred Property”
		
			 shall be as defined in Section 8.3(a).
		
“Confidentiality Agreement”
		
			 shall be as defined in Section 6.4.
		
“Code”
		
			 shall be as defined in Section 3.3.
		
“Conveyance”
		
			 shall be as defined in Section 8.1(b).
		
“CPR”
		
			 shall be as defined in Section 8.4(d).
		
“Cure Period”
		
			 shall be as defined in Section 8.3(a).
		
“Defect Value”
		
			 shall be as defined in Section 8.4.
		
“Defect Arbitrator”
		
			 shall be as defined in Section 8.4(d).
		
“Defensible Title”
		
			 shall be as defined in Section 8.1(e)(i).
		
“De Minimis Claim”
		
			 shall be as defined in Section 17.7(a).
		
“Dispute”
		
			 shall be as defined in Section 20.12(a).
		
“DTPA”
		
			 shall be as defined in Section 14.2(a).
		
“Effective Date” or “Effective Time”
		
			 shall mean 7:00 a.m., local time where the Assets are located, on January 1, 2013.
		
“Environmental Defect”
		
			 shall mean:
		

		
			(a)            a condition or activity with respect to an Asset that is in violation of any Environmental Law, any surface or mineral lease obligation or other condition which creates Environmental Obligations, whether an express or implied obligation, relating to natural resources, conservation, the environment or the emission, release, storage, treatment, disposal, transportation, handling or management of industrial or solid waste, hazardous waste, hazardous or toxic substances, chemicals or pollutants, petroleum, including crude oil, natural gas, natural gas liquids or liquefied natural gas, and any wastes, associated with the exploration and production of oil and gas (“Regulated Substances”); or
		

		

		

		 

		

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		(b)            the presence of Regulated Substances in the soil, groundwater or surface water in, on, at or under an Asset in any manner or quantity which is required currently to be remediated by Environmental Law or by any applicable action or guidance levels or other standards published by any Governmental Entity with jurisdiction over the Assets, or by an express surface or mineral lease obligation.
		

		
			Notwithstanding the foregoing, the Parties agree and acknowledge that (i) Buyer will be provided an opportunity to examine the Assets for potential naturally occurring radioactive materials (“NORM”), and any potential obligations with respect to NORM, and (ii) that the presence of NORM on any of the Assets may not be raised by Buyer as the subject of an Environmental Defect.
		
“Environmental Defect Notice Date”
		
			 shall be as defined in Section 7.1.
		
“Environmental Law”
		
			 shall mean any and all federal, state, tribal or local Laws entered, issued or made by any Governmental Entity pertaining to pollution, protection of human health or the environment, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et. seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1471 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; and all similar Laws entered, issued or made by any Governmental Entity having jurisdiction over the Assets or the operation thereof, and all amendments to such Laws.
		
“Environmental Obligations”
		
			 shall mean all Liabilities, obligations, expenses (including, without limitation, all reasonable attorneys’ fees), fines, penalties and Claims (including natural resource Claims) of any nature associated with the ownership and operation of the Assets and attributable to or resulting from:
		

			
			
				 (m)
			

			
			
			pollution or contamination in violation of any Environmental Law of soil, surface water, groundwater or air on, in, by, from or under the Assets or lands in the vicinity thereof, and any other contamination of or adverse effect upon the environment in violation of any Environmental Law;

			
			
				 (n)
			

			
			
			clean-up responses, remedial, control or compliance costs, including the required cleanup or remediation of spills, pits, lakes, ponds or lagoons, including any subsurface or surface pollution caused by such spills, pits, lakes, ponds or lagoons;

			
			
				 (o)
			

			
			
			noncompliance with applicable land use, permitting, surface disturbance(s), licensing or notification requirements, including express provisions of a surface or mineral lease;

			
			
				 (p)
			

			
			
			violation of any federal, state, tribal or local Environmental Law; and

			
			
				 (q)
			

			
			
			except to the extent such obligations relate to the Retained Obligations, any and all indemnity obligations of Seller with respect to the above, along with any and all Claims against 
		

		 

		

			-  5  -

		

 

		

			 

		

		Seller for indemnity with respect to the above, under, pursuant to or arising from any acquisition, purchase and sale or other agreement.

“Excluded Assets”
		
			 shall mean, except to the extent associated with or related to the Assumed Obligations, the following:
		

		
			(a)            Seller reserves and accepts from the Conveyance of the Leases, the lessor’s royalty and those certain overriding royalty burdens on production encumbering the Leases that are of record on the Effective Date; provided however, in no event shall the net revenue interest to be conveyed to the Buyer under the Leases ever be less than seventy-two percent of eight-eights (72% of 8/8ths) proportionately reduced to the mineral interest coved by the Leases or Seller’s undivided interest in the Leases.
		

			
			
				 (a)
			

			
			
			all corporate, financial and tax records of Seller and those records subject to attorney/client privilege; provided, however, Buyer shall be entitled to receive copies of any tax records which directly relate to any Assumed Obligations, or which are necessary for Buyer’s ownership, administration or operation of the Assets;

			
			
				 (r)
			

			
			
			(i) all trade credits, accounts receivable, notes receivable and other receivables attributable to the Assets with respect to any period of time prior to the Effective Time; (ii) all deposits, cash, checks in process of collection, cash equivalents and funds attributable to the Assets with respect to any period of time prior to the Effective Time; and (iii) all proceeds, income or revenues accruing with respect to the Assets prior to the Effective Time;

			
			
				 (s)
			

			
			
			except as provided in Article 15, all Claims of Seller arising from acts, omissions or events, or damage to or destruction of the Asset(s), occurring prior to the Effective Time; provided, however, Seller shall transfer to Buyer its proportionate share of all Claims of Seller against prior owners of the Assets or third Persons associated with or relating to Environmental Obligations that are not Retained Obligations;

			
			
				 (t)
			

			
			
			except as otherwise provided in Article 15, all rights, titles, Claims and interests of Seller relating to the Assets prior to the Effective Time (i) under any policy or agreement of insurance or indemnity; (ii) under any bond; or (iii) to any insurance or condemnation proceeds or awards;

			
			
				 (u)
			

			
			
			all Hydrocarbons produced from or attributable to the Assets with respect to all periods prior to the Effective Time, together with all proceeds from or of such Hydrocarbons, except the Inventory Hydrocarbons and the unsold inventory of gas plant products, if any, attributable to the Assets as of the Effective Time;

			
			
				 (v)
			

			
			
			Claims of Seller for refund of or loss carry forwards with respect to (i) production, windfall profit, severance, ad valorem or any other taxes attributable to any period prior to the Effective Time, or (ii) income or franchise taxes;

			
			
				 (w)
			

			
			
			all amounts due or payable to Seller as adjustments or refunds under any contracts or agreements (including take-or-pay Claims) affecting the Assets with respect to any period prior to the Effective Time;

		 

		

			-  6  -

		

 

		

			 

		

			
			
				 (x)
			

			
			
			all amounts due or payable to Seller as adjustments to insurance premiums related to the Assets with respect to any period prior to the Effective Time;

			
			
				 (y)
			

			
			
			all proceeds, income or revenues accruing (and any security or other deposits made) with respect to the Assets, and all accounts receivable attributable to the Assets that are attributable to the period prior to the Effective Time; and

			
			
				 (z)
			

			
			
			all of Seller’s intellectual property, including, but not limited to, proprietary computer software, patents, trade secrets, copyrights, names, marks and logos.

“Expiration Date”
		
			 shall be as defined in Section 20.17(a).
		
“Final Settlement,” “Final Settlement Date” and “Final Settlement Statement”
		
			 shall be as defined in Section 3.2(c).
		
“Governmental Entity”
		
			 shall mean any federal, state,  municipal,  domestic or foreign court, tribunal, administrative agency, department, commission, board, bureau or other governmental authority or instrumentality.
		
“Hydrocarbons”
		
			 shall mean crude oil, natural gas, casinghead gas, condensate, sulphur, natural gas liquids and other liquid or gaseous hydrocarbons and shall also refer to all other minerals of every kind and character which may be covered by or included in the Assets.
		
“Indemnified Party”
		
			 shall be as defined in Section 17.6(a).
		
“Indemnifying Party”
		
			 shall be as defined in Section 17.6(a).
		
“Indemnity Cap”
		
			 shall be as defined in Section 17.7(b).
		
“Indemnity Claim”
		
			 shall be as defined in Section 17.6.
		
“Indemnity Deductible”
		
			 shall be as defined in Section 17.7(a).
		
“Inventory Hydrocarbons”
		
			 shall mean all merchantable oil and condensate produced from or attributable to the Leases  prior to the Effective Time which has not been sold by Seller and which is above the inlet flange, delivery line, or fill line in any storage facility or tank.
		
“Knowledge”
		
			 means the actual knowledge of a Person after due inquiry of such Persons responsible for the matters in question, and if the Person is a corporation or limited liability company, the actual knowledge of the corporation’s or limited liability company’s officers.
		
“Laws” or “Law”
		
			 shall mean all statutes, laws, ordinances, regulations, orders, rules, codes, permits, franchises, licenses, certificates, writs, injunctions or decrees of the United States, any state or commonwealth, any municipality, any foreign country, any territory or possession or any Governmental Entity.
		
“Liability”
		
			 means any liability (whether asserted or unasserted, whether liquidated or unliquidated, whether known or unknown, and whether due or to become due).
		

		 

		

			-  7  -

		

 

		

			 

		

“Like-Kind Exchange Transaction”
		
			 shall be as defined in Section 20.11.
		
“Net Revenue Interest”
		
			 shall be as defined in Section 8.1(e)(i)(A).
		
1.53“NORM”
		
			 shall be as defined in the definition of the “Environmental Defect.”
		

		
			1.54            “Non-Compete Area” shall be as defined in Section 20.21(a).
		
1.55“Party” or “Parties”
		
			 shall be as defined in the Preamble.
		
1.56 “Permitted Encumbrances”
		
			 shall be as defined in Section 8.1(e)(iv).
		
1.57“Person”
		
			 shall mean any individual, firm, partnership, corporation, limited liability company, joint venture, trust, unincorporated organization or other entity or organization.
		
1.58“Plugging and Abandonment Obligations”
		
			 shall mean the responsibility and Liability, including, but not limited to, Claims for damages and/or other relief, for the following plugging and abandonment obligations related to the Assets, regardless of whether they are attributable to the ownership or operation of the Assets before or after the Effective Time:
		

			
			
				 (aa)
			

			
			
			the necessary and proper plugging, replugging and abandonment of all Wells, whether plugged and abandoned before or after the Effective Time;

			
			
				 (bb)
			

			
			
			the necessary and proper removal, abandonment, closure or disposal of all structures, pipelines, equipment, production facilities, disposal facilities, tank batteries, gathering lines, gas plants, gas processing plants or any related facilities, abandoned property and junk located on or comprising part of the Assets;

			
			
				 (cc)
			

			
			
			to the extent required by the applicable authorized Governmental Entity and the owners of the property affected, the necessary and proper capping and burying of all associated flow lines located on or comprising part of the Assets;

			
			
				 (dd)
			

			
			
			the necessary and proper restoration of the Assets and/or the property covered by the Assets or upon which the Assets are located, including surface, surface water, groundwater, waterbottom and subsurface, to such condition as may be required by applicable Laws or contract;

			
			
				 (ee)
			

			
			
			any necessary clean-up or disposal of Assets contaminated by NORM as may be required by applicable Laws or contract;

			
			
				 (ff)
			

			
			
			all plugging and abandonment obligations arising from contractual requirements and demands made by the applicable authorized Governmental Entity or Persons owning an interest in the Assets and/or the property covered by the Assets or upon which the Assets are located; and

			
			
				 (gg)
			

			
			
			any and all indemnity obligations of Seller with respect to any of the above, along with any and all Claims against Seller for indemnity with respect to any of the above, under, pursuant to or arising from any acquisition, purchase and sale or other agreement.

		 

		

			-  8  -

		

 

		

			 

		

1.59“Post-Closing Accounting and Reporting Agreement”
		
			 shall be as defined in Section 19.1.
		
1.60“Preferential Purchase Rights”
		
			 shall mean preferential rights, preemptive rights or contracts, rights of first refusal or other commitments or understandings of a similar nature to which Seller is a party or to which the Assets are subject.
		
1.61“Preliminary Settlement Statement”
		
			 shall be as defined in Section 3.2(b).
		
1.62“Purchase Price”
		
			 shall be as defined in Section 3.1.
		
1.63“Regulated Substances”
		
			 shall be as defined in the definition of “Environmental Defect.”
		
1.64“Request Date”
		
			 shall be defined in Section 3.2(c).
		
1.65“Retained Obligations”
		
			 shall mean:
		

			
			
				 (hh)
			

			
			
			any Environmental Obligations of Seller related to the Excluded Assets;

			
			
				 (ii)
			

			
			
			any Liabilities or Claims relating or attributable to the Excluded Assets;

			
			
				 (jj)
			

			
			
			all Claims for personal injury or wrongful death and property damage occurring, attributable to, or relating to any time prior to the Effective Time and that are asserted on or before the sixth anniversary of the Closing Date; and

			
			
				 (kk)
			

			
			
			except as otherwise provided in this Agreement all other Liabilities, Claims, duties and obligations that arise out of the Seller’s  ownership, operation or use of the Assets for the time period prior to the Effective Time and that are asserted on or before the sixth  anniversary of the Closing Date, including, but not limited to, the payment of all royalties, severance taxes, operating expenses and capital expenditures relating to the Assets, all Liabilities, duties and obligations, express or implied, imposed upon Seller under the provisions of the Leases (including, without limitation, the payment of royalties) and any and all assignments, subleases, farmout agreements, participation agreements, joint venture agreements, assignments of overriding royalty, joint operating agreements, easements, rights-of-way and all other contracts, agreements and instruments affecting the Leases, or the premises covered thereby, whether recorded or unrecorded, whether listed or not on Exhibit “D,” and under all applicable Laws.

1.66“Rules”
		
			 shall be as defined in Section 8.4(d).
		
1.67“Seller”
		
			 shall be as defined in the Preamble.
		
1.68“Seller Indemnitees”
		
			 shall be as defined in Section 17.2.
		
1.69“Seller’s Credits”
		
			 shall be as defined in Section 3.2(a)(i).
		

		
			1.70            “Seller’s Parties” shall be as defined in Section 20.21(a)
		
1.71“Survival Period”
		
			 shall be as defined in Section 20.17(a).
		

		 

		

			-  9  -

		

 

		

			 

		

1.72“Third Party Claim”
		
			 shall be as defined in Section 17.6(b).
		
1.73“Third Party Interests”
		
			 shall be as defined in Section 10.1(c).
		
1.74“Title Defect”
		
			 shall be as defined in Section8.1(e)(ii).
		
1.75“Title Defect Notice Date”
		
			 shall be as defined in Section 8.2.
		
1.76“Title Defect Property”
		
			 shall be as defined in Section 8.1(e)(iii).
		
1.77“Well” or “Wells”
		
			 shall refer to all rights, titles, claims and interests owned by Seller in and to all wells located on the Leases or lands pooled or unitized therewith, including, but not limited to, those wells identified on Exhibit “B” attached hereto, whether or not such wells are producing, active or inactive, plugged and abandoned, temporarily abandoned, shut-in, injection wells, disposal wells, water supply wells or otherwise.
		

		
			 
		

			
			
				 (ll)
			

			
			
			- AGREEMENT TO PURCHASE AND SELL

		
			Subject to the terms and conditions of this Agreement, Seller agrees to sell and convey to the Buyer an undivided one hundred percent (100%) of all of Seller’s right, title and interest in and to the Assets and the Buyer agrees to purchase and pay for the Assets and to assume the Assumed Obligations.
		

			
			
				 (mm)
			

			
			
			- PURCHASE PRICE AND PAYMENT

			
			
				 1.2
			

			
			
			Purchase Price.

		
			Subject to adjustment as provided in Section 3.2 set forth below, the purchase price for the Assets (the “Purchase Price”) shall be Forty-Three Million Two Hundred Fifty Thousand and No/100 Dollars ($43,250,000.00), which shall be allocated among the Assets as provided in Section 3.3.
		

			
			
				 1.3
			

			
			
			Purchase Price Adjustments.

			
			
				 (a)
			

			
			
			The Purchase Price shall be adjusted as follows:

			
			
				 (i)
			

			
			
			The Purchase Price shall be adjusted upward by the following, without duplication (“Seller’ Credits”):

			
			
				 (A)
			

			
			
			the value of (i) all Inventory Hydrocarbons existing as of the Effective Time, such value to be based upon the existing contract price for crude oil or natural gas, as applicable, in effect as of the Effective Time, less severance taxes, transportation fees and other fees that would be deducted by the purchaser of such oil or gas, such Inventory Hydrocarbons to be measured at the Effective Time by the operators of the Assets; and (ii) all of Seller’s unsold inventory of gas plant products, if any, attributable to the Assets as of Effective Time valued in the same manner as if such products had been sold under the contract then in existence between Seller and the purchaser of such products; provided, however, 
		

		 

		

			-  10  -

		

 

		

			 

		

		that, in each of cases (i) and (ii) above, if there is no such contract existing as of the Effective Time, such Inventory Hydrocarbons and/or gas plant products shall be valued in the same manner as if Inventory Hydrocarbons and/or gas plant products had been sold at the posted price in the field for said Inventory Hydrocarbons and/or gas plant products;

			
			
				 (B)
			

			
			
			the amount of all production expenses, operating expenses and all other expenditures attributable to the ownership or operation of the Assets after the Effective Time and paid by Seller prior to the Closing Date; provided, however, any wells in which the Seller owns 100% of the working interest, the operating expenses will be calculated on a COPAS basis which is mutually agreed between the Parties;

			
			
				 (C)
			

			
			
			the amount of all ad valorem, property, production, excise, severance and similar taxes and assessments (but not including income taxes) which accrue to the Assets after the Effective Time and are paid by Seller;

			
			
				 (D)
			

			
			
			an amount equal to the sum of any upward adjustments provided elsewhere in this Agreement;

			
			
				 (E)
			

			
			
			the amount of any Hydrocarbon underbalances as provided in Article 18; and

			
			
				 (F)
			

			
			
			any other amount agreed upon by Seller and Buyer in writing prior to Closing.

			
			
				 (ii)
			

			
			
			The Purchase Price shall be adjusted downward by the following, without duplication (“Buyer’s Credits”):

			
			
				 (A)
			

			
			
			the total collected sales value of all Hydrocarbons sold by Seller on or after the Effective Time, which are attributable to the Assets, and any other monies collected by Seller with respect to the ownership of the Assets on or after the Effective Time, but excepting interest income attributable thereto.

			
			
				 (B)
			

			
			
			the amount of all unpaid ad valorem, property, production, excise, severance and similar taxes and assessments (but not including income taxes), which taxes and assessments accrue to the Assets prior to the Effective Time, which amount shall, where possible, be computed based upon the tax rate and values applicable to the tax period in question; otherwise, the amount of the adjustment under this paragraph shall be computed based upon such taxes assessed against the applicable portion of the Assets for the immediately preceding tax period just ended;

			
			
				 (C)
			

			
			
			an amount equal to the sum of any downward adjustments provided elsewhere in this Agreement;

			
			
				 (D)
			

			
			
			an amount equal to the Allocated Value of any Preferential Purchase Rights or consents as provided in Article 10;

		 

		

			-  11  -

		

 

		

			 

		

			
			
				 (E)
			

			
			
			an amount equal to the value of all Title Defects as provided in Section 8.3.

			
			
				 (F)
			

			
			
			an amount equal to the value of all Environmental Defects as provided in Section 7.3;

			
			
				 (G)
			

			
			
			the amount of any Hydrocarbon overbalances as provided in Article 18; and

			
			
				 (H)
			

			
			
			any other amount agreed upon by Seller and Buyer in writing prior to Closing.

			
			
				 (b)
			

			
			
			Seller shall prepare and deliver to Buyer, at least five (5) Business Days prior to Closing, Seller’s estimate of the adjusted Purchase Price to be paid at Closing, together with a preliminary statement setting forth Seller’s estimate of the amount of each adjustment to the Purchase Price to be made pursuant to Section 3.2(a) and the calculations used by Seller to reach such estimates (the “Preliminary Settlement Statement”).  The Preliminary Settlement Statement shall be in substantially the same form as Exhibit “Q” attached hereto.  All such adjustments shall be determined in accordance with generally accepted accounting principles (GAAP) and Council of Petroleum Accountants Society (COPAS) standards.  The Parties shall negotiate in good faith and attempt to agree on such estimated adjustments prior to Closing.  In the event any estimated adjustment amounts are not agreed upon prior to Closing, the estimate of the adjusted Purchase Price for purposes of Closing shall be calculated based on Seller’s and Buyer’s agreed upon estimated adjustments and Seller’s reasonable good faith estimate of any disputed amounts (and any such disputes shall be resolved by the Parties in connection with the resolution of the Final Settlement Statement pursuant to Section 3.2(c) below).

			
			
				 (c)
			

			
			
			Within sixty (60) days after Closing (the “Final Settlement Date”), Seller shall provide to Buyer, for Buyer’s concurrence, an accounting (the “Final Settlement Statement”) of the actual amounts of Seller’s Credits and Buyer’s Credits for the adjustments set out in Section 3.2(a).  Buyer shall have the right for thirty (30) days after receipt of the Final Settlement Statement to audit and take exceptions to such adjustments.  The Parties shall attempt in good faith to expeditiously resolve any disagreements on a best efforts basis.  Those credits agreed upon by Buyer and Seller shall be netted, and the final settlement shall be paid as directed hereinbelow, on final adjustment by the Party owing it (the “Final Settlement”).  If Buyer and Seller are unable to agree with respect to the Final Settlement Statement within the thirty (30) day period after Buyer’s receipt of the Final Settlement Statement, then, at the written request of either Seller or Buyer, each of Seller and Buyer shall nominate and commit one of its senior officers to meet at a mutually agreed time and place not later than ten (10) days after the date of receipt by Buyer or Seller, as applicable, of such request (the “Request Date”) to attempt to resolve the dispute (the “Accounting Dispute”).  If such senior officers have been unable to resolve an Accounting Dispute within a period of thirty (30) days after the Request Date, either Party shall have the right, by written notice (the “Accounting Dispute Notice”) to the other Party, to resolve the Accounting Dispute by the submission thereof to a nationally recognized independent public accounting firm commonly considered as one of the “Big 4” and reasonably acceptable to Seller and Buyer, which firm shall serve as sole arbitrator of such Accounting Dispute (the “Accounting Referee”).  Within five (5) days of the selection of the Accounting 
		

		 

		

			-  12  -

		

 

		

			 

		

		Referee, Buyer and Seller shall each submit to the Accounting Referee in writing its position with respect to the Accounting Dispute, specifying in reasonable detail the basis for the Accounting Dispute.  The scope of the Accounting Referee’s engagement shall be limited to the resolution of the items described in the Accounting Dispute Notice given in accordance with the foregoing.  The Accounting Referee shall be instructed by the Parties to impartially resolve the Accounting Dispute as soon as reasonably practicable in light of the circumstances but in no event in excess of thirty (30) days following the submission of the Parties’ positions regarding the Accounting Dispute to the Accounting Referee.  The decision and award of the Accounting Referee shall be binding upon the Parties and final and nonappealable to the maximum extent permitted by Law, and decision and award thereon may be entered in a court of competent jurisdiction and enforced by any Party as a final judgment of such court.  Payment of any amount determined to be payable by the Accounting Referee hereunder or by the Parties pursuant to the agreed upon Final Settlement Statement shall be made in cash (via bank wire transfer) within five (5) Business Days after such determination.  The fees and expenses of the Accounting Referee shall be borne and paid one-half by Seller and one-half by Buyer.

			
			
				 1.4
			

			
			
			Allocation of Purchase Price.

		
			Concurrent with the execution of this Agreement, Buyer shall allocate the unadjusted Purchase Price among each of the Assets, in compliance with the principles of Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury regulations thereunder.  Such allocation of value shall be attached to this Agreement as Exhibit “F” (the “Allocated Value”).  The Allocated Value for any Asset equals the portion of the unadjusted Purchase Price allocated to such Asset on Exhibit “F,” increased or reduced as described in this Article 3.  Any adjustments to the Purchase Price other than the adjustments provided for in Sections 3.2(a)(ii)(D),  3.2(a)(ii)(E) and 3.2(a)(ii)(F) shall be applied on a pro rata basis to the amounts set forth on Exhibit “F” for all Assets.  After all such adjustments are made, any adjustments to the Purchase Price pursuant to Sections 3.2(a)(ii)(D),  3.2(a)(ii)(E) and 3.2(a)(ii)(F) shall be applied to the amounts set forth in Exhibit “F” for the particular affected Assets.  After Buyer has provided the Allocated Values for the Assets, Seller will be deemed to have accepted such Allocated Values for purposes of this Agreement and the transactions contemplated hereby but otherwise makes no representation or warranty as to the accuracy of such Allocated Values.  Seller and Buyer agree (i) that the Allocated Values, as adjusted pursuant to the foregoing, shall be used by Seller and Buyer as the basis for reporting asset values and other items for purposes of all federal, state and local tax returns, including, without limitation, Internal Revenue Service Form 8594, and (ii) that neither they nor their Affiliates will take positions inconsistent with such Allocated Values in notices to Governmental Entities, in audit or other proceedings with respect to Taxes, in notices to Preferential Purchase Right holders or in other documents or notices relating to the transactions contemplated by this Agreement.  Buyer and Seller further agree that, on or before the Final Settlement Date (or the Closing Date, in the event of a Like-Kind Exchange Transaction), they will attempt to agree, if necessary, to the further allocation of the Allocated Values included in Exhibit “F.”   If the Parties are unable to agree the dispute will be settled as provided in Section 3.2(c) above.
		

		 

		

			-  13  -

		

 

		

			 

		

			
			
				 1.5
			

			
			
			- SELLER’S REPRESENTATIONS AND WARRANTIES

		
			Seller represents and warrants to Buyer as of the date hereof and the Closing Date that:
		

			
			
				 (a)
			

			
			
			Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Texas;

			
			
				 (b)
			

			
			
			Seller has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement and the other documents and agreements contemplated hereby and to perform its obligations under this Agreement and the other documents and agreements contemplated hereby.  The execution, delivery and performance of this Agreement and the transactions contemplated hereunder have been duly and validly authorized by all requisite authorizing action on the part of Seller;

			
			
				 (c)
			

			
			
			The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, any provision of Seller’s governing documents or any agreement or instrument to which it is a party or by which it or the Assets are bound, except any provision contained in any contract listed on Exhibit “D” or any other agreements customary in the oil and gas industry, or Seller’s bank financing agreements relating to (1) the Preferential Purchase Rights; (2) required consents to transfer and related provisions; (3) maintenance of uniform interest provisions; and (4) any other third Person approvals or consents contemplated herein or any judgment, decree, order, statute, rule or regulation applicable to Seller or the Assets;

			
			
				 (d)
			

			
			
			This Agreement, and all documents and instruments required hereunder to be executed and delivered by Seller at Closing, constitute legal, valid and binding obligations of Seller in accordance with their respective terms, subject to applicable bankruptcy and other similar Laws of general application with respect to creditors;

			
			
				 (e)
			

			
			
			There are no bankruptcy, reorganization or receivership proceedings pending against, being contemplated by or, to the Knowledge of Seller, threatened against Seller;

			
			
				 (f)
			

			
			
			Neither Seller nor any Affiliate of Seller has incurred any obligation or Liability, contingent or otherwise, for brokers’ or finders’ fees in connection with this Agreement and the transaction provided herein for which Buyer shall have any Liability or responsibility;

			
			
				 (g)
			

			
			
			Other than as set forth in Exhibit “H,” there are no written demands, actions, suits or administrative, legal or arbitration proceedings relating to the Assets (including condemnation, expropriation or forfeiture proceedings) pending or, to the Knowledge of Seller, threatened against Seller or any of its Affiliates or any Asset;

			
			
				 (h)
			

			
			
			The transfer of the Assets to Buyer will not violate at the Closing Date any covenants or restrictions imposed on Seller by any bank or other financial institution in connection with a mortgage or other instrument and will not result in the creation or imposition of a lien on any portion of the Assets, except as to those mortgages or instruments to be released at Closing as provided in Section 13.2(f) herein;

		 

		

			-  14  -

		

 

		

			 

		

			
			
				 (i)
			

			
			
			Except as set forth on Exhibit “K” , there are no waivers, consents to assign, Preferential Purchase Rights, approvals or similar rights owned by third Persons and required in connection with the conveyance of the Assets from Seller to Buyer;

			
			
				 (j)
			

			
			
			All tax returns required to be filed with respect to the Assets have been duly and timely filed, each such tax return is true, correct and complete in all material respects, and all taxes owed with respect to the Assets (whether or not shown on a tax return) have been timely paid in full.  There are no liens for taxes on any of the Assets other than with respect to taxes not yet due and payable, and Seller has paid all ad valorem, property, production, severance, excise and other taxes or assessments related to the Assets that have become due and payable other than any such taxes being contested in good faith by Seller;

			
			
				 (k)
			

			
			
			Except as set forth on Exhibit “D,” no Hydrocarbons produced or to be produced from the Assets are subject to any Hydrocarbon sales, purchase or exchange contracts not cancellable on 60 or fewer days’ notice nor does any third Person have any call upon, option to purchase, take-or-pay obligations, dedication rights or similar rights with respect to the Hydrocarbons produced or to be produced from Assets”;

			
			
				 (l)
			

			
			
			Except as set forth on Exhibit “J,” there are no Hydrocarbon imbalances with respect to the Assets;

			
			
				 (m)
			

			
			
			Except as provided in Exhibit “O,” there are no mortgages, liens or other encumbrances of record affecting the Assets other than Permitted Encumbrances;

			
			
				 (n)
			

			
			
			If any of the interests comprising the Assets were acquired by Seller under farmout, exploration, development, participation or other agreements and Seller has not as of the Closing Date received assignments to such interests (which are described in Exhibit “M”), then, with respect to such Assets, Seller represents to Buyer that except for consents which are subject to Section 4(i) and interests which cannot be assigned due to provisions in applicable agreements prohibiting assignments of interests which do not meet specified minimum interest requirements, all conditions to earning assignments of record title or operating rights, as the case may be, to such Assets have been fully satisfied by Seller;

			
			
				 (o)
			

			
			
			Seller is not in material breach of any material contract described on Exhibit “D” and Exhibit “D”  sets forth a list of all material contracts, agreements, and commitments to which any of the Assets are subject to: (a) any agreement or contract for the sale, exchange or other disposition of hydrocarbons produced from the Leases or Wells that requires more than sixty (60) days’ prior written notice to cancel; (b) any agreement to sell, lease, farmout or otherwise dispose of any of the Seller’s interests in any of the Leases other than conventional rights of reassignment; (c) any operating agreement to which Seller’s interests in any of the Leases and/or Wells are  subject; (d) any contract that requires Seller to expend more than $20,000.00, net to the Seller’s interest, in any year in connection with the Assets; (e) any option to purchase the hydrocarbons produced from the Assets;

			
			
				 (p)
			

			
			
			The Assets currently are in material compliance with all applicable Environmental Laws, (i) all necessary governmental permits, licenses, approvals, consents, certificates and other authorizations required by applicable Environmental Laws with regard to the ownership or 
		

		 

		

			-  15  -

		

 

		

			 

		

		operations of the Assets have been obtained and maintained in effect by such Seller and no notices of unresolved written violations exist in respect of such permits, licenses, approvals, consents, certificates or authorizations except for such permits, licenses, approvals, consents, certificates or other authorizations, and (ii) Seller has not received any written notice that (A) the Assets are not in compliance with any applicable Environmental Laws, and (B) the Assets are subject to any pending or, to Seller’s Knowledge, threatened Claims which would require Seller, under applicable Environmental Laws, to conduct any investigation or remediation.

			
			
				 (q)
			

			
			
			- BUYER’S REPRESENTATIONS AND WARRANTIES

		
			Buyer represents and warrants to Seller as of the date hereof and the Closing Date that:
		

			
			
				 (r)
			

			
			
			Buyer is duly organized, validly existing and in good standing under the Laws of the state in which it was formed and is, or will be as of the Closing Date, duly qualified to carry on its business in those states where it is required to do so, including Texas;

			
			
				 (s)
			

			
			
			Buyer has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement and the other documents and agreements contemplated hereby and to perform its obligations under this Agreement and the other documents and agreements contemplated hereby.  The execution, delivery and performance of this Agreement and the transactions contemplated hereunder have been duly and validly authorized by all requisite authorizing action on the part of Buyer;

			
			
				 (t)
			

			
			
			The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, any provision of Buyer’s governing documents or any agreement or instrument to which it is a party or by which it is bound or any judgment, decree, order, statute, rule or regulation applicable to Buyer;

			
			
				 (u)
			

			
			
			This Agreement, and all documents and instruments required hereunder to be executed and delivered by Buyer at Closing, constitute legal, valid and binding obligations of Buyer in accordance with their respective terms, subject to applicable bankruptcy and other similar laws of general application with respect to creditors;

			
			
				 (v)
			

			
			
			There are no bankruptcy, reorganization or receivership proceedings pending against, being contemplated by or, to the Knowledge of Buyer, threatened against Buyer;

			
			
				 (w)
			

			
			
			Neither Buyer nor any Affiliate has incurred any obligation or Liability, contingent or otherwise, for brokers’ or finders’ fees in connection with this Agreement and the transaction provided herein for which Seller shall have any Liability or responsibility;

			
			
				 (x)
			

			
			
			Buyer is an experienced and knowledgeable investor and operator in the oil and gas business.  Prior to entering into this Agreement, Buyer was advised by and has relied solely on Seller’s express representations set forth herein and its own expertise and legal, tax, reservoir engineering, accounting and other professional counsel concerning this Agreement, the Assets and the value thereof;

			
			
				 (y)
			

			
			
			Buyer has, or by Closing will have, the financial resources to close the transaction contemplated by this Agreement, whether by third Person financing or otherwise;

		 

		

			-  16  -

		

 

		

			 

		

			
			
				 (z)
			

			
			
			Buyer is acquiring the Assets for its own account for use in its trade or business and not with a view toward or for sale associated with any distribution thereof, nor with any present intention of making a distribution thereof within the meaning of the Securities Act of 1933, as amended, and applicable state securities Laws;

			
			
				 (aa)
			

			
			
			Buyer is experienced and knowledgeable in the oil and gas business and aware of the risks of that business.  Buyer represents and warrants that (i) as of the execution date of this Agreement, it has made all such independent investigation, verification, analysis and evaluation of the Assets as it deems necessary or appropriate to enter into this Agreement, (ii) it has made all such reviews and inspections of the Assets as it has deemed necessary or appropriate to execute and deliver this Agreement, and (iii) prior to Closing, it will make further independent investigations, inspections and evaluations of the Assets as it deems necessary or appropriate to consummate the transactions contemplated hereby; and (iv) that in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own independent investigation, verification, analysis and evaluation.

			
			
				 (bb)
			

			
			
			- ACCESS TO INFORMATION AND INSPECTIONS

			
			
				 1.6
			

			
			
			Title Files.

		
			After the execution of this Agreement and until the Closing Date, Seller shall continue to permit Buyer and its representatives at reasonable times during normal business hours to examine, in Seller’s offices or at their actual location, all abstracts of title, title opinions, title files, ownership maps, lease files, assignments, division orders, payout statements, title curative, other title materials and agreements pertaining to the Assets as requested by Buyer, insofar as the same may now be in existence and in the possession or control of Seller.  No warranty of any kind is made by Seller as to the information so supplied, and Buyer agrees that any conclusions drawn therefrom are the result of its own independent review and judgment.
		

			
			
				 1.7
			

			
			
			Other Files.

		
			After the execution of this Agreement and until the Closing Date, Seller shall continue permit Buyer and its representatives at reasonable times during normal business hours to examine, in Seller’s offices or at their actual location, all production, well, regulatory, engineering and geological information, accounting information, environmental information, inspections and reports and other agreements, information, files, books, records and data pertaining to the Assets as reasonably requested by Buyer, insofar as the same may now be in existence and in the possession or control of Seller, including Seller’s proprietary interpretations of same, however, specifically excluding any such information that is subject to third party confidentiality agreements or to the attorney/client and work product privileges (provided Seller shall use its reasonable efforts to obtain waivers of any confidentiality restrictions).  No warranty of any kind is made by Seller as to the information so supplied, and Buyer agrees that any conclusions drawn therefrom are the result of its own independent review and judgment.
		

		 

		

			-  17  -

		

 

		

			 

		

			
			
				 1.8
			

			
			
			Copies.

		
			Buyer will be allowed to make copies of the files described in Article 6 at Buyer’s sole cost and expense; provided that, in the reasonable judgment of Seller, such copying does not unduly interfere with the conduct of Seller’s operation or business.
		

			
			
				 1.9
			

			
			
			Confidentiality Agreement.

		
			All information made available to Buyer pursuant to Article 6 shall be maintained confidential by Buyer until Closing.  The Confidentiality Agreement executed by Seller and Energy Group of South Texas, LLC, dated November 6, 2012 (the “Confidentiality Agreement”), shall remain in force and effect until Closing, at which time it shall terminate and the provisions thereof shall be superseded and replaced by the terms hereof and the Transaction Documents, except as to any Closing Deferred Properties, as to any Assets which were not otherwise transferred at Closing, as provided in Section 8.3  or as such information may be related to other properties not acquired by Buyer.
		

			
			
				 1.10
			

			
			
			Inspections.

		
			Promptly after the execution of this Agreement and until Closing, Seller, subject to any necessary third Person operator approval (which Seller shall use its reasonable efforts to obtain), shall continue to permit Buyer and its representatives at reasonable times and at their sole risk, cost and expense to conduct reasonable inspections of the Assets for all purposes, including any Environmental Defects.
		

			
			
				 1.11
			

			
			
			No Warranty or Representation on Seller’s Information.

		
			EXCEPT AS SET FORTH IN THIS AGREEMENT, (A) SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED AND EXPRESSLY DISCLAIMS, WITH RESPECT TO THE ACCURACY, COMPLETENESS OR MATERIALITY OF THE INFORMATION, RECORDS AND DATA NOW, HERETOFORE OR HEREAFTER MADE AVAILABLE TO BUYER IN CONNECTION WITH THE ASSETS OR THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF THE ASSETS, QUALITY OR QUANTITY OF HYDROCARBON RESERVES, IF ANY, PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GAS BALANCING INFORMATION, ALLOWABLES OR OTHER REGULATORY MATTERS, POTENTIAL FOR PRODUCTION OF HYDROCARBONS FROM THE ASSETS OR ANY OTHER MATTERS CONTAINED IN OR OMITTED FROM ANY OTHER MATERIAL FURNISHED TO BUYER BY SELLER AND (B) ANY AND ALL SUCH DATA, INFORMATION AND MATERIAL FURNISHED BY SELLER IS PROVIDED AS A CONVENIENCE ONLY AND ANY RELIANCE ON OR USE OF SAME IS AT BUYER’S SOLE RISK.
		
Inspection Indemnity.
		
			If Buyer exercises rights of access under this Article 6 or otherwise, or conducts examinations or inspections under this Section or otherwise, then (a) such access, examination and inspection shall be at Buyer’s sole risk, cost and expense, and Buyer waives and releases all Claims against Seller (and its Affiliates and the respective directors, 
		

		 

		

			-  18  -

		

 

		

			 

		

		officers, employees, attorneys, contractors, agents and successors and assigns) arising in any way therefrom or in any way connected therewith or arising in connection with the conduct of its directors, officers, employees, attorneys, contractors and agents in connection therewith, and (b) Buyer shall indemnify, defend and hold harmless the Seller Indemnitees from any and all Claims, actions, causes of action liabilities, damages, losses, costs or expenses (including, without limitation, court costs and attorneys’ fees), or liens or encumbrances for labor or materials arising out of or in any way connected with such matters.  THE FOREGOING RELEASE AND INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH CLAIMS, ACTIONS, CAUSES OF ACTION, LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES 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 INDEMNIFIED PARTY, OR (ii) STRICT LIABILITY.  FOR THE AVOIDANCE OF DOUBT, THE WAIVER AND RELEASE SET FORTH IN THIS SECTION SHALL NOT BE DEEMED A WAIVER AND RELEASE OF BUYER’S RIGHTS AGAINST SELLER PURSUANT TO THIS AGREEMENT.
		

			
			
				 1.12
			

			
			
			Amendments to Exhibits and Schedules.

		
			Seller and Buyer acknowledge that Buyer’s inspection of Seller’s records and files, or further review by Seller, prior to Closing may indicate that some or all of the Exhibits and/or Schedules attached to this Agreement were not complete or entirely correct at the time of execution of this Agreement, and accordingly, Seller and Buyer agree Seller has the right to revise and amend the Exhibits and Schedules to such representations and warranties, as needed, but no later than two (2) Business Days prior to Closing, in the event Closing occurs.  It is understood, however, that such revisions or amendments shall not otherwise be taken into account for purposes of the Closing condition set forth in Article 12 or the indemnification provisions set forth in Article 17 unless otherwise mutually agreed by the Parties in writing.
		

			
			
				 1.13
			

			
			
			- ENVIRONMENTAL MATTERS AND ADJUSTMENTS

			
			
				 1.14
			

			
			
			Environmental Defects Notice.

		
			Upon execution of and pursuant to the terms of this Agreement, Buyer (and Buyer’s environmental consultants) shall continue to have the right, at reasonable times during normal business hours, to conduct its investigation into the status of the physical and environmental condition of the Assets and their compliance with applicable Environmental Laws.  If, in the course of conducting such investigation, Buyer discovers that any Asset is subject to a material Environmental Defect, Buyer may raise such Environmental Defect in the manner set forth hereafter.  For purposes hereof, the term “material” shall mean that Buyer’s good faith estimate, supported by documentation, of the cost of remediating any single Environmental Defect exceeds Thirty Thousand and No/100 Dollars ($30,000.00) net to the interest of the Seller, the Parties agreeing that such amount will be a per Environmental Defect threshold rather than a deductible.  No later than 5:00 p.m. local time in Houston, Texas five (5) Business Days prior to the Closing Date (the “Environmental Defect Notice Date”), Buyer shall notify Seller in writing specifying such Environmental Defects, if any, the Assets are affected thereby, and Buyer’s good faith estimate of the costs of remediating such defects, together with supporting 
		

		 

		

			-  19  -

		

 

		

			 

		

		documentation.  Seller may, but shall be under no obligation to, correct at its own cost and expense such defects on or before the Closing Date, in which case there shall be no reduction to the Purchase Price therefor if such condition is properly remedied.  Prior to Closing, Buyer and Seller shall treat all information regarding any environmental conditions as confidential, whether material or not, and shall not make any contact with any Governmental Entity or third Person (other than Buyer’s representatives, consultants and lenders) regarding same without the written consent of the other Party unless required by Law.
		
Waiver of Environmental Defects.
		
			 
		

		
			If the Buyer fails to notify Seller prior to or on the Environmental Defect Notice Date of any Environmental Defects, all such defects, whether known or unknown, will be deemed waived (which waived defects shall be deemed Permitted Encumbrances), the Parties shall proceed with Closing, Seller shall be under no obligation to correct the defects, and Buyer shall assume its proportionate share of the risks, Liabilities and obligations associated with such Environmental Defects.
		

			
			
				 1.15
			

			
			
			Remedies for Environmental Defects.

		
			In the event any Environmental Defect relating to any of the Assets for which notice has been timely given as provided hereinabove, remains uncured as of Closing, Seller, at its sole option, shall (i) agree prior to Closing to cure or remediate, at Seller’s expense, such Environmental Defect as soon as reasonably possible after Closing and without any reduction to the Purchase Price in a manner acceptable to both Parties, or (ii) reduce the Purchase Price by the amount of the Defect Value as determined pursuant to Section 8.4, subject to the Thirty  Thousand and No/100 Dollars ($30,000.00) threshold described in Section 7.1 and the Defect Baskets described in Section 7.4.  Neither (i) (remediation) nor (ii) (reduction of Purchase Price) shall exceed the Allocated Value of such affected Assets.  If Seller elects the option set forth in clause (ii) above, Buyer shall be deemed to have assumed its proportionate share of such Environmental Defect and all Liabilities with respect thereto.  If Seller elects the option set forth in clause (i) above, Seller shall use commercially reasonable efforts to implement such remediation in a manner which is consistent with the requirements of Environmental Laws in a timely fashion for the type of remediation that Seller elects to undertake and shall have access to the affected Assets after the Closing Date to implement and complete such remediation.  Seller will be deemed to have adequately completed the remediation required in the immediately preceding sentence (a) upon receipt of approval from the applicable Governmental Entities that the remediation has been implemented to the extent necessary to comply with existing regulatory requirements or (b) upon receipt of a certificate from a third Person licensed professional engineer that the remediation has been implemented to the extent necessary to comply with applicable Environmental Laws.
		
