Document:

Exhibit 10.5(a)

Exhibit 10.5(a)

JOINDER TO GUARANTY

July 23, 2010

Reference is hereby made to the Guaranty (the “Guaranty”) made as of the 9th day of
November, 2007 by CHICAGO BRIDGE & IRON COMPANY, a Delaware corporation, CHICAGO BRIDGE & IRON
COMPANY (DELAWARE), a Delaware corporation, CB&I TYLER COMPANY, a Delaware corporation, CB&I
CONSTRUCTORS, INC., a Texas corporation, CBI SERVICES, INC., a Delaware corporation, HORTON CBI,
LIMITED, a corporation organized under the laws of Canada, CBI VENEZOLANA, S.A., a corporation
organized under the laws of the Republic of Venezuela, CBI EASTERN ANSTALT, a corporation organized
under the laws of the Principality of Liechtenstein, CBI CONSTRUCTORS PTY, LTD., a corporation
organized under the laws of the Commonwealth of Australia, LEALAND FINANCE COMPANY B.V., a
corporation organized under the laws of the Kingdom of the Netherlands, CB&I (EUROPE) B.V., a
corporation organized under the laws of the Kingdom of the Netherlands, ARABIAN GULF MATERIAL
SUPPLY COMPANY, LTD., a corporation organized under the laws of the Cayman Islands, ASIA PACIFIC
SUPPLY CO., a corporation organized under the laws of Delaware, CBI COMPANY LTD., a corporation
organized under the laws of Delaware, CBI CONSTRUCCIONES S.A., a corporation organized under the
laws of Argentina, CBI CONSTRUCTORS LIMITED, a corporation organized under the laws of the United
Kingdom, CBI HOLDINGS (U.K.) LIMITED, a corporation organized under the laws of England and Wales,
CBI OVERSEAS, LLC, a limited liability company organized under the laws of Delaware, CENTRAL
TRADING COMPANY, LTD., a corporation organized under the laws of Delaware, CHICAGO BRIDGE & IRON
(ANTILLES) N.V., a corporation organized under the laws of Curacao, CHICAGO BRIDGE & IRON COMPANY
B.V., a corporation organized under the laws of the Netherlands, CMP HOLDINGS B.V., a corporation
organized under the laws of the Netherlands, PACIFIC RIM MATERIAL SUPPLY COMPANY, LTD., a
corporation organized under the laws of the Cayman Islands, HOWE-BAKER INTERNATIONAL, L.L.C., a
limited liability company organized under the laws of Delaware, HOWE-BAKER ENGINEERS, LTD., a
limited partnership organized under the laws of Texas, HOWE-BAKER HOLDINGS, L.L.C., a limited
liability company organized under the laws of Delaware, HOWE-BAKER MANAGEMENT, L.L.C., a limited
liability company organized under the laws of Delaware, HOWE-BAKER, L.P., a limited partnership
organized under the laws of Texas, MATRIX ENGINEERING, LTD., a limited partnership organized under
the laws of Texas, HBI HOLDINGS, L.L.C., a limited liability company organized under the laws of
Delaware, HOWE-BAKER INTERNATIONAL MANAGEMENT, L.L.C., a limited liability company organized under
the laws of Delaware, A&B BUILDERS, LTD., a limited partnership organized under the laws of Texas,
MATRIX MANAGEMENT SERVICES, L.L.C., a limited liability company organized under the laws of
Delaware, CALLIDUS TECHNOLOGIES INTERNATIONAL, L.L.C., a limited liability company organized under
the laws of Delaware, CALLIDUS TECHNOLOGIES, L.L.C., a limited liability company organized under
the laws of Oklahoma, CONSTRUCTORS INTERNATIONAL, L.L.C., a limited liability company organized
under the laws of Delaware, SOUTHERN TROPIC MATERIAL SUPPLY COMPANY, LTD., a corporation organized
under the laws of the Cayman Islands, CB&I (NIGERIA) LIMITED, a corporation organized under the
laws of Nigeria, CHICAGO BRIDGE & IRON

 

 

 

(ESPANA) S.A., a corporation organized under the laws of
Spain, CBI (PHILLIPINES) INC., a corporation organized under the laws of the Philippines, CB&I JOHN BROWN
LIMITED, a company organized under the laws of England, MORSE CONSTRUCTION GROUP, INC., a
corporation organized under the laws of Washington, TPA HOWE-BAKER, LTD., a partnership organized
under the laws of Texas, and CB&I HUNGARY HOLDING LIMITED LIABILITY COMPANY, a limited liability
company organized under the laws of Hungary (the “Initial Guarantors” and along with any
additional Subsidiaries which become parties to this Guaranty by executing a Supplement hereto in
the form attached as Annex I, the “Guarantors”) in favor of the Administrative Agent under
the Term Loan Agreement. Capitalized terms used herein and not defined herein shall have the
meanings given to them in the Guaranty. By its execution below, each of (i) CB&I ENGINEERING
CONSULTANT (SHANGHAI) CO. LTD., a limited liability company organized under the laws of Shanghai,
(ii) CBI CONSTRUCTORS (PNG) PTY. LIMITED, a company limited by shares organized under the laws of
Papua New Guinea, and (iii) CBI COLOMBIANA S.A., a corporation organized under the laws of
Colombia, agrees to become, and does hereby become, a Guarantor under the Guaranty and agrees to be
bound by such Guaranty as if originally a party thereto. By its execution below, each of the
undersigned represents and warrants as to itself that all of the representations and warranties
contained in Section 2 of the Guaranty are true and correct in all respects as of the date
hereof.

[Signature Pages Follow]

 

 

 

IN WITNESS WHEREOF, the undersigned have executed and delivered this Joinder to Guaranty as of
the date first written above.

	 	 	 	 
	CB&I ENGINEERING CONSULTANT (SHANGHAI) CO. LTD.

 	 
	By:  	/s/ Geoffrey Ronald Loft
 	 
	 	Name:  	Geoffrey Ronald Loft 	 
	 	Title:  	Executive Director 	 
	 
	CBI CONSTRUCTORS (PNG) PTY. LIMITED

 	 
	By:  	/s/ Ross Adame
 	 
	 	Name:  	Ross Adame 	 
	 	Title:  	Director 	 
	 
	CBI COLOMBIANA S.A.

 	 
	By:  	/s/ Ronald A. Ballschmiede
 	 
	 	Name:  	Ronald A. Ballschmiede 	 
	 	Title:  	Director 	 

Signature Page (Joinder to Guaranty — Term)exv10w1

EXHIBIT 10.1

Execution Copy

PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

DELTA PETROLEUM CORPORATION

(Seller)

AND

WAPITI OIL & GAS, L.L.C.

