Document:

EXHIBIT 10.1

 

BANDOLIER
ENERGY LLC

 

SUBSCRIPTION
AGREEMENT

 

To the
Undersigned Purchasers:

 

Bandolier
Energy LLC, a Delaware limited liability company (the “Company”),
hereby agrees with each of you, as an undersigned purchaser identified in this Subscription Agreement (this “Agreement”),
as follows, it being understood and agreed that the representations, warranties and agreements set forth herein by each of you
are several in nature:

 

	1.	Sale
                                         and Purchase of Limited Liability Company Interest.

 

The
Company has been formed under the laws of the State of Delaware and has proposed to enter into an Amended and Restated Limited
Liability Company Agreement with each of you, in substantially the form attached hereto as Exhibit A with such modifications
as may be mutually agreed upon prior to execution thereof and as the same may be modified in accordance with the terms of any
subsequent amendment thereto (the “Company Agreement”). Capitalized
terms used herein without definition have the meanings set forth in the Company Agreement.

 

Subject
to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the respective parties
contained herein:

 

(a)the
Company agrees to sell to you, and you irrevocably subscribe for and agree to purchase from the Company, the number of Series
A Units set forth on your signature page attached hereto (represented, collectively, by the “Interests”);
and

 

(b)the
Company agrees that you shall be admitted as a Member, upon the terms and conditions, and in consideration of your agreement to
be bound by the terms and provisions of the Company Agreement and this Agreement, with a Capital Commitment in the amount set
forth on your signature page attached hereto (your “Line of Equity”), a portion of which (the “Initial
Capital Contribution”) in the amount set forth on your signature page attached hereto shall be due at Closing (as defined
below).

 

Subject
to the terms and conditions hereof and of the Company Agreement, your obligation to subscribe and pay for your Interests at the
time contemplated therein shall be complete and binding upon the execution and delivery of this Agreement.

 

	2.	Execution
                                         of Company Agreement.

 

You
hereby agree to become a party to, to be bound by, and to comply with the provisions of the Company Agreement. To that end, prior
to Closing (as defined below), you shall execute and deliver to the Company an executed signature page, in counterpart, to the
Company Agreement, which shall be deemed an original and, together with all other counterparts, shall constitute one and the same
instrument.

 

	3.	Payment
                                         of Line of Equity.

 

You
hereby agree that, subsequent to your funding of your Initial Capital Contribution, the remainder of your Line of Equity, or any
portion thereof, shall be due upon any duly issued Capital Calls in accordance with the terms of Section 6.2 of the Company Agreement.

 

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	4.	Acquisition
                                         of Spyglass Energy Group, LLC.

 

You
hereby acknowledge and agree that, upon consummation of the transactions contemplated hereby, the Company shall utilize your and
the other purchasers’ Initial Capital Contributions to acquire all of the issued and outstanding membership interests of
Spyglass Energy Group, LLC, in exchange for the payment of an agreed-upon purchase price and related closing costs (the “Spyglass
Transaction”), and for other business purposes as determined by the Board (as that term is defined in the Company Agreement)
of the Company and consistent with the Company Agreement.

 

	5.	Closing.

 

5.1The
closing and effectiveness (the “Closing”) of the sale to you, and
the subscription for and purchase by you, of the Interests, and your admission as a Member, shall take place on such date and
at such time as the Company shall designate following your full execution of this Agreement and the satisfaction of the conditions
set forth in Sections 5.2 and 5.3 (the “Closing Date”).

 

5.2Your
obligation to consummate the transactions described herein is subject to the satisfaction of the following conditions:

 

(a)the
Company Agreement shall have been duly authorized, executed and delivered by all parties thereto (other than you) and shall be
in full force and effect;

 

(b)the
Company’s representations and warranties being accurate and true in all material respects as of the Closing Date (unless
as of a specific date therein in which case they shall be accurate and true as of such date);

 

(c)the
performance in all material respects of all obligations, covenants and agreements of Company that are required to be performed
at or prior to the Closing Date; and

 

(d)the
satisfaction of all conditions to the closing of the Spyglass Transaction other than the payment of the purchase price thereunder.

 

5.3The
Company’s obligation to consummate the transactions described herein is subject to the satisfaction of the following conditions:

 

(a)your
representations and warranties being accurate and true in all material respects as of the Closing Date (unless as of a specific
date therein in which case they shall be accurate and true as of such date);

 

(b)your
performance in all material respects of all obligations, covenants and agreements that are required to be performed by you at
or prior to the Closing Date;

 

(c)you
shall have delivered, or caused to be delivered, your Initial Capital Contribution to the Company, by wire transfer of immediately
available funds, to an account designated by the Company in writing to you; and

 

(d)the
satisfaction of all conditions to the closing of the Spyglass Transaction other than the payment of the purchase price thereunder.

 

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	6.	Termination.
                                         

 

6.1Termination.
Subject to the provisions of Section 6.2, this Agreement may be terminated at any time prior to the Closing Date by any of the
following:

 

(a)by
the mutual written agreement of the Company and both of you;

 

(b)by
the Company, by written notice to you, if there has been a material violation or breach of any of your covenants or agreements
made herein, or if any representation or warranty of yours contained herein is materially inaccurate or misleading or, following
the use of reasonable efforts by the Company, the Closing is not effected by [__], 2014; or

 

(c)by
you, by written notice to the Company, if there has been a material violation or breach of any of the Company’s covenants
or agreements made herein, or if any representation or warranty of the Company contained herein is materially inaccurate or misleading
or, following the use of reasonable efforts by the Company, the Closing is not effected by [__], 2014.

 

6.2Effect
of Termination. If this Agreement shall be terminated as provided in Section 6.1, then this Agreement shall forthwith become
void and there shall be no continuing obligation on the part of the parties; provided, that no party shall be relieved of any
liability as a result of a breach of any of such party’s representations, warranties, covenants or agreements contained
herein.

 

	7.	Representations
                                         and Warranties of the Company.

 

7.1The
Representations and Warranties. The Company represents and warrants that each of the following statements shall be true and
correct as of the Closing Date:

 

(a)Formation
and Standing. The Company is duly formed and validly existing as a limited liability company under the laws of the State of
Delaware and, subject to applicable law, has all requisite limited liability company power and authority to carry on its business
as proposed to be conducted in the Company Agreement.

 

(b)Authorization
of Agreement, etc. The execution and delivery of this Agreement and the Company Agreement have been authorized by all necessary
action on behalf of the Company and this Agreement and the Company Agreement, when executed and delivered by the Company, are
legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.

 

(c)Compliance
with Laws and Other Instruments. The execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby will not conflict with or result in any violation of or default under any provision of the Company Agreement, or any agreement
or other instrument to which the Company is a party or by which it or any of its properties is bound, or any permit, franchise,
judgment, decree, statute, order, rule or regulation applicable to the Company or its business or properties.

 

(d)Offer
of Interests. Neither the Company nor anyone acting on its behalf has taken or will take any action that would subject the
issuance and sale of the Interests to the registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”).

 

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7.2Survival
of Representations and Warranties. All representations and warranties made by the Company in Section 7.1 shall survive the
execution and delivery of this Agreement, any investigation at any time made by you or on your behalf and the issue and sale of
Interests.

 

	8.	Representations
                                         and Warranties of the Purchaser.

 

8.1The
Representations and Warranties. As to yourself only, you represent and warrant to the Company and each other Person who is,
or in the future becomes, a Member, that each of the following statements shall be true and correct as of the Closing Date:

 

(a)Representation
of Investment Experience and Ability to Bear Risk. You (i) are knowledgeable and experienced with respect to the financial,
tax and business aspects of the ownership of the Interests and of the business contemplated by the Company and are capable of
evaluating the risks and merits of purchasing the Interests and, in making a decision to proceed with this investment, have not
relied upon any representations, warranties or agreements, other than those set forth in this Agreement and the Company Agreement,
if any, and (ii) can bear the economic risk of an investment in the Company for an indefinite period of time, and can afford to
suffer the complete loss thereof.

 

(b)Accredited
Investor. You are an accredited investor within the meaning of Rule 501(a) of Regulation D promulgated under the Securities
Act.

 

(c)The
Interests have not been and will not be registered under the Securities Act, and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in accordance with the registration requirements of the Securities
Act or pursuant to an exemption from such registration requirements. You hereby agree that any disposition of the Interests, including
the transactions contemplated hereunder, and irrespective of whether the Interests are certificated, shall include the following
legend:

 

“THE
LIMITED LIABILITY COMPANY INTERESTS OF THE COMPANY (THE “INTERESTS”) HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS OR THE LAWS OF ANY OTHER NATION OR JURISDICTION
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THE SAME HAVE BEEN INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY HAS BEEN RENDERED TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION
UNDER APPLICABLE SECURITIES LAWS IS AVAILABLE.

 

IN
ADDITION, TRANSFER OR OTHER DISPOSITION OF THE INTERESTS IS RESTRICTED AS PROVIDED IN THE LIMITED LIABILITY COMPANY AGREEMENT
OF THE COMPANY.”

 

(d)Transfers
and Transferability. You understand and acknowledge that the Interests have not been registered under the Securities Act or
any state securities laws and are being offered and sold in reliance upon exemptions provided in the Securities Act and state
securities laws for transactions not involving any public offering and, therefore, cannot be resold or transferred unless they
are subsequently registered under the Securities Act and such applicable state securities laws or unless an exemption from such
registration is available. You also understand that the Company does not have any obligation or intention to register the Interests
for sale under the Securities Act, any state securities laws or of supplying the information which may be necessary to enable
you to sell Interests; and that you have no right to require the registration of the Interests under the Securities Act, any state
securities laws or other applicable securities regulations. You also understand that sales or transfers of Interests are further
restricted by the provisions of the Company Agreement.

 

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You
represent and warrant further that you have no contract, understanding, agreement or arrangement with any person to sell or transfer
or pledge to such person or anyone else any of the Interests for which you hereby subscribe (in whole or in part); and you represent
and warrant that you have no present plans to enter into any such contract, undertaking, agreement or arrangement.

 

You
understand that, subject to Section 12.1(a) of the Company Agreement, the Interests cannot be sold or transferred without Board
Approval and Requisite Investor Approval, which approval may be withheld in their sole and absolute discretion and which approval
will be withheld if any such transfer could cause the Company to become subject to regulation under federal law as an investment
company or would subject the Company to adverse tax consequences or adverse consequences under ERISA.

 

You
understand that there is no public market for the Interests; any disposition of the Interests may result in unfavorable tax consequences
to you.

 

You
are aware and acknowledge that, because of the substantial restrictions on the transferability of the Interests, it may not be
possible for you to liquidate your investment in the Company readily, even in the case of an emergency.

 

(e)Residence.
You maintain your domicile or principal place of business at the address shown in the signature page of this Agreement and you
are not merely transient or temporarily resident there.

 

(f)Awareness
of Risks; Taxes. You represent and warrant that you are aware (i) that the Company has no operating history; (ii) that the
Interests involve a substantial degree of risk of loss of your entire investment and that there is no assurance of any income
from your investment; (iii) that any federal, state, or foreign income tax benefits which may be available to you may be lost
through the adoption of new laws or regulations, to changes to existing laws and regulations and to changes in the interpretation
of existing laws and regulations; and (iv) any disposition of Interests may result in unfavorable tax consequences to you. You
further represent that you are relying solely on your own conclusions or the advice of your own counsel or investment representative
with respect to tax aspects of any investment in the Company.

 

(g)Power,
Authority; Valid Agreement. (i) You have all requisite power and authority to execute, deliver and perform your obligations
under this Agreement and the Company Agreement and to subscribe for and purchase or otherwise acquire your Interests; (ii) your
execution of this Agreement and the Company Agreement has been authorized by all necessary corporate or other action on your behalf;
and (iii) this Agreement and the Company Agreement are each valid, binding and enforceable against you in accordance with their
respective terms.

 

(h)No
Conflict; No Violation. The execution and delivery of this Agreement and the Company Agreement by you and the performance
of your duties and obligations hereunder and thereunder (i) do not and will not result in a breach of any of the terms, conditions
or provisions of, or constitute a default under (A) any charter, bylaws, trust agreement, partnership agreement or other governing
instrument applicable to you, (B) (1) any indenture, mortgage, deed of trust, credit agreement, note or other evidence of indebtedness,
or any lease or other agreement or understanding, or (2) any license, permit, franchise or certificate, in either case to which
you or any of your Affiliates is a party or by which you or any of them is bound or to which your or any of their properties are
subject; (ii) do not require any authorization or approval under or pursuant to any of the foregoing; and (iii) do not violate
any statute, regulation, law, order, writ, injunction or decree to which you or any of your Affiliates is subject.

 

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8.2Survival
of Representations and Warranties. All representations and warranties made by you in Section 8.1 of this Agreement shall survive
the execution and delivery of this Agreement, as well as any investigation at any time made by or on behalf of the Company and
the issue and sale of Interests.

 

8.3Reliance.
You acknowledge that your representations, warranties, acknowledgments and agreements in this Agreement will be relied upon by
the Company in determining your suitability as a purchaser of Interests.

 

8.4Further
Assurances. You agree to provide, if requested, any additional information that may be requested or required to determine
your eligibility to purchase the Interests.

 

	9.	General
                                         Contractual Matters.

 

9.1Amendments
and Waivers. This Agreement may be amended and the observance of any provision hereof may be waived (either generally or in
a particular instance and either retroactively or prospectively) only with the written consent of you and the Company.

 

9.2Assignment.
You agree that neither this Agreement nor any rights which may accrue to you hereunder may be transferred or assigned.

 

9.3Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
to any party when delivered by hand, when mailed, first-class postage prepaid, or when emailed, (a) if to you, to you at the physical
or email address set forth below your signature, or to such other address as you shall have furnished to the Company in writing,
and (b) if to the Company, to Bandolier Energy LLC, 100 West 5th Street, Suite 900, Tulsa, Oklahoma 74103, Attn: Shane
E. Matson, , or to such other address or addresses, as the Company shall have furnished to you in writing, provided that
any notice to the Company (a) shall be effective only if and when received by the Company and (b) shall not be delivered by email.

