Document:

EXHIBIT
      10.1

     

     

    

      Purchase
        and Sale Agreement

      

      By
        and Between

      

      Bill
        Barrett CBM LLC

      

      as
        Seller 

      

      and

      

      Storm
        Cat Energy (USA) Corporation

      

      as
        Buyer

      

      

      Dated
        Effective July 1, 2006

      

      Wyoming
        CBM Package 

      

      Exhibit
        List

      

      Exhibit
        A Leases
        and Rights Of Way/WI/NRI

      Exhibit
        B Wells,
        Wellsites and Leases/Allocated Values

      Exhibit
        C Intentionally
        Omitted

      Exhibit
        D Material
        Agreements

      Exhibit
        E Required
        Consents and Preferential Purchase Rights

      Exhibit
        F Capital
        Projects 

      Exhibit
        G Insurance
        Coverage

      Exhibit
        H Hydrocarbon
        Sales Contracts/Calls On Production

      Exhibit
        I Non-Transferable
        Governmental Permits

      Exhibit
        J Imbalance
        Volumes

      Exhibit
        K Assignment,
        Bill Of Sale And Conveyance 

      Exhibit
        L SCE’s
        Officer Certificate

      Exhibit
        M BBC’s
        Officer Certificate

      Exhibit
        N FIRPTA
        Certificate

      Exhibit
        O Bonds,
        Etc. To Be Replaced At Closing

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

    

     

    
      
        	 	
                Page

              
	
                ARTICLE
                  1 PURCHASE AND SALE

              	
                1

              
	
                1.1

              	
                Purchase
                  and Sale.

              	
                1

              
	
                1.2

              	
                The
                  Assets.

              	
                1

              
	
                1.3

              	
                Effective
                  Time.

              	
                2

              
	
                1.4

              	
                1031
                  Exchange.

              	
                2

              
	 	 
	
                ARTICLE
                  2 PURCHASE PRICE

              	
                3

              
	
                2.1

              	
                Purchase
                  Price.

              	
                3

              
	
                2.2

              	
                Deposit.

              	
                3

              
	
                2.3

              	
                Allocation
                  of the Purchase Price.

              	
                3

              
	
                2.4

              	
                Adjustments
                  to Purchase Price.

              	
                3

              
	
                A.
                  Effective
                  Time Apportionment of Property Expenses.

              	
                3

              
	
                B.
                  Settlement
                  Statements.

              	
                4

              
	
                C.
                  Property
                  Expenses.

              	
                4

              
	
                D.
                  Upward
                  Adjustments.

              	
                4

              
	
                E.
                  Downward
                  Adjustments.

              	
                5

              
	
                F.
                  Well
                  and Pipeline Imbalance Adjustments.

              	
                5

              
	 	 
	
                ARTICLE
                  3 BUYER’S INSPECTION

              	
                6

              
	
                3.1

              	
                Access
                  to the Records.

              	
                6

              
	
                3.2

              	
                Disclaimer.

              	
                6

              
	
                3.3

              	
                Physical
                  Access to the Leases, Lands and Wells.

              	
                6

              
	
                3.4

              	
                SCE’s
                  Agents.

              	
                6

              
	 	 
	
                ARTICLE
                  4 TITLE MATTERS

              	
                7

              
	
                4.1

              	
                Definitions.

              	
                7

              
	
                A.
                  Defensible
                  Title.

              	
                7

              
	
                B.
                  Permitted
                  Encumbrances.

              	
                7

              
	
                C.
                  Title
                  Defect.

              	
                8

              
	
                D.
                  Title
                  Defect Value.

              	
                9

              
	
                4.2

              	
                Purchase
                  Price Adjustments for Title Defects.

              	
                9

              
	
                A.
                  Notices
                  of Title Defects.

              	
                9

              
	
                B.
                  Defect
                  Adjustments.

              	
                10

              
	
                4.3

              	
                Interest
                  Additions.

              	
                10

              
	
                4.4

              	
                Dispute
                  Resolution.

              	
                11

              
	
                4.5

              	
                Casualty
                  Loss.

              	
                11

              
	
                4.6

              	
                Preferential
                  Rights and Consents.

              	
                11

              
	
                A.
                  Required
                  Consents.

              	
                11

              
	
                B.
                  Preferential
                  Purchase Rights.

              	
                12

              
	
                C.
                  Exclusive
                  Remedy.

              	
                12

              
	 	 
	
                ARTICLE
                  5 ENVIRONMENTAL MATTERS

              	
                12

              
	
                5.1

              	
                Definitions.

              	
                12

              
	
                 

              	 	 

      

       

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

       

      
        	
                5.2

              	
                NEPA
                  Documents.

              	
                13

              
	
                5.3

              	
                Environmental
                  Liabilities and Obligations.

              	
                14

              
	
                A.
                  Assumed
                  Environmental Liabilities.

              	
                14

              
	
                B.
                  Retained
                  Environmental Liabilities.

              	
                14

              
	
                5.4

              	
                Remedies.

              	
                14

              
	
                A.
                  Environmental
                  Defects less than the Environmental Deductible.

              	
                14

              
	
                B.
                  Environmental
                  Defects greater than the Environmental Deductible.

              	
                14

              
	
                5.5

              	
                Contested
                  Environmental Defects.

              	
                15

              
	
                5.6

              	
                Exclusive
                  Remedies.

              	
                15

              
	 	 
	
                ARTICLE
                  6 SELLER’S REPRESENTATIONS

              	
                15

              
	
                6.1

              	
                Company
                  Representations.

              	
                16

              
	
                A.
                  Corporate
                  Representations.

              	
                16

              
	
                B.
                  Power
                  and Authority.

              	
                16

              
	
                C.
                  No
                  Violation.

              	
                16

              
	
                6.2

              	
                Authorization
                  and Enforceability.

              	
                16

              
	
                6.3

              	
                Liability
                  for Brokers’ Fees.

              	
                16

              
	
                6.4

              	
                No
                  Bankruptcy.

              	
                16

              
	
                6.5

              	
                Litigation.

              	
                16

              
	
                6.6

              	
                Capital
                  Projects.

              	
                16

              
	
                6.7

              	
                Insurance.

              	
                17

              
	
                6.8

              	
                Judgments.

              	
                17

              
	
                6.9

              	
                Compliance
                  with Law.

              	
                17

              
	
                6.10

              	
                Material
                  Agreements.

              	
                17

              
	
                6.11

              	
                Governmental
                  Permits.

              	
                17

              
	
                6.12

              	
                Hydrocarbon
                  Sales Contracts.

              	
                17

              
	
                6.13

              	
                Area
                  of Mutual Interest and Other Agreements; Tax Partnerships.

              	
                17

              
	
                6.14

              	
                Imbalance
                  Volumes.

              	
                18

              
	
                A.
                  Gas
                  Pipeline Imbalances.

              	
                18

              
	
                B.
                  Wellhead
                  Gas Imbalances.

              	
                18

              
	
                6.15

              	
                Records.

              	
                18

              
	 	 
	
                ARTICLE
                  7 BUYER’S REPRESENTATIONS

              	
                18

              
	
                7.1

              	
                Company
                  Representations.

              	
                18

              
	
                A.
                  Existence.

              	
                18

              
	
                B.
                  Power
                  and Authority.

              	
                18

              
	
                C.
                  No
                  Violation.

              	
                19

              
	
                7.2

              	
                Authorization
                  and Enforceability.

              	
                19

              
	
                7.3

              	
                Liability
                  for Brokers’ Fees.

              	
                19

              
	
                7.4

              	
                Litigation.

              	
                19

              
	
                7.5

              	
                Securities
                  Laws.

              	
                19

              
	
                7.6

              	
                Financial
                  Resources.

              	
                19

              
	
                7.7

              	
                Records.

              	
                19

              
	
                7.8

              	
                Independent
                  Evaluation.

              	
                20

              

      

       

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      
        	
              	 
	
                ARTICLE
                  8 COVENANTS AND AGREEMENTS

              	
                20

              
	
                8.1

              	
                Covenants
                  and Agreements of BBC.

              	
                20

              
	
                A.
                  Operations
                  Prior to Closing.

              	
                20

              
	
                B.
                  Restriction
                  on Operations.

              	
                20

              
	
                C.
                  Notification
                  of Claims.

              	
                21

              
	
                D.
                  Existing
                  Relationships.

              	
                21

              
	
                E.
                  Consents.

              	
                21

              
	
                F.
                  Entity
                  Status.

              	
                22

              
	
                8.2

              	
                Covenants
                  and Agreements of SCE.

              	
                22

              
	
                A.
                  Entity
                  Status.

              	
                22

              
	
                B.
                  Replacement
                  Bonds and Instruments.

              	
                22

              
	
                8.3

              	
                Covenants
                  and Agreements of the Parties.

              	
                22

              
	
                A.
                  Confidentiality.

              	
                22

              
	
                B.
                  Return
                  of Information.

              	
                22

              
	
                C.
                  Injunctive
                  Relief.

              	
                23

              
	
                D.
                  Cure
                  Period for Breach.

              	
                23

              
	
                E.
                  Notice
                  of Breach.

              	
                23

              
	 	 
	
                ARTICLE
                  9 TAX MATTERS

              	
                23

              
	
                9.1

              	
                Apportionment
                  of Tax Liability.

              	
                23

              
	
                9.2

              	
                Calculation
                  of Tax Liability.

              	
                23

              
	
                9.3

              	
                Tax
                  Reports and Returns.

              	
                23

              
	
                9.4

              	
                Sales
                  Taxes.

              	
                24

              
	 	 
	
                ARTICLE
                  10 CONDITIONS PRECEDENT TO CLOSING

              	
                24

              
	
                10.1

              	
                BBC’s
                  Conditions Precedent.

              	
                24

              
	
                10.2

              	
                SCE’s
                  Conditions Precedent.

              	
                24

              
	 	 
	
                ARTICLE
                  11 RIGHT OF TERMINATION AND ABANDONMENT

              	
                25

              
	
                11.1

              	
                Termination.

              	
                25

              
	
                11.2

              	
                Liabilities
                  Upon Termination.

              	
                25

              
	
                A.
                  SCE’s
                  Breach.

              	
                25

              
	
                B.
                  BBC’s
                  Breach.

              	
                25

              
	
                C.
                  Termination
                  Pursuant to Sections 11.1

              	
                25

              
	 	 
	
                ARTICLE
                  12 CLOSING

              	
                26

              
	
                12.1

              	
                Date
                  of Closing.

              	
                26

              
	
                12.2

              	
                Place
                  of Closing.

              	
                26

              
	
                12.3

              	
                Closing
                  Obligations.

              	
                26

              
	 	 
	
                ARTICLE
                  13 POST-CLOSING OBLIGATIONS

              	
                27

              
	
                13.1

              	
                Post-Closing
                  Adjustments.

              	
                27

              
	
                A.
                  Settlement
                  Statement.

              	
                27

              
	
                B.
                  Dispute
                  Resolution.

              	
                27

              
	
                13.2

              	
                Records.

              	
                27

              
	
                13.3

              	
                Transfer
                  of Operations/Operations After Closing.

              	
                28

              
	
                13.4

              	
                Further
                  Assurances.

              	
                28

              
	
                 

              	 	 

      

       

      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

       

      
        	
              	 
	
                ARTICLE
                  14 ASSUMPTION AND RETENTION OF OBLIGATIONS AND
                  INDEMNIFICATION

              	
                28

              
	
                14.1

              	
                SCE’s
                  Assumption of Liabilities and Obligations.

              	
                28

              
	
                14.2

              	
                BBC’s
                  Retention of Liabilities and Obligations.

              	
                28

              
	
                14.3

              	
                Proceeds
                  and Invoices for Property Expenses Received After the Settlement
                  Date.

              	
                28

              
	
                A.
                  Proceeds.

              	
                29

              
	
                B.
                  Property
                  Expenses.

              	
                29

              
	
                C.
                  Limitation
                  as to Time.

              	
                29

              
	
                14.4

              	
                Indemnification.

              	
                29

              
	
                A.
                  BBC’s
                  Indemnification of SCE.

              	
                29

              
	
                B.
                  SCE’s
                  Indemnification of BBC.

              	
                29

              
	
                C.
                  Release.

              	
                29

              
	
                14.5

              	
                Procedure.

              	
                30

              
	
                A.
                  Coverage.

              	
                30

              
	
                B.
                  Claim
                  Notice.

              	
                30

              
	
                C.
                  Information.

              	
                30

              
	
                14.6

              	
                Dispute
                  Resolution.

              	
                30

              
	
                14.7

              	
                No
                  Insurance; Subrogation.

              	
                32

              
	
                14.8

              	
                Reservation
                  as to Non-Parties.

              	
                32

              
	 	 
	
                ARTICLE
                  15 MISCELLANEOUS

              	
                32

              
	
                15.1

              	
                Expenses.

              	
                32

              
	
                15.2

              	
                Notices.

              	
                32

              
	
                15.3

              	
                Amendments/Waiver.

              	
                33

              
	
                15.4

              	
                Assignment.

              	
                33

              
	
                15.5

              	
                Announcements.

              	
                33

              
	
                15.6

              	
                Counterparts/Fax
                  Signatures.

              	
                33

              
	
                15.7

              	
                Governing
                  Law.

              	
                33

              
	
                15.8

              	
                Entire
                  Agreement.

              	
                33

              
	
                15.9

              	
                Knowledge.

              	
                33

              
	
                15.10

              	
                Binding
                  Effect.

              	
                33

              
	
                15.11

              	
                Survival.

              	
                33

              
	
                15.12

              	
                Limitation
                  on Damages.

              	
                34

              
	
                15.13

              	
                No
                  Third-Party Beneficiaries.

              	
                34

              
	
                15.14

              	
                Condition
                  Precedent.

              	
                34

              
	
                15.15

              	
                References,
                  Titles and Construction.

              	
                34

              

      

       

    

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

    

    PURCHASE
      AND SALE AGREEMENT

     

    This
      Purchase and Sale Agreement (this “Agreement”), dated July 17, 2006, is by and
      between Bill Barrett CBM, L.L.C., 1099 18th Street, Suite 2300, Denver, Colorado
      80202 (“BBC” or “Seller”) and Storm Cat Energy (USA) Corporation, 1125
      17th,
      Street,
      Suite 2310 Denver, Colorado, 80202 (“SCE” or “Buyer”). The transaction
      contemplated by this Agreement may be referred to as the “Transaction.” BBC and
      SCE may be referred to individually as a “Party” or collectively as the
“Parties.” 

     

    RECITALS

     

    A.    BBC
      owns
      and desires to sell its interests in certain oil and gas properties located
      in
      Sheridan and Campbell Counties, Wyoming containing approximately 25,205 gross
      mineral acres and 17,030 net mineral acres (the “Assets,” all as more
      particularly described in Section 1.2 below).

     

    B.    SCE
      has
      conducted and will conduct an independent investigation of the nature and extent
      of the Assets (as defined below) and desires to purchase all of BBC’s interest
      in the Assets pursuant to the terms of this Agreement. 

     

    C.    To
      accomplish the foregoing, the Parties wish to enter into this
      Agreement.

     

    AGREEMENT

     

    In
      consideration of the mutual promises contained herein, $100 and other good
      and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, SCE and BBC agree as follows:

     

    ARTICLE
      1

    PURCHASE
      AND SALE

     

    1.1    Purchase
      and Sale.  BBC
      agrees to sell and SCE agrees to purchase all of BBC’s right, title and interest
      in the Assets, all pursuant to the terms of this Agreement. 