(Buyer)

Dated July 23, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 PURCHASE AND SALE
	 	 	1	 
	1.1 Purchase and Sale
	 	 	1	 
	1.2 Effective Time
	 	 	1	 
	1.3 100% Assets
	 	 	1	 
	1.4 50% Assets
	 	 	2	 
	1.5 Asset Description
	 	 	4	 
	1.6 Excluded Assets
	 	 	4	 
	 
	 	 	 	 
	ARTICLE 2 PURCHASE PRICE
	 	 	5	 
	2.1 Purchase Price
	 	 	5	 
	2.2 Allocation of the Purchase Price
	 	 	5	 
	2.3 Adjustments to Purchase Price
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 3 BUYER’S INSPECTION
	 	 	8	 
	3.1 Due Diligence
	 	 	8	 
	3.2 Access to Records
	 	 	8	 
	3.3 On-Site Inspection
	 	 	8	 
	3.4 Disclaimer
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 4 TITLE MATTERS
	 	 	9	 
	4.1 Seller’s Title
	 	 	9	 
	4.2 Purchase Price Adjustment Procedures
	 	 	11	 
	4.3 Title Dispute Resolution
	 	 	14	 
	4.4 Preferential Rights and Consents
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 5 ENVIRONMENTAL MATTERS
	 	 	16	 
	5.1 Definitions
	 	 	16	 
	5.2 Environmental Representation and Warranty
	 	 	17	 
	5.3 Environmental Liabilities and Obligations
	 	 	18	 
	5.4 Environmental Defect Notice
	 	 	18	 
	5.5 Defect Adjustments
	 	 	19	 
	5.6 Contested Environmental Defects
	 	 	19	 
	5.7 Exclusive Remedies
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 6 SELLER’S REPRESENTATIONS AND WARRANTIES
	 	 	20	 
	6.1 Status
	 	 	20	 
	6.2 Power
	 	 	20	 
	6.3 Authorization and Enforceability
	 	 	20	 
	6.4 Liability for Brokers’ Fees
	 	 	20	 
	6.5 No Bankruptcy
	 	 	20	 
	6.6 Litigation
	 	 	20	 
	6.7 Material Agreements
	 	 	20	 
	6.8 Capital Projects
	 	 	21	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page	 
	6.9 Taxes and Assessments
	 	 	21	 
	6.10 Audits
	 	 	21	 
	6.11 Judgments
	 	 	22	 
	6.12 Compliance with Law And Government Authorizations
	 	 	22	 
	6.13 Lease Status/Rentals/Royalties/Taxes
	 	 	22	 
	6.14 Status and Operation of Assets
	 	 	22	 
	6.15 Suspense
	 	 	22	 
	6.16 Well Status
	 	 	22	 
	6.17 Calls on Production
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 7 BUYER’S REPRESENTATIONS AND WARRANTIES
	 	 	23	 
	7.1 Organization and Standing
	 	 	23	 
	7.2 Power
	 	 	23	 
	7.3 Authorization and Enforceability
	 	 	23	 
	7.4 Liability for Brokers’ Fees
	 	 	23	 
	7.5 Litigation
	 	 	23	 
	7.6 Financial Resources
	 	 	24	 
	7.7 Buyer’s Evaluation
	 	 	24	 
	 
	 	 	 	 
	ARTICLE 8 COVENANTS AND AGREEMENTS
	 	 	24	 
	8.1 Covenants and Agreements of Seller
	 	 	24	 
	8.2 Covenants and Agreements of Buyer
	 	 	26	 
	8.3 Covenants and Agreements of the Parties
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 9 TAX MATTERS
	 	 	28	 
	9.1 Definitions
	 	 	28	 
	9.2 Production Tax Liability
	 	 	28	 
	9.3 Sales Taxes
	 	 	28	 
	9.4 Tax Reports and Returns
	 	 	28	 
	 
	 	 	 	 
	ARTICLE 10 CONDITIONS PRECEDENT TO CLOSING
	 	 	29	 
	10.1 Seller’s Conditions
	 	 	29	 
	10.2 Buyer’s Conditions
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 11 RIGHT OF TERMINATION
	 	 	29	 
	11.1 Termination
	 	 	29	 
	11.2 Liabilities Upon Termination
	 	 	30	 
	 
	 	 	 	 
	ARTICLE 12 CLOSING
	 	 	30	 
	12.1 Date of Closing
	 	 	30	 
	12.2 Place of Closing
	 	 	31	 
	12.3 Closing Obligations
	 	 	31	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 13 POST-CLOSING OBLIGATIONS
	 	 	32	 
	13.1 Post-Closing Adjustments
	 	 	32	 
	13.2 Records
	 	 	33	 
	13.3 Further Assurances
	 	 	33	 
	13.4 Suspense Accounts and Division of Interest
	 	 	33	 
	13.5 Agreements concerning the Operating Agreements and Future Joint Operating Agreements
	 	 	33	 
	13.6 Future Payments Made Directly to Seller
	 	 	33	 
	 
	 	 	 	 
	ARTICLE 14 ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION; DISCLAIMERS
	 	 	34	 
	14.1 Buyer’s Assumption of Liabilities and Obligations
	 	 	34	 
	14.2 Seller’s Retention of Liabilities and Obligations
	 	 	34	 
	14.3 Indemnification
	 	 	34	 
	14.4 Procedure
	 	 	35	 
	14.5 No Insurance; Subrogation
	 	 	36	 
	14.6 Reservation as to Non-Parties
	 	 	36	 
	14.7 Disclaimers
	 	 	36	 
	 
	 	 	 	 
	ARTICLE 15 MISCELLANEOUS
	 	 	37	 
	15.1 Schedules
	 	 	37	 
	15.2 Expenses
	 	 	37	 
	15.3 Notices
	 	 	38	 
	15.4 Amendments
	 	 	39	 
	15.5 Assignment
	 	 	39	 
	15.6 Headings
	 	 	39	 
	15.7 Counterparts/Fax Signatures
	 	 	39	 
	15.8 References
	 	 	39	 
	15.9 Governing Law
	 	 	39	 
	15.10 Entire Agreement
	 	 	39	 
	15.11 Knowledge
	 	 	40	 
	15.12 Binding Effect
	 	 	40	 
	15.13 Survival of Warranties, Representations and Covenants
	 	 	40	 
	15.14 No Third-Party Beneficiaries
	 	 	40	 
	15.15 Dispute Resolution and Arbitration
	 	 	40	 
	15.16 Publicity
	 	 	41	 

-iii-

 

	 	 	 
	Defined Terms	 	Section Reference
	74 Ranch Properties	 	4.4(b)