Defect Baskets.
		
			 
		

		
			The Parties agree that adjustments to the Purchase Price under Article 7 and Article 8 shall only occur to the extent that the Defect Value for all Environmental Defects exceeds Three Hundred Thousand and No/100 Dollars ($300,000.00) after taking the applicable materiality threshold into account and the Defect Value for all Title Defects exceeds Three Hundred 
		

		 

		

			-  20  -

		

 

		

			 

		

		Thousand and No/100 Dollars ($300,000.00) after taking the applicable materiality threshold into account. (the “Defect Baskets”), after taking the applicable materiality deductibles into account.  For the purpose of clarity, each Defect Basket shall be a threshold and not a deductible and there may be adjustments for Environment Defects and not Title Defects and vice versa.
		

			
			
				 1.16
			

			
			
			Purchase Price Adjustment for Environmental Defect.

		
			In the event any adjustment to the Purchase Price is made due to an Environmental Defect raised by Buyer, the Parties shall proceed with Closing, Seller shall be under no obligation to correct the Environmental Defect, and the Environmental Defect shall become an Assumed Obligation of Buyer.
		

			
			
				 1.17
			

			
			
			- TITLE DEFECTS AND ADJUSTMENTS

			
			
				 1.18
			

			
			
			Seller’s Title.

			
			
				 (a)
			

			
			
			Except for the special warranty of title referenced in Section 8.1(b) and without limiting Buyer’s right to adjust the Purchase Price by operation of this Article 8, Seller makes no warranty or representation, express, implied, statutory or otherwise, with respect to Seller’s title to any of the Assets, and Buyer hereby acknowledges and agrees that for any defect of title, including any Title Defect, with respect to any of the Assets, (i) before Closing, Buyer’s sole remedy shall be Buyer’s right to adjust the Purchase Price to the extent provided in this Article 8, and (ii) after Closing Buyer’s sole remedy shall be pursuant to the special warranty of title referenced in Section 8.1(b).

			
			
				 (b)
			

			
			
			Seller shall, at Closing, deliver to Buyer a conveyance to reflect the transfer of “Defensible Title” to the Assets, which shall be substantially in the form of Exhibit “G” (the “Conveyance”).  The Conveyance, subject to the Permitted Encumbrances, shall be made without warranty of title, either express, implied, statutory or otherwise, except that, subject to the Permitted Encumbrances, Seller shall only warrant title to the Assets against all claims, liens, burdens and encumbrances arising by, through or under Seller, but not otherwise.  The Conveyance shall be made with full substitution and subrogation to Buyer in and to all covenants and warranties by others heretofore given or made to Seller with respect to the Assets to the extent such may be conveyed by Seller.

			
			
				 (c)
			

			
			
			Buyer shall not be entitled to protection under Seller’s special warranty of title in the Conveyance against (i) any Title Defect reported under this Article 8, or  (ii) any Title Defect disclosed to or known by Buyer prior to the Title Defect Notice Date.

			
			
				 (d)
			

			
			
			Notwithstanding anything herein provided to the contrary, if a Title Defect under this Article 8 results from any matter which could also result in the breach of any representation or warranty of Seller set forth in Article 4, then Buyer shall only be entitled to assert such matter (i) before Closing, as a Title Defect to the extent permitted by this Article 8, or (ii) after Closing, as a breach of Seller’s special warranty of title contained in the Conveyance to the extent permitted by this Section 8.1, and shall be precluded from also asserting such matter as the basis of the breach of any such representation or warranty.

		 

		

			-  21  -

		

 

		

			 

		

			
			
				 (e)
			

			
			
			For the purposes hereof, the terms set forth below shall have the meaning assigned thereto.

			
			
				 (i)
			

			
			
			“Defensible Title” subject to and except for the Permitted Encumbrances shall mean:

			
			
				 (A)
			

			
			
			Such title held by Seller that entitles Seller to receive a share of the Hydrocarbons produced, saved and marketed from any Well (and the Leases included in the production or pooled unit for any such Well) identified in Exhibit “B” throughout the duration of the productive life of such Well (after satisfaction of all royalties, overriding royalties, net profits interests or other similar burdens on or measured by production of Hydrocarbons) (a “Net Revenue Interest”) of not less than the Net Revenue Interest shown in Exhibit “B” for such Well, except decreases in connection with those operations in which (1) after Effective Date, Seller is a non-consenting co-owner; (2) there are decreases resulting from the establishment or amendment after the Effective Date of pools or units; (3) there are decreases required to allow other working interest owners to make up past underproduction or pipelines to make up past under deliveries; and (4) is expressly stated in such Exhibit “B,” as applicable.

			
			
				 (B)
			

			
			
			Such title held by Seller that obligates Seller to bear a percentage of the costs and expenses for the maintenance and development of, and operations relating to, any Well (and the Leases included in the production or pooled unit for any such Well) identified in Exhibit “B” not greater than the “working interest” shown in Exhibit “B” for such Well without increase throughout the productive life of such Well, except as stated in Exhibit “B” and except increases resulting from contribution requirements with respect to non-consenting co-owners under applicable operating agreements and increases that are accompanied by at least a proportionate increase in Seller’s Net Revenue Interest;

			
			
				 (C)
			

			
			
			Such title held by Seller in a Lease (which is not included in the unit or pool of a Well) that entitles Seller to the total Net Leased Mineral Acres identified for such Lease on Exhibit “A.”

			
			
				 (D)
			

			
			
			Such title held by Seller in a Lease (which is not included in the unit or pool of a Well) that it entitles Seller to receive the decimal share of oil and gas and other Hydrocarbons produced from the Lease which is not less than 72% of 8/8ths proportionately reduced to the mineral interest covered by the Leases or to Seller’s undivided interest in the Lease.

			
			
				 (E)
			

			
			
			Such title to any Well or Lease held by Seller is free and clear of liens, encumbrances, security interests or pledges; and

			
			
				 (F)
			

			
			
			As to other property included in the Assets, Seller’s ownership thereof is free and clear of any liens, claims or encumbrances of any kind or character.

		 

		

			-  22  -

		

 

		

			 

		

			
			
				 (ii)
			

			
			
			“Title Defect” shall mean any matter which causes Seller to have less than Defensible Title to any of the Assets, except for Permitted Encumbrances.  Notwithstanding the foregoing, imbalances with respect to oil or natural gas shall not be deemed to be Title Defects and shall be governed by Article 18 hereof.

			
			
				 (iii)
			

			
			
			“Title Defect Property” shall mean any Asset or portion thereof burdened by a Title Defect.

			
			
				 (iv)
			

			
			
			“Permitted Encumbrances” shall mean any of the following matters:

			
			
				 (A)
			

			
			
			defects in the early chain of title consisting of failure to recite marital status or the omission of succession or heirship proceedings;

			
			
				 (B)
			

			
			
			defects or irregularities arising out of uncancelled mortgages, judgments or liens, the inscriptions or the enforceable effect of which, on their face, have expired as a matter of Law prior to the Effective Time, or prior unreleased oil and gas leases which, on their face, expired more than ten (10) years prior to the Effective Time and have not been maintained in force and effect by production or operations pursuant to the terms of such leases and any deeds of trust affecting the lessor’s mineral interest subject to a lease, whether or not subordinated to such lease;

			
			
				 (C)
			

			
			
			tax liens and operator’s liens for amounts not yet due and payable or those that are being contested in good faith by Seller in the ordinary course of business;

			
			
				 (D)
			

			
			
			to the extent any of the following do not materially diminish the value of, or impair the conduct of operations on, any of the Assets and do not decrease the net revenue interest of Seller below that set forth on Exhibit “B” or increase the working interest of Seller above that set forth on Exhibit “B”:  (1) easements, rights-of-way, permits, surface leases and other rights in respect of surface operations, pipelines, grazing, hunting, fishing, logging, canals, ditches, lakes, reservoirs or the like, (2) easements for streets, alleys, highways, pipelines, telephone lines, power lines, railways and other similar rights-of-way on, over or in respect of property owned or leased by Seller or over which Seller owns rights-of-way, easements, permits or licenses, and (3) the terms and conditions of all leases, agreements, orders, instruments and documents pertaining to the Assets;

			
			
				 (E)
			

			
			
			all lessors’ royalties, overriding royalties, net profits interests, carried interests, production payments, reversionary interests and other burdens on or deductions from the proceeds of production if the net cumulative effect of such burdens or deductions does not reduce the Net Revenue Interest of Seller in any Assets affected thereby to the extent that Seller will not be able to deliver to Buyer at the Effective Time, a Net Revenue Interest of at least 72% of 8/8ths proportionately reduced to the mineral interest covered by the Leases  or to Seller’s undivided interest in the Lease of all Hydrocarbons produced, saved and 
		

		 

		

			-  23  -

		

 

		

			 

		

		marketed from or attributable to such Well, or impair the right to receive revenues attributable thereto;

			
			
				 (F)
			

			
			
			Preferential Purchase Rights and required third Person consents to assignments and similar agreements with respect to which waivers or consents are obtained from the appropriate parties or the appropriate time period for asserting the rights has expired without an exercise of the rights prior to the Closing Date;

			
			
				 (G)
			

			
			
			defects or irregularities of title arising out of events or transactions which have been barred by statutes of limitations or by adverse possession;

			
			
				 (H)
			

			
			
			the application of maintenance of uniform interest provisions contained with joint operating or similar agreements;

			
			
				 (I)
			

			
			
			any encumbrance or other matter having an adverse effect on the value of the Assets of Thirty Thousand and No/100 Dollars ($30,000.00) or less, the Parties agreeing that such amount will be a per Title Defect threshold rather than a deductible;

			
			
				 (J)
			

			
			
			rights reserved to or vested in any Governmental Entity to control or regulate any of the Assets in any manner, and all applicable Laws;

			
			
				 (K)
			

			
			
			any encumbrance or other matter (whether or not constituting a Title Defect) expressly waived in writing by Buyer or listed on Exhibit “O;”

			
			
				 (L)
			

			
			
			the assignments earned, acquired or otherwise due to Seller by a third Person but not yet received and/or filed of record, as listed on Exhibit “M;” and

			
			
				 (M)
			

			
			
			the assignments earned, acquired or otherwise owed by Seller to a third Person but not yet delivered and/or filed of record, as listed on Exhibit “N,” to the extent same do not reduce the Net Revenue Interest of Seller in any Asset below 72% of 8/8ths proportionately reduced to the mineral interest covered by the Leases or to Seller’s undivided interest in the Lease .

			
			
				 1.19
			

			
			
			Notice of Title Defects.

		
			No later than 5:00 p.m. local time in Houston, Texas five (5) Business Days prior to the Closing Date (the “Title Defect Notice Date”), Buyer may provide Seller written notice of any Title Defect relating to the Assets along with a description of those matters which, in Buyer’s reasonable opinion, constitute Title Defects and setting forth in detail Buyer’s calculation of the value for each Title Defect.  Seller may elect, at its sole cost and expense, but without obligation, to cure all or any portion of such Title Defects prior to Closing, in a manner reasonably acceptable to both Parties, in which case no reduction in the Purchase Price shall be made.  Subject to Buyer’s remedies for a breach of Seller’s obligations under Section 11.1, or a breach of the special warranty of title set forth in the Conveyance, any defect or deficiency concerning Seller’s title to the Assets (including, but not limited to, Title Defects) not asserted by Buyer on or prior to the Title Defect Notice Date shall be deemed waived by Buyer (which waived defects 
		

		 

		

			-  24  -

		

 

		

			 

		

		shall be deemed Permitted Encumbrances), the Parties shall proceed with Closing, Seller shall be under no obligation to correct such defects, and Buyer shall assume the risks, Liabilities and obligations associated with such defects.
		

			
			
				 1.20
			

			
			
			Title Defect Adjustment.

			
			
				 (a)
			

			
			
			In the event any Title Defect for the Assets, for which notice has been timely given as provided hereinabove, remains uncured as of Closing, Seller shall have the opportunity, but not the obligation, to cure until the Final Settlement Date (“Cure Period”) any such Title Defect, or, alternatively, Seller may elect to reduce the Purchase Price by an amount equal to the Defect Value as determined pursuant to Section 8.4, subject to the application of the Thirty  Thousand and No/100 Dollars ($30,000.00) threshold for each such Title Defect and the Defect Basket described in Section 7.4.  Should Seller elect to reduce the Purchase Price in this Section 8.3(a), those Assets affected by the Title Defect shall be transferred to Buyer at Closing. In no event shall the Defect Value for any Title Defect ever exceed the Allocated Value of such Asset.

			
			
				 (b)
			

			
			
			If Seller elects to attempt to cure a Title Defect for the Assets after Closing, Closing with respect to the portion of the Assets affected by such Title Defect will be deferred (the “Closing Deferred Property”).  Closing with respect to all other Assets will proceed as provided in this Agreement, but the Purchase Price delivered to Seller at such initial Closing shall be reduced by the aggregate Allocated Value of the Assets for all Closing Deferred Properties.  If Seller cures any Title Defect within the Cure Period, then the Closing with respect to the Closing Deferred Property for which such Title Defect has been cured will proceed and will be finalized within seven (7) days following the end of the Cure Period.  If Seller fails to cure any Title Defect prior to the expiration of the Cure Period, Buyer shall have the right to elect by written notice to Seller, which notice shall be delivered within seven (7) days after receipt by Buyer of notice from Seller of such failure to cure any such Title Defect, to waive all of the Title Defects applicable to any Closing Deferred Property (which waived Title Defects shall be deemed Permitted Encumbrances) and proceed to Closing on such Closing Deferred Property.  If Buyer does not elect to waive an existing Title Defect, Seller shall retain the Closing Deferred Property, and the Parties shall have no further obligation with respect thereto and such property shall not be subject to the terms of this Agreement.

			
			
				 (c)
			

			
			
			In the event any adjustment to the Purchase Price is made due to a Title Defect raised by Buyer, the Parties shall proceed with Closing, Seller shall be under no obligation to correct such Title Defect, and such Title Defect shall become an Assumed Obligation of Buyer.

			
			
				 1.21
			

			
			
			Environmental Defect and Title Defect Values.

		
			Upon timely delivery of notice of an Environmental Defect and/or a Title Defect under Section 7.1 or Section 8.2, respectively, Buyer and Seller shall in good faith use their reasonable efforts to agree on the validity and value of the claim for the purpose of making any adjustment to the Purchase Price (the “Defect Value”).  Notwithstanding anything to the contrary set forth herein, the Defect Value for any Title Defect and any related adjustment to the Purchase Price shall in no event exceed the Allocated Value of the affected Asset.  In determining the Defect Value of an Environmental Defect or a Title Defect, it is the intent of the Parties to include, to the extent possible, only that portion of the Assets, whether an undivided interest, separate 
		

		 

		

			-  25  -

		

 

		

			 

		

		interest or otherwise, adversely affected by such defect.  The following guidelines shall be followed by the Parties in establishing the Defect Value of any Environmental Defect or Title Defect for the purpose of adjusting the Purchase Price if the validity of the claim is agreed to by the Parties and proper notice has been timely given, subject to (i) application of the appropriate individual thresholds as set forth in this Agreement for Environmental Defects and Title Defects, and (ii) application of the Defect Baskets requirement as set forth in Section 7.4 for Environmental Defects and Title Defects:
		

			
			
				 (a)
			

			
			
			If the Title Defect is based on a difference in Net Revenue Interest, net mineral acres or expense interest from that shown on Exhibit “A” or Exhibit “B” for the affected Assets, then the Purchase Price shall be reduced based on the difference between interest identified on the applicable exhibit and the applicable defect.

			
			
				 (b)
			

			
			
			If the Environmental Defect or Title Defect is liquidated in amount (for example, but not limited to, a lien, encumbrance, charge or penalty), then the adjustment to the Purchase Price shall be the sum necessary to be paid to the obligee to remove the defect from the Asset.

			
			
				 (c)
			

			
			
			If the Environmental Defect or Title Defect represents an obligation or burden upon the affected Assets for which the economic detriment is not liquidated but can be estimated with reasonable certainty as agreed to by the Parties, the adjustment to the Purchase Price shall be the sum necessary to compensate Buyer at Closing for the estimated adverse economic effect which the Environmental Defect or Title Defect will have on the affected Assets, taking into account all relevant factors, including, but not limited to, the following:

		
			(1)the Allocated Value of the Assets affected by an Environmental Defect or a Title Defect;
		

		
			(2)the economic assumptions Buyer utilized in the determination of the Allocated Value of the Asset, including prices, forecasts, production, reserves, discount factors or other relevant information; and
		

		
			(3)cost to remediate or otherwise resolve an Environmental Defect.
		

			
			
				 (d)
			

			
			
			If the Defect Value cannot be determined using the above guidelines, and if the Parties cannot otherwise agree on the amount of an adjustment to the Purchase Price, or if the validity of the claim as to an Environmental Defect or Title Defect cannot be agreed upon, then the Closing shall include the Asset(s) affected thereby.  If the validity of the claim is in dispute or if the Defect Value of the claim is in dispute, the Purchase Price at Closing shall be adjusted by Buyer’s good faith estimate of the Defect Value subject to Section 7.4.  In either case Buyer or Seller shall have the right exercisable within thirty (30) days after the Closing Date to refer the disputed matter to arbitration, and such disputed matter shall be exclusively and finally resolved pursuant to this Section 8.4.  There shall be a single arbitrator, (i) for Title matters shall be a title attorney, in good standing, with at least ten (10) years’ experience in oil and gas title involving properties in the regional area in which the Assets are located or (ii) for Environmental matters shall be an environmental attorney, in good standing, with at least ten (10) years’ experience in environmental matters involving oil and gas properties in the regional area in which the Assets are located, which shall be selected by mutual agreement of Buyer and Seller within fifteen (15) 
		

		 

		

			-  26  -

		

 

		

			 

		

		Business Days after Buyer’s referral of the disputed matter to arbitration under this Section 8.4, and absent such agreement, by the International Institute for Conflict Prevention & Resolution (“CPR”) (the “Defect Arbitrator”).  The Defect Arbitrator shall not have been employed by or performed services to either Seller or Buyer for a period five (5) years prior to the Closing Date.  The arbitration proceeding shall be held in Houston, Texas and shall be conducted in accordance with the Rules for Non-Administered Arbitration (the “Rules”) of CPR (but need not be administered by the CPR), to the extent such rules do not conflict with the terms of this Section.  The Defect Arbitrator’s determination shall be made within fifteen (15) Business Days after submission of the matters in dispute and shall be final and binding upon both Parties, without right of appeal.  In making his determination, the Defect Arbitrator shall be bound by the rules set forth in this Section 8.4 and may consider such other matters as in the opinion of the Defect Arbitrator are necessary or helpful to make a proper determination.  Additionally, the Defect Arbitrator may consult with and engage disinterested third parties to advise the arbitrator, including, without limitation, petroleum or environmental engineers.  The Defect Arbitrator shall act as an expert for the limited purpose of determining the specific disputed Environmental or Title Defect and Environmental or Title Defect Value submitted by either Party and may not award damages, interest or penalties to either Party with respect to any matter.  Seller and Buyer shall each bear its own legal fees and other costs of presenting its case.  Each Party shall bear one-half of the costs and expenses of the Defect Arbitrator, including any costs incurred by the Defect Arbitrator that are attributable to such third party consultation.  Within ten (10) days after the Defect Arbitrator delivers written notice to Buyer and Seller of his award with respect to the specific disputed Environmental or Title Defect and Environmental or Title Defect Value, Buyer shall pay to Seller the amount, if any, so awarded by the Defect Arbitrator to Seller.

			
			
				 (e)
			

			
			
			- OPTION TO TERMINATE

			
			
				 1.22
			

			
			
			Option to Terminate for Defects.

		
			If the aggregate of the Defect Values attributable to all Environmental Defects and Title Defects determined pursuant to Articles 7 and 8 and the provisions of Section 9.3 below shall exceed ten percent (10%) of the Purchase Price after the application of the Defect Baskets set forth in Section 7.4, then either Buyer or Seller may terminate this Agreement without any further obligation by giving written notice of termination to the other Party at any time prior to Closing.
		

			
			
				 1.23
			

			
			
			Option to Terminate for Defects and Other Matters.

		
			If, prior to Closing the sum of (a) the aggregate Defect Values attributable to all Environmental Defects and Title Defects determined pursuant to Articles 7 and 8 and the provisions of Section 9.3 below, after application of the Defect Baskets set forth in Section 7.4, (b) the Allocated Values of all Assets excluded from the transactions contemplated hereby because of the exercise of Preferential Purchase Rights, (c) the Allocated Values of all Third Party Interest, and (d) the Allocated Values of all Assets affected by Casualty Losses excluded from the transactions contemplated hereby exceed Five Million and No/100 Dollars ($5,000,000.00), then either Buyer or Seller may terminate this Agreement without any further obligation by giving written notice of termination to the other Party at any time prior to Closing.
		

		 

		

			-  27  -

		

 

		

			 

		

			
			
				 1.24
			

			
			
			Dispute as to Defect Values.

		
			In the event of a dispute between Seller and Buyer as to the Defect Value for an Environmental Defect or Title Defect, the Parties shall negotiate in good faith as to estimates of such Defect Value for purposes of this Article 9 only.  Should the Parties be unable to agree on a Defect Value, Seller’s good faith estimate of the Defect Value shall be utilized for purposes of this Article 9 only.
		

			
			
				 1.25
			

			
			
			- PREFERENTIAL PURCHASE RIGHTS AND CONSENTS OF THIRD PARTIES

			
			
				 1.26
			

			
			
			Actions and Consents.

			
			
				 (a)
			

			
			
			Seller and Buyer shall each use all commercially reasonable efforts to take or cause to be taken all such action as may be necessary to consummate and make effective the transactions provided in this Agreement and to assure that it will not be under any material corporate, legal or contractual restriction that could prohibit or delay the timely consummation of such transaction.

			
			
				 (b)
			

			
			
			Seller shall notify all holders of (i) Preferential Purchase Rights relating to the Assets, (ii) rights of consent to the assignment of the Assets, or (iii) rights of approval to the assignment of the Assets of such terms and conditions of this Agreement to which the holders of such rights are entitled.  Seller shall promptly notify Buyer if any Preferential Purchase Rights are exercised, any consents or approvals denied, or if the requisite period has elapsed without said rights having been exercised or consents or approvals having been received.  Notwithstanding anything set forth in Articles 7 and 8 herein, if prior to Closing, any such Preferential Purchase Rights are timely and properly exercised, the interest or part thereof so affected shall be eliminated from the Assets and the Purchase Price reduced by the portion of the Purchase Price allocated to such interest or part thereof as provided in Exhibit “F.”  The Parties agree that the Allocated Values for Assets subject to Preferential Purchase Rights shall be the sole responsibility of Buyer, and Buyer agrees to indemnify and hold Seller harmless from all Liability and Claims related to reasonableness of such values.

			
			
				 (c)
			

			
			
			With respect to any portion of the Assets for which a Preferential Purchase Right has not been asserted or waived prior to Closing or a consent or other approval to assign has not been granted and for which the time for election to exercise such Preferential Purchase Right or to grant such consent or approval has not expired and, in the case of consents or approvals, the reassignment of the affected Lease in the absence of such consent or approval having been obtained would (x) be void or voidable at the option of the holder of the consent or approval right, (y) subject buyer to a liquidated damages penalty or (z) give rise to an express right to terminate the affected Lease, (and Buyer is unwilling to assume the Liability associated with the failure to obtain such consent or approval), Closing with respect to the specific portion of the Assets subject to such outstanding obligations will be deferred (the “Third Party Interests”).  Subject to Section 9.2, Closing with respect to all other Assets will proceed as provided in this Agreement, but the Purchase Price delivered to Seller at Closing will be reduced by the Allocated Value of the Third Party Interests.  In the event that within one hundred twenty (120) days after Closing any such Preferential Purchase Right is waived or consent or approval is 
		

		 

		

			-  28  -

		

 

		

			 

		

		obtained or the time for election to purchase or to deliver a consent or approval passes (such that under the applicable documents, Seller may sell the affected Third Party Interest to Buyer), then subject to the terms and conditions hereof (including Article 12), the Closing with respect to the applicable portion of the Third Party Interests will proceed promptly.  If such waivers, consents or approvals as are necessary are not received by Seller within the applicable one hundred twenty (120) day period, Seller shall retain such Third Party Interests, and the Parties shall have no further Liability or obligation to each other with respect thereto.

			
			
				 (d)
			

			
			
			If any additional Preferential Purchase Rights are discovered after Closing, or if a Preferential Purchase Rights holder alleges improper notice, then Buyer agrees to cooperate with Seller in giving effect to any such valid Preferential Purchase Rights.  In the event any such valid Preferential Purchase Rights are validly exercised after Closing, Buyer’s sole remedy against Seller shall be return by Seller to Buyer of that portion of the Purchase Price allocated under Exhibit “F” to the portion of the Assets on which such rights are exercised and lost by Buyer to such third Person.

			
			
				 (e)
			

			
			
			- COVENANTS

			
			
				 1.27
			

			
			
			Covenants of Seller Pending Closing.

			
			
				 (a)
			

			
			
			From and after the date of execution of this Agreement and until the Closing, and subject to Section 11.2 and the constraints of applicable operating and other agreements, Seller shall manage and administer the Assets as a reasonable and prudent operator and in a good and workmanlike manner consistent with industry standard practices and shall carry on its business with respect to the Assets in substantially the same manner as before execution of this Agreement.  Prior to Closing, Seller shall use all commercially reasonable efforts to preserve in full force and effect all Leases, operating agreements, easements, rights-of-way, surface leases, permits, licenses and agreements which relate to the Assets and shall perform all obligations of Seller in or under all such agreements relating to the Assets; provided, however, Buyer’s sole remedy for Seller’s breach of its obligations under this Section 11.1(a) shall be limited to the amount of that portion of the Purchase Price allocated in Exhibit “F” to that portion of the Assets affected by such breach.  Seller shall, except for emergency action taken in the face of serious risk to life, property or the environment, (1) submit in writing to Buyer, for prior written approval, all requests for operating or capital expenditures and all proposed contracts and agreements relating to the Assets which involve individual commitments of more than Thirty Thousand and No/100 Dollars ($30,000.00) net to Seller’s interest; (2) consult with, inform and advise Buyer regarding all material matters concerning the operation, management and administration of the Assets; (3) obtain Buyer’s written approval prior to voting under any operating, unit, joint venture, partnership or similar agreement relating to the Assets; and (4) obtain Buyer’s written approval prior to approving or electing to proceed as to any proposed well located on the Assets or to plug and abandon any Well.  On any matter requiring Buyer’s written approval under this Section 11.1(a), Buyer shall respond within two (2) Business Days to Seller’s written request for approval (unless Seller notifies Buyer in writing that a shorter time to respond is required in which case Buyer shall respond in the required time), and failure of Buyer to respond to Seller’s request for approval within such time shall release Seller from the obligation to obtain Buyer’s approval before proceeding on such matter.  With respect to emergency actions taken by Seller in the face of serious risk to life, property or the environment, without prior 
		

		 

		

			-  29  -

		

 

		

			 

		

		approval of Buyer pursuant to the provisions above, Seller will advise Buyer of its actions as promptly as reasonably possible and consult with Buyer as to any further related actions.

			
			
				 (b)
			

			
			
			Seller shall promptly notify Buyer of any threatened or actual Claim before any Governmental Entity of which Seller obtains Knowledge of and any Claim which relates to the Assets or which would reasonably be expected to result in impairment or loss of any material portion of the Assets or which would reasonably be expected to hinder or impede the operation of the Assets in any material respect.

			
			
				 (c)
			

			
			
			In addition, without the prior written approval of Buyer, Seller agrees to (i) not sell, lease, farmout, transfer or otherwise dispose of, directly or indirectly, any Assets, except for sales of Hydrocarbons in accordance with those contracts or agreements set forth on Exhibit “D,” (ii) maintain all insurance with respect to the Assets currently in effect, (iii) remain in material compliance with all Laws with respect to its ownership and operation of the Assets as a reasonably prudent operator, (iv) not amend any material contract or enter into any contract affecting the Assets that would be considered a material contract if in effect as of the date of this Agreement, or (v) not waive or release any material Claim or right with respect to the Assets or settle any Claim with respect to the Assets, except to the extent constituting a Retained Obligation or an Excluded Asset, or the litigation referred to in Exhibit “H.”

			
			
				 (d)
			

			
			
			Seller shall cooperate with Buyer and shall execute such documents or instruments as may be reasonably necessary to apply for the timely transfer to Buyer or re-issuance in the name of Buyer of all permits, licenses, registrations or other approvals required for Buyer’s post-Closing ownership or operation of the Assets, including, without limitation, those required under or pursuant to Environmental Laws.

			
			
				 (e)
			

			
			
			As requested by Buyer from time to time, Seller agrees to notify each holder of interests in such Assets (which are the subject of such notice) before Closing that Buyer will purchase the Assets and to direct each such interest holder to make all such assignments of interest in the Assets to Seller.  With respect to any such assignments received by Seller after Closing, Seller agrees to promptly assign such interests to Buyer pursuant to the provisions of this Agreement as if such assignments had been made at Closing.  All such property interests, whether assigned to Buyer by Seller or such third Person, shall be Assets for all purposes of this Agreement.

			
			
				 1.28
			

			
			
			Limitations on Seller’s Covenants Pending Closing.

		
			To the extent Seller is not the operator of any of the Assets, the obligations of Seller in Section 11.1 concerning operations or activities which normally or pursuant to existing contracts are carried out or performed by the operator shall be construed to require only that Seller use all reasonable efforts (without being obligated to incur any expense or institute any cause of action) to cause the operator of such Assets to take such actions or render such performance as would a reasonable prudent operator and within the constraints of the applicable operating agreements and other applicable agreements.
		

		 

		

			-  30  -

		

 

		

			 

		

			
			
				 1.29
			

			
			
			Notification of Breaches.

		
			Until the Closing,
		

			
			
				 (a)
			

			
			
			Buyer shall notify Seller promptly after Buyer obtains Knowledge that any representation or warranty of Seller or Buyer contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Seller or Buyer prior to or on the Closing Date has not been so performed or observed in any material respect.

			
			
				 (b)
			

			
			
			Seller shall notify Buyer promptly after Seller obtains Knowledge that any representation or warranty of Buyer or Seller contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Buyer or Seller prior to or on the Closing Date has not been so performed or observed in any material respect; and

			
			
				 (c)
			

			
			
			If any of Buyer’s or Seller’s representations or warranties are untrue or shall become untrue in any material respect between the date of execution of this Agreement and the Closing Date, or if any of Buyer’s or Seller’s covenants or agreements to be performed or observed prior to or on the Closing Date shall not have been so performed or observed in any material respect, but if such breach of representation, warranty, covenant or agreement shall (if curable) be cured in its entirety by the Closing (or, if the Closing does not occur, by the date set forth in Section 16.1), then such breach shall be considered not to have occurred for all purposes of this Agreement.

			
			
				 (d)
			

			
			
			- CLOSING CONDITIONS

			
			
				 1.30
			

			
			
			Seller’s Closing Conditions.

		
			The obligations of Seller under this Agreement are subject, at the option of Seller, to the satisfaction, at or prior to the Closing, of the following conditions:
		

			
			
				 (a)
			

			
			
			All representations and warranties of Buyer contained in this Agreement shall be true and accurate in all material respects as of the date hereof and as of the Closing as if such representations and warranties were made at and as of the Closing, and Buyer shall have performed, satisfied and complied in all material respects with all agreements and covenants required by this Agreement to be performed, satisfied and complied with by Buyer at or prior to the Closing;

			
			
				 (b)
			

			
			
			The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all necessary action, corporate, partnership or otherwise, on the part of Buyer, and Buyer shall have executed and delivered, at Closing, to Seller an officer’s certificate of Buyer confirming the same;

			
			
				 (c)
			

			
			
			As of the Closing Date, no suit, action or other proceeding (excluding any such matter initiated by Seller) shall be pending or threatened before any Governmental Entity seeking to restrain Seller or prohibit the Closing or seeking damages against Seller as a result of the consummation of this Agreement; and

		 

		

			-  31  -

		

 

		

			 

		

			
			
				 (d)
			

			
			
			Buyer shall have delivered (or be ready, willing and able to deliver) all Transaction Documents, instruments and any other documents which are required by other terms of this Agreement to be executed or delivered by Buyer to Seller prior to or in connection with the Closing.

			
			
				 1.31
			

			
			
			Buyer’s Closing Conditions.

		
			The obligations of Buyer under this Agreement are subject, at the option of Buyer, to the satisfaction, at or prior to the Closing, of the following conditions:
		

			
			
				 (a)
			

			
			
			All representations and warranties of Seller contained in this Agreement shall be true and accurate in all material respects at and as of the Closing as if such representations and warranties were made as of the date hereof and as of the Closing, and Seller shall have performed, satisfied and complied in all material respects with all agreements and covenants required by this Agreement to be performed, satisfied and complied with by Seller at or prior to the Closing;

			
			
				 (b)
			

			
			
			The execution, delivery and performance of this Agreement and the transactions contemplated thereby have been duly and validly authorized by all necessary action, corporate, partnership or otherwise, on the part of Seller, and Seller shall have executed and delivered, at Closing, to Buyer an officer’s certificate of Seller confirming the same;

			
			
				 (c)
			

			
			
			All necessary consents of and filings with any Governmental Entity relating to the consummation of the transactions contemplated by this Agreement shall have been obtained, accomplished or waived, except to the extent that such consents and filings are normally obtained, accomplished or waived after Closing;

			
			
				 (d)
			

			
			
			As of the Closing Date, no suit, action or other proceeding (excluding any such matter initiated by Buyer) shall be pending or threatened before any Governmental Entity seeking to restrain Buyer or prohibit the Closing or seeking damages against Buyer as a result of the consummation of this Agreement; and

			
			
				 (e)
			

			
			
			Seller shall have delivered (or be ready, willing and able to deliver) all transaction documents, instruments and any other documents which are required by other terms of this Agreement to be executed or delivered by Seller to Buyer prior to or in connection with the Closing.

			
			
				 (f)
			

			
			
			- CLOSING

			
			
				 1.32
			

			
			
			Closing.

		
			Consummation of the purchase and sale transaction contemplated by this Agreement, (the “Closing”) shall, unless otherwise agreed in writing by Seller and Buyer, be held at the offices of Seller located at 1301 McKinney, Suite 2800, Houston, Texas 77010, at 10:00 a.m., local time, on or before April 4, 2013, or at such other date or place as the Parties may agree in writing (herein called “Closing Date”).  Time is of the essence, and the Closing Date shall not be extended unless by written agreement of the Parties.
		

		 

		

			-  32  -

		

 

		

			 

		

			
			
				 1.33
			

			
			
			Seller’s Closing Obligations.

		
			At Closing, Seller shall deliver to Buyer the following:
		

			
			
				 (a)
			

			
			
			the Conveyance and such other documents as may be reasonably necessary to convey the Assets to Buyer in accordance with the provisions hereof executed by Seller;

			
			
				 (b)
			

			
			
			a non-foreign affidavit executed by Seller in the form attached as Exhibit “L;”

			
			
				 (c)
			

			
			
			copies of all applicable waivers of Preferential Purchase Rights, or evidence of consents or approvals relating to the Assets obtained by Seller;

			
			
				 (d)
			

			
			
			letters-in-lieu of transfer orders relating to the Assets prepared by Buyer in form reasonably acceptable to Seller;

			
			
				 (e)
			

			
			
			all regulatory transfer documents for the Texas Railroad Commission and any other required documentation for any Governmental Entity;

			
			
				 (f)
			

			
			
			releases of all mortgages, liens and similar encumbrances burdening the Assets and securing funded indebtedness of Seller and its Affiliates, including those shown on Exhibit “O,” in form and substance reasonably satisfactory to Buyer; and

			
			
				 (g)
			

			
			
			an officer’s certificate of Seller, certifying (i) that true and complete copies of the resolutions duly and validly adopted by the governing body of Seller evidencing the authorization of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby are attached thereto and are in full force and effect and (ii) to the incumbency of the officers of Seller executing this Agreement and the instruments contemplated hereby.

			
			
				 1.34
			

			
			
			Buyer’s Closing Obligations.

		
			At Closing, Buyer shall deliver to Seller the following:
		

			
			
				 (a)
			

			
			
			by wire transfer in immediately available funds to a bank account or accounts designated by Seller no later than two (2) Business Days prior to Closing the Purchase Price as adjusted by Section 3.2;

			
			
				 (b)
			

			
			
			Conveyance executed by Buyer, and

			
			
				 (c)
			

			
			
			an officer’s certificate of Buyer, certifying (i) that true and complete copies of the resolutions duly and validly adopted by the governing body of Buyer evidencing the authorization of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby are attached thereto and are in full force and effect and (ii) to the incumbency of the officers of Buyer executing this Agreement and the instruments contemplated hereby.

		 

		

			-  33  -

		

 

		

			 

		

			
			
				 1.35
			

			
			
			Joint Closing Obligations.

		
			The Parties at Closing shall execute and deliver to the other Party:
		

			
			
				 (a)
			

			
			
			Preliminary Settlement Statement evidencing the amount actually wire transferred and all adjustments to the Purchase Price taken into account at Closing;

			
			
				 (b)
			

			
			
			all other Transaction Documents; and

			
			
				 (c)
			

			
			
			Post-Closing Accounting and Reporting Agreement.

		
			All events of Closing shall each be deemed to have occurred simultaneously with the other, regardless of when actually occurring, and each shall be a condition precedent to the other.
		

			
			
				 (d)
			

			
			
			- LIMITATIONS ON WARRANTIES AND REMEDIES/DTPA WAIVER

			
			
				 1.36
			

			
			
			Limitations on Warranties and Remedies.

		
			THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT AND IN THE CONVEYANCE ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY OR VOLUME OF THE RESERVES, IF ANY, OF OIL, GAS OR OTHER HYDROCARBONS IN OR UNDER THE LEASES, OR THE ENVIRONMENTAL CONDITION OF THE ASSETS.  EXCEPT AS PROVIDED OTHERWISE HEREIN, THE ITEMS OF PERSONAL PROPERTY, EQUIPMENT, IMPROVEMENTS, FIXTURES AND APPURTENANCES CONVEYED AS PART OF THE ASSETS ARE SOLD HEREUNDER “AS IS, WHERE IS AND WITH ALL FAULTS,” AND NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONDITION, ARE GIVEN BY OR ON BEHALF OF SELLER.  IT IS UNDERSTOOD AND AGREED THAT PRIOR TO CLOSING BUYER SHALL HAVE INSPECTED THE ASSETS FOR ALL PURPOSES AND SHALL HAVE SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, AND THAT BUYER ACCEPT SAME IN ITS “AS IS, WHERE IS AND WITH ALL FAULTS” CONDITION, SUBJECT TO BUYER’S  RIGHTS HEREUNDER.  EXCEPT FOR THE LIMITED SPECIAL WARRANTY OF TITLE SET FORTH IN THE CONVEYANCE, BUYER HEREBY WAIVE ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, OF TITLE, AND OF ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONDITION OR CONFORMITY TO SAMPLES.
		

		
			BUYER ACKNOWLEDGES THAT THIS EXPRESS WAIVER IS A MATERIAL AND INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND BUYER ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF BUYER AND EXPLAINED IN DETAIL AND THAT BUYER 
		

		 

		

			-  34  -

		

 

		

			 

		

		HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER FOR THE ABOVE DESCRIBED ASSETS.
		

		
			THE EXPRESS REPRESENTATIONS AND WARRANTIES OF THE BUYER CONTAINED IN THIS AGREEMENT AND IN THE CONVEYANCE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, OF ANY KIND WHATSOEVER.  ANY AND ALL OTHER REPRESENTATIONS AND WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
		

		
			The above is subject to the other terms and conditions of this Agreement.
		

			
			
				 1.37
			

			
			
			Waiver of Trade Practices Act.

			
			
				 (a)
			

			
			
			It is the intention of the Parties that Buyer’s rights and remedies with respect to this transaction and with respect to all acts or practices of Seller, past, present or future, in connection with this transaction shall be governed by legal principles other than the Texas Deceptive Trade Practices--Consumer Protection Act, Tex.  Bus. & Com. Code Ann. § 17.41 et seq. (the “DTPA”).  As such, Buyer hereby waives  the applicability of the DTPA to this transaction and any and all duties, rights or remedies that might be imposed by the DTPA, whether such duties, rights and remedies are applied directly by the DTPA itself or indirectly in connection with other statutes; provided, however, Buyer does  not waive § 17.555 of the DTPA.  Buyer acknowledges, represents and warrants that it is purchasing the goods and/or services covered by this Agreement for commercial or business use; that it has knowledge and experience in financial and business matters that enable it to evaluate the merits and risks of a transaction such as this; and that it is not in a significantly disparate bargaining position with Seller.

			
			
				 (b)
			

			
			
			Buyer expressly recognizes that the price for which Seller has agreed to perform its obligations under this Agreement has been predicated upon the inapplicability of the DTPA and this waiver of the DTPA.  Buyer further recognizes that Seller, in determining to proceed with the entering into of this Agreement, has expressly relied on this waiver and the inapplicability of the DTPA.

			
			
				 (c)
			

			
			
			- CASUALTY LOSS AND CONDEMNATION

		
			If, prior to the Closing, all or any portion of the Assets are destroyed by fire or other casualty or if any portion of the Assets shall be taken by condemnation or under the right of eminent domain (all of which are herein called “Casualty Loss” and limited to property damage or taking only), Buyer and Seller must agree prior to Closing either (i) to delete that portion of the Assets which is subject to the Casualty Loss from the Assets, and the Purchase Price shall be reduced by the value allocated to the deleted Asset as set out in Exhibit “F,” or (ii) for Buyer to proceed with the purchase of such Assets, notwithstanding any such destruction or taking (without reduction of the Purchase Price) in which case Seller shall pay, at the Closing, to Buyer all sums paid to Seller by third Persons by reason of the destruction or taking of such Assets and shall assign, transfer and set over unto Buyer all insurance proceeds received by Seller as well as all of the right, title and interest of Seller in and to any Claims, unpaid proceeds or other payments from third Persons arising out of such destruction or taking.  
		

		 

		

			-  35  -

		

 

		

			 

		

			
			
				 (d)
			

			
			
			- TERMINATION

			
			
				 1.38
			

			
			
			Termination.

		
			This Agreement may be terminated at any time prior to Closing: (i) by the mutual prior written consent of Seller and Buyer; (ii) by Buyer or Seller pursuant to Section 9.1 and 9.2 and Article 15; or (iii) by Seller or Buyer, if Closing has not occurred on or before April 12, 2013  (the “Outside Date”) provided that no Party in breach of any obligation hereof may terminate the Agreement.
		

			
			
				 1.39
			

			
			
			Effect of Termination.

		
			If this Agreement is terminated pursuant to Section 16.1, this Agreement shall become void and of no further force or effect (except for the provisions of Sections 4(f),  5(f),  6.6,  6.7,  14.1,  14.2,  20.2,  20.12,  20.13 and 20.22 of this Agreement all of which shall continue in full force and effect), and Seller shall be free immediately to enjoy all rights of ownership of the Assets and to sell, transfer, encumber or otherwise dispose of the Assets to any party without any restriction under this Agreement.  Notwithstanding anything to the contrary in this Agreement, the termination of this Agreement under Section 16.1(iii) shall not relieve any party from liability for any willful failure to perform or observe in any material respect any of its agreements or covenants contained herein which are to be performed or observed at or prior to Closing or if Closing has not occurred, by the Outside Date owing to the willful breach of a Party.  In the event this Agreement terminates under Section 16.1(iii) because a Party has willfully failed to perform or observe in any material respect any of its agreements or covenants contained herein which are to be performed at or prior to Closing, then the other Party shall be entitled to all remedies available at law or in equity in lieu of termination or otherwise and shall be entitled to recover court costs and reasonable attorneys’ fees in addition to any other relief to which such party may be entitled.
		

			
			
				 1.40
			

			
			
			Other Remedies.

		
			Notwithstanding the foregoing, termination of this Agreement shall not prejudice or impair Buyer’s obligations under Section 6.4 (and the Confidentiality Agreement referenced therein).  The prevailing Party in any legal proceeding brought under or to enforce this Agreement shall be additionally entitled to recover court costs and reasonable attorneys’ fees from the non-prevailing Party.
		

			
			
				 1.41
			

			
			
			Limitations on Damages.