 

9.4GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS (EXCEPT INSOFAR AS AFFECTED BY THE SECURITIES OR “BLUE SKY” LAWS OF THE STATE
OR SIMILAR JURISDICTION IN WHICH THE OFFERING DESCRIBED HEREIN HAS BEEN MADE TO YOU).

 

9.5Submission
to Jurisdiction. Each party irrevocably consents and agrees that any legal action or proceeding with respect to this Agreement
and any action for enforcement of any judgment in respect thereof may be brought in the courts of the State of Delaware or the
United States federal courts for the State of Delaware, and, by execution and delivery of this Agreement, each party hereby submits
to and accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid
courts and appellate courts from any appeal thereof. Each party hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement
brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing in this section
shall be deemed to constitute a submission to jurisdiction, consent or waiver with respect to any matter not specifically referred
to herein.

 

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9.6Waiver
of Trial by Jury. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.

 

9.7Descriptive
Headings. The descriptive headings in this Agreement are for convenience of reference only and shall not be deemed to alter
or affect the meaning or interpretation of any provision of this Agreement.

 

9.8Entire
Agreement. This Agreement contains the entire agreement of the parties with respect to the subject matter of this Agreement,
and there are no representations, covenants or other agreements except as stated or referred to herein.

 

9.9Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together
shall constitute one and the same instrument.

 

9.10Circular
230 Notice. To ensure compliance with Treasury Department Circular 230, you are hereby notified that:

 

(a)any
discussion of Federal tax issues in this Agreement is not intended or written to be used, and cannot be used, by a Member for
the purpose of avoiding penalties that may be imposed on such Member under the Code;

 

(b)any
such discussion is written to support the promotion or marketing of the transactions or matters addressed in this Agreement; and

 

(c)each
Member should seek advice based on its particular circumstances from and independent advisor.

 

[signature
page follows]

 

    	7

    	 

    

 

If
you are in agreement with the foregoing, please sign the enclosed counterpart of this Agreement and return such counterpart of
this Agreement to the Company.

 

	 	BANDOLIER ENERGY LLC
	 	 	 
	 	By:	/s/ Shane Matson
	 	Name:	Shane Matson
	 	Title:	President

 

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The foregoing
Subscription Agreement is hereby agreed to by the undersigned on this 30th day of May, 2014.

 

	Petro River Oil Corp.	 
	 	 	 
	By: 	/s/
    Scot Cohen	 
	Name: 	Scot Cohen	 
	Title: 	Executive Chairman	 

 

	1980 Post Oak Blvd., Suite 2020	 
	Houston, TX 77056 	 
	Attn: Scot Cohen	 
	Email address: scohen@icofund.com	 
	 	 
	LINE OF EQUITY:	$[***]
	 	 
	INITIAL CAPITAL CONTRIBUTION:	$[***]
	 	 
	TOTAL SERIES A UNITS:	500

 

Certain
information in this agreement has been omitted and filed separately with the Securities and Exchange Commission. [***] indicates
that text has been omitted and is the subject of a confidential treatment request.

 

    	9Securities
Purchase Agreement

 

Spyglass
Energy Group, LLC

 

By
and Between

 

Nadel
and Gussman, LLC, 

 

Charles
W. Wickstrom,

 

Shane
E. Matson,

 

As
Sellers

 

And

 

Bandolier
Energy, LCC,

 

As
Purchaser

 

Effective
as of January 1, 2014

 

    	 

    	 

    

 

Table
of Contents

 

	Section	 	 	 
	 	 	 	 
	1.	Agreement
    of Sale and Purchase of the Membership Interests	 	1
	 	 	 	 
	2.	Purchase
    Price; Closing	 	1
	 	 	 	 
	3.	Inspection
    and Acceptance of Assets; Disclaimer of Warranties	 	6
	 	 	 	 
	4.	Sellers’
    Representations And Warranties	 	6
	 	 	 	 
	5.	Sellers’
    Representations and Warranties Concerning the Company	 	7
	 	 	 	 
	6.	Purchaser’s
    Representations and Warranties	 	13
	 	 	 	 
	7.	Independent
    Evaluation; Access	 	15
	 	 	 	 
	8.	Operation
    of Business	 	15
	 	 	 	 
	9.	Other
    Covenants	 	17
	 	 	 	 
	10.	Conditions
    to Proceed with Closing	 	20
	 	 	 	 
	11.	Actions
    to be Taken At Closing	 	22
	 	 	 	 
	12.	Expiration
    of Representations, Warranties and Covenants	 	23
	 	 	 	 
	13.	Release
    and Indemnification	 	23
	 	 	 	 
	14.	Termination
    of Agreement	 	27
	 	 	 	 
	15.	General
    Provisions	 	28
	 	 	 	 
	16.	Definitions	 	31

 

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Table
of Contents

 

	Section	 	 
	 	 	 
	 	 	Exhibits, Schedules and Closing Deliverables
	 	 	 
	Exhibit A	 	Sellers, Membership Interests, Distribution Amounts and Sharing
    Ratios
	Exhibit B	 	Assets, Leases and Wells
	Exhibit C	 	Form of Spousal Consent
	Exhibit D	 	Map of Prospect Interests Area
	Exhibit E	 	Form of Assignment of Membership Interests
	Exhibit F	 	Company Certificate of Good Standing and Form of Incumbency Certificate
	Exhibit G	 	Form of Disclaimers and Stipulations of Interest
	Exhibit H	 	Form of Transition Services Agreement
	Exhibit I	 	Form of Sellers’ Closing Tax Certificates
	 	 	 
	Schedule 2(c)(iii)(C)	 	Oil in the Tanks
	Schedule 2(c)(vii)	 	Preliminary Settlement Statement
	Schedule 4(b)	 	Required Authorizations and Consents
	Schedule 5(a)	 	Company Governing Documents
	Schedule 5(e)	 	Events Subsequent to Effective Date
	Schedule 5(h)	 	Material Agreements
	Schedule 5(i)	 	Litigation Proceedings
	Schedule 5(k)	 	Insurance Policies and Bonds
	Schedule 5(p)	 	Preferential Rights and Restrictions on Transfer
	Schedule 5(u)	 	Additional Liabilities
	Schedule 5(v)	 	Environmental Matters
	Schedule 5(x)	 	Equitable and Beneficial Interests
	Schedule 8(g)	 	Excluded Assets
	Schedule 10(b)(ii)	 	Sellers’ Closing Certificates
	Schedule 10(c)(ii)	 	Purchaser’s Closing Certificate
	Schedule 10(c)(iii)	 	Purchaser’s Evidence of Insurance and Bonds

 

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SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (“Agreement”) is made and entered into this ___ day of May, 2014 effective as of January
1, 2014 (“Effective Date”), among the parties identified on Exhibit A (collectively, the “Sellers”,
and individually a “Seller”); Spyglass Energy Group, LLC, an Oklahoma
limited liability company (“Company”); and Bandolier Energy, LLC, a
Delaware limited liability company (“Purchaser”). The Sellers, the Company and the Purchaser are each sometimes referred
to herein as a “Party” and are sometimes collectively referred to herein as the “Parties”.

 

RECITALS

 

A.The
Sellers own all of the issued and outstanding membership interests, units, warrants, options and any other rights to acquire membership
interests in the Company (collectively, the “Membership Interests”), such Membership Interests being owned by the
Sellers in the respective amounts set forth next to the Sellers’ names on Exhibit A.

 

B.The
Purchaser desires to purchase all, and not less than all, of the Membership Interests, and the Sellers desire to sell all, and
not less than all, of the Membership Interests for the Aggregate Purchase Price, subject to and in accordance with the terms and
conditions of this Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing recitals, the agreements contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.Agreement
of Sale and Purchase of the Membership Interests. Subject to the terms and conditions contained in Sections 2 and 10 below,
the Sellers shall sell to the Purchaser, and the Purchaser shall purchase from the Sellers, the Membership Interests as of the
Effective Date.

 

2.Purchase
Price; Closing.

 

(a)Purchase
Price. Subject to the terms and conditions contained in this Agreement, on the Closing Date, the Purchaser shall pay to
the Sellers, in the aggregate, an amount equal to [***] (the “Aggregate Purchase Price”), subject to adjustment as
provided in Section 2(c). The Aggregate Purchase Price as adjusted pursuant to Section 2(c) is herein referred to as the “Adjusted
Purchase Price”.

 

Certain
information in this agreement has been omitted and filed separately with the Securities and Exchange Commission. [***] indicates
that text has been omitted and is the subject of a confidential treatment request.

 

    	1

    	 

    

 

(b)Performance
Deposit. On or before the date that this Agreement is fully executed by all Parties, Purchaser shall pay, by wire transfer
of immediately available funds to Sellers’ designated account, the sum of [***] (the “Performance Deposit”).
If the Closing occurs, the Performance Deposit shall be applied as a credit toward the Preliminary Adjusted Purchase Price on
the Preliminary Settlement Statement. If the Closing does not occur solely as a result of the breach by Purchaser of the terms
of this Agreement and there has been no breach by Sellers of the terms of this Agreement, the Sellers shall have the right, as
their sole remedy, to retain the Performance Deposit as liquidated damages (and not as a penalty). The Parties acknowledge and
agree that the actual damages for such a breach would be difficult or impossible to ascertain with reasonable certainty, and that
the Performances Deposit would be a reasonable liquidated damages amount. If the closing does not occur for any other reason (other
than Purchaser’s breach), the Performance Deposit shall be immediately returned to Purchaser.

 

Certain
information in this agreement has been omitted and filed separately with the Securities and Exchange Commission. [***] indicates
that text has been omitted and is the subject of a confidential treatment request.

 

(c)Adjustments
to Aggregate Purchase Price. The Aggregate Purchase Price shall be adjusted to arrive at the Adjusted Purchase Price according
to this Section 2(c) without duplication.

 

(i)For
the purposes of this Agreement:

 

(A)“Property
Costs” means all capital expenses pertaining to the Assets (including costs incurred subsequent to the Effective Date and
prior to the Closing Date for drilling, developing, completing, equipping and plugging and abandoning Wells), insurance costs,
other expenses, joint interest billings, lease operating expenses, lease rental and maintenance costs, royalties, overriding royalties,
leasehold payments, severance Taxes, drilling expenses, workover expenses, geological, geophysical and any other exploration or
development expenditures chargeable under applicable operating agreements or other agreements consistent with the standards established
by the Council of Petroleum Accountants Society that are attributable to the maintenance and operation of the Assets; provided,
however, that for purposes of this Agreement, the following costs shall not be included in this calculation: the Lease Bonus
Payment made to the BIA for and on behalf of the Osage Tribe on January 27, 2014, in the amount of $[***].

 

Certain
information in this agreement has been omitted and filed separately with the Securities and Exchange Commission. [***] indicates
that text has been omitted and is the subject of a confidential treatment request.

 

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(B)For
purposes of allocating production (and proceeds and accounts receivable with respect thereto) to the Assets, under this Section
2(c), (1) the term “incurred” shall be interpreted in accordance with Council of Petroleum Accountants Society standards,
except as otherwise specified herein, (2) liquid Hydrocarbons shall be deemed to be “from or attributable to” the
Assets when they pass through the pipeline connecting into the storage facilities into which they are run; and (3) gaseous Hydrocarbons
shall be deemed to be “from or attributable to” the Assets when they pass through the royalty measurement meters,
delivery point sales meters or custody transfer meters on the gathering lines or pipelines through which they are transported
(whichever meter is closest to the well).

 

(ii)Proration
of Costs and Revenues.

 

(A)All
proceeds from the sale of any production of Hydrocarbons from or attributable to the Assets prior to the Effective Date (net of
(A) all amounts payable as royalties, overriding royalties, net profits interests and other similar burdens on or measured by
production; and (B) all applicable severance Taxes) shall be the property of the Sellers, and in the event the Company receives
any of those proceeds after the Closing (or before the Closing if the Aggregate Purchase Price has not been adjusted therefor),
Purchaser will cause the Company to remit those proceeds to Sellers within 45 days after such receipt, or the Aggregate Purchase
Price shall be increased by such amount if received prior to Closing. All proceeds from the sale of any production of Hydrocarbons
from or attributable to the Assets on or subsequent to the Effective Date (net of (1) all amounts payable as royalties, overriding
royalties, net profits interests and other similar burdens on or measured by production; and (2) all applicable severance Taxes
shall be the property of the Company for the benefit of Purchaser, and in the event Sellers receive any of those proceeds after
the Closing (or before the Closing if the Aggregate Purchase Price has not be adjusted therefor), Sellers will remit those proceeds
to the Company for the benefit of the Purchaser within 45 days after such receipt, or the Aggregate Purchase Price shall be reduced
by such amount if received prior to Closing.

 

(B)The
Company shall be responsible for all costs and expenses that are attributable to the Assets, including without limitation Property
Costs, incurred prior to the Effective Date, and the Aggregate Purchase Price shall be decreased by those costs and expenses to
the extent any of those costs and expenses are not paid by the Company or the Sellers before the Closing. Purchaser shall be responsible
for all costs and expenses that are attributable to the Assets, including without limitation Property Costs incurred on or after
the Effective Date, and the Aggregate Purchase Price shall be increased by those costs and expenses to the extent any of those
costs and expenses are paid by the Company or the Sellers before the Closing.

 

    	3

    	 

    

  

(iii)Upward
Adjustments. In addition to the adjustments called for in Section 2(c)(ii) above, the Aggregate Purchase Price shall be adjusted
upward by the following:

 

(A)an
amount equal to (1) all direct and actual expenses attributable to the Assets, including without limitation Property Costs, incurred
by or for the benefit of the Company, (2) all royalties, overriding royalties, net profit interests and similar burdens on or
measured by production, and (3) all applicable severance Taxes, in each case attributable to the Assets from and after the Effective
Date that were paid by the Company or the Sellers;

 

(B)an
amount equal to all prepaid expenses (including pre-paid bonuses, rentals, cash calls and advances to operators for expenses not
yet incurred, prepaid Taxes, and scheduled payments) attributable to the ownership or operation of the Assets from and after the
Effective Date that were incurred and paid by the Company or the Sellers, and;

 

(C)an
amount equal to the value of all oil in the storage tanks for the Wells at the Effective Date, calculated and as set forth in
Schedule 2(c)(iii)(C); and

 

(D)any
other amount expressly provided for in this Agreement or otherwise agreed to in writing by the Parties.