	50% Assets	 	1.4

	100% Assets	 	1.3

	Acceptance Period	 	8.1(h)

	Affected Asset	 	4.4(a)

	Aggregate Title Deductible	 	4.2(h)

	Agreement	 	Preamble

	Allocated Value	 	2.2

	Assets	 	Recitals

	Assumed Liabilities	 	14.1

	Buyer	 	Preamble

	Buyer’s Environmental Liabilities	 	5.3(b)

	Buyer’s Knowledge	 	15.11(b)

	Cap	 	14.3(c)

	Capital Projects	 	6.8

	Casualty Loss	 	8.3(c)

	Claim	 	14.4(b)

	Claim Notice	 	14.4(a)

	Closing	 	12.1

	Closing Amount	 	2.3

	Closing Date	 	12.1

	Code	 	9.1(a)

	Condition	 	5.1

	Contracts	 	1.5(d)

	COPAS	 	2.3(a)

	Cure Period	 	4.2(e)

	Deductible	 	14.3(c)

	Defect Notice Date	 	3.1

	Defensible Title	 	4.1(c)

	Drag Along Sale	 	8.1(g)

	Due Diligence Period	 	3.1

	Due Diligence Review	 	3.1

	Effective Time	 	1.2

	Environmental Assessment	 	3.3

	Environmental Defect	 	5.1

	Environmental Defect Adjustment	 	5.5(b)

	Environmental Defect Exclusion	 	5.5(a)

	Environmental Defect Notice	 	5.4

	Environmental Defect Value	 	5.5(a)

	Environmental Law	 	5.1

	Excluded Assets	 	1.6

	Exhibit A-1 Lands	 	1.3(a)

	Exhibit A-1 Leases	 	1.3(a)

	Exhibit A-2 Lands	 	1.4(a)

	Exhibit A-2 Leases	 	1.4(a)

-iv-

 

	 	 	 
	Defined Terms	 	Section Reference
	Exhibit B-1 Wells	 	1.3(c)

	Exhibit B-2 Wells	 	1.4(c)

	Final Purchase Price	 	13.1(a)

	Final Settlement Date	 	13.1(a)

	Final Settlement Statement	 	13.1(a)

	Fundamental Representations	 	15.13

	Governmental Authorizations	 	6.12

	Governmental Entity	 	5.1

	Hazardous Materials	 	5.1

	Hydrocarbons	 	1.3(b)

	Indemnified Party	 	14.4(a)

	Indemnifying Party	 	14.4(a)

	Individual Title Deductible	 	4.2(h)

	Lands	 	1.5(b)

	Leases	 	1.5(a)

	Losses	 	14.3

	Material Adverse Effect	 	6

	Material Agreements	 	6.7

	Net Casualty Loss	 	8.3(c)

	Net Imbalance	 	2.3(e)

	Net Revenue Interest	 	4.1(c)(i)

	Notice of Defective Interests	 	4.2(c)

	Obligations	 	14.1

	Offer	 	8.1(h)

	Offer Price	 	8.1(h)

	Operating Agreements	 	12.3(j)

	Party; Parties	 	Preamble

	Permitted Encumbrances	 	4.1(d)

	Person	 	6.7

	PGR Partners	 	4.2(a)(7)

	Piper Stock	 	1.1

	Plugging and Abandonment Obligations	 	5.1

	Preliminary Settlement Statement	 	2.3

	Production Taxes	 	9.1(b)

	Property Expenses	 	2.3(b)

	Purchase Price	 	2.1

	Records	 	1.5(f)

	Remediate; Remediation	 	5.1

	Retained Liabilities	 	14.2

	Sale Intention Notice	 	8.1(h)

	Seller	 	Preamble

	Seller Retained Interests	 	1.6(c)

	Seller’s Environmental Liabilities	 	5.3(a)

	Seller’s Knowledge	 	15.11(a)

	Specified Adjustment	 	2.3(d)

	Surface Contracts	 	1.5(e)

-v-

 

	 	 	 
	Defined Terms	 	Section Reference
	Survival Period	 	15.13

	Title Adjustment Amount	 	4.2(j)

	Title Benefit	 	4.2(b)

	Title Benefit Notice	 	4.2(d)

	Title Defect	 	4.2(a)

	Title Defect Amount	 	4.2(g)

	Title Defect Property	 	4.2(c)

	Title Disputed Matters	 	4.3

	Wells	 	1.5(c)

	Working Interest	 	4.1(c)(ii)

-vi-

 

	 	 	 
	List of Exhibits	 	 
	 
	 	 	 	 
	Exhibit A-1

	 	Exhibit A-1 Leases
	Exhibit A-2

	 	Exhibit A-2 Leases
	Exhibit B-1

	 	Exhibit B-1 Wells
	Exhibit B-2

	 	Exhibit B-2 Wells
	Exhibit C-1

	 	Exhibit C-1 Contracts
	Exhibit C-2

	 	Exhibit C-2 Contracts
	Exhibit D-1

	 	Form of Assignment, Bill of Sale and Conveyance — 100% Assets
	Exhibit D-2

	 	Form of Assignment, Bill of Sale and Conveyance — 50% Assets
	Exhibit E

	 	Form of Assignment and Assumption Agreement
	Exhibit F

	 	Affidavit of Non-Foreign Status
	Exhibit G

	 	Indemnification Agreement
	Exhibit H

	 	Form of Operating Agreement
	Exhibit I

	 	Transition Services Agreement
	Exhibit J

	 	Piper Petroleum Stock Purchase Agreement
	Exhibit K

	 	PGR Partners Interest Purchase Agreement

	 	 	 
	List of Schedules	 	 
	 
	 	 	 	 
	Schedule 1.6(b)

	 	Excluded Assets
	Schedule 2.2

	 	Allocated Values
	Schedule 4.4

	 	Preferential Rights and Consents
	Schedule 6.6

	 	Pending or Threatened Litigation
	Schedule 6.8

	 	Capital Projects
	Schedule 6.9

	 	Taxes
	Schedule 6.10

	 	Audits
	Schedule 6.15

	 	Suspense Accounts
	Schedule 6.16

	 	Well Status
	Schedule 6.17

	 	Hedging Contracts
	Schedule 8.1(b)

	 	Existing Drilling Plan
	Schedule 15.11(a)

	 	Seller’s Knowledge Representatives
	Schedule 15.11(b)

	 	Buyer’s Knowledge Representatives

-vii-

 

PURCHASE AND SALE AGREEMENT

     This Purchase and Sale Agreement (the “Agreement”), is dated this 23rd day of July,
2010, by and between Delta Petroleum Corporation, a Delaware corporation (“Seller”), whose address
is 370 17th Street, Suite 4300, Denver, CO 80202, and Wapiti Oil & Gas, L.L.C., a Delaware limited
liability company (“Buyer”), whose address is 800 Gessner, Suite 1000, Houston, Texas 77024, with
Buyer and Seller collectively and individually referred to as the “Parties” or the “Party”.

