Document:

exv10w1

Exhibit 10.1

FORM OF CONVEYANCE OF NET PROFITS INTEREST

     This Conveyance of Net Profits Interest (as may be amended, supplemented or otherwise modified
from time to time, this “Conveyance”) has been executed on [_________ __], 2011 (the
“Execution Date”), but is made effective as of the Effective Time (as defined below), from
Enduro Operating LLC, a Delaware limited liability company (“Grantor”) and wholly owned
subsidiary of Enduro Resource Partners LLC, a Delaware limited liability company (“Enduro
Sponsor”), to Enduro Texas LLC, a Delaware limited liability company and wholly owned
subsidiary of Enduro Sponsor (“Grantee”). The Parties acknowledge and agree that this Conveyance has been effected
pursuant to the terms and conditions of that certain Agreement and Plan of Merger, dated as of the Effective Date, between
Grantor and Grantee (the “Grantee Merger”). 

     Grantor and Grantee are sometimes referred to herein individually as a “Party” and
collectively as the “Parties.”  Capitalized terms used
in this Conveyance shall have the respective meanings ascribed to them in Article II.

ARTICLE I

GRANT OF NET PROFITS INTEREST

     For and in consideration of Ten and No/100 Dollars ($10.00) and other good and valuable
consideration to Grantor paid by Grantee, the receipt and sufficiency of which are hereby
acknowledged by Grantor, Grantor has bargained, sold, granted, conveyed, transferred, assigned, set
over, and delivered, and by this Conveyance does hereby bargain, sell, grant, convey, transfer,
assign, set over, and deliver unto Grantee, its successors and assigns, effective as of the
Effective Time, the Net Profits Interest, which shall be calculated in accordance with the
provisions of Article IV and payable solely out of the Net Profits derived from the gross proceeds
attributable to the sale of the Subject Hydrocarbons, all as more fully provided hereinbelow.

     TO HAVE AND TO HOLD the Net Profits Interest, together with all and singular the rights and
appurtenances thereto in anywise belonging, unto Grantee, its successors and assigns, subject,
however, to the following terms and provisions:

 

 

ARTICLE II

INTERPRETATION; DEFINITIONS

     Section 2.1 Interpretation

          (a) All references in this Conveyance to Exhibits, Articles, Sections, subsections, clauses
and other subdivisions refer to the corresponding Exhibits, Articles, Sections, subsections,
clauses and other subdivisions of or to this Conveyance unless expressly provided otherwise.
Titles or headings appearing at the beginning of any Exhibits, Articles, Sections, subsections,
clauses and other subdivisions of this Conveyance are for convenience only, do not constitute any
part of this Conveyance and shall be disregarded in construing the language hereof. The words
“this Conveyance,” “herein,” “hereby,” “hereunder” and “hereof,” and words of similar import, refer
to this Conveyance as a whole and not to any particular Article, Section, subsection, clause or
other subdivision unless expressly so limited. The words “this Article,” “this Section,” “this
subsection,” “this clause,” and words of similar import, refer only to the Article, Section,
subsection and clause 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 GAAP as interpreted as of the date of this Conveyance. Unless expressly provided
to the contrary, the word “or” is not exclusive. 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 referred to herein are attached to and by this
reference incorporated herein for all purposes. Reference herein to any federal, state, local or
foreign Law shall be deemed to also refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. The terms “grant,” “convey,” “transfer” and “assign” or
words of a similar nature, when used in relation to the Grantee Merger, shall
mean “allocated to” and “vested in.”

          (b) As used in this Conveyance, in regard to Subject Interests located in Louisiana:

               (i) Each reference to “person” will include “juridical persons” as such term is used in
the Louisiana Civil Code.

               (ii) Each reference to “lien” will include a reference to “privilege.”

               (iii) Each reference to “sale” or “conveyance” (and derivations thereof) will, if the
context requires, include a reference to “assignment” and “transfer of ownership” as such
terms are used in the Louisiana Civil Code.

               (iv) The term “fee interest” will refer to the rights of a landowner or a mineral
servitude owner in minerals as used in the Louisiana Mineral Code. Each reference to
“leaseholds” or “leasehold interests” will include a reference to “interests in a mineral
lease” as contemplated by the Louisiana Mineral Code.

               (v) Each reference to “pooling or unitization agreement” will include a reference to
“unitization orders,” and each reference to “pooled unit” will include a

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reference to units created by order or by agreement or declared pursuant to contractual
authority.

               (vi) Each reference to “property” will include, as the context may require,
“corporeals” and “incorporeals” and “movables” and “immovables” as such terms are used in
the Louisiana Civil Code. Each reference to “real property” will include “immovables,”
whether corporeal immovables or incorporeal immovables as the context may require, as such
terms are used in the Louisiana Civil Code, and also “minerals rights” as such term is used
in the Louisiana Mineral Code. Each reference to the term “personal property” will include
“movables,” whether corporeal movables or incorporeal movables as the context may require,
as such terms are used in the Louisiana Civil Code. Each reference to “fixtures” will
include a reference to “component parts” as such term is used in the Louisiana Civil Code.
Each reference to “easement” or “right-of-way” will include a reference to “servitude” as
such term is used in the Louisiana Civil Code. Each reference to “running with the Subject
Interests” will include the phrase “and a real right in the Subject Interests.”

     Section
2.2  Definitions. As used herein, the following terms shall have the respective meanings
ascribed to them below:

     “Acquisition Date” shall mean the date on which Grantor or its Affiliate acquired the
applicable Subject Interest.

     “Administrative Hedge Costs” shall mean those costs paid by Grantor after June 30,
2011 to counter-parties under the Existing Hedges or to Persons that provide credit to maintain any
Existing Hedge (in each case) after the Effective Time, but excluding any Hedge Settlement Costs.

     “Affiliate” shall mean with respect to a specified Person, any Person that directly or
indirectly controls, is controlled by, or is under common control with, the specified Person. As
used in this definition, the term “control” (and the related terms “controlling,” “controlled by,”
and “under common control”) shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

     “BOE” shall mean (a) for Oil included in the Subject Hydrocarbons, one barrel, (b) for
Gas Liquids included in the Subject Hydrocarbons, one (1) barrel, and (c) for Gas included in the
Subject Hydrocarbons, the amount of such hydrocarbons equal to one barrel, determined using the
ratio of six (6) Mcf of Gas to one barrel of Oil.

     “Business Day” shall mean any day that is not a Saturday, Sunday, a holiday determined
by the New York Stock Exchange as affecting “‘ex’ dates” or any other day on which national banking
institutions in New York, New York are closed as authorized or required by law.

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

     “Conveyance” shall have the meaning ascribed to it in the Preamble to this Conveyance.

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     “Credits” shall have the meaning given such term in Section 4.1(b).

     “Debit Balance” shall have the meaning given such term in Section 4.2(b).

     “Debit Balance Amount” shall have the meaning given such term in Section 4.2(b).

     “Debits” shall have the meaning given such term in Section 4.1(b).

     “Effective Time” shall mean 7:00 a.m., Central Standard Time, on May 1, 2011.

     “Eligible Materials” shall mean Materials for which amounts in respect of the cost of
such Materials were properly debited to the Net Profits Account.

     “Enduro Sponsor” shall have the meaning ascribed to it in the Preamble to this
Conveyance.

     “Environmental Laws” shall mean, as the same have been amended to the date hereof, 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.; and the Safe Drinking Water Act, 42 U.S.C.
§§ 300f through 300j; and all similar laws as of the date hereof of any governmental body having
jurisdiction over the property in question addressing pollution or protection of the environment
and all regulations implementing the foregoing that are applicable to the operation and maintenance
of the Subject Interests.

     “Excluded Deductions” shall mean deduction amounts related to any of the following
items: (a) any amount that has also been used to reduce or offset the amount of the Subject
Hydrocarbons (or proceeds of production thereof) or has otherwise not been included therein
(including proceeds attributable to royalties, overriding royalties, production payments and other
charges burdening the Subject Interests as of the Effective Time); (b) any overriding royalty,
production payment or other charge burdening the Subject Interests which was created by Grantor
after the Acquisition Date; (c) any general, administrative or overhead costs paid or incurred by
Grantor or its Affiliates, except for those expressly permitted hereunder; (d) any interest,
premiums, fees or similar charges arising out of borrowings or purchases of any goods, equipment or
other items on credit, whether or not used on or otherwise related to the Subject Interests; (e)
all Manufacturing Costs; (f) any amounts paid by Grantor (initial or a successor) to such Grantor’s
predecessor in interest with respect to part or all of the Subject Interests (including without
limitation any purchase price or other consideration paid by Grantor to such predecessor in
interest to acquire all or part of the Subject Interests); (g) any amount arising from any
condition, circumstance, activity, practice, incident, action, or plan that gives rise to any
material liability, or otherwise form the basis of any claim, action, suit, proceeding, hearing or
investigation, based on or related to the processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge, Release or threatened Release into
the environment, of any pollutant, contaminant, or hazardous substance or other toxic material or
waste from or attributable to the use or operation of any of the Subject Interests which either

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occurred prior to, on or after the Effective Time and are attributable to Grantor’s gross
negligence or willful misconduct; and (h) costs and expenses (not to exceed, in the aggregate,
$9,098,000) arising out of operations covered by the AFEs for the wells set forth on Exhibit
B.