 

(iv)Downward
Adjustments. In addition to the adjustments called for in Section 2(c)(ii) above, the Aggregate Purchase Price shall be adjusted
downward by the following:

 

(A)an
amount equal to (1) all direct and actual expenses attributable to the Assets, including without limitation Property Costs, incurred
and by the Company, (2) all royalties, overriding royalties, net profit interests and similar burdens on or measured by production,
and (3) all applicable severance Taxes, in each case attributable to the Assets prior to the Effective Date that were paid by
the Purchaser;

 

(B)an
amount equal to all prepaid expenses (including pre-paid bonuses, rentals, cash calls and advances to operators for expenses not
yet incurred, prepaid Taxes, and scheduled payments) attributable to the ownership or operation of the Assets prior to the Effective
Date that were incurred and paid by the Purchaser, and;

 

(C)any
other amount expressly provided in this Agreement or otherwise agreed to in writing by the Parties.

 

(v)Other
Adjustments. The Aggregate Purchase Price may also be adjusted by the written agreement of the Parties with respect to the costs,
expenses and revenues associated with the Excluded Assets between the Effective Date and the Closing Date.

 

    	4

    	 

    

  

(vi)Performance
Deposit. The Adjusted Purchase Price shall be adjusted downwards as provided in Section 2(b) to give effect to the Performance
Deposit having been previously paid by Purchaser.

 

(vii)Preliminary
Settlement Statement. On or before the day that is five Business Days prior to Closing, Sellers shall deliver to Purchaser a statement
in the form of Schedule 2(c)(vii) (the “Preliminary Settlement Statement”) setting forth Sellers’ good
faith calculations of the adjustments to the Aggregate Purchase Price set forth in Section 2(c) (the Aggregate Purchase Price,
as so adjusted “Preliminary Adjusted Purchase Price”), prepared in good faith using the best information reasonably
available to Sellers at the Closing Date, along with such data in Sellers’ possession as is reasonably necessary to support
such calculations. The Preliminary Settlement Statement also shall set forth Sellers’ designated accounts for purposes of
Purchaser’s payment of the Adjusted Purchase Price. The Parties shall attempt to agree in writing upon the Adjusted Purchase
Price prior to Closing, and in the event the Parties cannot agree upon the Adjusted Purchase Price prior to Closing, Purchaser
shall pay the Preliminary Adjusted Purchase Price to Sellers at Closing, and the Parties shall engage in good faith negotiations
to agree on the Adjusted Purchase Price. If the Adjusted Purchase Price is not agreed to by the Parties within 30 days after the
Closing Date, the dispute shall be submitted to arbitration in accordance with Section 15(f). Within 10 Business Days after final
agreement or determination of the Adjusted Purchase Price, (A) the Purchaser shall pay to the Sellers, based upon their Sharing
Ratios, the amount (if any) by which the Adjusted Purchase Price exceeds the Preliminary Adjusted Purchase Price paid to the Sellers
at Closing, or (B) the Sellers shall pay, based upon their Sharing Ratios, the amount (if any) by which the Preliminary Adjusted
Purchase Price paid to the Sellers at Closing exceeds the Adjusted Purchase Price.

 

(d)Closing.
The closing of this transaction shall be held at 9:00 a.m. on May 22, 2014, or, if the conditions set forth in Section
10 have not been satisfied by that date, two Business Days after the date on which the last of the conditions set forth in Section
10 shall have been satisfied or waived, in the offices of the Company at 15 East 5th Street, Suite 3400, Tulsa, Oklahoma
74103, or at such other time, place or method to be mutually agreed upon by the Parties (the “Closing” or “Closing
Date”).

 

    	5

    	 

    

  

3.Inspection
and Acceptance of Assets; Disclaimer of Warranties. Prior to the execution of this Agreement, Purchaser has been given full
access and opportunity to complete and has completed its due diligence investigation of the Company and the Assets, including
physical and environmental inspections of the Wells (including without limitation a Phase I Environmental Assessment and equipment
inventory) and to visit with Company personnel, including Matson, who is an executive officer of Purchaser and who is also a Seller.
Matson was actively involved on behalf of the Company in the development and operation of the Assets. Matson participated in Purchaser’s
due diligence investigation and also aided Sellers in preparing the Schedules to this Agreement. Except for the representations,
warranties and covenants of the Sellers set forth in Section 4, and the special warranty of title set forth in Section 9(i), Purchaser
acknowledges that the Assets are being sold “as is, where is” and with all faults, and Purchaser waives for all purposes
all objections associated with the condition (environmental, physical, contractual or otherwise) of the Assets, and Purchaser
assumes all risks of any kind whatsoever relating to the Assets including, without limitation, risks of changes in condition to
the Assets, changes in law, and physical and environmental conditions. Purchaser further acknowledges, except for the representations,
warranties and covenants of the Sellers set forth in Section 4, and the special warranty of title set forth in Section 9(i), as
follows:

 

(a)NEITHER
SELLERS, THE COMPANY NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES, NOR ANY PERSON ACTING ON BEHALF OF SELLERS OR THE COMPANY, HAS
MADE, AND SELLERS AND THE COMPANY HEREBY EXPRESSLY DISCLAIM AND NEGATE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING
TO THE CONDITION OF ANY OF THE ASSETS (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, PATENT OR TRADEMARK INFRINGEMENT, AND ANY AND ALL OTHER IMPLIED WARRANTIES EXISTING UNDER APPLICABLE
LAW).

 

(b)SELLERS
AND THE COMPANY HEREBY EXPRESSLY NEGATE AND DISCLAIM, AND PURCHASER HEREBY WAIVES AND ACKNOWLEDGES THAT NONE OF THE SELLERS, THE
COMPANY, THEIR RESPECTIVE REPRESENTATIVES, AND NO PERSON ACTING ON BEHALF OF SELLERS OR THE COMPANY, HAS MADE, AND PURCHASER IS
NOT RELYING UPON, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR OTHER ASSURANCE RELATING TO (I) THE ACCURACY, COMPLETENESS
OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR VERBAL), NOW, HERETOFORE, OR HEREAFTER FURNISHED TO PURCHASER
BY OR ON BEHALF OF SELLERS OR THE COMPANY, OR (II) PRODUCTION RATES, RECOMPLETION OPPORTUNITIES, DECLINE RATES, GEOLOGICAL OR
GEOPHYSICAL DATA OR INTERPRETATIONS, THE QUALITY, QUANTITY, RECOVERABILITY OR COST OF RECOVERY OF ANY HYDROCARBON RESERVES, ANY
PRODUCT PRICING ASSUMPTIONS, OR THE ABILITY TO SELL OR MARKET ANY HYDROCARBONS AFTER THE CLOSING.

 

4.Sellers’
Representations And Warranties. Each Seller hereby severally and not jointly represents and warrants to Purchaser, with respect
to itself/himself/herself, as of the date hereof and at Closing as follows:

 

(a)Organization
and Standing. To the extent Seller is a corporation, partnership, limited liability company, trust or other entity formed
under the laws of any state, Seller is duly organized, validly existing and in good standing under the laws of the state of its
organization and in such other jurisdictions necessary for the consummation of this Agreement.

 

    	6

    	 

    

  

(b)
Power. Seller has all requisite power and authority to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement. The execution and delivery of this Agreement does not, and the fulfillment
of and compliance with the terms and conditions hereof will not, violate, or be in conflict with, any provision of its governing
documents, to the extent applicable. Except as set forth in Schedule 4(b), Seller is not required to give any notice to,
make any filing with, or obtain any authorization, consent or approval of, any third party or any governmental authority in order
to execute and deliver this Agreement or consummate the transactions contemplated hereby, except for such authorizations, consents
or approvals as shall have been obtained or such notices or filings as shall have been accepted before the Closing Date.

 

(c)Authorization
and Enforceability. The execution, delivery and performance of this Agreement and the transactions contemplated hereby
have been duly and validly authorized by all requisite actions of the Seller. This Agreement constitutes the legal, valid and
binding obligation of the Seller and is enforceable in accordance with its terms, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium and other laws for the protection of creditors generally, as well as to general principles
of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

 

(d)Title
to Membership Interests. Seller owns the Membership Interests indicated in Exhibit A, and at Closing, will convey
to Purchaser good and marketable title to the Membership Interests free and clear of any and all liens, mortgages, claims, encumbrances,
pledges or security interests and all other defects of title, adverse claims or other matters whatsoever (other than those arising
under federal and state securities laws).

 

(e)Brokers’
Fees. Seller has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating
to the transactions contemplated by this Agreement for which the Purchaser or the Company shall have any responsibility.

 

5.Sellers’
Representations and Warranties Concerning the Company. Each Seller severally and not jointly represents and warrants to the
Purchaser as of the date hereof and at Closing as follows:

 

(a)Organization
and Standing. The Company is a limited liability company duly organized, validly existing and in good standing under the
laws of the State of Oklahoma set forth on Schedule 5(a) is a complete listing of the Certificate or Articles of Organization
and the Operating Agreement of the Company, and all amendments thereto, copies of which have previously been made available to
the Purchaser.

 

    	7

    	 

    

  

(b)Power.
The Company has all requisite power and authority to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement. The execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement will not: (i) violate or conflict with any provision of its Certificate or Articles
of Organization or Operating Agreement, as amended from time to time; (ii) violate or conflict with any judgment, decree, order,
statute, rule or regulation as in effect at the Closing Date to which the Company is subject; or (iii) violate, conflict with,
result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate,
terminate, modify, cancel or receive any payment under, require any notice of consent under, or result in the imposition of any
lien, claim or encumbrance upon any of the Assets under any agreement, contract, lease, license, instrument or other arrangement
to which the Company is a party, by which the Company is bound or to which the Assets are subject.

 

(c)Capitalization.
All outstanding Membership Interests have been validly issued, are fully paid and non-assessable, were not issued in violation
of the terms of any contract binding upon the Company and were issued in compliance with all governing documents of the Company.
There are no outstanding subscriptions, options, warrants, conversion rights, convertible securities, preemptive rights, preferential
rights (contractual or otherwise), “phantom” stock rights, or agreements, understandings or arrangements of any kind
relating to equity securities, obligating the Company to issue or sell any Membership Interests now or in the future. At Closing,
the Purchaser will acquire all of the issued and outstanding Membership Interests of the Company.

 

(d)Financial
Information. All financial information which has been provided to Purchaser with respect to the Company has been, and
is, true and correct in all respects, and while not maintained or prepared in accordance with GAAP are complete and accurate.
Other than the Tax Returns and associated work papers, such financial information is limited to the Assets. Except for lease operating
statements reflecting operating income and expenses for the Assets (which is reported on an 8/8ths basis), such financial information
(including the Tax Returns) is further limited to the Company’s 39.149128% interest in the Assets which it owned immediately
prior to the Effective Date and prior to acquiring the remaining aggregate 60.850872% interests of other Persons in and to the
Assets. Purchaser acknowledges that much of the financial information is comprised of raw data derived from the Company’s
accounting records.

 

(e)Events
Subsequent to Effective Date. Except as set forth in the financial information provided to Purchaser or on Schedule
5(e), since the Effective Date there have not been any changes in the Assets, condition, affairs (financial or otherwise)
or business prospects of the Company, in each case limited to the Assets, which have had or would be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect.

 

(f)Legal
Compliance. The Company: (i) to the Knowledge of Sellers, is in compliance with all applicable federal, state, local,
tribal or foreign laws (including statutes, rules, regulations, codes, plans, writs, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) in effect as of the Closing Date (collectively, “Laws”); (ii) has not received any
notice, charge, claim or action of any filed, commenced or to the Knowledge of Sellers threatened action alleging any violation
of Laws; and (iii) has not received any notice that any permit, license, certificate of authority, order and approval of, all
federal, state, local, tribal and foreign regulatory bodies required as of the Closing Date for the Company to carry on its current
operations in the Ordinary Course of Business (collectively, “Permits”) will be terminated or modified or cannot be
renewed in the Ordinary Course of Business, and Sellers have no Knowledge of any reasonable basis for any such termination, modification
or non-renewal.

 

    	8

    	 

    

  

(g)Tax
Matters. To the Knowledge of Sellers,

 

(i)the
Company has filed timely with the appropriate taxing authorities all Tax Returns required to be filed by the Company; each such
Tax Return is true, correct and complete in all material respects; and all Taxes of the Company that are due and payable through
and including the Effective Date, have been timely paid in full;

 

(ii)there
is no action, suit, proceeding, investigation, audit, claim or assessment pending or threatened with respect to the Company with
respect to a liability for Taxes or with respect to any Tax Return; no deficiency for any Tax has been assessed with respect to
the Company which has not been paid in full; and there are no liens for Taxes upon the Assets other than liens for Taxes not yet
due and payable;

 

(iii)the
Company has withheld all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, member or other third party;

 

(iv)there
are no outstanding waivers or comparable consents regarding the application of the statute of limitations with respect to any
Taxes or Tax Returns of the Company;

 

(v)the
Company is not a party to, is not bound by, and does not have any obligation under, any Tax sharing agreement, Tax indemnification
agreement or similar contract or arrangement; the Company does not have any potential liabilities or obligations to any Person
as a result of, or pursuant to, any such agreement, contract or arrangement; and the Company does not have any liability for Taxes
of another Person by contract or otherwise;

 

(vi)the
Company is, and has been since its inception, classified as a partnership for federal Tax purposes under Treasury Regulations
Sections 301.7701-2 and -3, and any comparable provision of applicable law of state and local jurisdictions that permit such treatment;
and

 

(vii)the
Sellers shall, at Sellers’s sole cost and expense, cause all state and federal income Tax Returns for the Company for calendar
year 2013 to be timely filed (as extended), and shall promptly provide copies thereof (together with all schedules thereto) to
the Company. Sellers shall provide Purchaser with copies of all associated work papers, schedules and accounting records necessary
to support the 2013 Tax Return.