RECITALS

     WHEREAS, Seller owns certain oil and gas leases located in Arkansas, Colorado, Kansas,
Louisiana, Mississippi, Nebraska, New Mexico, Texas, Utah, and Wyoming, and associated assets as
defined and more fully described in Sections 1.3 and 1.4 (the “Assets”);

     WHEREAS, Seller desires to sell and Buyer desires to purchase Seller’s interest in the Assets
upon the terms and conditions set forth in this Agreement;

     NOW WHEREFORE, in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and
Seller agree as follows:

ARTICLE 1

PURCHASE AND SALE

     1.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Buyer
agrees to purchase from Seller and Seller agrees to sell, assign and deliver to Buyer all of
Seller’s right, title and interest in the Assets for the consideration specified in Article 2.
Contemporaneous with the execution and delivery of this Agreement, as defined below, Buyer shall
enter into a stock purchase agreement to purchase 100% of the issued and outstanding stock of Piper
Petroleum Company, a Colorado corporation and wholly owned subsidiary of Seller pursuant to the
form attached hereto as Exhibit J.

     1.2 Effective Time. The purchase and sale of the Assets shall be effective as of May
1, 2010, at 12:01 a.m. at the location of the Assets (the “Effective Time”).

     1.3 100% Assets. As used herein, the term “100% Assets” refers to Seller’s right,
title, and interest in and to the following as of the Effective Time:

          (a) All of Seller’s right, title, and interest in the oil and gas leases (including all
leasehold estates, mineral interests, royalty interests, overriding royalty interests, net profits
interests, or similar interests) specifically described in Exhibit A-1 (collectively, the
“Exhibit A-1 Leases”) and the lands covered thereby or lands pooled or unitized therewith and all
lands covered by such leases and interests even though such rights might be omitted from Exhibit
A-1 or incorrectly described on Exhibit A-1 (the “Exhibit A-1 Lands”);

          (b) The oil, gas, casinghead gas, coal bed methane, condensate and other gaseous and liquid
hydrocarbons or any combination thereof, sulphur extracted from

-1-

 

hydrocarbons and all other lease substances (“Hydrocarbons”) under the Exhibit A-1 Leases and
that may be produced and saved under the Exhibit A-1 Leases;

          (c) The oil, gas, water or injection wells located on the Exhibit A-1 Lands, whether
producing, shut-in, or temporarily abandoned, specifically described in Exhibit B-1 (the
“Exhibit B-1 Wells”), including all of the personal property, equipment, fixtures and improvements
used in connection therewith;

          (d) The unitization, pooling and communitization agreements, declarations, orders, and the
units created thereby relating to the properties and interests described in Sections 1.3(a)
through (c) and to the production of Hydrocarbons, if any, attributable to said properties and
interests;

          (e) All equipment, machinery, fixtures and other tangible personal property and improvements
located on or used or held for use in connection with the operation of the interests described in
Sections 1.3(a) through (d) including any wells, tanks, boilers, buildings, fixtures, injection
facilities, saltwater disposal facilities, compression facilities, pumping units and engines,
platforms, flow lines, pipelines, gathering systems, gas and oil treating facilities, machinery,
power lines, telephone and telegraph lines, roads, and other appurtenances, improvements and
facilities;

          (f) All surface leases, permits, rights-of-way, licenses, easements and other surface rights
agreements used in connection with the production, gathering, treatment, processing, storing, sale
or disposal of Hydrocarbons or produced water from the interests described in Sections 1.3(a)
through (e);

          (g) All existing contracts and effective sales, purchase contracts, operating agreements,
exploration agreements, development agreements, balancing agreements, farmout agreements, service
agreements, transportation, processing, treatment or gathering agreements, equipment leases and
other contracts, agreements and instruments, including the contracts described in Exhibit
C-1, insofar as they directly relate to the properties and interests described in
Sections 1.3(a) through (f);

          (h) To the extent transferable without payment of additional consideration, originals, to the
extent available, or copies of all the files, records, and data relating to the items described in
Sections 1.3(a) through (g) above, which records shall include, without limitation: lease records;
well records; division order records; well files; title records (including abstracts of title,
title opinions and memoranda, and title curative documents); engineering records; geological and
geophysical data (including seismic data) and all technical evaluations, interpretive data and
technical data and information relating to the Assets; correspondence; electronic data files (if
any); maps; production records; electric logs; core data; pressure data; decline curves and
graphical production curves; reserve reports; appraisals and accounting records.

     1.4 50% Assets. As used herein, the term “50% Assets” refers to Seller’s right,
title, and interest in and to the following as of the Effective Time:

-2-

 

          (a) an undivided 50% of all of Seller’s right, title, and interest in the oil and gas leases
(including all leasehold estates, mineral interests, royalty interests, overriding royalty
interests, net profits interests, or similar interests) specifically described in
Exhibit A-2 (collectively, the “Exhibit A-2 Leases”) and the lands covered thereby or lands
pooled or unitized therewith and all lands covered by such leases and interests even though such
rights might be omitted from Exhibit A-2 or incorrectly described on Exhibit A-2 (the “Exhibit A-2
Lands”);

          (b) an undivided 50% of Seller’s right, title and interest in the oil, gas, casinghead gas,
coal bed methane, condensate and other gaseous and liquid hydrocarbons or any combination thereof,
sulphur extracted from hydrocarbons and all other lease substances (“Hydrocarbons”) under the
Exhibit A-2 Leases and that may be produced and saved under the Exhibit A-2 Leases;

          (c) an undivided 50% of Seller’s right, title and interest in the oil, gas, water or injection
wells located on the Exhibit A-2 Lands, whether producing, shut-in, or temporarily abandoned,
specifically described in Exhibit B-2 (the “Exhibit B-2 Wells”), including all of the
personal property, equipment, fixtures and improvements used in connection therewith;

          (d) an undivided 50% of Seller’s right, title and interest in the unitization, pooling and
communitization agreements, declarations, orders, and the units created thereby relating to the
properties and interests described in Sections 1.4(a) through (c) and to the production of
Hydrocarbons, if any, attributable to said properties and interests;

          (e) an undivided 50% of Seller’s right, title and interest in all equipment, machinery,
fixtures and other tangible personal property and improvements located on or used or held for use
in connection with the operation of the interests described in Sections 1.4(a) through (d)
including any wells, tanks, boilers, buildings, fixtures, injection facilities, saltwater disposal
facilities, compression facilities, pumping units and engines, platforms, flow lines, pipelines,
gathering systems, gas and oil treating facilities, machinery, power lines, telephone and telegraph
lines, roads, and other appurtenances, improvements and facilities;