     

    1.2    The
      Assets.  As
      used
      herein, the term “Assets” refers to all of the BBC’s right, title and interest
      in and to the following: 

     

    A.    The
      oil,
      gas and/or mineral leases, rights-of-way and other agreements specifically
      described in Exhibit A (the “Leases”), the lands described in Exhibit A (the
“Lands”) and the oil, gas and other hydrocarbons (“Hydrocarbons”) attributable
      to the Leases or Lands, including without limitation, all oil, gas and/or other
      mineral leases, leasehold estates, rights-of-way and easements, all mineral,
      royalty, overriding royalty, production payment, reversionary, net profit,
      contractual leasehold and other similar rights, estates and interests in the
      Leases or Lands, together with all the property and rights incident thereto.
      

     

    B.    Any
      oil
      and gas wells located on the “Wellsites” described on Exhibit B, (collectively,
      the “Wells”), together with all other oil and gas wells and all water, injection
      and disposal wells on the Lands or on lands pooled, communitized or unitized
      therewith.

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    C.    All
      equipment, fixtures and improvements located on the Leases and Lands and used
      in
      connection with the production, gathering, treatment, processing, storing,
      transportation, sale or disposal of Hydrocarbons or water produced from the
      properties and interests described in Section 1.2 A. through B., including
      without limitation the Wells, wellhead equipment, pumps, flowlines, gathering
      systems, piping, tanks, buildings, treatment facilities, disposal facilities,
      compression facilities, and other materials, supplies, equipment, facilities
      and
      machinery.

     

    D.    The
      unitization, pooling and communitization agreements, declarations and orders,
      if
      any, and all permits, including without limitation all water discharge permits
      relating to the properties and interests described in Sections 1.2 A.
      through C. and to the production of Hydrocarbons, if any, attributable to said
      properties and interests, to the extent transferable by Seller. 

     

    E.    All
      material contracts, agreements and instruments, which relate and only insofar
      as
      they relate, to the properties and interests described in Subsections 1.2
      A. through D., and including without limitation those which are described in
      Exhibit D (the “Material Agreements”). 

     

    F.    All
      lease
      files, land files, well files and contract files relating to the items described
      in Sections 1.2.A through E. maintained by BBC, but excluding from the foregoing
      those files, records and data subject to unaffiliated third party contractual
      restrictions on disclosure or transfer (the “Records”). To the extent that any
      of the Records contain interpretations of BBC, SCE agrees to rely on such
      interpretations at its own risk. 

     

    1.3    Effective
      Time.  The
      purchase and sale of the Assets shall be effective as of July 1, 2006 at
      7:00 a.m. Mountain Time (the “Effective Time”). 

     

    1.4    1031 Exchange. 
      BBC
      reserves the right, at or prior to Closing, to assign its rights under this
      Agreement with respect to all or a portion of the Purchase Price, and that
      portion of the Assets associated therewith (“1031 Assets”), to a Qualified
      Intermediary (“QI”) (as that term is defined in Section 1.1031(k)-1(g)(4)(v) of
      the Treasury Regulations) to accomplish this Transaction, in whole or in part,
      in a manner that will comply with the requirements of a like-kind exchange
      (“Like-Kind Exchange”) pursuant to Section 1031 of the Internal Revenue Code of
      1986, as amended (“Code”). If BBC so elects, BBC may assign its rights under
      this Agreement to the 1031 Assets to the QI. SCE hereby (i) consents to BBC’s
      assignment of its rights in this Agreement with respect to the 1031 Assets,
      and
      (ii) if such an assignment is made, agrees to pay all or a portion of the
      Purchase Price into the qualified trust account at Closing as directed in
      writing by BBC. BBC and SCE acknowledge and agree that a whole or partial
      assignment of this Agreement to a QI shall not release either Party from any
      of
      its respective liabilities and obligations to each other or expand any such
      respective liabilities or obligations under this Agreement. Neither Party
      represents to the other that any particular tax treatment will be given to
      either Party as a result of the Like-Kind Exchange. The Party not participating
      in the Like-Kind Exchange shall not be obligated to pay any additional costs
      or
      incur any additional obligations in its sale of the Assets if such costs are
      the
      result of the other Party’s Like-Kind Exchange, and the Party participating in
      the Like-Kind Exchange shall hold harmless and indemnify the other Party from
      and against all claims, losses and liabilities (including
      reasonable

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    attorneys’
      fees, court costs and related expenses), if any, resulting from such a Like-Kind
      Exchange. 

     

    ARTICLE
      2

    PURCHASE
      PRICE

     

    2.1    Purchase
      Price.  The
      purchase price for the Assets shall be $30,650,000.00 (the “Purchase Price”). At
      Closing, SCE shall pay BBC the Purchase Price, as adjusted pursuant to Section
      2.4.

     

    2.2    Deposit. 
      On
      or
      before three business days after the execution of this Agreement,
      SCE shall pay to BBC in cash, an amount equal to $1,532,500.00 (the “Deposit”).
      SCE’s timely payment of the Deposit is a condition precedent to the
      effectiveness of this Agreement. Accordingly, if SCE does not pay the Deposit
      to
      BBC on or before three business days after execution of this Agreement, this
      Agreement shall become null and void. BBC shall retain the Deposit in an
      interest bearing account. The
      Deposit shall be distributed to BBC and credited to the Purchase Price at
      Closing, or if this Agreement is terminated, shall be distributed or retained
      pursuant to Article 11. 

     

    2.3    Allocation
      of the Purchase Price.  SCE,
      after consultation with BBC, has allocated the Purchase Price among the Assets
      as set forth on Exhibit B. SCE and BBC agree to use the values so allocated
      as
      the values for the individual Assets when filing all tax returns. The value
      so
      allocated to a particular Asset may be referred to as the “Allocated Value” for
      that Asset. For purposes of calculating Title Defects, Environmental Defects
      or
      Interest Additions with respect to a Well, the Allocated Value for the Asset
      shall be the sum of the Allocated Values for all interests under the same Well
      spacing unit. For purposes of calculating Title Defects or Environmental Defects
      or Interest Additions with respect to a Lease, as to Lands not associated with
      the spacing unit of a Well and for which an Allocated Value is not set forth
      on
      Exhibit B (“Non-Wellsite Leasehold”), the Allocated Value for that Asset shall
      be the total number of acres in each Lease affected by a Title Defect or
      Environmental Defect or Interest Addition multiplied by the value per acre
      set
      forth on Exhibit B.

     

    2.4    Adjustments
      to Purchase Price.  All
      adjustments to the Purchase Price shall be made (i) according to the factors
      described in this Section, (ii) in accordance with generally accepted accounting
      principles as consistently applied in the oil and gas industry, and
      (iii) without duplication. 

     

    A.    Effective
      Time Apportionment of Property Expenses.  Seller
      and Buyer agree that all revenues, costs and expenses (both operating and
      capital), including Property Expenses (as defined below) will be apportioned
      between Buyer and Seller as of the Effective Time. Accordingly, Seller shall
      be
      entitled to any production revenues or other amounts realized from and accruing
      to the Assets attributable to the period of time before the Effective Time,
      and
      shall be liable for the payment of all costs and expenses, including Property
      Expenses, attributable to the Assets for the period of time before the Effective
      Time, and (ii) Buyer shall be entitled to any production revenues or other
      amounts realized from and accruing to the Assets attributable to the period
      of
      time after the Effective Time, and shall be liable for the payment
      of

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

    all
      costs
      and expenses including Property Expenses, attributable to the Assets for the
      period of time after the Effective Time. 

     

    B.    Settlement
      Statements.  The
      Purchase Price shall be adjusted at Closing pursuant to a “Preliminary
      Settlement Statement” prepared by BBC, submitted to SCE on or before five days
      before Closing, for SCE’s comment and review and agreed to by both SCE and BBC.
      The Preliminary Settlement Statement shall set forth the Closing Amount and
      all
      adjustments to the Purchase Price and associated calculations. The term “Closing
      Amount” means the Purchase Price, adjusted as provided in this Section using
      reasonable estimates as agreed to by the Parties if actual numbers are not
      available. After Closing, the Purchase Price shall be adjusted pursuant to
      the
      Settlement Statement delivered pursuant to Section 13.1. 

     

    C.    Property
      Expenses.  For
      the
      purposes of this Agreement, the term “Property Expenses” shall mean all capital
      expenses, joint interest billings, lease operating expenses, lease rental and
      maintenance costs, royalties, overriding royalties, leasehold payments, Taxes
      (as defined and apportioned as of the Effective Time pursuant to Article 9),
      drilling expenses, workover expenses, land, title, 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 Accountant Societies of North America
      that are attributable to the maintenance and operation of the Assets during
      the
      period in question. 

     

    D.    Upward
      Adjustments.  The
      Purchase Price shall be adjusted upward by the following:

     

    1.    An
      amount
      equal to all proceeds (net of royalty and Taxes not otherwise accounted for
      hereunder) received and retained by SCE from the sale of all Hydrocarbons
      produced from or credited to the Assets prior to the Effective
      Time;

     

    2.    An
      amount
      equal to all direct and actual expenses attributable to the Assets, including,
      without limitation, the Property Expenses, incurred and paid by BBC that are
      attributable to the period after the Effective Time;

     

    3.    To
      the
      extent not covered in the preceding paragraph, an amount equal to all prepaid
      expenses attributable to the Assets after the Effective Time that were paid
      by
      or on behalf of BBC, including without limitation, prepaid drilling and/or
      completion costs, applicable insurance costs through Closing, and prepaid
      utility charges; 

     

    4.    An
      amount
      equal to $100 per BBC-operated well per month, prorated for partial months,
      as
      BBC’s sole compensation for BBC’s office personnel operating the Assets from the
      Effective Time until SCE assumes operations. The $100 per BBC-operated well
      per
      month amount does not include all direct field expenses that are normally
      charged to the field as allowed by COPAS, such as field pumpers and field
      foremen that are BBC employees, and such costs will be apportioned between
      the
      Parties as of the Effective Time. 

     

    5.    An
      amount
      equal to the Interest Addition Adjustment; and

    
      
        
        

      

      
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    6.    Any
      other amount agreed to by SCE and BBC.

     

    E.    Downward
      Adjustments.  The
      Purchase Price shall be adjusted downward by the following: 

     

    1.    Proceeds
      received and retained by BBC (net of applicable Taxes and royalties) that are
      attributable to production from the Assets after the Effective Time;
 

     

    2.    the
      amount of all direct and actual expenses attributable to the Assets, including,
      without limitation, the Property Expenses, that remain unpaid by BBC that are
      attributable to the period prior to the Effective Time; 

     

    3.    an
      amount
      equal to the sum of all Environmental Defect Adjustments; 

     

    4.    an
      amount
      equal to the Title Defect Adjustments; and 

     

    5.    any
      other
      amount agreed to by SCE and BBC. 

     

    F.    Well
      and Pipeline Imbalance Adjustments.  In
      addition to the foregoing, the Purchase Price shall be adjusted downward or
      upward, as appropriate, by an amount equal to the Inside FERC Price for CIG
      for
      July 2006 per MMBtu for the well and pipeline gas imbalances existing as of
      the
      Effective Time.

    
      
        
        

      

      
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    ARTICLE
      3

    BUYER’S
      INSPECTION

     

    3.1    Access
      to the Records.  The
      Records. Seller will give Buyer, or Buyer’s authorized representatives, at
      Seller’s office and at all reasonable times before the Closing Date, access to
      Seller’s records pertaining to the ownership and/or operation of the Properties
      (including, without limitation, title files, division order files, and
      production, severance and ad valorem tax records), for the purpose of conducting
      due diligence reviews contemplated herein. Buyer may make copies of such
      records, at its expense, but shall, if Seller so requests, return all copies
      so
      made if the Closing does not occur; all costs of copying such items shall be
      borne by Buyer. Seller shall not be obligated to provide Buyer with access
      to
      any records or data which Seller considers to be proprietary or confidential
      to
      it or which Seller cannot provide to Buyer without, in its reasonable opinion,
      breaching, or risking a breach of, agreements with other parties, or waiving,
      or
      risking waiving, legal privilege. Buyer recognizes and agrees that all materials
      made available to it in connection with the transaction contemplated hereby,
      whether made available pursuant to this section or otherwise, are made available
      to it as an accommodation, and without representation or warranty of any kind
      as
      to the accuracy and completeness of such materials. No warranty of any kind
      is
      made by seller as to the information supplied to buyer or with respect to
      properties to which the information relates, and buyer expressly agrees that
      any
      conclusions drawn therefrom shall by the result of its own independent review
      and judgment.

     

    3.3    Disclaimer. 
      Except
      for the representations contained in this Agreement, BBC makes no representation
      of any kind as to the Records or any information contained therein. SCE agrees
      that any conclusions drawn from the Records shall be the result of its own
      independent review and judgment. 

     

    3.4    Physical
      Access to the Leases, Lands and Wells.  During
      reasonable business hours, BBC agrees to grant SCE physical access to the
      Leases, Lands and Wells to allow SCE to conduct, at SCE’s sole risk and expense,
      on-site inspections and environmental assessments of the Leases, Lands and
      Wells. In connection with any such on-site inspections and assessments, SCE
      agrees not to interfere with the normal operation of the Leases and Wells and
      agrees to comply with all operational and safety requirements of the operators
      of the Wells. If SCE or its agents prepares an environmental assessment of
      any
      Lease, Lands or Well, SCE agrees to keep such assessment confidential and to
      furnish copies thereof to BBC. In connection with granting such access, SCE
      represents that it is adequately insured and waives, releases and agrees to
      indemnify BBC, and its respective directors, officers, shareholders, employees,
      agents and representatives against all claims for injury to, or death of,
      persons or for damage to property arising as a result of any act or omission
      committed by SCE or its employees, agents, contractors or representatives in
      conducting SCE’s on-site inspections and environmental assessments of the Leases
      and Wells. This waiver, release and indemnity by SCE shall survive termination
      of this Agreement. 

     

    3.5    SCE’s
      Agents. 
      To
      the
      extent that SCE uses agents to conduct its due diligence activities, either
      in
      BBC’s offices or on the Lands, SCE agrees to (i) make such agents aware of
      the terms and conditions set forth in this Article 3 and the confidentiality
      provisions of Article 8,

    
      
        
        

      

      
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    and
      (ii)
      ensure that such agents agree to be bound by the terms of this Article 3 and
      the
      confidentiality provisions of Article 8. 

     

    ARTICLE
      4

    TITLE
      MATTERS

     

    4.1    Definitions.

     

    A.    Defensible
      Title.  The
      term
“Defensible Title” means such title to the Assets, that, subject to and except
      for Permitted Encumbrances: (i) entitles BBC to receive not less than the
      net revenue interest (“NRI”) set forth on Exhibit A for the currently
      producing formations in each Well and the NRI set forth on Exhibit A for the
      Non-Wellsite Leasehold, (ii) obligates BBC to bear costs and expenses
      relating to the maintenance, development, operation and the production of
      Hydrocarbons from the producing formation in each Well and attributable to
      each
      Lease in an amount not greater than the working interest (“WI”) set forth in
      Exhibit A); and (iii) is free and clear of encumbrances, liens and
      defects. If a Well or Non-Wellsite Leasehold is not listed on Exhibits A or
      B,
      then the deemed Allocated Value for such Well or location is zero. The Parties
      acknowledge that (i) BBC may not own 100% of the WI in the Lands covered by
      the
      Leases, or (ii) the Leases may not cover 100% of the Hydrocarbons or (iii)
      BBC
      may not own 100% of the applicable drilling and spacing unit. Accordingly,
      if
      and to the extent that BBC owns less than 100% of the WI in a particular
      interest comprising the Assets due to the factors acknowledged in the previous
      sentence, BBC’s WI and NRI shall be reduced proportionately. 