     “Excluded Proceeds” shall mean the following proceeds and amounts:

          (a) any Offset Amounts, except that, for purposes of determining the proceeds and amounts that
constitute “Excluded Proceeds” for purposes hereof, (i) there shall not be any deductions to such
proceeds and amounts, in the cases of subsections (c), (h) and (j) of the definition for “Offset
Amounts,” for the actual costs of salvage or disposition or any Manufacturing Costs, as applicable,
(ii) cash payments received by Grantor as a result of any pooling or unitization of the Subject
Interests shall be considered Excluded Proceeds regardless of whether the costs giving rise to such
payments were charged to the Net Profits Interest and (iii) insurance proceeds received by Grantor
shall be considered Excluded Proceeds regardless of whether the cost of such insurance was charged
to the Net Profits Account;

          (b) any proceeds that are withheld from Grantor for any reason (other than at the request of
Grantor), until such time that the proceeds are actually received by Grantor, provided that
proceeds that are received by Grantor and promptly deposited by it with an escrow agent in order to
resolve a dispute with respect thereto shall not be considered to be “received” by Grantor for
purposes of this definition until the time that such amounts are actually collected by Grantor;

          (c) if Grantor becomes an underproduced party under any Gas balancing or similar arrangement
affecting the Subject Interests, any amounts for any Gas attributable to the Subject Interests for
which Grantor is entitled to receive as “make-up” Gas that would otherwise be attributable to the
Subject Interests;

          (d) if Grantor becomes an overproduced party under any Gas balancing or similar arrangement
affecting the Subject Interests, any amounts for any Gas taken by an underproduced party as
“make-up” Gas that would otherwise be attributable to the Subject Interests;

          (e) any amount received by Grantor in respect of any production of Subject Hydrocarbons prior
to the Effective Time;

          (f) any amount to which Grantor is entitled by virtue of a judgment of a court of competent
jurisdiction resolving a dispute hereunder between Grantee and Grantor in favor of Grantor, or any
amount paid to Grantor in settlement of such dispute;

          (g) except as set forth in Section 6.2, any amounts or compensation received by Grantor in
connection with any Prior Reversionary Interest; and

          (h) any additional proceeds (i.e., proceeds attributable to the non-participating party) from
the sale of Hydrocarbons related to any Subject Well with respect to which Grantor elects to be a
participating party (whether such rights are available pursuant to an operating agreement or other
agreement or arrangement) with respect to any operation with respect to such Subject Well for which
another party or parties have elected not to participate in such operation

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(or have elected to abandon such Subject Well) and Grantor elects to pay the costs of such
nonparticipating or abandoning party and as a result of which Grantor becomes entitled to receive,
either temporarily (i.e., through a period of recoupment) or permanently such additional proceeds
from the sale of Hydrocarbons related to such Subject Well.

     “Execution Date” shall have the meaning ascribed to it in the Preamble to this
Conveyance.

     “Existing Hedges” shall mean the Hedges entered into by Grantor and described on
Exhibit C.

     “Fair Value” shall mean an amount equal to the excess, if any, of (a) the proceeds
which could reasonably be expected to be obtained from the sale of such portion of the Net Profits
Interest to a party which is not an Affiliate of either Grantor or
the Grantee on an arms-length
negotiated basis, taking into account relevant market conditions and factors existing at the time
of any such proposed sale or release, over (b) Grantee’s proportionate share of any sales costs,
commissions and brokerage fees related to such sales.

     “GAAP” shall mean U.S. generally accepted accounting principles.

     “Gas” shall mean natural gas and other gaseous hydrocarbons or minerals, including
helium, but excluding any Gas Liquids.

     “Gas Liquids” shall mean those natural gas liquids and other liquid hydrocarbons,
including ethane, propane, butane and natural gasoline, and mixtures thereof, that are removed from
a Gas stream by the liquids extraction process of any field facility or gas processing plant and
delivered by the facility or plant as natural gas liquids.

     “Grantee” shall have the meaning ascribed to it in the Preamble to this Conveyance.

     “Grantee
Merger” shall have the meaning ascribed to it in the
Preamble to this Conveyance.

     “Grantor” shall have the meaning ascribed to it in the Preamble to this Conveyance.

     “Gross Deductions” shall mean the following costs and expenses (and, where applicable,
losses, liabilities and damages), to the extent that the same (x) are properly allocable to the
Subject Interests (and any related equipment or property used in connection therewith) and the
production and marketing of Subject Hydrocarbons therefrom and (y) have been incurred or accrued by
Grantor, from and after the Effective Time, but that are not attributable to a production month
that occurs prior to the Effective Time (excluding, in all instances, the Excluded Deductions):

          (a) all costs paid by Grantor (i) for drilling, development, production and abandonment
operations (including activities necessary to gain access to and prepare well locations for
drilling; operations and activities related to drilling and equipping Subject Wells and service
wells; operations constituting or associated with workovers; the plugging and abandoning of any
well or facility on the Subject Interests; and secondary recovery, pressure

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maintenance, repressuring, recycling and other operations conducted for the purpose of
enhancing production from the Subject Interests), (ii) for all direct labor (including employee and
fringe benefits) and other services necessary for drilling, operating, producing and maintaining
the Subject Interests and workovers of any Subject Well, (iii) for treatment, dehydration,
compression, separation and transportation of the Subject Hydrocarbons (including activities
related to the acquisition, construction and installation of production and injection facilities),
(iv) for all Materials purchased for use on, or in connection with, any of the Subject Interests
and (v) for any other operations with respect to the exploration, development or operation of
Subject Hydrocarbons (including costs for the maintenance of any Subject Well or facility on the
Leases; replacement of any facilities; the restoration or remediation of the surface or subsurface
sites associated with the Subject Interests or lands pooled or unitized therewith; and any
marketing fees paid to non-Affiliates of Grantor); provided, however, that (A) the costs charged to
the Net Profits Account for such items shall be made (1) on the same basis as such costs are
charged under the operating agreement associated with the applicable portion of the Subject
Interests at the time the transaction giving rise to such costs occurred, or (2) in the absence of
such operating agreement, on the same basis as Grantor is charged under existing third party
arrangements; and (B) if Grantor elects to pay the costs of a nonconsenting party or
nonparticipating party with respect to which the gross proceeds derived from such costs are not
credited to the Net Profits Account, Grantor shall be solely responsible for such costs;

          (b) (i) all losses, costs, expenses, liabilities and damages (including outside legal,
accounting and engineering services) attributable to, or incident to the operation or maintenance
of, the Subject Interests associated with (A) defending, prosecuting, handling, investigating or
settling litigation, administrative proceedings, claims (including lien claims other than liens for
borrowed funds), damages, judgments, fines, penalties and other liabilities, (B) the payment of
judgments, penalties and other liabilities (including interest thereon), paid by Grantor and not
reimbursed under insurance maintained by Grantor or others (including all losses, costs, expenses,
liabilities and damages arising from third-party claims, lawsuits or causes of action for personal
injury or death or damage to personal or real property (both surface and subsurface), including
those losses, costs, expenses, liabilities and damages arising under Environmental Laws with
respect to the Subject Interests or in any way from the environmental condition of the Subject
Interests), (C) the payment or restitution of any proceeds of Subject Hydrocarbons, (D) complying
with applicable local, state and federal statutes, ordinances, rules and regulations, and (E) tax
or royalty audits, and (ii) any other loss, cost, expense, liability or damage (including
settlement costs and reasonable attorneys’ fees) incurred by Grantor in relation to the Subject
Interests not paid or reimbursed under insurance; excluding, in each instance, any expenses
incurred by Grantor in litigation of any claim or dispute arising hereunder between the Parties or
amounts paid by Grantor to Grantee pursuant to a final order entered by a court of competent
jurisdiction resolving any such claim or dispute or amounts paid by Grantor to Grantee in
connection with the settlement of any such claim or dispute;

          (c) all taxes, charges and assessments (excluding federal and state income, transfer,
mortgage, inheritance, estate, franchise and like taxes) incurred, accrued or paid by Grantor with
respect to the ownership of the Subject Interests or the extraction of the Subject Hydrocarbons,
including production, severance or excise and other similar taxes, charges and assessments assessed
against, or measured by, the production of (or the proceeds or value of production of) Subject
Hydrocarbons, occupation taxes, gathering, pipeline, excise, sales, use

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and other taxes, and ad valorem and property taxes, charges and assessments assessed against
or attributable to the Subject Interests or any equipment used in connection with production from
any of the Subject Interests and any extraordinary or windfall profits taxes, charges and
assessments that may be assessed in the future based upon profits realized or prices received from
the sale of Subject Hydrocarbons;

          (d) all insurance premiums attributable to the ownership or operation of the Subject Interests
paid by Grantor for insurance actually carried for periods after the Effective Time with respect to
the Subject Interests, or any equipment located on any of the Subject Interests, or incident to the
operation or maintenance of the Subject Interests;

          (e) all amounts and other consideration paid by Grantor for (i) rent and the use of or damage
to the surface, (ii) delay rentals, shut-in well payments, minimum royalties and similar payments,
and (iii) fees for renewal, extension, modification, amendment, replacement or supplementation of
the Leases included in the Subject Interests;

          (f) all amounts charged by the relevant operator as overhead, administrative or indirect
charges specified in the applicable operating agreements or other arrangements now or hereafter
covering the Subject Interests or operations with respect thereto;

          (g) to the extent Grantor is the operator of certain of the Subject Interests and there is no
operating agreement covering such portion of the Subject Interests, those overhead, all
administrative or indirect charges that are allocated by Grantor to such portion of the Subject
Interests, to the extent that such charges are allocated in the same manner that Grantor allocates
to other similarly owned and operated properties;

          (h) if, as a result of the occurrence of the bankruptcy or insolvency or similar occurrence of
the purchaser of Subject Hydrocarbons, any and all amounts previously credited to the Net Profits
Account are reclaimed from Grantor or its representative, then the amounts reclaimed as promptly as
practicable following Grantor’s payment thereof;

          (i) all costs and expenses paid by Grantor for recording this Conveyance and, immediately
prior to the last Payment Period, costs estimated in good faith to record the termination or
release of this Conveyance;

          (j) all Administrative Hedge Costs paid by Grantor;

          (k) all Hedge Settlement Costs paid by Grantor;

          (l) all amounts previously included, or otherwise accounted for, in the calculation of Gross
Profits but subsequently paid by Grantor as a refund, interest or penalty; and

          (m) at the option of Grantor, all amounts reserved for approved development expenditure
projects, including amounts for drilling, recompletion and workover costs, provided that, such
amounts, (i) to the extent not already spent or incurred by Grantor, will at no time exceed two
million dollars ($2,000,000) in the aggregate, and (ii) shall not be included as part of the Gross
Deductions in subsequent Payment Periods.