 

    	9

    	 

    

  

(h)Material
Agreements. Schedule 5(h) lists: (i) the Concession Agreement and the Leases; (ii) all agreements and contracts
(whether oral or written) with Persons who are or will be Affiliates of the Company or Affiliates of the Sellers immediately prior
to Closing that will be binding on the Company or the Assets after Closing; (iii) agreements for the sale or purchase of Hydrocarbons
produced from or attributable to the Assets; (iv) instruments that create any area of mutual interest, or that materially restrain,
limit or impede the Company’s ability to compete with or conduct its business as currently conducted, including geographic
limitations on the Company’s activities, in each case limited to the Assets; (v) contracts to which the Company is a party,
the performance of which will involve consideration in excess of $50,000 per year; or (vi) any other agreement not described in
(i) through (v) above the existence or loss of which has had or would be reasonably likely to have a Material Adverse Effect on
the Company (collectively, the “Material Agreements”). Additionally, all of the Material Agreements are still in effect
and there has been no notice of termination from any third party or their affiliate. With respect to each Material Agreement,
the Company is not in material breach or default of the terms and conditions of any Material Agreement.

 

(i)Litigation.
Except as set forth on Schedule 5(i) (which are part of the Retained Liabilities), (A) there is no action, suit,
proceeding, hearing, audit, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal, or regulatory,
in law or in equity, by or before any court or quasi-judicial or administrative agency of any jurisdiction or arbitrator (“Proceeding”)
pending, or, to the Knowledge of Sellers, threatened, against, relating to or naming as a party thereto the Company, any of the
Assets or any of the Company’s members, managers or officers (in their capacities as such), (B) there is no agreement, order,
judgment, decree, injunction or award of any governmental authority or arbitrator against and/or binding upon the Company, any
of the Assets or any of the Company’s members, managers or officers (in their capacities as such), and (iii) there is no
Proceeding that the Company has pending against other Persons.

 

(j)Brokers’
Fees. The Company has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating
to the transactions contemplated by this Agreement for which the Purchaser or the Company shall have any responsibility.

 

(k)Insurance.
Schedule 5(k) describes all contracts of insurance and bonds maintained by or for the benefit of the Company, which
are in full force and effect, and all premiums due and owing in connection with such policies have been paid. To the Knowledge
of Sellers, the Company has given notice or has otherwise presented every material claim known to the Company to be covered by
insurance under its insurance policies or contracts in a timely fashion, except for policies directly related to the Assets and
set forth on Schedule 5(k). Each of the policies will terminate as of the Closing Date, and Purchaser will be required
to have replacement policies in place prior to the Closing.

 

(l)Employee
Benefit Plans. The Company has no Benefit Plans, and the Company has made no agreement with any Person including, but
not limited to, any employee, manager, officer or any Seller, regarding the Tax treatment of the Membership Interests.

 

    	10

    	 

    

  

(m)Hedging
Transactions. The Company has no obligations in respect of any futures, hedges, swaps, collars, puts, calls, floors, caps,
options, forward sales, forward purchases or other contracts or derivative securities that are intended to benefit from, relate
to or reduce or eliminate the risk of fluctuations in the price of commodities (including, without limitation, Hydrocarbons),
interest rates, currencies or securities with respect to the Assets or the Wells (collectively, “Hedge Transactions”).

 

(n)Imbalances.
There are no aggregate production, pipeline transportation or processing imbalances or penalties existing with respect
to the Wells, and the Company has not received a deficiency payment under any Hydrocarbon contracts for which any party has a
right to take deficiency Hydrocarbons from the Company with respect to the Wells, nor has the Company received any payments for
production which are subject to refund or recoupment out of future production from the Wells.

 

(o)Prepaid
Obligations. The Company is not subject to any “take or pay” arrangement, production payment arrangement,
or other agreement or arrangement which require it to deliver or to suffer the delivery of Hydrocarbons produced in connection
with the Wells or the Assets at some future time (or make a cash payment in lieu thereof) without then or thereafter receiving
full payment therefor and without deduction or credit on account of such arrangement from the price that would otherwise be received.

 

(p)Preferential
Rights; Restrictions on Transfer. Except as set forth in Schedule 5(p), there are no preferential rights to purchase
or other similar rights or restrictions on assignment, including requirements for consents from third parties to assignment, affecting
the Assets that would be applicable to, or required for the consummation of, the transactions contemplated by this Agreement,
and the transactions contemplated by this Agreement will not create in any individual or entity any option to purchase, preferential
right to purchase or similar rights with respect to the Assets.

 

(q)Calls
on Production. There are no calls on production (whether or not exercised) or other similar marketing restrictions affecting
the Wells or the Assets, nor will the transactions contemplated by this Agreement create any such calls on production.

 

(r)Operation
of Wells. Although the Company owns the Leases and the Wells, the Company does not operate any of the Wells or any other
wells. To the Knowledge of Sellers, all the Wells have been drilled, operated and produced in accordance in all material respects
with reasonable, prudent oil and gas field practices and in compliance in all material respects with the applicable Leases and
applicable Law.

 

(s)Proceeds
of Production. All of the proceeds from the sale of the Company’s interest in Hydrocarbons produced from the Wells
(net of mineral owner royalty) are being received by the Company in a timely manner and are not being held in suspense for any
reason.

 

(t)Title
to the Leases and the Assets. The Company has Defensible Title to the Leases and the Assets free and clear of all Liens,
except for Permitted Encumbrances. To the knowledge of Sellers, the Leases and the Concession Agreement are in full force and
effect, the rentals, royalties and other payments due thereunder have been properly and timely paid and there is no existing default
(or event that, with notice or lapse of time or both, would become a default) thereunder.

 

    	11

    	 

    

  

(u)No
Undisclosed Liabilities. To the Knowledge of Sellers, except for liabilities incurred or paid (i) after the Effective
Date but before the date of this Agreement; and (ii) after the date of this Agreement that do not violate Section 8 below, there
are no liabilities, debts or obligations of the Company of any kind, whether accrued, absolute, contingent, inchoate or otherwise
(and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand against the Company giving rise to any such debt, liability or obligation) including any Taxes which are due and payable
as of the date hereof or any governmental charges or penalties, interest or fines, except as reflected in the financial information
provided to Purchaser or for liabilities set forth on Schedule 5(u).

 

(v)Environmental
Matters. Except as set forth in Schedule 5(v):

 

(i)the
Company has complied, and the Company is in compliance, with all applicable Environmental Laws, which compliance includes the
possession of all permits required under applicable Environmental Laws and compliance with the terms and conditions thereof and
the making and filing with all applicable governmental authorities of all reports, forms and documents and the maintenance of
all records required to be made, filed or maintained by it under any Environmental Law;

 

(ii)there
are no Environmental Claims pending or threatened against the Company or any Person whose liability for any Environmental Claim
the Company has retained, assumed or indemnified, either contractually or by operation of Law;

 

(iii)the
Company is not subject to any liability or obligation (accrued, contingent or otherwise) to cleanup, correct, abate or to take
any response, remedial or corrective action under or pursuant to any Environmental Laws, relating to (A) environmental conditions
on, under, or about any of the Wells or the Assets, including the air, soil, surface water and groundwater conditions at, on,
under, from or near such properties, or (B) the use, management, handling, transport, treatment, generation, storage, disposal
or Release of any Hazardous Substances, whether on-site on any of the Assets or with respect to the Assets at any off-site location;
and the Company has provided or made available to Purchaser copies of all studies, assessments, reports, data, results of investigations
or audits, analyses and test results, in the possession, custody or control of the Company relating to (x) the environmental conditions
on, under or about any of the Assets and (y) any Hazardous Substances used, managed, handled, transported, treated, generated,
stored or Released by any Person on, under, about or from, any of the Assets;

 

    	12

    	 

    

  

(iv)there
are no past or present actions, activities, circumstances, conditions, events or incidents in violation of Environmental Laws
related to the Assets (including the Release, emission, discharge, presence or disposal of any Hazardous Substance in violation
of Environmental Laws), that would be reasonably likely to form the basis of any Environmental Claim against the Company or against
any Person whose liability for such Environmental Claim the Company has retained or assumed either contractually or by operation
of law.

 

(w)Employees.
The Company has never had any employees and there are no Persons currently claiming to be an employee of the Company.

 

(x)Equitable
Interests. At the Closing, there are no Persons except those listed on Schedule 5(x), that have a legal or equitable
interest in the Assets including back-ins, overriding royalty interests, and net profit interests in third parties (including
Sellers).

 

(y)Water
Injection Wells. To the Knowledge of Sellers, all water injection wells within the Assets have been properly permitted,
drilled, equipped and operated in accordance with applicable Laws.

 

6.Purchaser’s
Representations and Warranties. Purchaser represents and warrants to Sellers and the Company as of the date hereof and at
Closing as follows:

 

(a)Organization
and Standing. Purchaser is a limited liability company, formed under the laws of the state of Delaware, and is duly organized,
validly existing and in good standing under the laws of Delaware and Oklahoma.

 

(b)Power.
Purchaser has all requisite power and authority to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement. The execution and delivery of this Agreement does not, and the fulfillment of and
compliance with the terms and conditions hereof will not, violate, or be in conflict with, any provision of its governing documents,
as applicable, or any material provision of any agreement, instrument, decree or order to which it is a party or by which it is
bound. The Purchaser is not required to give any notice to, make any filing with, or obtain any authorization, consent or approval
of, any third party or any governmental authority in order to execute and deliver this Agreement or consummate the transactions
contemplated hereby except for such authorizations, consents or approvals as shall have been obtained or such notices or filings
as shall have been accepted before the Closing Date.

 

(c)Authorization
and Enforceability. The execution, delivery and performance of this Agreement and the transactions contemplated hereby
have been duly and validly authorized by all requisite action of the Purchaser. This Agreement constitutes the legal, valid and
binding obligation of the Purchaser, and is enforceable in accordance with its terms, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium and other laws for the protection of creditors generally, as well as to general principles
of equity, regardless whether such enforceability is considered in a proceeding in equity or at law.

 

    	13

    	 

    

  

(d)Absence
of Litigation. There is no Proceeding pending, or to the Knowledge of the Purchaser, threatened, that questions the legality
or propriety of the transactions contemplated by this Agreement or that would reasonably be expected to prevent, hinder or delay
the consummation of the transactions contemplated hereby.

 

(e)Solvency.
As of the Closing Date, the Purchaser will not be insolvent (either because its financial condition is such that the sum of its
debts is greater than the fair value of its assets or because the present fair salable value of its assets will be less than the
amount required to pay its probable liability on its debts as they become absolute and matured) and will, in Purchaser’s
opinion, have sufficient working capital to own and operate the Assets.

 

(f)Financial
Ability. As of the Closing Date, the Purchaser will have available funds in cash or cash equivalents to pay the Aggregate
Purchase Price, as adjusted pursuant to this Agreement, and to effect the transactions contemplated hereby. In no event shall
the receipt by, or the availability of any funds or financing to, the Purchaser or any of its Affiliates or any other financing
be a condition to the Purchaser’s obligation to consummate the transactions contemplated by this Agreement.

 

(g)Investment
Representations. 

 

(i)The
Purchaser is acquiring the Membership Interests purchased hereunder for its own account with the present intention of holding
such securities for purposes of investment, and the Purchaser has no intention of selling such securities in a public distribution
in violation of the federal securities Laws or any applicable state securities Laws.

 

(ii)The
Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the “Securities Act”).

 

(h)Restriction
on Transfers. Purchaser acknowledges that the Membership Interests are not registered under the Securities Act. Purchaser
will not sell, transfer or otherwise dispose of the Membership Interests in violation of the Securities Act, the Securities Exchange
Act of 1934, as amended, or the rules promulgated thereunder, including Rule 144 under the Securities Act.

 

(i)Brokers’
Fees. Purchaser has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating
to the transaction contemplated by this Agreement for which any Seller shall have any responsibility.

 

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7.Independent
Evaluation; Access. Purchaser represents and warrants to Sellers that Purchaser is experienced and knowledgeable in the oil
and gas business. Purchaser is aware of risks associated with the oil and gas business and, specifically, the Company’s
businesses, operations with respect to the Assets and has formed its own judgment as to the value of the Membership Interests,
independent of the Excluded Assets and Retained Liabilities. Purchaser is relying upon its own judgment and decision in entering
into and consummating the transactions contemplated by this Agreement. Between the execution date and the Closing Date, the Sellers
shall cause the Company to continue to make available for Purchaser’s examination all of its files, records, weekly accounts
payable check runs, minute books, information and data regarding the Assets (collectively, the “Records”). Except
as provided in Sections 5(a), 5(d), 5(g), 5(h), 5(u), Purchaser acknowledges and agrees that none of the Company, Sellers or their
respective Affiliates, managers, officers, members, employees, agents or representatives have made any representations or warranties,
express or implied, written or oral, as to the accuracy of the Records. Except for the representations and warranties of Sellers
contained in this Agreement, no representations or warranties have been made to Purchaser, including any estimate with respect
to the value of the Assets or reserves or any projections as to production or other events that could or could not occur in the
future. In entering into this Agreement, Purchaser acknowledges and affirms that it has relied and will rely solely on the terms,
representations and warranties of this Agreement and upon its independent analysis, evaluation and investigation of, and judgment
with respect to, the business, economic, legal, tax or other consequences of this transaction including its own estimate and appraisal
of the extent and value of the petroleum, natural gas and other reserves attributable to the Assets. Except as provided in Section
13(c), no Seller shall have any liability to Purchaser or its Affiliates, managers, officers, members, employees, agents or representatives
resulting from any use, authorized or unauthorized, of the Records or other information related to the Company or the Assets other
than as related to Purchaser’s evaluation of the Assets and the Company for the purpose of acquiring the Membership Interests.
Nothing contained in this Section 7 shall serve to mitigate or modify the operation of Section 3 or the scope or effect of the
representations and warranties set forth in Sections 4 or 5 in any respect. Purchaser has not evaluated the Excluded Assets or
the Retained Liabilities.