          (f) an undivided 50% of Seller’s right, title and interest in all surface leases, permits,
rights-of-way, licenses, easements and other surface rights agreements used in connection with the
production, gathering, treatment, processing, storing, sale or disposal of Hydrocarbons or produced
water from the interests described in Sections 1.4(a) through (e);

          (g) an undivided 50% of Seller’s right, title and interest in all existing contracts and
effective sales, purchase contracts, operating agreements, exploration agreements, development
agreements, balancing agreements, farmout agreements, service agreements, transportation,
processing, treatment or gathering agreements, equipment leases and other contracts, agreements and
instruments, including the contracts described in Exhibit C-2, insofar as they directly
relate to the properties and interests described in Sections 1.4(a) through (f);

          (h) To the extent transferable without payment of additional consideration, copies of all the
files, records, and data relating to the items described in Sections 1.4(a) through (g) above,
which records shall include, without limitation: lease records; well records; division

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order records; well files; title records (including abstracts of title, title opinions and
memoranda, and title curative documents); engineering records; geological and geophysical data
(including seismic data) and all technical evaluations, interpretive data and technical data and
information relating to the Assets; correspondence; electronic data files (if any); maps;
production records; electric logs; core data; pressure data; decline curves and graphical
production curves; reserve reports; appraisals and accounting records.

     1.5 Asset Description.

          (a) “Leases” shall mean the Exhibit A-1 Leases and the Exhibit A-2 Leases. Exhibit
A-1 and Exhibit A-2 are sometimes collectively referred to herein as “Exhibit
A”.

          (b) “Lands” shall mean the Exhibit A-1 Lands and the Exhibit A-2 Lands.

          (c) “Wells” shall mean the Exhibit B-1 Wells and the Exhibit B-2 Wells. Exhibit B-1
and Exhibit B-2 are sometimes collectively referred to herein as “Exhibit B”.

          (d) “Contracts” shall mean the contracts described in Sections 1.3(g) and 1.4(g), excluding
the instruments constituting Leases. Exhibit C-1 and Exhibit C-2 are sometimes
collectively referred to herein as “Exhibit C”.

          (e) “Surface Contracts” shall mean the contracts described in Sections 1.3(f) and 1.4(f).

          (f) “Records” shall mean the records described in Sections 1.3(i) and 1.4(h).

     1.6 Excluded Assets. Notwithstanding the foregoing, the Assets shall not include, and
there is excepted, reserved and excluded from the purchase and sale contemplated hereby
(collectively, the “Excluded Assets”):

          (a) (i) all corporate, financial, income, tax and legal records of Seller that relate to
Seller’s business generally (whether or not relating to the Assets) and (ii) all books, records and
files that relate to the Excluded Assets;

          (b) the property listed on Schedule 1.6(b) including: (i) vehicles not used on the
Assets, (ii) equipment, inventory, machinery, fixtures and other tangible personal property and
improvements that are leased by Seller or located at or used in connection with any field office or
yard of Seller that are not used solely in connection with the Assets (iii) any computers and
related peripheral equipment that are not located on the Assets or not used solely in connection
with the Assets, (iv) communications equipment that is not located on the Assets and not used
solely in connection with the Assets, and (v) communications licenses granted by the Federal
Communications Commission or other governmental body;

          (c) Seller’s retained undivided 50% interest in the properties and interests comprising the
50% Assets (the “Seller Retained Interests”);

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          (d) all rights to any refunds for taxes or other costs or expenses borne by Seller or Seller’s
predecessors in interest and title attributable to periods prior to the Effective Time;

          (e) Seller’s area-wide bonds, permits and licenses or other permits, licenses or
authorizations used in the conduct of Seller’s business generally;

          (f) all trade credits, account receivables, note receivables, take or pay amounts receivable,
and other receivables attributable to the Assets with respect to any period of time prior to the
Effective Time;

          (g) Contracts and Surface Contracts to the extent the necessary consents to transfer are not
obtained pursuant to Section 4.4;

          (h) any refunds due Seller by a third party for any overpayment of rentals, royalties, excess
royalty interests or production payments attributable to the Assets with respect to any period of
time prior to the Effective Time; and

          (i) any causes of action, claims, rights, indemnities or defenses with respect to the Assets,
whether arising before or after the Effective Time, that relate to the Retained Liabilities or with
respect to any indemnification obligation of Seller hereunder as more fully described in Article 14
below.

ARTICLE 2

PURCHASE PRICE

     2.1 Purchase Price. Subject to the other terms and conditions of this Agreement, the
purchase price for the Assets and the Piper Stock shall be One Hundred Thirty Million Dollars
($130,000,000) (the “Purchase Price”). The Purchase Price shall be payable as follows:

          (a) At Closing, the Closing Amount (as defined in Section 2.3 below) shall be paid by wire
transfer of immediately available funds to Seller.

          (b) After Closing, final adjustments to the Purchase Price shall be made pursuant to the Final
Settlement Statement to be delivered pursuant to Section 13.1(a) and payments made by Buyer or
Seller as provided in Section 13.1(a).

     2.2 Allocation of the Purchase Price. Buyer and Seller have agreed upon an allocation
of the unadjusted Purchase Price among each of the Assets, in compliance with the principles of
Section 1060 of the Code and the regulations thereunder and such allocation of value is attached to
this Agreement as Schedule 2.2. The “Allocated Value” for any Asset equals the portion of
the unadjusted Purchase Price allocated to such Asset on Schedule 2.2, increased or reduced
as described in this Article 2. Any adjustments to the Purchase Price other than the adjustments
provided for in Section 2.3 shall be applied on a pro rata basis to the amounts set forth on
Schedule 2.2 for all Assets. After all such adjustments are made, any adjustments to the
Purchase Price pursuant to Section 2.3 shall be applied to the amounts set forth in
Schedule 2.2, for the particular affected Assets. After Seller and Buyer have agreed on
the Allocated Values for the Assets, Seller will be deemed to have accepted such Allocated

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Values for purposes of this Agreement and the transactions contemplated hereby, but otherwise
Seller makes no representation or warranty as to the accuracy of such values. Seller and Buyer
agree (i) that the Allocated Values, as adjusted pursuant to the foregoing, shall be used by Seller
and Buyer as the basis for reporting asset values and other items for purposes of all federal,
state and local Tax Returns, including without limitation Internal Revenue Service Form 8594 and
(ii) that neither they nor their affiliates will take a contrary position with respect to such
Allocated Values in notices to a Governmental Entity, in audit or other proceedings with respect to
Taxes, in notices to preferential purchaser right holders, or in other documents or notices
relating to the transactions contemplated by this Agreement.