		
			Notwithstanding any other provision contained elsewhere in this Agreement to the contrary, the Parties acknowledge that this Agreement does not authorize one Party to sue for or collect from the other Party its own punitive, consequential or indirect damages in connection with this Agreement and the transactions contemplated hereby, and each Party expressly waives for itself and on behalf of its Affiliates any and all Claims it may have against the other Party for such damages in connection with this Agreement and the transactions contemplated hereby.
		

		 

		

			-  36  -

		

 

		

			 

		

			
			
				 1.42
			

			
			
			- ASSUMPTION AND INDEMNITY

			
			
				 1.43
			

			
			
			Assumed Obligations.

		
			Upon and after Closing, Buyer shall own the Assets, together with all the rights, duties, obligations and Liabilities accruing to the Assets after Closing, including the Assumed Obligations and Buyer’s indemnity obligations hereunder.  Buyer agrees to assume and pay, perform, fulfill and discharge such duties, obligations and Liabilities, all Assumed Obligations and Buyer’s indemnity obligations.  Seller agrees to retain and pay, perform, fulfill and discharge all Retained Obligations, and all of Seller’s indemnity obligations contained herein.
		

			
			
				 1.44
			

			
			
			Buyer’s Indemnity.

		
			BUYER AGREES TO RELEASE, INDEMNIFY, DEFEND AND HOLD SELLER AND SELLER’S AFFILIATES AND EACH OF THEIR RESPECTIVE SHAREHOLDERS, MANAGERS, MEMBERS, EMPLOYEES, OFFICERS, DIRECTORS AND REPRESENTATIVES (“SELLER INDEMNITEES”) HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS WITH RESPECT TO ALL LIABILITIES AND OBLIGATIONS OR ALLEGED OR THREATENED LIABILITIES AND OBLIGATIONS CAUSED BY, RELATED TO, ATTRIBUTABLE TO OR ARISING OUT OF THE (I) ASSUMED OBLIGATIONS, (II) BUYER’S BREACH OF ITS REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, OR (III) BUYER’S  BREACH OF ITS COVENANTS CONTAINED IN THIS AGREEMENT.  THE DEFENSE AND INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE SOLE OR PARTIAL OR COMPARATIVE OR CONCURRENT OR OTHER FAULT, NEGLIGENCE OR STRICT, PRE-EXISTING OR OTHER LIABILITY ON THE PART OF SELLER.  ADDITIONALLY, THE DEFENSE AND INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE NATURE OF THE OBLIGATIONS OF SELLER, BE THEY IN TORT, CONTRACT, QUASI-CONTRACT, STATUTORY OR OTHERWISE.
		

			
			
				 1.45
			

			
			
			Seller’s Indemnity.

		
			SELLER AGREES TO RELEASE, INDEMNIFY, DEFEND AND HOLD BUYER AND BUYER’S AFFILIATES AND EACH OF THEIR PARTNERS, RESPECTIVE SHAREHOLDERS, MANAGERS, MEMBERS, EMPLOYEES, OFFICERS, DIRECTORS AND REPRESENTATIVES (“BUYERS INDEMNITEES”) HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS WITH RESPECT TO ALL LIABILITIES AND OBLIGATIONS OR ALLEGED OR THREATENED LIABILITIES AND OBLIGATIONS CAUSED BY, RELATED TO, ATTRIBUTABLE TO OR ARISING OUT OF (I) THE RETAINED OBLIGATIONS, (II) SELLER’S BREACH OF ITS REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, OR (III) SELLER’S BREACH OF ITS COVENANTS CONTAINED IN THIS AGREEMENT.  THE DEFENSE AND INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE SOLE OR PARTIAL OR COMPARATIVE OR CONCURRENT OR OTHER FAULT, NEGLIGENCE OR STRICT, PRE-EXISTING OR OTHER LIABILITY ON THE PART OF BUYER.  ADDITIONALLY, THE DEFENSE 
		

		 

		

			-  37  -

		

 

		

			 

		

		AND INDEMNITY OBLIGATIONS PROVIDED BY THIS SECTION SHALL APPLY REGARDLESS OF THE NATURE OF THE OBLIGATIONS OF BUYER, BE THEY IN TORT, CONTRACT, QUASI-CONTRACT, STATUTORY OR OTHERWISE.
		

			
			
				 1.46
			

			
			
			Stipulation Regarding Express Negligence and Fault.

		
			THE PARTIES BOTH AGREE AND STIPULATE THAT THEY HAVE ACTUAL KNOWLEDGE OF ALL INDEMNITY PROVISIONS HEREIN, THAT THEY ARE FAMILIAR WITH THE EXPRESS NEGLIGENCE TEST, THAT THIS DEFENSE AND INDEMNIFICATION AGREEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE TEST, THAT THE PARTIES CLEARLY INTEND TO TRANSFER THE RISK OF LOSS FOR THE INDEMNITEE’S NEGLIGENCE, FAULT AND OTHER LIABILITIES AND OBLIGATIONS AS SET FORTH ABOVE TO THE OTHER PARTY, AND THAT THESE INDEMNIFICATION PROVISIONS ARE CONSPICUOUS.
		

			
			
				 1.47
			

			
			
			Broker or Finder’s Fee.

		
			Each Party hereby agrees to indemnify and hold the other Party harmless from and against any Claim for a brokerage or finder’s fee or commission in connection with this Agreement or the transactions contemplated by this Agreement to the extent such Claim arises from or is attributable to the actions of such indemnifying Party or its Affiliates, including, without limitation, any and all losses, damages, attorneys’ fees, costs and expenses of any kind or character arising out of or incurred in connection with any such Claim or defending against the same.
		
Indemnification Procedures.
		
			 
		

		
			All Claims for indemnification (an “Indemnity Claim”) under this Agreement shall be asserted and resolved as follows:
		

			
			
				 (a)
			

			
			
			For purposes of this Section 17.6, the term “Indemnifying Party” shall mean the Party having an obligation to indemnify the other Party and its related parties pursuant to this Article 17, and the term “Indemnified Party” shall mean the Party having the right to be indemnified by the other Party pursuant to this Article 17.

			
			
				 (b)
			

			
			
			To make an Indemnity Claim under Section 6.7, this Article 17 or Section 20.16, an Indemnified Party shall notify the Indemnifying Party in writing of its Indemnity Claim, including the basis under this Agreement for its Indemnity Claim (the “Claim Notice”).  In the event that the Indemnity Claim is based upon a claim by a unaffiliated third Person against the Indemnified Party (a “Third Party Claim”), the Indemnified Party shall provide its Claim Notice promptly after the Indemnified Party has Knowledge of the Third Party Claim and shall enclose a copy of all papers (if any) served with respect to the Third Party Claim; provided that the failure of any Indemnified Party to give notice of a Third Party Claim as provided in this Section 17.6(b) shall not relieve the Indemnifying Party of its indemnification obligations under Section 6.7, this Article 17 or Section 20.17 except to the extent (and then only to such extent) such failure results in insufficient time being available to permit the Indemnifying Party to 
		

		 

		

			-  38  -

		

 

		

			 

		

		effectively defend against the Third Party Claim or otherwise materially prejudices the Indemnifying Party’s ability to defend against the Third Party Claim.

			
			
				 (c)
			

			
			
			In the case of an Indemnity Claim based upon a Third Party Claim, the Indemnifying Party shall have thirty (30) days from its receipt of the Claim Notice to notify the Indemnified Party whether it admits or denies its Liability to defend the Indemnified Party against such Third Party Claim at the sole cost and expense of the Indemnifying Party.  The Indemnified Party is authorized, prior to and during such thirty (30) day period, to file any motion, answer or other pleading that it shall deem necessary or appropriate to protect its interests or those of the Indemnifying Party so long as such pleading is not prejudicial to the Indemnifying Party.

			
			
				 (d)
			

			
			
			If the Indemnifying Party admits its Liability, it shall have the right and obligation to diligently defend, at its sole cost and expense, the Third Party Claim.  The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof.  If requested by the Indemnifying Party, the Indemnified Party agrees to cooperate (to the extent reasonable) in contesting any Third Party Claim which the Indemnifying Party elects to contest.  The Indemnified Party may (at its sole costs and expense) participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 17.6.  An Indemnifying Party shall not, without the written consent of the Indemnified Party, (i) settle any Third Party Claim or consent to the entry of any judgment with respect thereto which does not include an unconditional written release of the Indemnified Party from all Liability in respect of such Third Party Claim or (ii) settle any Third Party Claim or consent to the entry of any judgment with respect thereto in any manner that may materially and adversely affect the Indemnified Party (other than as a result of money damages covered by the indemnity).

			
			
				 (e)
			

			
			
			If, within the 30-day period after its receipt of the Claim Notice, the Indemnifying Party does not admit its Liability or admits its Liability with respect to but fails to diligently prosecute or settle, the Third Party Claim, then the Indemnified Party shall have the right to defend against the Third Party Claim at the sole cost and expense of the Indemnifying Party, with counsel of the Indemnified Party’s choosing, subject to the right of the Indemnifying Party to admit its Liability and assume the defense of the Third Party Claim at any time prior to settlement or final determination thereof.  If the Indemnifying Party has not yet admitted its Liability for a Third Party Claim, the Indemnified Party shall send written notice to the Indemnifying Party of any proposed settlement, and the Indemnifying Party shall have the option for ten (10) days following receipt of such notice to (i) admit in writing its Liability for the Third Party Claim and (ii) if Liability is so admitted, reject, in its reasonable judgment, the proposed settlement.

Liability Limitation.
		
			 
		

		
			Notwithstanding the foregoing provisions of this Article 17:
		

			
			
				 (f)
			

			
			
			Seller shall have no Liability for indemnification for any Claims under Section 17.3 unless and until the cumulative total of such Claims exceeds in the aggregate an amount equal to three percent (3%) of the Purchase Price (the “Indemnity Deductible”), at 
		

		 

		

			-  39  -

		

 

		

			 

		

		which time all amounts of Liabilities (other than De Minimis Claims (as defined below)) in excess of the Indemnity Deductible may be claimed and recovered as provided in this Agreement; provided, however, that in the event that the aggregate Claims with respect to a single matter for which indemnity otherwise is provided under Section 17.3 is less than Fifty Thousand and No/100 Dollars ($50,000.00) (a “De Minimis Claim”) such Claims shall not be included in calculating the aggregate amount of Claims for determining whether the Indemnity Deductible has been satisfied and shall not be recoverable for any reason.  For the purpose of clarity, Seller agrees that the Indemnity Deductible and the De Minimis Claim amount shall not be applicable to its indemnification obligations in respect of Section 17.3(I) or Section 17.5.

			
			
				 (g)
			

			
			
			The aggregate Liability of Seller pursuant to this Article 17 shall be limited to an amount equal to ten percent (10%) of the Purchase Price (the “Indemnity Cap”).  For the purposes of clarity, Seller agrees that the Indemnity Cap amount shall not be applicable to its indemnification obligations pursuant to Section 17.3(I) or Section 17.5.

			
			
				 (h)
			

			
			
			Notwithstanding Section 17.7(a) and Section 17.7(b), the Indemnity Deductible and Indemnity Cap shall not apply to Seller’s representations and warranties set forth in Sections 4(a),  (b),  (c),  (d),  (e),  (f) and (j).

			
			
				 (i)
			

			
			
			If an Indemnified Party recovers from any third party (including insurers) all or any part of any amount previously paid to it by an Indemnifying Party pursuant to Sections 6.7,  17.2,  17.3,  17.5 or 20.16, as applicable, such Indemnified Party will promptly pay over to the Indemnifying Party the amount so recovered (after deducting therefrom the full amount of the expenses incurred by it in procuring such recovery), but not in excess of any amount previously so paid by the Indemnifying Party; and

			
			
				 (j)
			

			
			
			Seller shall not be liable to indemnify Buyer for any Claim, and such Claim shall not be applied towards the deductibles in Section 17.7(a), to the extent such Claims constitute an Assumed Obligation.

			
			
				 (k)
			

			
			
			WITHOUT LIMITING THE RIGHTS THAT ANY PARTY MAY HAVE FOR FRAUD UNDER COMMON LAW, BUYER AND SELLER AGREE THAT, FROM AND AFTER THE CLOSING, THE SOLE AND EXCLUSIVE REMEDY OF ANY PARTY WITH RESPECT TO ALL CLAIMS RELATED TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY CLAIMS REGARDING THE ASSETS ARISING OUT OF ANY ACTUAL OR ALLEGED BREACH OF THIS AGREEMENT SHALL BE AS PROVIDED IN SECTION 6.7,  SECTION 20.17 AND THIS Article 17 SUBJECT TO LIMITATIONS IMPOSED THEREON CONTAINED IN THIS Article 17 AND SECTION 17.7.

			
			
				 (l)
			

			
			
			- GAS IMBALANCES

		
			Up to the Final Settlement Date, Seller and Buyer in good faith will use their reasonable efforts to update (to the Effective Time) the gas imbalance volume amounts listed on Exhibit “J.”  If, prior to the Final Settlement Date, either Party hereto notifies the other Party hereto that the volumes set forth in Exhibit “J” are incorrect, then Buyer or Seller will pay the other on the Final Settlement Date, as appropriate, an amount equal to $2.25 per net mmbtu variance from the net imbalance shown on Exhibit “J.”  Subject to such adjustment on the Final Settlement Date, as of 
		

		 

		

			-  40  -

		

 

		

			 

		

		the Closing, Buyer agrees to assume all Liability and obligation for gas production imbalances (whether over or under) attributable to the Assets (which liability and obligation shall be deemed Assumed Obligations).  Except as set forth in this Article 18, in assuming this Liability at Closing, Buyer shall not be obligated to make any additional payment over the Purchase Price to Seller, and Seller shall not be obligated to refund any of said price to reimburse Buyer for any over-balances existing at the time of sale.
		

			
			
				 (m)
			

			
			
			- TRANSITION

			
			
				 1.48
			

			
			
			Post-Closing Accounting and Reporting.

		
			Seller and Buyer agree that the post-closing transition procedures with respect to the Assets as set forth in this Section 19.1 shall be governed by the “Post-Closing Accounting and Reporting Agreement” to be executed at Closing which is attached hereto as Exhibit “P.”
		

			
			
				 1.49
			

			
			
			- MISCELLANEOUS

			
			
				 1.50
			

			
			
			Receivables and other Excluded Funds.

		
			Buyer shall be under no obligation to collect on behalf of Seller any receivables or other funds included in the Excluded Assets and described in Section 1.37(c) of the definition of Excluded Assets.
		

			
			
				 1.51
			

			
			
			Public Announcements.

		
			The Parties agree that prior to Closing, each Party may publicly disclose the principal terms of this Agreement following its execution, and prior to making any public announcement or statement with respect to the transaction(s) contemplated by this Agreement, the Party desiring to make such public announcement or statement shall notify the other Party and exercise reasonable efforts to obtain approval of the other Party to the text of the public announcement or statement to be made solely by Seller or Buyer, as the case may be (such approval not to be unreasonably withheld, conditioned or delayed).  Nothing contained in this paragraph shall be construed to prevent either Party from disclosing information with respect to the transaction contemplated by this Agreement to any Governmental Entity to the extent (i) required by applicable Law; or (ii) necessary to comply with disclosure requirements of the New York Stock Exchange or other recognized exchange or over the counter, and applicable securities Laws.
		

			
			
				 1.52
			

			
			
			Filing and Recording of Assignments, etc.

		
			Buyer shall be solely responsible for all filings and the prompt recording of the Conveyance and any assignments and other documents related to the transfer of the Assets as contemplated hereunder, and for all fees connected therewith, including the fees charged by any Governmental Entity in connection with the change of operator, and Buyer shall furnish copies of all such filed and/or recorded documents to Seller once they become available.  Seller shall not be responsible for any loss to Buyer because of Buyer’s failure to file or record documents correctly or promptly.  Buyer shall promptly file all appropriate forms, declarations or bonds with Governmental Entities relative to its assumption of operations, and Seller shall cooperate with Buyer in connection with such filings.  Seller shall also comply with all notice provisions 
		

		 

		

			-  41  -

		

 

		

			 

		

		contained in the Leases or otherwise applicable to the transfer of the Assets which call for notice to be given following the consummation of the transactions contemplated by this Agreement.
		

			
			
				 1.53
			

			
			
			Further Assurances and Records.

			
			
				 (a)
			

			
			
			After the Closing, each of the Parties will execute, acknowledge and deliver to the other Party such further instruments, and take such other action, as may be reasonably requested in order to more effectively assure to said Party all of the respective properties, rights, titles, interests, estates and privileges intended to be assigned, delivered or inuring to the benefit of such Party in consummation of the transactions contemplated hereby.  Without limiting the foregoing, in the event the Exhibits and Schedules incorrectly or insufficiently describe or reference a property or an interest intended to be conveyed hereby as described in the definition of “Assets,” Seller agrees to, within twenty (20) days of Seller’s receipt of Buyer’s written request, together with supporting documentation satisfactory to Seller, correct such Exhibit and/or execute an amended assignment or other appropriate instruments necessary to transfer the property or interest intended to be conveyed hereby to Buyer.

			
			
				 (b)
			

			
			
			Buyer agrees to maintain the files and records of Seller that are acquired pursuant to this Agreement for three (3) years after Closing.  Buyer shall provide Seller and its representatives reasonable access to and the right to copy such files and records for the purposes of (i) preparing and delivering any accounting provided for under this Agreement and adjusting, prorating and settling the charges and credits provided for in this Agreement; (ii) complying with any Law affecting the Assets prior to the Closing Date; (iii) preparing any audit of the books and records of any third Persons relating to the Assets prior to the Closing Date, or responding to any audit related to the Assets prepared by such third Persons; (iv) preparing tax returns; (v) responding to or disputing any tax audit related to the Assets; or (vi) asserting, defending or otherwise dealing with any Claim or dispute under this Agreement or as to the Assets.

			
			
				 (c)
			

			
			
			The records associated (including, originals (to the extent that Seller has in its possession), copies and electronic data files) with the Assets shall be made available to Buyer within ten (10) Business Days after the Closing Date at Seller’s offices. Any reproduction, transportation, postage or delivery costs from Seller’s offices shall be at Buyer’s sole cost, risk and expense.

			
			
				 (d)
			

			
			
			Buyer shall comply with all current and subsequently amended Laws applicable to the Assets and shall promptly obtain and maintain all permits required by Governmental Entities in connection with the Assets.

			
			
				 1.54
			

			
			
			Notices.

		
			Except as otherwise expressly provided herein, all communications required or permitted under this Agreement shall be in writing and may be given by personal delivery, facsimile, email, US mail (postage prepaid) or nationally recognized delivery service, and any communication hereunder shall be deemed to have been duly given and received when actually delivered to if during normal business hours (or upon the next Business Day, if not during normal business hours) the address of the Parties to be notified as set forth below and addressed as follows:
		

		

		

		 

		

			-  42  -

		

 

		

			 

		

		If to Seller, as follows:
		

		
			ZaZa Energy Corporation
		

		
			Attention: VP & General Counsel, E&P
		

		
			1301 McKinney St., Suite 3000
		

		
			Houston, Texas 77010
		

		
			E-mail: patrick.dunn@zazaenergy.com
		

		
			Facsimile: +1.713.595.1919
		

		
			If to Buyer, as follows:
		

		
			BEP Moulton, LLC
		

		
			Attention:  Mr. Larry Ewers
		

		
			8531 N. New Braunfels
		

		
			Suite 200
		

		
			San Antonio, Texas  78217
		

		
			E-mail:
		

		
			Facsimile: (210) 824-3589
		

		
			 
		

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

			
			
				 1.55
			

			
			
			Incidental Expenses.

		
			Buyer shall bear and pay (i) all state, tribal or local government sales, transfer, gross proceeds or similar taxes incident to or caused by the transfer of the Assets to Buyer, (ii) all documentary, transfer and other state and local government taxes incident to the transfer of the Assets to Buyer; and (iii) all filing, recording or registration fees and other cash and expenses for any assignment or conveyance delivered hereunder.  Each Party shall bear its own respective expenses incurred in connection with the negotiation and Closing of this transaction, including its own consultants’ fees, attorneys’ fees, accountants’ fees and other similar costs and expenses.
		

			
			
				 1.56
			

			
			
			Waiver.

		
			Except as otherwise expressly provided in this Agreement, (i) any of the terms, provisions, covenants, representations, warranties or conditions hereof may be waived only by a written instrument executed by the Party waiving compliance, and (ii) the failure of any Party at any time or times to require performance of any provision hereof shall in no manner affect such Party’s right to enforce the same.  No waiver by any Party of any condition, or of the breach of any term, provision, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term, provision, covenant, representation or warranty.
		

		 

		

			-  43  -

		

 

		

			 

		

			
			
				 1.57
			

			
			
			Binding Effect; Assignment.

		
			All the terms, provisions, covenants, obligations, indemnities, representations, warranties and conditions of this Agreement shall inure to the benefit of, and be binding upon, and shall be enforceable by, the Parties hereto and their respective successors and assigns.
		

			
			
				 1.58
			

			
			
			Taxes.

			
			
				 (a)
			

			
			
			Seller shall be responsible for all state, local and federal property, ad valorem, excise, severance and other similar taxes attributable to or arising from the ownership or operation of the Assets prior to the Effective Time.  Buyer shall be responsible for its proportionate share of all property, severance and other similar taxes attributable to or arising from the ownership or operation of the Assets on and after the Effective Time.  Any Party which pays such taxes for the other Party shall be entitled to prompt reimbursement upon evidence of such payment from the other Party.  Each Party shall be responsible for its own federal and state income taxes, if any, as may result from this transaction.

			
			
				 (b)
			

			
			
			Seller acquired the Assets for use or consumption, and Seller has not been engaged, nor held itself out as being engaged, in selling similar property on a repeated or continuing basis.  The Assets constitute an identifiable segment of Seller’s business within the meaning of Texas Comptroller’s Sales Tax Rule 34 Tex. Admin. Code § 3.316(d), and, accordingly, it is Seller’s belief that the sale of the Assets (other than any motor vehicles) is exempt from Texas sales and use tax as an occasional sale pursuant to Texas Tax Code 151.304(b)(2).

			
			
				 (c)
			

			
			
			If this transaction is determined to result in state sales or transfer taxes, Buyer shall be solely responsible for any and all such taxes due on the Assets acquired by Buyer by virtue of this transaction.  If Buyer is assessed such taxes, Buyer shall promptly remit same to the taxing authority.  If Seller is assessed such taxes, Buyer shall reimburse Seller for any such taxes paid by Seller to the taxing authority.

			
			
				 1.59
			

			
			
			Audits.

		
			It is expressly understood and agreed that Seller retains its right to receive its proportionate share of the proceeds attributable to the Assets from any audits relating to activities prior to the Effective Time, and Seller shall likewise pay its share of any costs attributable to the Assets and attributable to the period prior to the Effective Time resulting from any such audits.
		

			
			
				 1.60
			

			
			
			Like-Kind Exchanges.

		
			Each Party consents to the other Party’s assignment of its rights and obligations under this Agreement to its Qualified Intermediary (as that term is defined in Section 1.1031(k)-l(g)(4)(v) of the Treasury Regulations) and/or to its Qualified Exchange Accommodation Titleholder (as that term is defined in Rev. Proc. 2007-37 issued effective September 15, 2000) in connection with effectuation of a like-kind exchange, in whole or in part, as provided in Section 1031 of the Code and the Treasury Regulations thereto, and if applicable, Rev. Proc. 2000-37, 2000-2 C.B. 308 (Sept. 18, 2000), as amended by Rev. Proc. 2004-51, 2004-33 I.R.B. 294 (Jul. 20, 2004) (a “Like-Kind Exchange Transaction”).
		

		

		

		 

		

			-  44  -

		

 

		

			 

		

		However, Seller and Buyer acknowledges and agrees that any assignment of this Agreement to a Qualified Intermediary or Qualified Exchange Accommodation Titleholder does not release either Party from any of its respective Liabilities and obligations to the other Party under this Agreement, including, without limitation, indemnities, warranties, representations or covenants set forth in this Agreement.  If requested by the other Party, each Party agrees to cooperate with the other Party (to the extent reasonable) to attempt to structure the transaction as a Like-Kind Exchange Transaction.  If a Like-Kind Exchange Transaction occurs, the Parties recognize that IRS Form 8824, Like-Kind Exchanges, will be required to be filed, and each Party consents to the filing of such Form and will fully cooperate, to the extent necessary, with the other Party in filing such Form.
		

			
			
				 1.61
			

			
			
			Governing Law and Arbitration.

			
			
				 (a)
			

			
			
			THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OTHERWISE APPLICABLE TO SUCH DETERMINATIONS.  The Parties agree that any dispute arising out of or relating to or in connection with this Agreement or the alleged breach thereof (a “Dispute”) shall be resolved in accordance with the procedures specified in this Section 20.12, which shall be the sole and exclusive procedures for the resolution of any such disputes.

			
			
				 (b)
			

			
			
			The Parties shall attempt in good faith to resolve any Dispute promptly by negotiation between the executive officers or managers of the Parties who have authority to settle the Dispute.  Either Party may give the other Party written notice of any Dispute not resolved in the normal course of business.  Within fifteen (15) days after delivery of such notice, the receiving Party shall submit to the other a written response.  The notice and response shall include (i) a statement of that Party’s position and a summary of arguments supporting that position, and (ii) the name and title of the executive officer or manager who will represent that Party and of any other person who will accompany the executive.  Within thirty (30) days after delivery of the initial notice, the executives of the Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the Dispute.  All reasonable requests for information made by one Party to the other will be honored.  All communications and negotiations pursuant to this provision shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

			
			
				 (c)
			

			
			
			If the Dispute has not been resolved by negotiation as provided herein within forty-five (45) days after delivery of the initial notice of negotiation (or if the Parties failed to meet within thirty (30) days), the Parties shall endeavor to settle the Dispute by mediation under the CPR Mediation Procedure currently in effect, provided, however, that if one Party fails to participate in the negotiation as provided herein, the other Party can initiate mediation prior to the expiration of the forty-five (45) days.  Unless otherwise agreed, the Parties will select a mediator from the CPR Panels of Distinguished Neutrals, and all fees and costs of the mediator shall be borne equally.

			
			
				 (d)
			

			
			
			If a Dispute is not resolved by agreement among the Parties as provided in Section 20.12(b), and said Dispute was not resolved in mediation as provided in 
		

		 

		

			-  45  -

		

 

		

			 

		

		Section 20.12(c), then within ten (10) calendar days after the later of (i) the date of the mediation was conducted, or (ii) sixty (60) days after delivery of the initial notice of the Dispute as proved in Section 20.12(b), either Party may provide written notice to the other Parties of an intent to submit such matter to arbitration, and the Parties hereby agree, upon the request of such Party providing such notice, to submit the Dispute to binding arbitration to be held in Houston, Texas, such arbitration to be conducted in accordance with the Rules (but need not be administered by the CPR).  The Dispute must be resolved through arbitration regardless of whether the Dispute involves claims that this Agreement is unlawful, unenforceable, void or voidable or involves claims sounding in tort, contract, statute or common law.  The obligation to arbitrate a Dispute shall be binding on and shall inure to the benefit of the Parties.

			
			
				 (e)
			

			
			
			The arbitration shall be governed by Texas law, provided that issues involving application of arbitration law shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et.seq.  The arbitration shall be before a three-person (3) panel of neutral arbitrators (the “Arbitrators”).  No later than ten (10) days after the submission of the matter to arbitration, each Party shall select an Arbitrator and request the two (2) selected Arbitrators to select a third neutral Arbitrator.  This third Arbitrator shall be the presiding Arbitrator.  If the two (2) Arbitrators fail to select a third on or before the tenth (10th) day after the second Arbitrator was selected, either Party is entitled to request CPR to appoint the third neutral Arbitrator in accordance with the Rules.  Before beginning the hearings, each Arbitrator must provide an oath or undertaking of impartiality.  The presiding Arbitrator shall be a member of the CPR Panel of Distinguished Neutrals.  All Arbitrators shall be and remain at all times independent and impartial, and, once appointed, no Arbitrator shall have any ex parte communications with any of the Parties or any of their affiliates concerning the arbitration or the underlying Dispute other than communications directly concerning the selection of the presiding Arbitrator, when applicable.  All Arbitrators (whether appointed or nominated by a claimant or respondent, by the other Arbitrators, or by the CPR) shall be lawyers licensed to practice law who are in good standing and have at least fifteen (15) years of experience in representing parties engaged in the oil and/or gas business or in the handling of disputes involving application of oil and/or gas law.  No Arbitrator shall have been an employee or consultant to any Party or any of its Affiliates within the five (5) year period preceding the arbitration, or have any financial interest in the Dispute.  Notwithstanding the foregoing, if a Dispute arises regarding the rights or remedies available to a Party or an Affiliate of a Party pursuant to a final award of an arbitral tribunal that is issued pursuant to this Agreement, such Dispute shall be heard and resolved by the same arbitral tribunal that issued the award, unless one or more of the Arbitrators serving on the arbitral tribunal that issued the award is unable or unwilling to serve as Arbitrator.

			
			
				 (f)
			

			
			
			Without limitation of the Arbitrators’ authority to decide any Dispute and grant any relief allowed by agreement, at Law, or in equity, the Arbitrators shall have the authority to award declaratory relief regarding future obligations of the Parties and declaratory relief regarding the remedies that are available to the Parties as allowed by agreement, at Law or in equity.

			
			
				 (g)
			

			
			
			All decisions of the arbitral tribunal shall be made by majority vote.  The award of the arbitral tribunal shall be final and binding.

		 

		

			-  46  -

		

 

		

			 

		

			
			
				 (h)
			

			
			
			Notwithstanding the agreement to arbitrate Disputes in this Section 20.12, any Party may apply to a United States Federal District Court sitting in Houston, Texas for interim measures pending appointment of the arbitration tribunal, including injunction, attachment and conservation orders as allowed by applicable Law.  The Parties agree that no court other than a United States Federal District Court sitting in Houston, Texas will have authority or jurisdiction to enter interim orders pending appointment of the arbitration tribunal, and the Parties agree that neither the Parties nor their Affiliates shall make any application for interim orders to any court other than a United States Federal District Court sitting in Houston, Texas unless that court would not have personal and subject matter jurisdiction.  The Parties agree that seeking and obtaining such court-ordered interim measures shall not waive the right to arbitration.  Additionally, the Arbitrators (or in an emergency the presiding Arbitrator acting alone in the event one or more of the other Arbitrators is unable to be involved in a timely fashion) may grant interim measures including injunctions, attachments and conservation orders as allowed by applicable Law, which measures may be immediately enforced by court order.

			
			
				 (i)
			

			
			
			Any disputes over the scope of discovery shall be determined by the Arbitrators.  The Arbitrators shall conduct a hearing no later than ninety (90) days after appointment of the presiding Arbitrator, and the Arbitrators shall render a written decision within thirty (30) days of the hearing.  At the hearing, the Parties shall present such evidence and witnesses as they may choose, with or without counsel.  Adherence to formal rules of evidence shall not be required, but the Arbitrators shall consider any evidence and testimony that they determine to be relevant, in accordance with procedures that they determine to be appropriate.  Any award entered in the arbitration shall be made by a written opinion stating the reasons and basis for the award made and any payment due pursuant to the arbitration shall be made within fifteen (15) days of the decision by the Arbitrators.  The Arbitrators will have no authority to award indirect, consequential, special or punitive damages or other damages not measured by the prevailing Party’s actual damages.

			
			
				 (j)
			

			
			
			All negotiations, mediation and arbitration relating to a Dispute (including a settlement resulting from negotiation or mediation, an arbitral award, documents exchanged or produced during a mediation or arbitration proceeding and memorials, briefs or other documents prepared for the arbitration) are confidential and may not be disclosed by the Parties, their respective Affiliates and each of their respective employees, officers, directors, counsel, consultants and expert witnesses, except to the extent necessary to enforce any settlement agreement or arbitration award, to enforce other rights of a Party, as required by Law or regulation (including stock exchange rules), or for a bona fide business purpose, such as disclosure to accountants, attorneys or shareholders; provided, however, that breach of this confidentiality provision shall not void any settlement or award.

			
			
				 (k)
			

			
			
			Any papers, notices or process necessary or proper for an arbitration hereunder, or any court action in connection with an arbitration or an award, may be served on a Party in the manner set forth in Section 20.5 for the giving of notices or any other manner allowed by Law.

			
			
				 (l)
			

			
			
			Any arbitration award may be confirmed by a United States Federal District Court sitting in Houston, Texas.  Any action to confirm, challenge, vacate or set aside the award in whole or in part may be brought in a United States Federal District Court sitting in Houston, Texas.  The Parties agree to jointly request that any such action be decided by the court on an 
		

		 

		

			-  47  -

		

 

		

			 

		

		expedited basis.  Any arbitration award may be recognized and enforced, and judgment on the award may be entered, by any United States Federal District Court sitting in Houston, Texas or by any other court of competent subject matter jurisdiction (including a court located in a jurisdiction in which a Party holds or keeps assets).  The Parties and their Affiliates agree to jointly request that any application for recognition or enforcement of an award be decided by the court on an expedited basis.  All Parties and their Affiliates waive their right to appeal any court order confirming, recognizing or enforcing an award.  The Parties and their Affiliates do not waive any rights they may have to appeal a court order refusing to confirm, recognize or enforce an award.

			
			
				 (m)
			

			
			
			The arbitral tribunal shall award costs, attorneys’ fees, fees of the arbitrators and expert witness fees to the prevailing party or parties.

			
			
				 1.62
			

			
			
			Entire Agreement.

		
			This Agreement and the Exhibits  hereto and the documents delivered pursuant to the terms hereof embody the entire agreement between the Parties and replaces and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof, whether written or oral.  No other agreement, statement or promise made by any Party, or to any employee, officer or agent of any Party which is not contained in this Agreement shall be binding or valid.  This Agreement may be supplemented, altered, amended, modified or revoked by a writing only, signed by the Parties hereto.  The headings herein are for convenience only and shall have no significance in the interpretation hereof.  The Parties stipulate and agree that this Agreement shall be deemed and considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, submittal or other event of negotiation, drafting or execution thereof.
		

			
			
				 1.63
			

			
			
			Severability.

		
			If any provision of this Agreement is found by a court of competent jurisdiction to be invalid or unenforceable, that provision will be deemed modified to the extent necessary to make it valid and enforceable, and if it cannot be so modified, it shall be deemed deleted and the remainder of the Agreement shall continue and remain in full force and effect.
		

			
			
				 1.64
			

			
			
			Exhibits.

		
			All Exhibits attached to this Agreement, and the terms of those Exhibits  which are referred to in this Agreement, are made a part hereof and incorporated herein by reference.
		

			
			
				 1.65
			

			
			
			Suspended Funds.

		
			At Closing, Seller shall transfer to Buyer all funds, if any, held by Seller in suspense owing to third Persons on account of the sale of Hydrocarbons from the Assets, together with all information in the possession of Seller identifying the funds.  Buyer upon receipt of the funds shall assume all responsibility for the payment thereof to third Persons entitled to the same.  Buyer shall indemnify and hold Seller harmless for its proportionate share of Claims and Liabilities relating to or arising out of Buyer’s payment, mispayment or failure to make payments of any such funds.  Seller shall indemnify and hold Buyer harmless for Claims and 
		

		 

		

			-  48  -

		

 

		

			 

		

		Liabilities related to wrongfully withheld suspended funds attributable to the period of time prior to the Effective Time.  Notwithstanding anything the contrary set forth herein, the terms of this Section 20.16 shall survive the Closing.
		

			
			
				 1.66
			

			
			
			Survival.

			
			
				 (a)
			

			
			
			Representations and Warranties.  All of the representations and warranties of or by the Parties to this Agreement, excluding the special warranty of title of Seller contained in Section 8.1(b), will survive the Closing until twelve (12) months after the Closing Date (the “Expiration Date”), at which time all such representations and warranties shall expire (the time periods set forth in this Section 20.17(a) and Section 20.17(b) are each respectively a “Survival Period”).

			
			
				 (b)
			

			
			
			Covenants.  Except as otherwise provided herein, the covenants and agreements contained in this Agreement to the extent that, by their terms, they are to be performed or complied with (i) prior to or on the Closing Date, shall expire at Closing, and (ii) after the Closing Date, shall expire on the later of (x) the Expiration Date or (y) thirty (30) days after the period in which such covenant is to be performed.

			
			
				 (c)
			

			
			
			Notwithstanding anything in this Agreement to the contrary, no Party shall have any obligation to indemnify the other pursuant to Section 17.2 or Section 17.3 (as those provisions apply to the representations and warranties only) unless a notice has been received by the Indemnifying Party prior to the end of the respective Survival Period.

			
			
				 (d)
			

			
			
			The covenants and agreements contained in Section 20.21 shall survive the Closing and shall remain in full force and effect as between the Parties and any of their Affiliates for a period of two  (2) years after the Closing Date.

			
			
				 1.67
			

			
			
			Subsequent Adjustments.

		
			Regardless of the date set for the Final Settlement, Buyer and Seller agree that their intent is to allow for the earliest practical forwarding of revenue and reimbursement of expenses between them, and Seller and Buyer recognize that either may receive funds or pay expenses after the Final Settlement Date which is properly the property or obligation of the other.  Therefore, upon receipt of net proceeds or payment of net expenses due to or payable by the other Party hereto, whichever occurs first, Seller or Buyer, as the case may be, shall submit a statement to the other Party hereto showing the relevant items of income and expense with supporting documentation.  Payment of any net amount due by Seller or Buyer, as the case may be, on the basis thereof shall be made within ten (10) Business Days of receipt of the statement.
		

			
			
				 1.68
			

			
			
			Counterparts.

		
			This Agreement may be executed in any number of counterparts, each of which shall be deemed an original instrument, but all such counterparts together shall constitute one (1) agreement.
		

		 

		

			-  49  -

		

 

		

			 

		

			
			
				 1.69
			

			
			
			Change of Name.

		
			As promptly as practicable, but in any case within ninety (90) days after the Closing Date, Buyer shall eliminate the names “ZaZa Energy, LLC,” ZaZa Energy Corporation,” and “ZaZa” and any variants of these names from the Assets acquired pursuant to this Agreement and, except with respect to such grace period for eliminating existing usage, shall have no right to use any logos, trademarks or trade names belonging to Seller or any of its Affiliates.
		

			
			
				 1.70
			

			
			
			Non-Compete Provision.

		
			(a)      As additional consideration for the consummation of the transaction contemplated by this Agreement, the Seller has agreed that for a period of three (3) years from the Closing Date, that neither Seller nor any of its Affiliates, officers, directors, members, or managers,  (“Seller’s Parties”)  shall directly or indirectly, acquire or seek to acquire any additional acreage, oil and gas leasehold, mineral interests, or any other oil and gas interest within the area outlined in purple on the plat that is attached hereto as Exhibit “R ” (“Non-Compete Area”)  In the event the Seller’s Parties  acquire any additional acreage, oil and gas leasehold, mineral interests, or any other oil and gas interest within the Non-Compete Area, Buyer shall be entitled to an assignment from Seller’s Parties of any additional acreage, oil and gas leasehold, mineral interests, or any other oil and gas interest within fifteen (15) days after Seller’s receipt of written demand for an assignment from Buyer.  Buyer shall, upon receipt of an executed assignment or conveyance, in recordable form  of any such interest, reimburse Seller the actual consideration, costs and expenses paid to an unaffiliated third party for the additional acreage, oil and gas leasehold, mineral interests, or any other oil and gas interest.
		

		
			(b)     As a result of the unique nature of the oil and gas interests involved, Seller acknowledges that Buyer may be irreparably damaged by the acquisition of any additional acreage, oil and gas leasehold, mineral interest, or any other oil and gas interest within the Non-Compete Area.  Without prejudice to the rights and remedies otherwise available to Buyer, Buyer may be entitled to seek equitable relief, including an injunction or specific performance, in the event of any breach of this Section 20.21 of the Agreement.  Seller agrees to reimburse Buyer for all costs and expenses, including reasonable attorneys’ fees, incurred by Buyer in enforcing the terms of this Section 20.21.
		

		
			 
		

			
			
				 1.71
			

			
			
			No Third-Party Beneficiaries.

		
			Nothing in this Agreement shall entitle any Person other than Buyer and Seller to any Claims, remedy or right of any kind, except as to those rights expressly provided to Seller Indemnitees and Buyer Indemnitees (provided, however, any Indemnity Claim hereunder on behalf of a Seller Indemnitee or a Buyer Indemnitee must be made and administered by a Party to this Agreement).
		

			
			
				 1.72
			

			
			
			Rules of Construction

		
			All references in this Agreement to Exhibits, Articles, Sections, subsections and other subdivisions refer to the corresponding Exhibits, Articles, Sections, subsections and other subdivisions of or to this Agreement unless expressly provided otherwise.  Titles appearing at the beginning of any Articles, Sections, subsections and other subdivisions of this Agreement are for 
		

		 

		

			-  50  -

		

 

		

			 

		

		convenience only, do not constitute any part of this Agreement and shall be disregarded in construing the language hereof.  The words “this Agreement,” “herein,” “hereby,” “hereunder” and “hereof,” and words of similar import, refer to this Agreement as a whole and not to any particular Article, Section, subsection or other subdivision unless expressly so limited.  The words “this Article,” “this Section” and “this subsection,” and words of similar import, refer only to Article, Section or subsection hereof in which such words occur.  The word “including” (in its various forms) means “including, without limitation.”  All references to “$” or “dollars” shall be deemed references to United States Dollars.  Each accounting term not defined herein will have the meaning given to it under generally accepted accounting principles (GAAP).  Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.  Exhibits and Schedules referred to herein are attached to and made a part of this Agreement.  Unless expressly stated otherwise, references to any Law shall mean such Law as it may be amended from time to time.
		