 

8.Operation
of Business. From the date hereof until the Closing Date, the Sellers shall not permit the Company to, and the Company will
not without the written consent of Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), except
as expressly contemplated by this Agreement, engage in any practice, take any action, or enter into any transaction with respect
to the Assets that is outside the Ordinary Course of Business. Without limiting the generality of the foregoing, from the date
hereof until the Closing Date, the Company will not without the written consent of Purchaser (which consent shall not be unreasonably
withheld, conditioned or delayed), do any of the following:

 

(a)amend
or otherwise change its Certificate or Articles of Organization or Operating Agreement or equivalent governing documents;

 

(b)make
or commit to make any capital expenditure or group of any capital expenditures in excess of $25,000 individually or $100,000 in
the aggregate (as used herein, “capital expenditures” means customary and reasonable costs and expenses incurred by
the Company in connection with certain major repairs, replacements and improvements of the Assets);

 

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(c)issue,
sell, pledge, exchange, dispose of, grant, lease, mortgage, hypothecate, encumber or authorize the issuance, sale, pledge, exchange,
disposition, grant, lease, mortgage, hypothecation or encumbrance of (i) any Membership Interests or any other direct or indirect
ownership or participation interest in the Company, or (ii) any of the Assets, except for (A) sales of Hydrocarbons in the Ordinary
Course of business consistent with past practices, provided, however, that the Sellers shall be free to sell, transfer or convey
out of the Company to any third party or to themselves the Excluded Assets.

 

(d)acquire
(including, without limitation, by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other
business organization or any division thereof or any material amount of assets;

 

(e)incur
any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any individual or entity, or make any loans or advances;

 

(f)enter
into any employment, bonus, finder’s fee, consulting or severance agreement with, any Person, or establish, adopt, enter
into or amend any Benefit Plan or any employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement
for the benefit of any manager, officer, employee or consultant;

 

(g)declare,
set aside or pay any dividend or make any other distribution in respect of its Membership Interests, other than (i) distributions
of cash and (ii) the conveyance of the Excluded Assets described in Schedule 8(g);

 

(h)amend
in any material respect any Material Agreement or terminate any Material Agreement prior to the expiration of the term thereof;

 

(i)commence
or file any Proceeding; provided that the Company may enter into any consent or settlement with respect to any Proceeding;

 

(j)pay,
discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise) other than in
the Ordinary Course of Business;

 

(k)make,
change or rescind any express or deemed election relating to Taxes, or except as may be required by applicable Law, make any change
to any of its Tax accounting methods, policies or procedures; provided that the Company may enter into any consent or settlement
with respect to any Proceeding relating to Taxes;

 

(l)enter
into any new sales contract or supply contract which cannot be cancelled on 30 days’ prior notice;

 

(m)fail
to maintain in full force and effect the existing insurance policies or insurance policies with substantially comparable terms
and coverages covering the Company and the Assets, except to the extent such policies cease to be available on commercially reasonable
terms (other than bonds or similar instruments in the ordinary course of business); or

 

(n)commit
or agree to any of the foregoing.

 

Each
of the Sellers agrees to cause the Company to promptly inform the Purchaser of any practices, activities or transactions that
might require consent by the Purchaser hereunder and will afford Purchaser reasonable access to any books and Records necessary
for such consent to be made on an informed basis.

 

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9.Other
Covenants.

 

(a)Transition
Services Agreement. NG and Company shall at the Closing execute and deliver the Transition Services Agreement in the form
attached as Exhibit H, for the purpose of transitioning operations of the Assets to Purchaser in an orderly manner.

 

(b)Excluded
Assets. The Parties acknowledge that it may not be possible for the Company to complete the distribution and transfer
of all the Excluded Assets to the Sellers (or other Persons entitled thereto) prior to the Closing. The Excluded Assets, and all
rights, titles, interests, claims, revenues, expenses, liabilities, rights and obligations relating thereto are and shall remain
the sole property and responsibility of the Sellers (including as nominee for other Persons entitled thereto). The Purchaser,
at no cost or liability to Purchaser or the Company, shall fully cooperate with the Sellers to ensure that the Company distributes
and transfers all the Excluded Assets to the Sellers (or to other Persons as directed by the Sellers), including without limitation
all property and proceeds thereof received by the Company or the Purchaser after the Effective Date. The Excluded Assets which
have not yet been transferred at the date of execution of this Agreement are listed in Schedule 8(g).

 

(c)Further
Assurances. Subject to the terms and conditions herein provided, each Party shall take, or cause to be taken, all actions
and shall do, or cause to be done, all things necessary, appropriate or desirable under any applicable Laws or under applicable
governing agreements to consummate and make effective the transactions contemplated by this Agreement, including using reasonable
efforts to obtain all necessary waivers, consents and approvals. Each Party shall take, or cause to be taken, all action or shall
do, or cause to be done, all things necessary, appropriate or desirable to cause the covenants and conditions applicable to the
transactions contemplated hereby to be performed or satisfied as soon as practicable. In addition, if any governmental authority
shall have issued any order, decree, ruling or injunction, or taken any other action that would have the effect of restraining,
enjoining or otherwise prohibiting or preventing the consummation of the transactions contemplated hereby, each of the Parties
shall use reasonable efforts to have such order, decree, ruling or injunction or other action declared ineffective as soon as
practicable. With respect to all actions required to be taken by the Company pursuant to this Agreement (including, without limitation,
under Sections 8 and 9), each of the Sellers shall take, or cause to be taken, all action and shall do, or cause to be done, all
things necessary, appropriate or desirable to cause the Company to take those actions.

 

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(d) Employment
Matters; Non-Solicitation. No employees of the Company, the Sellers or their respective Affiliates are to be hired
by the Purchaser at the Closing. Purchaser agrees that for a period of two years following the Closing Date, Purchaser shall
not, nor permit any Person controlled by the Purchaser to, offer to hire or hire (whether as employees, contractors or
consultants to such Persons) Persons who are at the date of this Agreement employees of the Company, the Sellers, or their
respective Affiliates, managers, officers and members.

 

(e) Confidentiality
Obligation. From the date of this Agreement until two years after the Closing Date, none of the Sellers or their respective
Affiliates shall disclose, and each Seller shall cause its Affiliates, managers, officers, members, employees, agents and representatives
not to disclose, except to the extent permitted in Section 9(e)(i) or (ii) below, any geological, geophysical, technical, contractual
or other information of any nature or kind (written, verbal, electronic, digital, or otherwise) consisting of, or involving, concerning
or pertaining in any manner to the Assets (including drilling or testing operations or results) (“Confidential Information”).
Notwithstanding the foregoing, any Party may make any public disclosure it believes in good faith is required by applicable law
(in which case the disclosing Party will use its reasonable best efforts to advise the other Parties prior to making the disclosure).

 

(i) Sellers
may disclose Confidential Information to any Person who Sellers have engaged to represent or assist Sellers in the negotiation
or preparation of this Agreement, or to advise Sellers with respect thereto, and to any employee of Sellers who is involved in
assisting Sellers with respect to the purchase and sale contemplated by this Agreement, but only if such Person (including legal
counsel) has agreed to a non-disclosure agreement containing the same disclosure prohibitions as set forth above in this Section
9(e).

 

(ii) Notwithstanding
the disclosure prohibitions set forth in Section 9(e)(i), Sellers shall not be liable for disclosure of any Confidential Information
if the same: (A) is now in or hereafter comes into the public domain without breach of this Agreement and through no fault of
the receiving Party, including any public disclosure made by Purchaser which it believes in good faith is required by applicable
law; or (B) is properly and lawfully known to any of the Sellers or their respective Affiliates prior to disclosure hereunder
as evidenced by its written records; or (C) subsequent to disclosure hereunder, is lawfully received by the Sellers or their respective
Affiliates from a third party whose rights therein are without any restriction to disseminate the Confidential Information; or
(D) is developed by Sellers or their respective Affiliates independently of and without reference to any Confidential Information
as shown by tangible evidence; or (E) is lawfully required to be disclosed by the disclosing party to a duly constituted governmental
or judicial body, provided that the disclosing party shall, prior to disclosure, notify the other party of such requirement and
shall use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such Confidential Information.

 

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(f) Non-Compete.
From the Closing Date until two years after the Closing Date, none of the Sellers nor their respective Affiliates shall
directly or indirectly obtain or acquire, or cause to be obtained or acquired, any legal or beneficial interest in the lands set
forth on Exhibit D (the “Prospect Interests”), and Sellers shall cause each of its respective managers, officers,
and employees not to obtain or acquire, or cause to be obtained or acquired, any legal or beneficial interest therein.

 

(g) Closing
Tax Certificate. On the Closing Date, each Seller shall deliver to the Purchaser a certificate in the form of Exhibit
I (the “Closing Tax Certificate”) signed under penalties of perjury (i) stating that it is not a foreign person,
(ii) providing its taxpayer identification number, and (iii) providing its address, all pursuant to Section 1445 of the Code.

 

(h) Cooperation
on Tax Matters. The Sellers shall, at Sellers’s sole cost and expense, cause all state and federal income Tax Returns
for the Company for calendar year 2013 to be timely filed (as extended), and shall promptly provide copies thereof (together with
all schedules thereto) to the Company. The Parties shall cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns and any Proceeding with respect to Taxes (each, a “Tax Proceeding”).
Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information
that are reasonably relevant to any such Tax Proceeding and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The Parties agree (A) to retain all books and records
with respect to Tax matters pertinent to the Company to any taxable period beginning before the Closing Date until the expiration
of the statute of limitations (and, to the extent notified by Purchaser or the Sellers, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other
Parties reasonable written notice prior to transferring, destroying or discarding any such books and records and, if any other
Party so requests, shall allow such Party to take possession of such books and records. The Purchaser shall not have any liability
for adverse claims that may be asserted on the Company by the Internal Revenue Service for any Tax Filings made by the Company
for periods prior to the Effective Date or for the Excluded Assets for periods prior to, on or after the Effective Date.

 

(i) Special
Warranty of Title by Sellers. Notwithstanding anything to the contrary herein, Sellers shall warrant and defend title
to the Leases and the Wells against all claims and demands of Persons claiming by, through or under the Sellers and the Company,
but not otherwise.

 

(j) Certain
Post-Closing Liabilities.

 

(i) Osage
Land and Cattle. The Company is as of the date of execution of this Agreement engaged in negotiations with Osage Land & Cattle
Co. and Osage Buck Creek, L.L.C. (collectively, “OL&C”), (A) to settle surface damages for operations conducted
by the Company prior to the Effective Date on OL&C’s lands, and (B) for a Master Surface Use Agreement to govern the
Company’s operations on and after the Effective Date on OL&C’s lands. The Parties covenant and agree that Sellers
shall have the exclusive right and obligation to negotiate resolution of item (A) above in Sellers’ sole and absolute discretion,
and all obligations and payments related thereto shall be a Retained Liability. The Parties further covenant and agree that the
Buyer, as agent for the Company, shall have the exclusive right and obligation to negotiate resolution of item (B) above in the
Buyer’s sole and absolute discretion, and all obligations and payments related thereto shall be the sole responsibility
of the Company (and the Sellers shall have no obligations under this Agreement therefor) without any adjustment to the Aggregate
Purchase Price.

 

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(ii) Reed
Litigation. The Company is as of the date of execution of this Agreement a party to certain Proceedings styled (A) Nadel and
Gussman, LLC, et al., Plaintiffs, vs. Jimmie W. Reed, Trustee, et al., Defendants, Case No. 4:13-cv-00570-TCK-TLW, in the
United States District Court for the Northern District of Oklahoma, as on appeal, Case No. 14-5028, in the United States Court
of Appeals for the Tenth Circuit, and (B) Nadel and Gussman, LLC, et al., Plaintiffs, vs. Reed Family Ranch LLC, et al., Defendants,
Case No. CV-2014-00016, in the District Court of Osage County, Oklahoma (collectively, the “Reed Litigation”). The
Reed Litigation is a dispute regarding compensation for surface damages from operations conducted by the Company prior to the
Effective Date on lands owned by the Reed Litigation defendants. A potential settlement of the Reed Litigation would require the
Company to agree that the settlement payment may be used as evidence of the value of surface damages for future operations on
lands owned by the Reed Litigation defendants. The Parties covenant and agree that the Sellers shall have the exclusive right
and obligation to settle or litigate the Reed Litigation in the Sellers’ sole and absolute discretion, so long as such settlement
or litigation does not restrict the future ingress and egress of the Company in and to the Reed Property or otherwise impose any
physical (vs. financial) limitation on its current right to conduct ongoing or future oil and gas operations on same. All obligations
and payments related to the Reed Litigation shall be a Retained Liability.

 

10. Conditions
to Proceed with Closing. The obligation of the Parties to proceed with Closing shall be subject to the satisfaction or waiver,
on or before the Closing Date, of the following conditions:

 

(a) Conditions
to the Parties’ Obligation to Proceed with Closing. The obligation of the Sellers and the Purchaser to proceed with
Closing shall be subject to the satisfaction or waiver, on or before the Closing Date, of the following conditions:

 

(i) All
authorizations, consents, orders, declarations or approvals of, or filings with any governmental or regulatory authority, which
the failure to obtain, make or occur would have the effect of making the transactions contemplated by this Agreement illegal or
would have (or would be reasonably likely to have) a Material Adverse Effect on any of the Company, the Assets or the Purchaser
assuming the transactions contemplated by this Agreement had taken place, shall have been obtained, made or occurred on or before
the Closing Date.

 

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(ii) The
Company shall have closed the purchase from its joint venture partners of all working interests in the Assets not owned by the
Company prior to the date of this Agreement, so that the Company shall own 100% of the working interests in the Assets at the
Closing Date and effective immediately prior to the Effective Date.