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     “Gross Fair Value” means an amount equal to the Fair Value divided by eighty percent
(80%).

     “Gross Profits” shall mean, for each Payment Period following the Effective Time, an
amount equal to the sum of (excluding, in all instances, the Excluded Proceeds) the gross proceeds
received by Grantor during the applicable Payment Period (and that are not attributable to a
production month that occurs prior to the Effective Time) from the sale of all Subject
Hydrocarbons, including the following proceeds and amounts: (a) all proceeds and consideration
received, directly or indirectly, for advance payments and payments under take-or-pay and similar
provisions of Production Sales Contracts when credited against the price for delivery of
production; and (b) all proceeds and amounts received by Grantor (i) from any “make up” Gas taken
by Grantor as a result of its position as an underproduced party under any Gas balancing or similar
arrangement affecting the Subject Interests, (ii) received as a balancing of accounts under a Gas
balancing or other similar arrangement affecting the Subject Interests either as an interim
balancing or at the depletion of the reservoir, and (iii) for any Gas taken by Grantor attributable
to the Subject Interests in excess of its entitlement share of such Gas; provided, however, that
Gross Profits (A) shall not include any Manufacturing Proceeds and (B) in the event that Subject
Hydrocarbons are Processed prior to sale, shall only include the Payment Value of such Subject
Hydrocarbons before any such Processing.

     “Gross Reversionary Compensation” means an amount equal to (a) that portion of the
Reversionary Compensation that is attributable to the Net Profits Interest released pursuant to
Section 6.2 divided by (b) eighty percent (80%).

     “Hedge” shall mean any commodity hedging transaction pertaining to Hydrocarbons,
whether in the form of (a) forward sales and options to acquire or dispose of a futures contract
solely on an organized commodities exchange, (b) derivative agreements for a swap, cap, collar or
floor of the commodity price, or (c) similar types of financial transactions classified as
“notional principal contracts” pursuant to Treasury Regulation § 1.988-1(a)(2)(iii)(B)(2).

     “Hedge Settlement Costs” shall mean any and all payments required to be made by
Grantor after June 30, 2011 to the counterparties in connection with the settlement or
mark-to-market of trades made under any Existing Hedge and all payments made by Grantor for any
early termination of any Existing Hedge.

     “Hedge Settlement Revenues” shall mean any and all payments received by Grantor after
June 30, 2011 from the counterparties in connection with the settlement or mark-to-market of trades
made under any Existing Hedge and all payments received by Grantor for any early termination of any
Existing Hedge.

     “Hydrocarbons” shall mean Oil, Gas and Gas Liquids.

     “Lease” shall mean, subject to the depth limitations and other restrictions that may
be set forth therein, (a) the oil and gas leases, oil, gas and mineral leases, subleases and other
leaseholds, contractual rights, and other rights to hydrocarbons set forth on Exhibit A as
to all lands and depths described in such lease (or the applicable part or portion thereof, if
limited in depth or areal extent in Exhibit A) and any interest therein and any leasehold
interest in any other

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lease of Hydrocarbons derived from the pooling or unitization of each such lease (or portion
thereof, if limited in depth or areal extent in Exhibit A) with other leases, together with any
interest acquired or maintained in any and all renewals and extensions of such lease, (b) any
replacement lease taken upon or in anticipation of termination of such lease (if executed and
delivered during the term of or within one year after the expiration of the predecessor lease), as
to all lands and depths described in the predecessor lease and in which Grantor had an interest
under the predecessor lease (unless the extended or predecessor lease is specifically limited in
depth or areal extent in Exhibit A, in which event only the corresponding portion of such
lease shall be considered a renewal or extension or a replacement lease subject to this
Conveyance), and (c) any other leasehold, royalty, overriding royalty or fee interest described on
Exhibit A.

     “Manufacturing Costs” shall mean the costs of Processing that generate Manufacturing
Proceeds received by Grantor.

     “Manufacturing Proceeds” shall mean the excess, if any, of (a) proceeds received by
Grantor from the sale of Subject Hydrocarbons that are the result of any Processing over (b) the
part of such proceeds that represents the Payment Value of such Subject Hydrocarbons before any
Processing.

     “Materials” shall mean materials, supplies, equipment and other personal property or
fixtures located on or used in connection with the Subject Interests.

     “Mcf” shall mean one thousand cubic feet.

     “Monthly Statement” shall have the meaning given such term in Section 4.5.

     “Net Deductions” shall mean, for each Payment Period following the Effective Time, an
amount equal to the excess, if any, of (a) the sum of the Gross Deductions over (b) the sum of the
Offset Amounts.

     “Net Profits” shall have the meaning given such term in Section 4.2(a).

     “Net Profits Account” shall mean the account maintained in accordance with the
provisions of Section 4.1.

     “Net Profits Interest” shall mean an overriding royalty calculated as a variable
undivided percentage interest in and to the Subject Hydrocarbons entitling Grantee to receive a sum
equal to the Proceeds Percentage of the Net Profits for each Payment Period for the term of this
Conveyance.

     “NPI Calculation” shall have the meaning given such term in Section 4.2(a).

     “NPI Payout” shall have the meaning given such term in Section 4.2(a).

     “Offset Amounts” shall mean the following amounts (net of any applicable taxes):

          (a) any amounts received by Grantor as delay rentals, bonus, royalty or other similar
payments;

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          (b) any amounts received by Grantor in connection with, or for dry hole, bottom hole or other
similar contributions related to, the Subject Interests;

          (c) upon salvage or other disposition, the applicable actual salvage value (determined in
accordance with the applicable operating agreement then in effect and binding upon Grantor or, in
the absence of such agreement, based on the fair market value of such items in the region in which
they are located) of any Eligible Materials, less, in each instance, the actual costs of salvage or
other disposition paid or incurred by Grantor in connection with such sale;

          (d) any cash payments received by Grantor as a result of any pooling or unitization of the
Subject Interests if the costs giving rise to such payments were charged to the Net Profits
Account, directly or indirectly;

          (e) any insurance proceeds received by Grantor as a result of any loss, liability or damage
relating to the Subject Interests, Eligible Materials or Subject Hydrocarbons if the cost of such
insurance was charged to the Net Profits Account;

          (f) any amounts received by Grantor from third parties as rental or use fees for Eligible
Materials;

          (g) the gross proceeds of any judgments or claims received by Grantor for damages occurring on
or after the Effective Time to (i) the Subject Interests, (ii) any Eligible Materials and (iii) any
Subject Hydrocarbons;

          (h) to the extent not covered under subsection (c) above, any proceeds received by Grantor
from the sale of Eligible Materials less the actual costs paid or incurred by Grantor in connection
with such sale;

          (i) any payments made to Grantor in connection with the drilling or deferring of drilling of
any Subject Well;

          (j) for any Subject Hydrocarbons that are Processed before sale, the excess, if any, of the
Manufacturing Proceeds arising therefrom (that are received by Grantor) over the Manufacturing
Costs of such Processing (that are paid or incurred by Grantor);

          (k) any interest, penalty or other amount not derived from the sale of the Subject
Hydrocarbons that is paid to Grantor by the purchaser of production or escrow agent in connection
with proceeds withheld or deposited with an escrow agent;

          (l) any Hedge Settlement Revenues;

          (m) in the event that any such Transfers occur, the Gross Fair Value of the Net Profits
Interest released during the relevant Payment Period in connection with the Transfers described in
Section 6.1(a)(ii); and

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          (n) any amounts of Gross Reversionary Compensation associated with a conveyance of all or any
portion of the Subject Interests, or cessation of production from any Subject Well, in connection
with a Prior Reversionary Interest pursuant to Section 6.2.

     “Oil” shall mean crude oil, condensate and other liquid hydrocarbons recovered by
field equipment or facilities, excluding Gas Liquids.

     “Party” or “Parties” shall have the meaning ascribed to it in the Preamble to
this Conveyance.

     “Payment Period” shall mean a calendar month, provided that for purposes of the Net
Profits Interest, (a) the first Payment Period shall mean the period from and after the Effective
Time until [_________ __], 2011, and (b) the last Payment Period shall mean any portion of the
calendar month during which the expiration of the term of this Agreement occurs from the beginning
of such calendar month until and including the date of such expiration.

     “Payment Value” of any Subject Hydrocarbons shall mean:

          (a) With respect to Oil and Gas Liquids, (i) the highest price available to Grantor for such
Oil and Gas Liquids at the Lease on the date of delivery pursuant to a bona fide offer, posted
price or other generally available marketing arrangement from or with a non-Affiliate purchaser, or
(ii) if no such offer, posted price or arrangement is available, the fair market value of such Oil
or Gas Liquids, on the date of delivery at the Lease, determined in accordance with generally
accepted and usual industry practices; and

          (b) With respect to Gas, (i) the price specified in any Production Sales Contract for the sale
of such Gas, or (ii) if such Gas cannot be sold pursuant to a Production Sales Contract, (A) the
average of the three highest prices (adjusted for all material differences in quality) being paid
at the time of production for Gas produced from the same field in sales between non-affiliated
Persons (or, if there are not three such prices within such field, within a 50-mile radius of such
field) but, for any Gas subject to price restrictions established, prescribed or otherwise imposed
by any governmental authority having jurisdiction over the sale of such Gas, no more than the
highest price permitted for such category or type of Gas after all applicable adjustments
(including tax reimbursement, dehydration, compression and gathering allowances, inflation and
other permitted escalations), or (B) if subsection (b)(ii)(A) above is not applicable, the fair
market value of such Gas, on the date of delivery, at the Lease, determined in accordance with
generally accepted and usual industry practices.