		
			IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
		

		
			SELLER:
		

		
			ZAZA ENERGY, LLC
		

		
			                                                                                                                                                                                                                                                                                                            
		

		
			Todd A. Brooks, Manager
		

		
			 
		

		
			BUYER:
		

		
			BEP MOULTON, LLC
		

		
			                                                                                                                                                                                                                                                                                                            
		

		
			Larry Ewers, Manager
		

		
			 
		

		

		

		 

		

			-  51  -

		

 

		

			 

		

		 
		

		
			 
		

		
			EXHIBITS TO
		

		
			 
		

		
			PURCHASE AND SALE AGREEMENT
		

		
			by and between
		

		
			ZAZA ENERGY, LLC
		

		
			(SELLER)
		

		
			And
		

		
			BEP MOULTON, LLC
		

		
			(BUYER)
		

		
			Dated March 22, 2013
		

		
			Effective January 1, 2013
		

		
			 
		

		

		

		 

		

			 

		

 

		

			

		

		EXHIBIT “A”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

			
					
						Leases

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Lease #

					
					
						Lessor

					
					
						Lessee

					
					
						Lease Date

					
					
						Gross Acres

					
					
						Net Acres

					
					
						County

					
					
						Book

					
					
						Page

					
					
						NRI

				
	
					
						0013000-001

					
					
						ROBERT BEN HOERSTER

					
					
						SCOUT ENERGY

					
					
						7/12/2010

					
					
						98.893

					
					
						49.447

					
					
						FAYETTE

					
					
						1541

					
					
						524

					
					
						0.725

				
	
					
						0013000-002

					
					
						MILTON ODELL GATES

					
					
						SCOUT ENERGY

					
					
						8/6/2010

					
					
						98.893

					
					
						9.889

					
					
						FAYETTE

					
					
						1541

					
					
						490

					
					
						0.75

				
	
					
						0013000-003

					
					
						CELITA GATES HASTINGS

					
					
						SCOUT ENERGY

					
					
						8/6/2010

					
					
						98.893

					
					
						9.889

					
					
						FAYETTE

					
					
						1541

					
					
						531

					
					
						0.75

				
	
					
						0013000-004

					
					
						GARY LEWIS ANDERSON

					
					
						SCOUT ENERGY

					
					
						8/6/2010

					
					
						98.893

					
					
						9.889

					
					
						FAYETTE

					
					
						1541

					
					
						533

					
					
						0.75

				
	
					
						0013000-005

					
					
						LEIGHTON NOBLE GATES

					
					
						SCOUT ENERGY

					
					
						8/6/2010

					
					
						98.893

					
					
						4.945

					
					
						FAYETTE

					
					
						1541

					
					
						529

					
					
						0.75

				
	
					
						0013000-006

					
					
						RONALD AUSTIN GATES

					
					
						SCOUT ENERGY

					
					
						8/6/2010

					
					
						98.893

					
					
						4.945

					
					
						FAYETTE

					
					
						1541

					
					
						492

					
					
						0.75

				
	
					
						0013000-007

					
					
						SYLVIA GATES WORRELL

					
					
						SCOUT ENERGY

					
					
						8/6/2010

					
					
						98.893

					
					
						4.945

					
					
						FAYETTE

					
					
						1541

					
					
						494

					
					
						0.75

				
	
					
						0013000-008

					
					
						DAVID WAYNE GATES

					
					
						SCOUT ENERGY

					
					
						10/26/2010

					
					
						98.893

					
					
						4.945

					
					
						FAYETTE

					
					
						1544

					
					
						802

					
					
						0.75

				
	
					
						0013001-000

					
					
						HUGO WEHMEYER JR ET UX

					
					
						SCOUT ENERGY

					
					
						6/11/2010

					
					
						18.140

					
					
						18.140

					
					
						FAYETTE

					
					
						1541

					
					
						496

					
					
						0.75

				
	
					
						0013002-000

					
					
						ROBERT DALE WEHMEYER ET UX

					
					
						SCOUT ENERGY

					
					
						6/11/2010

					
					
						4.960

					
					
						4.960

					
					
						FAYETTE

					
					
						1541

					
					
						488

					
					
						0.75

				
	
					
						0013003-001

					
					
						ELIZA FAIRES LEIGH

					
					
						SCOUT ENERGY

					
					
						7/19/2010

					
					
						88.000

					
					
						66.000

					
					
						FAYETTE

					
					
						1541

					
					
						582

					
					
						0.75

				
	
					
						0013003-002

					
					
						ROBERT F THOMPSON JR

					
					
						SCOUT ENERGY

					
					
						7/19/2010

					
					
						88.000

					
					
						22.000

					
					
						FAYETTE

					
					
						1541

					
					
						581

					
					
						0.725

				
	
					
						0013004-000

					
					
						STANLEY ROSS CRUMP

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						70.000

					
					
						70.000

					
					
						FAYETTE

					
					
						1541

					
					
						593

					
					
						0.725

				
	
					
						0013005-000

					
					
						LINDA MATHEWS KAUFHOLD

					
					
						SCOUT ENERGY

					
					
						6/21/2010

					
					
						101.539

					
					
						101.539

					
					
						FAYETTE

					
					
						1541

					
					
						498

					
					
						0.725

				
	
					
						0013006-000

					
					
						GREGORY SCOTT PFOFF ET UX

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						121.980

					
					
						121.980

					
					
						FAYETTE

					
					
						1541

					
					
						585

					
					
						0.725

				
	
					
						0013007-001

					
					
						BALCONES MINERALS CORPORATION

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						151.295

					
					
						149.048

					
					
						FAYETTE

					
					
						1541

					
					
						536

					
					
						0.725

				
	
					
						0013008-001

					
					
						KRYSTAL SEGER

					
					
						SCOUT ENERGY

					
					
						7/12/2010

					
					
						100.000

					
					
						50.000

					
					
						FAYETTE

					
					
						1541

					
					
						601

					
					
						0.72

				
	
					
						0013008-002

					
					
						VERDEAN JUREK SCHIHAB

					
					
						SCOUT ENERGY

					
					
						7/12/2010

					
					
						100.000

					
					
						50.000

					
					
						FAYETTE

					
					
						1541

					
					
						518

					
					
						0.72

				
	
					
						0013010-000

					
					
						RICHARD F STEARNS ET UX

					
					
						SCOUT ENERGY

					
					
						6/30/2010

					
					
						190.460

					
					
						190.460

					
					
						FAYETTE

					
					
						1541

					
					
						576

					
					
						0.725

				
	
					
						0013011-000

					
					
						NEZZEL "PAT" WERLEIN

					
					
						SCOUT ENERGY

					
					
						7/12/2010

					
					
						216.400

					
					
						216.400

					
					
						FAYETTE

					
					
						1541

					
					
						594

					
					
						0.72

				
	
					
						0013013-000

					
					
						HUGO WEHMEYER JR ET AL

					
					
						SCOUT ENERGY

					
					
						6/11/2010

					
					
						99.600

					
					
						99.600

					
					
						FAYETTE

					
					
						1541

					
					
						514

					
					
						0.75

				
	
					
						0013014-000

					
					
						ROBERT WAYNE PECHACEK, TRUSTEE

					
					
						SCOUT ENERGY

					
					
						6/25/2010

					
					
						110.250

					
					
						110.250

					
					
						FAYETTE

					
					
						1541

					
					
						598

					
					
						0.75

				
	
					
						0013015-001

					
					
						DEANNA JEAN HANNA WIELAND

					
					
						SCOUT ENERGY

					
					
						7/12/2010

					
					
						258.720

					
					
						86.240

					
					
						FAYETTE

					
					
						1543

					
					
						546

					
					
						0.72

				
	
					
						0013015-002

					
					
						KENT FRANK HANNA

					
					
						SCOUT ENERGY

					
					
						7/12/2010

					
					
						258.720

					
					
						86.240

					
					
						FAYETTE

					
					
						1543

					
					
						564

					
					
						0.72

				
	
					
						0013015-003

					
					
						WAYNE WILLIAM HANNA

					
					
						SCOUT ENERGY

					
					
						7/11/2010

					
					
						258.720

					
					
						86.240

					
					
						FAYETTE

					
					
						1543

					
					
						562

					
					
						0.72

				
	
					
						0013016-001

					
					
						JOY RAE LAY HUTTO

					
					
						SCOUT ENERGY

					
					
						7/6/2010

					
					
						99.000

					
					
						49.500

					
					
						FAYETTE

					
					
						1541

					
					
						522

					
					
						0.75

				
	
					
						0013016-002

					
					
						LOU ANN LAY MATLOCK

					
					
						SCOUT ENERGY

					
					
						7/6/2010

					
					
						99.000

					
					
						49.500

					
					
						FAYETTE

					
					
						1541

					
					
						527

					
					
						0.75

				
	
					
						0013017-000

					
					
						WINDEL-SULLIVAN PARTNERSHIP LTD

					
					
						SCOUT ENERGY

					
					
						5/17/2010

					
					
						79.125

					
					
						79.125

					
					
						FAYETTE

					
					
						1541

					
					
						516

					
					
						0.72

				
	
					
						0013018-001

					
					
						CARA ANNE COLLIER

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						159.580

					
					
						19.948

					
					
						FAYETTE

					
					
						1541

					
					
						590

					
					
						0.725

				
	
					
						0013018-002

					
					
						CHRISTOPHER DOLTON COLLIER

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						159.580

					
					
						19.948

					
					
						FAYETTE

					
					
						1541

					
					
						591

					
					
						0.725

				
	
					
						0013018-003

					
					
						FELIX BARGAS ET UX

					
					
						SCOUT ENERGY

					
					
						6/11/2010

					
					
						159.580

					
					
						79.790

					
					
						FAYETTE

					
					
						1541

					
					
						588

					
					
						0.725

				
	
					
						0013018-004

					
					
						GABRIEL CORNELL COLLIER

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						159.580

					
					
						19.948

					
					
						FAYETTE

					
					
						1541

					
					
						592

					
					
						0.725

				
	
					
						0013018-005

					
					
						KEILAH JOAN COLLIER SWEENEY

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						159.580

					
					
						19.948

					
					
						FAYETTE

					
					
						1541

					
					
						587

					
					
						0.725

				
	
					
						0013019-000

					
					
						BENJAMIN CERNY

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						96.510

					
					
						96.510

					
					
						FAYETTE

					
					
						1541

					
					
						499

					
					
						0.75

				
	
					
						0013020-001

					
					
						BETTY JOYCE DESHA

					
					
						SCOUT ENERGY

					
					
						6/11/2010

					
					
						62.000

					
					
						20.667

					
					
						FAYETTE

					
					
						1541

					
					
						584

					
					
						0.75

				
	
					
						0013020-002

					
					
						LESLIE RICHARDSON

					
					
						SCOUT ENERGY

					
					
						6/11/2010

					
					
						62.000

					
					
						20.667

					
					
						FAYETTE

					
					
						1541

					
					
						558

					
					
						0.75

				
	
					
						0013020-003

					
					
						QUEEN ESTHER DESHA BROWN

					
					
						SCOUT ENERGY

					
					
						6/11/2010

					
					
						62.000

					
					
						20.667

					
					
						FAYETTE

					
					
						1541

					
					
						583

					
					
						0.75

				
	
					
						0013022-001

					
					
						RICHARD E. BRUNNER

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						164.450

					
					
						64.925

					
					
						FAYETTE

					
					
						1541

					
					
						482

					
					
						0.72

				
	
					
						0013022-002

					
					
						DENNIS F BRUNNER

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						164.450

					
					
						64.925

					
					
						FAYETTE

					
					
						1541

					
					
						484

					
					
						0.72

				
	
					
						0013022-003

					
					
						JAMES DAVID POWELL

					
					
						SCOUT ENERGY

					
					
						11/8/2010

					
					
						69.200

					
					
						4.325

					
					
						FAYETTE

					
					
						1551

					
					
						835

					
					
						0.725

				
	
					
						0013022-004

					
					
						WAYNE AHR

					
					
						SCOUT ENERGY

					
					
						11/11/2010

					
					
						69.200

					
					
						4.325

					
					
						FAYETTE

					
					
						1551

					
					
						805

					
					
						0.725

				
	
					
						0013023-000

					
					
						JOHN H MARTISEK ET UX

					
					
						SCOUT ENERGY

					
					
						8/1/2010

					
					
						138.186

					
					
						138.186

					
					
						FAYETTE

					
					
						1541

					
					
						561

					
					
						0.72

				
	
					
						0013024-001

					
					
						ESTATE OF EDWIN J. CHERNOSKY

					
					
						SCOUT ENERGY

					
					
						6/1/2010

					
					
						105.000

					
					
						52.500

					
					
						FAYETTE

					
					
						1551

					
					
						811

					
					
						0.725

				
	
					
						0013024-002

					
					
						THOMAS GRAY FORDTRAN, II TRUST

					
					
						SCOUT ENERGY

					
					
						6/1/2010

					
					
						105.000

					
					
						52.500

					
					
						FAYETTE

					
					
						1551

					
					
						815

					
					
						0.725

				
	
					
						0013025-000

					
					
						LINDA LOU BARTA

					
					
						SCOUT ENERGY

					
					
						8/11/2010

					
					
						85.054

					
					
						85.054 

					
					
						FAYETTE GONZALES

					
					
						1541

					
						1036

					
					
						525

					
						927

					
					
						0.72

				
	
					
						0013026-001

					
					
						GENE D SYRINEK ET UX

					
					
						SCOUT ENERGY

					
					
						7/25/2010

					
					
						46.880

					
					
						23.440

					
					
						FAYETTE

					
					
						1551

					
					
						857

					
					
						0.72

				
	
					
						0013026-002

					
					
						JAMES A SMITH

					
					
						SCOUT ENERGY

					
					
						7/25/2010

					
					
						46.880

					
					
						23.440

					
					
						FAYETTE

					
					
						1551

					
					
						803

					
					
						0.72

				
	
					
						0013027-001

					
					
						ERNEST F MICA ESTATE

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						105.272

					
					
						52.636

					
					
						FAYETTE

					
					
						1541

					
					
						605

					
					
						0.72

				
	
					
						0013027-002

					
					
						RONALD W WOTIPKA

					
					
						SCOUT ENERGY

					
					
						7/21/2010

					
					
						105.272

					
					
						23.399

					
					
						FAYETTE

					
					
						1541

					
					
						508

					
					
						0.72

				
	
					
						0013027-003

					
					
						RICHARD YOUNG

					
					
						SCOUT ENERGY

					
					
						7/21/2010

					
					
						105.272

					
					
						29.237

					
					
						FAYETTE

					
					
						1541

					
					
						509

					
					
						0.72

				
	
					
						0013028-000

					
					
						EVELYN BECK SYRINEK ET VIR

					
					
						SCOUT ENERGY

					
					
						7/7/2010

					
					
						67.000

					
					
						67.000

					
					
						FAYETTE

					
					
						1541

					
					
						596

					
					
						0.72

				
	
					
						0013030-000

					
					
						BARBARA KLOZIK

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						28.500

					
					
						28.500

					
					
						FAYETTE

					
					
						1541

					
					
						519

					
					
						0.72

				
	
					
						0013032-001

					
					
						BIRDIE MATTHEWS REEDY

					
					
						SCOUT ENERGY

					
					
						8/2/2010

					
					
						113.070

					
					
						56.535

					
					
						FAYETTE

					
					
						1541

					
					
						467

					
					
						0.72

				
	
					
						0013032-002

					
					
						PHYLLIS DOBSON MCGUYER

					
					
						SCOUT ENERGY

					
					
						8/2/2010

					
					
						113.070

					
					
						56.535

					
					
						FAYETTE

					
					
						1541

					
					
						500

					
					
						0.72

				
	
					
						0013033-001

					
					
						STEPHEN R. HUMPHREY ET UX

					
					
						SCOUT ENERGY

					
					
						7/21/2010

					
					
						34.500

					
					
						8.625

					
					
						FAYETTE

					
					
						1541

					
					
						600

					
					
						0.75

				
	
					
						0013033-002

					
					
						PITTS FAMILY PARTNERSHIP, LTD

					
					
						ZAZA ENERGY

					
					
						11/18/2011

					
					
						34.500

					
					
						25.875

					
					
						FAYETTE

					
					
						1596

					
					
						517

					
					
						0.725

				
	
					
						0013034-001

					
					
						WILLIAM FRANKLIN HUFF

					
					
						SCOUT ENERGY

					
					
						7/8/2010

					
					
						104.000

					
					
						52.000

					
					
						FAYETTE

					
					
						1541

					
					
						473

					
					
						0.75

				
	
					
						0013034-002

					
					
						AMELIA HUFF BECK

					
					
						SCOUT ENERGY

					
					
						7/8/2010

					
					
						165.320

					
					
						113.320

					
					
						FAYETTE

					
					
						1541

					
					
						474

					
					
						0.725

				
	
					
						0013035-000

					
					
						JOE FRED CRABB, ET UX

					
					
						SCOUT ENERGY

					
					
						8/26/2010

					
					
						631.862

					
					
						631.862

					
					
						GONZALES

					
					
						1034

					
					
						412

					
					
						0.72

				
	
					
						0013036-001

					
					
						BARBARA ANN ENAX HART

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						61.500

					
					
						15.375

					
					
						GONZALES

					
					
						1034

					
					
						387

					
					
						0.725

				
	
					
						0013036-002

					
					
						MICHAEL WAYNE ENAX

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						61.500

					
					
						15.375

					
					
						GONZALES

					
					
						1034

					
					
						391

					
					
						0.725

				
	
					
						0013036-003

					
					
						PEGGY ENAX

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						61.500

					
					
						15.375

					
					
						GONZALES

					
					
						1034

					
					
						389

					
					
						0.725

				
	
					
						0013036-004

					
					
						SANDRA JEAN ENAX MACHA

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						61.500

					
					
						15.375

					
					
						GONZALES

					
					
						1034

					
					
						393

					
					
						0.725

				
	
					
						0013038-001

					
					
						BRYAN B. BERGER ET AL

					
					
						SCOUT ENERGY

					
					
						8/26/2010

					
					
						457.843

					
					
						434.797

					
					
						FAYETTE
GONZALES

					
					
						1541

					
					
						551

					
					
						0.72

				
	
					
						0013038-002

					
					
						MICHAEL GENE SCHULZE ESTATE TRUST

					
					
						SCOUT ENERGY

					
					
						10/1/2010

					
					
						46.093

					
					
						23.047

					
					
						FAYETTE

					
					
						1543

					
					
						561

					
					
						0.725

				
	
					
						0013039-001

					
					
						LINDA MATHEWS KAUFHOLD

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						10.033

					
					
						3.762

					
					
						FAYETTE

					
					
						1541

					
					
						478

					
					
						0.75

				
	
					
						0013039-002

					
					
						RODNEY P KAUFHOLD

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						20.612

					
					
						14.341

					
					
						FAYETTE

					
					
						1541

					
					
						476

					
					
						0.75

				
	
					
						0013039-003

					
					
						GREGORY K MOHR ET UX

					
					
						ZAZA ENERGY

					
					
						11/1/2011

					
					
						10.033

					
					
						2.508

					
					
						FAYETTE

					
					
						1596

					
					
						515

					
					
						0.75

				
	
					
						0013041-001

					
					
						BEVERLY ANN BUCEK

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						121.980

					
					
						30.495

					
					
						FAYETTE

					
					
						1541

					
					
						549

					
					
						0.725

				
	
					
						0013041-002

					
					
						THE ROY E BUCEK TRUST ET AL

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						121.980

					
					
						60.990

					
					
						FAYETTE

					
					
						1541

					
					
						547

					
					
						0.725

				
	
					
						0013041-003

					
					
						BARBARA MOELLENBERNDT

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						121.980

					
					
						30.495

					
					
						FAYETTE

					
					
						1541

					
					
						479

					
					
						0.725

				
	
					
						0013042-000

					
					
						LULA MARIE DARLING

					
					
						SCOUT ENERGY

					
					
						8/19/2010

					
					
						323.400

					
					
						323.400

					
					
						FAYETTE

					
					
						1541

					
					
						559

					
					
						0.75

				
	
					
						0013043-001

					
					
						H. NOVAK, L.P., BY HENRY J. NOVAK

					
					
						SCOUT ENERGY

					
					
						8/25/2010

					
					
						256.383

					
					
						245.951

					
					
						FAYETTE

					
					
						1541

					
					
						480

					
					
						0.72

				
	
					
						0013044-000

					
					
						HENRY J NOVAK ET AL

					
					
						SCOUT ENERGY

					
					
						8/25/2010

					
					
						54.380

					
					
						54.380

					
					
						FAYETTE

					
					
						1541

					
					
						469

					
					
						0.72

				
	
					
						0013045-000

					
					
						KRISTI I ANGUIANO ET VIR

					
					
						SCOUT ENERGY

					
					
						8/11/2010

					
					
						17.000

					
					
						17.000

					
					
						FAYETTE

					
					
						1541

					
					
						506

					
					
						0.725

				
	
					
						0013046-000

					
					
						JOYCE D VAUGHN ET AL

					
					
						SCOUT ENERGY

					
					
						8/11/2010

					
					
						11.202

					
					
						11.202

					
					
						FAYETTE

					
					
						1541

					
					
						504

					
					
						0.725

				
	
					
						0013047-001

					
					
						JAMES THOMAS MILLER

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						13.000

					
					
						6.500

					
					
						FAYETTE

					
					
						1541

					
					
						580

					
					
						0.72

				
	
					
						0013047-002

					
					
						KENNETH D SYRINEK

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						13.000

					
					
						6.500

					
					
						FAYETTE

					
					
						1541

					
					
						512

					
					
						0.72

				
	
					
						0013048-000

					
					
						ALLEN R SYRINEK

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						13.000

					
					
						13.000

					
					
						FAYETTE

					
					
						1541

					
					
						572

					
					
						0.72

				
	
					
						0013049-000

					
					
						ROBERT L. SYRINEK

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						13.000

					
					
						13.000

					
					
						FAYETTE

					
					
						1541

					
					
						510

					
					
						0.72

				
	
					
						0013050-000

					
					
						CHRISTOPHER J MILLER

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						13.000

					
					
						13.000

					
					
						FAYETTE

					
					
						1541

					
					
						564

					
					
						0.72

				
	
					
						0013051-000

					
					
						EVELYN CAROL S MILLER

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						13.100

					
					
						13.100

					
					
						FAYETTE

					
					
						1541

					
					
						566

					
					
						0.72

				
	
					
						0013052-000

					
					
						RICHARD MILLER ET UX

					
					
						SCOUT ENERGY

					
					
						7/26/2010

					
					
						16.390

					
					
						16.390

					
					
						FAYETTE

					
					
						1541

					
					
						568

					
					
						0.72

				
	
					
						0013053-001

					
					
						DEANNA JEAN HANNA WIELAND

					
					
						SCOUT ENERGY

					
					
						7/25/2010

					
					
						73.020

					
					
						12.170

					
					
						FAYETTE

					
					
						1551

					
					
						855

					
					
						0.72

				
	
					
						0013053-002

					
					
						KENT FRANK HANNA

					
					
						SCOUT ENERGY

					
					
						7/25/2010

					
					
						73.020

					
					
						12.170

					
					
						FAYETTE

					
					
						1551

					
					
						847

					
					
						0.72

				
	
					
						0013053-003

					
					
						WAYNE WILLIAM HANNA

					
					
						SCOUT ENERGY

					
					
						7/25/2010

					
					
						73.020

					
					
						12.170

					
					
						FAYETTE

					
					
						1551

					
					
						849

					
					
						0.72

				
	
					
						0013053-004

					
					
						DORIS B FINKE

					
					
						SCOUT ENERGY

					
					
						11/22/2010

					
					
						17.780

					
					
						8.890

					
					
						FAYETTE

					
					
						1553

					
					
						234

					
					
						0.75

				
	
					
						0013053-005

					
					
						MARIGLEN WILSON BURKMAN

					
					
						SCOUT ENERGY

					
					
						3/11/2011

					
					
						18.000

					
					
						9.000

					
					
						FAYETTE

					
					
						1575

					
					
						168

					
					
						0.725

				
	
					
						0013053-006

					
					
						PATSY JANAK SALAZAR

					
					
						SCOUT ENERGY

					
					
						3/8/2011

					
					
						18.300

					
					
						9.150

					
					
						FAYETTE

					
					
						1560

					
					
						566

					
					
						0.725

				
	
					
						0013053-007

					
					
						LINDA DIANNE FAVRO

					
					
						ZAZA ENERGY LLC

					
					
						6/1/2012

					
					
						13.000

					
					
						1.625

					
					
						FAYETTE

					
					
						1615

					
					
						521

					
					
						0.745

				
	
					
						0013053-008

					
					
						TERRY L FAVRO

					
					
						ZAZA ENERGY LLC

					
					
						5/23/2012

					
					
						13.000

					
					
						1.625

					
					
						FAYETTE

					
					
						1615

					
					
						523

					
					
						0.745

				
	
					
						0013054-000

					
					
						EDWARD BRANECKY ET UX

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						6.749

					
					
						6.749

					
					
						FAYETTE

					
					
						1541

					
					
						545

					
					
						0.725

				
	
					
						0013055-001

					
					
						WILLIAM GLENN PARKER ET UX

					
					
						SCOUT ENERGY

					
					
						8/25/2010

					
					
						20.290

					
					
						10.145

					
					
						FAYETTE

					
					
						1541

					
					
						502

					
					
						0.72

				
	
					
						0013055-002

					
					
						MARCELINO A. ALVAREZ

					
					
						SCOUT ENERGY

					
					
						2/21/2011

					
					
						20.290

					
					
						10.145

					
					
						FAYETTE

					
					
						1558

					
					
						558

					
					
						0.75

				
	
					
						0013056-001

					
					
						RICHARD F STEARNS ET AL

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						12.000

					
					
						6.000

					
					
						FAYETTE

					
					
						1541

					
					
						578

					
					
						0.725

				
	
					
						0013056-002

					
					
						SARA B POLLARD

					
					
						SCOUT ENERGY

					
					
						10/18/2010

					
					
						12.000

					
					
						6.000

					
					
						FAYETTE

					
					
						1544

					
					
						810

					
					
						0.725

				
	
					
						0013057-000

					
					
						RONALD K MCCLUNG ET AL

					
					
						SCOUT ENERGY

					
					
						9/2/2010

					
					
						40.390

					
					
						40.390

					
					
						FAYETTE

					
					
						1541

					
					
						471

					
					
						0.72

				
	
					
						0013058-001

					
					
						BARBARA C. CHUMNEY

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						149.500

					
					
						74.750

					
					
						FAYETTE

					
					
						1541

					
					
						556

					
					
						0.72

				
	
					
						0013058-002

					
					
						MILDRED C. ELAM

					
					
						SCOUT ENERGY

					
					
						8/9/2010

					
					
						149.500

					
					
						74.750

					
					
						FAYETTE

					
					
						1541

					
					
						486

					
					
						0.72

				
	
					
						0013059-001

					
					
						AMELIA HUFF BECK

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						162.000

					
					
						40.500

					
					
						FAYETTE

					
					
						1541

					
					
						535

					
					
						0.725

				
	
					
						0013059-002

					
					
						WILLIAM FRANKLIN HUFF

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						162.000

					
					
						121.500

					
					
						FAYETTE

					
					
						1541

					
					
						505

					
					
						0.75

				
	
					
						0013061-001

					
					
						MARION S NORMAN

					
					
						SCOUT ENERGY

					
					
						9/2/2010

					
					
						65.580

					
					
						2.733

					
					
						FAYETTE

					
					
						1543

					
					
						553

					
					
						0.725

				
	
					
						0013061-002

					
					
						PRISCILLA S. DAVIS

					
					
						SCOUT ENERGY

					
					
						9/2/2010

					
					
						65.580

					
					
						6.831

					
					
						FAYETTE

					
					
						1544

					
					
						804

					
					
						0.725

				
	
					
						0013061-003

					
					
						KENNETH P SOLOMONS III

					
					
						SCOUT ENERGY

					
					
						3/14/2011

					
					
						65.580

					
					
						6.831

					
					
						FAYETTE

					
					
						1575

					
					
						157

					
					
						0.725

				
	
					
						0013062-001

					
					
						ROBERT W WEBSTER JR ET UX

					
					
						SCOUT ENERGY

					
					
						8/25/2010

					
					
						56.246

					
					
						28.123

					
					
						FAYETTE

					
					
						1541

					
					
						543

					
					
						0.725

				
	
					
						0013063-001

					
					
						EDWIN J BARTA

					
					
						SCOUT ENERGY

					
					
						9/30/2010

					
					
						68.320

					
					
						24.358

					
					
						FAYETTE

					
					
						1543

					
					
						580

					
					
						0.725

				
	
					
						0013063-002

					
					
						FLORETTA BARTA RILEY

					
					
						SCOUT ENERGY

					
					
						9/30/2010

					
					
						68.320

					
					
						24.358

					
					
						FAYETTE

					
					
						1543

					
					
						568

					
					
						0.725

				
	
					
						0013064-001

					
					
						DAVID HILL ET UX

					
					
						SCOUT ENERGY

					
					
						9/16/2010

					
					
						12.632

					
					
						6.316

					
					
						FAYETTE

					
					
						1543

					
					
						566

					
					
						0.725

				
	
					
						0013065-000

					
					
						CHARLES E PHILLIPUS ET UX

					
					
						SCOUT ENERGY

					
					
						8/16/2010

					
					
						11.328

					
					
						11.328

					
					
						FAYETTE

					
					
						1541

					
					
						541

					
					
						0.72

				
	
					
						0013066-000

					
					
						ALLENE KORICANEK PHILLIPUS ET VIR

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						11.328

					
					
						11.328

					
					
						FAYETTE

					
					
						1543

					
					
						555

					
					
						0.72

				
	
					
						0013067-000

					
					
						MILLIE KORICANEK OWENS

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						5.664

					
					
						5.664

					
					
						FAYETTE

					
					
						1541

					
					
						540

					
					
						0.72

				
	
					
						0013068-000

					
					
						STEVEN KORICANEK

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						5.664

					
					
						5.664

					
					
						FAYETTE

					
					
						1543

					
					
						582

					
					
						0.72

				
	
					
						0013069-000

					
					
						CAROL ROSS HUNTER

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						5.664

					
					
						5.664

					
					
						FAYETTE

					
					
						1541

					
					
						615

					
					
						0.72

				
	
					
						0013070-000

					
					
						WALTER KORICANEK

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						5.664

					
					
						5.664

					
					
						FAYETTE

					
					
						1543

					
					
						577

					
					
						0.72

				
	
					
						0013071-000

					
					
						FRED E. KORICANEK FAMILY TRUST

					
					
						SCOUT ENERGY

					
					
						8/30/2010

					
					
						11.328

					
					
						11.328

					
					
						FAYETTE

					
					
						1541

					
					
						616

					
					
						0.72

				
	
					
						0013072-000

					
					
						ROBIN LEA KORICANEK

					
					
						SCOUT ENERGY

					
					
						8/23/2010

					
					
						5.664

					
					
						5.664

					
					
						FAYETTE

					
					
						1541

					
					
						618

					
					
						0.72

				
	
					
						0013073-000

					
					
						DOUGLAS G MACH ET UX

					
					
						SCOUT ENERGY

					
					
						7/9/2010

					
					
						128.790

					
					
						128.790

					
					
						FAYETTE

					
					
						1541

					
					
						520

					
					
						0.72

				
	
					
						0013074-001

					
					
						CYNTHIA MICA HURST ET VIR

					
					
						SCOUT ENERGY

					
					
						8/16/2010

					
					
						28.549

					
					
						3.569

					
					
						FAYETTE

					
					
						1543

					
					
						573

					
					
						0.72

				
	
					
						0013074-002

					
					
						HENRIETTA MICA REVOCABLE TRUST

					
					
						SCOUT ENERGY

					
					
						8/16/2010

					
					
						28.549

					
					
						14.275

					
					
						FAYETTE

					
					
						1543

					
					
						550

					
					
						0.72

				
	
					
						0013074-003

					
					
						DAVID L LEHMAN ET UX

					
					
						SCOUT ENERGY

					
					
						8/16/2010

					
					
						28.549

					
					
						10.706

					
					
						FAYETTE

					
					
						1544

					
					
						808

					
					
						0.72

				
	
					
						0013075-000

					
					
						EMIL MICHAL JR ET UX

					
					
						SCOUT ENERGY

					
					
						7/21/2010

					
					
						17.195

					
					
						17.195

					
					
						FAYETTE

					
					
						1541

					
					
						603

					
					
						0.72

				
	
					
						0013076-000

					
					
						SAMUEL DALE MIGL ET UX

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						6.744

					
					
						6.744

					
					
						FAYETTE

					
					
						1541

					
					
						538

					
					
						0.725

				
	
					
						0013077-000

					
					
						MELISSA GARDEA

					
					
						SCOUT ENERGY

					
					
						9/7/2010

					
					
						7.000

					
					
						7.000

					
					
						FAYETTE

					
					
						1555

					
					
						561

					
					
						0.75

				
	
					
						0013078-000

					
					
						SILVESTER ROSAS

					
					
						SCOUT ENERGY

					
					
						9/7/2010

					
					
						7.710

					
					
						7.710

					
					
						FAYETTE

					
					
						1543

					
					
						559

					
					
						0.75

				
	
					
						0013079-000

					
					
						PAULA R SALAZAR

					
					
						SCOUT ENERGY

					
					
						9/18/2010

					
					
						7.000

					
					
						7.000

					
					
						FAYETTE

					
					
						1591

					
					
						231

					
					
						0.75

				
	
					
						0013080-000

					
					
						EUSEBIO ROSAS

					
					
						SCOUT ENERGY

					
					
						9/7/2010

					
					
						7.000

					
					
						7.000

					
					
						FAYETTE

					
					
						1543

					
					
						557

					
					
						0.75

				
	
					
						0013081-000

					
					
						JAMES E FAUST ET UX

					
					
						SCOUT ENERGY

					
					
						10/6/2010

					
					
						19.767

					
					
						19.767

					
					
						FAYETTE

					
					
						1541

					
					
						611

					
					
						0.725

				
	
					
						0013083-001

					
					
						ARVIL HART

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						42.110

					
					
						21.055

					
					
						FAYETTE

					
					
						1543

					
					
						544

					
					
						0.725

				
	
					
						0013083-002

					
					
						CLAY COOPER

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						42.110

					
					
						4.211

					
					
						FAYETTE

					
					
						1541

					
					
						607

					
					
						0.725

				
	
					
						0013083-003

					
					
						CURTIS COOPER

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						42.110

					
					
						4.211

					
					
						FAYETTE

					
					
						1541

					
					
						609

					
					
						0.725

				
	
					
						0013083-004

					
					
						DONNA URBANOVSKY

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						42.110

					
					
						4.211

					
					
						FAYETTE

					
					
						1543

					
					
						548

					
					
						0.725

				
	
					
						0013083-005

					
					
						HOPE MILLS

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						42.110

					
					
						4.211

					
					
						FAYETTE

					
					
						1543

					
					
						551

					
					
						0.725

				
	
					
						0013083-006

					
					
						KATHY HARRIS

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						42.110

					
					
						4.211

					
					
						FAYETTE

					
					
						1543

					
					
						575

					
					
						0.725

				
	
					
						0013084-001

					
					
						PATRICIA HARRIS BAYNE

					
					
						SCOUT ENERGY

					
					
						8/3/2010

					
					
						327.968

					
					
						109.869

					
					
						FAYETTE
GONZALES

					
					
						1548
1034

					
					
						691
397

					
					
						0.725

				
	
					
						0013084-002

					
					
						JAMES SPENCER HARRIS TRUST ET AL

					
					
						SCOUT ENERGY

					
					
						8/3/2010

					
					
						327.968

					
					
						108.229

					
					
						FAYETTE
GONZALES

					
					
						1548
1034

					
					
						686
401

					
					
						0.725

				
	
					
						0013084-003

					
					
						ELIZABETH H STEPHENS

					
					
						SCOUT ENERGY

					
					
						8/3/2010

					
					
						327.968

					
					
						109.869

					
					
						GONZALES
FAYETTE

					
					
						1034
1543

					
					
						399
542

					
					
						0.725

				
	
					
						0013085-001

					
					
						JAMES E FAUST ET UX

					
					
						SCOUT ENERGY

					
					
						10/12/2010

					
					
						66.274

					
					
						33.137

					
					
						FAYETTE
GONZALES

					
					
						1541
1041

					
					
						613
833

					
					
						0.725

				
	
					
						0013085-002

					
					
						JIMMY F WALKER

					
					
						SCOUT ENERGY

					
					
						10/14/2010

					
					
						66.274

					
					
						33.137

					
					
						FAYETTE
GONZALES

					
					
						1557

					
					
						85

					
					
						0.725

				
	
					
						0013086-000

					
					
						SCOTT ALLEN BROWN

					
					
						SCOUT ENERGY

					
					
						9/15/2010

					
					
						38.479

					
					
						38.479

					
					
						GONZALES

					
					
						1034

					
					
						408

					
					
						0.725

				
	
					
						0013087-000

					
					
						LINDA KATHLEEN RODRIGUEZ

					
					
						SCOUT ENERGY

					
					
						9/15/2010

					
					
						3.290

					
					
						3.290

					
					
						GONZALES

					
					
						1034

					
					
						410

					
					
						0.725

				
	
					
						0013088-000

					
					
						WALTER S BAZARSKY ET UX

					
					
						SCOUT ENERGY

					
					
						9/17/2010

					
					
						71.287

					
					
						71.287

					
					
						GONZALES

					
					
						1034

					
					
						404

					
					
						0.725

				
	
					
						0013089-001

					
					
						L.M. PREUSS III ET UX

					
					
						SCOUT ENERGY

					
					
						9/1/2010

					
					
						39.960

					
					
						35.964

					
					
						GONZALES

					
					
						1041

					
					
						440

					
					
						0.725

				
	
					
						0013089-002

					
					
						JANET S REED

					
					
						SCOUT ENERGY

					
					
						2/1/2011

					
					
						18.287

					
					
						1.829

					
					
						GONZALES

					
					
						1045

					
					
						88

					
					
						0.75

				
	
					
						0013089-003

					
					
						WALTER S BAZARSKY ET UX

					
					
						SCOUT ENERGY

					
					
						10/4/2010

					
					
						21.673

					
					
						2.167

					
					
						GONZALES

					
					
						1034

					
					
						406

					
					
						0.725

				
	
					
						0013095-001

					
					
						ERVIN O STEINHAUSER

					
					
						SCOUT ENERGY

					
					
						9/23/2010

					
					
						100.000

					
					
						29.630

					
					
						FAYETTE

					
					
						1546

					
					
						628

					
					
						0.725

				
	
					
						0013095-002

					
					
						KENNETH WAYNE STEINHAUSER

					
					
						SCOUT ENERGY

					
					
						9/23/2010

					
					
						100.000

					
					
						29.630

					
					
						FAYETTE

					
					
						1546

					
					
						627

					
					
						0.725

				
	
					
						0013095-003

					
					
						LILLIAN STEINHAUSER RAGSDALE

					
					
						SCOUT ENERGY

					
					
						9/23/2010

					
					
						100.000

					
					
						29.630

					
					
						FAYETTE

					
					
						1546

					
					
						629

					
					
						0.725

				
	
					
						0013095-004

					
					
						HERBERT H STEINHAUSER

					
					
						SCOUT ENERGY

					
					
						9/23/2010

					
					
						100.000

					
					
						11.111

					
					
						FAYETTE

					
					
						1551

					
					
						802

					
					
						0.725

				
	
					
						0013096-001

					
					
						JOAN S MOHR

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						36.390

					
					
						18.195

					
					
						FAYETTE

					
					
						1544

					
					
						812

					
					
						0.725

				
	
					
						0013096-002

					
					
						LEONARD G SCHULZE

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						36.390

					
					
						18.195

					
					
						FAYETTE

					
					
						1544

					
					
						811

					
					
						0.725

				
	
					
						0013097-001

					
					
						DALE TOEPPERWEIN ET UX

					
					
						SCOUT ENERGY

					
					
						9/22/2010

					
					
						2.000

					
					
						1.000

					
					
						FAYETTE

					
					
						1544

					
					
						806

					
					
						0.725

				
	
					
						0013098-000

					
					
						WESLEY W BURKLUND ET UX

					
					
						SCOUT ENERGY

					
					
						10/18/2010

					
					
						101.560

					
					
						101.560

					
					
						FAYETTE

					
					
						1543

					
					
						578

					
					
						0.725

				
	
					
						0013100-000

					
					
						JEROME RAINOSEK ET UX

					
					
						SCOUT ENERGY

					
					
						11/8/2010

					
					
						45.000

					
					
						45.000

					
					
						FAYETTE

					
					
						1551

					
					
						833

					
					
						0.725

				
	
					
						0013101-000

					
					
						THOMAS C DIBALA ET UX

					
					
						SCOUT ENERGY

					
					
						10/25/2010

					
					
						14.380

					
					
						14.380

					
					
						FAYETTE

					
					
						1551

					
					
						807

					
					
						0.725

				
	
					
						0013102-000

					
					
						MIGUEL ESTRADA JR. ET UX

					
					
						SCOUT ENERGY

					
					
						10/20/2010

					
					
						5.998

					
					
						5.998

					
					
						FAYETTE

					
					
						1551

					
					
						809

					
					
						0.725

				
	
					
						0013103-000

					
					
						DOUGLAS G MACH ET UX

					
					
						SCOUT ENERGY

					
					
						10/25/2010

					
					
						10.000

					
					
						10.000

					
					
						FAYETTE

					
					
						1546

					
					
						630

					
					
						0.72

				
	
					
						0013104-001

					
					
						EULINE JONES PRICE

					
					
						SCOUT ENERGY

					
					
						10/11/2010

					
					
						35.750

					
					
						20.109

					
					
						FAYETTE

					
					
						1592

					
					
						823

					
					
						0.75

				
	
					
						0013104-002

					
					
						LLOYD DOUGLAS JONES

					
					
						ZAZA ENERGY LLC

					
					
						1/24/2012

					
					
						35.750

					
					
						1.117

					
					
						FAYETTE

					
					
						1600

					
					
						863

					
					
						0.725

				
	
					
						0013104-003

					
					
						VANESSA JONES FULLER

					
					
						ZAZA ENERGY LLC

					
					
						1/24/2012

					
					
						35.750

					
					
						1.117

					
					
						FAYETTE

					
					
						1600

					
					
						861

					
					
						0.725

				
	
					
						0013104-004

					
					
						REGINA ANDREWS

					
					
						ZAZA ENERGY LLC

					
					
						3/28/2012

					
					
						35.750

					
					
						1.117

					
					
						FAYETTE

					
					
						1608

					
					
						85

					
					
						0.725

				
	
					
						0013104-005

					
					
						VICTORIA BELL

					
					
						ZAZA ENERGY LLC

					
					
						3/28/2012

					
					
						35.750

					
					
						1.117

					
					
						FAYETTE

					
					
						1608

					
					
						87

					
					
						0.725

				
	
					
						0013104-006

					
					
						JOSEPH SIMMS

					
					
						ZAZA ENERGY LLC

					
					
						4/23/2012

					
					
						35.750

					
					
						2.234

					
					
						FAYETTE

					
					
						1608

					
					
						105

					
					
						0.725

				
	
					
						0013105-001

					
					
						DAVID LEE ZOUZALIK

					
					
						SCOUT ENERGY

					
					
						11/2/2010

					
					
						60.400

					
					
						2.517

					
					
						FAYETTE

					
					
						1551

					
					
						819

					
					
						0.725

				
	
					
						0013105-002

					
					
						CAROL ANN VRANA

					
					
						SCOUT ENERGY

					
					
						11/1/2010

					
					
						60.400

					
					
						2.517

					
					
						FAYETTE

					
					
						1551

					
					
						841

					
					
						0.725

				
	
					
						0013105-003

					
					
						ROBERT JAMES ZOUZALIK

					
					
						SCOUT ENERGY

					
					
						11/2/2010

					
					
						60.400

					
					
						2.517

					
					
						FAYETTE

					
					
						1551

					
					
						839

					
					
						0.725

				
	
					
						0013105-004

					
					
						LAWRENCE ZOUZALIK

					
					
						SCOUT ENERGY

					
					
						11/2/2010

					
					
						60.400

					
					
						10.067

					
					
						FAYETTE

					
					
						1551

					
					
						829

					
					
						0.725

				
	
					
						0013105-005

					
					
						GENE ZOUZALIK

					
					
						SCOUT ENERGY

					
					
						11/1/2010

					
					
						60.400

					
					
						10.067

					
					
						FAYETTE

					
					
						1551

					
					
						843

					
					
						0.725

				
	
					
						0013105-006

					
					
						GARY LEON ZOUZALIK

					
					
						SCOUT ENERGY

					
					
						11/1/2010

					
					
						60.400

					
					
						2.517

					
					
						FAYETTE

					
					
						1551

					
					
						823

					
					
						0.725

				
	
					
						0013105-007

					
					
						GREG VRANA ET UX

					
					
						SCOUT ENERGY

					
					
						11/1/2010

					
					
						1.453

					
					
						0.727

					
					
						FAYETTE

					
					
						1555

					
					
						559

					
					
						0.725

				
	
					
						0013105-008

					
					
						CHARLES VRANA, JR, ET UX

					
					
						SCOUT ENERGY

					
					
						11/1/2010

					
					
						58.947

					
					
						29.474

					
					
						FAYETTE

					
					
						1551

					
					
						831

					
					
						0.725

				
	
					
						0013106-000

					
					
						ADAH FRANCES KENNON

					
					
						SCOUT ENERGY

					
					
						9/20/2010

					
					
						9.433

					
					
						9.433

					
					
						FAYETTE

					
					
						1558

					
					
						725

					
					
						0.725

				
	
					
						0013108-000

					
					
						KENNETH J. PONDER, ET UX

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						17.470

					
					
						17.470

					
					
						FAYETTE

					
					
						1541

					
					
						570

					
					
						0.725

				
	
					
						0013111-000

					
					
						CHARLES STEVEN COCHRAN

					
					
						SCOUT ENERGY

					
					
						10/12/2010

					
					
						18.260

					
					
						18.260

					
					
						GONZALES

					
					
						1040

					
					
						288

					
					
						0.725

				
	
					
						0013112-000

					
					
						BARBARA J. GIBSON LIFE TENANT ET AL

					
					
						SCOUT ENERGY

					
					
						9/3/2010

					
					
						60.004

					
					
						60.004

					
					
						GONZALES

					
					
						1040

					
					
						290

					
					
						0.725

				
	
					
						0013127-001

					
					
						LEONARD B COX ET UX

					
					
						SCOUT ENERGY

					
					
						12/9/2010

					
					
						15.554

					
					
						3.889

					
					
						FAYETTE

					
					
						1551

					
					
						821

					
					
						0.725

				
	
					
						0013128-000

					
					
						CARRIE J WINGO

					
					
						SCOUT ENERGY

					
					
						11/9/2010

					
					
						27.390

					
					
						27.390

					
					
						FAYETTE

					
					
						1551

					
					
						804

					
					
						0.725

				
	
					
						0013129-001

					
					
						DENNIS CARDENAS

					
					
						SCOUT ENERGY

					
					
						11/8/2010

					
					
						20.000

					
					
						17.500

					
					
						FAYETTE

					
					
						1551

					
					
						845

					
					
						0.725

				
	
					
						0013129-002

					
					
						BILLIE GRACE HERRING

					
					
						SCOUT ENERGY

					
					
						11/9/2010

					
					
						5.000

					
					
						2.500

					
					
						FAYETTE

					
					
						1551

					
					
						837

					
					
						0.725

				
	
					
						0013130-000

					
					
						RONALD CRAIG OWENS ET UX

					
					
						SCOUT ENERGY

					
					
						12/10/2010

					
					
						0.777

					
					
						0.777

					
					
						FAYETTE

					
					
						1551

					
					
						825

					
					
						0.725

				
	
					
						0013131-000

					
					
						DENNIS JOE MICAN ET UX

					
					
						SCOUT ENERGY

					
					
						10/20/2010

					
					
						7.500

					
					
						7.500

					
					
						FAYETTE

					
					
						1551

					
					
						851

					
					
						0.725

				
	
					
						0013132-000

					
					
						ROBERT SAM HALE

					
					
						SCOUT ENERGY

					
					
						11/30/2010

					
					
						11.210

					
					
						11.210

					
					
						FAYETTE

					
					
						1552

					
					
						807

					
					
						0.725

				
	
					
						0013134-000

					
					
						JOHNNY MAC OSBORNE ET UX

					
					
						SCOUT ENERGY

					
					
						11/3/2010

					
					
						61.000

					
					
						61.000

					
					
						FAYETTE

					
					
						1551

					
					
						853

					
					
						0.725

				
	
					
						0013135-001

					
					
						WAYNE AHR

					
					
						SCOUT ENERGY

					
					
						12/2/2010

					
					
						24.030

					
					
						3.004

					
					
						FAYETTE

					
					
						1551

					
					
						801

					
					
						0.725

				
	
					
						0013135-002

					
					
						JAMES DAVID POWELL

					
					
						SCOUT ENERGY

					
					
						12/2/2010

					
					
						24.030

					
					
						3.004

					
					
						FAYETTE

					
					
						1551

					
					
						813

					
					
						0.725

				
	
					
						0013135-003

					
					
						G. STEWART VINSON ET UX

					
					
						ZAZA ENERGY

					
					
						12/14/2011

					
					
						24.030

					
					
						6.008

					
					
						FAYETTE

					
					
						1596

					
					
						521

					
					
						0.725

				
	
					
						0013136-000

					
					
						JOSEPH H BREADS ET AL

					
					
						SCOUT ENERGY

					
					
						12/21/2010

					
					
						46.760

					
					
						46.760

					
					
						FAYETTE

					
					
						1551

					
					
						797

					
					
						0.725

				
	
					
						0013139-000

					
					
						PATRICK T. KLOZIK, ET UX

					
					
						SCOUT ENERGY

					
					
						1/13/2011

					
					
						3.050

					
					
						3.050

					
					
						FAYETTE

					
					
						1555

					
					
						557

					
					
						0.725

				
	
					
						0013141-001

					
					
						RICHARD E. BRUNNER

					
					
						SCOUT ENERGY

					
					
						11/19/2010

					
					
						47.180

					
					
						23.590

					
					
						FAYETTE

					
					
						1553

					
					
						827

					
					
						0.72

				
	
					
						0013141-002

					
					
						DENNIS F. BRUNNER

					
					
						SCOUT ENERGY

					
					
						11/19/2010

					
					
						47.180

					
					
						23.590

					
					
						FAYETTE

					
					
						1553

					
					
						825

					
					
						0.72

				
	
					
						0013142-000

					
					
						DENNIS F BRUNNER ET UX

					
					
						SCOUT ENERGY

					
					
						11/19/2010

					
					
						5.000

					
					
						5.000

					
					
						FAYETTE

					
					
						1553

					
					
						823

					
					
						0.72

				
	
					
						0013143-001

					
					
						LETICIA AUSTIN

					
					
						SCOUT ENERGY

					
					
						10/10/2010

					
					
						70.000

					
					
						14.000

					
					
						FAYETTE

					
					
						1555

					
					
						563

					
					
						0.725

				
	
					
						0013143-002

					
					
						CHARLES RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						70.000

					
					
						42.000

					
					
						FAYETTE

					
					
						1575

					
					
						152

					
					
						0.725

				
	
					
						0013144-000

					
					
						BYRON WATSON TRUCKING INC.