     

    B.    Permitted
      Encumbrances.  The
      term
“Permitted Encumbrances” shall mean: 

     

    1.    lessors’
      royalties, overriding royalties, net profits interests, production payments,
      reversionary interests and similar burdens (payable or in suspense) if the
      net
      cumulative effect of such burdens does not operate to reduce the
      NRI;

     

    2.    liens
      for
      Taxes, or assessments not yet due and delinquent or, if delinquent, that are
      being contested in good faith in the normal course of business and for which
      BBC
      shall retain responsibility;

     

    3.    all
      rights to consent by, required notices to, filings with, or other actions by
      federal, state, local or foreign governmental bodies, in connection with the
      conveyance of the applicable Asset if the same are customarily obtained after
      such conveyance;

     

    4.    rights
      of
      reassignment upon the surrender or expiration of any Lease;

     

    5.    the
      terms
      and conditions of the Material Agreements and all documents of record to the
      extent such do not decrease the NRI for the affected Asset or increase the
      WI
      for such Asset without a corresponding proportionate increase in the NRI for
      such Asset; 

     

    6.    easements,
      rights-of-way, servitudes, permits, surface leases and other rights with respect
      to surface operations, on, over or in respect of any of the Assets or
      any

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    

    restriction
      on access thereto that do not materially interfere with the operation of the
      affected Asset as has been conducted in the past or materially affect the value
      thereof; 

     

    7.    liens
      to
      be released in connection with the Closing pursuant to Section 12.3;

     

    8.    assignments,
      conveyances or transfers of title to federal or State leasehold that have been
      properly filed with the appropriate federal or State agency, but which are
      pending approval by said agency and such approval is purely administrative;
      and

     

    9.    materialmen’s,
      mechanics’, operators’ or other similar liens arising in the ordinary course of
      business incidental to operation of the Assets (i) if such liens and charges
      have not been filed pursuant to law and the time for filing such liens and
      charges has expired, (ii) if filed, such liens and charges have not yet become
      due and payable or payment is being withheld as provided by law, or (iii) if
      their validity is being contested in good faith by appropriate action and for
      which BBC shall retain responsibility. 

     

    C.    Title
      Defect.   The
      term
“Title Defect” means any lien, encumbrance, claim or defect in or to real
      property title, excluding Permitted Encumbrances, that alone or in combination
      with other defects renders the BBC's title to the Asset (i) less than Defensible
      Title, and (ii) reduces the Allocated Value of the affected Asset by more than
      $20,000.00 (with such amount being the “Individual Title Threshold”) and (iii)
      if the Lease in question is part of the Non-Wellsite Leasehold, the Lease,
      or
      BBC’s title to the Lease, has failed or is likely to fail. Notwithstanding the
      foregoing, the following shall not be considered Title Defects:  

     

    1.    defects
      in the chain of title, consisting of the failure to recite marital status in
      a
      document, unless SCE provides reasonable written evidence that such failure
      or
      omission has resulted in another party claiming title to the relevant
      Asset;

     

    2.    defects
      based on a lack of information or incorrect information in BBC’s
      files;

     

    3.    defects
      arising out of lack of survey; 

     

    4.    defects
      based on failure to record Leases issued by the BLM or any state, or any
      assignments of record title or operating rights in such Leases, in the real
      property or other county records of the county in which such Asset is located;
      provided that such Leases or assignments are properly filed with the applicable
      federal or state office;

     

    6.    defects
      that are uncontrovertibly defensible by possession under applicable statutes
      of
      limitation for adverse possession or for prescription; 

     

    7.    defects
      based on (i) a gap in BBC’s chain of title in the BLM records as to federal
      leases, or in the state’s records as to state leases or in the county records as
      to fee leases (subject to subsection 6. above), unless such gap is affirmatively
      shown to exist in such records and written evidence of such break in the chain
      of title shall be included in a Notice of Title Defects, and provided further,
      the consequence of such break in the chain of title must result in

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    

    another
      party having a justiciable claim to a portion or all of the affected Asset
      or
      (ii) lack of a receipt of formal approval by the BLM or State authorities of
      previously submitted assignments; and

     

    8.    any
      defect, other than those described in Section 4.1(D)(1) below, if the net
      cumulative effect of such burdens does not operate to render Seller’s title in
      any Asset less than Defensible Title.

     

    D.    Title
      Defect Value.  “Title
      Defect Value” means the amount by which the Allocated Value of an Asset has been
      reduced by a Title Defect. In determining the Title Defect Value, the Parties
      intend to include only that portion of the Asset affected by the defect. The
      Title Defect Value may not exceed the Allocated Value of the Asset and shall
      be
      determined by the Parties in good faith taking into account all relevant
      factors, including without limitation, the following:

     

    1.    If
      the
      Title Defect is a lien or encumbrance on the Asset created by BBC, BBC shall
      have the lien or encumbrance unconditionally released, and consequently, there
      shall be no Title Defect Value associated with such lien or encumbrance.

     

    2.    If
      the
      Title Defect is an actual reduction in NRI or any other matter that does not
      fall within the matters described in subsection 1, but causes Seller’s title to
      be less than Defensible Title, then Seller and Buyer agree to a downward
      adjustment equal to the amount determined by multiplying the Allocated Value
      for
      the affected portion of the Assets by a fraction, the numerator of which is
      the
      difference between the NRI set forth in Exhibit “A” and the actual NRI, and the
      denominator of which is the NRI in Exhibit “A”. If the Title Defect affects
      Non-Wellsite Leasehold, then Seller and Buyer agree to a downward adjustment
      equal to the amount determined by multiplying the number of Non-Wellsite
      Leasehold acres affected by the Title Defect by the allocated value per acre,
      as
      set forth on Exhibit B.

     

    4.2    Purchase
      Price Adjustments for Title Defects.

     

    A.    Notices
      of Title Defects.  SCE
      shall
      give BBC a written “Title Defects Notice” as soon as possible but no later than
      Wednesday, August 16, 2006 at 5:00 p.m. Mountain Time (the “Title Defect Date”).
      To be effective, each Title Defect Notice must be in writing and must satisfy
      the following conditions precedent: (i) name the affected Asset;
      (ii) describe each Title Defect in reasonable detail; (iii) describe
      the basis for each Title Defect; (iv) attach Supporting Documentation;
      (v) state the Allocated Value of the affected Asset; (vi) state SCE’s
      good faith estimate of the Title Defect Value; and (vii) set forth the
      computations, upon which SCE’s estimate is based. For the purposes of this
      Section, “Supporting Documentation” for a particular Title Defect means if the
      basis is derived from any document, a copy of such document (or pertinent part
      thereof) or if the basis is derived from any gap in BBC’s chain of title, the
      documents preceding and following the gap shall be attached, or in any case
      other reasonable written documentation. If such Supporting Documentation is
      in
      BBC’s possession, SCE agrees to provide a copy of such documentation to BBC, or
      alternatively, a location where BBC can obtain such supporting documentation
      -
      such as a file number etc. 

    
      
        
        

      

      
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    B.    Defect
      Adjustments.

     

    1.    If
      an
      Asset is affected by a Title Defect, the Purchase Price will be reduced under
      Section 2.4 and as set forth below, unless, at BBC’s election: (i) BBC
      cures the Title Defect prior to Closing, (ii) SCE agrees to waive the
      relevant Title Defect, (iii) BBC elects on or before Closing to cure such
      Title Defect no later than 90 days after Closing; (iv) BBC, with SCE’s
      consent, which SCE may withhold in its sole discretion, elects on or before
      Closing to indemnify SCE against any loss attributable to the relevant Title
      Defect or (v) BBC elects to exclude the affected portion of the Asset from
      the
      transaction and reduce the Purchase Price by the Allocated Value of such Asset.
      The Purchase Price shall be adjusted only if Title Defects that exceed the
      Individual Title Threshold exceed 5% of the Purchase Price (the “Title
      Deductible”), and then the Purchase Price shall be adjusted only for the amount
      exceeding the Title Deductible, with such adjustment being the “Title Defect
      Adjustment.” The Title Deductible and the Environmental Deductible are separate
      and distinct and operate independently. 

     

    2.    If
      BBC
      elects to cure the relevant Title Defect post-Closing, BBC shall assign the
      affected Asset to SCE at Closing and the Purchase Price will not be reduced
      at
      Closing for such Title Defect. If BBC cures the relevant Title Defect to SCE’s
      reasonable satisfaction, there shall be no adjustment to the Purchase Price;
      subject to the Individual Title Threshold, if BBC does not cure the relevant
      Title Defect to SCE’s reasonable satisfaction, the Purchase Price shall be
      adjusted by an amount equal to the Title Defect Value attributable to the
      applicable Title Defect, such adjustment and payment by BBC to SCE to be made
      within 15 days of the determination that the alleged Title Defect will not
      be
      cured to SCE’s reasonable satisfaction subject to BBC’s right to dispute such
      determination in accordance with the provisions of Section 4.4. 

     

    4.3    Interest
      Additions.  Promptly
      on discovery, but on or before two days prior to Closing, SCE shall in good
      faith notify BBC, or BBC shall in good faith notify SCE, of any additional
      interest discovered by that Party that would be an Asset hereunder, but BBC
      failed to list as an Asset (with such interest being an “Interest Addition”);
      provided however, that the “Value of any Interest Addition” (defined below) must
      exceed the Individual Title Threshold. Interest Additions shall include without
      limitation, the failure to describe the interest in detail and any interest
      that
      entitles BBC to receive more than the NRI or obligates BBC to bear costs and
      expenses in an amount less than the WI without a proportionate change in NRI.
      SCE acknowledges and agrees to comply with the affirmative obligation set forth
      in the first sentence of this Section. Each such notice of an Interest Addition
      shall be in writing and shall describe the Interest Addition, the estimated
      Allocated Value for the Interest Addition, or the amount by which the Allocated
      Value of the Asset has been increased by the Interest Addition (“Value of
      Interest Addition”), together with the associated computations and supporting
      documentation. The Parties shall determine the Value of the Interest Addition
      in
      good faith in the same manner as provided in Section 4.1.D.2 taking into account
      all relevant factors. The Purchase Price shall be increased for only those
      Interest Additions that exceed the Individual Title Threshold (with the amount
      of such adjustment being the “Interest Addition Adjustment”). Notwithstanding
      the foregoing, any net mineral acres delivered by BBC over 17,030 net mineral
      acres shall be considered Interest Additions. 

    
      
        
        

      

      
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    4.4    Dispute
      Resolution.  The
      Parties agree to resolve disputes concerning title matters pursuant to the
      Arbitration procedure set forth in Section 14.6. 

     

    4.5    Casualty
      Loss.  After
      the
      Effective Time and prior to Closing, if a portion of the Assets is destroyed
      by
      fire or other casualty, or is taken or threatened to be taken in condemnation
      or
      under the right of eminent domain (with such event being a “Casualty Loss”), SCE
      shall purchase the Asset at Closing for the Allocated Value of the Asset reduced
      by the estimated cost to repair or replace such Asset (with equipment of similar
      utility) up to the Allocated Value thereof (the reduction being the “Net
      Casualty Loss”). At its sole option, BBC may elect to cure such Casualty Loss.
      If BBC elects to cure such Casualty Loss, BBC may replace any personal property
      that is the subject of a Casualty Loss with equipment of similar grade and
      utility. If BBC cures the Casualty Loss, SCE shall purchase the affected Asset
      at Closing for the Allocated Value thereof without any Purchase Price Adjustment
      for such Casualty Loss. BBC shall retain all rights to receive insurance,
      damage, or condemnation payments with respect to a Casualty Loss.

     

    4.6    Preferential
      Rights and Consents.  To
      BBC’s
      knowledge, the preferential purchase rights and/or required consents affecting
      the Assets are set forth on Exhibit E. To the extent that there are preferential
      purchase rights or required consents affecting the Assets, the provisions of
      this Section 4.6 shall apply. BBC shall use its reasonable efforts to obtain
      all
      required consents and to give notices required in connection with preferential
      purchase rights prior to Closing. If SCE discovers Assets subject to
      preferential purchase rights and/or required consents that are not set forth
      on
      Exhibit E during the course of SCE’s due diligence activities, SCE shall notify
      BBC immediately and BBC shall use its reasonable efforts to obtain such consents
      or obtain waivers and to give the notices required in connection with the
      preferential rights prior to Closing.

     

    A.    Required
      Consents.  Except
      for consents and approvals which are customarily obtained post-Closing, and
      those consents which would not invalidate the conveyance of the Assets if a
      consent is required to convey an interest in an Asset, (with such consents
      being
“Required Consents”), and if a Required Consent to assign any Asset has not been
      obtained as of the Closing, then (i) the portion of the Assets for which
      such Required Consent has not been obtained shall not be conveyed at the
      Closing, (ii) the Allocated Value for that Asset shall not be paid to BBC,
      and
      (iii) BBC shall use its reasonable efforts to obtain such Required Consent
      as promptly as possible following Closing. If such Required Consent has been
      obtained as of the Final Settlement Date, BBC shall convey the affected Asset
      to
      SCE effective as of the Effective Time and SCE shall pay BBC the Allocated
      Value
      of the affected Asset, reduced by the amount of any net proceeds from the
      affected Asset attributable to the period of time after the Effective Time
      with
      BBC retaining such net proceeds attributable to the period of time after the
      Effective Time until the affected Asset is assigned, and with BBC bearing all
      attendant Property Costs for the affected Asset accruing during this period
      of
      time. If such Required Consent has not been obtained as of the Final Settlement
      Date, the affected Asset shall be deemed to be an Excluded Asset and BBC shall
      retain such Asset and the Purchase Price shall be deemed to be reduced by an
      amount equal to the Allocated Value of the particular Asset (with such
      adjustment being an “Exclusion Adjustment”). SCE shall reasonably cooperate with
      BBC in obtaining any Required Consent including providing assurances of
      reasonable financial

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    

    conditions,
      but SCE shall not be required to expend funds or make any other type of
      financial commitments a condition of obtaining such consent. 

     

    B.    Preferential
      Purchase Rights. 

     

    1.    If
      any
      preferential right to purchase any portion of the Assets is exercised and
      consummated prior to the Closing Date, that portion of the Assets affected
      by
      such preferential purchase right shall be excluded from the Assets and the
      Purchase Price shall be adjusted downward by an amount equal to the Allocated
      Value of such affected Assets without the requirement for SCE to give notice
      (with such adjustment being an “Exclusion Adjustment”).

     

    2.    If
      by
      Closing, the time frame for the exercise of such preferential purchase rights
      has not expired and BBC has not received notice of an intent not to exercise
      or
      a waiver of the preferential purchase right, that portion of the Assets affected
      by such preferential purchase right shall be included in the Assets and assigned
      to SCE at Closing. If such preferential purchase right is exercised, the
      provisions of Section 4.6.B.3 shall apply.

     

    3.    If
      the
      affected Asset has been conveyed to SCE at Closing, and a preferential purchase
      right affecting the Asset is consummated after Closing, SCE agrees to convey
      such affected Asset to the party exercising such preferential purchase right
      on
      the same terms and conditions under which BBC conveyed such Assets to SCE and
      retain all amounts paid by the party exercising such preferential right to
      purchase. In the event of such exercise, SCE shall prepare, execute and deliver
      a form of conveyance of such Asset to such exercising party, such conveyance
      to
      be in form and substance as provided in this Agreement, and BBC agrees to hold
      harmless and indemnify SCE from any and all liabilities and obligations
      associated with such conveyed Asset.