     “Permitted Encumbrances” shall mean the following insofar as they cover, describe or
relate to the Subject Interests or the lands described in any Lease:

          (a) the terms, conditions, restrictions, exceptions, reservations, limitations and other
matters contained in the agreements, instruments and documents that create or reserve to Grantor
its interests in any of the Leases, including any Prior Reversionary Interest;

          (b) any (i) undetermined or inchoate liens or charges constituting or securing the payment of
expenses that were incurred incidental to maintenance, development, production or operation of the
Leases or for the purpose of developing, producing or processing

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Hydrocarbons therefrom or therein, and (ii) materialman’s, mechanics’, repairman’s,
employees’, contractors’, operators’ or other similar liens or charges for liquidated amounts, in
each case, arising in the ordinary course of business that Grantor has agreed to pay or is
contesting in good faith in the ordinary course of business;

          (c) any liens for taxes and assessments not yet delinquent or, if delinquent, that are being
contested in good faith by Grantor in the ordinary course of business;

          (d) any liens or security interests created by law or reserved in any Lease for the payment of
royalty, bonus or rental, or created to secure compliance with the terms of the agreements,
instruments and documents that create or reserve to Grantor its interests in the Leases;

          (e) any obligations or duties affecting the Leases to any municipality or public authority
with respect to any franchise, grant, license or permit, and all applicable laws, rules,
regulations and orders of any governmental authority;

          (f) any (i) easements, rights-of-way, servitudes, permits, surface leases and other rights in
respect of surface operations, pipelines, grazing, hunting, lodging, canals, ditches, reservoirs or
the like, and (ii) easements for streets, alleys, highways, pipelines, telephone lines, power
lines, railways and other similar rights-of-way, on, over or in respect of the lands described in
the Leases;

          (g) all lessors’ royalties, overriding royalties, net profits interests, carried interests,
production payments, reversionary interests and other burdens on the Subject Interests or
deductions from the proceeds of production attributable to the Subject Interests created or in
existence as of the Acquisition Date;

          (h) preferential rights to purchase or similar agreements and required third party consents to
assignments or similar agreements created or in existence as of the Acquisition Date;

          (i) all rights to consent by, required notices to, filings with, or other actions by any
Person in connection with the Transfer of the Leases or interests therein;

          (j) production sales contracts; division orders; contracts for sale, purchase, exchange,
refining or processing of Hydrocarbons; unitization and pooling designations, declarations, orders
and agreements; operating agreements; agreements for development; area of mutual interest
agreements; gas balancing or deferred production agreements; processing agreements; plant
agreements; pipeline, gathering and transportation agreements; injection, repressuring and
recycling agreements; salt water or other disposal agreements; seismic or geophysical permits or
agreements; and any and all other agreements entered into by Grantor or its Affiliates in
connection with the exploration or development of the Leases or the extraction, processing or
marketing of production therefrom or to which any of the Leases were subject as of the Acquisition
Date; and

13

 

          (k) conventional rights of reassignment that obligate Grantor to reassign all or part of a
property to a third party if Grantor intends to release or abandon such property, including any
Prior Reversionary Interest.

     “Person” shall mean any individual, partnership, limited liability company,
corporation, trust, unincorporated association, governmental agency, subdivision, instrumentality,
or other entity or association.

     “Prime Rate” means the rate of interest published from time to time as the “Prime
Rate” in the “Money Rates” section of The Wall Street Journal.

     “Prior Reversionary Interest” shall mean any contract, agreement, lease, deed,
conveyance or operating agreement that exists as of the Effective Time or that burdened the Subject
Interests at the Acquisition Date, that by the terms thereof requires a Person to convey a part of
the Subject Interests (or the Net Profits Interest with respect to any part of the Subject
Interests) to another Person or to permanently cease production of any Subject Well, including
obligations arising pursuant to any operating agreements, Leases, and other similar agreements or
instruments affecting or burdening the Subject Interests.

     “Proceeds Percentage” shall mean eighty percent (80%).

     “Processing” or “Processed” shall mean to manufacture, fractionate or refine
Subject Hydrocarbons, but such terms do not mean or include activities involving the use of normal
lease or well equipment (such as dehydrators, gas treating facilities, mechanical separators,
heater-treaters, lease compression facilities, injection or recycling equipment, tank batteries,
field gathering systems, pipelines and equipment and similar items) to treat or condition
Hydrocarbons or other normal operations on any of the Subject Interests.

     “Production Sales Contracts” shall mean all contracts, agreements and arrangements for
the sale or disposition of Hydrocarbons.

     “Release” shall mean any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching,
dumping or disposing into the environment.

     “Reversionary Compensation” shall have the meaning given such term in Section 6.2.

     “Subject Hydrocarbons” shall mean all Hydrocarbons in and under and that may be
produced, saved, and sold from, and are attributable to, the Subject Interests from and after the
Effective Time, after deducting the appropriate share of all royalties and any overriding
royalties, production payments, net profits interests and other similar charges (except the Net
Profits Interest) burdening the Subject Interests as of the Acquisition Date to the extent such
burdens were still in force and effect at the Effective Time, provided that, (a) there shall not be
included in the Subject Hydrocarbons (i) any Hydrocarbons attributable to non-consent operations
conducted with respect to the Subject Interests (or any portion thereof) as to which Grantor shall
be a non-consenting party as of the Effective Time that are dedicated to the recoupment or
reimbursement of costs and expenses of the consenting party or parties by the terms of the relevant
operating agreement, unit agreement, contract for development, or other instrument

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providing for such non-consent operations (including any interest, penalty or other amounts
related thereto), or (ii) any Hydrocarbons lost in production or marketing or used by Grantor for
drilling, production or plant operations (including fuel, secondary or tertiary recovery) conducted
solely for the purpose of producing Subject Hydrocarbons from the Subject Interests, and (b) there
shall be included in the Subject Hydrocarbons any Hydrocarbons attributable to non-consent
operations conducted with respect to the Subject Interests (or any portion thereof) as to which
Grantor shall be a non-consenting party as of the Effective Time that are produced, saved, and sold
from, and are attributable to the Subject Interests after the Effective Time from and after the
recoupment or reimbursement of costs and expenses (including any interest, penalty or other amounts
related thereto) of the consenting party or parties by the terms of the relevant operating
agreement, unit agreement, contract agreement, contract development, or other instruments providing
for such non-consent operations.

     “Subject Interests” shall mean each kind and character of right, title, claim, or
interest (solely for purposes of this definition, collectively “rights”) that Grantor has or owns
in the Leases and the Subject Wells, whether such rights be under or by virtue of a lease, a
unitization or pooling order or agreement, an operating agreement, a division order, or a transfer
order or be under or by virtue of any other type of claim or title, legal or equitable, recorded or
unrecorded, even though Grantor’s interest be incorrectly or incompletely described in, or a
description thereof omitted from, Exhibit A, all as such rights shall be (a) enlarged or
diminished by virtue of the provisions of Section 5.2, and (b) enlarged by the discharge of any
obligations for payments out of production or by the removal of any charges or encumbrances to
which any of such rights are subject at the Effective Time (provided that such discharge or removal
is pursuant to the express terms of the instrument that created such charge, obligation or
encumbrance) and any and all renewals, extensions and replacements of the right occurring within
one year after the expiration of such rights.

     “Subject Well” shall mean each well (whether now existing or hereinafter drilled) on
the Leases in respect of which Grantor owns any interest or is entitled to any of the Hydrocarbons
production or the proceeds therefrom (including directly or indirectly by virtue of the effect of
any farmout or farmin provisions or other provisions).

     “Transfer” shall mean any assignment, sale, transfer, conveyance, exchange, or
disposition of any property (and shall include any derivative variants of each such term);
provided, however, that, as used herein, the term “Transfer” shall not include the granting of a
security interest, pledge, or mortgage in or of Grantor’s interest in any property, including the
Subject Interests or the Subject Hydrocarbons.

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ARTICLE III

SPECIAL WARRANTY OF TITLE

     Grantor warrants title to the Net Profits Interest, subject to the Permitted Encumbrances,
unto Grantee, its successors and assigns, against all persons whomsoever claiming or to claim the
same, or any part thereof, by, through or under Grantor, but not otherwise. Grantor transfers to
Grantee by way of substitution and subrogation (to the fullest extent that same may be
transferred), all rights or actions over and against all of Grantor’s predecessors, covenantors or
warrantors of title (other than Affiliates of Grantor). Grantor’s special warranty of title set
forth in this Article III is understood to include, in regard to Subject Interests located in
Louisiana, an express exclusion of the warranty against eviction as provided in Article 2503 of the
Louisiana Civil Code, including any obligation on the part of Grantor for return of the price or
other consideration given.

ARTICLE IV

ESTABLISHMENT OF NET PROFITS ACCOUNT

     Section 4.1 Net Profits Account.

          (a) In order to account for, track and make the payments associated with the Net Profits
Interest, Grantor shall establish and maintain true and correct books and records in order to
determine the credits and debits to a Net Profits Account to be maintained by Grantor at all times
during the term hereof. The Net Profits Account will be maintained in accordance with the terms of
this Conveyance and prudent and accepted accounting principles.

          (b) From and after the Execution Date with respect to each Payment Period, (i) the Net Profits
Account shall be credited with an amount equal to the sum of the Gross Profits (subject to the
deduction described in Section 4.4(a)) received by Grantor from the sale of all Subject
Hydrocarbons during the applicable Payment Period (the “Credits”), and (ii) the Net Profits
Account shall be debited with an amount equal to the sum of the Net Deductions during the
applicable Payment Period (subject to the following sentence) (the “Debits”). If, in
calculating the amount of Net Deductions for any Payment Period, the Offset Amounts exceed the
Gross Deductions, then the Net Deductions for that Payment Period shall be zero, and such excess,
plus interest on such excess amount at the Prime Rate for the period between the last day of the
preceding Payment Period and the date the excess amount has been used to reduce the Net Deductions
in succeeding Payment Periods, shall be applied to reduce the Net Deductions in each succeeding
Payment Period until exhausted. Under no circumstances shall the amount paid in respect of any
Payment Period exceed eighty percent (80)% of Gross Profits for such Payment Period.

          (c) The Credits and Debits to the Net Profits Account shall not be interpreted or applied in
any manner that (i) results in any duplication of all or any part of any such Credit or Debit (or
reduction thereto) under this Conveyance, or (ii) ever results in the inclusion of any charge to
the Net Profits Account that is reimbursed to Grantor by any Person.

