Document:

TERMINATION
AGREEMENT

 

This
Termination Agreement, dated as of December 22, 2018 (the “Termination Agreement”), by and among ZHUOLU
JINXIN MINING CO., LTD., a limited company organized under the laws of the People’s Republic of China (the “VIE
Company”); ZHANGJIAKOU TONGDA MINING SERVICE CO., LTD., a limited company organized under the laws of the People’s
Republic of China (“Adamant Subsidiary”); ADAMANT DRI PROCESSING AND MINERALS GROUP, a publicly traded
Nevada corporation and, through one or more wholly-owned subsidiaries, owner of all of the outstanding shares of the Adamant Subsidiary
(the “Adamant”); and each of the SHAREHOLDERS of Adamant set forth on Schedule 1 attached hereto
and signatory hereto (each, individually, an “Exiting Shareholder” and collectively, the “Exiting
Shareholders”). The Exiting Shareholders, together with the Vie Company and Adamant, the “Parties”,
and each, a “Party”).

 

WHEREAS,
the Adamant Subsidiary, the Exiting Shareholders and the VIE Company previously entered into the VIE Agreements (as defined herein),
pursuant to which the Adamant Subsidiary obtained the right and obligation to manage all aspects of the operations of the VIE
Company, which scope of authority included, but was not limited to, the right to make all major decisions, the right to manage
the assets, capital and finances of the VIE Company, authority for all decisions related to human resources, daily operation management
and technical support;

 

WHEREAS,
under the VIE Agreements, the board of directors and shareholders of the VIE Company were precluded from taking any actions without
the consent of the Adamant Subsidiary and, for accounting purposes, the operations were consolidated on the financial statements
of Adamant; and

 

WHEREAS,
the Parties wish to terminate the VIE Agreements and unwind the arrangements contemplated by the VIE Agreements, (i) returning
control of the operations to the board and shareholders of the VIE Company and (ii) releasing the pledges of, and options to purchase,
all of the equity in the VIE Company.

 

NOW,
THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

1.
Termination of the VIE Agreements.

 

(a)
Subject to the terms and conditions of this Termination Agreement, the VIE Agreements are each hereby terminated as of the date
first written above (the “Termination Date”). From and after the Termination Date, the VIE Agreements will be of no
further force or effect, and the rights and obligations of each of the Parties thereunder shall terminate.

 

(b)
“VIE Agreements” means each of: (a) that certain Management Entrustment Agreement dated as of May 9, 2011 by
and between ZhangJiaKou TongDa Mining Service Co., Ltd. and Zhuolu Jinxin Mining Co., Ltd.; (b) those certain Exclusive Purchase
Option Agreements dated as of May 9, 2011 by and among ZhangJiaKou TongDa Mining Service Co., Ltd., Zhuolu Jinxin Mining Co.,
Ltd and each of its shareholders; (c) those certain Powers of Attorney, dated as of May 9, 2011 from each of the shareholders
of Zhuolu Jinxin Mining Co., Ltd; and (d) those certain Equity Pledge Agreements dated as of May 9, 2011 between ZhangJiaKou TongDa
Mining Service Co., Ltd. and each of the shareholders of Zhuolu Jinxin Mining Co., Ltd.

 

    	 	 	 

    	 

    

 

2.
Termination Payment.

 

(a)
As material consideration for the covenants, agreements, and undertakings of the Parties under this Termination Agreement, contemporaneously
with the execution of this Termination Agreement the Exiting Shareholders hereby assign, transfer and deliver, for cancellation
upon surrender, the shares of Adamant indicated on Schedule 1, free and clear of all security interests, liens, pledges,
encumbrances, charges, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer or adverse
claims of any kind, nature, or description whatsoever (“Liens”), (as defined below) (the “Termination
Payment”).

 

(b)
It is acknowledged and confirmed by the VIE Company that the Exiting Shareholders shall receive equity in the VIE Company in accordance
with negotiated arrangements among the Exiting Shareholders and the VIE Company (the “VIE Share Issuance”),
and, as such, will derive substantial direct and indirect benefits from the transactions contemplated by the Termination Agreement.
Payment of the Termination Payment by the Exiting Shareholders is a condition precedent to the VIE Share Issuance.

 

(c)
The Exiting Shareholders each shall, and agrees to cooperate fully with the other Parties to, effect: (a) delivery of the physical
possession of the certificates of registration (original) of the Adamant Shares; (b) provision of the proper record relating to
the cancellation of such Adamant Shares; and (c) such approval and examination, registration and filling procedures required by
the laws of the PRC.