 

(b) Conditions
to the Purchaser’s Obligation to Proceed with Closing. The obligation of the Purchaser to proceed with Closing shall
be subject to the satisfaction or waiver, on or before the Closing Date, of the following conditions:

 

(i) The
representations and warranties set forth in Sections 4 and 5 shall be true and correct in all respects at Closing, and the Company
and the Sellers shall have complied in all material respects with those covenants contained in this Agreement that are applicable
to them.

 

(ii) The
Purchaser shall have received from each Seller an unqualified certificate covering those items addressed in Section 10(b)(i) (each,
a “Seller’s Closing Certificate”).

 

(iii) Each
manager and officer of the Company shall have delivered to the Purchaser a letter of voluntary resignation from such positions
with the Company effective as of the Closing.

 

(iv) None
of the Wells nor the other Assets shall have been damaged or destroyed by any natural event (including, without limitation, any
storm, flood, hurricane, washout, landslide, earthquake, lightning, fire or other act of God) or other casualty or been taken
in condemnation or under right of eminent domain, except for such destructions, casualties or takings as would not, individually
or in the aggregate, constitute a Material Adverse Change.

 

(v) Except
as would not, individually or in the aggregate, constitute a Material Adverse Change, the Company shall not have received any
demand or notice with respect to any Environmental Claims or non-compliance with Environmental Laws (“Environmental Defects”);
provided, the existence of any of the foregoing, together with any other Environmental Defects, that would not reasonably be estimated
to represent an aggregate liability equal to or less than $50,000.00, shall not be deemed to represent a Material Adverse Change
solely due to the estimated cost of such liabilities.

 

(vi) To
the extent that any Seller that is an individual or their spouse is currently a resident or subject to the family, estate or probate
laws of any state that is a community property state, the spouse of such Seller shall have executed and delivered to the Purchaser
a written instrument substantially the form attached hereto as Exhibit C.

 

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(vii) The
Purchaser shall have received from the Company a Certificate of Good Standing from the State of Oklahoma and an Incumbency Certificate
from the Manager of the Company in the form attached as Exhibit F attached hereto.

 

(viii) Except
for the Excluded Assets listed in Schedule 8(g), Sellers shall have conveyed out of the Company all Excluded Assets to
the satisfaction of Purchaser.

 

(ix) Sellers
shall have procured executed Disclaimers and Stipulations of Interest in the form attached as Exhibit G attached hereto
from NG, HB&R Oil Company, LLC, Murfin Drilling Company, Inc., Staghorn Energy, LLC, and the owners of all overriding royalties
and other burdens carved out of the working interest.

 

(c) Conditions
to the Sellers’ Obligation to Proceed with Closing. The obligation of the Sellers to proceed with Closing shall
be subject to the satisfaction or waiver, on or before the Closing Date, of the following:

 

(i) The
representations and warranties set forth in Section 6 shall be true and correct in all respects at Closing and the Purchaser shall
have complied in all material respects with those covenants contained in this Agreement that are applicable to it.

 

(ii) The
Sellers shall have received from Purchaser an unqualified certificate covering those items addressed in Section 10(c)(i) (“Purchaser’s
Closing Certificate”).

 

(iii) The
Sellers shall have received evidence acceptable to Sellers that Purchaser has secured for the Company suitable replacements for
all contracts of insurance and bonds listed in Schedule 5(k) effective as of the Effective Date.

 

11. Actions
to be Taken At Closing.

 

(a) Sellers’
Actions at Closing. At the Closing, each Seller shall execute, acknowledge and (upon payment of the Adjusted Purchase
Price or Preliminary Adjusted Purchase Price, as applicable) deliver to the Purchaser the following:

 

(i) An
Assignment of Membership Interests in the form of Exhibit E;

 

(ii) Its
respective Seller’s Closing Certificate;

 

(iii) Its
respective Closing Tax Certificate; and

 

(iv) All
other instruments as may be reasonably required to consummate the agreements of the Parties hereunder, including execution and
delivery by NG of the Transition Services Agreement.

 

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(b) Purchaser’s
Actions at Closing. At Closing (upon the assignment of all of the Membership Interests), Purchaser shall execute, acknowledge
and deliver to Sellers the following:

 

(i) Pay
to the Sellers, by wire transfers of immediately available funds, the Adjusted Purchase Price or the Preliminary Adjusted Purchase
Price, as applicable, to the accounts set forth in the Preliminary Settlement Statement;

 

(ii) The
Purchaser’s Closing Certificate; and

 

(iii) All
other instruments as may be reasonably required to consummate the agreements of the Parties hereunder including execution and
delivery to NG of the Transition Services Agreement.

 

12. Expiration
of Representations, Warranties and Covenants. All representations, warranties, covenants and indemnities of the Parties contained
herein, and any certificate delivered hereunder, to the extent that such certificate relates to such representations and warranties
concerning the Assets, shall survive for a period of two years after the Closing Date, except that (a) the covenants set forth
in Sections 8, 9(a), 9(g) and 10 shall expire at Closing and (b) the representations, warranties, covenants and indemnities set
forth in Section 13(c) with respect to the Excluded Assets and the Retained Liabilities, the obligation set forth in Section 5(g)(vii),
and the obligations contained in Sections 9(b), (c), (h), (i) and (j) shall survive indefinitely (the covenants and other agreements
which shall survive the Closing being referred to as the “Surviving Covenants”).

 

13. Release
and Indemnification.

 

(a) Release
of Sellers. Except for the indemnification obligations of Sellers as set forth in Section 13(b) and Section 13(c) below,
Purchaser hereby releases, remises, and forever discharges Sellers and their respective Affiliates, managers, officers, directors,
members, employees, agents and representatives from any and all claims, damages, actions, suits, proceedings, demands, assessments,
adjustments, losses, liabilities, diminutions of value, costs and expenses (including, without limitation, reasonable attorneys’
fees) (collectively, “Losses”), in law or in equity, known or unknown, which Purchaser might now or subsequently may
have, based on, relating to, or arising out of this Agreement or any other agreement, contract or instrument contemplated herein
with respect to the Company’s ownership, use, or operation of the Assets, or the condition, quality, status, or nature of
the Assets, INCLUDING RIGHTS TO CONTRIBUTION OR COST RECOVERY UNDER ALL ENVIRONMENTAL LAWS, BREACHES OF STATUTORY AND IMPLIED
WARRANTIES, NUISANCE OR OTHER TORT ACTIONS, RIGHTS TO PUNITIVE DAMAGES, COMMON LAW RIGHTS OF CONTRIBUTION, ANY RIGHTS UNDER INSURANCE
POLICIES ISSUED OR UNDERWRITTEN BY SELLER OR ANY OF SELLER’S AFFILIATES (IN EACH CASE) EVEN IF CAUSED IN WHOLE OR IN PART
BY THE NEGLIGENCE (WHETHER ACTIVE, PASSIVE, SIMPLE, SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF ANY RELEASED
PERSON, INVITEE OR THIRD PERSON, OR BY A PREEXISTING CONDITION.

 

    	23

    	 

    

 

(b) Indemnification
by Sellers. Each Seller jointly and severally covenants and agrees that it will indemnify, defend and hold harmless the
Purchaser, the Company and their respective managers, officers, directors, members, employees, agents, representatives and Affiliates
(collectively, the “Purchaser Indemnified Parties”) from and against all Losses arising directly or indirectly from,
as a result of or in connection with (i) any breach of the representations and warranties of Sellers that by their terms survive
the Closing, (ii) any breach by Sellers of the Surviving Covenants. In respect of the indemnification obligation set forth in
the immediately preceding sentence, (x) no Seller shall be liable for any other Seller’s breach of Section 4(d) or the Seller’s
Closing Certificate delivered by any other Seller, or for fraud committed by any other Seller, (y) the liability of each Seller
for all Losses hereunder shall be limited to the amount labeled “Distribution Amount” on Exhibit A for each
Seller (subject to adjustment to the Aggregate Purchase Price pursuant to Section 2(c)) and (z) the liability of each Seller for
all Losses hereunder shall be limited to the amount of such Losses multiplied by such Seller’s Sharing Ratio. Any claim
for indemnification pursuant to this Section 13(b) based on the breach of a representation, warranty or Surviving Covenant that
survives the Closing for a finite period must be asserted by the Purchaser or a Purchaser Indemnified Party on or before the expiration
of such finite period for such claim to be enforceable.

 

(c) Indemnification
by the Sellers on the Excluded Assets and Retained Liabilities. Each Seller jointly and severally covenants and agrees
that it will indemnify, defend, and hold harmless the Purchaser, the Company and their respective managers, officers, directors,
members, employees, agents, representatives, and Affiliates (collectively the “Purchaser Indemnified Parties”), from
and against all Losses arising directly or indirectly from, as a result of or in connection with, any of the Excluded Assets and
Retained Liabilities, together with any tax obligation/loss or encumbrance pertaining to said Excluded Assets and/or Retained
Liabilities, with no monetary limit. The indemnification granted herein shall be without regard to any representation or warranty
or surviving covenant contained elsewhere in this Agreement and this indemnification is intended to survive the Closing. Further,
the Sellers do hereby indemnify the Purchaser Indemnified Parties from and against any and all liability for income taxes, interest,
late penalties, or other penalties imposed by the Internal Revenue Service or the State of Oklahoma or any other state having
jurisdiction pertaining to the taxation of the Company and/or its members, with respect for the Excluded Assets for all time periods
prior to, on or after, the Effective Date.

 

(d) Indemnification
by Purchaser. After the Closing Date, the Purchaser agrees that it will indemnify, defend and hold harmless the Sellers
and their respective Affiliates, managers, officers, directors, employees, agents, representatives (collectively, the “Seller
Indemnified Parties”) from any and all from and against all Losses arising after the Closing Date as a result of or in connection
with the Assets or the Company, and any Environmental Claims arising after the Closing relating to the Assets, but in no event
will the Purchaser offer such indemnity to any claim or losses pertaining to the Excluded Assets and the Retained Liabilities.

 

    	24

    	 

    

 

(e) Certain
Limitations on Indemnity Obligations.

 

(i) No
claim of Purchaser or any of the Purchaser Indemnified Parties pursuant to Section 13(b) shall be made hereunder until such claim
exceeds an amount equal to $5,000.00 (each, an “Individual Claim”).

 

(ii) In
addition, no claim of Purchaser or any of the Purchaser Indemnified Parties pursuant to Section 13(b) shall be made hereunder
until the total of all Individual Claims exceeds $100,000 (the “Basket”). If the total amount of all Individual Claims
exceeds the Basket, then Sellers’ obligations under Section 13(b) shall be limited to the amount by which the aggregate
amount of such Individual Claims exceeds the Basket; provided, however, claims of Purchaser or any of the Purchaser Indemnified
Parties pursuant to Section 13(c) above shall not be subject to the Individual Claim limitation or the Basket.

 

(iii) In
addition, the Sellers shall not be required to pay an aggregate amount to Purchaser or the Purchaser Indemnified Parties pursuant
to Section 13(b) in excess of the Adjusted Purchase Price (the “Indemnity Cap”); provided, however, none of
the limitations set forth in this Section 13(e)(iii) will apply to (A) claims of Purchaser or any of the Purchaser Indemnified
Parties pursuant to Section 13(c) above or (B) claims based upon fraud of any of the Sellers.

 

(iv) The
amount of any indemnification under Section 13(b) or (d) shall be net of any amounts actually recovered by the indemnified party
under insurance policies.

 

(f) Exclusive
Remedy for Breaches of Representations, Warranties and Covenants. Except as specifically set forth in Section 13(b) and
Section 13(c), effective upon the Closing, in the absence of fraud on the part of a Seller in connection with the negotiation,
execution or delivery of this Agreement or the consummation of the transactions contemplated hereby (to the extent determined
by a final judgment of a court of competent jurisdiction), the Purchaser, on behalf of itself and the Purchaser Indemnified Parties,
waives any rights or claims it or any other Purchaser Indemnified Party may have against any Seller, whether in law or equity
(except as relates to adjustments to the Aggregate Purchase Price in accordance with Section 2(c) and except for the obligations
of Sellers contained in Section 13(c) above) for any Seller’s breach of a representation or warranty contained in this Agreement
and for breaches of any covenant or other agreement, including, without limitation, claims for contribution or other rights of
recovery arising out of or relating to any Environmental Laws, claims for breach of contract, breach of implied covenants, negligent
misrepresentation and all other claims for breach of duty. For the avoidance of doubt, except for fraud, Articles 13 and 14 set
forth the exclusive remedies available to the Purchaser or the Purchaser Indemnified Parties for any breach by the Sellers of
this Agreement.

 

    	25

    	 

    

 

(g)
Procedure for Indemnification.

 

(i) Promptly
after receipt by an indemnified Party under Section 13(b), (c) or (d) of a claim for Losses or notice of the commencement of any
Proceeding against it, such indemnified Party shall, if a claim is to be made against an indemnifying Party under such Section,
give notice to the indemnifying Party of the commencement of such claim. The failure of any indemnified Party to give notice of
a claim shall not relieve the indemnifying Party of its obligations under this Article 13 except to the extent such failure materially
prejudices the indemnifying Party. A claim for indemnification for any matter not involving a third-party claim may be asserted
by notice to the Party from whom indemnification is sought.

 

(ii) If
any Proceeding referred to in Section 13(g)(i) is brought against an indemnified Party and it gives notice to the indemnifying
Party of the commencement of such Proceeding, the indemnifying Party shall be entitled to participate in such Proceeding and,
to the extent that it wishes (unless (i) the indemnifying Party is also a party to such Proceeding and the indemnified party determines
in good faith that joint representation would be inappropriate, or (ii) the indemnifying Party fails to provide reasonable assurance
to the indemnified party of its financial capacity to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel reasonably satisfactory to the indemnified party and, after
notice from the indemnifying Party to the indemnified Party of its election to assume the defense of such Proceeding, the indemnifying
Party shall not, as long as it diligently conducts such defense, be liable to the indemnified party under this Article 13 for
any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each case subsequently incurred
by the indemnified party in connection with the defense of such Proceeding. If the indemnifying Party assumes the defense of a
Proceeding, no compromise or settlement of such claims may be effected by the indemnifying Party without the indemnified party’s
consent unless (A) there is no finding or admission of any violation of legal requirements or any violation of the rights of any
Person and no effect on any other claims that may be made against the indemnified Party, and (B) the sole relief provided is monetary
damages that are paid in full by the indemnifying Party, and (C) the indemnified Party shall have no liability with respect to
any compromise or settlement of such claims effected without its consent and (D) the indemnified Party is provided a full and
unconditional release of liability.