     2.3 Adjustments to Purchase Price and Preliminary Settlement Statement. The Purchase
Price shall be adjusted according to this Section 2.3 without duplication. Such adjustment shall
be set out on a “Preliminary Settlement Statement” that shall be delivered by Seller to Buyer at
least three (3) business days prior to Closing and shall be approved by Seller and Buyer on or
before Closing. The Preliminary Settlement Statement shall set forth the Purchase Price as
adjusted as provided in this Section 2.3 using the best information available at the Closing Date,
which amount shall be paid at Closing and is referred to herein as the “Closing Amount.” The full
amount of the Specified Adjustment contemplated by Section 2.3(d) shall be placed in escrow with a
third party escrow agent and subject to an escrow agreement to be mutually agreed upon by the
Seller and Buyer.

          (a) Proration of Costs and Revenues. Buyer shall be entitled to all production of
Hydrocarbons from or attributable to the Leases, Lands, and Wells at and after the Effective Time
(and all products and proceeds attributable thereto), and to all other income, proceeds, receipts
and credits earned with respect to the Assets at or after the Effective Time, and shall be
responsible for (and entitled to any refunds with respect to) all Property Expenses (as defined in
Section 2.3(c) below) incurred at and after the Effective Time. Seller shall be entitled to all
Hydrocarbon production from or attributable to Leases, Lands, and Wells prior to the Effective Time
(and all products and proceeds attributable thereto), and to all other income, proceeds, receipts
and credits earned with respect to the Assets prior to the Effective Time, and shall be responsible
for (and entitled to any refunds with respect to) all Property Expenses incurred prior to the
Effective Time. “Earned” and “incurred”, as used in the Agreement shall be interpreted in
accordance with generally accepted accounting principles and Council of Petroleum Accountants
Society (“COPAS”) standards, except as otherwise specified herein. For purposes of allocating
production (and accounts receivable with respect thereto), under this Section 2.3(a), (i) liquid
Hydrocarbons shall be deemed to be “from or attributable to” the Leases, Lands, and Wells when they
pass through the pipeline connecting into the storage facilities into which they are run and
(ii) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Leases, Lands, and
Wells when they pass through the royalty measurement meters, delivery point sales meters or custody
transfer meters on the gathering lines or pipelines through which they are transported (whichever
meter is closest to the well). Seller shall utilize reasonable interpolative procedures,
consistent with industry practice, to arrive at an allocation of production when exact meter
readings or gauging and strapping data are not available. As part of Preliminary Settlement
Statement, Seller shall provide to Buyer, all data necessary to support any estimated allocation,
for purposes of establishing the Closing Amount.

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          (b) Property Expenses. The term “Property Expenses” means all capital expenses
(including all capital expenditures authorized by Section 8.1(a)), Production Taxes (as defined and
apportioned as of the Effective Time pursuant to Article 9) and operating expenses incurred in the
ownership, development and operation of the Assets in the ordinary course of business and, where
applicable, in accordance with any relevant operating agreement, if any, and all Lease rental and
maintenance costs, net profit payments, royalties, overriding royalties and other similar burdens
incurred in connection with the Leases or the production and sale of Hydrocarbons therefrom.
“Property Expenses” shall include overhead for the period between the Effective Time and the
Closing Date based upon the applicable joint operating agreement and where no joint operating
agreement is applicable the overhead shall be $750.00 per month for each Well that produces for any
portion of such month.

          (c) Upward Adjustments. To calculate the Closing Amount, the Purchase Price shall be
adjusted upward by the following:

          (1) The proceeds received by Buyer, net of royalties, overriding royalties, profit
payments and similar burdens and Production Taxes, from the sale of any liquid
Hydrocarbons that were produced from the Assets prior to the Effective Time.

          (2) An amount equal to all Property Expenses attributable to the Assets from and
after the Effective Time that were paid by Seller prior to Closing (all to be apportioned
as of the Effective Time except as otherwise provided).

          (3) An amount equal to the Title Adjustment Amount attributed to Title Benefits, if
any, pursuant to Section 4.2.

          (4) Any other amount provided for in this Agreement or otherwise agreed to by Buyer
and Seller.

          (d) Downward Adjustments. To calculate the Closing Amount, the Purchase Price shall
be adjusted downward by the following; provided, however, that the aggregate downward adjustment in
respect of subparagraphs (1), (2) and (3) below shall be $17,750,000 (the “Specified Adjustment”):

          (1) An amount equal to the Title Adjustment Amount attributable to Title Defects, if
any, pursuant to Section 4.2;

          (2) An amount equal to the Environmental Defect Adjustment, if any, pursuant to
Section 5.5(b);

          (3) The Allocated Value of those Assets not conveyed at Closing due to the failure to
obtain a consent to assign in accordance with Section 4.4(a) or the exercise of any
preferential rights to purchase in accordance with Section 4.4(b);

          (4) Any proceeds on Hydrocarbons produced from and after the Effective Time, net of
royalties, overriding royalties, net profit payments and similar

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burdens and Production Taxes, received by Seller between the Effective Time and
Closing relating to the Assets;

          (5) An amount equal to all Property Expenses attributable to the Assets for the
period before the Effective Time that were paid by Buyer prior to Closing;

          (6) The value of any Casualty Loss pursuant to Section 8.3(c);

          (7) Revenue held in suspense for royalties, overriding royalties and similar
leasehold burdens; and

          (8) Any other amount provided in this Agreement or otherwise agreed to by Buyer and
Seller.

          (e) Pipeline and Well Imbalance Adjustments. The Parties agree that in calculating
the Closing Amount, the Purchase Price will be adjusted downward or upward, as appropriate, for
pipeline and well imbalances related to the Assets, if any, as follows: The sum of all gas
underproduction imbalances less the sum of all overproduction imbalances is herein called the “Net
Imbalance.” The Purchase Price shall be adjusted upward (if the Net Imbalance is a positive
number), or downward (if the Net Imbalance is a negative number) by an amount equal to (a) the
absolute value of the Net Imbalance multiplied by (b) $3.50 per Mmbtu.

ARTICLE 3

BUYER’S INSPECTION

     3.1 Due Diligence. Subject to Section 3.3, upon execution of this Agreement, Seller
will make the Assets available to Buyer and its representatives for inspection and review to permit
Buyer to perform its due diligence (“Due Diligence Review”) as hereinafter provided. Buyer shall
be entitled to conduct its Due Diligence Review until 5:00 o’clock p.m. Mountain Time on the day
prior to the Closing Date (the “Due Diligence Period”). The notices pertaining to the Due
Diligence Review for the Notice of Defective Interest and the Environmental Defect Notice must be
received by Seller no later than 5:00 o’clock p.m. Mountain Time on July 28, 2010 (the “Defect
Notice Date”).