					
					
						SCOUT ENERGY

					
					
						1/6/2011

					
					
						8.530

					
					
						8.530

					
					
						FAYETTE

					
					
						1555

					
					
						704

					
					
						0.725

				
	
					
						0013147-000

					
					
						JIMMY F. WALKER

					
					
						SCOUT ENERGY

					
					
						12/22/2010

					
					
						40.291

					
					
						40.291

					
					
						GONZALES
FAYETTE

					
					
						1041

					
					
						831

					
					
						0.725

				
	
					
						0013154-000

					
					
						CONNIE V. KUBESCH

					
					
						SCOUT ENERGY

					
					
						1/10/2011

					
					
						8.750

					
					
						8.750

					
					
						FAYETTE

					
					
						1553

					
					
						833

					
					
						0.725

				
	
					
						0013155-000

					
					
						JERRY N. BROWNING

					
					
						SCOUT ENERGY

					
					
						12/3/2010

					
					
						12.660

					
					
						12.660

					
					
						FAYETTE

					
					
						1557

					
					
						87

					
					
						0.725

				
	
					
						0013156-001

					
					
						PEDRO VILLEGAS ET UX

					
					
						SCOUT ENERGY

					
					
						1/19/2011

					
					
						13.523

					
					
						6.762

					
					
						FAYETTE

					
					
						1557

					
					
						83

					
					
						0.725

				
	
					
						0013158-001

					
					
						BRYAN B BERGER ET AL

					
					
						SCOUT ENERGY

					
					
						8/26/2010

					
					
						147.135

					
					
						120.302

					
					
						FAYETTE

					
					
						1541

					
					
						553

					
					
						0.72

				
	
					
						0013158-002

					
					
						WAYNE AHR

					
					
						SCOUT ENERGY

					
					
						12/14/2010

					
					
						8.000

					
					
						2.667

					
					
						FAYETTE

					
					
						1551

					
					
						817

					
					
						0.725

				
	
					
						0013158-003

					
					
						JAMES DAVID POWELL

					
					
						SCOUT ENERGY

					
					
						12/14/2010

					
					
						8.000

					
					
						2.667

					
					
						FAYETTE

					
					
						1551

					
					
						827

					
					
						0.725

				
	
					
						0013177-001

					
					
						DONALD A STRYK

					
					
						SCOUT ENERGY

					
					
						12/22/2010

					
					
						7.504

					
					
						3.752

					
					
						FAYETTE

					
					
						1558

					
					
						562

					
					
						0.725

				
	
					
						0013179-000

					
					
						ALAN BERRY ET AL

					
					
						SCOUT ENERGY

					
					
						1/6/2011

					
					
						198.030

					
					
						198.030

					
					
						FAYETTE

					
					
						1558

					
					
						559

					
					
						0.725

				
	
					
						0013182-001

					
					
						JEFFREY WAYNE HILLERY ET UX

					
					
						SCOUT ENERGY

					
					
						1/24/2011

					
					
						30.200

					
					
						7.550

					
					
						GONZALES
FAYETTE

					
					
						1058
1575

					
					
						43
142

					
					
						0.72

				
	
					
						0013182-002

					
					
						JENNIFER LYNN STEVENS

					
					
						SCOUT ENERGY

					
					
						1/24/2011

					
					
						30.200

					
					
						7.550

					
					
						FAYETTE
GONZALES

					
					
						1591
1074

					
					
						201
836

					
					
						0.72

				
	
					
						0013182-003

					
					
						REBECCA KINSEY HILLERY

					
					
						SCOUT ENERGY

					
					
						1/24/2011

					
					
						30.200

					
					
						7.550

					
					
						FAYETTE
GONZALES

					
					
						1591
1074

					
					
						203
838

					
					
						0.72

				
	
					
						0013182-004

					
					
						DAVID TAUCH

					
					
						SCOUT ENERGY

					
					
						7/7/2010

					
					
						192.649

					
					
						154.999

					
					
						FAYETTE
GONZALES

					
					
						1548
1034

					
					
						689
395

					
					
						0.75

				
	
					
						0013182-005

					
					
						CHRIS HICKS ET UX

					
					
						SCOUT ENERGY

					
					
						1/10/2011

					
					
						30.000

					
					
						15.000

					
					
						GONZALES

					
					
						1048

					
					
						580

					
					
						0.72

				
	
					
						0013185-001

					
					
						THEODORE MIRELES

					
					
						SCOUT ENERGY

					
					
						3/28/2011

					
					
						61.000

					
					
						20.333

					
					
						FAYETTE

					
					
						1575

					
					
						161

					
					
						0.725

				
	
					
						0013185-002

					
					
						EUSEFIO MIRELEZ

					
					
						ZAZA ENERGY LLC

					
					
						2/1/2012

					
					
						61.000

					
					
						6.778

					
					
						FAYETTE

					
					
						1600

					
					
						865

					
					
						0.725

				
	
					
						0013185-003

					
					
						MARIA MIRELES SANDOVAL

					
					
						ZAZA ENERGY, LLC

					
					
						2/10/2012

					
					
						61.000

					
					
						8.472

					
					
						FAYETTE

					
					
						1604

					
					
						412

					
					
						0.725

				
	
					
						0013185-004

					
					
						SALLY ORTIZ

					
					
						ZAZA ENERGY LLC

					
					
						3/20/2012

					
					
						61.000

					
					
						1.694

					
					
						FAYETTE

					
					
						1604

					
					
						410

					
					
						0.725

				
	
					
						0013185-005

					
					
						IRENE COMPTON

					
					
						ZAZA ENERGY LLC

					
					
						3/20/2012

					
					
						61.000

					
					
						1.694

					
					
						FAYETTE

					
					
						1608

					
					
						83

					
					
						0.725

				
	
					
						0013185-006

					
					
						TONI MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1608

					
					
						101

					
					
						0.725

				
	
					
						0013185-007

					
					
						CATHERINE MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						2.259

					
					
						FAYETTE

					
					
						1608

					
					
						95

					
					
						0.725

				
	
					
						0013185-008

					
					
						DAVID MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1608

					
					
						103

					
					
						0.725

				
	
					
						0013185-009

					
					
						FRANCES MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1608

					
					
						89

					
					
						0.725

				
	
					
						0013185-010

					
					
						STEVE MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1608

					
					
						91

					
					
						0.725

				
	
					
						0013185-011

					
					
						GUADALUPE SANCHEZ

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1608

					
					
						97

					
					
						0.725

				
	
					
						0013185-012

					
					
						JOSIE SANCHEZ

					
					
						ZAZA ENERGY, LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1608

					
					
						93

					
					
						0.725

				
	
					
						0013185-013

					
					
						FRANCIS ALBARRAN

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						885

					
					
						0.745

				
	
					
						0013185-014

					
					
						GLORIA ANDERSON

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1620

					
					
						102

					
					
						0.745

				
	
					
						0013185-015

					
					
						CONNIE DAVILA

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						887

					
					
						0.745

				
	
					
						0013185-016

					
					
						BESSIE GARCIA

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						889

					
					
						0.745

				
	
					
						0013185-017

					
					
						CINDY GARCIA

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						891

					
					
						0.745

				
	
					
						0013185-018

					
					
						MARY LOPEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						899

					
					
						0.745

				
	
					
						0013185-019

					
					
						ALBERT MARTINEZ JR

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						893

					
					
						0.745

				
	
					
						0013185-020

					
					
						EDDY MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						895

					
					
						0.745

				
	
					
						0013185-021

					
					
						RALPH MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1613

					
					
						897

					
					
						0.745

				
	
					
						0013185-022

					
					
						CARMEN MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1613

					
					
						901

					
					
						0.745

				
	
					
						0013185-023

					
					
						CASIMIRO MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1620

					
					
						104

					
					
						0.745

				
	
					
						0013185-024

					
					
						EUSEBIA M MIRELES - LIFE TENANT

					
					
						ZAZA ENERGY LLC

					
					
						5/10/2012

					
					
						61.000

					
					
						2.259

					
					
						FAYETTE

					
					
						1613

					
					
						903

					
					
						0.745

				
	
					
						0013185-025

					
					
						SYL MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1613

					
					
						905

					
					
						0.745

				
	
					
						0013185-026

					
					
						JANE ROSS

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1613

					
					
						907

					
					
						0.745

				
	
					
						0013185-027

					
					
						ROSALIO MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1615

					
					
						535

					
					
						0.745

				
	
					
						0013185-028

					
					
						TAMMY HOWARD

					
					
						ZAZA ENERGY LLC

					
					
						5/10/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1615

					
					
						527

					
					
						0.745

				
	
					
						0013185-029

					
					
						BOBBY MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1615

					
					
						529

					
					
						0.745

				
	
					
						0013185-030

					
					
						EUSEBIA M MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/10/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1615

					
					
						531

					
					
						0.745

				
	
					
						0013185-031

					
					
						PAUL MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1615

					
					
						533

					
					
						0.745

				
	
					
						0013185-032

					
					
						ASHLEY CASTILLO

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.167

					
					
						FAYETTE

					
					
						1620

					
					
						106

					
					
						0.745

				
	
					
						0013185-033

					
					
						ALICE DAVILA

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1620

					
					
						108

					
					
						0.745

				
	
					
						0013185-034

					
					
						BEN MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1620

					
					
						110

					
					
						0.745

				
	
					
						0013185-035

					
					
						FIDEL MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1620

					
					
						112

					
					
						0.745

				
	
					
						0013185-036

					
					
						FRANK MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.075

					
					
						FAYETTE

					
					
						1620

					
					
						114

					
					
						0.745

				
	
					
						0013185-037

					
					
						JOE MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.452

					
					
						FAYETTE

					
					
						1620

					
					
						116

					
					
						0.745

				
	
					
						0013185-038

					
					
						LEWIS MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.075

					
					
						FAYETTE

					
					
						1620

					
					
						118

					
					
						0.745

				
	
					
						0013185-039

					
					
						RAY MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.075

					
					
						FAYETTE

					
					
						1620

					
					
						120

					
					
						0.745

				
	
					
						0013185-040

					
					
						ROSIE MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.075

					
					
						FAYETTE

					
					
						1620

					
					
						122

					
					
						0.745

				
	
					
						0013185-041

					
					
						TOMMY MARTINEZ

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.075

					
					
						FAYETTE

					
					
						1620

					
					
						124

					
					
						0.745

				
	
					
						0013185-042

					
					
						BENJAMIN MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						3/20/2012

					
					
						61.000

					
					
						1.694

					
					
						FAYETTE

					
					
						1620

					
					
						126

					
					
						0.745

				
	
					
						0013185-043

					
					
						JASON MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.167

					
					
						FAYETTE

					
					
						1620

					
					
						128

					
					
						0.745

				
	
					
						0013185-044

					
					
						MARK MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						8/16/2012

					
					
						61.000

					
					
						0.067

					
					
						FAYETTE

					
					
						1620

					
					
						130

					
					
						0.745

				
	
					
						0013185-045

					
					
						SEAN MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						8/10/2012

					
					
						61.000

					
					
						0.100

					
					
						FAYETTE

					
					
						1620

					
					
						132

					
					
						0.745

				
	
					
						0013185-046

					
					
						MELISSA VILLA

					
					
						ZAZA ENERGY LLC

					
					
						8/16/2012

					
					
						61.000

					
					
						0.067

					
					
						FAYETTE

					
					
						1620

					
					
						134

					
					
						0.745

				
	
					
						0013185-047

					
					
						TONY ROGER CASTILLO

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.167

					
					
						FAYETTE

					
					
						1624

					
					
						848

					
					
						0.745

				
	
					
						0013185-048

					
					
						AMY GARCIA

					
					
						ZAZA ENERGY LLC

					
					
						9/14/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1624

					
					
						850

					
					
						0.745

				
	
					
						0013185-049

					
					
						GABRIEL GARCIA

					
					
						ZAZA ENERGY LLC

					
					
						9/14/2012

					
					
						61.000

					
					
						0.151

					
					
						FAYETTE

					
					
						1624

					
					
						852

					
					
						0.745

				
	
					
						0013185-050

					
					
						DANIEL MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						10/10/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1635

					
					
						126

					
					
						0.745

				
	
					
						0013185-051

					
					
						FRED MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1635

					
					
						130

					
					
						0.745

				
	
					
						0013185-052

					
					
						MARTIN MIRELES JR

					
					
						ZAZA ENERGY LLC

					
					
						8/16/2012

					
					
						61.000

					
					
						0.067

					
					
						FAYETTE

					
					
						1635

					
					
						124

					
					
						0.745

				
	
					
						0013185-053

					
					
						SANTIAGO JAMES MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						4/11/2012

					
					
						61.000

					
					
						0.502

					
					
						FAYETTE

					
					
						1635

					
					
						128

					
					
						0.745

				
	
					
						0013185-054

					
					
						VICTORIA MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						9/14/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1635

					
					
						122

					
					
						0.745

				
	
					
						0013185-055

					
					
						JOSIE SHY

					
					
						ZAZA ENERGY LLC

					
					
						5/29/2012

					
					
						61.000

					
					
						0.075

					
					
						FAYETTE

					
					
						1635

					
					
						134

					
					
						0.745

				
	
					
						0013185-056

					
					
						SANTOS MIRELES

					
					
						ZAZA ENERGY LLC

					
					
						5/11/2012

					
					
						61.000

					
					
						0.301

					
					
						FAYETTE

					
					
						1635

					
					
						132

					
					
						0.745

				
	
					
						0013186-001

					
					
						BETTY HUSER

					
					
						SCOUT ENERGY

					
					
						3/28/2011

					
					
						27.000

					
					
						3.871

					
					
						FAYETTE
GONZALES

					
					
						1575
1058

					
					
						140
41

					
					
						0.725

				
	
					
						0013186-002

					
					
						PAUL HUSER FAMILY TRUST

					
					
						SCOUT ENERGY

					
					
						3/23/2011

					
					
						27.000

					
					
						3.871

					
					
						FAYETTE
GONZALES

					
					
						1575
1058

					
					
						148
49

					
					
						0.725

				
	
					
						0013186-003

					
					
						POLLARD GALIPP

					
					
						SCOUT ENERGY

					
					
						3/31/2011

					
					
						27.000

					
					
						0.774

					
					
						FAYETTE
GONZALES

					
					
						1575
1058

					
					
						144
45

					
					
						0.725

				
	
					
						0013186-004

					
					
						DAVID HOUSTON

					
					
						SCOUT ENERGY

					
					
						4/20/2011

					
					
						27.000

					
					
						0.774

					
					
						FAYETTE
GONZALES

					
					
						1575
1058

					
					
						146
47

					
					
						0.725

				
	
					
						0013186-005

					
					
						EMILY HOUSTON NEAL

					
					
						SCOUT ENERGY

					
					
						4/20/2011

					
					
						27.000

					
					
						0.774

					
					
						FAYETTE
GONZALES

					
					
						1591
1074

					
					
						205
840

					
					
						0.725

				
	
					
						0013186-006

					
					
						MATTHEW GALIPP

					
					
						SCOUT ENERGY

					
					
						4/20/2011

					
					
						27.000

					
					
						0.774

					
					
						FAYETTE
GONZALES

					
					
						1591
1074

					
					
						207
842

					
					
						0.725

				
	
					
						0013186-007

					
					
						CHAVEL MELCHOR

					
					
						SCOUT ENERGY

					
					
						1/17/2011

					
					
						23.035

					
					
						11.518

					
					
						GONZALES
FAYETTE

					
					
						1043

					
					
						969

					
					
						0.725

				
	
					
						0013189-000

					
					
						DWAYNE EDWARD HASELOFF

					
					
						SCOUT ENERGY

					
					
						12/10/2010

					
					
						7.790

					
					
						7.790

					
					
						FAYETTE

					
					
						1575

					
					
						165

					
					
						0.725

				
	
					
						0013190-001

					
					
						SAMUEL L BROWN

					
					
						ZAZA ENERGY LLC

					
					
						1/13/2012

					
					
						8.947

					
					
						0.746

					
					
						FAYETTE

					
					
						1600

					
					
						857

					
					
						0.725

				
	
					
						0013190-002

					
					
						LOIS FIRKINS

					
					
						ZAZA ENERGY LLC

					
					
						1/13/2012

					
					
						8.947

					
					
						0.746

					
					
						FAYETTE

					
					
						1600

					
					
						859

					
					
						0.725

				
	
					
						0013190-003

					
					
						JACKIE T BERTLING

					
					
						ZAZA ENERGY LLC

					
					
						5/2/2012

					
					
						8.947

					
					
						0.249

					
					
						FAYETTE

					
					
						1608

					
					
						99

					
					
						0.725

				
	
					
						0013190-004

					
					
						LEWIS BERTLING

					
					
						ZAZA ENERGY LLC

					
					
						5/3/2012

					
					
						8.947

					
					
						0.249

					
					
						FAYETTE

					
					
						1608

					
					
						107

					
					
						0.725

				
	
					
						0013190-005

					
					
						MARILYN SUE VRANA

					
					
						ZAZA ENERGY LLC

					
					
						6/15/2012

					
					
						8.947

					
					
						0.895

					
					
						FAYETTE

					
					
						1615

					
					
						537

					
					
						0.745

				
	
					
						0013190-006

					
					
						FRANCES ARLEEN HOPKINS

					
					
						ZAZA ENERGY LLC

					
					
						6/15/2012

					
					
						8.947

					
					
						0.597

					
					
						FAYETTE

					
					
						1615

					
					
						525

					
					
						0.745

				
	
					
						0013190-007

					
					
						DOROTHY BERTLING

					
					
						ZAZA ENERGY LLC

					
					
						8/21/2012

					
					
						8.947

					
					
						0.083

					
					
						FAYETTE

					
					
						1624

					
					
						846

					
					
						0.745

				
	
					
						0013190-008

					
					
						DARREL BERTLING

					
					
						ZAZA ENERGY LLC

					
					
						8/21/2012

					
					
						8.947

					
					
						0.083

					
					
						FAYETTE

					
					
						1624

					
					
						844

					
					
						0.745

				
	
					
						0013190-009

					
					
						CINDY POLASEK

					
					
						ZAZA ENERGY LLC

					
					
						8/21/2012

					
					
						8.947

					
					
						0.083

					
					
						FAYETTE

					
					
						1624

					
					
						854

					
					
						0.745

				
	
					
						0013190-010

					
					
						ROBERT STIPANOVIC ET UX

					
					
						ZAZA ENERGY LLC

					
					
						8/27/2012

					
					
						8.947

					
					
						1.491

					
					
						FAYETTE

					
					
						1624

					
					
						856

					
					
						0.745

				
	
					
						0013190-011

					
					
						MRS MARGIE WENDT

					
					
						ZAZA ENERGY LLC

					
					
						9/20/2012

					
					
						8.947

					
					
						0.249

					
					
						FAYETTE

					
					
						1624

					
					
						858

					
					
						0.745

				
	
					
						0013191-001

					
					
						FELIX ALAN VINKLAREK

					
					
						ZAZA ENERGY LLC

					
					
						1/10/2012

					
					
						1.240

					
					
						0.155

					
					
						FAYETTE

					
					
						1600

					
					
						869

					
					
						0.725

				
	
					
						0013191-002

					
					
						LAWRENCE JOSEPH VINKLAREK

					
					
						ZAZA ENERGY LLC

					
					
						1/10/2012

					
					
						1.240

					
					
						0.155

					
					
						FAYETTE

					
					
						1600

					
					
						871

					
					
						0.725

				
	
					
						0013191-003

					
					
						VICTOR ALPHONSE VINKLAREK

					
					
						ZAZA ENERGY LLC

					
					
						1/10/2012

					
					
						1.240

					
					
						0.155

					
					
						FAYETTE

					
					
						1604

					
					
						414

					
					
						0.725

				
	
					
						0013300-001

					
					
						LATONJA SUTTON

					
					
						SCOUT ENERGY

					
					
						3/28/2011

					
					
						45.000

					
					
						7.607

					
					
						GONZALES
FAYETTE

					
					
						1058
1575

					
					
						51
150

					
					
						0.725

				
	
					
						0013302-001

					
					
						DONNY A. HEARN ET UX

					
					
						SCOUT ENERGY

					
					
						1/27/2011

					
					
						58.230

					
					
						9.766

					
					
						FAYETTE

					
					
						1575

					
					
						166

					
					
						0.725

				
	
					
						0013302-002

					
					
						MARY HELEN DI STEFANO

					
					
						SCOUT ENERGY

					
					
						4/14/2011

					
					
						58.230

					
					
						22.443

					
					
						FAYETTE

					
					
						1591

					
					
						233

					
					
						0.725

				
	
					
						0013302-003

					
					
						BARBARA JOHNSON

					
					
						ZAZA ENERGY

					
					
						12/20/2011

					
					
						58.230

					
					
						11.221

					
					
						FAYETTE

					
					
						1596

					
					
						509

					
					
						0.725

				
	
					
						0013302-004

					
					
						TERRY TOOTLE

					
					
						ZAZA ENERGY

					
					
						12/20/2011

					
					
						58.230

					
					
						11.221

					
					
						FAYETTE

					
					
						1596

					
					
						519

					
					
						0.725

				
	
					
						0013302-005

					
					
						JIMMY A. HEARN, ET UX

					
					
						SCOUT ENERGY

					
					
						1/27/2011

					
					
						43.230

					
					
						6.578

					
					
						FAYETTE

					
					
						1560

					
					
						564

					
					
						0.725

				
	
					
						0013302-006

					
					
						JAMES WILLIAM SANDERS, ET UX

					
					
						SCOUT ENERGY

					
					
						4/20/2011

					
					
						39.040

					
					
						16.520

					
					
						FAYETTE

					
					
						1591

					
					
						227

					
					
						0.725

				
	
					
						0013302-007

					
					
						JUANITA LUCILLE THOMPSON

					
					
						ZAZA ENERGY LLC

					
					
						1/24/2012

					
					
						39.040

					
					
						19.520

					
					
						FAYETTE

					
					
						1600

					
					
						867

					
					
						0.725

				
	
					
						0013304-000

					
					
						GENERAL LAND OFFICE

					
					
						ZAZA ENERGY

					
					
						5/3/2011

					
					
						25.305

					
					
						25.305

					
					
						GONZALES

					
					
						1074

					
					
						844

					
					
						0.72

				
	
					
						0013305-001

					
					
						DENNIS RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						1.786

					
					
						FAYETTE

					
					
						1575

					
					
						170

					
					
						0.725

				
	
					
						0013305-002

					
					
						CHARLES RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						1.786

					
					
						FAYETTE

					
					
						1575

					
					
						154

					
					
						0.725

				
	
					
						0013305-003

					
					
						DONNIE RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						1.786

					
					
						FAYETTE

					
					
						1591

					
					
						209

					
					
						0.725

				
	
					
						0013305-004

					
					
						VIRGINIA DRASTATA

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						1.786

					
					
						FAYETTE

					
					
						1591

					
					
						213

					
					
						0.725

				
	
					
						0013305-005

					
					
						CLAYTON RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						1.786

					
					
						FAYETTE

					
					
						1591

					
					
						217

					
					
						0.725

				
	
					
						0013305-006

					
					
						TERRY RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						1.786

					
					
						FAYETTE

					
					
						1591

					
					
						215

					
					
						0.725

				
	
					
						0013305-007

					
					
						WILLIAM RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						1.786

					
					
						FAYETTE

					
					
						1591

					
					
						219

					
					
						0.725

				
	
					
						0013305-008

					
					
						ROBERT M DIDION

					
					
						ZAZA ENERGY

					
					
						12/2/2011

					
					
						25.000

					
					
						2.083

					
					
						FAYETTE

					
					
						1596

					
					
						507

					
					
						0.725

				
	
					
						0013305-009

					
					
						FALCON INTERNATIONAL BANK

					
					
						ZAZA ENERGY LLC

					
					
						12/13/2011

					
					
						25.000

					
					
						6.250

					
					
						FAYETTE

					
					
						 

					
					
						 

					
					
						 

				
	
					
						0013307-001

					
					
						NANCY KEATHLEY WICKER

					
					
						SCOUT ENERGY

					
					
						4/28/2011

					
					
						79.710

					
					
						19.928

					
					
						FAYETTE

					
					
						1575

					
					
						223

					
					
						0.725

				
	
					
						0013307-002

					
					
						KAREN KEATHLEY

					
					
						SCOUT ENERGY

					
					
						4/28/2011

					
					
						79.710

					
					
						19.928

					
					
						FAYETTE

					
					
						1591

					
					
						221

					
					
						0.725

				
	
					
						0013307-003

					
					
						RICHARD F STEARNS ET UX

					
					
						SCOUT ENERGY

					
					
						6/30/2010

					
					
						79.710

					
					
						39.855

					
					
						FAYETTE

					
					
						1541

					
					
						574

					
					
						0.725

				
	
					
						0013309-000

					
					
						SARAH HUNT, ET AL

					
					
						SCOUT ENERGY

					
					
						5/2/2011

					
					
						35.000

					
					
						35.000

					
					
						FAYETTE

					
					
						1591

					
					
						225

					
					
						0.725

				
	
					
						0013310-000

					
					
						JEROME A. RITTIMANN, ET UX

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						9.449

					
					
						9.449

					
					
						FAYETTE

					
					
						1591

					
					
						229

					
					
						0.725

				
	
					
						0013311-000

					
					
						DONNIE RICHTER

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						25.000

					
					
						25.000

					
					
						FAYETTE

					
					
						1591

					
					
						211

					
					
						0.725

				
	
					
						0013312-000

					
					
						JOHNNY MAC OSBORNE ET UX

					
					
						SCOUT ENERGY

					
					
						4/20/2011

					
					
						75.430

					
					
						75.430

					
					
						FAYETTE

					
					
						1575

					
					
						155

					
					
						0.725

				
	
					
						0013313-001

					
					
						CHARLES RICHTER, ET AL

					
					
						SCOUT ENERGY

					
					
						4/26/2011

					
					
						48.760

					
					
						24.380

					
					
						FAYETTE

					
					
						1575

					
					
						172

					
					
						0.725

				
	
					
						0013315-000

					
					
						CAROL J BARRE

					
					
						ZAZA ENERGY

					
					
						11/17/2011

					
					
						152.300

					
					
						152.300

					
					
						FAYETTE

					
					
						1596

					
					
						505

					
					
						0.725

				
	
					
						0013316-001

					
					
						HENRIETTA VYBIRAL MICA

					
					
						ZAZA ENERGY

					
					
						11/18/2011

					
					
						22.546

					
					
						11.273

					
					
						FAYETTE

					
					
						1596

					
					
						513

					
					
						0.725

				
	
					
						0013316-002

					
					
						BARBARA KLOZIK

					
					
						ZAZA ENERGY

					
					
						11/18/2011

					
					
						22.546

					
					
						11.273

					
					
						FAYETTE

					
					
						1596

					
					
						511

					
					
						0.725

				
	
					
						0017733-000

					
					
						ALBIN M LAMZA ET UX

					
					
						TEXAS INDEPENDENT EXPLORATION LTD

					
					
						5/5/2010

					
					
						50.500

					
					
						50.500

					
					
						LAVACA

					
					
						510

					
					
						384

					
					
						0.71

				
	
					
						0017734-001

					
					
						ESTELLE FRANCIS BAROS

					
					
						TEXAS INDEPENDENT EXPLORATION LTD

					
					
						5/5/2010

					
					
						178.976

					
					
						89.488

					
					
						LAVACA

					
					
						510

					
					
						330

					
					
						0.71

				
	
					
						0017737-000

					
					
						ESTELLE FRANCIS BAROS

					
					
						TEXAS INDEPENDENT EXPLORATION LTD

					
					
						5/5/2010

					
					
						186.580

					
					
						186.580

					
					
						LAVACA

					
					
						510

					
					
						339

					
					
						0.71

				
	
					
						0017739-000

					
					
						WENDEL'S JEWELRY, INC.

					
					
						TEXAS INDEPENDENT EXPLORATION LTD

					
					
						4/21/2010

					
					
						47.270

					
					
						47.270

					
					
						LAVACA

					
					
						510

					
					
						349

					
					
						0.71

				
	
					
						0017758-000

					
					
						JOHN BEMROSE III

					
					
						TEXAS INDEPENDENT EXPLORATION LTD

					
					
						5/6/2010

					
					
						78.352

					
					
						78.352

					
					
						LAVACA

					
					
						510

					
					
						322

					
					
						0.71

				
	
					
						0017760-000

					
					
						ETHEL WAGNER JOHNSON

					
					
						TEXAS INDEPENDENT EXPLORATION LTD

					
					
						4/20/2010

					
					
						98.900

					
					
						98.900

					
					
						LAVACA

					
					
						510

					
					
						486

					
					
						0.71

				
	
					
						0017761-000

					
					
						CARL W. SWORDS ET UX

					
					
						TEXAS INDEPENDENT EXPLORATION LTD

					
					
						5/12/2010

					
					
						50.300

					
					
						50.300

					
					
						LAVACA

					
					
						510

					
					
						478

					
					
						0.71

				
	
					
						KAUFHOLD

					
					
						KAUFHOLD 

					
					
						-

					
					
						-

					
					
						970.000

					
					
						970.000

					
					
						FAYETTE

					
					
						-

					
					
						-

					
					
						-

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						End of Exhibit "A"

				

		 

		

			Exhibit A

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 2 of 2

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 3 of 3

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 4 of 4

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 5 of 5

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 6 of 6

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 7 of 7

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 8 of 8

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 9 of 9

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 10 of 10

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 11 of 11

		

		

			 

		

		

			 

		

 

		

			

		

		 

		

			Exhibit A

		

		

			Page 12 of 12

		

		

			 

		

		

			 

		

 

		

			

		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit A

		

		

			Page 13 of 13

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “B”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Wells
		

			
					
						 

				
	
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Well Name

					
					
						API Number

					
					
						ZaZa WI

					
					
						ZaZa NRI

					
					
						 

				
	
					
						CRABB RANCH A-1H

					
					
						42-177-32266

					
					
						1.00000000

					
					
						0.72000000

					
					
						 

				
	
					
						SABLE HUNTER A-1H

					
					
						42-285-33603

					
					
						0.15970442

					
					
						0.11339016

					
					
						 

				
	
					
						RING "A" A-1H

					
					
						42-149-33240

					
					
						0.08804785

					
					
						0.06360976

					
					
						 

				
	
					
						RING "A" A-2H

					
					
						42-149-33244

					
					
						0.08804785

					
					
						0.06360976

					
					
						 

				
	
					
						RING "A" A-3H

					
					
						42-149-33252

					
					
						0.08804785

					
					
						0.06360976

					
					
						 

				
	
					
						RING "A" A-4H

					
					
						42-149-33253

					
					
						0.08804785

					
					
						0.06360976

					
					
						 

				
	
					
						RING "A" A-5H

					
					
						42-149-33260

					
					
						0.08804785

					
					
						0.06360976

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						End of Exhibit "B"

				

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit B

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “C”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Rights-of-Way, Easements and Surface Estates
		

		
			 
		

		
			None
		

		
			 
		

		

		

		 

		

			Exhibit C

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “D”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			Contracts and Other Agreements
		

			
			
				 1.
			

			
			
			Operating Agreement dated August 1, 2011, by and between Southern Bay Operating, LLC and ZaZa Energy, LLC, and recorded as a Memorandum of Operating Agreement/Mortgage and Financing Statement in Volume 1587, Page 770, Document No. 11-7374 in the Official Public Records of Fayette County, Texas, as amended by that certain Revised Memorandum of Operating Agreement/Mortgage and Financing Statement recorded in Volume 1594, Page 760, Document No. 12-536 in the Official Public Records of Fayette County, Texas.

		
			 
		

			
			
				 2.
			

			
			
			Operating Agreement dated June 27, 2011, by and between Eagle Ford Hunter Resources, Inc., a wholly-owned subsidiary of Magnum Hunter Resources Corporation, and ZaZa Energy, LLC, as amended by that certain letter agreement dated April 18, 2012.

		
			 
		

			
			
				 3.
			

			
			
			GulfMark Contract No. 52573, Crude Oil Purchase Agreement dated effective July 1, 2012, by and between GulfMark Energy, Inc. (“Buyer”) and ZaZa Energy, LLC (“Seller”).

		
			 
		

			
			
				 4.
			

			
			
			Gas Purchase Contract dated December 1, 2011, by and between ZaZa Energy Corporation and DCP Midstream.

		
			 
		

		

		

		 

		

			Exhibit D

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “E”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			INTENTIONALLY DELETED
		

		
			 
		

		

		

		 

		

			Exhibit E

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “F”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Allocated Values
		

		
			The allocated value for the Wells is as follows:
		

			
					
						Well Name

					
					
						API Number

					
					
						ZaZa WI

					
					
						ZaZa NRI

					
					
						Allocated Value

				
	
					
						CRABB RANCH A-1H

					
					
						42-177-32266

					
					
						1.00000000

					
					
						0.72000000

					
					
						$6,444,849.92

				
	
					
						SABLE HUNTER A-1H

					
					
						42-285-33603

					
					
						0.15970442

					
					
						0.11339016

					
					
						$633,317.07

				
	
					
						RING "A" A-1H

					
					
						42-149-33240

					
					
						0.08804785

					
					
						0.06360976

					
					
						$598,970.64

				
	
					
						RING "A" A-2H

					
					
						42-149-33244

					
					
						0.08804785

					
					
						0.06360976

					
					
						$432,439.56

				
	
					
						RING "A" A-3H

					
					
						42-149-33252

					
					
						0.08804785

					
					
						0.06360976

					
					
						$271,475.81

				
	
					
						RING "A" A-4H

					
					
						42-149-33253

					
					
						0.08804785

					
					
						0.06360976

					
					
						282,640.93

				
	
					
						RING "A" A-5H

					
					
						42-149-33260

					
					
						0.08804785

					
					
						0.06360976

					
					
						$334,413.67

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Total 

					
					
						$8,998,107.60

				

		
			
		

		
			The allocated value for the net leasehold acreage set forth on Exhibit “A”  shall be $3,400 per net leasehold acre based on a total of 10,074.086 net leasehold acres for a total amount of $34,251,892.40.   
		

		
			 
		

		

		

		 

		

			Exhibit F

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “G”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			CONVEYANCE, ASSIGNMENT AND BILL OF SALE
		

		
			STATE OF TEXAS§
		

		
			COUNTY OF ____________§
		

		
			This CONVEYANCE,  ASSIGNMENT AND BILL OF SALE (“Assignment”) dated [  ], 2013, but effective as of January 1, 2013 (“Effective Date”), is from ZaZa Energy, LLC, a Texas limited liability company, with an office at 1301 McKinney Street, Suite 2850, Houston, Texas 77010  (“Assignor”) to [ ● ], a [ ● ], with an office at [ ● ] (“Assignee”), Assignor and Assignee may be collectively referred to herein as the “Parties” and individually as a “Party.” This Assignment relates to that certain Purchase And Sale Agreement dated effective January 1, 2013, between Assignor and Assignee (hereinafter referred to as the “PSA”).  Each capitalized term used in this Assignment that is not otherwise defined herein shall have the meaning as set out in the PSA.
		

		
			ARTICLE I
		

		
			Assignment of the Assets
		

		
			 
		

		
			Assignor, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, by these presents does hereby ASSIGN, TRANSFER, SELL, SET OVER and DELIVER unto Assignee, all of Assignor’s right, title, and interest, in and to the following described Assets (defined below):
		

		
			(a)the oil, gas and/or mineral leases listed and described on Exhibit “A” or the lands covered by said leases, or in lands pooled or unitized with such leases (including all depths), or which Assignor is entitled to receive by reason of any participation, joint venture, farmin, farmout, joint operating agreement, unitization agreement or other agreement, including all leasehold estates, royalty interests, overriding royalty interests, net revenue interests, executory interests, net profit interests, working interests, reversionary interests, mineral interests and any other interests of Seller in said oil, gas and/or mineral leases, or lands covered by said leases, it being the intent hereof that the leases, properties and interests and the legal descriptions set forth on Exhibit “A” or in instruments described in Exhibit “A” includes all of Assignor’s right, title and interest in said oil, gas and/or mineral leases, other than lessor’s royalty and overriding royalty interests of record on the Effective Date, including, but not limited to, those described on 
		

		 

		

			Exhibit G

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		Exhibit “A” or in instruments described in Exhibit “A” even though such interests may be incorrectly described in Exhibit ”A” or omitted from Exhibit “A” (collectively the “Leases”);  
		

		
			(b) all Wells listed on Exhibit “B” attached hereto and made a part hereof, including but not limited to, production accruing from and after the Effective Time, Inventory Hydrocarbons, all equipment and other personal property, inventory, spare parts, tools, tubing, casing, pipe, fixtures, wellhead equipment, downhole equipment, pumping units, tank batteries, transportation and gathering lines or systems, flowlines, production equipment, compressors, gas plants and facilities, treatment facilities, injection facilities, disposal facilities, dehydration facilities, radio towers, remote terminal units, SCADA equipment, all other tangible personal assets, appurtenances and improvements situated upon the Assets or lands pooled or unitized therewith as of or after the Effective Time or used or held for use in connection with the ownership, development or operation of the Assets or the production, treatment, storage, compression, processing or transportation of Hydrocarbons from or in the Wells or the lands covered by the Leases or lands pooled or unitized;  
		

		
			(c)all oil and gas purchase and sale contracts, farmin or farmout agreements, operating agreements, unit agreements, processing agreements, joint venture agreements, pooling agreements, transportation agreements and all other agreements in which Assignor has an interest to the extent the same directly affect and/or pertain to the ownership or operation of the interests described in the Leases and Wells; and
		

		
			(d)all files (whether originals, copies, or in digital or electronic format), including the title files, abstracts of title, title opinions, title information, title commitments, land surveys, maps, data, correspondence, environmental and regulatory files and reports, engineering and production files, accounting files relating directly to the Leases or Wells, seismic records and surveys, gravity maps, geological or geophysical data and records, analyses, interpretations, and all other files, documents, materials, information, instruments and records of every kind and description in Assignor’s control or possession which affect, concern, pertain or relate to, or are used directly in connection with, the Leases or Wells.
		

		
			For the purposes of this Assignment the term “Wells” or “Well” shall refer to all wells located on the Assets, or lands pooled or unitized therewith, including but not limited to (i) those wells identified on Exhibit “B” attached hereto, whether or not such wells are producing, active or inactive, plugged and abandoned, temporarily abandoned, shut-in, injection wells, disposal wells, water supply wells or otherwise. 
		

		
			The interests in and to the properties described in and assigned, transferred, set over and delivered pursuant to this Article I are hereinafter sometimes collectively called the “Assets.”
		

		
			
		

		 

		

			Exhibit G

		

		

			Page 2 of 2

		

		

			 

		

		

			 

		

 

		

			

		

		ARTICLE II
		

		
			Limited Warranty of Title
		

		
			 
		

		
			Section 2.1Limited Warranty of Title.  This Assignment is made without warranty of title, either express or implied, except that Assignor hereby binds itself, its successors and assigns to warrant and forever defend, all and singular, title to the Assets unto Assignee, its successors and assigns, against every person or entity whomsoever lawfully claiming or to claim the Assets by, through, or under Assignor, but not otherwise.
		

		
			 
		

		
			Section 2.2Disclaimer of Representations and Warranties with Respect to Personal Property.  ASSIGNEE IS ACQUIRING THOSE ASSETS WHICH ARE PERSONAL PROPERTY ON AN “AS IS, WHERE IS” BASIS, SUBJECT TO ALL FAULTS AND DEFECTS. 
		

		
			 
		

		
			Section 2.3Prior Agreements.  The Assets are assigned by Assignor and accepted by Assignee expressly subject to the following:
		

		
			 
		

		
			(a)the terms and provisions of the PSA, including, but not limited to the  Retained Obligations of the Assignor, the Assumed Obligations of the Assignee, and the Permitted Encumbrances (as those terms are defined in the PSA).  Nothing in this Assignment shall operate to limit, release, or impair any of Assignor’s or Assignee's respective rights, obligations, interests, remedies, or indemnities in the PSA.  To the extent the terms and provisions of this Assignment are in conflict, or inconsistent, with the terms and provisions of the PSA, the terms and provisions of the PSA shall control;
		

		
			 
		

		
			(b)the existing burdens on the Leases as of the Effective Date;
		

		
			 
		

		
			(c)the terms of the Leases;
		

		
			 
		

		
			(d)any other burdens of record as of the Effective Date; and
		

		
			 
		

		
			(e)any and all of the applicable, rules, regulations and orders of all regulatory bodies, State, Federal or local.
		

		
			 
		

		
			ARTICLE III
		

		
			Miscellaneous
		

		
			 
		

		
			Section 3.1Further Assurances.  The Parties agree to execute such further agreements, instruments, documents, stipulations, and/or conveyances as may be reasonably necessary to accomplish the intents and purposes of this Assignment and the PSA.
		