 

3.
Mutual Release.

 

(a)
In consideration of the covenants, agreements and undertakings of the Parties under this Termination Agreement, each Party, on
behalf of itself and its respective present and former parents, subsidiaries, affiliates, officers, directors, shareholders, members,
successors and assigns (collectively, “Releasors”) hereby releases, waives and forever discharges the other
Parties and their respective present and former, direct and indirect, parents, subsidiaries, affiliates, employees, officers,
directors, shareholders, members, agents, representatives, permitted successors and permitted assigns (collectively, “Releasees”)
of and from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings,
obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extents, executions, claims, and demands, of every kind and nature whatsoever, whether now known
or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty or equity (collectively,
“Claims”), which any of such Releasors ever had, now have, or hereafter can, shall, or may have against any
of such Releasees for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of time through the date
of this Termination Agreement arising out of or relating to the VIE Agreements, except for any Claims relating to rights and obligations
preserved by, created by or otherwise arising out of this Termination Agreement. Notwithstanding anything to the contrary contained
herein, for avoidance of doubt it is acknowledged and agreed that the VIE Company, as Releasor, hereby releases, waives and forever
discharges Adamant, Adamant Subsidiary and related Releasees from Claims arising out of any contractual arrangements entered into
by VIE Company and third parties at any time during the effectiveness of the VIE Agreements.

 

    	 	 	 

    	 

    

 

(b)
Each Party, on behalf of itself and each of its respective Releasors, understands that it may later discover Claims or facts that
may be different than, or in addition to, those that it or any other Releasor now knows or believes to exist regarding the subject
matter of the release contained in this Section, and which, if known at the time of signing this Termination Agreement, may have
materially affected this Termination Agreement and such Party’s decision to enter into it and grant the release contained
in this Section. Nevertheless, the Releasors intend to fully, finally and forever settle and release all Claims that now exist,
may exist or previously existed, as set forth in the release contained in this Section, whether known or unknown, foreseen or
unforeseen, or suspected or unsuspected, and the release given herein is and will remain in effect as a complete release, notwithstanding
the discovery or existence of such additional or different facts. The Releasors hereby waive any right or Claim that might arise
as a result of such different or additional Claims or facts.

 

4.
Representations and Warranties. Each Party hereby represents and warrants to the other Party that:

 

(a)
It has the requisite power and authority to enter into this Termination Agreement and to perform its obligations hereunder and
to consummate the transactions contemplated hereby; and has taken all actions required by law, its organizational and governing
documents (if applicable), or otherwise to authorize the execution and delivery of this Agreement.

 

(b)
This Termination Agreement has been executed and delivered by such Party and (assuming due authorization, execution, and delivery
by the other Party hereto) constitutes the legal, valid and binding obligation of such Party, enforceable against such Party in
accordance with its terms, except as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar
laws and equitable principles related to or affecting creditors’ rights generally or the effect of general principles of
equity.

 

(c)
The execution of this Termination Agreement, the consummation of the transactions contemplated by this Termination Agreement and
the performance of its respective obligations under this Termination Agreement will not: (i) violate any organizational or governing
documents of such Party, as applicable, (ii) require the consent of any third party or governmental entity under any applicable
laws; (iii) with or without notice, lapse of time or both, result in the breach of any term or provision of, constitute a default
under, or terminate, accelerate or modify the terms of any indenture, mortgage, deed of trust, or other material agreement, or
instrument to which such Party is a party or to which any of its assets, properties or operations are subject; (iv) violate any
provision of law, statute, rule, regulation or executive order to which such Party is subject; or (v) violate any judgment, order,
writ or decree of any court applicable to such Party.

 

    	 	 	 

    	 

    

 

(d)
It knows of no Claims against the other Party relating to or arising out of the VIE Agreements that are not covered by the release
contained in Section 4 and has neither assigned nor transferred any of the Claims released herein to any person or entity and
no person or entity has subrogated to or has any interest or rights in any Claims.

 

EXCEPT
FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTIONS 4 AND 5 OF THIS TERMINATION AGREEMENT, EACH PARTY HERETO
ACKNOWLEDGES THAT, IN ENTERING INTO THIS TERMINATION AGREEMENT, IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY
THE OTHER PARTY, OR ANY OTHER PERSON ON SUCH OTHER PARTY’S BEHALF, EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 5.