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          (d) GRANTEE ACKNOWLEDGES AND AGREES THAT THE PROVISIONS ESTABLISHING AND MAINTAINING THE NET
PROFITS ACCOUNT AND THE DEBITING OF ITEMS THERETO SHALL BE APPLICABLE REGARDLESS OF WHETHER THE
LOSSES, COSTS, EXPENSES, LIABILITIES AND DAMAGES THAT MAY BE DEBITED IN ACCORDANCE WITH THIS
CONVEYANCE AROSE SOLELY OR IN PART FROM THE ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, STRICT
LIABILITY OR OTHER FAULT OF GRANTOR OR ANY OF ITS AFFILIATES, OTHER THAN LOSSES, COSTS, EXPENSES,
LIABILITIES AND DAMAGES THAT AROSE FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF GRANTOR OR
ANY OF ITS AFFILIATES, WHICH SHALL NOT BE DEBITED TO THE NET PROFITS ACCOUNT. NOTWITHSTANDING THE
FOREGOING, NOTHING IN THIS CONVEYANCE SHALL BE CONSTRUED AS A WAIVER OR RELEASE OF GRANTOR FROM ANY
CLAIM, ACTION OR LIABILITY ARISING UNDER SECTION 5.1(a).

     Section 4.2 Accounting and Payment.

          (a) Following the conclusion of each Payment Period, a calculation (the “NPI
Calculation”) shall be made by Grantor by deducting (i) (A) the total Debits for such Payment
Period and (B) the absolute value of the Debit Balance Amount, if any, carried forward in the Net
Profits Account at the beginning of such Payment Period from (ii) the total Credits for such
Payment Period. If the NPI Calculation results in a positive amount with respect to the Payment
Period (the “Net Profits”), then (i) that positive amount shall be subtracted from the
balance of the Net Profits Account to cause the Net Profits Account to have a zero balance
immediately following the end of such Payment Period, (ii) that positive amount shall be multiplied
by the Proceeds Percentage, and (iii) the resulting product thereof (the “NPI Payout”)
shall be payable to Grantee as specified in Section 4.3.

          (b) If the NPI Calculation results in a negative amount with respect to a Payment Period, the
negative sum shall be deemed the “Debit Balance” for purposes hereof; and no payments
shall be made to Grantee in respect of the Net Profits Interest nor shall Grantee ever be liable to
make any payment to Grantor in respect of the Debit Balance. Any Debit Balance, plus interest on
such amount at the Prime Rate for the period between the last day of the Payment Period that
resulted in such Debit Balance and the last day of the next Payment Period, (the “Debit Balance
Amount”) shall be carried forward in the Net Profits Account for the following Payment Period.

          (c) All amounts received by Grantor from the sale of the Subject Hydrocarbons for any Payment
Period shall be held by Grantor in one of its general bank accounts and Grantor shall not be
required to maintain a segregated account for such funds.

     Section 4.3 Payment of NPI Payout. For each Payment Period, Grantor shall transfer or cause to be
transferred to Grantee an amount equal to the NPI Payout, if any, with respect to the Payment
Period on or before the last day of the month that follows such period. All funds payable to
Grantee on account of the Net Profits Interest shall be calculated and paid entirely and
exclusively out of the Net Profits.

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     Section 4.4 Overpayment; Past Due Payments.

          (a) If Grantor ever pays Grantee more than the amount of money then due and payable to Grantee
under this Conveyance, Grantee shall not be obligated to return the overpayment, but Grantor may at
any time thereafter reduce the NPI Payout by, and retain for its own account, an amount equal to
the overpayment, plus interest at the Prime Rate on such amount for the period between the
fifteenth (15th) day from the date of the overpayment and the date such amount is recovered by
Grantor. In order to exercise its rights under this Section 4.4(a), Grantor must give Grantee
written notice with respect to any such overpayment, together with supporting information and data.

          (b) Any amount not paid by Grantor to Grantee with respect to the Net Profits Interest when
due shall bear, and Grantor hereby agrees to pay, interest at the Prime Rate from the due date
until such amount has been paid. Grantor shall give Grantee written notice with respect to any
such past due payment, together with supporting information and data.

     Section 4.5 Statements. For each Payment Period, Grantor shall deliver to Grantee a statement
(“Monthly Statement”) showing the NPI Calculation with respect to the Payment Period on or
before the last day of the month that follows such period. Additionally, the Monthly Statement
delivered in July shall also show the computation of the NPI Calculation for the preceding calendar
year. If Grantee takes exception to any item or items included in any Monthly Statement, Grantee
must notify Grantor in writing within one hundred and twenty (120) days after the end of the
calendar year with respect to which such Monthly Statement relates. Such notice must set forth in
reasonable detail the specific Debits or Credits to which exception is taken. Adjustments shall be
made for all exceptions that are agreed to by the Parties. All matters contained in Monthly
Statements that are not objected to by Grantee in the manner provided by this Section 4.5 shall be
conclusively deemed correct.

     Section 4.6 Information; Access. Grantor shall maintain true and correct books, records and
accounts of (a) all transactions required or permitted by this Conveyance (including all financial
information necessary to reflect such transactions), and (b) the financial information necessary to
make the NPI Calculation with respect to any Payment Period. Grantee or its representative, at the
Grantee’s expense and upon reasonable prior written notice, may inspect and copy such books, records,
and accounts, and such other documents, contracts and information as may be reasonably requested by
the Grantee, in Grantor’s office during normal business hours. At Grantee’s request, subject to
applicable restrictions on disclosure and transfer of information, Grantor shall give Grantee and
its designated representatives reasonable access in Grantor’s office
during normal business hours to (i) all production data in Grantor’s possession or Grantor’s
Affiliates’ possession, relating to operations on the Subject Interests, and (ii) all reserve
reports and reserve studies in the possession of Grantor or of Grantor’s Affiliates, relating to
the Subject Interests, whether prepared by Grantor, by Grantor’s Affiliates, or by consulting
engineers. GRANTOR MAKES NO REPRESENTATIONS OR WARRANTIES ABOUT THE ACCURACY OR COMPLETENESS OF
ANY SUCH DATA, REPORTS, OR STUDIES REFERRED TO IN THIS SECTION 4.6 AND SHALL HAVE NO LIABILITY TO

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GRANTEE OR ANY OTHER PERSON RESULTING FROM SUCH DATA, STUDIES, OR REPORTS OR THE
USE THEREOF.

ARTICLE V

OPERATION OF THE SUBJECT INTERESTS

     Section 5.1 Operations.

          (a) To the extent that it has the right to do so under the terms of any lease, operating
agreement or similar instrument affecting or pertaining to the Subject Interests, Grantor shall
conduct and carry on, or use commercially reasonable efforts to cause the operator thereof to
conduct and carry on, the operation and maintenance of the Subject Interests in the same manner as
a reasonably prudent operator in the State in which the applicable portion of the Subject Interests
is located would under the same or similar circumstances acting with respect to its own properties
(without regard to the existence of the Net Profits Interest).

          (b) As to any third Person, the acts of Grantor shall be binding on Grantee, and it shall not
be necessary for Grantee to join with the Grantor in the execution or ratification of any operating
agreement, unit operating agreement, contract for development, or similar instrument affecting or
pertaining to any of the Subject Interests.

          (c) Grantee acknowledges that Grantor is not the only undivided interest owner in the
properties underlying the Subject Interests. As such, Grantee agrees that the acts or omissions of
Grantor’s co-owners shall not be deemed to constitute a violation of the provisions of Section
5.1(a), nor shall any action required by a vote of co-owners be deemed to constitute such a
violation so long as Grantor has voted its interest in a manner designed to comply with Section
5.1(a).

          (d) WITHOUT LIMITING THE FOREGOING, (i) THE PARTIES ACKNOWLEDGE THAT GRANTEE HAS NO RIGHT OR
POWER TO PROPOSE THE DRILLING OF A WELL OR ANY OTHER OPERATIONS, TO DETERMINE THE TIMING OR
SEQUENCE OF ANY OPERATIONS, TO COMMENCE OR SHUT DOWN PRODUCTION, TO TAKE OVER OPERATIONS, OR TO
SHARE IN ANY OPERATING DECISION WHATSOEVER OR IN ANY DECISION PERTAINING TO THE MARKETING AND SALE
OF PRODUCTION WHATSOEVER AND, (ii) THE PARTIES HEREBY EXPRESSLY NEGATE ANY INTENT TO CREATE (AND
THIS CONVEYANCE SHALL NEVER BE CONSTRUED AS CREATING) A MINING OR OTHER PARTNERSHIP OR JOINT
VENTURE OR OTHER RELATIONSHIP SUBJECTING GRANTOR AND GRANTEE TO JOINT LIABILITY OR ANY OTHER DUTIES
BETWEEN GRANTOR AND GRANTEE (EXCEPT THOSE EXPRESSLY SET FORTH HEREIN).

     Section 5.2 Pooling and Unitization

          (a) Certain of the Subject Interests may have been heretofore pooled or unitized for the
production of Hydrocarbons. Such Subject Interests are and shall be subject to the terms and
provisions of such pooling or unitization agreements, and this Conveyance shall apply to and affect
only the production of Hydrocarbons from such units which accrues to such Subject Interests under
and by virtue of the applicable pooling and unitization agreements.

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          (b) Grantor shall have the right to pool or unitize all or any of the Subject Interests (and
the Net Profits Interest) and to alter, change, amend or terminate any pooling or unitization
agreements heretofore or hereafter entered into, as to all or any part of the lands covered by the
Leases, as to one or more of the formations or horizons thereunder, when, in the reasonable
judgment of Grantor, it is necessary or advisable to do so in order to facilitate the orderly
development of the Subject Interests or to comply with the requirements of any law or governmental
order or regulation relating to the spacing of wells or proration of the production therefrom. For
purposes of computing Net Profits, there shall be allocated to the Subject Interests included in
such unit a pro rata portion of the Hydrocarbons produced from the pooled unit on the same basis
that production from the pool or unit is allocated to other working interests in such pool or unit
by virtue of the applicable pooling or unitization agreement. The interest in any such unit
allocable to the Subject Interests included therein shall become a part of the Subject Interests
and shall be subject to the Net Profits Interest.