		
			 
		

		
			Section 3.2Successors and Assigns.  All of the provisions of this Assignment shall be covenants running with the land hereof shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties.  All references herein to either Assignor or Assignee shall include their respective successors and assigns.  Any subsequent transfer of all or 
		

		 

		

			Exhibit G

		

		

			Page 3 of 3

		

		

			 

		

		

			 

		

 

		

			

		

		any part of the Assets conveyed and assigned herein shall be made expressly subject to the terms and provisions of this Assignment.
		

		
			 
		

		
			Section 3.3Exhibits.  All exhibits attached to this Assignment, and the terms of those exhibits which are referred to in this Exhibit, are made a part hereof and incorporated herein by reference.  References in such exhibits to instruments on file in the public records are made for all purposes.  Unless provided otherwise, all recording references in such exhibits are to the appropriate records of the counties in which the Assets are located.
		

		
			 
		

		
			Section 3.4Counterparts.  This Assignment is being executed in several original counterparts, all of which are identical, and each such counterpart shall be deemed to be an original instrument, but all such counterparts shall constitute but one and the same assignment.
		

		
			 
		

		
			IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed on the dates of their respective acknowledgments set forth below, to be effective, however, as of the Effective Time.
		

		
			 
		

		
			Assignor:
		

		
			 
		

		
			______________________________
		

		
			 
		

		
			 
		

		
			By: 
		

		
			Name: 
		

		
			Title:                                    
		

		
			 
		

		
			
		

		
			Assignee:
		

		
			
		

		
			______________________________
		

		
			 
		

		
			 
		

		
			By: 
		

		
			Name: 
		

		
			Title:
		

		

		

		 

		

			Exhibit G

		

		

			Page 4 of 4

		

		

			 

		

		

			 

		

 

		

			

		

		THE STATE OF _____________§
		

		
			§
		

		
			COUNTY OF _______________§
		

		
			 
		

		
			This instrument was acknowledged before me on the ____ day of _______________, 20____, by ___________, ____________ of ________________________, a ___________________________, on behalf of said _______________________.
		

		
			 
		

		
			 
		

		
			(S E A L)
		

		
			Notary Public in and for the State of ____________
		

		
			 
		

		
			 
		

		
			 
		

		
			THE STATE OF _____________§
		

		
			§
		

		
			COUNTY OF _______________§
		

		
			 
		

		
			This instrument was acknowledged before me on the ____ day of _______________, 20____, by ___________, ____________ of ________________________, a ___________________________, on behalf of said _______________________.
		

		
			 
		

		
			 
		

		
			(S E A L)
		

		
			                                                                        Notary Public in and for the State of ____________
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit G

		

		

			Page 5 of 5

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “H”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			Litigation
		

		
			None
		

		
			 
		

		

		

		 

		

			Exhibit H

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “I”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			Payout Balances
		

		
			None
		

		
			 
		

		

		

		 

		

			Exhibit I

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “J”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			Gas and Oil Imbalances
		

		
			None
		

		
			 
		

		

		

		 

		

			Exhibit J

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “K”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			Consents to Assign, Preferential Rights to Purchase and Burdens
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Lease #

					
					
						Lessor

					
					
						Lessee

					
					
						Lease Date

					
					
						County

					
					
						Book

					
					
						Page

				
	
					
						0013018-001

					
					
						CARA ANNE COLLIER

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						FAYETTE

					
					
						1541

					
					
						590

				
	
					
						0013018-002

					
					
						CHRISTOPHER DOLTON COLLIER

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						FAYETTE

					
					
						1541

					
					
						591

				
	
					
						0013018-004

					
					
						GABRIEL CORNELL COLLIER

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						FAYETTE

					
					
						1541

					
					
						592

				
	
					
						0013018-005

					
					
						KEILAH JOAN COLLIER SWEENEY

					
					
						SCOUT ENERGY

					
					
						6/18/2010

					
					
						FAYETTE

					
					
						1541

					
					
						587

				
	
					
						0013023-000

					
					
						JOHN H MARTISEK ET UX

					
					
						SCOUT ENERGY

					
					
						8/1/2010

					
					
						FAYETTE

					
					
						1541

					
					
						561

				
	
					
						0013035-000

					
					
						JOE FRED CRABB, ET UX

					
					
						SCOUT ENERGY

					
					
						8/26/2010

					
					
						GONZALES

					
					
						1034

					
					
						412

				
	
					
						0013038-001

					
					
						BRYAN B. BERGER ET AL

					
					
						SCOUT ENERGY

					
					
						8/26/2010

					
					
						FAYETTE
GONZALES

					
					
						1541

					
					
						551

				
	
					
						0013158-001

					
					
						BRYAN B BERGER ET AL

					
					
						SCOUT ENERGY

					
					
						8/26/2010

					
					
						FAYETTE

					
					
						1541

					
					
						553

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						End of EXHIBIT "K"

				

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit K

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “L”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			NON-FOREIGN AFFIDAVIT
		

		
			 
		

		
			Exemption from Withholding of Tax
For Dispositions of U.S. Real Property Interests
		

		
			 
		

		
			            Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform BEP Moulton, LLC that withholding of tax is not required upon the disposition of U.S. real property interests by ZaZa Energy, LLC, the undersigned hereby certifies the following:
		

		
			 
		

		
			1.  ZaZa Energy, LLC, is not a nonresident alien, foreign corporation, foreign partnership, foreign trust or foreign estate for purposes of U.S. income taxation (as those terms are defined in the Internal Revenue Code of 1986, as amended and the U. S. Treasury regulations thereunder). 
		

		
			 
		

		
			2.            ZaZa Energy, LLC’s  taxpayer identification number is _________. 
		

		
			 
		

			
			
				 3.
			

			
			
			The office address of ZaZa Energy, LLC:

		
			                                    
		

		
			                                                1301 McKinney
		

		
			                                                Suite 2800
		

		
			                                                Houston, Texas  77010
		

		
			 
		

		
			
		

		
			             ZaZa Energy, LLC  understands that this certification may be disclosed to the Internal Revenue Service by BEP Moulton, LLC and that any false statement contained herein could be punished by fine, imprisonment or both.
		

		
			 
		

		
			            Under penalties of perjury, I declare that I have examined this certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare I have authority to sign this document.
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit L

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			            Dated the __ day of _____, 2013.
		

		
			 
		

		
			ZAZA ENERGY, LLC
		

		
			
		

		
			 
		

		
			By:                                                            
		

		
			
		

		
			Title:                                                            
		

		
			 
		

		
			 
		

		
			STATE OF TEXAS                        §
		

		
			                                                §
		

		
			COUNTY OF HARRIS                        §
		

		
			 
		

		
			 
		

		
			On this ___ day of ______, 2013, before me personally appeared _______________, to me personally known and acknowledged, who being by me duly sworn, did say that he is the ____________ of ZaZa Energy, LLC, and that the foregoing instrument was signed and delivered on behalf of the limited liability company as the free act and deed of said limited liability company.   
		

		
			 
		

		
			___________________________________
		

		
			                                           Notary Public in and for the State of Texas
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit L

		

		

			Page 2 of 2

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “M”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Assignments Due Seller
		

		
			None
		

		
			 
		

		

		

		 

		

			Exhibit M

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “N”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Assignments Owed by Seller
		

		
			None
		

		
			 
		

		

		

		 

		

			Exhibit N

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “O”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Mortgages, Liens and Encumbrances
		

			
			
				 1.
			

			
			
			Securities Purchase Agreement dated as of February 21, 2012 among ZaZa Energy Corporation, a Delaware corporation (the “Company”), and the Purchasers party thereto, as amended.

		
			 
		

			
			
				 2.
			

			
			
			Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Production, effective March 6, 2013, by ZaZa Energy, LLC as Mortgagor, to Mauri J Cowen, as Trustee, for the benefit of U.S. Bank National Association in its capacity as collateral agent, a counterpart of which is recorded in the respective office designated for the filing of record of mortgages and deeds of trust in Fayette County

		
			 
		

		

		

		 

		

			Exhibit O

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “P”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Post-Closing Accounting and Reporting Agreement
		

		
			In connection with the Purchase and Sale Agreement (the “Agreement”) between ZaZa Energy, LLC ( “Seller”) and BEP Moulton, LLC (“Buyer”), the following is hereby agreed between the parties with respect to the Assets to be delivered at such Closing:
		

		
			 
		

			
			
				 1.
			

			
			
			Seller will prepare and submit state production reports for the Assets for the production month of __________.  All subsequent monthly production reports will be the responsibility of Buyer.  Seller will send a copy of the __________ reports as filed to Buyer.

		
			 
		

			
			
				 2.
			

			
			
			Change of operator forms will be prepared by Seller showing BEP Moulton, LLC as the new operator of the Assets effective __________.  BEP Moulton, LLC’s  operator number for  the State of Texas is  ________________.

		
			 
		

			
			
				 3.
			

			
			
			Letters-in-lieu, effective with __________ production will be sent to the purchasers by Buyer.  Seller shall prepare the letters and provide them at  Closing. 

		
			 
		

			
			
				 4.
			

			
			
			Seller will make royalty distributions for the production month of __________.  Royalty distributions for the production month of __________, will be the responsibility of Buyer.

		
			 
		

			
			
				 5.
			

			
			
			Seller will pay severance taxes for the production month of __________.  Severance tax payments for the production month of __________ will be the responsibility of Buyer.

		
			 
		

			
			
				 6.
			

			
			
			Seller will make rental, minimum royalty and any other lease (including surface) obligation payments due on or before __________.  Buyer will make subsequent monthly payments.  Buyer agrees to indemnify and hold Seller harmless for any missed lease rental and/or minimum royalty payments from Closing through __________.

		
			 
		

			
			
				 7.
			

			
			
			Buyer will take any royalty monies in suspense accounts attributable to the  Assets.

		

		

		 

		

			Exhibit P

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

			
			
				 8.
			

			
			
			Seller will make gas nominations for the production month of __________.  Buyer will make gas nominations beginning for the production month of __________.

		
			 
		

			
			
				 9.
			

			
			
			Seller will have their measurement service agent process the volumes for the wellhead meter points to be used in reporting and allocating for __________ production which will be closed out in __________ accounting.  Buyer will take over this measurement function effective __________.  Seller will provide Buyer with volume and integration statements for __________ production.

		
			 
		

			
			
				 10.
			

			
			
			Buyer will assume actual field operations for the Assets at 12:00 pm the day of the Closing Date. 

		
			 
		

			
			
				 11.
			

			
			
			If either party receives revenue or other payments for the benefit of the other party, the party receiving revenue shall promptly forward such revenue to the other party.  If either party pays invoices or otherwise incurs expenses for the benefit of the other party and provides supporting documentation related thereto, the party for whose benefit the payment in question was made shall promptly reimburse the party making such payment.  For purposes of this paragraph, “promptly” shall be understood to mean within five (5) business days, in the absence of extenuating circumstances.  

		
			 
		

			
			
				 12.
			

			
			
			This agreement is intended to set forth the division of reporting and other responsibilities between the parties, but is not intended to alter any provisions of the Agreement related to which party will be ultimately financially responsible for payments made before or after the Effective Date.  In the event of any conflict between the provisions of this memorandum and the Agreement, the Agreement shall control.  All capitalized terms not defined herein shall have the meanings given in the Agreement.

		
			 
		

		
			 
		

		
			Signed the _____ day of __________ 2013.
		

		
			 
		

		
			 
		

		
			 
		

		
			SELLER:BUYER:
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			By:                                                                                                By:_______________________
		

		
			 
		

		
			Title:________________________                                                Title:_______________________             
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit P

		

		

			Page 2 of 2

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “Q”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			PRELIMINARY SETTLEMENT STATEMENT 
		

		
			Closing Date:            ________, 2013
		

		
			Effective Date:  January 1, 2013
		

		
			 
		

		
			 
		

			
					
						SELLER:

					
						 

					
						ZAZA ENERGY, LLC 

					
						 

					
					
						BUYER:

					
						 

					
						BEP MOULTON, LLC 

				

		
			 
		

		
			Purchase Price
		

		
			 
		

		
			Section 3.1
		

		
			Immediately available funds$ 43,250,000.00
		

		
			 
		

		
			Upward Purchase Price Adjustments*
		

		
			 
		

		
			Section 3.2 (a)(i)(A)(i)
		

		
			Inventory Hydrocarbons$  000,000.00
		

		
			(as of the Effective Date)
		

		
			 
		

		
			Section 3.2(a)(i)(A)(ii)
		

		
			Seller’s unsold inventory of gas plant products$  000,000.00
		

		
			(as of the Effective Date)
		

		
			 
		

		
			Section 3.2(a)(i)(B)
		

		
			Operating Expenses after Effective Time$  000,000.00
		

		
			(January, February, March and April)
		

		
			 
		

		
			Section 3.2(a)(i)(C)
		

		
			Taxes (Ad Valorem and Severance)$000,000.00
		

		
			 
		

		
			Section 3.2(a)(i)(D)
		

		
			Upward Adjustments$000,000.00
		

		
			(provided otherwise in Agreement)
		

		
			 
		

		
			Section 3.2(a)(i)(E)
		

		
			Hydrocarbon underbalances$000,000.00
		

		

		

		 

		

			Exhibit Q

		

		

			Page 1 of 1

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			Section 3.2(a)(i)(F)
		

		
			Other Agreed Adjustments$000,000.00
		

		
			 
		

		
			 
		

		
			Total Upward Adjustments            $            000,000.00
		

		
			 
		

		
			Adjusted Purchase Price $43,250,000.00
		

		
			(After Upward Adjustments)                        
		

		
			 
		

		
			Downward Purchase Price Adjustments*
		

		
			 
		

		
			Section 3.2(a)(ii)(A)
		

		
			Revenues collected by Seller and attributable($000,000.00)
		

		
			to the Assets after the Effective Date
		

		
			(January, February, March, and April)
		

		
			 
		

		
			Section 3.2(a)(ii)(B)
		

		
			Unpaid Taxes($000,000.00)
		

		
			 
		

		
			Section 3.2(a)(ii)(C)
		

		
			Downward Adjustments($000,000.00)
		

		
			(provided otherwise in Agreement)
		

		
			 
		

		
			Section 3.2(a)(ii)(D)
		

		
			Allocated Value of Preferential Purchase Rights($000,000.00)
		

		
			 
		

		
			Section 3.2(a)(ii)(E)
		

		
			Title Defects($000,000.00)
		

		
			 
		

		
			Section 3.2(a)(ii)(F)
		

		
			Environmental Defects($000,000.00)
		

		
			 
		

		
			Section 3.2(a)(ii)(G)
		

		
			Hydrocarbon overbalances($000,000.00)
		

		
			 
		

		
			Section 3.2(a)(ii)(G)
		

		
			Other Agreed Adjustments($000,000.00)
		

		
			 
		

		
			 
		

		
			Total Downward Adjustments                         ($000,000.00)
		

		
			 
		

		
			 
		

		
			Adjusted Purchase Price            $ 43,250,000.00
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit Q

		

		

			Page 2 of 2

		

		

			 

		

		

			 

		

 

		

			

		

		Adjusted Purchase Price to be wire transferred to ZaZa Energy, LLC by or on behalf of BEP Moulton, LLC at the following financial institution:
		

		
			 
		

			
					
						Bank

					
					
						ABA No.

					
					
						Account No.

					
					
						Amount

				
	
					
						 

					
					
						 

					
					
						 

					
43,250,000.00 
				

		
			 
		

		
			 
		

		
			 
		

		
			*Back-up for all Adjustments to the Purchase Price are attached hereto and incorporated herein for all purposes.
		

		
			 
		

		
			AGREED and ACCEPTED on this the  ____ day of _____, 2013. 
		

		
			 
		

		
			 
		

		
			ZAZA ENERGY, LLC 
		

		
			 
		

		
			By:                                                            
		

		
			 
		

		
			Title:_______________________________
		

		
			 
		

		
			 
		

		
			BEP MOULTON, LLC 
		

		
			 
		

		
			By:                                                            
		

		
			                                                            
		

		
			                                                            Title:______________________________
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			Exhibit Q

		

		

			Page 3 of 3

		

		

			 

		

		

			 

		

 

		

			

		

		 
		

		
			EXHIBIT “R”
		

		
			Attached to and made a part of that certain 
		

		
			Purchase and Sale Agreement, Effective January 1, 2013,
		

		
			by and between ZaZa Energy, LLC, as Seller and 
		

		
			BEP Moulton, LLC, as Buyer
		

		
			 
		

		
			Non-Compete Area Map
		

		
			 
		

		
			Insert Map
		

		 

		

			Exhibit R

		

		

			Page 1 of 1Ex 10.4 - Redacted Joint Exploration and Development Agreement

		
			                                                                        Exhibit 10.4
		

		
			JOINT EXPLORATION AND DEVELOPMENT AGREEMENT
WALKER, GRIMES, MADISON, TRINITY, AND MONTGOMERY COUNTIES, TEXAS
		

		
			This Joint Exploration and Development Agreement (this “Agreement”) is effective as of the 1st day of March, 2013 (the “Effective Date”), by and among EOG RESOURCES, INC. (“EOG”), whose address is 6101 S. Broadway, Suite 200, Tyler, Texas 75703, and ZaZa Energy Corporation (“ZaZa Corporation”), a Delaware corporation, and ZaZa Energy LLC, a Texas limited liability company (“ZaZa LLC” and, together with ZaZa Corporation, “ZaZa”), each having an address of 1301 McKinney, Suite 2850, Houston, Texas 77010.  ZaZa and EOG are sometimes herein referred to individually as a “Party” and collectively as the “Parties.”
		

		
			Exhibits and Schedules; Definitions
		

		
			Reference is herein made to: (i) Appendix 1 attached hereto for a list of all exhibits and schedules attached to this Agreement and made a part hereof, and (ii) Appendix 2 attached hereto for a list of all defined terms in this Agreement.
		

		
			Recitals
		

		
			A.        The Parties have identified certain land located in Walker, Grimes, Madison, Trinity, and Montgomery Counties, Texas, outlined on the attached Exhibit “A” (but excluding the areas depicted and described on Exhibit “A” as “Excluded Areas”), which land is referred to herein as the “Project Area.”
		

		
			B.        ZaZa and EOG each own certain Oil and Gas Interests within the Project Area.  The Oil and Gas Interests owned by ZaZa within the Project Area are more particularly described on Exhibit “B-1” (the “ZaZa Leasehold”).  A portion of the ZaZa Leasehold consists of an undivided seventy-five percent (75%) of 8/8ths leasehold interest in those certain Oil and Gas Interests, comprising approximately 61,123 gross acres and 37,837 net mineral acres (i.e., ZaZa’s undivided seventy-five percent interest therein comprises approximately 28,277.5 net leasehold acres) within the Project Area, that were assigned by Range to ZaZa pursuant to the Range-ZaZa JV Agreement as more particularly described on Exhibit “B-2” ((the  “Range-ZaZa Leasehold”).
		

		
			C.        EOG desires to acquire an undivided interest in certain portions of the ZaZa Leasehold, and ZaZa is willing to grant, assign, and convey to EOG such interests and rights in exchange for certain considerations stated below, including the right to participate jointly with EOG in the exploration and development of the Project Area for oil and gas production.
		

		
			Agreement
		

		
			In consideration  of the foregoing, and of the mutual benefits and advantages accruing to the Parties, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ZaZa and EOG hereby agree as follows: 
		

		 

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 1.
			

			
			
			FIRST CLOSING AND INITIAL CASH CONSIDERATION

		
			The First Closing shall take place at the offices of Baker & McKenzie LLP, 711 Louisiana, Suite 3400, Houston, Texas 77002, at 10:00 a.m. (local time) on or before April 1, 2013, or such other time or place as the Parties may agree upon in writing (the “First Closing Date”).  Subject to Section 5.3, failure to consummate the First Closing on the date and time and at the place determined pursuant to Section 1 shall not result in the termination of this Agreement and shall not relieve either Party of any obligation under this Agreement.  Subject to Section 5.1.1, and pursuant to Section 5.2.2(h), at the First Closing, EOG will pay ZaZa, in cash (U.S. dollars) by federal funds wire transfer to an account designated by ZaZa, an amount equal to $10,000,000.00 (the “Initial Cash Consideration”).
		

			
			
				 2.
			

			
			
			AREA OF MUTUAL INTEREST

			
			
				 2.1
			

			
			
			Designation of Area of Mutual Interest.  Subject to exceptions set forth in Section 2.3, the Parties hereby establish an area of mutual interest consisting of all lands within the Project Area (the “AMI”).

			
			
				 2.2
			

			
			
			Exclusive Rights to Lease.  Subject to the Parties’ respective rights hereunder to participate in the Acquired Interests:

			
			
				 2.2.1.
			

			
			
			EOG shall have the exclusive right to acquire (i) Phase I and, if applicable, Phase II, Oil and Gas Interests within the area depicted and described on Exhibit “A” as ‘EOG Leasing Area” and (ii) during Phase  II, Oil and Gas Interests within the entire AMI; and

			
			
				 2.2.2.
			

			
			
			ZaZa shall have the exclusive right to acquire, during Phase I and, if applicable, Phase II,  Oil and Gas Interests within area depicted and described on Exhibit “A” as “ZaZa Leasing Area”.

		
			Each Party shall deliver to the other, no later than the fifth Business Day of each month, a written update of such leasing activity conducted, and all Acquired Interests acquired, in the prior month by such Party, including the estimated cost, location and net acres associated with each such acquisition.
		

			
			
				 2.3
			

			
			
			Exceptions from AMI.  For avoidance of doubt, the Leases are excluded from the AMI.

			
			
				 2.4
			

			
			
			Notice of Acquisition.  During the AMI Term and subject to Section 2.4.1,  if either Party or its Affiliates (the “Acquiring Party”) acquires, directly or indirectly, including the option or right to acquire, any Oil and Gas Interest within the AMI (an “Acquired Interest”), the Acquiring Party shall offer the other Party (the “Non-Acquiring Party”) the option of purchasing its Participation Interest in the Acquired Interest(s) in accordance with the following provisions.    Within thirty (30) calendar days after the Acquired Interest Offer Date, the Acquiring Party shall notify the Non-Acquiring Party in writing of such acquisition.    Such notice shall set forth (i) a description of the Acquired Interest, (ii) the total 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		Acquisition Cost of the Acquired Interest, (iii) the Participation Interest the Non-Acquiring Party is entitled to acquire hereunder, (iv) any other pertinent terms of such acquisition necessary for the Non-Acquiring Party to make an informed decision whether to participate in the Acquired Interest, including copies of the following to the extent within the Acquiring Party’s control: relevant leases, conveyances, assignments, bank draft or other evidence of payment for the interest, farmout agreements and term assignment agreements and any other agreements or commitments relating to the Acquired Interest, all lease take-off reports, landman’s run sheets, abstracts of title, deeds, leases, and encumbrances. There shall be no additional Encumbrances placed on any Acquired Interest by Acquiring Party at the time of or subsequent to its acquisition of such interest (except for Encumbrances that shall be borne entirely by Acquiring Party), such that the Non-Acquiring Party shall have, should it elect to participate, the same net revenue interest in its portion of the Acquired Interest as was initially obtained by the Acquiring Party.  By way of example, ZaZa may encumber its undivided interest in an Acquired Interest with the Post-3/1/13 Merger ORRIs, provided that the Post-3/1/13 Merger ORRIs shall be borne by ZaZa.

		
			The “Acquired Interest Offer Date” for any Acquired Interest shall be as follows:
		

		
			            (A)            the first day of the next calendar quarter following the date of acquisition or proposed acquisition of any Acquired Interest except Acquired Interests (x) outside of the outer boundaries of the area covered by Phase I while in Phase I  or outside of the outer boundaries of the areas covered by Phase I and Phase II (as then determined pursuant to Section 3.2)  if in Phase II; 
		

		
			            (B)            EOG’s election of Phase II for any Acquired Interest within the outer the area covered by Phase II (as then determined pursuant to Section 3.2) acquired prior to such election date; and 
		

		
			            (C)            for any Acquired Interest not previously offered pursuant to items A) or (B) immediately above, the earlier of (x) EOG’s election of Phase II and (y) he end of the AMI Term.  
		

			
			
				 2.4.1.
			

			
			
			Range-ZaZa Area of Mutual Interest.    If, after the Effective Date and through March 1, 2015 (being the term of the Range-ZaZa AMI), either Party or its Affiliates acquires, directly or indirectly, including the option or right to acquire, any Range AMI Interest within the Range-ZaZa AMI, then such acquiring Party shall offer the other Party and Range the option of purchasing their respective Participation Interest in such Range AMI Interest(s) in accordance with Section 2.5.2 and the provisions and procedures described in Paragraph 5 of the Range-ZaZa JV Agreement. 

			
			
				 2.5
			

			
			
			Participation Interests.  The interests of the Parties and Range within the AMI (the “Participation Interests”) shall be determined as follows:

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 2.5.1.
			

			
			
			Outside of the Range-ZaZa AMI.  With respect to all Acquired Interests other than those within the Range-ZaZa AMI, the Participation Interests which each Party may elect to acquire shall be as follows:

		
			                                    EOG                        75%
                                    ZaZa                        25%
		

		
			 
		

			
			
				 2.5.2.
			

			
			
			Within the Range-ZaZa AMI.  With respect to any Range AMI interests acquired by a Party within the Range-ZaZa AMI, the Participation Interests which each Party and Range may erect to acquire shall be as follows:

		
			                                    EOG                        50%
                                    ZaZa                        25%
		

		
			                                    Range                        25%
		

		
			 
		

		
			provided,  however, that if the Earning Point (as defined in the Range-ZaZa JV Agreement) is not reached, then, subject to Section 3.1.2.2, the Participation Interests of each Party and Range in such Range AMI Interest shall be as follows:
		

		
			                                    EOG                        33.33%
                                    ZaZa                        16.67%
		

		
			                                    Range                        50%;
		

		
			 
		

		
			provided,  further,  however, that if Range does not elect to participate in a Range AMI Interest within the Range-ZaZa AMI, then the Participation Interests of the Parties in such Range AMI shall be as follows:
		

		
			                                    EOG                        75%
                                    ZaZa                        25%
		

		
			 
		

			
			
				 2.6
			

			
			
			Election.    Upon delivery of the notice required under Section 2.4,  a Non-Acquiring Party shall have thirty (30) calendar days to elect to join in such acquisition to the extent of its Participation Interest.  Failure to notify the Acquiring Party of its election within thirty (30) calendar days after delivery of the required notice shall be conclusively deemed an election not to participate in the Acquired Interest.  If the Acquired Interest is a farmout/farmin, term  assignment, or  similar agreement requiring the drilling of a well or the performance of other obligations, the Non-Acquiring Party’s election to participate in the Acquired Interest shall include an agreement by the Non- Acquiring Party to assume and be bound by all obligations and terms imposed by any such agreement to the extent of the Non-Acquiring Party’s Participation Interest.  Irrespective of whether more than one Acquired Interest is offered on the same Acquired Interest Offer Date, elections shall be on an Acquired Interest  basis, with each Non-Acquiring Party having an independent election decision for each of the Acquired Interests required to be offered pursuant to Section 2.4.  

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 2.7
			

			
			
			Election Not to Participate.  If the Non-Acquiring Party elects or is deemed to have elected not to acquire an interest in an Acquired Interest, the Acquiring Party shall retain its full interest in the Acquired Interest and in any production therefrom or attributable thereto, and the Acquired Interest shall not be subject to this Agreement, notwithstanding anything to the contrary in this Agreement

			
			
				 2.8
			

			
			
			Conveyance of Acquired Interests.  Within (30) calendar days after a Non­ Acquiring Party’s election to participate in an Acquired Interest and concurrently with the Non-Acquiring Party’s payment to the Acquiring Party of its Participation Interest share of the Acquisition Costs incurred by the Acquiring Party to acquire same, the Acquiring Party shall  assign to  the  Non-Acquiring Party, using  the  form  of assignment attached hereto as Exhibit “C”, and except for any warranties made by the transferor to the Acquiring Party, without warranty of title, express or implied, except as to claims by,  through, and under the Acquiring Party, the appropriate percentage of undivided interest, pursuant to Section 2.5, in the Acquired Interests so acquired by the Acquiring Party and provide the Non-Acquiring Party with copies (to the extent such are in the Acquiring Party’s possession or control and were not previously provided with the notice of acquisition): (i) the lease and assignment; (ii) lease purchase report; (iii)  mineral ownership report; (iv) draft or check copy documenting payment; (v) W-9; and (vi) legal description and plat.   For purposes of this Section 2, “Acquisition Cost” is defined as all actual out of-pocket costs and expenses, including lease bonus or other cash payments to the assignor of Acquired Interest, land broker’s fee and commissions, title examination costs, attorney’s fees, recording fees, and taxes, but excluding in all cases internal charges and Affiliate charges.  Failure of a Non-Acquiring Party to timely pay its Participation Interest share of Acquisition Costs within the 30-day period following its election to participate in an Acquired Interest shall be deemed an election not to participate in such Acquired Interest and a waiver of any right to do so, notwithstanding any written to participate by that Party.

			
			
				 2.9
			

			
			
			Lands Outside of AMI.  Recognizing that a Party may acquire multiple Oil and Gas interests pursuant to a single acquisition contract, farmout agreement or term assignment, some of which may pertain to lands that are not within the AMI, this Section 2 shall apply only to that portion of the Acquired Interest that pertains to the boundaries of the AMI.  The Acquiring Party’s Acquisition Cost for the AMI portion shall be deemed to be:

		
			Acquisition Cost of AMI Portion = A * B/C
		

		
			WHERE “A” is the Acquisition Cost incurred by the Acquiring Party;  “B”  is the number of AMI net acres covered by such Acquired Interest; and “C” is the total net acres covered by the entire interest acquired (including the Acquired Interest); 
		

		
			provided,  however, that with respect to (i) any acquisition of Acquired Interests by merger, consolidation, reorganization or equity acquisition, (ii) any acquisition 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		of assets for which any Acquired Interests are subject to completion of specified obligations such as drill to earn requirements, or (iii) any other package deal for which the Acquisition Cost of the AMI portion is not reasonably determinable, then: the Acquisition Cost for such Acquired Interest will be the average acquisition costs, calculated on a net acre basis, paid by the Parties for other Acquired Interests within the 6-month period prior to such Acquired Interest Offer Date.
		

		
			The Non-Acquiring Party shall reimburse and pay the Acquiring Party for its Participation Interest share of the Acquisition Cost of the Acquired Interest, and, if applicable, its Participation Interest share of any costs for a well within the AMI.
		

			
			
				 2.10
			

			
			
			Operations.    All Acquired Interests jointly acquired by the Parties pursuant to Section 2.5 shall be subject to this Agreement and the JOA contemplated by Section 3.5.    

			
			
				 2.11
			

			
			
			AMI Term.  The AMI shall remain in effect until the later of December 31, 2015, or the expiration of the Term, unless sooner terminated by mutual written agreement of the Parties (the “AMI Term”).    Notwithstanding anything in this Agreement to the contrary, any Acquired Interest for which negotiations were commenced after the expiration of the AMI Term shall not be subject to the AMI.  

			
			
				 2.12
			

			
			
			EARNING PHASES, COMMITMENT WELLS AND EARNING PROVISIONS

			
			
				 2.13
			

			
			
			Phase I.

			
			
				 2.13.1.
			

			
			
			Phase I Assignment.

		
			At the First Closing, subject to the reassignment obligations set forth below in Section 3.1.4, ZaZa shall execute and deliver to EOG an assignment, in the form attached hereto as Exhibit “G-2”, of an undivided seventy-five percent (75%) of 8/8ths interest (except that, with respect only to Range-ZaZa Leasehold, the assignment shall be an undivided fifty percent (50%) of 8/8ths interest) in the Phase I Leases, and al associated rights therewith.  
		

			
			
				 2.13.2.
			

			
			
			Commitment Wells and Target Intervals.

		
			In addition to payment of Initial Cash Consideration by EOG to ZaZa, EOG further commits to drill three (3) wells (i.e.,  Well No. 1, Well No. 2, and Well No. 3 described below) at locations selected solely by EOG (after consultation with ZaZa) and in any order as determined solely by EOG (each a “Phase I Commitment Well”, and, collectively, the “Phase I Commitment Wells”), to test the Target Intervals (“Phase I”), as described below; provided,  however, that (a) unless the Parties agree otherwise, the wellbores for each Phase I Commitment Well shall be located such that all production therefrom is allocated solely to Phase I Leases, and (b) Well No. 2 shall be proposed to Range and drilled 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		pursuant to the requirements set forth in Paragraph 3 of the Range-ZaZa JV Agreement.  The Phase I Commitment Wells shall be the first three wells drilled and Completed by EOG within the Project Area.  
		

			
			
				 2.13.2.1.
			

			
			
			Well No. 1:  One Phase I Commitment Well (i.e., Well No. 1) shall be a vertical well to test the Lower Cretaceous Interval and may be utilized, at EOG’s sole discretion, as a monitor well for another Phase I Commitment Well prior to any completion attempt in the Target Interval.  EOG will bear 100% of Costs through Completion for a seventy-five percent (75%) of 8/8ths working interest in the well (except that, if the well is located on the Range-ZaZa Leasehold, EOG will bear 100% of Costs through Completion for a fifty percent (50%) of 8/8ths working interest in the well).  Subject to Section 3.9, this Well No. 1 and associated carry obligation will be deemed satisfied by (i) drilling to the top of the Georgetown Formation in the Lower Cretaceous Interval, and (ii) using reasonable commercial efforts as a reasonable prudent operator to Complete such well, whether or not said Well No. 1 is successfully Completed as a well capable of producing in paying quantities.

			
			
				 2.13.2.2.
			

			
			
			Well No. 2:  Another Phase I Commitment Well (i.e., Well No. 2) shall be a “horizontal drainhole well” (as defined in the Range-ZaZa JV Agreement) to test the Eagle Ford Interval within the Range-ZaZa Leasehold.  EOG will bear 100% of all costs and expenses incurred through the Earning Point (as defined in the Range-ZaZa JV Agreement) for a fifty percent (50%) of 8/8ths working interest in the well under the Range-ZaZa JV Agreement, subject to Range’s option to elect to take a 25% of 8/8ths working interest in the well.  If Range elects to take a working interest, ZaZa will instruct Range to reimburse to EOG 25% of the above costs.  If Range does not elect to participate, EOG shall earn a seventy-five percent (75%) of 8/8ths working interest in the well.  Operations for drilling Well No. 2 must commence on or before July 15, 2013, and said Phase I Commitment Well must be drilled and completed pursuant to the requirements set forth in Paragraph 3 of the Range-ZaZa JV Agreement, including the requirement that said Commitment Well reach the Earning Point (as defined in the. Range-ZaZa JV Agreement).  Notwithstanding the foregoing, if EOG commences Well No. 2 on or before July 15, 2013, but its efforts do not result in said Commitment Well fully satisfying the requirements set forth in Paragraph 3 of the Range-ZaZa JV Agreement, including the requirement that said Commitment Well timely reach the Earning Point, this Commitment Well and associated carry obligation will nevertheless be deemed satisfied by EOG (i) drilling to the Target Interval, and (ii) using reasonable commercial efforts as a reasonable prudent operator to Complete such well; provided that EOG shall reassign to Range a 16.67% of 8/8ths working interest, and ZaZa shall reassign to Range a 8.33% of 8/8ths working interest, respectively, in the “Range Leases” (as defined in, and described on 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		Exhibit “A-2” to the assignment to be executed pursuant to this Agreement in accordance with Section 3.1.1).  Prior to such reassignment, EOG may, at its sole option and discretion, commence drilling operations on a substitute well that meets the requirements set forth in this Section 3.1.2.2 and qualifies as a “Substitute Well” as defined in Paragraph 3 of the Range-ZaZa JV Agreement.  Notwithstanding the preceding, if EOG elects to commence such Substitute Well, then EOG will bear 100% of the Costs through Completion for such Substitute Well (as part of EOG’s Phase I Well No. 2 obligation).

			
			
				 2.13.2.3.
			

			
			
			Well No. 3:  Another Phase I Commitment Well (i.e., Well No. 3) shall be a horizontal well to test the Eagle Ford Interval on ZaZa Leasehold acreage other than Range-ZaZa Leasehold acreage.  EOG will bear 100% of the Costs through Completion for a seventy-five percent (75%) working interest in such Commitment Well.  EOG must commence operations for drilling Well No. 3 on or before December 31, 2013.  This Commitment Well and associated carry obligation will be deemed satisfied by EOG (i) drilling to the Target Interval, (ii) using reasonable commercial efforts as a reasonable prudent operator to drill a lateral or horizontal drainhole a minimum of four thousand feet (4,000’) in length in the Target Interval, provided, however, EOG shall have the option to limit horizontal drilling to such shorter length as may be deemed prudent, in EOG’s commercially reasonable discretion as a reasonable prudent operator, based on factors including then-existing hole conditions, equipment limitations, geologic factors or other relevant technological or mechanical considerations that would render further drilling impracticable, but in no event shall such lateral be less than one thousand five hundred feet (1,500’) in length in the Target Interval, and (iii) using reasonable commercial efforts as a reasonable prudent operator to Complete such well, whether or not a successful lateral drainhole is drilled a minimum of four thousand feet (4,000’) and whether or not such Commitment Well is successfully completed as a well capable of producing in paying quantities.

		
			EOG must commence operations for drilling the third Phase I Commitment Well on or before December 31, 2013.
		

			
			
				 2.13.3.
			

			
			
			Costs through Completion.

		
			The term “Costs through Completion” as used in this Section 3 shall mean all actual costs and expenses of drilling a Commitment Well through Completion, including all of the following costs to the extent and only to the extent the same are incurred on or before Completion:  all costs associated with the drilling of a Commitment Well that are chargeable to the joint account under the JOA and any third party title review or examination costs; permitting costs; drilling and completion costs; costs 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		for any on-lease facilities (including separation equipment and metering equipment) that are required to enable sales of hydrocarbons from the Commitment Well and if any Commitment Well is not capable of producing in paying quantities, then the costs of plugging and abandonment, restoration, and reclamation required by Applicable Law or contract and decommissioning and dismantling costs associated with such unsuccessful Commitment Well.   All costs and expenses incurred after Completion shall be borne by the Parties in proportion to each Party’s Participation Interest.  For avoidance of doubt, “Costs through Completion” shall not include any costs of infrastructure, gathering, flowlines, processing, or other costs related to transportation of natural gas that are incurred after regular sales of oil production have commenced.
		

			
			
				 2.13.4.
			

			
			
			Failure to Satisfy Phase I Commitment Well Obligations.

		
			If EOG fails to fully satisfy the specified drilling and completion requirements for all three (3) Phase I Commitment Wells:
		

			
			
				 (i)
			

			
			
			this Agreement shall terminate;

			
			
				 (ii)
			

			
			
			EOG shall forfeit the initial Cash Consideration;

			
			
				 (iii)
			

			
			
			EOG shall forfeit the right to enter into Phase II or Phase III as described below;

			
			
				 (iv)
			

			
			
			within thirty (30) days after the occurrence of such Early Termination Event, EOG shall reassign the Phase I Leases to ZaZa insofar and only insofar as they cover all of the lands covered thereby and not included in Earned Acreage; and

			
			
				 (v)
			

			
			
			within thirty (30) days after the occurrence of such Early Termination Event, EOG shall provide notice to ZaZa identifying (a) all Acquired Interests in which ZaZa participated and which are outside the boundaries of all Earned Acreage, and (b) the aggregate amount of EOG’s Participation Interest share of the Acquisition Costs for such Acquired Interests, and ZaZa shall have the option, but not the obligation, to acquire all of EOG’s right, title, and interest in such Acquired Interests.  Within thirty (30) days after delivery of such notice, ZaZa shall notify EOG whether it elects to exercise its option to acquire all of EOG’s right, title, and interest in such Acquired Interests.  ZaZa’s failure to notify EOG of its election within thirty (30) days after delivery of such notice shall be conclusively deemed an election to acquire all of EOG’s right, title, and interest in such Acquired Interests.  If ZaZa so elects, ZaZa shall reimburse EOG for the aggregate amount specified in EOG’s notice and, further, concurrently with such payment, EOG shall assign all of its right, title, and interest in all such Acquired Interests to ZaZa, without warranty of title, express, implied, or otherwise, except for any warranties made by 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		the transferor to EOG, and further except as to claims by, through, and under EOG.  If such an Acquired Interest lies partially within and partially outside the boundaries of Earned Acreage, then the portion of the total reimbursement amount applicable to such Acquired Interest shall be proportionately reduced on a surface acreage basis, and as to such Acquired Interest, the assignment from EOG to ZaZa shall be limited to that portion of the Acquired Interest lying outside the boundaries of the Earned Acreage. Notwithstanding the foregoing, ZaZa may request to acquire less than all of the Acquired Interests included in EOG’s notice, and EOG, in its sole discretion, may agree or decline to assign less than all of such Acquired Interests to ZaZa.  If EOG agrees to assign less than all of such Acquired Interests to ZaZa, then the reimbursement amount will be reduced accordingly.

		
			With respect to Phase I, “Earned Acreage” shall mean 10,000 Net Acres for each horizontal Phase I Commitment Well, which shall include the ZaZa Leasehold surrounding the applicable horizontal Phase I Commitment Well and, to the greatest extent possible, other ZaZa Leasehold contiguous with same, and may include outlying tracts in the same vicinity of same.  Thus, if EOG fully satisfies the specified drilling and completion requirements for both horizontal Phase I Commitment Wells, then the Earned Acreage for Phase I shall consist of all acreage covered by the Phase I Leases.  
		

		
			EOG shall designate the Earned Acreage for the first horizontal Phase I Commitment Well as to which EOG has satisfied the specified drilling and completion requirements in a written notice delivered to ZaZa within sixty (60) days after satisfying such requirements for such Commitment Well.
		

		
			Other than as described in this Section 3.1.4,  EOG shall have no liability or penalty to ZaZa under this Agreement for failing to satisfy its Commitment Well requirements with respect to Phase I.
		

			
			
				 2.14
			

			
			
			Phase II.  

		
			If EOG satisfies all Commitment Well requirements of Phase I as set forth in Section 3.1, then EOG shall have the option (but not the obligation) at its sole discretion to conduct additional drilling to earn additional interests in ZaZa Leasehold under this Section 3.2 (“Phase II”).  To elect to enter into Phase II, EOG must notify ZaZa in writing of its election by the later of: (a) sixty (60) days after satisfaction of its obligations under Phase I, but in any event no later than April 1, 2014; or (b) January 31, 2014.  Such notice shall designate the Leases selected by EOG for Phase II, which shall comprise such net leasehold acreage as will collectively deliver 20,000 Net Acres to EOG and will consist of ZaZa Leasehold interests in contiguous acreage to the greatest extent possible and may include any outlying tracts that are not contiguous but are in the vicinity of such acreage.  Upon delivery to ZaZa of such election, ZaZa shall promptly take such actions as necessary to notify the holders of all Preferential Rights and Required Consents 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		applicable to the selected Leases, and to seek the appropriate waivers or consents from such holders.  If ZaZa is unable to obtain any such waivers of Preferential Rights or any Required Consents within 30 days after EOG’s delivery to ZaZa of the notice designating the Leases for Phase II (or, with respect to Preferential Rights, such longer period as is specified in the terms and conditions of the Preferential Right), EOG shall identify other Leases to substitute for the affected Leases, which lands associated with such identified Leases must be contiguous with the originally designated Leases to the greatest extent possible.  If any Preferential Right or Required Consent applies to any substitute Lease, then ZaZa shall seek waivers of such Preferential Rights and any Required Consents consistent with the requirements of this Section 3.2.   All further obligations of the Parties which follow in this Section 3.2 with respect to such acreage burdened by Preferential Rights or Required Consents shall be conditioned on ZaZa securing the required waivers of Preferential Rights and any Required Consents on the Leases or substitute Leases identified by EOG in its election, which Leases and substitute Leases must comprise such net leasehold acreage as will collectively deliver 20,000 Net Acres to EOG.  Following this process, the Leases and such substitute Leases ultimately selected by EOG for Phase II shall constitute the “Phase II Leases.”
		

			
			
				 2.14.1.
			

			
			
			Phase II Cash Consideration, Phase II Assignment.