 

5.
Additional Representation and Warranties of Exiting Shareholders. Each of the Exiting Shareholders hereby represents and
warrants to the other Parties that:

 

(a)
It is the record and exclusive beneficial owner of, and has paid in full the subscribed registered capital with respect to, the
shares of Adamant’s common stock (the “Adamant Shares”) set forth opposite such shareholder’s name
on Schedule 1, with the right and authority to transfer freely such Adamant Shares. As of the date hereof, the Adamant
Shares are free and clear of all Liens.

 

(b)
Upon delivery of any certificate or certificates duly assigned, representing the same as herein contemplated, Adamant will receive
good title to the Adamant Shares, free and clear of all Liens.

 

THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 5 SHALL SURVIVE FOR THE PERIOD EQUAL TO THE APPLICABLE STATUTE OF LIMITATIONS
RELATING TO SAID MATTERS.

 

6.
Miscellaneous.

 

(a)
Confidentiality. The Parties agree and shall cause their relevant personnel to keep strict confidence of all the confidential
matters of the other Parties hereto except as required to be disclosed pursuant to U. S. securities laws,. They shall not disclose
the aforesaid information to any third party unless it is required by the explicit provision of law, or the instruction of judicial
or governmental agencies or with consent of the other party, otherwise, the disclosing party shall bear the relevant legal consequences.
The confidentiality obligation of the parties shall survive the termination of this Termination Agreement.

 

(b)
Public Announcements and Filings. Except as required by applicable U.S. securities laws, none of the parties will issue
any report, statement or press release to the general public, trade or trade press, or to any third party (other than its advisors
and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Termination
Agreement and the transactions contemplated hereby, except as may be mutually agreed by the parties. Copies of any such filings,
public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory authorities, shall
be delivered to each party prior to the release thereof.

 

    	 	 	 

    	 

    

 

(c)
Governing Law; Dispute Resolution.

 

(i)
The execution, effectiveness, construction, performance, amendment and termination of this Termination Agreement and the resolution
of disputes hereunder shall be governed by the formally published and publicly available laws of the PRC. Matters not covered
by formally published and publicly available laws of the PRC shall be governed by international legal principles and practices.

 

(ii)
This parties agree that any dispute arising from or in relation to this Agreement shall first be settled by the friendly negotiation
of both parties. If the negotiation fails within 45 days, each party shall have the right to file the dispute with China International
Economic and Trade Arbitration Commission (“CIETAC”) in Beijing for arbitration pursuant to the currently effective
arbitration rules of CIETAC at the time of application. This arbitration shall be final and bind all parties and shall be enforceable
in any court of competent jurisdiction. The arbitration fees shall be borne by the losing party

 

(iii)
Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration
of any dispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective
rights under this Agreement and perform their respective obligations under this Agreement.

 

(d)
Further Actions. Each of the Parties shall, and shall cause its respective affiliates to, from time to time at the
request of the other Party, without any additional consideration, furnish the other Party such further information or assurances,
execute and deliver such additional documents, instruments and conveyances, and take such other actions and do such other things,
as may be necessary or desirable to carry out the provisions of this Termination Agreement and give effect to the transactions
contemplated hereby.

 

(e)
Specific Performance. Each Party acknowledges and agrees that (i) a breach or threatened breach by such party of any of
its obligations under this Termination Agreement would give rise to irreparable harm to the other party for which monetary damages
would not be an adequate remedy and (ii) in the event of a breach or a threatened breach by such Party of any such obligations,
the other Party will, in addition to any and all other rights and remedies that may be available to such party at law, in equity
or otherwise in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction,
specific performance and any other relief that may be available from a court of competent jurisdiction, without any requirement
to post a bond or other security, and without any requirement to prove actual damages or that monetary damages will not afford
an adequate remedy. Each Party agrees that it shall not oppose or otherwise challenge the appropriateness of equitable relief
or the entry by a court of competent jurisdiction of an order granting equitable relief, in either case, consistent with the terms
of this Section 6(g).

 

    	 	 	 

    	 

    

 

(f)
Third Party Beneficiaries. Except as expressly set forth in the second sentence of this Section 6(f), this Termination
Agreement benefits solely the Parties hereto and their respective permitted successors and permitted assigns, and nothing in this
Termination Agreement, express or implied, confers on any other person or entity any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Termination Agreement. The Parties hereby designate all Releasees as third-party
beneficiaries of Section 3, having the right to enforce such Sections.