     Section 5.3 Non-Consent. Grantor shall have the right to elect not to participate in any
operations that are to be conducted under the terms of any operating agreement, unit operating
agreement, contract for development, or similar instrument affecting or pertaining to any of the
Subject Interests. If Grantor elects to be a non-participating party under any such arrangement
with respect to any operation on any portion of the Subject Interests or elects to be an abandoning
party with respect to a Subject Well, the consequence of which election is that Grantor’s interest
in such Subject Well is temporarily (i.e., during a recoupment period) or permanently relinquished
to the parties participating in such operations, or electing not to abandon such Subject Well, then
the costs and proceeds attributable to such relinquished interest shall not, for the period of such
relinquishment (which may be a continuous and permanent period), be debited or credited to the Net
Profits Account and such relinquished interest shall not, for the period of such relinquishment, be
considered to be subject to the Net Profits Interest. Notwithstanding the foregoing, Grantor shall
not elect, as to any portion of the Subject Interests, to be a non-participating party with respect
to any operation contemplated in this Section 5.3 in the event any Affiliate of Grantor will also
be a participating party in such operation.

     Section 5.4 Marketing. Grantor shall have exclusive charge and control of the marketing of all
Subject Hydrocarbons. Grantor shall market or cause to be marketed all commercial quantities of
the Subject Hydrocarbons in accordance with Section 5.1(a), and shall not be entitled to deduct
from the calculation of the Net Profits any fee for marketing the Subject Hydrocarbons allocable to
the Net Profits Interest other than fees for marketing paid to non-Affiliates. Grantor shall not
enter into any Hedges (other than the Existing Hedges) with respect to the Subject Hydrocarbons
from and after the Effective Time or modify or terminate the Existing Hedges. Grantee shall have
no right to take in kind any Subject Hydrocarbons.

     Section 5.5 Leases. Grantor shall have the right to renew, extend, modify, amend or supplement
the Leases with respect to any of the lands covered thereby without the consent of Grantee. The
Net Profits Interest shall apply to all such renewals, extensions, modifications, amendments and
supplements of the Leases (as to all lands and depths described in the predecessor lease and in
which Grantor had an interest under the predecessor lease), and no renewal, extension,
modification, amendment, or supplement shall adversely affect any of Grantee’s rights hereunder.
Any fees payable with respect to such renewal, extension, modification, amendment or supplement
shall be considered Gross Deductions for purposes

20

 

hereof. Grantor shall promptly
furnish Grantee with written notice of any renewal, extension, modification, amendment, or
supplementation that materially affects the Net Profits Interest identifying the location and the
acreage covered thereby.

     Section 5.6 Abandonment. Grantor shall have the right to release, surrender or abandon its
interest in any portion of the Subject Interests that Grantor reasonably believes, in accordance
with the standard set forth in Section 5.1(a), will no longer produce (or be capable of producing)
Subject Hydrocarbons in paying quantities. The effect of such release, surrender or abandonment
will be to release, surrender or abandon the Net Profits Interest insofar as the Net Profits
Interest covers the applicable portion of the Subject Interests so released, surrendered or
abandoned by Grantor. Following any such release, surrender or abandonment, Grantor will promptly
notify Grantee in writing of the portion of the Subject Interests that has been released,
surrendered or abandoned, and the date on which such release, surrender or abandonment has
occurred. Further, Grantor shall have the right to abandon any portion of the Subject Interests if
(a) such abandonment is necessary for health, safety or environmental reasons, or (b) the Subject
Hydrocarbons that would have been produced from the abandoned portion of the Subject Interests
would reasonably be expected to be produced from Subject Wells located on the remaining portion of
the Subject Interests.

     Section 5.7 Contracts with Affiliates. Grantor and its Affiliates may perform services and
furnish supplies or equipment with respect to the Subject Interests that are required to operate
the Subject Interests and treat the costs of such services or furnishing of such supplies or
equipment as Gross Deductions for purposes hereof. The terms of the provision of such services or
furnishing of supplies or equipment shall be substantially similar to those terms available from
non-Affiliates in the same area as the applicable portion of the Subject Interests that are engaged
in the business of rendering comparable services or furnishing comparable equipment and supplies,
taking into consideration all such terms, including the price, term, condition of supplies or
equipment, and availability of supplies or equipment.

     Section 5.8 No Personal Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
CONVEYANCE, GRANTEE SHALL NEVER BE PERSONALLY RESPONSIBLE FOR THE PAYMENT OF ANY PART OF THE
LOSSES, COSTS, EXPENSES, LIABILITIES OR DAMAGES INCURRED IN CONNECTION WITH THE EXPLORING,
DEVELOPING, OPERATING AND MAINTAINING OF THE SUBJECT INTERESTS, AND, SUBJECT TO SECTION 4.1(d), ALL
SUCH LOSSES, COSTS, EXPENSES, LIABILITIES OR DAMAGES SHALL, TO THE EXTENT THE SAME RELATE TO ACTS,
OMISSIONS, EVENTS, CONDITIONS OR CIRCUMSTANCES OCCURRING FROM AND AFTER THE EFFECTIVE TIME, BE
TREATED AS GROSS DEDUCTIONS FOR PURPOSES HEREOF.

     Section 5.9 Real Property Interest. IT IS THE EXPRESS INTENT OF THE PARTIES THAT, AS TO SUBJECT
INTERESTS LOCATED IN TEXAS AND NEW MEXICO, THE NET PROFITS INTEREST SHALL FOR ALL PURPOSES
CONSTITUTE (AND THIS CONVEYANCE SHALL CONCLUSIVELY BE CONSTRUED FOR ALL PURPOSES AS CREATING) A
SINGLE AND SEPARATE NON-POSSESSORY, NON-OPERATING, ROYALTY INTEREST IN AND TO THE SUBJECT INTERESTS
AND A

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FULLY VESTED
AND FULLY CONVEYED INTEREST IN REAL PROPERTY RUNNING WITH THE SUBJECT INTERESTS.

     Section 5.10 Incorporeal Immovable and Real Right. IT IS THE EXPRESS INTENT OF THE PARTIES THAT,
AS TO SUBJECT INTERESTS LOCATED IN LOUISIANA, THE NET PROFITS INTEREST SHALL FOR ALL PURPOSES
CONSTITUTE (AND THIS CONVEYANCE SHALL CONCLUSIVELY BE CONSTRUED FOR ALL PURPOSES AS CREATING) A
SINGLE AND SEPARATE NON-POSSESSORY, NON-OPERATING, ROYALTY INTEREST IN AND TO THE SUBJECT INTERESTS
AND A FULLY VESTED AND FULLY CONVEYED INCORPOREAL IMMOVABLE AND A REAL RIGHT IN THE SUBJECT
INTERESTS.

ARTICLE VI

TRANSFERS AND CHARGES

     Section 6.1 Assignment by Grantor Subject to Net Profits Interest.

          (a) Right to Sell.

               (i) Grantor may from time to time Transfer its interest in the Subject Interests, or
any part thereof or undivided interest therein, subject to the Net Profits Interest and this
Conveyance. Grantor shall cause the assignee, purchaser, transferee or grantee of any such
transaction to take the affected Subject Interests subject to the Net Profits Interest and
this Conveyance and, from and after the actual date of any such Transfer, to assume
Grantor’s obligations under this Conveyance with respect to such Subject Interests.

               (ii) Notwithstanding the foregoing, Grantor may from time to time Transfer to
non-Affiliates of Grantor, free and clear of the Net Profits Interest and this Conveyance,
any of the Subject Interests that accounts for less than or equal to 0.25% of the total
production of Subject Hydrocarbons from the Subject Interests in the preceding twelve (12)
month period. The aggregate Fair Value of all portions of the Net Profits Interest released
in connection with such Transfers shall not exceed an aggregate Fair Value of five hundred
thousand dollars ($500,000) during any consecutive twelve (12) month period. In the event
of any such Transfer, (A) the Gross Fair Value of the released portion of the Net Profits
Interest shall be considered an Offset Amount for purposes hereof during the Payment Period
in which the Transfer occurs, and (B) Grantee shall, upon receiving a written request from
Grantor, immediately prior to any such Transfer, execute, acknowledge, and deliver to
Grantor a recordable instrument (reasonably acceptable to Grantor) that terminates and
releases the Net Profits Interest with respect to the Subject Interests being Transferred.

          (b) Effect of Sale. From and after the actual date of any of the Transfers described
in Section 6.1(a) by Grantor, Grantor (and in the case of Section 6.1(a)(ii) only, any grantee,
purchaser, transferee or grantee of the Subject Interests) shall be relieved of all obligations,
requirements, and responsibilities arising under this Conveyance with respect to the Subject
Interests Transferred, except for those that accrued prior to such date.

22

 

          (c) Allocation of Consideration. Grantee is not entitled to receive any share of the
sales proceeds received by Grantor in any transaction permitted by this Section 6.1.

          (d) Separate Interest. Effective on the effective date of any Transfer of any Subject
Interest pursuant to this Section 6.1, Gross Profits, Excluded Proceeds, Net Deductions, Gross
Deductions, Offset Amounts and Net Profits shall thereafter be calculated and determined separately
(by the assignee, purchaser, transferee or grantee) with respect to such Subject Interests; and
Debits and Credits during each Payment Period in respect of the Subject Interests Transferred shall
reflect items received or incurred by the assignee, purchaser, transferee or grantee, and shall be
calculated in accordance with Article IV hereof.