     

    C.    Exclusive
      Remedy.  The
      remedies set forth in this Section 4.6 are the exclusive remedies under this
      Agreement for exercised preferential purchase rights and required consents
      to
      assign the Assets.

     

    ARTICLE
      5

    ENVIRONMENTAL
      MATTERS

     

    The
      provisions of this Article apply only to the environmental matters associated
      with the Assets as the result of oil and gas operations on the
      Land.

     

    5.1    Definitions. 
      For
      the
      purposes of the Agreement, the following terms shall have the following
      meanings: 

     

    “Environmental
      Consultant” means a third party consultant reasonably acceptable to SCE and BBC.

     

    “Environmental
      Defect” means (a) a condition in, on or under an Asset (including, without
      limitation, air, land, soil, surface and subsurface strata, surface water and
      ground water) attributable to the period of time prior to the Effective Time
      that (i) causes an Asset to be in

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    

    material
      violation of an Environmental Law, or (ii) requires Remediation under an
      Environmental Law and (b) the cost to remediate the Environmental Defect exceeds
      $20,000 per incident or condition, net to Seller’s interest (“Individual
      Environmental Threshold”). The Parties agree that each Environmental Defect will
      be addressed as a single incident or condition, and that Environmental Defects
      will not be aggregated on a per well basis or a per condition basis or
      otherwise, and that the term “per incident or condition” in the preceding
      sentence shall be interpreted accordingly. The terms and conditions of the
      Leases, or NEPA Documents (as defined below), or any restrictions imposed by
      any
      governmental authority having jurisdiction over the Assets shall not be the
      basis for an Environmental Defect, and Buyer accepts the risk of the foregoing
      

     

    “Environmental
      Deductible” means 5% of the Purchase Price. 

     

    “Environmental
      Defect Notice” means each written notice given by SCE to BBC alleging an
      Environmental Defect. To be effective, each Environmental Defect Notice must
      be
      in writing and must satisfy the following conditions precedent: (i) name
      the affected Asset, (ii) describe the condition that causes the Environmental
      Defect, (iii) provide reasonable factual substantiation for the
      Environmental Defect, and (iv) state the estimated Remediation Cost as
      calculated by the Environmental Consultant. To be valid, all Environmental
      Defect Notices must be received by BBC on or before Wednesday August 16, 2006
      at
      5:00 p.m. Mountain Time. For the purpose of the preceding sentence, “factual
      substantiation for the Environmental Defect” shall mean reports prepared by, or
      the basis of tests performed by the Environmental Consultant. 

     

    “Environmental
      Defect Value” means the costs to remediate that particular Environmental Defect.

     

    “Environmental
      Law” means any law, statute, rule, regulation, code, ordinance or order issued
      by any federal, state, or local governmental entity in effect on or before
      the
      Effective Time regulating or imposing liability or standards of conduct
      concerning protection of the environment or human health and safety or the
      release or disposal of waste or hazardous materials.

     

    “Remediation”
      means actions taken to correct an Environmental Defect or otherwise required
      to
      remediate in compliance with applicable Environmental Law, as recommended in
      writing by the Environmental Consultant. 

     

    5.2    NEPA
      Documents.  The
      Assets may be subject to National Environmental Policy Act documents, including
      the following: (i) Record of Decision for the Resource Management Plan/Final
      Environmental Impact Statement for the Buffalo Resource Area (1985) and
      accompanying Draft Environmental Impact Statement (1984) and Final Environmental
      Impact Statement (1985); (ii) the Decision Record for the Coal Bed Methane
      Environmental Assessment for Western Campbell County and Easter Johnson County,
      Wyoming (1990); (iii) the Record of Decision and Resource Management Plan
      Amendments for the Powder River Basin Oil and Gas Project (2003) and
      accompanying Draft Environmental Impact Statement (2002) and Final Environmental
      Impact Statement (2003); (iv) Decision Record, Finding of No Significant Impact,
      and Environmental Assessment, (Retrospective) Oil and Gas Leasing in the Buffalo
      Field Office (2005); and (v) Environmental Assessment (Prospective) Oil and
      Gas
      Leasing in the

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    

    Buffalo
      Field Office (pending), see
      69
      Fed.
      Reg. 75,336 (Dec. 16, 2004) (collectively, the “NEPA Documents”). Buyer agrees
      to take title to the Assets at Closing subject to the terms and conditions
      set
      forth in the NEPA Documents, and that the terms and conditions set forth in
      the
      NEPA Documents shall not be the basis for a Title Defect, Environmental Defect,
      or other Purchase Price adjustment. 

     

    5.3    Environmental
      Liabilities and Obligations.  

     

    A.    Assumed
      Environmental Liabilities.  Except
      for Retained Environmental Liabilities (as defined below), at Closing, Buyer
      agrees to assume and pay, perform, fulfill and discharge all liabilities and
      obligations related to, and release Seller from all Losses relating to, the
      environmental conditions in, on or under the Assets attributable to the period
      of time before and after the Effective Time, including without limitation any
      and all liability for (i) ground water contamination, (ii) Naturally Occurring
      Radioactive Materials, (iii) man-made material fibers, and (iv) the obligation
      to plug and abandon all of the wells located on the Lands and reclamation of
      existing well sites on the Lands (collectively, the “Assumed Environmental
      Liabilities”). If Buyer fails to timely deliver an Environmental Defect Notice
      with respect to an Asset, or if the aggregate of all Environmental Defects
      is
      equal to or less than the Environmental Deductible (as defined in Section
      5.1),Buyer shall be deemed to (i) accept the environmental condition(s) in,
      on and under that Asset or the Assets, (ii) have waived its right to claim
      an Environmental Defect with respect to that particular condition in, on or
      under the Assets, and (iii) include the particular environmental
      condition(s) as part of the Assumed Environmental Liabilities.

     

    B.    Retained
      Environmental Liabilities.  If
      Seller
      receives an Environmental Defect Notice for a particular Environmental Defect
      and such Environmental Defect Notice is not contested under the provisions
      of
      Section 5.5, and Seller elects to retain the Assets affected by such
      Environmental Defect pursuant to Section 5.4.B, Seller agrees to retain all
      claims, cost, expenses, liabilities and obligations accruing or relating to
      the
      Environmental Defect that was the subject of the Environmental Defect Notice
      (the “Retained Environmental Liabilities”). Timely receipt of an Environmental
      Defect Notice and verification of the Remediation Costs by the Environmental
      Consultant are conditions precedent to Seller’s obligation to retain liability
      for Retained Environmental Liabilities.

     

    5.4    Remedies. 

     

    A.    Environmental
      Defects less than the Environmental Deductible.  If
      the
      aggregate Environmental Defect Values of all Environmental Defect Notices timely
      delivered to BBC is less than or equals the Environmental Deductible, the
      Environmental Defects identified in such notices will not be Retained
      Environmental Liabilities; accordingly, BBC will have no obligation hereunder
      with respect thereto and SCE agrees to assume, and release BBC from, the
      obligations with respect thereto as part of the Assumed Environmental
      Liabilities. The Environmental Deductible and the Title Deductible are separate
      and distinct and operate independently and each is a deductible and not a
      threshold.

     

    B.    Environmental
      Defects Greater than the Environmental Deductible.  If
      the
      aggregate Environmental Defect Values of all Environmental Defect Notices timely
      delivered to

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

    BBC
      exceeds the Environmental Deductible then BBC shall be liable for only that
      portion of any Losses attributable thereto which exceeds the Environmental
      Deductible. For those Environmental Defects not contested by BBC which aggregate
      more than the Environmental Deductible, BBC shall elect one of the following
      options: (i) remediate the condition on the affected Assets comprising the
      specified Environmental Defect(s) as promptly as practicable (and retain its
      obligation to indemnify and defend SCE from any Losses relating to such
      Environmental Defects), such remediation to be consistent with Environmental
      Laws and subject to the Environmental Deductible; or (ii) at Closing pay SCE
      its
      estimate of the Environmental Defect Value in excess of the Environmental
      Deductible (“Environmental Defect Adjustment”), in which event SCE shall release
      BBC from any further Retained Environmental Liability relating to the
      Environmental Defects so satisfied or (iii) if the Environmental Defect Value
      exceeds the Allocated Value of an Asset, Seller may elect to exclude such Asset
      from this Transaction and reduce the Purchase Price by the Allocated Value
      of
      that Asset. 

     

    5.5    Contested
      Environmental Defects.  If
      BBC
      contests the existence of an Environmental Defect or the Environmental Defect
      Value, BBC shall notify SCE in writing on or before five days after receipt
      of
      the Environmental Defect Notice (“Rejection Notice”). The Rejection Notice shall
      state with reasonable specificity the basis of the rejection of the
      Environmental Defect or the Environmental Defect Value. Within 5 business days
      of receipt of the Rejection Notice, representatives of SCE and BBC knowledgeable
      in environmental matters shall meet and, either (i) mutually agree to reject
      the
      particular Environmental Defect or (ii) agree on the validity of such
      Environmental Defect and the Environmental Defect Value. If the Parties cannot
      agree on either options (i) or (ii) in the preceding sentence, the Environmental
      Defect and/or the Environmental Defect Value subject to the Rejection Notice
      shall be resolved in accordance with the arbitration procedures set forth in
      Section 14.6. If BBC fails to timely deliver a Rejection Notice, BBC shall
      be
      deemed to have accepted the validity of the Environmental Defect and SCE’s
      estimate of the Environmental Defect Value, and shall be deemed to have waived
      its own option to contest the Environmental Defect pursuant to this Section.
      

     

    5.6    Exclusive
      Remedies.  The
      rights and remedies granted each Party in this Article, together with the
      indemnifications set forth in Article 14 and the rights of each Party to not
      close pursuant to Articles 10 and 11 are the exclusive rights and remedies
      against the other Party related to any Environmental Defect or other
      environmental matters. 

     

    ARTICLE
      6

    SELLER’S
      REPRESENTATIONS 

     

    The
      Parties agreement with respect to Title Matters and Environmental Matters is
      set
      forth in Articles 4 and 5 respectively, and the provisions of those Articles
      set
      forth BBC’s representations with respect to Title Matters and Environmental
      Matters. Except for Title Matters and Environmental Matters, BBC makes the
      following representations as of the execution of this Agreement and as of
      Closing:

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

    6.1    BBC
      Representations.

     

    A.    Existence. 
      BBC
      is a
      limited liability company, duly organized, validly existing and in good standing
      under the laws of the State of Texas and is qualified to do business in Wyoming.
      

     

    B.    Power
      and Authority.  BBC
      has
      all requisite power and authority to own the Assets, to carry on its business
      as
      presently conducted to execute, deliver, and perform this Agreement and each
      other document executed or to be executed by BBC in connection with the
      Transaction. The execution, delivery, and performance by BBC of this Agreement
      and each other document executed or to be executed by BBC in connection with
      the
      Transaction and the consummation by it of the Transaction have been duly
      authorized by all necessary company action of BBC.

     

    C.    No
      Violation.  The
      execution and delivery of this Agreement does not (i) create a lien or
      encumbrance on the Assets that will remain in existence after Closing, (ii)
      violate, or be in conflict with, any provision of BBC’s governing documents, or
      any provision of any statute, rule or regulation applicable to BBC or the Assets
      or any material lease, contract, agreement, instrument or obligation to which
      BBC is a party or by which BBC or the Assets are bound, or (iii) violate, or
      be
      in conflict with any judgment, decree or order applicable to BBC. 

     

    6.2    Authorization
      and Enforceability.  This
      Agreement and each other document executed by BBC in connection with this
      Transaction constitutes BBC’s legal, valid and binding obligation, enforceable
      in accordance with their respective terms, subject, however, to the effects
      of
      bankruptcy, insolvency, reorganization, moratorium and other laws for the
      protection of creditors and equitable principles which may limit the
      availability of certain equitable remedies (such as specific performance) in
      certain instances. 

     

    6.3    Liability
      for Brokers’ Fees.  BBC
      has
      not incurred any liability, contingent or otherwise, for brokers’ or finders’
fees relating to this Transaction for which SCE shall have any responsibility
      whatsoever.

     

    6.4    No
      Bankruptcy.  There
      are
      no bankruptcy proceedings pending, being contemplated by or, to the knowledge
      of
      BBC, threatened against BBC by any third party.

     

    6.5    Litigation. 
      BBC
      has
      not received a written claim or written demand notice that has not been resolved
      that would adversely affect any of the Assets. There are no actions, suit,
      ongoing governmental investigations, written governmental inquiries or
      proceedings pending or, to the knowledge of BBC, threatened against BBC or
      any
      of the Assets, in any court or by or before any federal, state, municipal or
      other governmental agency that relate to any of the Assets, or that would affect
      the BBC’s ability to execute and deliver this Agreement or to consummate this
      Transaction. 

     

    6.6    Capital
      Projects.  Exhibit
      F
      is a list and description of all wells or other specified capital projects
      to
      the extent such capital projects will extend beyond the Effective Time, and
      associated costs or estimates thereof to the extent such costs or estimates
      exceed $25,000 per well or project net to BBC’s interest, may be referred to as
      the “Capital Projects.” All costs and

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

    expenses
      incurred by the Parties with respect to the Capital Projects will be apportioned
      between the Parties as of the Effective Time, with SCE assuming all
      post-Effective Time costs and expenses and BBC retaining all pre-Effective
      Time
      costs and expenses.

     

    6.7    Insurance. 
      BBC
      maintains, and through the Closing Date will maintain, with respect to the
      Assets, the insurance coverage described on Exhibit G.

     

    6.8    Judgments. 
      There
      are
      no unsatisfied judgments or injunctions issued by a court of competent
      jurisdiction or other governmental agency outstanding against BBC that would
      be
      reasonably expected to materially interfere with the operation of any of the
      Assets, or materially affect the value of any of the Assets, or impair BBC’s
      ability to enter into this Agreement or consummate this
      Transaction.

     

    6.9    Compliance
      with Law.  BBC
      has
      not received a written notice of a material violation of any statute, law,
      ordinance, regulation, permit, rule or order of any federal, state, tribal
      or
      local government or any other governmental department or agency, or any
      judgment, decree or order of any court, applicable to the Assets or operations
      on the Assets, which remains uncured.

     

    6.10    Material
      Agreements.  To
      the
      extent not listed elsewhere in this Agreement and except for the Leases,
      Exhibit D is a list of all agreements that are material to the ownership
      and operation of the Assets (with such agreements listed on Exhibit D being
      the “Material Agreements”).

     

    6.11    Governmental
      Permits.  To
      the
      best of BBC’s knowledge, BBC has all governmental licenses, filings and permits
      (including, without limitation, permits, licenses, approval registrations,
      notifications, exemptions and any other authorizations pursuant to Law)
      necessary or appropriate to own and operate the Assets as presently being owned
      and operated. BBC has not received written notice of any violations in respect
      of any such licenses or permits that remains uncured. Except for those permits
      listed on Exhibit I, all such permits are transferable to SCE. All of BBC’s
      representations related to governmental licenses, filings and permits
      (including, without limitation, permits, licenses, approval registrations,
      notifications, exemptions and any other authorizations pursuant to Environmental
      Laws) related to Environmental Laws are set forth in Section 5.2. BBC makes
      no
      representations as to SCE’s ability to obtain permits for future operations.