 

(g)
Assignment. No Party may assign, transfer or delegate any or all of its rights or obligations under this Termination Agreement
without the prior written consent of the other Party; provided, however, that any Party may assign this Termination Agreement
to a successor-in-interest by consolidation, merger or operation of law or to a purchaser of all or substantially all of the Party’s
assets. No assignment will relieve the assigning party of any of its obligations hereunder. Any attempted assignment, transfer
or other conveyance in violation of the foregoing will be null and void. This Termination Agreement will inure to the benefit
of and be binding upon each of the Parties and each of their respective permitted successors and permitted assigns.

 

(h)
Entire Agreement. This Termination Agreement represents the entire agreement between the Parties relating to the subject
matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject
matter.

 

(i)
Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether
conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance
of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. This Agreement may by amended only by a writing signed by all parties hereto.

 

(j)
Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all
of which taken together shall be but a single instrument. Such executions may be transmitted to the Company and/or the other Members
by facsimile or other electronic transmission (e.g. “pdf” or “tiff” or any electronic signature
complying with the U.S. federal ESIGN Act of 2000, including www.docusign.com), and such facsimile or other electronic
execution shall have the full force and effect of an original signature.

 

[Remainder
of Page Intentionally Left Blank; Signature Page follows]

 

    	 	 	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Termination Agreement as of the date first-above written.

 

	ZHUOLU JINXIN MINING CO., LTD.	 	ZHANGJIAKOU
    TONGDA MINING SERVICE CO., LTD.
	 	 	 	 	 
	By:	/s/
    Jiazhen Liu	 	By:	/s/
    Jiazhen Liu
	Name:	Jiazhen
    Liu	 	Name:	Jiazhen
    Liu
	Title:	Legal
    Representative	 	Title:	Legal
    Representative
	 	 	 	 	 
	ADAMANT
    DRI PROCESSING AND MINERALS GROUP	 	 	 
	 	 	 	 	 
	By:	/s/
    Ethan Chuang	 	/s/ Changkui Zhu 
	Name:	Ethan
    Chuang	 	CHANGKUI ZHU 
	Title:	President	 	 	 
	 		 	On
    behalf of himself and the following Exiting Shareholders:
	 		 	 	 
	 	 	 	Dongli
    Sun
	 	 	 	Idea
    Vantage Limited
	 	 	 	Meijie
    Wang 
	 	 	 	Southern
    Sleek Limited
	 	 	 	Southern
    Shine Limited
	 	 	 	Sui
    Feng Limited
	 	 	 	Talent
    Horse Limited
	 	 	 	Talent
    Lead Investments Limited
	 	 	 	Trophy
    Journey Limited
	 	 	 	True
    Sino Enterprises Limited
	 	 	 	True
    South Limited
	 	 	 	United
    Ample International Limited
	 	 	 	Wealth
    Sino Trading Limited
	 	 	 	Wisdom
    Thrive Limited
	 	 	 	Xingwang
    Shao

 

[Signature
Page – Termination Agreement]

 

    	 	 	 

    	 

    

 

Schedule
1

 

Existing
Shareholders

 

	Shareholder
    Name	 	Address	 	Adamant
    Shares	 
	Dongli
    Sun
	 

     	No.
    55, Liulijing Xili

    Chongwen District, Beijing, PRC	 

     	 

     	

    111,499	 

     
	 	 	 	 	 	 	 
	Idea
    Vantage Limited	 

     

     	c/o
    Jiazhen Liu

    Section 1, Apt 609, Building 7, Quxizhongli, Cheng

    Hedong District, Tianjin, PRC	 

     

     	 

     

     	

     

    2,049,828	 

     

     
	 	 	 	 	 	 	 
	Meijie
    Wang
	 

     	78-15,
    Pinganli, Gutaqu District, Jinzhou

    Liaoning, PRC.	 

     	 

     	

    66,899	 

     
	 	 	 	 	 	 	 
	Southern
    Sleek Limited	 

     

     	c/o
    Dengwei Gao

    No. 14 Xiaoshichang, Jingwei Road

    Hebei District, Tianjin, PRC	 

     

     	 

     

     	

     

    116,833	 

     

     
	 	 	 	 	 	 	 
	Splendid
    Shine Limited
	 

     

     	c/o
                                         Fengqin Ji

                                 #7,
                                 Apt 201, Building One
 97 Guangdongshanzhuang Rd.
 Hedong District, Tianjin, PRC
	 

     

     	 

     

     	

     

    436,900	 

     

     
	 	 	 	 	 	 	 