 

(iii) Notwithstanding
the foregoing, if an indemnified Party determines in good faith that there is a reasonable probability that a Proceeding may adversely
affect it or its Affiliates other than as a result of monetary damages for which it would be entitled to indemnification under
this Agreement, the indemnified party may, by notice to the indemnifying Party, assume the exclusive right to defend, compromise,
or settle such Proceeding, but the indemnifying Party shall not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be unreasonably withheld).

 

    	26

    	 

    

 

(h) No
Waiver of Fraud. NOTHING RELATING TO (I) THE EXPIRATION OF ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT SET FORTH
IN THIS AGREEMENT, (II) THE INDEMNIFICATION PROVISIONS SET FORTH IN THIS AGREEMENT, (III) THE EXCLUSIVENESS OF ANY REMEDIES UNDER
THIS AGREEMENT OR (IV) ANY OTHER MATTER SHALL BE DEEMED TO BE A WAIVER OF ANY RIGHT OR CLAIM THAT ANY PARTY MAY HAVE AGAINST ANY
OTHER PARTY IN RESPECT OF SUCH PARTY’S FRAUD.

 

14. Termination
of Agreement. This Agreement may be terminated as provided below:

 

(a) by
mutual written consent of the Purchaser and a Majority of the Sellers at any time prior to the Closing;

 

(b) by
the Purchaser if the Closing shall not have occurred on or before May 22, 2014, for any reason not attributable to the breach
by the Purchaser of any representations, warranties or covenants contained in this Agreement;

 

(c) by
the Purchaser if the Sellers have breached any representation or warranty in any material respect, the Purchaser has notified
the Sellers of the breach, and the breach has continued without cure for a period of 10 Business Days after the notice of breach;

 

(d) by
the Majority of Sellers if the Closing shall not have occurred on or before May 22, 2014, for any reason not attributable to the
breach by the Sellers or the Company of any representations, warranties or covenants contained in this Agreement;

 

(e) by
the Majority of Sellers if the Purchaser has breached any representation, warranty, or covenant contained in this Agreement in
any material respect, the Sellers have notified the Purchaser of the breach, and the breach has continued without cure for a period
of 10 Business Days after the notice of breach;

 

(f) by
the Purchaser if the Sellers have not made available to Purchaser all of the Company’s files and records in accordance with Section
7 above, and the Purchaser has requested such access in writing; or

 

(g) by
the Purchaser if Sellers do not produce the Disclaimers and Stipulations of Ownership as provided in Section 10(b)(ix).

 

If
this Agreement is terminated by mutual written consent of the Purchaser and a Majority of the Sellers pursuant to Section 14(a),
then all rights and obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party.
If this Agreement is terminated for any reason other than that described in Section 14(d) above, Sellers shall immediately return
the Performance Deposit to the Purchaser. If this Agreement is terminated by Sellers for the reason described in Section 14(e)
above, Sellers shall retain the Performance Deposit and Purchaser shall forfeit all rights thereto.

 

    	27

    	 

    

 

15. General
Provisions.

 

(a) Entire
Agreement. This Agreement together with the Schedules and Exhibits contains the entire understanding of the Parties with regard
to the subject matter hereof and no warranties, representations, promises or agreements have been made between the Parties other
than as expressly herein set forth. This Agreement supersedes any previous agreement or understanding between the Parties and
cannot be modified or amended except in a writing executed by the Purchaser and the Majority of Sellers.

 

(b) Assignments,
Successors and Third Party Beneficiaries. No Party may assign any of its rights under this Agreement without the prior written
consent of all other Parties, such consent not to be unreasonably withheld. Subject to the foregoing sentence, upon execution,
this Agreement shall be binding and fully enforceable and shall inure to the benefit of the Parties hereto, their successors,
permitted assigns, personal representatives and heirs. This Agreement shall not confer any rights or remedies upon any Person
other than the Parties and their respective heirs, personal representatives, successors and permitted assigns.

 

(c) Notices.
All notices as may be required by this Agreement shall be deemed given if delivered personally or sent by electronic mail (with
confirmation of receipt) during normal business hours of the recipient, the next Business Day if sent by overnight courier, or
upon receipt if sent by U.S. Mail to the respective parties at the addresses set forth below:

 

	To Sellers:	 	See Exhibit A
	 	 	 
	To Purchaser:	 	Bandolier Energy, LLC
	 	 	624 S. Boston Ave., Suite 230
	 	 	Tulsa, Oklahoma 74119
	 	 	Attn: Shane E. Matson
	 	 	E-mail:
    shanematson@gmail.com

 

(d) Severability.
In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any
court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be
affected thereby and effect shall be given to the intent manifested by the provisions, or portions thereof, held to be enforceable
and valid.

 

(e) Governing
Law; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of the State of Oklahoma without
regard to its choice of law provisions that would apply the law of any other state. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

    	28

    	 

    

 

(f) Arbitration
of Net Defect Amount Disputes. After Closing, disputes regarding the Adjusted Purchase Price (“Arbitrable Disputes”)
shall be submitted to binding arbitration conducted in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the “AAA”), as supplemented to the extent necessary to determine any procedural appeal questions arising
under the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section 15(f)
and the Commercial Arbitration Rules or the Federal Arbitration Act, then this Section 15(f) shall control. Arbitration shall
be initiated by the Claimant (as defined below) serving written notice on the Respondent (as defined below) that the Claimant
elects to refer the Arbitrable Dispute to binding arbitration. Unless otherwise agreed by the Parties, a single neutral arbitrator
will decide the Arbitrable Dispute. The Parties shall select the arbitrators as follows: the Claimant shall request the administrator
of the Dallas, Texas office of the AAA to provide the Parties with an arbitrator. The arbitrator must (x) be a neutral person
who has never been officer, director, employee, or consultant or had other business relationships with the Parties or any of their
Affiliates, officers, directors or employees, and (y) have not less than fifteen (15) years recent experience in the U.S. oil
and gas accounting. The arbitration hearing will be conducted in Tulsa, Oklahoma, and shall commence as soon as practicable after
the selection of the arbitrator. If the Parties are unable to agree on a single arbitrator, then any Party may petition the Presiding
Judge of the District Court of Osage County, Oklahoma to appoint an arbitrator. The Parties and the arbitrator shall proceed diligently
and in good faith so that the arbitrator’s determination can be made as promptly as possible. The arbitrator may consult
with and engage disinterested third parties to advise the arbitrator, including, without limitation, petroleum engineers, petroleum
landmen, and environmental engineers and consultants, as appropriate. The arbitrator’s determination shall be made in writing,
including findings of fact and conclusions of law, within 45 days after submission of the matters in dispute. Judgment may be
entered on the award, and the award may be judicially enforced. Except as provided in the Federal Arbitration Act, the decision
of the arbitrator shall be binding on and non-appealable by the Parties. The arbitrator shall act for the limited purpose of resolving
the specific Arbitrable Disputes and may not award damages, costs (including attorneys’ fees), interest or penalties with
respect to any matter. Further, the arbitrator shall have no right or authority to grant or award indirect, consequential, punitive
or exemplary damages of any kind. The Parties shall each bear their own legal fees and other costs of presenting their case. The
Sellers, on the one hand, and the Purchaser, on the other hand, shall each pay 50% of the fees and expenses of the arbitrator.

 

(g) Counterparts;
Facsimile Signatures. This Agreement may be executed in any number of counterparts and each such counterpart shall be considered
an original and an enforceable agreement. Facsimile and electronic signatures to this Agreement shall be valid.

 

(h) Notice
of Developments. Each Party will give prompt written notice to the others of any material breach of any of its representations,
warranties and covenants contained herein.

 

    	29

    	 

    

 

(i) Exclusivity.
Prior to the earlier to occur of (i) the Closing and (ii) the termination of this Agreement, Sellers will not (and the Sellers
will not cause or permit the Company or any of its or their representatives, advisors, agents or controlled affiliates to) intentionally
solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any of
the Membership Interests of the Company, or assets of the Company (except for sales permitted pursuant to Section 8) (including
any acquisition structured as a merger, consolidation, share exchange or other business combination or recapitalization).

 

(j) Other
Post-Closing Covenants. After Closing, if any further action is necessary to carry out the purposes of this Agreement, each
of the Parties will take such further action as any other Party reasonably may request, all at the sole cost and expense of the
requesting Party. If any Party is contesting or defending against any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand in connection with any transaction on or prior to the Closing Date involving the Company, each of
the other Parties shall cooperate with it and its counsel in the defense or contest, all at the sole cost and expense of the contesting
or defending Party.

 

(k) Press
Releases and Public Announcements. No Party shall issue, or permit the Company to issue, any press release or make any public
announcement relating to the subject matter of this Agreement prior to the Closing without the prior written approval of the other
Parties, which approval shall not be unreasonably withheld; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law, or any listing or trading agreement concerning its publicly-traded securities
(in which case the disclosing Party will use its reasonable best efforts to advise the other Parties prior to making the disclosure).

 

(l) Expenses.
Notwithstanding anything contained herein, all fees, costs, and expenses for investment advisors, attorneys and accountants retained
by the Sellers or the Company to facilitate the transactions contemplated by this Agreement shall be paid by the Sellers, respectively
based on their pro rata share of the Aggregate Purchase Price. All fees, costs, and expenses incurred by the Purchaser in connection
with the transactions contemplated by this Agreement shall be paid by the Purchaser.

 

(m) Limitation
of Damages; Enforcement of Agreement. There shall be no liability under this Agreement for consequential, special, punitive
or exemplary damages. The Parties agree that irreparable damage may occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms. Accordingly, the Parties agree that each Party may be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to specifically enforce the terms and provisions of this Agreement
in any appropriate court, the foregoing being in addition to (and not to the exclusion of) any other remedy to which a Party may
be entitled at law or in equity.

 

    	30

    	 

    

 

16. Definitions.

 

(a) “AAA”
is defined in Section 15(f).

 

(b) “Adjusted
Purchase Price” is defined in Section 2(a).

 

(c) “Affiliate”
shall mean, when used with respect to a specified Person, any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the specified Person as of the time or for the time periods during which such
determination is made. For purposes of this definition “control”, when used with respect to any specified Person,
means the power to direct the management and policies of the Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have the meanings
correlative to the foregoing.

 

(d) “Aggregate
Purchase Price” is defined in Section 2(a).

 

(e) “Agreement”
is defined in the introductory paragraph.

 

(f) “Arbitrable
Dispute” is defined in Section 15(f).

 

(g) “Assets”
means all of the Company’s right, title and interest (of whatever kind or character, whether legal or beneficial, and whether
vested or contingent) in and to the following:

 

(i) all
oil, gas and other minerals in and under and that may be produced from the lands covered by the Concession Agreement and the Leases
including, without limitation, interests in oil, gas and/or mineral leases covering any part of the lands (and all renewals, extensions,
ratifications, and amendments thereof, together with all rights, interests, and benefits in, derived or carved from, or appurtenant
or attributable to, those leases including royalties, excess royalties, overriding royalty interests, net profits interests, production
payments, working interests, leasehold cost-bearing interests, and similar interests), overriding royalty interests, production
payments, and net profits interests in any part of the lands or leases, fee royalty interests, fee mineral interests, and other
interests in oil, gas and other minerals in any part of the lands, whether the lands are described in Exhibit B or by reference
to another instrument for description, even though the Company’s interests may be incorrectly described in, or omitted from,
Exhibit B;

 

(ii) all
the lands described in the Concession Agreement and the Leases;

 

(iii) the
oil and gas wells described in Exhibit B and all wells located on a Lease (or on any acreage spaced, pooled and/or unitized
with a Lease) including, without limitation, (A) all oil, gas or condensate wells and wellbores (whether producing, not producing
or temporarily abandoned); and (B) all water source, water injection and other injection or disposal wells and systems;

 

(iv) all
facilities, pipelines, gathering systems, equipment, fixtures, inventory, spare parts, tools and other personal property appurtenant
to the wells described in (g) (iii) above and dedicated to operations on a Lease;

 

    	31

    	 

    

 

(v) all
surface and subsurface rights, easements, rights-of-way, usage rights, licenses, leases, and rights of access, ingress and egress
pertaining to the lands covered by the Leases;

 

(vi) the
Concession Agreement and all Material Agreements primarily used or primarily held for use in connection with the production, gathering,
treatment, processing, storage, sale, disposal and other handling of Hydrocarbons or produced water from the Leases;

 

(vii) all
Permits, orders and authorizations issued by governmental authorities, and any written or oral contract or agreement (including
farm-in and farm-out agreements, participation, exploration and development agreements, drilling contracts and service agreements,
crude oil, condensate and natural gas purchase and sale, gathering, transportation and marketing agreements, joint operating agreements,
balancing agreements, unitization agreements, Unit operating agreements; processing agreements, facilities or equipment leases,
and other similar contracts), but only insofar as each (A) affects, covers, includes or pertains to the Assets, including the
ownership, use or exploitation thereof; and/or (B) provides any right or benefit, or contains or results in any undertaking, liability
or obligation with respect to, the Assets; and

 

(viii) all
files, records, and data relating to the Assets described in clauses (i) through (vii) above, which records shall include: lease
records; well records; division order records; well files; title records (including abstracts of title, title opinions and memoranda,
and title curative documents); engineering records; geological and geophysical data (including seismic data) and all technical
evaluations, interpretive data and technical data and information relating to the other Assets; maps; production records; electric
logs; core data; pressure data; decline curves and graphical production curves; reserve reports; environmental reports and records;
appraisals, joint interest billing decks and other partner details, archeological surveys, surface damage agreements, right of
ways, electrical supply agreements, lease operating statements and Asset Tax records; provided, however, that all e-mails and
other electronic files on the Company’s servers and networks relating to the items referenced in this clause (viii) and
in clauses (i) through (vii) above, in each case, shall be excluded.