     

    6.12    Hydrocarbon
      Sales Contracts. 
      Except
      for the Hydrocarbon Sales Contracts listed in Exhibit H, no Hydrocarbons are
      subject to a sales contract (other than division orders or spot sales agreements
      terminable on no more than 30 days notice) and no person has any call upon,
      option to purchase or similar rights with respect to the production from the
      Assets. Proceeds from the sale of oil, condensate, and gas from the Assets
      are
      being received in all respects by BBC in a timely manner and are not being
      held
      in suspense for any reason. 

     

    6.13    Area
      of Mutual Interest and Other Agreements; Tax Partnerships. 
To
      BBC’s
      knowledge, no Asset is subject to (or has related to it) any area of mutual
      interest agreements or any farm-out or farm-in agreement under which any party
      thereto is entitled to receive

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    

    assignments
      not yet made, or could earn additional assignments after the Effective Time
      other than the Wells listed on Exhibit A as having an after payout NRI. No
      Asset
      is subject to (or has related to it) any tax partnership. 

     

    6.14    Imbalance
      Volumes.

     

    A.    Gas
      Pipeline Imbalances.  Except
      for the gas imbalances reflected on Exhibit J (“Imbalance Volumes”), there do
      not exist any gas imbalances (i) which are with gatherers processors, or
      transporters (ii) which are associated with the Assets and (iii) where BBC
      has
      received a quantity of gas prior to the Effective Time for which SCE will have
      a
      duty after the Effective Time to deliver an equivalent quantity of gas or pay
      a
      sum of money. 

     

    B.    Wellhead
      Gas Imbalances.  Except
      for the Imbalances Volumes, there do not exist any gas imbalances relating
      either to production from, or at the, wellhead between co-tenants or working
      interest owners in a well, unit, or field which are associated with the Assets
      where BBC has received any quantity of gas prior to the Effective Time for
      which
      SCE will have a duty after the Effective Time to deliver an equivalent quantity
      of gas or pay a sum of money. 

     

    6.15    Records. 
      BBC
      makes
      no representations regarding the accuracy of any of the Records, and SCE
      expressly agrees that any conclusions drawn therefrom shall be the result of
      its
      own independent review and judgment. 

     

    6.16    Suspense
      Accounts.  Except
      for the suspense accounts identified to SCE in writing on or before the
      25th
      day
      after execution of this Agreement (“Suspense Accounts”), as of May 1, 2006, none
      of the BBC interests in the Wells and Hydrocarbons produced from the Assets
      were
      in suspense and BBC is not holding in suspense for any third party any proceeds
      from production from the Wells for which BBC is responsible for making
      payment.

     

    ARTICLE
      7

    BUYER’S
      REPRESENTATIONS 

     

    SCE
      makes
      the following representations to BBC as of the execution of this Agreement
      and
      as of Closing:

     

    7.1    SCE
      Representations.

     

    A.    Existence. 
      SCE
      is a
      corporation, duly organized, validly existing and in good standing under the
      laws of the State of Colorado and is qualified to do business in Wyoming.

     

    B.    Power
      and Authority.  SCE
      has
      all requisite power and authority to own the Assets, to carry on its business
      as
      presently conducted, to execute, deliver, and perform this Agreement and each
      other document executed or to be executed by SCE in connection with the
      Transaction. The execution, delivery, and performance by SCE of this Agreement
      and each other document executed or to be executed by SCE in connection with
      the
      Transaction and the consummation by it of the Transaction have been duly
      authorized by all necessary company action of SCE.

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    

    C.     No
      Violation.  The
      execution and delivery of this Agreement does not (i) create a lien or
      encumbrance on the Assets that will remain in existence after Closing, (ii)
      violate, or be in conflict with, any provision of SCE’s governing documents, or
      any provision of any statute, rule or regulation applicable to SCE or the Assets
      or any material lease, contract, agreement, instrument or obligation to which
      SCE is a party or by which SCE or the Assets are bound, or (iii) violate, or
      be
      in conflict with any judgment, decree or order applicable to SCE. 

     

    7.2    Authorization
      and Enforceability.  The
      execution, delivery and performance of this Agreement and this Transaction
      have
      been duly and validly authorized by all requisite action on behalf of SCE.
      This
      Agreement and each other document executed by SCE in connection with this
      Transaction constitutes SCE’s legal, valid and binding obligation, enforceable
      in accordance with their respective terms, subject, however, to the effects
      of
      bankruptcy, insolvency, reorganization, moratorium and similar laws for the
      protection of creditors and equitable principles which may limit the
      availability of certain equitable remedies (such as specific performance) in
      certain instances. 

     

    7.3    Liability
      for Brokers’ Fees.  SCE
      has
      not incurred any liability, contingent or otherwise, for brokers’ or finders’
fees relating to this Transaction for which BBC shall have any responsibility
      whatsoever.

     

    7.4    Litigation. 
      There
      is
      no action, suit, proceeding, claim or investigation by any person, entity,
      administrative agency or governmental body pending or, to SCE’s knowledge,
      threatened against it before any governmental authority that impedes or is
      likely to impede SCE’s ability to consummate this Transaction and to assume the
      liabilities to be assumed by SCE under this Agreement, including without
      limitation, the Assumed Liabilities.

     

    7.5    Securities
      Laws.  SCE
      is
      familiar with the Assets and it is a knowledgeable, experienced and
      sophisticated investor in the oil and gas business. SCE understands and accepts
      the risks and absence of liquidity inherent in ownership of the Assets. SCE
      acknowledges that the Assets are or may be deemed to be “securities” under the
      Securities Act of 1933, as amended, and certain applicable state securities
      or
      Blue Sky laws and that resales thereof may therefore be subject to the
      registration requirements of such acts. The Assets are being acquired solely
      for
      SCE’s own account for the purpose of investment and not with a view to resale,
      distribution or granting a participation therein in violation of any securities
      laws.

     

    7.6    Financial
      Resources.  SCE
      has
      the financial resources available to close this Transaction without financing
      that is subject to any contingency. 

     

    7.7    Records. 
      SCE
      acknowledges that BBC is making available to it the Records and the opportunity
      to examine, to the extent it deems necessary in its sole discretion, all real
      property, personal property and equipment associated with the Assets. Except
      for
      the representations of BBC contained in this Agreement, SCE acknowledges and
      agrees that BBC has not made any representations or warranties, express or
      implied, written or oral, as to the accuracy or completeness of the Records
      or
      any other information relating to the Assets furnished or to be furnished to
      SCE
      or its representatives by or on behalf of BBC, including without limitation
      any
      estimate with respect to the value of the Assets, estimates or any

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    

    projections
      as to reserves and/or events that could or could not occur, future operating
      expenses, future workover expenses and future cash flow. 

     

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

    

    ARTICLE
      8

    COVENANTS
      AND AGREEMENTS

     

    8.1    Covenants
      and Agreements of BBC.  BBC
      covenants and agrees with SCE as follows:

     

    A.    Operations
      Prior to Closing.  From
      the
      date of execution hereof to the Closing, BBC will operate the Assets in a good
      and workmanlike manner and consistent with past practices. BBC agrees to
      maintain the insurance now in effect with respect to the Assets through the
      date
      of Closing. From the date of execution of this Agreement to the Closing Date,
      BBC shall pay or cause to be paid its proportionate shares of all Property
      Expenses incurred in connection with the ownership or operations of the Assets.
      Except for Capital Projects, BBC will timely notify SCE of proposed activities
      and major capital expenditures that could reasonably be expected to cost in
      excess of $25,000 per activity net to BBC’s interests conducted on the Assets
      and will keep SCE timely informed of all material developments affecting any
      of
      the Assets.

     

    B.    Restriction
      on Operations.  Except
      in
      the case of an emergency, BBC will promptly inform SCE of all requests for
      commitments to expend funds in excess of $25,000 with respect to the Assets.
      Without the prior written consent of SCE, BBC shall not:

     

    1.    enter
      into any new agreements or commitments with respect to the Assets which extend
      beyond the Closing; 

     

    2.    commit
      to
      or incur any expenditures in excess of $25,000 (net to BBC’s interest) with
      respect to any part of the Assets;

     

    3.    make
      any
      nonconsent elections with respect to operations affecting the
      Assets;

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    4.    abandon
      any Well or release (or permit to terminate), or modify or reduce its rights
      under all or any portion of any of the Leases;

     

    5.    modify
      or
      terminate any of the Material Agreements or waive or relinquish any right
      thereunder; 

     

    6.    agree
      to
      any renegotiated price, take or other terms under existing gas purchase
      agreements; 

     

    7.    agree
      to
      any credit or prepayment arrangement that would reduce the share of gas
      deliverable with respect to the Assets following the Effective
      Time;

     

    8.    enter
      into any agreement or instrument for the sale, treatment, or transportation
      of
      production from the Assets (except for sales agreements terminable on no more
      than 30 days’ notice);

     

    9.    create
      any material gas imbalance affecting the Assets; 

     

    10.    encumber,
      sell or otherwise dispose of any of the Assets, other than personal property
      that is replaced by equivalent property or consumed in the normal operation
      of
      the Assets; and

     

    11.    except
      where necessary in the event of an emergency regarding BBC’s interest in the
      Assets, propose (i) the drilling of any additional wells, (ii) the deepening,
      plugging back or reworking of any Well, (iii) the conducting of any other
      operations which require consent under the applicable operating agreement,
      or
      (iv) the conducting of any other operations other than the normal operation
      of
      the existing wells on the Assets.

     

    C.    Notification
      of Claims.  BBC
      shall
      promptly notify SCE of any suit, action or other written proceeding before
      any
      court or governmental agency and any cause of action that relates to the Assets
      or that might, in BBC’s reasonable judgment, result in impairment or loss of
      BBC’s title to any portion of the Assets or the value thereof or that might
      hinder or impede the operation of the Leases arising or threatened prior to
      the
      Closing.

     

    D.    Existing
      Relationships.  Prior
      to
      the Closing, BBC shall not introduce any new method of management, operation
      or
      accounting with respect to the Assets and shall use all reasonable efforts
      to
      preserve its relationships with customers, suppliers, distributors, contractors,
      operators, non-operators, royalty owners, and others having business dealings
      with it in connection with the Assets.

     

    E.    Consents. 
      For
      the
      purposes of obtaining the written consents required in this Section 8.1,
      SCE designates the person set forth in Section 15.2. Such consents may be
      obtained in writing by overnight courier or given by telecopy or facsimile
      transmission.

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    

    F.    Entity
      Status.  BBC
      shall
      maintain its company status from the date hereof until Closing and through
      the
      Final Settlement to assure that as of the Closing Date and the Final Settlement,
      BBC will not be under any material legal or contractual restriction that would
      prohibit or delay the timely consummation of this Transaction.

     

    8.2    Covenants
      and Agreements of SCE.  SCE
      covenants and agrees with BBC as follows:

     

    A.    Entity
      Status.  SCE
      shall
      maintain its corporate status from the date hereof until the Closing Date and
      the Final Settlement, and use all reasonable efforts to assure that as of the
      Closing Date and the Final Settlement it will not be under any material legal
      or
      contractual restriction that would prohibit or delay the timely consummation
      of
      this Transaction. 

     

    B.    Replacement
      Bonds and Instruments.  At
      Closing, SCE shall provide replacement instruments for each bond or similar
      contingent obligation given by BBC securing its, or its contract operator’s,
      obligations relating to the Assets, set forth on Exhibit O (collectively, the
      “Instruments”). As soon as practical after Closing, SCE (with reasonable
      assistance of BBC as requested by SCE) shall use its commercially reasonable
      efforts to obtain the release of the Assets and/or BBC from the
      Instruments.

     

    8.3    Covenants
      and Agreements of the Parties.  The
      Parties covenant and agree as follows:

     

    A.    Confidentiality. 
      All
      data
      and information, whether written or oral, obtained from BBC in connection with
      this Transaction, including the Records, whether obtained by SCE before or
      after
      the execution of this Agreement, and data and information generated by SCE
      in
      connection with this Transaction (collectively, the “Information”), is deemed by
      the Parties to be confidential and proprietary to BBC. Until the Closing (and
      for a period of two year if Closing should not occur for any reason), except
      as
      required by law or applicable stock exchange rule and after consulting with
      BBC,
      SCE and its officers, agents and representatives will hold in strict confidence
      the terms of this Agreement, and all Information, except any Information which:
      (i) at the time of disclosure to SCE by BBC is in the public domain; (ii) after
      disclosure to SCE by BBC becomes part of the public domain by publication or
      otherwise, except by breach of this commitment by SCE; (iii) SCE can establish
      by competent proof was rightfully in SCE’s possession at the time of disclosure
      to SCE by BBC; (iv) SCE rightfully receives from third parties free of any
      obligation of confidence; or (v) is developed independently by SCE without
      the
      Information, provided that the person or persons developing the data shall
      not
      have had access to the Information.

     

    B.    Return
      of Information.  If
      this
      Transaction does not close on or before Closing, or such later date as agreed
      to
      by the Parties, SCE shall (i) return to BBC all copies of the Information in
      possession of SCE obtained pursuant to any provision of this Agreement, which
      Information is at the time of termination required to be held in confidence
      pursuant to Section 8.3.A.; (ii) not utilize or permit utilization of the
      Information to compete with BBC; and (iii) destroy any and all notes, reports,
      studies or analyses based on or incorporating the Information. The terms of
      Section 8.3A., B. and C. shall survive termination of this
      Agreement.

    
      
        
        

      

      
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    C.    Injunctive
      Relief.  SCE
      agrees that BBC will not have an adequate remedy at law if SCE violates any
      of
      the terms of Sections 8.3A. and/or B. In such event, BBC will have the
      right, in addition to any other it may have, to obtain injunctive relief to
      restrain any breach or threaten breach of the terms of Sections 8.3.A.
      and/or B., or to obtain specific enforcement of such terms.

     

    D.    Cure
      Period for Breach.  If
      any
      Party believes any other Party has breached the terms of this Agreement, the
      Party who believes the breach has occurred shall give written notice to the
      breaching Party of the nature of the breach and give the breaching Party
      48 hours to cure. Notwithstanding the foregoing, this Subsection shall not
      apply to breach of the Parties’ obligations at Closing and shall not operate to
      delay Closing.

     

    E.    Notice
      of Breach.  If
      either
      BBC or SCE develops or possesses information that leads it to believe that
      the
      other Party may have breached a representation or warranty under this Agreement,
      that Party shall promptly inform the other Party of such potential breach so
      that it may attempt to remedy or cure such breach prior to Closing. The
      provisions of this Agreement and the various documents and agreements to be
      executed and delivered pursuant hereto relating to representations, warranties,
      indemnities and agreements of BBC or SCE shall not be altered or modified by
      the
      Closing or by SCE’s or BBC’s knowledge of any event or SCE’s or BBC’s review of
      any documents or other matters except as expressly provided herein to the
      contrary.

     

    ARTICLE
      9

    TAX
      MATTERS

     

    9.1    Apportionment
      of Tax Liability.  “Taxes”
      shall mean all ad valorem, property, production, excise, net proceeds, severance
      and all other taxes and similar obligations assessed against the Assets or
      based
      upon or measured by the ownership of the Assets or the production of
      Hydrocarbons or the receipt of proceeds therefrom, other than income taxes.
      All
      Taxes based on or attributable to the ownership of, or based on production
      of
      hydrocarbons shall be deemed attributable to the period during which such
      production occurred, with the exception of severance taxes, which shall be
      based
      on the date such severance taxes were assessed. All Taxes for all taxable
      periods that begin before and end after the Effective Time shall be prorated
      between SCE and BBC as of the Effective Time. The apportionment of Taxes between
      the Parties shall take place in the Preliminary Statement and Settlement
      Statement, using estimates of such Taxes if actual numbers are not available.
      Subject to the provisions of Section 14.3, Taxes are considered part of the
      Property Expenses. 