     3.2 Access to Records. The Records will be made available to Buyer at the offices of
Seller during Seller’s normal business hours or as otherwise reasonably requested by Buyer to
complete its Due Diligence Review.

     3.3 On-Site Inspection. Seller hereby consents to Buyer conducting, prior to Closing
and upon advance notice to Seller, at Buyer’s sole risk and expense, on-site inspections and an
ASTM Phase One Environmental Assessment (an “Environmental Assessment”) of the Assets; provided
that Buyer shall not conduct any sampling activities without prior notice and consent of Seller,
which consent shall not be unreasonably withheld. In connection with any Environmental Assessment,
Buyer agrees not to interfere with the normal operation of the Assets and agrees to comply with all
requirements and safety policies of the operator. If Buyer or its agents prepares an Environmental
Assessment, Buyer will furnish a copy thereof to Seller upon Seller’s request. The Parties shall
execute a “common undertaking” letter regarding the confidentiality of

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environmental assessments where appropriate. In connection with the granting of such access,
Buyer represents that it is adequately insured and, except to the extent caused by Seller’s willful
misconduct, waives, releases and agrees to defend and indemnify Seller and Seller’s representatives
against all claims for injury to, or death of, persons or for damage to property arising in any way
from the access afforded to Buyer hereunder or the activities of Buyer. This waiver, release and
indemnity by Buyer shall survive termination of this Agreement.

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

ARTICLE 4

TITLE MATTERS

     4.1 Seller’s Title.

          (a) Limited Defensible Title Representation. Seller represents to Buyer that as of
the Defect Notice Date its title to the Leases and Wells is Defensible Title as defined in
Section 4.1(c). Except as set forth in this Section 4.1(a), Seller makes no warranty or
representation, express, implied, statutory or otherwise, with respect to Seller’s title to the
Leases, Wells and other Assets and Buyer hereby acknowledges and agrees that Buyer’s sole remedy
for any defect of title, including any Title Defect, with respect to any of the Leases, Wells and
other Assets before Closing, shall be Buyer’s right to adjust the Purchase Price to the extent
provided in this Article 4.

          (b) Exclusive Remedy. The representation in Section 4.1(a) shall terminate as of the
Defect Notice Date and shall have no further force and effect thereafter. The Assignment and Bill
of Sale delivered at Closing shall contain a limited warranty of title as set forth in the
instrument attached hereto as Exhibit D-1, as to the 100% Assets, and Exhibit D-2,
as to the 50% Assets (collectively “Exhibit D”). Section 4.2 shall be the exclusive right
and remedy of Buyer with respect to Seller’s failure to have Defensible Title with respect to the
Leases, Wells and other Assets.

          (c) Defensible Title — Leases and Wells. The term “Defensible Title” means such
ownership of record to the Leases and Wells that, subject to and except for Permitted Encumbrances
as defined in Section 4.1(d):

          (i) Entitles Seller to receive a share of the Hydrocarbons produced, saved and marketed
from any Lease or Well throughout the duration of the productive life of such Lease or Well
or such specified zone(s) therein after satisfaction of all royalties, overriding royalties,
nonparticipating royalties, net profits interests or other similar burdens on or measured by
production of Hydrocarbons (a “Net Revenue Interest”), of not less than the Net Revenue
Interest share shown in Exhibit A for such Lease or Well;

          (ii) Obligates Seller to bear a percentage of the costs and expenses for the
maintenance, development, operation and the production relating to any Lease or

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Well throughout the productive life of such Lease or Well (“Working Interest”) not
greater than the Working Interest shown in Exhibit B for such Lease or Well without
increase, except increases to the extent that they are accompanied by a proportionate
increase in Seller’s Net Revenue Interest; and

          (iii) is free and clear of liens, encumbrances and defects.

          (d) Permitted Encumbrances. The term “Permitted Encumbrances” shall mean:

          (1) lessors’ royalties, overriding royalties, net profits interests, production
payments, reversionary interests and similar burdens if the net cumulative effect of such
burdens does not operate to reduce the Net Revenue Interests below those set forth on
Exhibit A;

          (2) statutory liens for taxes, Production Taxes or assessments not yet due and
delinquent or if delinquent are being contested in good faith in the normal course of
business;

          (3) all rights to consent by, required notices to, filings with, or other actions by
Governmental Entities, in connection with the conveyance of the applicable Asset if the
same are customarily sought after such conveyance;

          (4) rights of reassignment contained in any Leases, or assignments thereof, providing
for reassignment upon the surrender or expiration of any Leases;

          (5) 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
restriction on access thereto that do not materially interfere with the operation of the
affected Asset;

          (6) the terms and conditions of the Contracts listed in Exhibit C to the
extent such terms and conditions do not cause the Net Revenue Interest to be less than or
the Working Interest to be more than as set forth in Exhibits A and B,
respectively, for the applicable Asset;

          (7) materialmen’s, mechanics’, operators’ or other similar liens arising in the
ordinary course of business (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;

          (8) such Title Defects (as defined in Section 4.2(a)) as Buyer has waived;

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          (9) any defects, irregularities or deficiencies in title to easements, rights-of-way
or surface use agreements that do not materially adversely affect the value of any Asset;
and

          (10) all other liens, charges, encumbrances, contracts, agreements, instruments,
obligations, defects and irregularities affecting the Assets that do not (or would not
upon foreclosure or other enforcement) reduce the Net Revenue Interest set forth in
Exhibit A nor prevent the receipt of proceeds of production therefrom, nor
increase the share of costs above the Working Interest set forth in Exhibit B nor
materially adversely interfere with or detract from the ownership, operation, value or use
of the Assets, or liens of record that Seller causes to be released at Closing.