 

(h) “Basket”
is defined in Section 13(e)(ii).

 

(i) “Benefit
Plan(s)” means (i) any Pension Plan, Welfare Plan, bonus, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, stock appreciation, phantom stock, retirement, vacation, leave of absence, severance, salary continuation,
disability, death benefit, hospitalization, medical, dependent care, cafeteria, employee assistance, scholarship, employment,
fringe benefit or other similar agreement, plan, program, arrangement or understanding (whether or not covered under Section 3(3)
of ERISA and whether or not legally binding) that is sponsored, maintained, contributed to or required to be contributed to by
the Company and as to which the Company has or may have any obligation or liability, contingent or otherwise, thereunder to or
for current or former partners, employees, directors or individual consultants and (ii) all employment, consulting, non-competition,
employee non-solicitation, employee loan or other compensation agreements or arrangements.

 

    	32

    	 

    

 

(j) “Business
Day” means any day other than Saturday, Sunday or any other day on which banks located in the State of Oklahoma are authorized
or obligated to close.

 

(k) “capital
expenditures” is defined in Section 8(b).

 

(l) “Claimant”
is defined in Section 15(f).

 

(m) “Closing”
and “Closing Date” shall have the meaning set forth in Section 2(d).

 

(n) “Closing
Tax Certificate” shall have the meaning set forth in Section 9(g).

 

(o) “Code”
means the Internal Revenue Code of 1986, as amended.

 

(p) “Company”
is defined in the introductory paragraph.

 

(q) “Concession
Agreement” means the Lease Acquisition and Exploration Agreement, made and entered into as of September 21, 2005, by and
between the Osage Tribe of Indians of Oklahoma and the Company as approved by Tribal Resolution No. 31-1240, as amended from time
to time.

 

(r) “Confidential
Information” is defined in Section 9(e).

 

(s) “Defensible
Title” means, as to an Asset, such title of the Company that: (i) is deducible of record from the records of the county
in which the property is located, and in the case of tribal leases, from the records of the applicable office of the Bureau of
Indian Affairs; and (ii) is free and clear of liens and material encumbrances and defects, except for Permitted Encumbrances.

 

(t) “Distribution
Amount” is set forth in Exhibit A.

 

(u) “Effective
Date” means January 1, 2014.

 

(v) “Environmental
Claim” means any claim, demand, suit, action, cause of action, proceeding, investigation or notice to the Company by any
Person or entity alleging any potential liability (including potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, personal injuries, or penalties) arising out of, based on, or resulting from (i) the
presence, or Release into the environment, of any Hazardous Substance at any location, whether or not owned, leased, operated
or used by the Company, and (ii) circumstances forming the basis of any violation, or alleged violation, of any applicable Environmental
Law.

 

(w) “Environmental
Defect” has the meaning provided in Section 10(b)(v).

 

    	33

    	 

    

 

(x) “Environmental
Laws” means all applicable federal, state or local laws, statutes, codes, ordinances, permits, licenses, rules, regulations
and common law in effect as of the date hereof, and any judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment, relating to the environment or to the emission, discharge, release, threatened
release, use, treatment, storage, disposal, transportation or handling of pollutants, contaminants or industrial, toxic or hazardous
substances, wastes or materials. Environmental Laws include, but are not limited to: the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Clean
Water Act, the Clean Air Act, the Federal Water Pollution Control Act, the Oil Pollution Control Act, the Endangered Species Act,
and the Safe Drinking Water Act, as such acts may have been amended or supplemented from time to time, the state and local counterparts
or equivalents of all such acts, and all rules, regulations and orders adopted under any such statutes.

 

(y) “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

(z) “Excluded
Assets” means all real and personal property of the Company which is not an Asset as defined herein and all rights, titles,
liabilities and interests related thereto. In particular, all cash held by or for the benefit of the Company derived from production
from the Assets for periods prior to the Effective Date shall remain the property of the Sellers.

 

(aa) “from
and attributable” is defined in Section 2(c)(i)(B).

 

(bb) “Hazardous
Substance” means (i) chemicals, pollutants, contaminants, wastes, toxic and hazardous substances, and oil and petroleum
products, (ii) any substance that is or contains asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum
or petroleum-derived substances or wastes, chlorides, radon gas or related materials or lead or lead-based paint or materials,
(iii) any substance, material or waste that requires investigation, removal or remediation under any Environmental Law, or is
defined, listed or identified as hazardous, toxic or otherwise dangerous under any Environmental Laws or (iv) any substance that
is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous.

 

(cc) “Hedge
Transactions” is defined in Section 5(m).

 

(dd) “Hydrocarbons”
means oil, bitumen and products derived therefrom, synthetic crude oil, petroleum, natural gas, natural gas liquids, coal bed
methane, and any and all other substances produced in association with any of the foregoing, whether liquid, solid, or gaseous.

 

(ee) “incurred”
is defined in Section 2(c)(i)(B).

 

(ff) “Indemnity
Cap” is defined in Section 13(e)(iii).

 

    	34

    	 

    

 

(gg) “Individual
Claim” is defined in Section 13(e)(i).

 

(hh) “IRS”
means the Internal Revenue Service.

 

(ii) “Knowledge
of Sellers” of a fact or matter means the knowledge of any of the Sellers, or an employee of Sellers (including, without
limitation, Matson) who has devoted substantial attention to matters of such nature during the ordinary course of his employment
with the Sellers.

 

(jj) “Laws”
is defined in Section 5(f).

 

(kk) “Leases”
means the Oil and Gas Leases issued pursuant to the Concession Agreement and described in Exhibit B.

 

(ll) “Lien”
means any lien, mortgage, pledge, security interest, clouds-on-title, options, or imperfections of title.

 

(mm) “Losses”
is defined in Section 13(a).

 

(nn) “Majority
of Sellers” means Sellers representing greater than fifty percent (50%) of the voting Membership Interests.

 

(oo) “Material
Adverse Change” means any actions, suits, arbitrations, proceedings, facts, circumstances, events, conditions or developments
that, individually or in the aggregate, have had or would be reasonably likely to have a Material Adverse Effect.

 

(pp) “Material
Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or business prospects
of the Person referenced, taken as a whole, which shall exceed $50,000, except for (i) any such effects resulting from changes
affecting the United States economy, financial and capital markets or the oil and gas industry in general, or (ii) changes in
the prices generally paid for oil, natural gas or equivalents.

 

(qq) “Material
Agreements” is defined in Section 5(h).

 

(rr) “Matson”
means Shane E. Matson.

 

(ss) “Membership
Interests” is defined in the recitals.

 

(tt) “NG”
means Nadel and Gussman, LLC.

 

(uu) “OL&C”
is defined in Section 9(j)(i).

 

(vv) “Ordinary
Course of Business” means in the ordinary course of business consistent with past custom and practice.

 

(ww) “Party”
and “Parties” shall have the meaning provided in the introductory paragraph.

 

    	35

    	 

    

 

(xx) “Pension
Plan(s)” means any “employee pension benefit plan as such term is defined in Section 3(2) of ERISA (whether or not
covered by Section 3(20 of ERISA).

 

(yy) “Performance
Deposit” shall have the meaning set forth in Section 2(b).

 

(zz) “Permit”
shall have the meaning set forth in Section 5(f).

 

(aaa) “Permitted
Encumbrances” means, with respect to any Asset, any and all of the following, in regard to (i), (ii) and (iii) below only
insofar as such were in effect on or before the Effective Date (whether or not filed of record): (i) royalties, overriding royalties,
production payments, reversionary interests, convertible interests, net profits interests and similar burdens encumbering an Asset;
(ii) consents to assignment and similar contractual provisions affecting transfer of the Asset, provided that such consents, if
applicable, have been obtained prior to Closing; (iii) preferential rights to purchase and similar contractual provisions affecting
the Asset, provided that such preferential rights, if applicable, have expired or been waived prior to Closing; (iv) rights reserved
to or vested in a governmental authority having jurisdiction to control or regulate the Asset, and all applicable Laws of such
governmental authorities; (v) easements, rights-of-way, servitudes, sub-surface leases, equipment, pipelines, and utility lines
on, over and through the Asset, provided that they do not materially interfere with the operation of the Asset in the manner such
operations were conducted as of the Closing; (vi) terms and conditions of unitization, communitization, and pooling agreements,
and any other similar agreements affecting the Asset; (vii) terms and conditions of governmental licenses and Permits affecting
the Asset; (viii) Liens for Taxes or assessments not yet delinquent or, if delinquent, being contested in good faith in the Ordinary
Course of Business; (ix) Liens of operators, mechanics and materialmen relating to obligations not yet delinquent or, if delinquent,
being contested in good faith in the Ordinary Course of Business; (x) Liens created by surface owners that do not materially interfere
with the use or ownership of the Assets; (xi) zoning Laws, restrictions, surface usage covenants and restrictions, and building
and other land use Laws; and (xii) all other Liens, contracts, obligations, defects and irregularities affecting the Assets, provided
that the cumulative effect of such items does not materially interfere with the ownership, operation, value or use of the Asset
affected thereby and that would not be considered material when applying general standards in the oil and gas industry.

 

(bbb) “Person”
means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust,
enterprise, unincorporated organization, or governmental authority.

 

(ccc) “Phase
I Environmental Assessment” means an assessment of the Company’s compliance with Environmental Laws consisting of
examination of the Company’s files and public documents, interviews of personnel of the Company and of other appropriate
persons, visual inspection of Company’s property, and NORM and asbestos surveys.

 

(ddd) “Preliminary
Adjusted Purchase Price” is defined in Section 2(c)(vii).

 

    	36

    	 

    

 

(eee) “Preliminary
Settlement Statement” is defined in Section 2(c)(vii).

 

(fff) “Proceeding”
is defined in Section 5(i).

 

(ggg) “Property
Costs” is defined in Section 2(c)(i)(A).

 

(hhh) “Prospect
Interests” mean all the lands depicted on Exhibit D.

 

(iii) “Purchaser”
is defined in the introductory paragraph.

 

(jjj) “Purchaser’s
Closing Certificate” is defined in Section 10(c)(ii).

 

(kkk) “Purchaser
Indemnified Parties” is defined in Section 13(b).

 

(lll) “Records”
is defined in Section 7.

 

(mmm) “Reed
Litigation” is defined in Section 9(j)(ii).

 

(nnn) “Release”
means any release, disposal, discharge, injection, spill, leak, pumping, dumping, emission, escape, dispersal, leaching, migration
or placing into, through or upon the environment, including any land, soil, surface water, ground water or air.

 

(ooo) “Respondent”
is defined in Section 15(f).

 

(ppp) “Retained
Liabilities” means all Losses arising out of, incident to or in connection with the ownership, operation, use, exploitation
or maintenance of any of the Excluded Assets and, except as provided in Section 9(j), all costs, expenses and liabilities relating
in any way to the matters set forth on Schedule 5(i).

 

(qqq) “Securities
Act” is defined in Section 6(g)(ii).

 

(rrr) “Sellers”
is defined in the introductory paragraph.

 

(sss) “Seller
Indemnified Parties” is defined in Section 13(d).

 

(ttt) “Seller’s
Closing Certificate” is defined in Section 10(b)(ii).

 

(uuu) “Sharing
Ratio” shall be as set forth in Exhibit A.

 

(vvv) “Surviving
Covenants” is defined in Section 12.

 

(www) “Tax”
or “Taxes” means any and all taxes, including any interest, fines, penalties or other additions to tax that may become
payable in respect thereof, imposed by any federal, state, local or foreign government or any agency or political subdivision
of any such government, which taxes shall include, without limiting the generality of the foregoing, all income or profits taxes,
payroll and employee withholding taxes, unemployment insurance taxes, social security taxes, severance taxes, license charges,
taxes on stock, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation
and other obligations of the same or of a similar nature to any of the foregoing.

 

    	37

    	 

    

 

(xxx)
“Tax Proceeding” is defined in Section 9(h).

 

(yyy) “Tax
Return” means any report, return (including any information return), declaration, statement, bill, schedule, claim for refund
or written information required to be supplied to a federal, state, local or foreign taxing authority in connection with Taxes,
including any amendments thereof or any schedule or attachment thereto.

 

(zzz) “Transition
Services Agreement” is defined in Section 9(a).

 

(aaaa)
“Welfare Plan(s)” means any employee welfare benefit plan” as such term is defined in Section 3(1) of ERISA
(whether or not covered by Section 3(1) of ERISA).

 

(bbbb) “Wells”
means all wells for the purpose of discovering or producing Hydrocarbons or disposing of fluids produced in connection with the
production of Hydrocarbons located on the Leases, including the Wells described on Exhibit B.

 

[Signatures
Appear On Following Pages]

 

    	38

    	 

    

 

IN
WITNESS WHEREOF, the undersigned parties have executed this Agreement as of the date first set forth above.

 

	PURCHASER:	BANDOLIER ENERGY, LLC
	 	 
	 	By:	/s/ Shane E. Matson
	 	Name:	Shane E. Matson
	 	Title:	President

 

	SELLERS:	NADEL AND GUSSMAN, LLC
	 	 	 
	 	By:	Nadel
    and Gussman Management, LLC,
	 	 	Its
    Manager

 

	 	By:	/s/
    James F. Adelson
	 	 	James
    F. Adelson, Manager

 

	 	 	/s/
    Charles Wickstrom
	 	 	CHARLES
    W. WICKSTROM

 

	 	 	/s/ Shane E. Matson
	 	 	SHANE E.MATSON

 

	COMPANY:	SPYGLASS ENERGY GROUP, LLC
	 	 	 
	 	By:	Nadel
    and Gussman Management, LLC,
	 	 	its
    Manager

 

	 	By:	/s/
    James F. Adelson
	 	 	James
    F. Adelson, Manager

 

    	39

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