	Sui
    Feng Limited	 

     	c/o
    Junyan Tian

    Hedong District, Tianjin, PRC	 

     	 

     	

    452,641	 

     
	 	 	 	 	 	 	 
	Talent
    Horse Limited
	 

     

     	c/o
    Yuqin Wei

    No. 3 Zhongxin Yixiang, Xiaodianzi, Zhangjiawo

    Xiqing District, Tianjin, PRC	 

     

     	 

     

     	

     

    80,804	 

     

     
	 	 	 	 	 	 	 
	Talent
    Lead Investments Limited	 

     

     	c/o
    Shaofeng Han

    No. 6, Nanjingli Huzhuangzi, Shuanggang

    Jinnan District, Tianjin, PRC	 

     

     	 

     

     	

     

    80,804	 

     

     
	 	 	 	 	 	 	 
	Trophy
    Journey Limited
	 

     

     	c/o
    Lixin Shi

    12818-3-501 Shiyou, North street, Nanpi County

    Cangzhou, Hebei Province, PRC	 

     

     	 

     

     	

     

    291,383	 

     

     
	 	 	 	 	 	 	 
	True
    Sino Enterprises Limited
	 

     

     	c/o
    Huiqin Wang

    1-505 Haixing Huayuan, Shizilin Street

    Hebei District, Tianjin, PRC	 

     

     	 

     

     	

     

    90,248	 

     

     
	 	 	 	 	 	 	 
	True
    South Limited	 

     

     	c/o
    Xia Wang

    Section 1, Apt.101, Building 2

    Shiji Garden, Nanmenwai St.	 

     

     	 

     

     	

     

    442,497	 

     

     
	 	 	 	 	 	 	 
	United
    Ample International Limited
	 

     

     	c/o
    Wenyan Yang

    11-3-407, Guangxia Zhouli, Yangcun

    Tianjin, PRC	 

     

     	 

     

     	

     

    166,155	 

     

     
	 	 	 	 	 	 	 
	Wealth
    Sino Trading Limited	 

     

     	c/o
    Changqing Han

    Section 65, Apt. 105 Yilin Rd., Kuanfuli

    Hexi District, Tianjin, PRC	 

     

     	 

     

     	

     

    704,147	 

     

     
	 	 	 	 	 	 	 
	Wisdom
    Thrive Limited
	 

     

     	c/o
    Jianxin Wei

    82-1-101, Tangu, Tangu East Street, Changan District

    Shjiazhuang, Hebei Province, PRC	 

     

     	 

     

     	

     

    19,939	 

     

     
	 	 	 	 	 	 	 
	Xingwang
    Shao	 

     	No.
    47, Caiyuan Street, Tanshan District, Tanan

    Shandong, PRC	 

     	 

     	

    44,600	 

     
	 	 	 	 	 	 	 
	Changkui
    Zhu	 

     	Section
    1, Apt.202, Shenlan Apartment Building 2,

    Nankai District, Tianjin,	 

     	 

     	

    223,041	 

     
	 	 	 	 	 	 	 