     

    9.2    Calculation
      of Tax Liability.  Consistent
      with Section 9.1, and based on the best current information available as of
      Closing, the proration of Taxes shall be made between the Parties as an
      adjustment to the Purchase Price pursuant to Section 2.4 and thereafter
      pursuant to the provision of Section 14.3.

     

    9.3    Tax
      Reports and Returns.  BBC
      agrees to file all tax returns for the period of time prior to the Effective
      Time, and SCE agrees to file all tax returns for the period of time after
      Effective Time. The Party not filing the return agrees to provide the Party
      filing the return

    
      
        
        

      

      
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    with
      appropriate information which is necessary to file any required tax reports
      and
      returns related to the Assets. SCE agrees to file all tax returns and reports
      applicable to the Assets that are required to be filed after the Closing, and
      pay all required Taxes payable with respect to the Assets subject to the
      provisions of Sections 9.1 and 14.3. 

     

    9.4    Sales
      Taxes.  SCE
      shall
      be liable for and shall indemnify BBC for, any sales and use taxes, conveyance,
      transfer and recording fees and real estate transfer stamps or taxes that may
      be
      imposed on any transfer of the Assets pursuant to this Agreement. If required
      by
      applicable law, BBC shall, in accordance with applicable law, calculate and
      remit any sales or similar taxes that are required to be paid as a result of
      the
      transfer of the Assets to SCE and SCE shall promptly reimburse BBC therefor.
      If
      BBC receives notice that any sales and/or use taxes are due, BBC shall promptly
      forward such notice to SCE for handling.

     

    ARTICLE
      10

    CONDITIONS
      PRECEDENT TO CLOSING

     

    10.1    BBC’s
      Conditions Precedent.  The
      obligations of BBC at the Closing are subject, at the option of BBC, to the
      satisfaction or waiver at or prior to the Closing of the following conditions
      precedent:

     

    A.    All
      representations and warranties of SCE contained in this Agreement are true
      in
      all material respects (considering this Transaction as a whole) at and as of
      the
      Closing in accordance with their terms as if such representations and warranties
      were remade at and as of the Closing. SCE has performed and satisfied all
      covenants and agreements required by this Agreement to be performed and
      satisfied by SCE at or prior to the Closing in all material respects and SCE
      shall deliver a certificate to SCE confirming the foregoing;

     

    B.    No
      order
      has been entered by any court or governmental agency having jurisdiction over
      the Parties or the subject matter of this Agreement that restrains or prohibits
      this Transaction and that remains in effect at the time of Closing; and

     

    C.    The
      aggregate net reduction to the Purchase Price due to Title Defects, Interest
      Additions, Environmental Defects, and reductions based on breaches of
      representations and warranties, but excluding reductions for Exclusion
      Adjustments does not exceed in the aggregate 10% of the Purchase
      Price.

     

    10.2    SCE’s
      Conditions Precedent.  The
      obligations of SCE at the Closing are subject, at the option of SCE, to the
      satisfaction or waiver at or prior to the Closing of the following conditions
      precedent:

     

    A.    All
      representations and warranties of BBC contained in this Agreement are true
      in
      all material respects at and as of the Closing in accordance with their terms
      as
      if such representations were remade at and as of the Closing. BBC has performed
      and satisfied all covenants and agreements required by this Agreement to be
      performed and satisfied by BBC at or prior to the Closing in all material
      respects and BBC shall deliver a certificate to SCE confirming the
      foregoing;

    
      
        
        

      

      
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    B.    No
      order
      has been entered by any court or governmental agency having jurisdiction over
      the Parties or the subject matter of this Agreement that restrains or prohibits
      this Transaction and that remains in effect at the time of Closing;
      and

     

    C.    The
      aggregate net reduction to the Purchase Price due to Title Defects, Interest
      Additions, Environmental Defects, and reductions based on breaches of
      representations and warranties, but excluding reductions for Exclusion
      Adjustments does not exceed in the aggregate 10% of the Purchase
      Price.

     

    ARTICLE
      11

    RIGHT
      OF TERMINATION AND ABANDONMENT

     

    11.1    Termination. 
      This
      Agreement may be terminated in accordance with the following
      provisions:

     

    A.    by
      BBC if
      either BBC’s conditions set forth in Section 10.1 are not satisfied through no
      fault of BBC, or are not waived by BBC, as of the Closing Date;

     

    B.    by
      SCE if
      SCE’s conditions set forth in Section 10.2 are not satisfied through no fault of
      SCE, or are not waived by SCE, as of the Closing Date; and

     

    C.    by
      either
      Party if the Purchase Price reduction described in either Sections 10.1C. or
      10.2C. has occurred and not been waived by both BBC and SCE.

     

    11.2    Liabilities
      Upon Termination.  

     

    A.    SCE’s
      Breach  If
      Closing does not occur because SCE wrongfully fails to tender performance at
      Closing or otherwise breaches this Agreement prior to Closing, and BBC is ready
      to close, BBC shall retain the Deposit, together with interest thereon, as
      liquidated damages. SCE’s failure to close shall not be considered wrongful if
      SCE has terminated this Agreement as of right under Section 11.1. The remedy
      set
      forth herein shall be BBC’s sole and exclusive remedy for SCE’s wrongful failure
      to close hereunder and BBC expressly waives any and all other remedies, legal
      and equitable, that it otherwise may have had for SCE’s wrongful failure to
      Close.

     

    B.    BBC’s
      Breach  If
      Closing does not occur because BBC wrongfully fails to tender performance at
      Closing or otherwise breaches this Agreement prior to Closing, and SCE is ready
      and otherwise able to close, BBC shall return the Deposit, together with
      interest thereon, to SCE 15 days after the determination that the Closing will
      not occur, and the remedy set forth herein shall be SCE’s sole and exclusive
      remedy for BBC’s wrongful failure to close hereunder. 

     

    C.    Termination
      Pursuant to Sections 11.1  If
      SCE or
      BBC terminates this Agreement pursuant to Section 11.1 in the absence of a
      breach by the other Party, neither SCE nor BBC shall have any liability to
      the
      other Party for termination of this Agreement, BBC shall return the Deposit,
      together with interest thereon, to SCE immediately after the determination
      that
      the Closing will not occur. 

    
      
        
        

      

      
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    ARTICLE
      12

    CLOSING

     

    12.1    Date
      of Closing.  The
      “Closing” of this Transaction shall be held on or before Wednesday August 30,
      2006. The date the Closing actually occurs is called the “Closing
      Date.”

     

    12.2    Place
      of Closing.  The
      Closing shall be held at the offices of BBC in Denver, Colorado, at 9:00 a.m.
      or
      at such other time and place as SCE and BBC may agree in writing.

     

    12.3    Closing
      Obligations.  At
      Closing, the following events shall occur, each being a condition precedent
      to
      the others and each being deemed to have occurred simultaneously with the
      others:

     

    A.    BBC
      shall
      execute, acknowledge and deliver to SCE, an Assignment, Bill of Sale and
      Conveyance in the form attached as Exhibit K, in sufficient counterparts for
      recording in each county where the Assets are located, conveying the Assets
      to
      SCE as of the Effective Time, with (i) a special warranty of the real property
      title by, through and under BBC but not otherwise, and (ii) with all personal
      property and fixtures conveyed “AS IS, WHERE IS,” with no warranties whatsoever,
      express, implied or statutory.

     

    B.    BBC
      shall
      execute, acknowledge and deliver to SCE, an assignment on the required
      governmental forms necessary to convey the Assets to SCE.

     

    C.    BBC
      and
      SCE shall execute and deliver the Preliminary Settlement Statement.

     

    D.    SCE
      shall
      deliver the Closing Amount to the account at the bank designated by BBC in
      writing, by wire transfer in immediately available funds, or by such other
      method as agreed to by the Parties.

     

    E.    SCE
      shall
      deliver to BBC the Officer Certificate, dated as of the Closing Date, in form
      and substance as set forth in Exhibit L.

     

    F.    BBC
      shall
      deliver to SCE the Officer Certificate, dated as of the Closing Date, in form
      and substance as set forth in Exhibit M.

     

    G.    BBC
      shall
      execute and deliver to SCE an affidavit of non-foreign status and no requirement
      for withholding under Section 1445 of the Code in the form attached as Exhibit
      N.

     

    H.    SCE
      shall
      provide evidence that it has provided replacement Instruments as set forth
      in
      Section 8.2B.

     

    I.    BBC
      shall
      prepare, execute and deliver to SCE appropriate letters-in-lieu of transfer
      orders.

    
      
        
        

      

      
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    J.    SCE
      and
      BBC shall execute all documents necessary to transfer operations on the BBC
      operated Assets to SCE or SCE’s designated operator.

     

    K.    BBC
      shall
      make the Records available for pick up by SCE at Closing to the extent possible,
      but in any event, within five business days after Closing.

     

    L.    BBC
      and
      SCE shall take such other actions and deliver such other documents as are
      contemplated by this Agreement.

     

    M.    BBC
      shall
      transfer to SCE all Suspense Accounts, if any, being held by BBC on behalf
      of
      third party payees, and SCE shall indemnify, defend and hold harmless BBC from
      any and all Losses attributable to the Suspense Accounts so
      transferred.

     

    ARTICLE
      13

    POST-CLOSING
      OBLIGATIONS

     

    13.1    Post-Closing
      Adjustments.

     

    A.    Settlement
      Statement.  As
      soon
      as practicable after the Closing, but in no event later than 90 days after
      Closing, BBC, with assistance from SCE’s staff, will prepare and deliver to SCE,
      in accordance with customary industry accounting practices, the Settlement
      Statement (the “Settlement Statement”) setting forth each adjustment or payment
      that was not finally determined as of the Closing and showing the calculation
      of
      such adjustment and the resulting final purchase price (the “Final Purchase
      Price”). As soon as practicable after receipt of the Settlement Statement, but
      in no event later than on or before 30 days after receipt of BBC’s proposed
      Settlement Statement, SCE shall deliver to BBC a written report containing
      any
      changes that SCE proposes to make to the Settlement Statement. SCE’s failure to
      deliver to BBC a written report detailing proposed changes to the Settlement
      Statement by that date shall be deemed an acceptance by SCE of the Settlement
      Statement as submitted by BBC. The Parties shall agree with respect to the
      changes proposed by SCE, if any, no later than 45 days after receipt of BBC’s
      proposed Settlement Statement. The date upon which such agreement is reached
      or
      upon which the Final Purchase Price is established shall be herein called the
      “Settlement Date.” If the Final Purchase Price is more than the Closing Amount,
      SCE shall pay BBC the amount of such difference. If the Final Purchase Price
      is
      less than the Closing Amount, BBC shall pay to SCE the amount of such
      difference. Any payment by SCE or BBC, as the case may be, shall be made by
      wire
      transfer of immediately available funds within 5 days of the Settlement Date.
      Any adjustments requiring additional payment by either SCE or BBC shall also
      be
      made in the same manner.

     

    B.    Dispute
      Resolution.  If
      the
      Parties are unable to resolve a dispute as to the Final Purchase Price by 45
      days after SCE’s receipt of BBC’s proposed Settlement Statement, the Parties
      shall submit the dispute to binding arbitration to be conducted pursuant to
      Section 14.6.

     

    13.2    Records. 
      BBC
      shall
      make the Records available for pick up by SCE at Closing to the extent possible,
      but in any event, within five business days after Closing. BBC may retain copies
      of the Records and BBC shall have the right to review and copy the
      Records

    
      
        
        

      

      
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    during
      standard business hours upon reasonable notice for so long as SCE retains the
      Records. SCE agrees that the Records will be maintained in compliance with
      all
      applicable laws governing document retention. SCE will not destroy or otherwise
      dispose of Records for a period of 4 years after Closing, unless SCE first
      gives
      BBC reasonable notice and an opportunity to copy the Records to be
      destroyed.

     

    13.3    Transfer
      of Operations/Operations After Closing.  BBC
      agrees to transfer possession and physical operations of the Assets to SCE
      at
      the Closing; provided, however, that BBC does not guaranty that operations
      can
      be transferred to SCE, and that all transfers of operations will be subject
      to
      all necessary regulatory approvals. BBC agrees to use its commercially
      reasonable efforts to assist SCE in becoming successor operator of the Assets
      operated by BBC; provided however, that BBC shall not be required to expend
      any
      monies assisting SCE in becoming successor operator. BBC agrees to retain the
      obligation to distribute the proceeds attributable to July 2006 production
      from
      the Assets. SCE agrees to assume the obligation to distribute the proceeds
      attributable to all production for months after July 2006.

     

    13.4    Further
      Assurances.  From
      time
      to time after Closing, BBC and SCE shall each execute, acknowledge and deliver
      to the other such further instruments and take such other action as may be
      reasonably requested in order to accomplish more effectively the purposes of
      this Transaction.

     

    ARTICLE
      14

    ASSUMPTION
      AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION

     

    14.1    SCE’s
      Assumption of Liabilities and Obligations.  Upon
      Closing, and except for Retained Liabilities, SCE shall assume and pay, perform,
      fulfill and discharge all claims, costs, expenses, liabilities and obligations
      accruing or relating to the owning, developing, exploring, operating or
      maintaining of the Assets or the producing, transporting and marketing of
      Hydrocarbons from the Assets for the period before and after the Effective
      Time,
      including, without limitation, (i) the Material Contracts, (ii) the Assumed
      Environmental Liabilities whether arising before or after the Effective Time,
      (iii) the obligation to plug and abandon all wells and reclaim all well sites
      located on the Lands regardless of when the obligations arose, (iv) the make-up
      and balancing obligations for gas from the Wells, and (v) any breach of any
      representation, warranty, covenant or agreement of SCE contained in this
      Agreement (collectively, the “Assumed Liabilities”).

     

    14.2    BBC’s
      Retention of Liabilities and Obligations.  Upon
      Closing, BBC retains all claims, costs, expenses, liabilities and obligations
      accruing or relating to (i) the Retained Environmental Liabilities
      (ii) any breach of any representation, warranty, covenant or agreement of
      BBC contained in this Agreement, and (iii) the Property Expenses incurred or
      attributable to the period of time prior to the Effective Time, subject to
      Section 14.3 (collectively, the “Retained Liabilities”). 

     

    14.3    Proceeds
      and Invoices for Property Expenses Received After the Settlement Date. 
After
      the
      Settlement Date, those proceeds attributable to the Assets received by a Party
      or invoices received for or Property Expenses paid by one Party for or on behalf
      of the

    
      
        
        

      

      
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    other
      Party with respect to the Assets which were not already included in the Final
      Settlement, shall be settled as follows: 

     

    A.    Proceeds. 
      Proceeds
      received by SCE with respect to sales of Hydrocarbons produced prior to the
      Effective Time shall be remitted or forwarded to BBC. Proceeds received by
      BBC
      with respect to sales of Hydrocarbons produced after the Effective Time shall
      be
      forwarded to SCE. 

     

    B.    Property
      Expenses.  Invoices
      for Property Expenses received by SCE that relate to operations on the Assets
      prior to the Effective Time shall be forwarded to BBC by SCE. Invoices for
      Property Expenses received by BBC that relate to operations on the Assets after
      the Effective Time shall be forwarded to SCE by BBC, or if already paid by
      BBC,
      invoiced by BBC to SCE. 