		
			Within ten (10) calendar days after final selection of the Phase II Leases, (a) EOG shall: (i) remit payment to ZaZa, in cash (U.S. dollars) by federal funds wire transfer to an account designated by ZaZa, an amount equal to $20,000,000.00 (the “Phase II Cash Consideration”), (ii) execute and deliver to ZaZa an original of the assignment of Phase II Leases described immediately below, and (iii) execute, acknowledge (if applicable), and deliver to ZaZa all other agreements, instruments, and documents as may be reasonably required by ZaZa to complete the Second Closing; and (b) subject to the reassignment obligations set forth below in Section 3.2.3,  ZaZa shall: (i) execute and deliver to EOG, in the form of assignment attached as Exhibit “G-l” (or, if the Phase II Leases include Range-ZaZa Leasehold, in the form of assignment attached as Exhibit “G-2”), in sufficient counterparts for recording in each county in which the Phase II Leases are located, an assignment of an undivided seventy-five percent (75%) of 8/8ths interest in the Phase II Leases (except that, with respect only to Range-ZaZa Leasehold, the assignment shall be such other percentage as is described in Section 2.5.2), and all associated rights therewith, (ii) deliver to EOG a fully executed and recordable original partial release of the U.S. Bank Mortgage as to any interest to be assigned to EOG with respect to the Phase II Leases, in sufficient counterparts for recording in each county in which the Phase II Leases are located, in a form reasonably approved by EOG, and (iii) execute, acknowledge (if applicable), and deliver to EOG all other agreements, instruments, and documents as may be reasonably required by EOG to complete the Second Closing.  ZaZa shall deliver (or cause to be delivered) to EOG the same net revenue interest in each Lease as ZaZa held as of the Effective Date, 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		free of any Encumbrances subsequently created by ZaZa after the Effective Date.
		

			
			
				 2.14.2.
			

			
			
			Phase II Commitment Wells and Target Intervals.

		
			In addition to payment of the Phase II Cash Consideration by EOG to ZaZa, EOG further commits to drill three (3) wells at locations selected by EOG (after consultation with ZaZa) (the “Phase II Commitment Wells”), to test the Target Intervals; provided,  however, that unless the Parties agree otherwise, (a) the wellbores for each Phase II Commitment Well shall be located such that all production therefrom is allocated solely to Phase I: Leases or Phase II Leases, and (b) the wellbore for at least one Phase II Commitment Well shall be located such that all production therefrom is allocated solely to Phase II Leases.  Except for (i) one monitoring well in Phase II (other than the Phase II vertical Commitment Well described below), and (ii) wells which are necessary to maintain Phase I Leases and Phase II Leases, the Phase II Commitment Wells shall be the fourth, fifth, and sixth wells drilled and Completed by EOG, respectively, in the Project Area, and EOG shall not commence drilling any additional wells during Phase I prior to electing into Phase II and drilling and Completing the Phase II Commitment Wells.
		

		
			The three (3) Phase II Commitment Wells shall consist of one vertical Lower Cretaceous Interval test, with respect to which EOG will use reasonable commercial efforts as a reasonable prudent operator to drill to the stratigraphic equivalent of the base of the [*] Formation, which occurs at a measured depth of [*] as shown on the [*] logs dated [*] for the [*] well, API No. 42‐471 [*],  Walker County, Texas, in the Lower Cretaceous Interval, and two horizontal Eagle Ford Interval tests, the order of drilling to be at EOG’s sole discretion.  EOG shall bear 100% of the Costs through Completion in each Phase II Commitment Well and shall provide ZaZa up to an additional $1,250,000.00 in work credit to be applied on ZaZa’s behalf for non-Commitment Well expenditures.   Without limitation, said work credit may be applied by EOG, at ZaZa’s election, toward ZaZa’s share of: costs and expenses for the drilling of a well (including a monitoring well) other than a Commitment Well during Phase II or, if applicable, Phase III; cost of 3D seismic acquisition; cost of microseismic monitoring of completion operations; and/or such other work activity as may be conducted during Phase II or, if applicable, Phase III.  
		

		
			Subject to Section 3.9,  each Phase II Commitment Well and its associated carry obligation shall be deemed satisfied by EOG (A) drilling to the Target Interval and (B) using reasonable commercial efforts as a reasonable prudent operator to Complete the Commitment Well (and in the case of horizontal tests, using reasonable commercial efforts as a reasonable prudent operator to drill a lateral or horizontal drainhole a 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		minimum of four thousand feet (4,000’) in length in the Target Interval), whether or not the Commitment Well (vertical or horizontal) is successfully Completed as a well capable of producing in paying quantities.  In drilling horizontal tests, EOG shall use its reasonable commercial efforts as a reasonable prudent operator to drill a lateral or horizontal drainhole a minimum of four thousand feet (4,000’) in length in the Target Interval.  However, EOG shall have the option to limit horizontal drilling to such shorter length as may be deemed prudent, in EOG’s commercially reasonable discretion, as a reasonable prudent operator, based on factors including then-existing hole conditions, equipment limitations; geologic factors or other relevant technological and mechanical considerations that would render further lateral drilling impracticable, provided,  however, the Commitment Well obligation for a horizontal well shall not be deemed satisfied unless a lateral has been drilled to at least one thousand five hundred feet (1,500’) in length in the Target Interval.
		

		
			EOG must commence operations for drilling the first Phase II Commitment Well on or before April 1, 2014, the second Phase II Commitment Well on or before August 1, 2014, and the third Phase II Commitment Well on or before December 31, 2014.  
		

			
			
				 2.14.3.
			

			
			
			Failure to Satisfy Phase II Commitment Well Obligations.

		
			If EOG fails to fully satisfy the specified drilling and completion requirements for all three (3) Phase II Commitment Wells:
		

			
			
				 (i)
			

			
			
			this Agreement shall terminate;

			
			
				 (ii)
			

			
			
			EOG shall forfeit the Phase II Cash Consideration;

			
			
				 (iii)
			

			
			
			EOG shall forfeit the right to enter into Phase III as described below;

			
			
				 (iv)
			

			
			
			within thirty (30) days after the occurrence of such Early Termination Event, EOG shall reassign the Phase II Leases to ZaZa insofar and only insofar as they cover all of the lands covered thereby and not included in Earned Acreage; and

			
			
				 (v)
			

			
			
			within thirty (30) days after the occurrence of such Early Termination Event, EOG shall provide notice to ZaZa identifying (a) all Acquired Interests in which ZaZa participated and which are outside the boundaries of all Earned Acreage, and (b) the aggregate amount of EOG’s Participation Interest share of the Acquisition Costs for such Acquired Interests, and ZaZa shall have the option, but not the obligation, to acquire all of EOG’s right, title; and interest in such Acquired Interests.  Within thirty (30) days after delivery of such notice, ZaZa shall notify EOG whether it elects to exercise its option to acquire all of EOG’s right, title, 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		and interest in such Acquired Interests.  ZaZa’s failure to notify EOG of its election within thirty (30) days after delivery of such notice shall be conclusively deemed an election to acquire all of EOG’s right, title, and interest in such Acquired Interests.  If ZaZa so elects, ZaZa shall reimburse EOG for the aggregate amount specified in EOG’s notice and, further, concurrently with such payment, EOG shall assign all of its right, title, and interest in all such Acquired Interests to ZaZa, without warranty of title, express, implied, or otherwise, except for any warranties made by the transferor to EOG, and further except as to claims by, through, and under EOG.  If such an Acquired Interest lies partially within and partially outside the boundaries of Earned Acreage, then the portion of the total reimbursement amount applicable to such Acquired Interest shall be proportionately reduced on a surface acreage basis, and as to such Acquired Interest, the assignment from EOG to ZaZa shall be limited to that portion of the Acquired Interest lying outside the boundaries of the Earned Acreage. Notwithstanding the foregoing, ZaZa may request to acquire less than all of the Acquired Interests included in EOG’s notice, and EOG, in its sole discretion, may agree or decline to assign less than all of such Acquired Interests to ZaZa.  If EOG agrees to assign less than all of such Acquired Interests to ZaZa, then the reimbursement amount will be reduced accordingly.

		
			With respect to Phase II, “Earned Acreage” shall mean 10,000 Net Acres for each horizontal Phase II Commitment Well, which shall include the ZaZa Leasehold surrounding the applicable horizontal Phase II Commitment Well and, to the greatest extent possible, other ZaZa Leasehold contiguous with same, and may include outlying tracts in the same vicinity of same.  Thus, if EOG fully satisfies the specified drilling and completion requirements for both horizontal Phase II Commitment Wells, then the Earned Acreage for Phase II shall consist of all acreage covered by the Phase II Leases.
		

		
			EOG shall designate the Earned Acreage for the first horizontal Phase II Commitment Well as to which EOG has satisfied the specified drilling and completion requirements in a written notice delivered to ZaZa within sixty (60) days after satisfying such requirements for such Commitment Well.
		

		
			Other than as described in this Section 3.2.3, EOG shall have no liability or penalty to ZaZa under this Agreement for failing to satisfy its Commitment Well requirements with respect to the Phase II Commitment Wells.
		

			
			
				 2.15
			

			
			
			Phase III.

		
			If EOG satisfies all Commitment Well obligations of Phase II as set forth in Section 3.2,  then EOG shall have the option (but not the obligation) at 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		its sole discretion to conduct additional drilling to earn additional interests in ZaZa Leasehold under this Section 3.3 (“Phase III”).  To elect to enter into Phase III, EOG must notify ZaZa in writing of its election by the later of: (A) sixty (60) days after satisfaction of its obligations under Phase II but in any event no later than April 1, 2015; or (B) January 31, 2015.  Such notice shall designate the Leases selected by EOG for Phase III, which shall comprise such net leasehold acreage as will collectively deliver 15,000 Net Acres to EOG and will consist of ZaZa Leasehold interests in contiguous acreage to the greatest extent possible and may include any outlying tracts that are not contiguous but are in the vicinity of such acreage.  Upon delivery to ZaZa of such election, ZaZa shall promptly take such actions as necessary to notify the holders of all Preferential Rights and Required Consents applicable to the selected Leases, and to seek the appropriate waivers or consents from such holders.  If ZaZa is unable to obtain any such waivers of Preferential Rights or any Required Consents within 30 days after EOG’s delivery to ZaZa of the notice designating the Leases for Phase III (or, with respect to Preferential Rights, such longer period as is specified in the terms and conditions of the Preferential Right), EOG shall identify other Leases to substitute for the affected Leases, which lands associated with such identified Leases must be contiguous with the originally designated Leases to the greatest extent possible.  If any Preferential Right or Required Consent applies to any substitute Lease, then ZaZa shall seek waivers of such Preferential Rights and Required Consents consistent with the requirements of this Section 3.3.    All further obligations of the Parties which follow in this Section 3.3 with respect to such acreage burdened by Preferential Rights or Required Consents shall be conditioned on ZaZa securing the required waivers of Preferential Rights and any Required Consents on the Leases or substitute Leases identified by EOG in its election, which Leases and substitute Leases must comprise such net leasehold acreage as will collectively deliver 15,000 Net Acres to EOG.  Following this process, the Leases and such substitute Leases ultimately selected by EOG for Phase III shall constitute the “Phase III Leases”.  
		

			
			
				 2.15.1.
			

			
			
			Phase III Cash Consideration; Phase III Assignment.

		
			Within ten (10) days after final selection of the Phase III Leases, (a) EOG shall: (i) remit payment to ZaZa, in cash (U.S. dollars) by federal funds wire transfer to an account designated by ZaZa, an amount equal to the sum of $20,000,000.00 (the “Phase III Cash Consideration”), (ii) execute and deliver to ZaZa an original of the assignment of Phase III Leases described immediately below, and (iii) execute, acknowledge (if applicable), and deliver to ZaZa all other agreements, instruments, and documents as may be reasonably required by ZaZa to complete the Third Closing; and (b) subject to the reassignment obligations set forth below in Section 3.3.3,  ZaZa shall: (i) execute and deliver to EOG, in the form of 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		assignment attached as Exhibit “G-l” (or, if the Phase III Leases include Range-ZaZa Leasehold, in the form of assignment attached as Exhibit “G‐2”) in sufficient counterparts for recording in each county in which the Phase III Leases are located, an assignment of an undivided seventy-five percent (75%) of 8/8ths interest in the Phase III Leases (except that, with respect only to Range-ZaZa Leasehold, the assignment shall be such other percentage as is described in Section 2.5.2), and all associated rights therewith, (ii) deliver to EOG a fully executed and recordable original partial release of the U.S. Bank Mortgage as to any interest to be assigned to EOG with respect to the Phase III Leases, in sufficient counterparts for recording in each county in which the Phase III Leases are located, in a form reasonably approved by EOG, and (iii) execute, acknowledge (if applicable), and deliver to EOG all other agreements, instruments, and documents as may be reasonably required by EOG to complete the Third Closing.  ZaZa shall deliver (or cause to be delivered) to EOG the same net revenue interest in each Lease as ZaZa held as of the Effective Date, free of any Encumbrances subsequently created by ZaZa after the Effective Date.
		

			
			
				 2.15.2.
			

			
			
			Phase III Commitment Wells and Target Intervals.

		
			In addition to payment of the Phase III Cash Consideration by EOG to ZaZa, EOG further commits to drill three (3) wells at locations selected by EOG (after consultation with ZaZa) (the “Phase III Commitment Wells”), to test the Target Intervals; provided,  however, that unless the Parties agree otherwise, (a) the wellbores for each Phase III Commitment Well shall be located such that all production therefrom is allocated solely to Phase I Leases, Phase II Leases, or Phase III Leases, and (b) the wellbore for at least one Phase III Commitment Well shall be located such that all production therefrom is allocated solely to Phase III Leases.  Except for (i) one monitoring well during Phase III (other than the Phase III vertical Commitment Well described below), and (ii) wells which are necessary to maintain Phase I Leases, Phase II Leases or Phase III Leases, the Phase III Commitment Wells shall be the seventh, eighth, and ninth wells drilled and Completed by EOG, respectively, in the Project Area, and EOG shall not commence drilling any additional wells during Phase II prior to electing into Phase III and drilling and Completing the Phase III Commitment Wells.
		

		
			The three (3) Phase III Commitment Wells shall consist of one vertical Lower Cretaceous Interval test, with respect to which EOG will use reasonable commercial efforts as a reasonable prudent operator to drill to the stratigraphic equivalent of the base of the [*] Formation, which occurs at a measured depth of [*] as shown on the [*] logs dated [*] for the [*] well, API No. 42-471 [*], Walker County, Texas, in the Lower Cretaceous Interval, and two horizontal Eagle Ford Interval tests, the order of drilling 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		to be at EOG’s sole discretion.  EOG shall bear 100% of the Costs through Completion in each Phase III Commitment Well and shall provide ZaZa up to an additional $1,250,000.00 in work credit to be applied on ZaZa’s behalf for non-Phase III Commitment Well expenditures.  Without limitation, said work credit may be applied by EOG, at ZaZa’s election, toward ZaZa’s share of: costs and expenses for a well (including a monitoring well) other than a Commitment Well during Phase III; cost of 3D seismic acquisition; cost of microseismic monitoring of completion operations; and/or such other work activity as may be conducted during Phase III.
		

		
			Subject to Section 3.9,  each Phase III Commitment Well and its associated carry obligation shall be deemed satisfied by EOG (A) drilling to the Target Interval and (B) using reasonable commercial efforts as a reasonable prudent operator to Complete the Commitment Well (and in the case of horizontal tests, using reasonable commercial efforts as a reasonable prudent operator to drill a lateral or horizontal drainhole the minimum of four thousand feet (4,000’) in length in the Target Interval), whether or not the Commitment Well (vertical or horizontal) is successfully Completed as a well capable of producing in paying quantities.  In drilling horizontal tests, EOG will use its reasonable commercial efforts as a reasonable prudent operator to drill a lateral or horizontal drainhole a minimum of four thousand feet (4,000’) in length in the Target Interval.  However, EOG shall have the option to limit horizontal drilling to such shorter length as may be deemed prudent, in EOG’s commercially reasonable discretion as a reasonable prudent operator, based on factors including then-existing hole conditions, equipment limitations, geologic factors or other relevant technological or mechanical considerations that would render further lateral drilling impracticable, provided,  however, the Commitment Well obligation for a horizontal well shall not be deemed satisfied unless a lateral has been drilled to at least one thousand five hundred feet (1,500’) in length In the Target Interval.
		

		
			EOG must commence operations for drilling the third Phase III Commitment Well on or before December 31, 2015.
		

			
			
				 2.15.3.
			

			
			
			Failure to Satisfy Phase III Commitment Well Obligations.  

		
			If EOG fails to fully satisfy the specified drilling and completion requirements for all three (3) Phase III Commitment Wells:
		

			
			
				 (i)
			

			
			
			this Agreement shall terminate;

			
			
				 (ii)
			

			
			
			EOG shall forfeit the Phase III Cash Consideration; and

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 (iii)
			

			
			
			within thirty (30) days after the occurrence of such Early Termination Event, EOG shall reassign the Phase III Leases to ZaZa insofar and only insofar as they cover all of the lands covered thereby and not included in Earned Acreage; and

			
			
				 (iv)
			

			
			
			within thirty (30) days after the occurrence of such Early Termination Event, EOG shall provide notice to ZaZa identifying (a) all Acquired Interests in which ZaZa participated and which are outside the boundaries of all Earned Acreage, and (b) the aggregate amount of EOG’s Participation Interest share of the Acquisition Costs for such Acquired Interests, and ZaZa shall have the option, but not the obligation, to acquire all of EOG’s right, title, and interest in such Acquired Interests.  Within thirty (30) days after delivery of such notice, ZaZa shall notify EOG whether it elects to exercise its option to acquire all of EOG’s right, title, and interest in such Acquired Interests.  ZaZa’s failure to notify EOG of its election within thirty (30) days after delivery of such notice shall be conclusively deemed an election to acquire all of EOG’s right, title, and interest in such Acquired Interests.  If ZaZa so elects, ZaZa shall reimburse EOG for the aggregate amount specified in EOG’s notice and, further, concurrently with such payment, EOG shall assign all of its right, title, and interest in all such Acquired Interests to ZaZa, without warranty of title, express, implied, or otherwise, except for any warranties made by the transferor to EOG, and further except as to claims by, through, and under EOG.   If such an Acquired Interest lies partially within and partially outside the boundaries of Earned Acreage, then the portion of the total reimbursement amount applicable to such Acquired Interest shall be proportionately reduced on a surface acreage basis, and as to such Acquired Interest, the assignment from EOG to ZaZa shall be limited to that portion of the Acquired Interest lying outside the boundaries of the Earned Acreage. Notwithstanding the foregoing, ZaZa may request to acquire less than all of the Acquired Interests included in EOG’s notice, and EOG, in its sole discretion, may agree or decline to assign less than all of such Acquired Interests to ZaZa.  If EOG agrees to assign less than all of such Acquired Interests to ZaZa, then the reimbursement amount will be reduced accordingly.

		
			With respect to Phase III, “Earned Acreage” shall mean 7,500 Net Acres for each horizontal Phase III Commitment Well, which shall include the ZaZa Leasehold surrounding the applicable horizontal Phase III Commitment Well and, to the greatest extent possible, other ZaZa Leasehold contiguous with same, and may include outlying tracts in the same vicinity of same. Thus, if EOG fully satisfies the specified drilling and completion requirements for both horizontal Phase III Commitment Wells, then the Earned Acreage for Phase III shall consist of all acreage covered by the Phase III Leases, EOG shall designate the Earned Acreage for the first horizontal Phase III Commitment Well as to which EOG has 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		satisfied the specified drilling and completion requirements in a written notice delivered to ZaZa within sixty (60) days after satisfying such requirements for such Commitment Well.
		

		
			Other than as described in this Section 3.3.3, EOG shall have no liability or penalty to ZaZa under this Agreement for failing to satisfy its Commitment Well requirements with respect to Phase III.
		

			
			
				 2.16
			

			
			
			Lease Protection Wells.   If EOG elects to drill any well that is necessary to maintain a Lease pursuant to Section 3.2.2(ii) or Section 3.3.2(ii),  EOG shall bear 100% of the Costs through Completion for such well as if such well were a Commitment Well, and such well shall be designated as a Commitment Well that satisfies EOG’s obligations with respect to one of its Commitment Wells in Phase II or Phase III, as the case may be.  If EOG elects not to proceed with Phase II or Phase III, as the case may be, and has satisfied its Commitment Well obligations for the preceding Phase, then upon 20 calendar days’ notice, ZaZa will reimburse EOG for ZaZa’s Participating Interest share of the Costs through Completion for such additional carried well.  Notwithstanding the preceding, ZaZa shall have the right to elect (prior to the spud date) to pay its Participation Interest share of costs for any Lease maintenance well proposed pursuant to Section 3.2.2(ii) or Section 3.3.2(ii),  in which case, should ZaZa elect to participate, such well shall not count as a Commitment Well.

			
			
				 2.17
			

			
			
			Treatment of Overrides.

			
			
				 2.17.1.
			

			
			
			Pre-3/11/13 Merger ORRIs.  With respect to each Commitment Well that is Completed and is capable of producing, ZaZa shall bear 100% of any burdens associated with the Pre-3/11/13 Merger ORRIs out of its Participation Interest share until Payout.  From and after Payout for a Commitment Well, and at all times for any other well drilled on the Leases, the Pre-3/11/13 Merger ORRIs for such well shall be treated as any other royalty burdening the leasehold estate, with such burden shared according to the Parties’ respective Participation Interests.

			
			
				 2.17.2.
			

			
			
			Post-3/11/13 Merger ORRIs. With respect to any well (including any Commitment Well) drilled on the Leases, ZaZa shall bear 100% of any burdens associated with the Post-3/11/13 Merger ORRIs out of its Participation interest share at all times.

			
			
				 2.18
			

			
			
			Substitute Wells.  If EOG is unable to satisfy the specified requirements for any Commitment Well because of mechanical or other operational difficulties or because the well encounters excessive water flow, loss of circulation, excessive pressures, cavities, caprock, salt or salt dome material, heaving shale or other practicably impenetrable conditions which would, in the opinion of a reasonable prudent operator, render further drilling impracticable, then EOG may at its sole discretion (after consultation with ZaZa), commence drilling operations on a substitute Commitment Well at another location selected by EOG, with the 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		exception of Phase I, Well No. 2, at EOG’s sole discretion (after consultation with ZaZa) (“Substitute Well”), within the Project Area within ninety (90) days after completion of abandonment obligations for the well being replaced (or shorter time period if required to comply with the ZaZa Leasehold lease obligations) and thereupon the Substitute Well shall be considered and treated for all purposes hereunder as though the same is a Commitment Well.

			
			
				 2.19
			

			
			
			Joint Operating Agreement. The Parties agree to execute the joint operating agreement attached hereto as Exhibit “D” (“JOA”) based on the 1989 AAPL Model Form Joint Operating Agreement and naming EOG as Operator (as defined in the JOA).  The JOA shall govern operations on the Project Area.  The “Contract Area” (as defined in the JOA) covered by the JOA shall be the same as the Project Area less and except any lands covered by the Range-ZaZa JOA.  The interests of the Parties in the “Contract Area” of the JOA shall be EOG 75% and ZaZa 25%.  On the expiration of the Term (unless EOG has fully satisfied its earning obligations for Phases I, II and III as set forth in Section 3), the Parties shall amend the JOA to modify the “Contract Area” to cover the Project Area insofar and only insofar as to include lands covered by Leases in which EOG retains an undivided interest.

			
			
				 2.20
			

			
			
			Thrice-Yearly Technical and Operational Meetings.  EOG agrees to conduct, at EOG’s offices, thrice-yearly meetings with ZaZa on technical and operational aspects of EOG’s present and future activities on the Project Area.  At least every four (4) calendar months, EOG shall provide to ZaZa the following reports and data to the extent generated from operations conducted on the Project Area: (i) a work report estimating drilling and other activities for the next 12 months, (ii) a land report showing leases under negotiation and an estimate of land acquisitions over the next 12 months, (iii) copies of all logs or surveys, including in digitally recorded format if available, daily drilling and production reports, (iv) copies of all tests and core data, (v) copies of written notices provided to EOG by any third Person regarding violations or potential violations of Applicable Law or Permits, (vi) copies of all regulatory reports filed by EOG with any Governmental Entity, and (vii) copies of all title opinions, including as applicable drill site title opinions and division order title opinions; provided, however, that if any such reports are prepared by a third Person that is not an Affiliate of EOG, then unless the costs of such third Person’s services are chargeable to the joint account under the JOA, EOG shall not be required to provide such third Person reports to ZaZa.

			
			
				 2.21
			

			
			
			Well and Technical Data.  EOG shall furnish ZaZa with the notices, reports and other data as provided in Exhibit “F” attached hereto, and to conduct the tests and surveys provided for therein, and ZaZa shall have ongoing access to EOG’s online platform for data delivery (currently “box.com”).  ZaZa shall have the right to send its employees or representatives to observe such tests and surveys and the results thereof; provided, however, ZaZa and its Representatives shall observe such tests, surveys, and results at the sole risk and expense of ZaZa, which shall be fully liable for all damages, liabilities, and destruction of property or injury or 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		death of individuals resulting from, or in any way attributable to, the actions of ZaZa or its Representatives while such individuals are on the Project Area.

			
			
				 2.22
			

			
			
			Excess Leases.  Following final selection of the Phase III Leases, EOG shall have the option (but not the obligation) to notify ZaZa that EOG elects to acquire an undivided interest (as described below) in any remaining ZaZa Leasehold within the Project Area for an additional payment of [*] per Net Acre, excluding the areas depicted on Exhibit “A” as “Excluded Areas.”  Upon delivery to ZaZa of such election, ZaZa shall promptly take such actions as necessary to notify the holders of all Preferential Rights and Required Consents applicable to the selected Leases, and to seek the appropriate waivers or consents from such holders.  Any such Leases as to which all necessary waivers of Preferential Rights and Required Consents are obtained shall constitute the “Assigned Excess Leases,” and the sum of [*] per Net Acre in the Assigned Excess Leases shall constitute the “Excess Lease Consideration.”  Within ten (10) days after ZaZa has provided EOG with all necessary waivers of Preferential Rights and Required Consents with respect to the Assigned Excess Leases, EOG shall remit the Excess Lease Consideration to ZaZa, in cash (U.S. dollars) by federal funds wire transfer to an account designated by ZaZa, and contemporaneously therewith ZaZa shall assign to EOG an undivided seventy-five percent (75%) of 8/8ths interest in the Assigned Excess Leases (except that, with respect only to Range-ZaZa Leasehold, the assignment shall be such other percentage as is described in Section 2.5.2), and all associated rights therewith.  Such assignment shall be on the form of assignment attached as Exhibit “G-1” (or, if the Assigned Excess Leases include Range-ZaZa Leasehold, in the form of assignment attached as Exhibit “G-2”).  For avoidance of doubt, EOG shall have no reassignment obligation with respect to the Assigned Excess Leases, regardless whether EOG fully satisfies its Commitment Well requirements with respect to Phase III.

			
			
				 2.23
			

			
			
			REPRESENTATIONS AND WARRANTIES

			
			
				 2.24
			

			
			
			ZaZa’s Representations and Warranties.  ZaZa Corporation and ZaZa LLC each represents and warrants (as to itself and not with respect to the other, and further, as to those representations and warranties described in Sections 4.1(d),  (e),  (f),  (j),  (k),  (l), and (m) below, only to the extent of its ownership interest in the ZaZa Leasehold), as of the date of this Agreement and as of the date of each Closing, to EOG that:

			
			
				 (a)
			

			
			
			ZaZa Corporation is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to own properties and conduct oil and gas operations in the State of Texas; and (ii) ZaZa LLC is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Texas and is duly qualified to own properties and conduct oil and gas operations in the State of Texas; 

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 (b)
			

			
			
			the execution and delivery of this Agreement have been, and the performance of this Agreement and the Transactions are, duly and validly authorized by all requisite action on the part of it, including due approval by it in accordance with its governing documents;

			
			
				 (c)
			

			
			
			it is not in breach or default of the obligations under the Range-ZaZa JV Agreement, nor has it received any notice from, and to its Knowledge there is not any assertion by, Range, any Governmental Entity, or any other Person claiming any violation or repudiation of the Range-ZaZa JV Agreement or any violation of any Applicable Law with respect to same;

			
			
				 (d)
			

			
			
			(i) the ZaZa Leasehold comprises no less than: fifty-five thousand (55,000) Net Acres as of the First Closing, thirty-five thousand (35,000) Net Acres as of the Second Closing, and fifteen thousand (15,000) Net Acres as of the Third Closing; (ii) it owns the ZaZa Leasehold free and clear of the claims of any Person claiming by, through or under it other than Permitted Encumbrances; (iii) no consent, approval, order or authorization of, or declaration, filing or registration with, any Governmental Entity or any other Person (including any consents under the Leases) is required to be obtained or made by it in connection with the Transactions other than those certain consents to assign (the “Required Consents”) required under the instruments, documents, and agreements set forth on Schedule 4.1(d)(iii); and (iv) no part of the ZaZa Leasehold is subject to any Preferential Right, rights of first refusal, or similar rights;

			
			
				 (e)
			

			
			
			it has not created, assigned, conveyed, suffered, or permitted to exist any Encumbrance on all or any part of the Project Area or ZaZa Leasehold other than the Permitted Encumbrances;

			
			
				 (f)
			

			
			
			except as set forth on Schedule 4.1(f), no Proceeding is pending or, to its Knowledge, threatened, on all or any portion of the ZaZa Leasehold, or on its ability to consummate the Transactions, or which could materially and adversely affect EOG’s ownership or operations of the ZaZa Leasehold;

			
			
				 (g)
			

			
			
			there are no bankruptcy, reorganization, or similar arrangement proceedings pending, being contemplated by, or threatened against it or any of its Affiliates;

			
			
				 (h)
			

			
			
			it has knowledge, skill, and experience in financial, business, and investment matters relating to the Transactions and is capable of evaluating the merits and risks of the Transactions.  To the extent deemed necessary by it, it has retained, at its sole expense, and relied upon, appropriate professional advice regarding the investment, tax, and legal merits and consequences of its execution of this Agreement;

			
			
				 (i)
			

			
			
			neither it nor any of its Affiliates has incurred any obligation or entered into any agreement for any investment banking, brokerage, or finder’s fee, 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		or commission in respect of the Transactions for which EOG or any Affiliate of EOG shall incur any liability;

			
			
				 (j)
			

			
			
			(i) it has paid all Taxes on or relating to the ZaZa Leasehold, which are currently due and payable as required by Applicable Law prior to delinquency; (ii) there is not currently in effect any extension or waiver by it of any statute of limitations of any jurisdiction regarding the assessment or collection of any such Tax related to the ZaZa Leasehold; (iii) the ZaZa Leasehold is not bound as of the Effective Date by any tax partnership agreement that will be binding upon EOG; (iv) it is not a nonresident alien, foreign person, foreign partnership, foreign trust, foreign estate, or foreign corporation (as those terms are defined in the Code); and (v) it is not an  “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and is not otherwise subject to regulation under or the restrictions of such act;

			
			
				 (k)
			

			
			
			(i) it has not received written notice of any request or demand for payments, adjustments of payments or performance pursuant to the obligations under all or any portion of the ZaZa Leasehold that are still outstanding; (ii) it has not received a written notice of default with respect to the payment or calculation of royalties, overriding royalties, rentals, or bonuses that has not been cured; (iii) all bonus, rental, and other payments provided in the Leases (excluding the Range-ZaZa Leasehold) due and payable have been paid; and (iv) to its Knowledge, all bonus, rental, and other payments with respect to the Range-ZaZa Leasehold due and payable have been paid;

			
			
				 (l)
			

			
			
			ZaZa Corporation and ZaZa LLC, collectively, have title that is properly filed for record in the appropriate public records in a manner sufficient to give constructive notice to third Persons and which (i) with respect to each Lease, covers the number of Net Acres set forth for such Lease in Exhibit “B-1”; (ii) shall entitle EOG to a net revenue interest (“NRI”) in each Lease and all oil, gas, and other hydrocarbons and minerals produced therefrom that is not less than the NRI set forth in Exhibit “B-1” for such Lease, proportionately reduced to the assigned working interest; and (iii) is free and clear of Encumbrances other than the. Permitted Encumbrances; and

			
			
				 (m)
			

			
			
			each Lease has a primary term expiring no sooner than the date set forth for such Lease on Exhibit “B-1”.

		
			Any references to the ZaZa Leasehold in Section 4.1 above shall be interpreted to mean (A) with respect to the date of this Agreement and the First Closing, the entire ZaZa Leasehold; (B) with respect to the Second Closing, the ZaZa Leasehold less and except for the Phase I Leases; and (C) with respect to the Third Closing, the ZaZa Leasehold less and except for the Phase I Leases and Phase II Leases and (D) if applicable, with respect to the Fourth Closing, any 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		remaining ZaZa Leasehold within the Project Area less and except the Phase I Leases, Phase II Leases, and the Phase III Leases.
		

		
			The representations and warranties of ZaZa contained in this Agreement and in any assignment executed hereunder are exclusive and are in lieu of all other representations and warranties, express, implied, statutory, or otherwise, whether contained in any writing or communicated orally and whether made by ZaZa or its Representatives.  Without limitation of the foregoing, and except as provided for in this Agreement and in any assignment executed hereunder, ZaZa expressly disclaims any and all such other representations and warranties, including as to (i) title to any of the ZaZa Leasehold, (ii) the contents, character or nature of any Files or information provided by ZaZa or its Representatives; (iii) the quantity, quality or recoverability of hydrocarbons in or from the ZaZa Leasehold or any estimates of the value or future revenues to be generated from the ZaZa Leasehold.  
		

			
			
				 2.25
			

			
			
			EOG’s Representations and Warranties.  EOG represents and warrants to ZaZa, as of the date of this Agreement and as of the date of each Closing, that:

			
			
				 (a)
			

			
			
			EOG is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to own properties and conduct oil and gas operations in the State of Texas;

			
			
				 (b)
			

			
			
			the execution and delivery of this Agreement has been, and the performance of this Agreement and the Transactions are, duly and validly authorized by all requisite action on the part of LOG, including due approval by LOG in accordance with its governing documents;

			
			
				 (c)
			

			
			
			EOG has knowledge, skill, and experience in financial, business, and investment matters relating to the Transactions and is capable of evaluating the merits and risks of such transactions.  To the extent deemed necessary by EOG, EOG has retained, at its sole expense, and relied upon, appropriate professional advice regarding the investment, tax, and legal merits and consequences of its execution of this Agreement; and 

			
			
				 (d)
			

			
			
			neither EOG nor its Affiliates has incurred any obligation or entered into any agreement for any investment banking, brokerage, or finder’s fee, or commission in respect of the Transactions for which ZaZa or any Affiliate of ZaZa shall incur any liability.

		
			The representations and warranties of EOG contained in this Agreement and in any assignment executed hereunder are exclusive and are in lieu of all other representations and warranties, express, implied, statutory, or otherwise, whether contained in any writing or communicated orally and whether made by EOG or its 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		Representatives.  Without limitation and in any assignment executed hereunder, EOG expressly disclaims any and all such other representations and warranties.  
		

			
			
				 (e)
			

			
			
			CONDITIONS PRECEDENT TO FIRST CLOSING; FIRST CLOSING OBLIGATIONS; TERMINATION; ADDITIONAL COVENANTS AND OBLIGATIONS

			
			
				 2.26
			

			
			
			Conditions Precedent to First Closings.

			
			
				 2.26.1.
			

			
			
			Conditions Precedent to EOG’s Obligation to Close.  EOG’s obligation to take the actions required of EOG at the First Closing is subject to the satisfaction, at or prior to the First Closing, of each of the following conditions (any of which may be waived by EOG, in whole or in part):

			
			
				 (a)
			

			
			
			All of ZaZa’s representations and warranties in this Agreement must have been accurate in all material respects (or, with respect to representations and Warranties qualified by materiality, in all respects) as of the date of this Agreement, and same must be accurate in all material respects (or, with respect to representations and warranties qualified by materiality, in all respects) as of the First Closing Date as if made on the First Closing Date;

			
			
				 (b)
			

			
			
			All of the covenants, agreements, conditions, and obligations that ZaZa is required to perform or to comply with pursuant to this Agreement at or prior to the First Closing must have been duly performed and complied with in all material respects;

			
			
				 (c)
			

			
			
			ZaZa must deliver each document, instrument, and agreement required to be delivered by it pursuant to Section 5.2.1; and

			
			
				 (d)
			

			
			
			EOG must have completed its due diligence review of the ZaZa Leasehold (including title thereto) and the Project Area and be reasonably satisfied that it can identify Leases to select for Phase I comprising twenty thousand (20,000) Net Acres as to which no more than ten percent (10%) of same is affected by Defects.  Without limitation, for purposes of this Section 5.1.1(d), only, any of the following shall be reasonably considered a “Defect”:

			
			
				 (i)
			

			
			
			a fact, event, condition, or matter that would cause or result in the representations and warranties contained in Sections 4.1(d),  (e),  (f),  (j),  (k),  (l), or (m) to be untrue or inaccurate, in whole or in part;

			
			
				 (ii)
			

			
			
			a fact, event, condition, or matter that would materially affect or interfere with the development of a Lease or the operation, use, or ownership thereof, including conditions arising from other operations, surface or subsurface conditions, third-Person objections, or Governmental Entity restrictions;

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 (iii)
			

			
			
			a materially adverse restriction or drilling requirement imposed by a Lease (regardless of whether termination of the Lease in whole or in part is the only penalty for noncompliance);

			
			
				 (iv)
			

			
			
			the absence from a Lease of adequate pooling, unitization or communitization authority or other provisions reasonably necessary for EOG to form a pooled unit;

			
			
				 (v)
			

			
			
			a condition of default of the lessee’s obligations under a Lease (or the written notice thereof by a third-Person); or

			
			
				 (vi)
			

			
			
			a depth limitation in a Lease that would prevent EOG from drilling to the Target Interval for any Commitment Well.

			
			
				 2.26.2.
			

			
			
			Conditions Precedent to ZaZa’s Obligation to Close.   ZaZa’s obligation to, take the actions required of ZaZa at the First Closing is subject to the satisfaction, at or prior to the First Closing, of each of the following conditions (any of which may be waived by ZaZa, in whole or in part):

			
			
				 (a)
			

			
			
			All of EOG’s representations and warranties in this Agreement must have been accurate in all material respects (or, with respect to representations and warranties qualified by materiality, in all respects) as of the date of this Agreement, and must be accurate in all material respects (or, with respect to representations and warranties qualified by materiality, in all respects) as of the First Closing Date as if made on the First Closing Date;

			
			
				 (b)
			

			
			
			All of the covenants, agreements, conditions, and obligations that EOG is required to perform or to comply with pursuant to this Agreement at or prior to the First Closing must have been duly performed and complied with in all material respects; and

			
			
				 (c)
			

			
			
			EOG must deliver each document, instrument, and agreement required to be delivered by it pursuant Section 5.2.

			
			
				 2.27
			

			
			
			First Closing Obligations.

			
			
				 2.27.1.
			

			
			
			ZaZa’s Closing Deliverables.  At the First Closing, ZaZa shall deliver to EOG

			
			
				 (a)
			

			
			
			an executed and acknowledged original assignment of the Phase I Leases in sufficient counterparts for recording in each county in which the Phase I Leases are located, in the form attached hereto as Exhibit “G-2”, dated effective as of the Effective Date;

			
			
				 (b)
			

			
			
			an executed original JOA dated effective as of the Effective Date;

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 (c)
			

			
			
			an executed and acknowledged original Memorandum of JOA, in sufficient counterparts for recording in each county in which the Leases are located, in the form attached hereto as Exhibit “E”;

			
			
				 (d)
			

			
			
			executed original Federal Foreign Investment in Real Property Tax Act of 1980 and 1984 (FIRPTA) certificates for ZaZa Corporation and ZaZa LLC, in the form attached hereto as Exhibit “J”;

			
			
				 (e)
			

			
			
			a written, executed settlement statement regarding the Transactions with respect to the First Closing, in a form reasonably approved by the Parties;

			
			
				 (f)
			

			
			
			a copy of the Letter Agreement executed by ZaZa and Range, in a form approved by EOG;

			
			
				 (g)
			

			
			
			fully executed copies of all Required Consents (including signatures of all consenting parties) required under the instruments, documents, and agreements set forth on Schedule 4.1(d)(iii);

			
			
				 (h)
			

			
			
			a fully executed original Surface Use Agreement by and among ZaZa LLC, Rayonier Forest Resources, L.P., and TerraPointe LLC, in a form approved by EOG;

			
			
				 (i)
			

			
			
			a fully executed and recordable original partial release of the U.S. Bank Mortgage as to any interest to be assigned to EOG with respect to the Phase I Leases, in sufficient counterparts for recording in each county in which the Phase I Leases are located, in a form reasonably approved by EOG;

			
			
				 (j)
			

			
			
			an executed and acknowledged original Memorandum of Joint Exploration and Development Agreement, in sufficient counterparts for recording in each county in which the Leases are located, in the form attached hereto as Exhibit “I”;  

			
			
				 (k)
			

			
			
			an executed original letter from Range to ZaZa confirming that ZaZa has satisfied all covenants and obligations set forth in the Fifth Amendment to the Range-ZaZa JV Agreement with respect to the Re-entry Well (as defined in the Range-ZaZa JV Agreement), in a form approved by EOG; and

			
			
				 (l)
			

			
			
			all other executed and acknowledged (if applicable) agreements, instruments, and documents as may be reasonably required by EOG to complete the Transactions.

			
			
				 2.27.2.
			

			
			
			EOG’s Closing Deliverables.   At the First Closing, EOG shall deliver to ZaZa:

			
			
				 (a)
			

			
			
			an executed and acknowledged original assignment of the Phase I Leases in the form attached hereto as Exhibit “G-2” dated effective as of the Effective Date;

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 (b)
			

			
			
			an executed original JOA dated effective as of the Effective Date;

			
			
				 (c)
			

			
			
			an executed and acknowledged original Memorandum of JOA in the form attached hereto as Exhibit “E”;

			
			
				 (d)
			

			
			
			a written, executed settlement statement regarding the Transactions with respect to the First Closing, in a form reasonably approved by the Parties;

			
			
				 (e)
			

			
			
			a copy of the Letter Agreement executed by EOG;

			
			
				 (f)
			

			
			
			an executed and acknowledged original Memorandum of Joint Exploration and Development Agreement in the form attached hereto as Exhibit “I”;

			
			
				 (g)
			

			
			
			all other executed and acknowledged (if applicable) agreements, instruments, and documents as may be reasonably required by ZaZa to complete the Transactions; and

			
			
				 (h)
			

			
			
			payment of the Initial Cash Consideration pursuant to Section 1.  

			
			
				 2.28
			

			
			
			Termination.

			
			
				 2.28.1.
			

			
			
			Termination Events.  This Agreement may be terminated:

			
			
				 (a)
			

			
			
			by mutual written consent of the Parties, given prior to or at the First Closing; or

			
			
				 (b)
			

			
			
			by written notice from either Party if the First Closing has not occurred (other than as a result of a material breach of any covenant, representation, or condition contained in this Agreement by the Party seeking to terminate this Agreement) on or before April 10, 2013.

			
			
				 2.28.2.
			

			
			
			Effect of Termination.    If this Agreement is terminated pursuant to Section 5.3.1, all further right and obligations of the Parties under this Agreement shall terminate.

			
			
				 2.29
			

			
			
			ZaZa’s Additional Covenants and Obligations.

			
			
				 (a)
			

			
			
			Unless otherwise previously furnished to EOG, upon the execution of this Agreement, ZaZa shall promptly deliver to EOG copies of (i) all logs, drilling reports, regulatory filings, and samples of all cuttings and cores, and all other well data pertaining or relating to the Commodore and Stingray Wells, and (ii) the Files, to the extent such data and records can be provided to EOG without the consent of or payment to any third Person (provided that ZaZa will use reasonable efforts to obtain any such consent) or without, in ZaZa’s reasonable opinion, breaching, or risking a breach of, agreements with other Persons or waiving, or risking waiving, legal privilege.

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 (b)
			

			
			
			Notwithstanding anything to the contrary in this Agreement, between the date of this Agreement and the date of each Closing, ZaZa shall not (and shall not commit to), without EOG’s prior written consent:

			
			
				 (i)
			

			
			
			take any action that would cause its representations or warranties under this Agreement to be materially incorrect (or, with respect to representations and warranties qualified by materiality, incorrect in any respect) as of the date of any Closing;

			
			
				 (ii)
			

			
			
			commence, propose, or agree to participate in any operations with respect to the Leases other than operations proposed by EOG under the JOA or by Range under the Range-ZaZa JOA;

			
			
				 (iii)
			

			
			
			go non-consent as to any operations with respect to any Range-ZaZa Leasehold that has not been assigned to EOG under this Agreement;

			
			
				 (iv)
			

			
			
			terminate, release, cancel, amend, alter, or modify any Lease (in whole or in part);

			
			
				 (v)
			

			
			
			enter into any Contract that would adversely affect EOG’s ability to use, own, or operate the Leases; or

			
			
				 (vi)
			

			
			
			sell, convey, grant, bargain, set over, deliver, transfer, or assign to any Person, or otherwise encumber, all or any portion of the ZaZa Leasehold, if and to the extent such action would render ZaZa unable to perform its covenants and obligations under this Agreement.