	 	 	TOTAL
    ADAMANT SHARES:	 	 	5,378,219Exhibit

Exhibit 10.1

TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this “Agreement”) is dated as of December 21, 2018, by and among Earthstone Energy, Inc., a Delaware corporation (“Acquiror Parent”), Earthstone Energy Holdings, LLC, a Delaware limited liability company (“Acquiror”), and Sabalo Holdings, LLC, a Delaware limited liability company (“Contributor”). Acquiror Parent, Acquiror and Contributor are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.” Capitalized terms used but not defined herein have the respective meanings given to them in the Contribution Agreement (as defined below).
WHEREAS, the Parties entered into that certain Contribution Agreement, dated as of October 17, 2018 (the “Contribution Agreement”); and
WHEREAS, the Special Committee, the Acquiror Parent Board and the board of managers of Contributor have determined that it is in the best interest of their respective companies, stockholders and members to terminate the Contribution Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements herein set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
1.Termination. Pursuant to Section 10.1(a) of the Contribution Agreement, the Parties hereby agree that the Contribution Agreement, including all schedules and exhibits thereto, and any ancillary agreements contemplated thereby or entered pursuant thereto (collectively, the “Transaction Documents”), are hereby terminated in their entirety effective immediately as of the date hereof (the “Termination Time”) and, except as set forth in Section 10.2 of the Contribution Agreement, shall be of no further force or effect whatsoever (the “Termination”).
2.    Expense Reimbursement. Within five (5) Business Days from the date of this Agreement, Acquiror agrees to (a) pay Contributor an amount equal to One Million Six Hundred Thirty-Four Thousand Ninety-Eight Dollars and no/100 ($1,634,098.76) (the “Reimbursement Expense”) as reimbursement for reasonable, documented out-of-pocket costs and expenses incurred by Contributor in connection with the Contribution Agreement, and (b) pay Contributor One Million Dollars ($1,000,000) (the “Shad Payment”) in connection with the payment that Contributor has agreed to pay to Shad Permian, LLC (“Shad”) to terminate the Shad Letter Agreement dated October 17, 2018 by and among, Shad, Contributor and Sabalo Energy, LLC. Within 60 days from the date of this Agreement, Acquiror agrees to pay Contributor up to an additional Five Hundred Thousand Dollars and no/100 ($500,000.00) for any reasonable, documented out-of-pocket costs and expenses incurred by Contributor in connection with the Contribution Agreement that exceed the amount of the Reimbursement Expense and which Contributor provides a written invoice containing reasonable supporting detail. Acquiror agrees to pay such amounts in cash by wire transfer of immediately available funds to the account designated in writing by Contributor as specified on Schedule A hereto. 
3.    Mutual Release; Disclaimer of Liability. Each of Acquiror Parent and Acquiror and Contributor, each on behalf of itself and each of its respective successors, Subsidiaries, Affiliates, 

assignees, officers, directors, employees, Representatives, agents, attorneys, auditors, stockholders, members, managers and advisors and the heirs, successors and assigns of each of them (the “Releasors”), does, to the fullest extent permitted by Law, hereby fully release, forever discharge and covenant not to sue any other Party, any of their respective successors, Subsidiaries, Affiliates, assignees, officers, directors, employees, Representatives, agents, attorneys, auditors, stockholders, members, managers and advisors and the heirs, successors and assigns of each of them (collectively, the “Releasees”), from and with respect to any and all liability, claims, rights, actions, causes of action, suits, liens, obligations, accounts, debts, demands, agreements, promises, liabilities, controversies, costs, charges, damages, expenses and fees (including attorney’s, financial advisor’s or other fees) (“Claims”), howsoever arising, whether based on any Law or right of action, known or unknown, mature or unmatured, contingent or fixed, liquidated or unliquidated, accrued or unaccrued, which Releasors, or any of them, ever had or now have or can have or shall or may hereafter have against the Releasees, or any of them, in connection with, arising out of or related to the Transaction Documents or the transactions contemplated therein or thereby. The release contemplated by this Section 3 is intended to be as broad as permitted by Law and is intended to, and does, extinguish all Claims of any kind whatsoever, whether in Law or equity or otherwise, that are based on or relate to facts, conditions, actions or omissions (known or unknown) that have existed or occurred at any time to and including the Termination Time. Nothing in this Section 3 shall (a) apply to any action by any Party to enforce the rights and obligations imposed pursuant to this Agreement or (b) constitute a release by any Party for any Claim arising under this Agreement.
4.    Representations and Warranties. 
(a)    Each Party represents and warrants to the other that: (a) such Party has all requisite corporate or limited liability company power and authority to enter into this Agreement and to take the actions contemplated hereby; (b) the execution and delivery of this Agreement and the actions contemplated hereby have been duly authorized by all necessary corporate or other action on the part of such Party; and (c) this Agreement has been duly and validly executed and delivered by such Party and, assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes a legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and (ii) subject to principles governing the availability of equitable remedies (regardless of whether that enforceability is considered in a proceeding in equity or at law).
(b)    Contributor represents and warrants to the Acquiror Parent and Acquiror that Contributor and its Affiliates do not have in their respective possession any lease files; land files; well files; contract and surface right files; gas processing files; division order files; runsheets; take-offs; ownership reports; abstracts; title opinions; land surveys; non-confidential logs; maps; geological and engineering data and reports; data and records related to operations, health, environmental and safety, marketing and sales, and Tax and accounting matters; or files and any other books, records, data, files, maps, production and accounting records to the extent related to the assets of Acquiror (including notes relating thereto). 