     

    C.    Limitation
      as to Time.  The
      provisions of this Article shall be applicable until December 31, 2006, after
      which time, Buyer agrees to assume the obligation to pay all Property Expenses
      for the Assets attributable to the period of time before and after the Effective
      Time and shall be entitled to retain the proceeds of production attributable
      to
      the period of time before and after the Effective Time. 

     

    14.4    Indemnification. 
      “Losses”
      shall mean any actual losses, costs, expenses (including court costs, reasonable
      fees and expenses of attorneys, technical experts and expert witnesses and
      the
      cost of investigation), liabilities, damages, demands, suits, claims, and
      sanctions of every kind and character (including civil fines) arising from,
      related to or reasonably incident to matters indemnified against; excluding
      however any special, consequential, punitive or exemplary damages, diminution
      of
      value of an Asset, loss of profits incurred by a Party hereto or Loss incurred
      as a result of the indemnified Party indemnifying a third party.

     

    After
      the
      Closing, the Parties shall indemnify each other as follows:

     

    A.    BBC’s
      Indemnification of SCE.  BBC
      assumes all risk, liability, obligation and Losses in connection with, and
      shall
      defend, indemnify, and save and hold harmless SCE, its officers, directors,
      employees and agents, from and against all Losses which arise from or in
      connection with (i) the Retained Liabilities, (ii) any matter for which BBC
      has
      agreed to indemnify SCE under this Agreement, and (iii) any breach by BBC of
      this Agreement.

     

    B.    SCE’s
      Indemnification of BBC.  SCE
      assumes all risk, liability, obligation and Losses in connection with, and
      shall
      defend, indemnify, and save and hold harmless BBC, its members, officers,
      directors, employees and agents, from and against all Losses which arise from
      or
      in connection with (i) the Assumed Liabilities, (ii) any matter for which SCE
      has agreed to indemnify BBC under this Agreement, and (iii) any breach by SCE
      of
      this Agreement.

     

    C.    Release. 
      SCE
      shall
      be deemed to have released BBC at the Closing from any Losses for which SCE
      has
      agreed to indemnify BBC hereunder, and BBC shall be deemed to have released
      SCE
      at the Closing from any Losses for which BBC has agreed to indemnify SCE
      hereunder. 

    
      
        
        

      

      
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    14.5    Procedure. 
      The
      indemnifications contained in Section 14.4 shall be implemented as
      follows:

     

    A.    Coverage. 
      Such
      indemnity shall extend to all Losses suffered or incurred by the indemnified
      Party.

     

    B.    Claim
      Notice.  The
      Party
      seeking indemnification under the terms of this Agreement (“Indemnified Party”)
      shall submit a written “Claim Notice” to the other Party (“Indemnifying Party”)
      which shall list the amount claimed by an Indemnified Party, the basis for
      such
      claim, with supporting documentation, and list each separate item of Loss for
      which payment is so claimed. The amount claimed shall be paid by the
      Indemnifying Party to the extent required herein within 30 days after receipt
      of
      the Claim Notice, or after the amount of such payment has been finally
      established, whichever last occurs. 

     

    C.    Information. 
      If
      the
      Indemnified Party receives notice of a claim or legal action that may result
      in
      a Loss for which indemnification may be sought under this Agreement (a “Claim”),
      the Indemnified Party shall give written notice of such Claim to the
      Indemnifying Party as soon as is practicable. If the Indemnifying Party or
      its
      counsel so requests, the Indemnified Party shall furnish the Indemnifying Party
      with copies of all pleadings and other information with respect to such Claim.
      At the election of the Indemnifying Party made within 60 days after receipt
      of
      such notice, the Indemnified Party shall permit the Indemnifying Party to assume
      control of such Claim (to the extent only that such Claim, legal action or
      other
      matter relates to a Loss for which the Indemnifying Party is liable), including
      the determination of all appropriate actions, the negotiation of settlements
      on
      behalf of the Indemnified Party, and the conduct of litigation through attorneys
      of the Indemnifying Party’s choice, which counsel shall be reasonably
      satisfactory to the Indemnified Party; provided, however, that any settlement
      of
      the claim by the Indemnifying Party may not result in any liability or cost
      to
      the Indemnified Party without its prior written consent. If the Indemnifying
      Party elects to assume control, (i) any expense incurred by the Indemnified
      Party thereafter for investigation or defense of the matter shall be borne
      by
      the Indemnified Party and (ii) the Indemnified Party shall give all reasonable
      information and assistance, other than pecuniary, that the Indemnifying Party
      shall deem necessary to the proper defense of such Claim. In the absence of
      such
      an election, the Indemnified Party will use its best efforts to defend, at
      the
      Indemnifying Party’s expense, any claim, legal action or other matter to which
      such other Party’s indemnification under this Article 14 applies until the
      Indemnifying Party assumes such defense. If the Indemnifying Party fails to
      assume such defense within the time period provided above, the Indemnified
      Party
      may settle the Claim, in its reasonable discretion at the Indemnifying Party’s
      expense. If such a Claim requires immediate action, both the Indemnified Party
      and the Indemnifying Party will cooperate in good faith to take appropriate
      action so as not to jeopardize defense of such Claim or either Party’s position
      with respect to such Claim. 

     

    14.6    Dispute
      Resolution.  The
      Parties agree to resolve all “Disputes” concerning this Agreement pursuant to
      the provisions of this section, such disputes to include without limitation
      (i) the existence and scope of a Title Defect or Interest Addition,
      (ii) the Title Defect Value of that portion of the Asset affected by a
      Title Defect, (iii) the Value of an Interest Addition, (iv) the
      adequacy of BBC’s Title Defect curative materials, (v) the existence of
      an

    
      
        
        

      

      
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    Environmental
      Defect, (vi) the Environmental Defect Value, (vii) the adequacy of any
      remediation actions take with respect to an Environmental Defect, (viii) the
      Imbalance Volumes, or (ix) disputes concerning a Claim or amount to be paid
      by
      an Indemnifying Party. The Parties agree to submit all Disputes to binding
      arbitration in Denver, Colorado, such arbitration to be conducted as follows:
      The arbitration proceeding shall be governed by Colorado law and shall be
      conducted in accordance with the Commercial Arbitration Rules of the American
      Arbitration Association (“AAA”), with discovery to be conducted in accordance
      with the Federal Rules of Civil Procedure, and with any disputes over the scope
      of discovery to be determined by the “Arbitrators.” The arbitration shall be
      before a single arbitrator chosen by the mutual agreement of the Parties
      involved in the matter to be arbitrated, or if no such agreement can be reached
      within 10 days, a three-person panel of neutral arbitrators, consisting of
      one
      person picked by each side, and the two arbitrators so selected picking the
      third (with the panel so picked being the “Arbitrators”). The Arbitrator(s)
      shall conduct a hearing no later than 60 days after submission of the matter
      to
      arbitration, and the Arbitrator(s) shall render a written decision within 30
      days of the hearing. At the hearing, the Parties shall present such evidence
      and
      witnesses as they may choose, with or without counsel. Adherence to formal
      rules
      of evidence shall not be required but the arbitration panel shall consider
      any
      evidence and testimony that it determines to be relevant, in accordance with
      procedures that it determines to be appropriate. Any award entered in the
      arbitration shall be made by a written opinion stating the reasons and basis
      for
      the award made and any payment due pursuant to the arbitration shall be made
      within 15 days of the decision by the Arbitrator(s). The final decision shall
      be
      binding on the Parties, final and non-appealable, and may be filed in a court
      of
      competent jurisdiction and may be enforced by any Party as a final judgment
      of
      such court. Each Party shall bear its own costs and expenses of the arbitration,
      provided, however, that the costs of employing the Arbitrator(s) shall be borne
      50% by the BBC and 50% by the SCE.

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    

    14.7    No
      Insurance; Subrogation.  The
      indemnifications provided in this Agreement shall not be construed as a form
      of
      insurance. SCE and BBC hereby waive for themselves, their respective successors
      or assigns, including, without limitation, any insurers, any rights to
      subrogation for Losses for which each of them is respectively liable or against
      which each respectively indemnifies the other, and, if required by applicable
      policies, SCE and BBC shall obtain waiver of such subrogation from their
      respective insurers.

     

    14.8    Reservation
      as to Non-Parties.  Nothing
      herein is intended to limit or otherwise waive any recourse SCE or BBC may
      have
      against any non-Party for any obligations or liabilities that may be incurred
      with respect to the Assets.

     

    ARTICLE
      15

    MISCELLANEOUS

     

    15.1    Expenses. 
      All
      fees,
      costs and expenses incurred by SCE or BBC in negotiating this Agreement or
      in
      consummating this Transaction shall be paid by the Party incurring the same,
      including, without limitation, engineering, land, title, legal and accounting
      fees, costs and expenses. 

     

    15.2    Notices. 
      All
      notices and communications required or permitted under this Agreement shall
      be
      in writing and addressed as set forth below. Any communication or delivery
      hereunder shall be deemed to have been made and the receiving Party charged
      with
      notice when received whether by (i) personal delivery, (ii) telecopy or
      facsimile transmission, (iii) mail or (iv) overnight courier. All notices shall
      be addressed as follows:

     

    If
      to
      BBC:

    

    Bill
      Barrett CMB, L.L.C.

    1099
      18th
      Street,
      Suite 2300

    Denver,
      Colorado 8202 

    Attention:
      Hunt Walker

    Telephone:
      303.312.8515 

    Fax:
      303.312.8598 

     

    If
      to
      SCE:

    Storm
      Cat
      Energy (USA) Corporation

    1125
      17th
      Street,
      Suite 2310

    Denver,
      Colorado 80202 

    Attention:
      Barbara Zimmerman

    Telephone:
      303.991.5070

    Fax:
      303.991.5075

    

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

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    

    15.3    Amendments/Waiver. 
      Except
      for waivers specifically provided for in this Agreement, this Agreement may
      not
      be amended nor any rights hereunder waived except by an instrument in writing
      signed by the Party to be charged with such amendment or waiver and delivered
      by
      such Party to the Party claiming the benefit of such amendment or
      waiver.

     

    15.4    Assignment. 
      If
      either
      Party assigns all or a portion of its rights and obligations under this
      Agreement, such Party shall remain responsible for all of its obligations under
      this Agreement, including without limitation, its indemnity obligations. No
      such
      assignment or obligation shall increase the burden on the non-assigning Party
      or
      impose any duty on the non-assigning Party to communicate with or report to
      any
      transferee, and the non-assigning Party may continue to look to the assigning
      Party for all purposes under this Agreement.
      

     

    15.5    Announcements. 
      BBC
      and
      SCE shall consult with each other with regard to all press releases and other
      announcements issued after the date of execution of this Agreement and prior
      to
      the Closing Date concerning this Agreement or this Transaction and, except
      as
      may be required by applicable laws or the applicable rules and regulations
      of
      any governmental agency or stock exchange, SCE or BBC shall not issue any such
      press release or other publicity without the prior written consent of the other
      Party, which consent shall not be unreasonably withheld.

     

    15.6    Counterparts/Fax
      Signatures.  SCE
      and
      BBC may execute this Agreement in any number of counterparts, each of which
      shall be deemed an original instrument, but all of which together shall
      constitute but one and the same instrument. The Parties agree that facsimile
      signatures are binding.

     

    15.7    Governing
      Law.  This
      Agreement and this Transaction and any arbitration or dispute resolution
      conducted pursuant hereto shall be construed in accordance with, and governed
      by, the laws of the State of Colorado.

     

    15.8    Entire
      Agreement.  This
      Agreement constitutes the entire understanding among the Parties, their
      respective members, shareholders, officers, directors and employees with respect
      to the subject matter hereof, superseding all written or oral negotiations
      and
      discussions, and prior agreements and understandings relating to such subject
      matter. Each Exhibit and Schedule attached to this Agreement is incorporated
      into this Agreement. 

     

    15.9    Knowledge. 
      The
      “knowledge of a Party” shall mean for purposes of this Agreement, the actual,
      conscious knowledge of the Party at the time the assertion regarding knowledge
      is made. If the Party is a limited liability company, or corporation, or other
      entity other than a natural person, such actual, conscious knowledge must be
      on
      the part of the person having supervising management authority over the matters
      to which such knowledge pertains.

     

    15.10    Binding
      Effect.  This
      Agreement shall be binding upon, and shall inure to the benefit of, the Parties
      hereto, and their respective successors and assigns.

     

    15.11    Survival. 
      The
      representations set forth in Sections 6.1 through 6.4, and Sections 7.1 through
      7.8 shall survive without limitation as to time. The representations made
      in

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    

    Section
      6.14 shall survive for a period of 90 days following Closing. The remaining
      representations and warranties set forth in this Agreement, except those
      relating to BBC’s special warranty of title as described herein, shall not
      survive the Closing. Except for representations that survive, as set forth
      above, a claim for a breach of a representation or warranty must be made on
      or
      before Closing. Delivery of the Assignment, Bill of Sale and Conveyance at
      the
      Closing will not constitute a merger of this Agreement with such
      Assignment.

     

    15.12    Limitation
      on Damages.  The
      Parties shall not have any liability to each other for consequential, special,
      punitive or exemplary damages arising out of or related to a Party’s breach of
      any provision of this Agreement.

     

    15.13    No
      Third-Party Beneficiaries.  This
      Agreement is intended to benefit only the Parties hereto and their respective
      permitted successors and assigns. There are no third party beneficiaries to
      this
      Agreement.

     

    15.14    Condition
      Precedent.  A
      condition precedent to the effectiveness of this Agreement is signature by
      both
      SCE and BBC. Unless and until both SCE and BBC have executed this Agreement,
      the
      Agreement will not be legally binding. 

     

    15.15    References,
      Titles and Construction.

     

    A.    All
      references in this Agreement to articles, sections, subsections and other
      subdivisions refer to corresponding articles, sections, subsections and other
      subdivisions of this Agreement unless expressly provided otherwise.

     

    B.    Titles
      appearing at the beginning of any of such subdivisions are for convenience
      only
      and shall not constitute part of such subdivisions and shall be disregarded
      in
      construing the language contained in such subdivisions.

     

    C.    The
      words
“this Agreement”, “this instrument”, “herein”, “hereof”, “hereby”, “hereunder”
and words of similar import refer to this Agreement as a whole and not to any
      particular subdivision unless expressly so limited.

     

    D.    Words
      in
      the singular form shall be construed to include the plural and vice versa,
      unless the context otherwise requires. Pronouns in masculine, feminine and
      neutral genders shall be construed to include any other gender.

     

    E.    Unless
      the context otherwise requires or unless otherwise provided herein, the terms
      defined in this Agreement which refer to a particular agreement, instrument
      or
      document also refer to and include all renewals, extensions, modifications,
      amendments or restatements of such agreement, instrument or document, provided
      that nothing contained in this subsection shall be construed to authorize such
      renewal, extension, modification, amendment or restatement.

     

    F.    Examples
      shall not be construed to limit, expressly or by implication, the matter they
      illustrate.

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    G.    The
      word
“or” is not intended to be exclusive and the word “includes” and its derivatives
      mean “includes, but is not limited to” and corresponding derivative
      expressions.

     

    H.    No
      consideration shall be given to the fact or presumption that one party had
      a
      greater or lesser hand in drafting this Agreement.

     

    I.    All
      references herein to “$” or “dollars” shall refer to U.S. Dollars.

     

    

     

    REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK.

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    The
      Parties have executed this Agreement effective as of the Effective
      Time.

     

    

    SELLER:

    Bill
      Barrett CBM, L.L.C.