     Section 6.2 Release of Other Properties. Notwithstanding anything herein to the contrary, in the
event that any Person notifies Grantor that, pursuant to a Prior Reversionary Interest, Grantor is
required to convey all or any portion of the Subject Interests (or the Net Profits Interest with
respect to all or any portion of the Subject Interests) to such Person or cease production from any
Subject Well, Grantor shall have the right to provide such conveyance with respect to such portion
of the Subject Interests (or the Net Profits Interest with respect to such portion of the Subject
Interests) or permanently cease production from any such Subject Well. If in connection with any
such conveyance or permanent cessation of production pursuant to any Prior Reversionary Interest,
Grantor receives compensation attributable to all or any portion of the Net Profits Interest
(“Reversionary Compensation”), an amount equal to the Gross Reversionary Compensation shall
be considered an Offset Amount for purposes hereof during the Payment Period in which Grantor
receives the Reversionary Compensation. In connection with any such conveyance or permanent
cessation of production, Grantee shall, on request, immediately prior to such event, execute,
acknowledge, and deliver to Grantor a recordable instrument (reasonably acceptable to Grantor) that
terminates and releases the Net Profits Interest with respect to any such portion of the Subject
Interests or Subject Well, as applicable, to Grantor. From and after the actual date of any such
conveyance or permanent cessation of production, Grantor and any grantee, purchaser, transferee or
grantee of such Subject Interest (or the Net Profits Interest with respect to such Subject
Interest) shall be relieved of all obligations, requirements, and responsibilities arising under
the Net Profits Interest or this Conveyance with respect to such portion of the Subject Interests,
except for those that accrued prior to such date.

     Section 6.3 Mortgages and Security Interests. Nothing herein shall prevent Grantor from granting
a lien, mortgage, security interest or other charge in Grantor’s interest in any property,
including the Subject Interests and the Subject Hydrocarbons. Grantor agrees that it shall cause
each agreement, indenture, bond, deed of trust, filing, application or other instrument that
creates or purports to create a lien, mortgage, security interest or other charge secured by the
Subject Interests, the Subject Hydrocarbons or the proceeds from the sale of the Subject
Hydrocarbons to include an express agreement and acknowledgement by the parties thereto that the
Net Profits Interest is senior in right of payment and collection to any and all obligations
created thereby in respect of the Subject Interests, the Subject Hydrocarbons or the proceeds from
the sale of the Subject Hydrocarbons. The preceding sentence shall not apply to any agreement,
indenture, bond, deed of trust, filing, application or other instrument that creates a lien,
mortgage, security interest or other charge secured by not more than Grantor’s residual interest in
the Subject Interests, the Subject Hydrocarbons or the proceeds from the sale of the Subject
Hydrocarbons.

23

 

     Section 6.4 Rights of Mortgagee, Pledgee or Trustee. If Grantee shall at any time execute a
mortgage, pledge or deed of trust covering all or part of the Net Profits Interest, the
mortgagee(s), pledge(s) or trustee(s) therein named or the holder of any obligation secured thereby
shall be entitled, to the extent such mortgage, pledge or deed of trust so provides, to exercise
all the rights, remedies, powers, and privileges conferred upon Grantee by the terms of this
Conveyance and to give or withhold all consents required to be obtained hereunder by Grantee, but
the provisions of this Section 6.4 shall in no way be deemed or construed to impose upon Grantor
any obligation or liability undertaken by Grantee under such mortgage, pledge or deed of trust or
under any obligation secured thereby.

     Section 6.5 Assignment or Mortgage by Grantee. Grantee shall provide Grantor with written notice
of any Transfer, mortgage or pledge of all or any portion of the Net Profits Interest. No such
Transfer, mortgage or pledge will affect the method of computing Gross Profits, Excluded Proceeds,
Net Deductions, Gross Deductions, Offset Amounts or Net Profits, or impose any additional
obligation or liability on Grantor. Grantor shall never be obligated to pay the NPI Payout (or
portions thereof) to more than one Person. If more than one Person is ever entitled to receive
payment of any part of the NPI Payout, Grantor may suspend payments of the NPI Payout until the
concurrent owners or claimants of the Net Profits Interest or the right to receive payment of the
NPI Payout appoint one Person in writing to receive all payments of the Net Profits on their
behalf. Grantor may thereafter conclusively rely upon the authority of that Person to receive
payments of the NPI Payout and shall be under no further duty to inquire into the authority or
performance of such Person.

ARTICLE VII

MISCELLANEOUS

     Section 7.1 Notices. All notices and other communications which are required or may be given
pursuant to this Conveyance must be given in writing, in English and delivered personally, by
courier, by telecopy or by registered or certified mail, postage prepaid, as follows:

If to Grantor:

Enduro Operating LLC

777 Main Street, Suite 800

Fort Worth, Texas 76102

Attention: Jon S. Brumley

Facsimile No.: [________________]

If to Grantee:

Enduro Texas LLC

777 Main Street, Suite 800

Fort Worth, Texas 76102

Attention: Jon S. Brumley

Facsimile No.: [________________]

24

 

Either Party may change its address for notice by notice to the other Party in the manner set forth
above. All notices shall be deemed to have been duly given at the time of receipt by the Party to
which such notice is addressed.

     Section 7.2 Ownership of Certain Property. The Net Profits Interest does not include any right,
title, or interest in and to any personal property, fixtures, or equipment and is exclusively an
interest in and to the Subject Interests and the Subject Hydrocarbons.

     Section 7.3 Non-Recourse. Grantee shall look solely to the Net Profits for the
satisfaction and discharge of the Net Profits Interest and, except in the event of Grantor’s
failure to pay as required by Section 4.3, Grantor shall not be liable for such satisfaction or
discharge. Grantor shall not have any liability (and Grantee shall have no recourse or remedy
against Grantor) in the event that the Subject Interests terminate without having generated the
Subject Hydrocarbons, Net Profits or NPI Payouts that are expected to be generated during the term
of the Net Profits Interest.

     Section 7.4 Payments. Grantor shall transfer or cause to be transferred all monies to which
Grantee is entitled hereunder by Federal funds wire transfer not later than the date when due, to
Grantee at the bank account specified by Grantee in writing to Grantor.

     Section 7.5 Amendments. This Conveyance may not be amended, altered or modified except pursuant
to a written instrument executed by the Parties.

     Section 7.6 Further Assurances. The Parties shall from time to time do and perform such further
acts and execute and deliver such further instruments, conveyances, and documents as may be
required or reasonably requested by the other Party to establish, maintain, or protect the
respective rights and remedies of the Parties and to carry out and effectuate the intentions and
purposes of this Conveyance.

     Section 7.7 Waivers. Any failure by either Party to comply with any of its obligations,
agreements or conditions herein contained may be waived by the Party to whom such compliance is
owed by an instrument signed by such Party and expressly identified as a waiver, but not in any
other manner. No waiver of, or consent to a change in, any of the provisions of this Conveyance
shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.

     Section 7.8 Severability. The invalidity or unenforceability of any term or provision of this
Conveyance in any situation or jurisdiction shall not affect the validity or enforceability of the
other terms or provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction and the remaining terms and
provisions shall remain in full force and effect, unless doing so would result in an interpretation
of this Conveyance which is manifestly unjust.

     Section 7.9 No Partition. The Parties acknowledge that Grantee has no right or interest that
would permit Grantee to partition any portion of the Subject Interests, and Grantee hereby waives
any such right.

25

 

     Section 7.10 Governing Law. EXCEPT WHERE PROHIBITED BY THE LAW OF THE
STATE IN WHICH THE RELEVANT SUBJECT INTERESTS ARE LOCATED, THIS CONVEYANCE AND THE LEGAL RELATIONS
BETWEEN THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT REFERENCE TO CONFLICTS OF LAW RULES OR PRINCIPLES THAT MAY REQUIRE THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION.

     Section 7.11 Rule Against Perpetuities. It is not the intent of the Parties that any provision
herein violate any applicable law regarding the rule against perpetuities or other rules regarding
the vesting or duration of estates, and this Conveyance shall be construed as not violating any
such rule to the extent the same can be so construed consistent with the expressed intent of the
Parties as set forth herein. In the event, however, that any provision hereof is determined to
violate any such rule, then such provision shall nevertheless be effective for the maximum period
(but not longer than the maximum period) permitted by such rule that will result in no violation.
To extent that the maximum period is permitted to be determined by reference to “lives in being,”
the Parties agree that “lives in being” shall refer to the lifetime of the last survivor of the
descendents of the late Joseph P. Kennedy (the father of the late John F. Kennedy, the 35th
President of the United States of America) living as of the Effective Time.

     Section 7.12 Tax Matters. Without limiting the disclaimer in Section 5.1(d)(ii), nothing herein
contained shall be construed to constitute a partnership or to cause either Party (under state law
or for tax purposes) to be treated as being the agent of, or in partnership with, the other party.
Grantor may cause to be withheld from any payment hereunder any tax withholding required by law or
regulations, including, in the case of any withholding obligation arising from income that does not
give rise to any cash or property from which any applicable withholding tax could be satisfied, by
way of set off against any subsequent payment of cash or property hereunder.

     Section 7.13 Counterparts. This Conveyance may be executed in counterparts, each of which shall be
deemed an original instrument, but all such counterparts together shall constitute but one
instrument. No Party shall be bound until such time as all of the Parties have executed
counterparts of this Conveyance. To facilitate recordation, there may be omitted from the Exhibits
to this Conveyance in certain counterparts descriptions of property located in recording
jurisdictions other than the jurisdiction in which the particular counterpart is to be filed or
recorded.

     Section 7.14 Conspicuous. GRANTOR AND GRANTEE AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW
TO BE EFFECTIVE OR ENFORCEABLE, THE PROVISIONS IN THIS CONVEYANCE IN ALL CAPS FONT ARE
“CONSPICUOUS” FOR THE PURPOSE OF ANY APPLICABLE LAW.

     Section 7.15 Binding Effect. All the covenants, restrictions and agreements of Grantor herein
contained shall be deemed to be covenants running with the Subject Interests and the

26

 

lands affected
thereby. All of the provisions hereof shall inure to the benefit of Grantee and its
successors and assigns and shall be binding upon Grantor and its successors and assigns and
all other owners of the Subject Interests or any part thereof or any interest therein.