5.    Acquiror Non-Compete.
(a)    From the Termination Time until the one (1) year anniversary of the Termination Time, Acquiror covenants and agrees that it will, and will cause its Affiliates (collectively, the “Restricted Persons”) to, refrain from partially or fully acquiring for its own account or for any Third Party, any interest in any Restricted Opportunity (as defined below) within the Designated Area (the “Non-Compete Assets”). Notwithstanding any provision of this Section 5 to the contrary, this Section 5 shall not apply to, limit or restrict in any way, any direct or indirect investment made by any Restricted Person (i) in any debt or equity securities of any Person (including without limitation any options, warrants or derivatives relating thereto) listed on a national securities exchange or actively trading in the public over-the-counter market to the extent such investment constitutes a passive investment, (ii) in any non-convertible debt (including without limitation any options, warrants or derivatives relating thereto) of any Person listed on a national securities exchange or actively traded in the public over-the-counter market, or (iii) the acquisition of any Restricted Opportunity by descent or devise.
(b)    As used herein “Restricted Opportunity” means any opportunity for the leasing, acquisition, farm-in, exploration, development, production, or any combination of the foregoing, of oil, gas or other Hydrocarbon leases and/or any overriding royalty interests, non-participating royalty interests, or any mineral fee interests in Hydrocarbons, including rights to royalties on production and rights to shut-in royalties, executive rights to lease, rights to produce, rights to delay rentals, rights to bonus payments, rights of reversion and any and all other rights relating to the ownership of mineral fee interests, in the Designated Area. Notwithstanding the foregoing, a Restricted Opportunity shall not include any transaction where the assets involved that are located in the Designated Area constitutes less than fifteen percent (15%) of the assets involved (either as to the number of acres or wells subject thereto or the value of such assets) in the transaction, and any assets in the area described above that are acquired as described in this provision shall be exempted from the restrictions in this Section 5.   
(c)    To the extent any Restricted Person breaches this Section 5, as the Contributor’s sole and exclusive remedy for such breach, Acquiror shall be obligated to, or to cause the applicable Restricted Person to, immediately offer to Contributor any acquired Non-Compete Assets, and Contributor shall have the right, but not the obligation, to acquire such Non-Compete Assets under the same terms and conditions as agreed to by such Restricted Person, and for the same consideration paid by such Restricted Person, together with any out-of-pocket expenses incurred by such Restricted Person in acquiring such Non-Compete Asset. Upon receipt of Contributor’s wire transfer of such amount, Acquiror shall, or shall cause such Restricted Person to assign to Contributor such Non-Compete Assets, pursuant to an assignment and bill of sale in a form to be mutually agreed upon between Contributor and such Restricted Person.
6.    Contributor Non-Compete. 
(a)    From the Termination Time until the one (1) year anniversary of the Termination Time, Contributor covenants and agrees that it will, and will cause its Affiliates (collectively, the “Contributor Restricted Persons”) to, refrain from partially or fully acquiring for its own account or for any Third Party, any interest in any Contributor Restricted Opportunity (as 

defined below) within the geographic area set forth on Schedule B attached hereto (the “Acquiror Designated Area”) (the “Acquiror Non-Compete Assets”). Notwithstanding any provision of this Section 6 to the contrary, this Section 6 shall not apply to, limit or restrict in any way, any direct or indirect investment made by any Contributor Restricted Person (i) in any debt or equity securities of any Person (including without limitation any options, warrants or derivatives relating thereto) listed on a national securities exchange or actively trading in the public over-the-counter market to the extent such investment constitutes a passive investment, (ii) in any non-convertible debt (including without limitation any options, warrants or derivatives relating thereto) of any Person listed on a national securities exchange or actively traded in the public over-the-counter market, or (iii) the acquisition of any Contributor Restricted Opportunity by descent or devise.
(b)    As used herein “Contributor Restricted Opportunity” means any opportunity for the leasing, acquisition, farm-in, exploration, development, production, or any combination of the foregoing, of oil, gas or other Hydrocarbon leases and/or any overriding royalty interests, non-participating royalty interests, or any mineral fee interests in Hydrocarbons, including rights to royalties on production and rights to shut-in royalties, executive rights to lease, rights to produce, rights to delay rentals, rights to bonus payments, rights of reversion and any and all other rights relating to the ownership of mineral fee interests, in the Acquiror Designated Area. Notwithstanding the foregoing, a Contributor Restricted Opportunity shall not include any transaction where the assets involved that are located in the Acquiror Designated Area constitutes less than fifteen percent (15%) of the assets involved (either as to the number of acres or wells subject thereto or the value of such assets) in the transaction, and any assets in the area described above that are acquired as described in this provision shall be exempted from the restrictions in this Section 6.
(c)    To the extent any Contributor Restricted Person breaches this Section 6, as the Acquiror’s sole and exclusive remedy for such breach, Contributor shall be obligated to, or to cause the applicable Contributor Restricted Person to, immediately offer to Acquiror any acquired Acquiror Non-Compete Assets, and Acquiror shall have the right, but not the obligation, to acquire such Acquiror Non-Compete Assets under the same terms and conditions as agreed to by such Contributor Restricted Person, and for the same consideration paid by such Contributor Restricted Person, together with any out-of-pocket expenses incurred by such Contributor Restricted Person in acquiring such Acquiror Non-Compete Asset. Upon receipt of Acquiror’s wire transfer of such amount, Contributor shall, or shall cause such Contributor Restricted Person to assign to Acquiror such Acquiror Non-Compete Assets, pursuant to an assignment and bill of sale in a form to be mutually agreed upon between Acquiror and such Contributor Restricted Person.
7.    Destruction and/or Return of Records.  Acquiror agrees to return confidential information of Contributor as set forth in Schedule C hereto.
8.    Further Assurances. Each Party shall, and shall cause its Subsidiaries and Affiliates to, cooperate with each other in the taking of all actions necessary, proper or advisable under this Agreement and applicable Laws to effectuate the Termination.
9.    Third-Party Beneficiaries. Except for the provisions of Section 3, with respect to which each Releasee is an expressly intended third-party beneficiary thereof, this Agreement is not 