    

    By:
      /s/ Huntington T.
      Walker          

    Name: Huntington
      T. Walker

    Title:
      Sr. Vice President - Land

    Date:
      July 17, 2006

    

    

    BUYER:

    Storm
      Cat Energy (USA) Inc. 

    

    By: 
      /s/ J. Scott
      Zimmerman              

    J.
      Scott
      Zimmerman,

    President
      and Chief Executive Officer

    Date:
      July 17, 2006

    
      
        
        

      

      -36-EXHIBIT
      4.1

     

    GENESIS
      BIOVENTURES, INC.

    

    2006
      CONSULTANT STOCK PLAN

    

    As
      Adopted July 7, 2006

    

    

    PURPOSE
      OF PLAN

     

    WHEREAS,
      the
      purpose of this 2006 Consultant Stock Plan is to advance the interests of the
      Company by helping the Company obtain and retain the services of persons
      providing consulting services upon whose judgment, initiative, efforts or
      services the Company is substantially dependent, by offering to or providing
      those persons with incentives or inducements affording such persons an
      opportunity to become owners of capital stock of the Company.

     

    TERMS
      AND CONDITIONS OF PLAN

     

    1.           DEFINITIONS.

     

    Set
      forth
      below are definitions of capitalized terms that are generally used throughout
      this Plan, or references to provisions containing such definitions (capitalized
      terms whose use is limited to specific provisions are not referenced in this
      Section):

     

    (a)           Affiliate -
      The
      term "Affiliate" is defined as any person controlling the Company, controlled
      by
      the Company, or under common control with the Company.

     

    (b)           Award -
      The
      term "Award" is collectively and severally defined as any Award Shares granted
      under this Plan.

     

    (c)           Award
      Shares -
      The
      term "Award Shares" is defined as shares of Common Stock granted by the Plan
      Committee in accordance with Section
      5
      of this
      Plan.

     

    (d)           Board
      - The
      term "Board" is defined as the Board of Directors of the Company, as such body
      may be reconstituted from time to time.

     

    (e)           Common Stock
      - The
      term "Common Stock" is defined as the Company's common stock reserved for
      issuance under this Plan.

     

    (f)           Company -
      The
      term "Company" is defined as Genesis Bioventures, Inc., a New York
      corporation.

     

    (g)           Disposed
      - The
      term "Disposed" (or the equivalent terms "Disposition" or "Dispose") is defined
      as any transfer or alienation of an Award which would directly or indirectly
      change the legal or beneficial ownership thereof, whether voluntary or by
      operation of law, or with or without the payment or provision of consideration,
      including, by way of example and not limitation: (i) the sale, assignment,
      bequest or gift of the Award; (ii) any transaction that creates or grants a
      right to obtain an interest in the Award; (iii) any transaction that creates
      a
      form of joint ownership in the Award between the Recipient and one or more
      other
      Persons; (iv) any Disposition of the Award to a creditor of the Recipient,
      including the hypothecation, encumbrance or pledge of the Award or any interest
      therein, or the attachment or imposition of a lien by a creditor of the
      Recipient of the Award or any interest therein which is not released within
      thirty (30) days after the imposition thereof; (v) any distribution by a
      Recipient which is an entity to its stockholders, partners, co-venturers or
      members, as the case may be, or (vi) any distribution by a Recipient which
      is a
      fiduciary such as a trustee or custodian to its settlors or beneficiaries.
      

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)           Eligible
      Person
      - The
      term "Eligible Person" means any Person who, at a particular time, is an
employee,
      officer, director, consultant, independent contractor, advisor, or other service
      provider of the Company or any Parent or Subsidiary of the Company; provided
      that such services are not in connection with the offer and sale of securities
      in a capital-raising transaction. 

     

       (i)           Fair
      Market Value
      - The
      term "Fair Market Value" means the fair market value as of the applicable
      valuation date of the Award Shares, or other shares of Common Stock, as the
      case
      may be (the "Subject Shares"),
      to be
      valued as determined by the Plan Committee in its good faith judgment, but
      in no
      event shall the Fair Market Value be less than the par value of the Subject
      Shares. 

     

    (j)           Person
      - The
      term "Person" is defined, in its broadest sense, as any individual, entity
      or
      fiduciary such as, by way of example and not limitation, individual or natural
      persons, corporations, partnerships (limited or general), joint-ventures,
      associations, limited liability companies/partnerships, or fiduciary
      arrangements, such as trusts. 

     

    (k)           Plan -
      The
      term "Plan" is defined as this 2006 Consultant Stock Plan.

     

    (l)           Plan
      Committee -
      The
      term "Plan Committee" is defined as that Committee appointed by the Board to
      administer and interpret this Plan as more particularly described in
Section
      3
      of the
      Plan; provided,
      however,
      that
      the
      term Plan Committee will refer to the Board during such times as no Plan
      Committee is appointed by the Board.

     

    (m)           Recipient
      - The
      term "Recipient" is defined as any Eligible Person who, at a particular time,
      receives the grant of an Award.

     

    (n)           Securities
      Act -
      The
      term "Securities Act" is defined as the Securities Act of 1933, as amended
      (references herein to Sections of the Securities Act are intended to refer
      to
      Sections of the Securities Act as enacted at the time of the adoption of this
      Plan by the Board and as subsequently amended, or to any substantially similar
      successor provisions of the Securities Act resulting from recodification,
      renumbering or otherwise).

     

      2.           TERM
      OF PLAN.

     

    This
      Plan
      shall be effective as of such time and date as this Plan is adopted by the
      Board, and this Plan shall terminate on the first business day prior to the
      ten
      (10) year anniversary of the date this Plan became effective. All Awards granted
      pursuant to this Plan prior to the effective date of this Plan shall not be
      affected by the termination of this Plan and all other provisions of this Plan
      shall remain in effect until the terms of all outstanding Awards have been
      satisfied or terminated in accordance with this Plan and the terms of such
      Awards.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.           PLAN
      ADMINISTRATION.

     

    (a)           Plan
      Committee. 

     

    (i)           The
      Plan shall be administered and interpreted by a committee consisting of one
      (1)
      or more members of the Board; provided,
      however,
      no
      member
      of the Board who may serve as a member of the Plan Committee if such person
      serves or served as a member of the plan committee with respect to any plan
      (other than this Plan) of the Company or its Affiliates which plan was or is
      established to comply with the provisions of Rule 16b-3(c)(2)(i) to the
      Securities and Exchange Act of 1934, as amended (i.e., pertaining to the
      establishment of so-called "Section 16b-3 Plans"), and, by reason of such
      person's proposed service as a member of the Plan Committee, such person would
      not be considered a "disinterested" person within the meaning of said Rule
      with
      respect to such other plan.

     

    (ii)           Members
      of the Plan Committee may resign at any time by delivering written notice to
      the
      Board. Vacancies in the Plan Committee shall be filled by the Board. The Plan
      Committee shall act by a majority of its members in office. The Plan Committee
      may act either by vote at a meeting or by a memorandum or other written
      instrument signed by a majority of the Plan Committee.

     

    (iii)           If
      the Board, in its discretion, does not appoint a Plan Committee, the Board
      itself will administer and interpret the Plan and take such other actions as
      the
      Plan Committee is authorized to take hereunder; provided that the Board may
      take
      such actions hereunder in the same manner as the Board may take other actions
      under the Articles of Incorporation and bylaws of the Company generally.

     

    (b)           Eligibility
      of Plan Committee Members to Receive Awards.
      While
      serving on the Plan Committee, such members shall not be eligible for selection
      as Eligible Persons to whom an Award may be granted under the Plan.

     

    (c)           Power
      to Make Awards.
      The Plan
      Committee shall have the full and final authority in its sole discretion, at
      any
      time and from time-to-time, subject only to the express terms, conditions and
      other provisions of the Articles of Incorporation of the Company and this Plan,
      and the specific limitations on such discretion set forth herein,
      to:

     

    (i)           Designate
      the Eligible Persons or classes of Eligible Persons eligible to receive Awards
      from among the Eligible Persons;

     

    (ii)           Grant
      Awards to such selected Eligible Persons or classes of Eligible Persons in
      such
      form and amount (subject to the terms of the Plan) as the Plan Committee shall
      determine; 

     

    (iii)           Interpret
      the Plan, adopt, amend and rescind rules and regulations relating to the Plan,
      and make all other determinations and take all other action necessary or
      advisable for the implementation and administration of the Plan;
      and

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iiii)           Delegate
      all or a portion of its authority under subsections (i) and (ii) of this
Section
      3(c)
      to one
      or more directors of the Company who are executive officers of the Company,
      subject to such restrictions and limitations (such as the aggregate number
      of
      shares of Common Stock that may be awarded) as the Plan Committee may decide
      to
      impose on such delegate directors.

     

    In
      determining the recipient, form and amount of Awards, the Plan Committee shall
      consider any factors deemed relevant, including the recipient's functions,
      responsibilities, value of services to the Company and past and potential
      contributions to the Company's profitability and sound growth.

     

    (d)           Interpretation
      Of Plan.
      The Plan
      Committee shall, in its sole and absolute discretion, interpret and determine
      the effect of all matters and questions relating to this Plan. The
      interpretations and determinations of the Plan Committee under the Plan
      (including without limitation determinations pertaining to the eligibility
      of
      Persons to receive Awards, the form, amount and timing of Awards, the methods
      of
      payment for Awards, and the other terms and provisions of Awards and the
      certificates or agreements evidencing same) need not be uniform and may be
      made
      by the Plan Committee selectively among Persons who receive, or are eligible
      to
      receive, Awards under the Plan, whether or not such Persons are similarly
      situated. All actions taken and all interpretations and determinations made
      under this Plan in good faith by the Plan Committee shall be final and binding
      upon the Recipient, the Company, and all other interested Persons. No member
      of
      the Plan Committee shall be personally liable for any action taken or decision
      made in good faith relating to this Plan, and all members of the Plan Committee
      shall be fully protected and indemnified to the fullest extent permitted under
      applicable law by the Company in respect to any such action, determination,
      or
      interpretation.

     

    (e)           Compensation;
      Advisors.
      Members
      of the Plan Committee shall receive such compensation for their services as
      members as may be determined by the Board. All expenses and liabilities incurred
      by members of the Plan Committee in connection with the administration of the
      Plan shall be borne by the Company. The Plan Committee may, with the approval
      of
      the Board, employ attorneys, consultants, accountants, appraisers, brokers,
      or
      other Persons, at the cost of the Company. The Plan Committee, the Company
      and
      its officers and directors shall be entitled to rely upon the advice, opinions,
      or valuations of any such Persons. 

     

    4.           STOCK
      POOL. 

     

    (a)           Maximum
      Number of Shares Authorized Under Plan.
      Shares
      of stock which may be issued or granted under the Plan shall be authorized
      and
      unissued or treasury shares of Common Stock. The aggregate maximum number of
      shares of Common Stock which may be issued as a grant of Award Shares shall
      not
      exceed 3,000,000 shares of Common Stock (the "Stock Pool").

     

    (b)           Date
      of Award.
      The date
      an Award is granted shall mean the date selected by the Plan Committee as of
      which the Plan Committee allots a specific number of shares to a Recipient
      with
      respect to such Award pursuant to the Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.           AWARD
      SHARES.

     

    (a)           Grant.
      The Plan
      Committee may from time to time, and subject to the provisions of the Plan
      and
      such other terms and conditions as the Plan Committee may prescribe, grant
      to
      any Eligible Person one or more shares of Common Stock ("Award Shares")
      allotted by the Plan Committee. The grant of Award Shares or grant of the right
      to receive Award Shares shall be evidenced by either a written consulting
      agreement or a separate written agreement confirming such grant, executed by
      the
      Company and the Recipient, stating the number of Award Shares granted and
      stating all terms and conditions of such grant.

     

    (b)           Purchase
      Price and Manner of Payment.
      The Plan
      Committee, in its sole discretion, may grant Award Shares in any of the
      following instances: 

     

    (i)           as
      a "bonus" or "reward" for services previously rendered and compensated, in
      which
      case the recipient of the Award Shares shall not be required to pay any
      consideration for such Award Shares, and the value of such Award Shares shall
      be
      the Fair Market Value of such Award Shares on the date of grant; or

     

    (ii)           as
      "compensation" for the previous performance or future performance of services
      or
      attainment of goals, in which case the recipient of the Award Shares shall
      not
      be required to pay any consideration for such Award Shares (other than the
      performance of his services).

     

    6.           ADJUSTMENTS.

     

    (a)           Subdivision
      or Stock Dividend.
      If (i)
      outstanding shares of Common Stock shall be subdivided into a greater number
      of
      shares by reason of recapitalization or reclassification, the number of shares
      of Common Stock, if any, available for issuance in the Stock Pool shall,
      simultaneously with the effectiveness of such subdivision or immediately after
      the record date of such dividend, be proportionately increased, and (ii)
      conversely, if the outstanding shares of Common Stock shall be combined into
      a
      smaller number of shares, the number of shares of Common Stock, if any,
      available for issuance in the Stock Pool shall, simultaneously with the
      effectiveness of such combination, be proportionately increased. 

     

    (b)           Adjustments
      Determined in Sole Discretion of Board.
      To the
      extent that the foregoing adjustments relate to stock or securities of the
      Company, such adjustments shall be made by the Plan Committee, whose
      determination in that respect shall be final, binding and conclusive.

     

    (c)           No
      Other Rights to Recipient.
      Except
      as expressly provided in this Section
      6,
      (i) the
      Recipient shall have no rights by reason of any subdivision or consolidation
      of
      shares of stock of any class or the payment of any stock dividend or any other
      increase or decrease in the number of shares of stock of any class, and (ii)
      the
      dissolution, liquidation, merger, consolidation or divisive reorganization
      or
      sale of assets or stock to another corporation, or any issue by the Company
      of
      shares of stock of any class, or securities convertible into shares of stock
      of
      any class, shall not affect, and no adjustment by reason thereof shall be made
      with respect to, the number of shares. The grant of an Award pursuant to this
      Plan shall not affect in any way the right or power of the Company to make
      adjustments, reclassifications, reorganizations or changes of its capital or
      business structure or to merge, consolidate, dissolve or liquidate, or to sell
      or transfer all or any part of its business or assets. 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7.           EMPLOYMENT
      STATUS.

     

    In
      no
      event shall the granting of an Award be construed as granting a continued right
      of employment to a Recipient if such Person is employed by the Company, nor
      effect any right which the Company may have to terminate the employment of
      such
      Person, at any time, with or without cause, except to the extent that such
      Person and the Company have agreed otherwise in writing.

     

    
      	 	
              8.

            	
              AMENDMENT
                AND DISCONTINUATION OF PLAN; MODIFICATION OF
                AWARDS.

            

    

     

    (b)           Amendment,
      Modification or Termination of Plan.
      The
      Board
      may amend the Plan or suspend or discontinue the Plan at any time or from
      time-to-time; provided,
      however no
      such
      action may adversely alter or impair any Award previously granted under this
      Plan without the consent of each Recipient affected thereby.

     

    (b)           Compliance
      with Laws.
      The
      Plan
      Committee may at any time or from time-to-time, without receiving further
      consideration from any Person who may become entitled to receive or who has
      received the grant of an Award hereunder, modify or amend Awards granted under
      this Plan as required to: (i) comply with changes in securities, tax or other
      laws or rules, regulations or regulatory interpretations thereof applicable
      to
      this Plan or Awards thereunder or to comply with stock exchange rules or
      requirements.

     

    *
      * * *
      *

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]