     Section 7.16 Limitation on Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY, NONE OF GRANTOR,
GRANTEE OR ANY OF THEIR RESPECTIVE AFFILIATES SHALL BE ENTITLED TO SPECIAL, INDIRECT, PUNITIVE OR
EXEMPLARY DAMAGES IN CONNECTION WITH THIS CONVEYANCE, AND EACH PARTY, FOR ITSELF AND ON BEHALF OF
ITS AFFILIATES, HEREBY EXPRESSLY WAIVES ANY RIGHT TO SPECIAL, INDIRECT, PUNITIVE OR EXEMPLARY
DAMAGES IN CONNECTION WITH THIS CONVEYANCE AND THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 7.17 Term. The Net Profits Interest shall remain in full force and effect as long as any
portion of the Subject Interests is in full force and effect. At any time after the termination of
the Net Profits Interest, Grantee shall, upon the request of Grantor, execute and deliver such
instruments as may be necessary to evidence the termination of the Net Profits Interest.

     Section 7.18 No Third Party Beneficiaries. Nothing in this Conveyance shall entitle any Person
other than the Parties to any claims, cause of action, remedy or right of any kind.

     Section 7.19 Construction. The Parties acknowledge that (a) Grantor and Grantee have had the
opportunity to exercise business discretion in relation to the negotiation of the details of the
transaction contemplated hereby, (b) this Conveyance is the result of arms-length negotiations from
equal bargaining positions, and (c) Grantor and Grantee and their respective counsel participated
in the preparation and negotiation of this Conveyance. Any rule of construction that a document be
construed against the drafter shall not apply to the interpretation or construction of this
Conveyance.

     Section 7.20
Merger Clause. This Conveyance constitutes the entire
agreement between the Parties pertaining to the subject matter
hereof, and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or written, of the Parties
pertaining to the subject matter hereof.

     Section 7.21 Reliance by Third Parties. No third party (including operators, production purchasers
and disbursing parties) is responsible for calculating or separately reporting and paying to
Grantee any sums that are potentially attributable to the Net Profits Interest; and such third
parties may include the interest of Grantee within the interest credited to Grantor for all
purposes. Grantor shall attend to the actual distribution of the NPI Payout to Grantee as
provided in this Conveyance. To the extent that any provision of a state oil and gas proceeds
payment statute requires an operator, production purchaser or disbursing party to account for and

27

 

separately pay proceeds of production attributable to the Net Profits Interest, Grantor and Grantee
specifically (a) authorize such third parties to include the Net Profits Interest within the
interest credited to Grantor, and (b) waive the application of such statute, to the extent
possible, and such payment shall be made to Grantor directly. No third party shall be under any obligation to inquire as
to, or to see to, the application by Grantor of the proceeds received by it from any sale of
production attributable to the Net Profits Interest.

[Signature Page Follows]

28

 

     IN WITNESS WHEREOF, this Conveyance has been signed by each of the Parties on the
Execution Date and duly acknowledged before the undersigned competent witnesses and Notary Public.

	 	 	 	 	 	 	 	 	 	 	 

	WITNESSES:	 	 	 	GRANTOR:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Enduro Operating LLC
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Printed Name:
	 	 	 	 	 	Name:	 	 	 	 
	

	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 
	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Printed Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESSES:	 	 	 	GRANTEE:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Enduro Texas LLC
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Printed Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Printed Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

[Signature Page — Conveyance]

 

 

STATE OF ___________ §

                 
               
        §

COUNTY OF _________§

     BE IT KNOWN, that on this ___ day of ______, 2011, before me, the undersigned authority,
personally came and appeared ___________________ appearing herein in ___ capacity as
___________________ of Enduro Operating LLC, to me personally known to be the identical person
whose name is subscribed to the foregoing instrument as the said officer of said company, and
declared and acknowledged to me, Notary, that ___________________ executed the same on behalf of
said company with full authority of its ___________________, and that the said instrument is the
free act and deed of the said company and was executed for the uses, purposes and benefits therein
expressed.

	 	 	 

	 

	 	 
	 
	 	 
	 

	 	
Printed Name:                                                                                                        

	 
	 	 
	 

	 	Notary Public for the State of                                                             
	 
	 	 
	 

	 	County of                                                                           
      

My
commission expires:                                                             

	 	 	 

	STATE OF ___________

	 	§
	 

	 	§
	COUNTY OF ___________

	 	§

     BE IT KNOWN, that on this ___ day of ______, 2011, before me, the undersigned authority,
personally came and appeared ___________________ appearing herein in ___ capacity as
___________________ of Enduro Texas LLC, to me personally known to be the identical person whose
name is subscribed to the foregoing instrument as the said officer of said company, and declared
and acknowledged to me, Notary, that ___________________ executed the same on behalf of said
company with full authority of its ___________________, and that the said instrument is the free
act and deed of the said company and was executed for the uses, purposes and benefits therein
expressed.

	 	 	 

	 

	 	 
	 
	 	 
	 

	 	Printed Name:                                                             
	 
	 	 
	 

	 	Notary Public for the State of ___________
	 
	 	 
	 

	 	County of ___________
	 
	 	 
	My commission expires:                                         
	 	 

[Acknowledgement Page — Conveyance]

 

 

EXHIBIT A

ATTACHED TO AND MADE A PART OF THAT

CERTAIN CONVEYANCE OF NET PROFITS INTEREST

DATED AS OF [_________ __], 2011

LEASES

[To be provided]

Exhibit A

 

 

EXHIBIT B

ATTACHED TO AND MADE A PART OF THAT

CERTAIN CONVEYANCE OF NET PROFITS INTEREST

DATED AS OF [_________ __], 2011

WELLS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operator	 	Operator AFE #	 	Enduro
AFE #	 	API	 	Enduro Well ID	 	Field	 	County/Parish	 	State
	QEP
	 	9*35868
	 	N11LA-0001
	 	1701524682
	 	70038.012.00
	 	ELM GROVE
	 	BOSSIER
	 	LA
	XCO
	 	810*20574
	 	N10LA-0077
	 	1703125129
	 	70178.001.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22699
	 	N10LA-0088
	 	1703125507
	 	70087.014.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22697
	 	N10LA-0087
	 	1703125249
	 	70087.013.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22777
	 	N11LA-0010
	 	1703125508
	 	70087.017.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22781
	 	N11LA -0009
	 	1703125604
	 	70087.016.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22718
	 	N11LA-0008
	 	1703125527
	 	70087.018.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22911
	 	N11LA-0015
	 	1703125588
	 	70079.017.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22721
	 	N11LA -0007
	 	1703125525
	 	70079.015.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22672
	 	N11LA-0011
	 	1703125597
	 	70079.014.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22906
	 	N11LA -0016
	 	1703125644
	 	70079.018.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22857
	 	N11LA -0017
	 	1703125556
	 	70079.020.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*22912
	 	N11LA -0018
	 	1703125526
	 	70079.019.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*21163
	 	N11LA -0032
	 	1703125645
	 	70079.021.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*23388
	 	N11LA -0036
	 	1703125672
	 	70168.003.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*23306
	 	N11LA -0029
	 	1703125652
	 	70082.006.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*23549
	 	N11LA -0034
	 	1703125677
	 	70082.009.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*23387
	 	N11LA -0035
	 	1703125679
	 	70082.010.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810*23678
	 	N11LA -0049
	 	1703125653
	 	70082.007.00
	 	KINGSTON
	 	DESOTO
	 	LA
	XCO
	 	810-23678
	 	N11LA -0051
	 	1703125673
	 	70168.002.00
	 	KINGSTON
	 	DESOTO
	 	LA
	OXY
	 	N/A
	 	N11NM-0052
	 	3001538254
	 	84064.020.00
	 	LOST TANK
	 	EDDY
	 	NM

Exhibit B

 

 

EXHIBIT C

EXISTING HEDGES

Exhibit Caccelr8exh101.htm

Exhibit 10.1

Amendment #3 to the

Letter of Intent

Incorporating the terms and conditions of the Letter of Intent Agreement, effective as of June 14, 2010 (hereinafter collectively referred to as the “Agreement”), and Amendment # 1 thereto effective November 10, 2010 and Amendment #2 there to effective June 24, 2011 made by and between Novartis Vaccines and Diagnostics, Inc. ("Novartis V&D") and Accelr8 Technology Corporation ("Accelr8"), the Agreement is amended, effective as of July 20, 2011, as set forth herein.

NOW THEREFORE, in consideration of the mutual promises contained herein, the parties agree to amend the Agreement as follows:

	
  

	
•

	
Clause 1. Amended to extend terms of the LOI for the Parties to continue good faith negotiations with the intent to agree on business terms for a formal business relationship and definitive Business Agreement by September 30, 2011.

	
  

	
•

	
Clause 3. Amended to execute the option in LOI extension of Exclusive Licence Period for two (2) additional thirty (30) day periods at a cost of seventy-thousand dollars (USD $70,000) per period, for a total payment by Novartis of $140,000. For the avoidance of doubt, the period of exclusivity will extend from August l, 2011 through September 30, 2011.

	
  

	
•

	
Novartis Diagnostics shall have the right to extend the Exclusive License Period for an additional 94 Days, payable at cost of seventy-thousand dollars (USD $70,000) per thirty days.

Capitalized terms in this Amendment #3 shall have the same meaning as set forth in the Agreement. All of the other terms and conditions of the Agreement shall continue in full force and effect. This Amendment #3, together with the Agreement, constitutes the entire agreement between the parties hereto regarding the subject matter hereof and supersedes any prior and/or contemporaneous agreement(s), understanding(s) and/or negotiations(s).

IN WITNESS WHEREOF, the parties hereto hereby execute this Amendment #3 as of the date set forth above,

	
Novartis Vaccines and Diagnostics, Inc.

	  	
Accelr8 Technology Corporation

	  	  	  
	
By:    ____________________________

	  	
By:  __________________________

	  	  	  
	
Name: ___________________________

	  	
Name: ________________________

	  	  	  
	
Title:  ___________________________

	  	
Title:  _________________________

	  	  	  
	
Date:  ___________________________

	  	
Date:  _________________________

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