intended to (and does not) confer on any Person other than the Parties any rights or remedies or impose on any Person other than the Parties any obligations.
10.    Entire Agreement; Counterparts. This Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the Parties or any of them with respect to the subject matter hereof.  This Agreement may be executed and delivered in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by electronic image scan transmission in .pdf shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by electronic image scan transmission in .pdf shall be deemed to be their original signatures for all purposes. Any Party that delivers an executed counterpart signature page by electronic image scan transmission in .pdf shall promptly thereafter deliver a manually executed counterpart signature page to the other Party; provided, however, that the failure to do so shall not affect the validity, enforceability, or binding effect of this Agreement.
11.    Amendments. Any amendment, modification or waiver of any provision of this Agreement, or any consent to departure from the terms of this Agreement, shall not be binding unless in writing and signed by the Party or Parties against whom such amendment, modification, waiver or consent is sought to be enforced.
12.    Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without giving effect to conflicts of laws principles that would result in the application of the Law of any other jurisdiction.
13.    Submission to Jurisdiction; Appointment of Agent for Service of Process. Each Party consents to personal jurisdiction in any action brought in the United States federal courts located in the State of Texas with respect to any dispute, claim or controversy arising out of or in relation to or in connection with this Agreement, and each of the Parties agrees that any action instituted by it against the other with respect to any such dispute, controversy or claim will be instituted exclusively in the United States District Court for the Southern District of Texas. Each Party (a) irrevocably submits to the exclusive jurisdiction of such courts, (b) waives any objection to laying venue in any such action or proceeding in such courts, (c) waives any objection that such courts are an inconvenient forum or do not have jurisdiction over it, and (d) agrees that service of process upon it may be effected by mailing a copy thereof by registered mail (or any substantially similar form of mail), postage prepaid, to it at its address specified in Section 12.2 of the Contribution Agreement. The foregoing consents to jurisdiction and service of process shall not constitute general consents to service of process in the State of Texas for any purpose except as provided herein and shall not be deemed to confer any rights on any Person other than the Parties. 
14.    Waiver of Jury Trial. Each of the Parties waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any of the transactions contemplated hereby.

15.    Specific Performance. Each Party agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each Party agrees that, in the event of any breach or threatened breach by any other Party of any covenant or obligation contained in this Agreement, the non-breaching Party shall be entitled (in addition to any other remedy that may be available to it whether in law or equity, including monetary damages) to (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction restraining such breach or threatened breach.
[Signature Page Follows]

IN WITNESS WHEREOF, this Agreement has been signed by each of the Parties as of the date first above written.
CONTRIBUTOR:
	
		
	SABALO HOLDINGS, LLC

	By:
	/s/ Barry Clark

	Name:
	Barry Clark

	Title:
	President

ACQUIROR:
	
		
	EARTHSTONE ENERGY HOLDINGS, LLC 

	By:
	/s/ Robert J. Anderson

	Name:
	Robert J. Anderson

	Title:
	President

ACQUIROR PARENT:
	
		
	EARTHSTONE ENERGY, INC.

	By:
	/s/ Robert J. Anderson

	Name:
	Robert J. Anderson

	Title:
	President

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