		
			References to the ZaZa Leasehold in Section 5.4(b)(vi) immediately above shall be interpreted to mean (A) with respect to the date of this Agreement and the First Closing, the entire ZaZa Leasehold; (B) with respect to the Second Closing, the ZaZa Leasehold less and except for the Phase I Leases, (C) with respect to the Third Closing, the ZaZa Leasehold less and except for the Phase I Leases and Phase II Leases; and (D) if applicable, with respect to the Fourth Closing, any remaining ZaZa Leasehold within the Project Area less and except the Phase I Leases, Phase II Leases, and the Phase III Leases.
		

			
			
				 (c)
			

			
			
			From and after the Effective Date (and except as provided in Section 5.5(a)), ZaZa shall timely and correctly pay, and (subject to Section 5.5(c)) charge to the joint account under the JOA, all option to lease payments, delay rental payments, shut-in well payments, extension payments and/or renewal leases, and all other payments, required to maintain the Leases in full force and effect within the Project Area, whether inside or outside of the currently elected Phase(s).  

			
			
				 (d)
			

			
			
			If Phase 1, Well No. 2 reaches the Earning Point (as defined in the Range-ZaZa JV Agreement), and Range does not timely exercise its option to 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		participate in such well in accordance with its rights under the Range-ZaZa JV Agreement or goes non-consent, then ZaZa shall instruct Range to execute an assignment to EOG (in a form reasonably acceptable to EOG) of Range’s twenty-five percent (25%) working interest in such well and its associated interest in the applicable Range-ZaZa Leasehold.

			
			
				 (e)
			

			
			
			If ZaZa’s title to any portion of the Net Acres to be delivered to EOG fails due to ZaZa Corporation’s or ZaZa LLC’s breach of any representation or warranty or other provision of this Agreement, or if there exist facts or circumstances giving rise to a breach or deficiency of one or more representations or warranties of ZaZa Corporation or ZaZa LLC insofar as pertains to title to any specific Oil and Gas Interest, or if ZaZa’s title to any portion of the Net Acres subject to any Proceedings set forth on Schedule 4.1(f) fails or is deficient as a result of such Proceedings, then ZaZa shall have ninety (90) days from the date EOG delivers notice to ZaZa reasonably identifying such deficiency or breach to cure such deficiency or breach to the reasonable satisfaction of EOG. In the event such deficiency or breach is not cured to the reasonable satisfaction of EOG within such ninety (90) day period, ZaZa shall promptly assign such substitute Net Acres (acceptable to EOG in its reasonable discretion) as are necessary to replace the affected Net Acres from: (i) the Phase 11 Leases (in respect of any Phase I shortfall), (ii) the Phase III Leases (in respect of any Phase II shortfall), or (iii) any other acreage within the AMI (in respect of any Phase III shortfall). If ZaZa cures such deficiency or breach within the ninety (90) day period, EOG shall have no further recourse or remedy against ZaZa in connection with such breach or deficiency. If ZaZa is unable to timely cure such breach or deficiency, but assigns substitute Net Acres to EOG, as described above, within one hundred twenty (120) days after EOG’s delivery of notice to ZaZa of the breach or deficiency, such assignment of appropriate substitute Net Acres shall be the sole remedy for any such breach or deficiency of a representation or warranty or. other provision of this Agreement. If ZaZa is unable to timely cure such breach or deficiency and assign substitute Net Acres to EOG, as described above, within said one hundred twenty (120) day period, then ZaZa shall pay to EOG, within ten (10) days, a total amount equal to U.S. [*] per Net Acre affected by such deficiency or breach, as liquidated damages (“Title Defect Liquidated Damages”), and EOG shall promptly re-assign its interest in such affected Net Acres back to ZaZa without warranty of title, express, implied, or otherwise, except as to claims by, through, and under EOG. It is expressly stipulated by the Parties that the actual amount of damages resulting from ZaZa’s failure to timely cure such breach or deficiency or to assign substitute Net Acres, as described above, would be difficult if not impossible to determine accurately because of the unique nature of this Agreement and the Transactions, and that the Title Defect Liquidated Damages are a reasonable estimate by the Parties of such damages.

			
			
				 (f)
			

			
			
			From the date of this Agreement through the date of each Closing, ZaZa shall promptly notify EOG in writing if ZaZa obtains Knowledge of any 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		fact, circumstance, or other condition that causes or constitutes a material breach of any of ZaZa’s representations and warranties in this Agreement as of the date of this Agreement or as of the date of each Closing, or if ZaZa obtains Knowledge of the occurrence after the date of this Agreement, or after the date of each Closing, of any fact or condition that would cause or constitute a material breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. During the same period, ZaZa shall promptly notify EOG if ZaZa obtains Knowledge of the occurrence of any material breach of any covenant of ZaZa in this Section 5.4. From the date of this Agreement to the First Closing Date, ZaZa shall promptly notify EOG if ZaZa obtains knowledge of the occurrence of any event that may make the satisfaction of the conditions in Section 5.1.1 impossible or unlikely.

			
			
				 2.30
			

			
			
			EOG`s Additional Covenants and Obligations.

			
			
				 (a)
			

			
			
			Prior to the expiration of the primary term set forth in the Gibbs Brothers Lease, EOG will enter, into good faith negotiations with the lessors of such Lease and use its reasonable commercial efforts as a reasonable prudent operator to obtain an extension of the primary term by not less than twelve (12) months, whether obtained through an amendment, modification, renewal, or extension of same. EOG shall bear 100% of the expenses associated with obtaining such extension. Regardless of whether EOG is successful in obtaining said primary term extension, EOG’s right to earn interest in ZaZa Leasehold under this Agreement shall remain unaffected,

			
			
				 (b)
			

			
			
			From and after the Effective Date and until EOG has satisfied its obligations under Section 3 of this Agreement, EOG shall not sell, convey, grant, bargain, set over, deliver, transfer, or assign to any Person, or otherwise encumber, all or any portion of the ZaZa Leasehold in which EOG acquires an interest, in each case, other than as would result in a Permitted Encumbrance, and then only if and to the extent such action would not render EOG unable to perform its obligations under this Agreement. (For purposes of only this Section 5.5(b) the definition of “Permitted Encumbrances” is deemed to be amended as appropriate to describe the equivalent or reciprocal encumbrances that would not materially adversely affect any interests to be reassigned by EOG to ZaZa under this Agreement, rather than interests to be assigned by ZaZa to EOG.)

			
			
				 (c)
			

			
			
			From and after the Effective Date to. December 31, 2013 (and except as provided Section 5.5(a)), EOG shall, pursuant to the joint account under the JOA, pay to ZaZa one-third of the cost paid by ZaZa of all delay rental payments, extension payments and/or renewal leases, and all other payments (but excluding. all option to lease payments), that are required to maintain the Phase I Leases in full force and effect and that are due and payable during such time period. For avoidance of doubt, if Range elects to take a working interest in Phase 1, Well No. 2, ZaZa shall retain all rights to reimbursement from Range with 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		respect to the lease extension costs on the Range-ZaZa Leasehold as set forth in Section 3.2(a) of the Range-ZaZa JV Agreement as amended by the Fifth Amendment thereto. Further, if Range declines to take a working interest in Phase 1, Well No. 2, then EOG shall, pursuant to the joint account under the JOA, pay to ZaZa an additional one-fourth of the cost paid by ZaZa. of all delay rental payments, extension payments and/or renewal leases, and all other payments (but excluding all option to lease payments), that are required to maintain the. Phase I Leases in full force and effect and that are due and payable during such time period. From and after January 1, 2014, EOG shall reimburse ZaZa for its Participation. Interest share of all delay rental payments, shut-in well payments, extension payments and/or renewal leases, and all other payments. (but excluding all option to lease payments), that are required to maintain the Leases in full force and effect within the Project Area, whether inside or outside of the currently elected Phase(s); provided, however, that such obligation shall cease (i) for Leases in any unelected Phase(s) upon EOG’s election to not proceed with the next Phase(s) and (ii) for any Lease that EOG is required to reassign to ZaZa pursuant to Sections 3.1.4,  3.2.3,  3.3.3 and 5.4(e) upon its reassignment to ZaZa.

			
			
				 (d)
			

			
			
			EOG shall not propose or drill more than eight (8) wells at any time prior to Completion of all previous wells drilled by EOG in the Project Area.

			
			
				 (e)
			

			
			
			From the date of this Agreement through the date of each Closing, EOG shall promptly notify ZaZa in writing if EOG obtains Knowledge of any fact, circumstance, or condition that causes or constitutes a material breach of any of EOG’s representations and warranties in this Agreement as of the date of this Agreement or as of the date of each Closing, or if EOG obtains Knowledge of the occurrence after the date of this Agreement, or after the date of each Closing, of any fact or condition that would cause or constitute a material breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. During the same period, EOG shall promptly notify ZaZa if EOG obtains Knowledge of the occurrence of any material breach of any covenant of EOG in this Section 5.5. From the date of this Agreement to the First Closing Date, EOG shall promptly notify ZaZa if EOG obtains knowledge of the occurrence of any event that may make the satisfaction of the conditions in Section 5.12 impossible or unlikely.

			
			
				 (f)
			

			
			
			MISCELLANEOUS

			
			
				 2.31
			

			
			
			Term and Survival of Specific Provisions.  Unless terminated pursuant to Section 5 3 1, the term of this Agreement (the “Term”) (excepting the AMI provisions of Section 2 and EOG’s reassignment obligations under Sections 3.1.4,  3.2.3,  3.3.3 and 5.4(e)) shall extend from the Effective Date until EOG has fully performed its earning obligations for Phases I, II, and Ill as provided in Section 3, unless sooner terminated by any of the following events (each, an “Early Termination Event”); EOG’s failure to timely commence drilling of any Commitment Well (or Substitute Well therefor) in connection with Phase I, Phase 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		11, or Phase Ill as provided in Section 3, EOG’s failure to satisfy the Commitment Well requirements in Phase I, Phase II, or Phase III, or the failure of EOG to timely elect to participate in Phase II or Phase III.  Notwithstanding the foregoing, the following provisions of this Agreement will survive and be applicable, but only to the extent of EOG’s retention of any interest in the ZaZa Leasehold after termination:

		
			Sections 5.5(d),  6.1,  6.2,  6.3,  6.4,  6.5,  6.6,  6.7,  6.8,  6.10,  6.11,  6.12 and 6.14.
		

		
			If any of these surviving provisions expressly conflicts with any term of the applicable JOA, then the terms of the JOA shall govern. However, the absence of a provision in the JOA that addresses the same subject matter as a surviving provision of this Agreement shall not be deemed a conflict between such provision and the JOA.
		

			
			
				 2.32
			

			
			
			Construction.  The headings of Sections, Appendices, Exhibits, and Schedules in this Agreement are provided for convenience only and shall not affect its construction or interpretation. Unless otherwise indicated, all references to “Section,” “Appendix,” “Exhibit,” or “Schedule” refer to the corresponding Section, Appendix, Exhibit, or Schedule of this Agreement. Unless otherwise expressly provided herein, the word “including” does not limit the preceding words or terms and (in its various forms) means including without limitation.  Each Party has had substantial input into the drafting and preparation of this Agreement and has had the opportunity to exercise business discretion in relation to the negotiation of the details of the Transactions.  This Agreement is the result of arm’s-length negotiations from equal bargaining positions.  This Agreement shall not be construed against any Party, and no consideration shall be given or presumption made on the basis of who drafted this Agreement or any particular provision hereof or who supplied the form of Agreement.

			
			
				 2.33
			

			
			
			Entire Agreement. This Agreement, together with all exhibits and schedules attached hereto, supersedes all prior negotiations, understandings, letters of intent, agreements, and communications (whether written or oral) between the Parties relating to the Project Area and embodies the entire understanding and agreement between the Parties with respect thereto. Any amendments or modifications to this Agreement shall be in writing and executed by all of the Parties.

			
			
				 2.34
			

			
			
			No Third Person Beneficiaries. This Agreement shall be binding upon and inure to the benefit of EOG and ZaZa, and each of their respective heirs, legal representatives, successors and permitted assigns. Except as specifically set forth herein, nothing in this Agreement is intended to or shall confer upon any Person other than the Parties, and their respective heirs, legal representatives, successors and permitted assigns any rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement.

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

			
			
				 2.35
			

			
			
			Invalid Terms. If any term or other provision of this Agreement is determined to be invalid, illegal, or incapable of being enforced by Applicable Law or public policy, all other conditions, terms, and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the maximum extent possible.

			
			
				 2.36
			

			
			
			Governing Law. The laws of the State of Texas, without regard to any conflict of laws principles, shall be applied in the interpretation, construction, application and for all other matters concerning this Agreement.

			
			
				 2.37
			

			
			
			Successors and Assigns. This Agreement, including any rights, interests, or obligations contained herein, may not be assigned in whole or in part by either Party without the prior written consent of the other Party. Such consent shall not be unreasonably withheld, conditioned, or delayed. Any attempted assignment made in violation of this provision will be, in the sole discretion of the non-assigning Party (and in addition to any other remedy available to such Party at law or in equity), voidable and of no force and effect, The granting of consent to any assignment will be effective only as to the specific assignment that is the express subject of such consent, and any subsequent assignment that may, be proposed or attempted will be void without the non-assigning Party’s prior written consent.

			
			
				 2.38
			

			
			
			Force Majeure. Should either Party be prevented from complying with any obligation or other requirement of this Agreement (in EOG’s case, including the timely commencement of drilling operations for any well during Phase 1, Phase II, and/or Phase III as set forth in Section 3) due to scarcity of or inability to procure or to use any necessary equipment, material, transportation, services, or labor, or due to issuance or enactment of any federal, state or local law, order, rule or regulation, or due to any other circumstances beyond the reasonable control of such Party, Including earthquake, flood, acts of God or of the elements or by public enemies, war, insurrection, riot, strike, picketing, boycotting, lockouts, acts of any Governmental Entity, failure or delay (other than an account of price) of third Persons or Governmental Entities from whom a Party is obtaining or must obtain rights of way, easements, Permits, consents or approvals, machinery, materials, equipment, transportation, independent contractors, services or suppliers, including gas gathering or transportation services, to grant or deliver same. (individually and collectively, a “Force Majeure Event”), then while so prevented, the impaired Party’s performance obligations hereunder shall be suspended, and such Party shall not be liable or responsible to the other Party for any delay, damages, losses, liabilities, or failure occasioned by a Force Majeure Event. If there is a time period provided hereunder for such performance, then the time period shall be extended by the duration of the Force Majeure Event. Notwithstanding the foregoing and any provision contained in any applicable JOA to the contrary: (i) the occurrence of any Force Majeure Event shall never excuse 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		the making of any payment due to any other Party hereunder; (ii) in any event where the terms of this Section 6.8 are in conflict with the force majeure terms of any oil and gas lease, such terms of the oil and gas lease shall prevail in every instance involving the performance by any Party of any of the obligations of the original lessee of such oil and gas lease; and (iii) no Party shall be required against its will to adjust any labor or similar dispute except in accordance with the Applicable Laws of any Governmental Entity maintaining jurisdiction thereover.

			
			
				 2.39
			

			
			
			Notices. All notices and other communications hereunder shall be in writing and are deemed duly delivered when (a) delivered if delivered personally or by a nationally recognized overnight courier service (costs prepaid), (b) sent by facsimile (fax) or electronic mail with confirmation of receipt (or, the first Business Day following such transmission if the date of transmission is not a Business Day or if the confirmation of receipt is received after 5 p.m. Central time), or (c) received or rejected by the addressee, if sent by United States of America certified or registered mail, return receipt requested; in each case to the following addresses or facsimile numbers and marked to the attention of the individual (by name or title) designed below (or to such other address, facsimile number or individual as a Party may designate by notice to the other Party):

		
			If to ZaZa:            ZaZa Energy Corporation
		

		
			            ZaZa Energy LLC
		

		
			            Attn: Vice President Land (cc: Chief Compliance Officer), ZaZa Energy Corporation
		

		
			            1301 McKinney, Suite 2850 
		

		
			            Houston, Texas 77010
		

		
			            Fax No (713) 595-1919
		

		
			 
		

		
			If to EOG:            EOG Resources, Inc.
		

		
			            Attn: Land Manager
		

		
			            6101 S. Broadway, Suite 200
		

		
			            Tyler, Texas 75703
		

		
			            Fax No.: (903) 283-9104
		

		
			 
		

			
			
				 2.40
			

			
			
			Further Assurances. From time to time following the Effective Date, at the request of a Party, without further consideration, the other Party shall perform such other acts and execute and deliver such other documents and instruments as may be necessary in order to effectuate more fully and effectively the terms and provisions of this Agreement.

			
			
				 2.41
			

			
			
			No Partnerships. The Parties do not intend to create a mining or any other partnership, joint venture or association by entering into, and performing under, this Agreement The Parties agree that for the purposes of United States federal income taxation; they are not to be taxed as a partnership and each Party will elect to be excluded from the application of all of the provisions of Subchapter “K” Chapter 1, Subtitle “a,” the Code, as permitted and authorized by Section 761 of 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		the Code and the regulations promulgated thereunder. Any liability of the Parties hereunder shall be several, not joint or collective.

			
			
				 2.42
			

			
			
			Public Announcements. Subject to Applicable Law and the requirements of the principal stock exchange in which any securities of a Party are listed, quoted or admitted for trading; at all times during the Term and AMI Term, no Party shall issue, or permit any of its Representatives to issue, any press release or other public announcement with respect to this Agreement, the operations conducted hereunder or the Transactions without prior mutual discussion among the Parties regarding its content and the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned, or delayed. Any such press release or statement required by Applicable Law shall only be made after reasonable notice to the other Party (to the extent permitted by Applicable Law and the requirements of the principal stock exchange in which any securities of a Party are listed, quoted or admitted for trading).

			
			
				 2.43
			

			
			
			Counterpart Originals. This Agreement may be executed in counterparts, each of which will be considered an original for all purposes. This Agreement may be validly executed and delivered by facsimile or other electronic transmission.

			
			
				 2.44
			

			
			
			Mutual Confidentiality. The terms, provisions, and conditions of this Agreement and any materials, information, files, and documentation provided by one Party to the other Party in connection herewith are strictly confidential and proprietary, and shall be treated and maintained as such, and except where otherwise expressly provided hereunder, including Section 6.12 above, neither the terms, provisions, and conditions hereof or any materials, information, and documents received from the other Party in connection herewith shall be disclosed by a Party without the prior written consent of the other Party to any Person not a Party to this Agreement, except to a Party’s Representatives, lease holders, lessors, or potential lessors within the Project Area to whom a Party has a need or an obligation to disclose certain information, and such disclosures as may be required by Applicable Law and the requirements of the principal stock exchange in which any securities of a Party are listed, quoted or admitted for trading.

			
			
				 2.45
			

			
			
			Time is of the Essence. The Parties agree that time is of the essence with respect to this Agreement.

			
			
				 2.46
			

			
			
			Waiver. EOG or ZaZa may (a) waive any inaccuracies in the representations and warranties of the other contained in this Agreement or in any document, instrument, certificate, or writing delivered pursuant to this Agreement, or (b) waive compliance by the other with any of the other’s agreements or fulfillment of any conditions to their own obligations contained in this Agreement. Any agreement on the part of a Party to any such waiver shall be valid only if set forth in an instrument in writing signed by or on behalf of such Party. The failure of a Party to insist in any one or more instance upon the strict performance of any one or more of the obligations under this Agreement, or to 
		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		exercise any election herein contained, shall not be construed as a waiver or relinquishment for the future of the performance of such one or more obligations of this agreement or of the right to exercise such election, but the same shall continue and remain in full force and effect with respect to any subsequent breach or omission.

			
			
				 2.47
			

			
			
			Cumulative Remedies. In the event of a default by a Party in the performance of its obligations pursuant to this Agreement, the JOA, and any other valid agreement or instrument between the Parties, the other Party shall be entitled to all remedies available at law or in equity, and all such remedies shall be cumulative. Should any Party initiate a Proceeding against the other Party to enforce this Agreement, the non-prevailing Party shall be liable for the reasonable and necessary attorneys’ fees, costs, and expenses of the prevailing Party.

			
			
				 2.48
			

			
			
			Jurisdiction and Venue. THE PARTIES AGREE THAT ANY STATE OR FEDERAL COURT OF HARRIS COUNTY, TEXAS, SHALL HAVE EXCLUSIVE JURISDICTION AND VENUE OVER ALL PROCEEDINGS, DISPUTES AND OTHER MATTERS RELATING TO (I) THE INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT OR ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO, (II) THE PROJECT AREA, AND (III) ANY OBLIGATIONS OF A PARTY THAT MAY SURVIVE THE EXECUTION OF THIS AGREEMENT, AND THE PARTIES EXPRESSLY CONSENT TO AND AGREE NOT TO CONTEST SUCH EXCLUSIVE JURISDICTION AND VENUE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW.

			
			
				 2.49
			

			
			
			Limitation of Damages. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY (EXCEPT AS TO SECTION 6.17 AND THE TITLE DEFECT LIQUIDATED DAMAGES AS DESCRIBED IN SECTION 5.4(E)), IN NO EVENT SHALL EITHER PARTY AND/OR ITS REPRESENTATIVES BE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, INDIRECT, ECONOMIC, EXEMPLARY, OR PUNITIVE DAMAGES CLAIMED BY THE OTHER PARTY ARISING FROM OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS, EXCEPT TO THE EXTENT SUCH CLAIMING PARTY SUFFERS SUCH DAMAGES TO A THIRD PERSON (EXCLUDING ANY REPRESENTATIVE OF SUCH CLAIMING PARTY).

		
			(Signature Page Follows)
		

		
			 
		

		

		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		
		

		
			THIS AGREEMENT is signed by the Parties as of the date shown under their respective signatures, and when signed by the Parties shall be deemed effective as of the Effective Date.
		

			
					
						ZaZa Energy Corporation

					
						 

					
						 

					
						By:

					
						

					
						

					
						 

					
						Date:______________

					
						 

					
						 

					
						 

					
						 

					
					
						ZaZa Energy LLC

					
						 

					
						 

					
						By:

					
						

					
						

					
						 

					
						Date:______________

				
	
					
						   

					
						 

					
						 

					
						By:

					
						Ernest J. LaFlure

					
						Vice President and General Manager

					
						 

					
						Date:______________

					
						 

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		Appendix 1
		

		
			List of Exhibits and Schedules
		

			
					
						Exhibit “A”

					
					
						Map of Project Area

				
	
					
						Exhibit “B‐1”

					
					
						Schedule of ZaZa Leasehold

				
	
					
						Exhibit “B‐2”

					
					
						Schedule of Range-ZaZa Leasehold

				
	
					
						Exhibit “C”

					
					
						Form of Assignment for AMI Acquired Interests

				
	
					
						Exhibit “D”

					
					
						Form of JOA

				
	
					
						Exhibit “E”

					
					
						Form of Memorandum of JOA

				
	
					
						Exhibit “F”

					
					
						Oil and Gas Well Data Sheet

				
	
					
						Exhibit “G‐1”

					
					
						Form of Assignment from ZaZa to EOG (where no Range‐ZaZa Leasehold is included)

				
	
					
						Exhibit “G‐2”

					
					
						Form of Assignment from ZaZa to EOG (where Range‐ZaZa Leasehold is included)

				
	
					
						Exhibit “H-1”

					
					
						Pre‐3/1/13 Merger ORRIs

				
	
					
						Exhibit “H‐2”

					
					
						Post‐3/1/13 Merger ORRIs

				
	
					
						Exhibit “I”

					
					
						Memorandum of Joint Exploration and Development Agreement

				
	
					
						Exhibit “J”

					
					
						Form of FIRPTA Certificate

				
	
					
						Schedule 4.1(d)(iii)

					
					
						Required Consents

				
	
					
						Schedule 4.1(f)

					
					
						Proceedings

				

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			Appendix 1-1

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		 
		

		
			Appendix 2
		

		
			Definitions
		

		
			“Acquired Interest” has the meaning assigned to such term in Section 2.4.
		

		
			“Acquired Interest Offer Date” has the meaning assigned to such term in Section 2.4.
		

		
			“Acquiring Party” has the meaning assigned to such term in Section 2.4.
		

		
			“Affiliate” means any Person directly or indirectly controlling, controlled by or under common control with a Person.  For the purposes of this definition, “control” means possession, directly or indirectly, of the power to direct or cause the direction of management, policies, or action of a Person through ownership of fifty percent (50.0%) or more of the Person’s voting rights or other equity rights, pursuant to a written agreement or contract, membership in management or in the group appointing or electing management, or otherwise through formal or informal arrangements or business relationships.  The terms “controls”,  “controlling”, and “controlled by” and other derivatives shall be construed accordingly.
		

		
			“Agreement” has the meaning assigned to such term in the introductory paragraph.
		

		
			“AMI” has the meaning assigned to such term in Section 2.1.
		

		
			“AMI Term” has the meaning assigned to such term in Section 2.11.
		

		
			“Applicable Law” means any statute, law, principle of common law, treaties, rule, regulation, judgment, order, ordinance, requirement, code, writ, injunction, decision, or decree of any Governmental Entity, including the common or civil law and all judgments, decrees, injunctions, writs, orders, or like action of any court, arbitrator, or other Governmental Entity of competent jurisdiction.
		

		
			“Assigned Excess Leases” has the meaning assigned to such term in Section 3.10.
		

		
			“Business Day” means a day other than a Saturday, Sunday, or day on which commercial banks in the State of Texas are authorized to require to be closed for business.
		

		
			“Closing” means any of: (i) the First Closing, (ii) the Second Closing, (iii) the Third Closing, and (iv) if applicable, the Fourth Closing.
		

		
			“Code” means the Internal Revenue Code of 1986, or any comparable successor statute thereto, as amended.  
		

		
			“Commitment Well” means a Phase I Commitment Well, Phase II Commitment Well, or a Phase III Commitment Well, as applicable.
		

		
			“Commodore Well” means the Commodore A‐1H Well, API No. 471‐30353, located in the W. Garrett Survey, Abstract No. 208, Walker County, Texas.
		

		

		

		 

		

			Appendix 2-1

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		“Complete”,  “Completion” or “Completed” means (a) for a well capable of producing, the point at which drilling operations have been completed, all well production facilities have been installed on the unit to enable such well to be placed on production under normal operations, and sales of petroleum (either oil or gas) have begun to be made through such surface facilities; and (b) for an unsuccessful well (e.g., dry or abandoned and plugged hole or a well incapable of producing in paying quantities), that all operations in respect of the well (including for its plugging and abandonment) have been completed.
		

		
			“Contract” means any contract, agreement, instrument, lease (separate from the Leases), license, commitment, understanding, options, or other document, by which any of the ZaZa Leasehold is bound, or that affects, concerns, pertains or relates to, or is used in connection with, the ZaZa Leasehold, including operating agreements; unitization, pooling, and communitization agreements, declarations, and orders; joint venture agreements; farmin and farmout agreements; water rights agreements; production handling agreements; exploration agreements; development agreements; participation agreements; exchange agreements; compressor rental agreements; transportation or gathering agreements; and agreements for the sale of oil, gas or other hydrocarbons.
		

		
			“Defect” has the meaning assigned to such term in Section 5.1.1(d).
		

		
			“Eagle Ford Interval” means the stratigraphic equivalent of the interval depicted between the depths of [*] as shown [*].
		

		
			“Early Termination Event” has the meaning assigned to such term in Section 6.1.
		

		
			“Earned Acreage” has the meaning assigned to such term in Section 3.1.4,  3.2.3, or 3.3.3, as applicable.
		

		
			“Effective Date” has the meaning assigned to such term in the introductory paragraph.
		

		
			“Encumbrance” means any burden (including any royalty or other interest), claim, lien, lis pendens, mortgage, deed of trust, security interest, pledge, charge, option, right‐of‐way, easement, right‐of‐way, encroachment, or encumbrance of any kind whatsoever.
		

		
			“EOG” has the meaning assigned to such term in the introductory paragraph.  
		

		
			“Excess Lease Consideration” has the meaning assigned to such term in Section 3.10.
		

		
			“Files” means all files (whether originals, copies, or in digital or electronic format), including the Contracts, the Leases, lease files, title files, abstracts of title, title opinions, title information, title commitments, land surveys, maps, data, correspondence, environmental and regulatory files and reports, engineering and production files, accounting files or other portion thereof relating directly to the Project Area or ZaZa Leasehold, seismic records and surveys, gravity maps, geological or geophysical data and records, analyses, interpretations, and all other files, documents, materials, information, instruments and records of every kind and description that EOG may reasonably request that are in ZaZa’s control or possession which affect, concern, pertain or relate to, or are used in connection with, the Project Area or ZaZa Leasehold.
		

		

		

		 

		

			Appendix 2-2

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		“First Closing” means the closing of those certain Transactions related to payment of the Initial Cash Consideration and the assignment of the Phase I Leases.
		

		
			“First Closing Date” has the meaning assigned to such term in Section 1.
		

		
			“Force Majeure Event” has the meaning assigned to such term in Section 6.8.
		

		
			“Fourth Closing” means the closing of those certain Transactions related to payment of the Excess Lease Consideration and the assignment of the Assigned Excess Leases.
		

		
			“Georgetown Formation” means the stratigraphic equivalent of the interval depicted between the [*].
		

		
			“Gibbs Brothers Lease” means that certain Oil and Gas Lease dated effective August 4, 2010, by and between Gibbs Brothers & Company, L.P., as lessor, and Gulf Sands Energy, LLC, as lessee, as evidenced by that certain Memorandum of Oil and Gas Lease dated effective August 4, 2010, recorded in Volume 983, Page 740, of the Official Public Records of Walker County, Texas.
		

		
			“Governmental Entity” means any court or tribunal in any jurisdiction (domestic or foreign) or any federal, state, county, provincial, tribal, parish, municipal or other governmental or quasi‐governmental body, agency, authority, administration, department, board, commission, instrumentality, bureau, or instrumentality.
		

		
			“Initial Cash Consideration” has the meaning assigned to such term in Section 1.
		

		
			“JOA” has the meaning assigned to such term in Section 3.7.
		

		
			“Knowledge” of a specified Person (or similar references to a Person’s knowledge) means (a) in the case of a Person who is an individual, the actual knowledge of such Person, or (b) in the case of a Person which is corporation or other entity, the actual knowledge of an officer or employee who devoted substantive attention to matters of such nature during the ordinary course of his employment by such Person without any independent diligence or verification.
		

		
			“Leases” means those certain oil and gas (or oil, gas and other mineral) leases and the leasehold estates created thereby, described in Exhibit “B-1” together with the corresponding interests in and to all related property and rights.
		

		
			“Letter Agreement” means that certain Letter Agreement dated March ___, 2013, between EOG, ZaZa, and Range, regarding the Sixth Amendment to and Consent to Partial Assignment of the Range-ZaZa JV Agreement.
		

		
			“Lower Cretaceous Interval” means the stratigraphic equivalent of [*].
		

		
			“Net Acre” means the arithmetic product of: (i) ZaZa’s undivided interest in the ZaZa Leasehold created by the applicable Lease, multiplied by (ii) the number of acres of the Project 
		

		 

		

			Appendix 2-3

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		Area covered by the Lease, multiplied by (iii) the lessor’s percentage interest in the oil, gas and mineral fee estate in the land covered by such Lease.
		

		
			“NRI” has the meaning assigned to such term in Section 4.1(l).
		

		
			“Non-Acquiring Party” has the meaning assigned to such term in Section 2.4.  
		

		
			“Oil and Gas Interest” means any oil and gas leasehold interest (including any renewal, modification, amendment, or extension of same) or other interest in the oil, gas and mineral estate, including any working interests, operating rights, fee mineral interests, production payments, net profits interests, carried interests, royalty interests, overriding royalty interests, and any other interest in oil and gas and/or oil and gas rights, or rights to earn any such interest under a farmout/farmin contract, farmout option contract, or other right to explore for, develop, or produce oil, gas, or other minerals.
		

		
			“Participation Interests” has the meaning assigned to such term in Section 2.5.
		

		
			“Party” and “Parties” have the meanings assigned to such terms in the introductory paragraph.
		

		
			“Payout” means the date that EOG first recovers 100% of the Costs attributable to a Commitment Well out of EOG’s Share of Production attributable to such Commitment Well. For purposes of this definition: (i) “Costs” shall include all unreimbursed Costs through Completion and any other unreimbursed costs incurred by EOG in operating such Commitment Well until such recoupment occurs, together with any applicable gross production, ad valorem, severance, and other similar Taxes measured by production and paid by EOG, and (ii) “Share of Production” shall include all production attributable to the Commitment Well after deducting applicable royalties, overriding royalties, and other similar burdens.  Without limiting the foregoing, EOG’s Share of Production expressly does not include the share of production payable to ZaZa or any other leasehold interest owner.
		

		
			“Permits” means licenses, permits, franchises, consents, approvals, variances, exemptions, and other authorizations of or from any Governmental Entity.
		

		
			“Permitted Encumbrances” means
		

		
			(a)            (i) lessors’ royalties, overriding royalties and any other similar payments out of production affecting EOG’s NRI if the net cumulative effect of such burdens does not operate to reduce the NRI or Net Acres of EOG in any Lease below the NRI or Net Acres set forth for such Lease on Exhibit “B-1”, proportionately reduced to the assigned working interest, (ii) subject to Section 3.5.1, the Pre-3/11/13 Merger ORRIs as reflected on Exhibit “H-1”, and (iii) subject to Section 3.5.2, the Post-3/1/13 Merger ORRIs as reflected on Exhibit “H-2”;
		

		
			(b)            Preferential Rights with respect to which either (i) waivers or consents with respect to the Transactions are obtained from the holders thereof, or (ii) required notices 
		

		 

		

			Appendix 2-4

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		of the Transactions have been given to the holders of such rights and the appropriate period for asserting such rights has expired without an exercise of such rights;
		

		
			(c)            required third Person consents to assignment and similar agreements with respect to which (i) waivers or consents are obtained from the appropriate Persons, (ii) proper notice in compliance with the terms of such consent or similar agreement has been given to the appropriate Persons and the appropriate time for asserting such rights has expired without an exercise of such rights, request for further information about the Transactions or either Party, or other objection to the Transactions, (iii) arrangements (acceptable to EOG in its reasonable discretion) have been made by the Parties to allow EOG to receive substantially the same economic benefits as if all such waivers and consents had been obtained, (iv) there is no provision therein that such consent may be withheld in the sole and absolute discretion of the holder, or (v) there is no provision therein expressly stating that an assignment in violation thereof is void or voidable, triggers the payment of damages (liquidated or otherwise), or causes termination of the Leases.
		

		
			(d)            all consents by, required notices to, filings with, or other actions by Governmental Entities in connection with the sale or conveyance of the Leases if the same are customarily obtained subsequent to such sale or conveyance;
		

		
			(e)            easements, rights-of-way, servitudes, permits, surface leases, and other rights in respect of surface operations which do not and will not materially interfere with or detract from the operation, value, or use of the Leases by EOG or the handling, processing, storage, sale, or transportation of production therefrom;
		

		
			(f)            statutory liens for taxes not yet due or not yet delinquent;
		

		
			(g)            all rights reserved to or vested in any Governmental Entity to control or regulate any of the Leases in any manner and all Applicable Laws;
		

		
			(h)            all defects and irregularities of title that would not reasonably be expected to result in claims that would materially and adversely affect EOG’s title to, or ownership, operation or value of, the Leases or the handling, processing, storage, sale, or transportation of production therefrom, including without limitation (i) defects in the early chain of title consisting of the failure to recite marital status or the omission of succession or heirship proceedings; (ii) defects or irregularities arising out of the lack of a survey or metes and bounds description; (iii) defects or irregularities arising out of or relating to the lack of powers of attorney from corporations to execute and deliver documents on their behalf; (iv) defects related to the lack of spousal joinder in situations in which the Texas Title Examination Standards (Texas Property Code Title 2, Appendix) indicate that spousal joinder is not necessary; (v) irregularities cured by possession under applicable statutes of limitation and statutes relating to acquisitive (or liberative) prescription; (vi) defects arising from prior expired oil and gas leases that are not surrendered or released of record, provided that evidence satisfactory to EOG in its reasonable discretion is provided to EOG to establish that such leases are not maintained, in whole or in part, by operations, production, or otherwise; and (viii) defects arising out of any change in Applicable Laws after the Effective Date;
		

		

		

		 

		

			Appendix 2-5

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		(i)            any liens or encumbrances created by deeds of trust, mortgage instruments, security instruments, or other documents securing a promissory note granted by any Party or the owner of the surface or minerals, which, individually or in the aggregate, do not (and would not upon foreclosure or other enforcement): (i) interfere materially with the operation, value or use of any of the Leases by EOG or the handling, processing, storage, sale, or transportation of production therefrom; (ii) prevent EOG from receiving the proceeds of production from any of the Leases attributable to its Participating Interest, (iii) reduce the NRI of EOG in any Lease below the NRI set forth for such Lease on Exhibit “B-1”, proportionately reduced to the assigned working interest; or (iv) reduce the Net Acres in any Lease below the Net Acres set forth for such Lease on Exhibit “B‐1”; and
		

		
			(j)            the U.S. Bank Mortgage to the limited extent that it is released, insofar as it covers any interest to be assigned to EOG under this Agreement, by a fully executed, recordable instrument delivered to EOG prior to or contemporaneously with each Closing.
		

		
			“Person” means any individual, corporation, body corporate, partnership, limited liability company (or similar entity), joint venture, association, joint-stock company, syndicate, enterprise, company, entity, sole proprietorship, trust, enterprise, unincorporated organization, or Governmental Entity or other entity, in each case whether or not having a separate legal personality.
		

		
			“Phase” means Phase I, Phase II, or Phase III.
		

		
			“Phase I” has the meaning assigned to such term in Section 3.1.2.
		

		
			“Phase I Commitment Wells” has the meaning assigned to such term in Section 3.1.2.
		

		
			“Phase I Leases” means the Leases to be assigned by ZaZa to EOG in connection with Phase I, as mutually selected and designated by the Parties prior to the First Closing Date and as more particularly described on Exhibits A-1 and A-2 to the original assignment to be delivered by each Party at the First Closing (per Sections 5.2.1(a) and 5.2 2(a)) in the form attached hereto as Exhibit “G-2,” pursuant to which ZaZa shall collectively deliver to EOG 20,000 Net Acres.
		

		
			“Phase II” has the meaning assigned to such term in Section 3.2.
		

		
			“Phase II Cash Consideration” has the meaning assigned to such term in Section 3.2.1.  
		

		
			“Phase II Commitment Wells” has the meaning assigned to such term in Section 3.2.2.
		

		
			“Phase II Leases” has the meaning assigned to such term into Section 3.2.
		

		
			“Phase III” has the meaning assigned to such term in Section 3.3.
		

		
			“Phase III Cash Consideration” has the meaning assigned to, such term in Section 3.3.1.  
		

		

		

		 

		

			Appendix 2-6

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		“Phase III Commitment Wells” has the meaning assigned to such term in Section 3.3.2.
		

		
			“Phase III Leases” has the meaning assigned to such term in Section 3.3.
		

		
			“Post-3/1/13 Merger ORRIs” means the overriding royalty interests and similar burdens described on Exhibit “H-2”.
		

		
			“Pre-3/1/13 Merger ORRIs” means the overriding royalty interests and similar burdens described on Exhibit “H-1”.
		

		
			“Preferential Right” means any right or agreement that enables any Person to purchase or otherwise acquire all or part of any Lease or any right, title, or interest therein or any asset associated therewith, as a result of or in connection with (a) the sale, assignment, or other transfer of any Lease or any interest therein, portion thereof, or associated right therewith, or (b) the execution, delivery, or performance of this Agreement.
		

		
			“Proceedings” means any proceedings, actions, audits, disputes, claims, suits, investigations, reassessments, and inquiries by or before any arbitrator or Governmental Entity.
		

		
			“Protect Area” has the meaning assigned to such term in the Recitals to this Agreement. 
		

		
			“Range” means Range Texas Production, LLC, a Delaware limited liability company.
		

		
			“Range AMI Interest” means any leasehold interest or contractual right to earn a leasehold interest, mineral interest, royalty interest, right under a farmout or farmin agreement, production payment, net profits interest, or any other interest in the oil, gas, condensate, and casinghead gas in, on or under the lands within the Range‐ZaZa AMI during the term of such Range‐ZaZa AMI; provided, however, that the following shall not be considered “Range AMI Interests”: (i) any interest or right to acquire an interest in the Range‐ZaZa AMI pursuant to a merger, consolidation, reorganization or share acquisition, (ii) any lease or legal or equitable contractual interest therein, including, without limitation, any unexercised lease options, letters of intent, or other contractual arrangements within the Range-ZaZa AMI which ZaZa had an interest in, either directly or indirectly, or was a party to, on or before the execution date of the Range-ZaZa JV Agreement, or which EOG had an interest in, either directly or indirectly, or was a party to, on or before the execution date of the Letter Agreement, or (iii) any undivided interest acquired by ZaZa after the execution date of the Range‐ZaZa JV Agreement in a lease within the Range‐ZaZa AMI held by ZaZa, or for the account of ZaZa, prior to the execution date of the Range‐ZaZa JV Agreement.
		

		
			“Range‐ZaZa AMI” means the area of mutual interest established between Range and ZaZa, pursuant to Paragraph 5 of the Range-ZaZa JV Agreement.
		

		
			“Range-ZaZa JOA” means that certain joint operating agreement dated March 1, 2012, between Range and ZaZa, pursuant to Paragraph 6.1 of the Range-ZaZa JV Agreement.
		

		
			“Range-ZaZa JV Agreement” means that certain Participation Agreement dated March 1, 2012, between Range and ZaZa, as amended.
		

		

		

		 

		

			Appendix 2-7

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		“Range-ZaZa Leasehold” has the meaning assigned to such term in the Recitals to this Agreement.
		

		
			“Representatives” means, with respect to a Party or Person, any Affiliate, shareholder, director, officer, member, employee, agent, manager, representative, and third-party consultant and advisor of such Party or Person.
		

		
			“Required Consents” has the meaning assigned to such term in Section 4.1(d).  
		

		
			“Second Closing” means the closing of those certain Transactions related to payment of the Phase II Cash Consideration and the assignment of the Phase II Leases.
		

		
			“Stingray Well” means the Stingray A-1H Well, API No. 471-30352, located in the R. Bankhead Survey, Abstract No. 70, Walker County, Texas.
		

		
			“Substitute Well” has the meaning assigned to such term in Section 3.6.
		

		
			“Target Interval” means either the Eagle Ford Interval or the Lower Cretaceous Interval; as specified with respect to each Commitment Well.
		

		
			“Taxes” means any income taxes or similar assessments or any sales, excise, occupation, use, ad valorem, property, production, severance, transportation, employment, payroll, franchise, or  other tax imposed by any United States federal, state, or local (or any foreign or provincial) taxing authority, including any interest, penalties, or additions attributable thereto.
		

		
			“Term” has the meaning assigned to such term in Section 6.1.
		

		
			“Third Closing” means-the closing of those certain Transactions related to payment of the Phase III Cash Consideration and the assignment of the Phase III Leases.
		

		
			“Title Defect Liquidated Damages” has the meaning ascribed to such term in Section 5.4(e).
		

		
			“Transactions” means the transactions contemplated or permitted by this Agreement or the documents and agreements delivered hereunder.  
		

		
			“U.S. Bank Mortgage” means that certain Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Production dated May 25, 2012, from ZaZa Energy Corporation, as Grantor and Debtor, to Mauri J. Cowen, Trustee for the benefit of U.S. Bank National Association, as Beneficiary, recorded in Volume 1026, Page 42, Official Public Records of Walker County, Texas, as amended or assigned (if applicable).
		

		
			“ZaZa” has the meaning assigned to such term in the introductory paragraph.
		

		
			“ZaZa Corporation” has the meaning assigned to such term in the introductory paragraph. 
		

		
			“ZaZa Leasehold” has the meaning assigned to such term in the Recitals to this Agreement. 
		

		

		

		 

		

			Appendix 2-8

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

		

		

			 

		

 

		

			 

		

		“ZaZa LLC” has the meaning assigned to such term in the introductory paragraph.
		

		
			 
		

		
			 
		

		 

		

			Appendix 2-9

		

		

			[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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