     4.2 Purchase Price Adjustment Procedures.

          (a) Title Defect. As used in this Agreement, the term “Title Defect” means any lien,
charge, encumbrance, obligation (including contract obligation), defect, or other matter (including
without limitation a discrepancy in Net Revenue Interest or Working Interest) that causes a breach
of Seller’s representation in Section 4.1(a). Notwithstanding the foregoing, the following shall
not be considered Title Defects:

          (1) defects based solely on lack of information in connection with documents filed of
record not contained in Seller’s files;

          (2) defects in the chain of title consisting of the mere failure to recite marital
status in a document or omissions of successions of heirship or estate proceedings, unless
Buyer provides clear and convincing evidence that such failure or omission has resulted in
another person’s actual and superior claim of title to the relevant Asset;

          (3) defects arising out of lack of survey, unless a survey is expressly required by
applicable laws or regulations;

          (4) defects asserting a change in Working Interest or Net Revenue Interest based on a
change in drilling and spacing units, tract allocation or other changes in pool or unit
participation occurring after the Effective Time by a party other than the Seller;

          (5) defects arising out of lack of corporate or other entity authorization unless
Buyer provides affirmative evidence that such corporate or other entity action was not
authorized and results in another person’s actual and superior claim of title to the
relevant Asset;

          (6) defects based on failure to record Leases issued by the BLM, MMS or any state, or
any assignments of record title or operating rights in such Leases, in the real property,
conveyance or other records of the county or parish in which such Lease is located;

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          (7) defects based on the fact that certain Assets are owned by PGR Partners, LLC
(“PGR Partners”) rather than Seller, it being expressly provided that the ownership of
such Assets by PGR Partners will be subject to the same terms and conditions concerning
Title Defects that are applicable to Seller; and

          (8) defects that have been cured by applicable laws of limitations, prescription or
otherwise.

          (b) Title Benefit. As used in this Agreement, the term “Title Benefit” shall mean any
right, circumstance or condition that operates (i) to increase the Net Revenue Interest of Seller
in any Lease or Well above that shown in Exhibit A, to the extent the same does not cause a
greater than proportionate increase in Seller’s Working Interest therein above that shown in
Exhibit B, or (ii) to decrease the Working Interest of Seller in any Lease or Well below
that shown in Exhibit B, to the extent the same causes a decrease in Seller’s Working
Interest that is proportionately greater than the decrease in Seller’s Net Revenue Interest therein
below that shown in Exhibit A.

          (c) Notice of Defective Interest. On or before the Defect Notice Date, Buyer shall
formally advise Seller in writing of any matters that in Buyer’s reasonable opinion constitute a
Title Defect with respect to Seller’s title to all or any portion of the Leases and Wells (“Notice
of Defective Interest”). The Notice of Defective Interests shall be in writing and contain the
following: (i) a clear, complete and accurate description of the alleged Title Defect(s), (ii) the
Leases or Wells (and the applicable zone(s) therein) affected by the alleged Title Defect(s) (each
a “Title Defect Property”), (iii) the Allocated Value of each Lease or Well subject to the alleged
Title Defect(s), (iv) supporting documents reasonably necessary for Seller (as well as any title
attorney or examiner hired by Seller) to verify the existence of the alleged Title Defect(s), and
(v) the amount by which Buyer reasonably believes the Allocated Value of each Title Defect Property
is reduced by the alleged Title Defect(s) and the computations and information upon which Buyer’s
belief is based. To give Seller an opportunity to commence reviewing and curing Title Defects,
Buyer agrees to give Seller, on or before the end of each calendar week prior to the Defect Notice
Date, written notice of all Title Defects discovered by Buyer during the calendar week preceding
the calendar week then ending, which may be preliminary in nature and supplemented prior to the
Defect Notice Date. Seller shall be deemed to have waived all Title Defects of which it has not
given notice on or before the Defect Notice Date.

          (d) Notice of Title Benefits. On or before the Defect Notice Date, Seller shall have
the right, but not the obligation, to advise Buyer in writing of any matters that in Seller’s
reasonable opinion constitute a Title Benefit with respect to Seller’s title to all or any portion
of the Leases and Wells (a “Title Benefit Notice”). The Title Benefit Notice shall be in writing
and contain the following: (i) a description of the Title Benefit, (ii) the Leases or Wells (and
the applicable zone(s) therein) affected by the Title Benefit, (iii) the Allocated Values of the
Leases or Wells (and the applicable zone(s) therein) subject to such Title Benefit, and (iv) the
amount by which the Seller reasonably believes the Allocated Value of those Leases or Wells (and
the applicable zone(s) therein) is increased by the Title Benefit, and the computations and
information upon which Seller’s belief is based. Seller shall be deemed to have waived all Title
Benefits of which it has not given notice on or before the Defect Notice Date.

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          (e) Seller’s Right to Cure. Seller shall have the right, but not the obligation, to
attempt, at its sole cost, to cure or remove at any time prior to Closing (the “Cure Period”) any
Title Defects of which it has been advised by Buyer.

          (f) Remedies for Title Defects. Subject to Seller’s continuing right to title dispute
resolution under Section 4.3, in the event that any Title Defect timely asserted by Buyer in
accordance with Section 4.2(c) actually exists and is not waived by Buyer or cured on or before
Closing, Seller shall elect the following:

          (1) subject to the Individual Title Deductible and the Aggregate Title Deductible,
convey the Title Defect Property to Buyer at Closing with a reduction to the Purchase
Price by an amount agreed upon pursuant to Section 4.2(g) and retain the right to cure the
Title Defect after Closing. Seller shall have until the Final Settlement Date in which to
attempt to cure any such Title Defects. If Seller cures any such Title Defect, then Buyer
shall promptly pay Seller the Title Defect Amount with respect to the Title Defect that is
so cured, expressly provided that the Buyer retains the right to waive any such Title
Defect that remains subject to cure and to purchase and pay for the affected Asset at any
time prior to the Final Settlement Date;

          (2) with the consent of Buyer, convey the Title Defect Property to Buyer at Closing,
without adjustment to the Purchase Price, and indemnify Buyer against all liability, loss,
cost and expense resulting from such Title Defect, pursuant to the terms and conditions of
the Indemnification Agreement attached hereto as Exhibit G; or

          (3) with the consent of Buyer, retain the entirety of the Leases or Wells subject to
such Title Defect, together with all associated Assets, in which event the Purchase Price
shall be reduced by an amount equal to the Allocated Value of such property and such
associated Assets.

          (g) Title Defect Amount. The “Title Defect Amount” means the amount by which the
Allocated Value of the Title Defect Property affected by such Title Defect is reduced as a result
of the existence of such Title Defect and shall be determined in accordance with the following
methodology, terms and conditions:

          (1) if Buyer and Seller agree on the Title Defect Amount, that amount shall be the
Title Defect Amount;

          (2) if the Title Defect is a lien, encumbrance or other charge which is undisputed
and liquidated in amount, then the Title Defect Amount shall be the amount of the payment
necessary to remove the Title Defect from the Title Defect Property; and

          (3) if the Title Defect represents an obligation, encumbrance, burden or charge upon
or other defect in title to the Title Defect Property of a type not described in
subsections (1) or (2) above, the Title Defect Amount shall be determined by taking into
account the following factors: (i) any discrepancy between (A) the Net Revenue Interest
for any Title Defect Property and (B) the Net Revenue Interest stated

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in Exhibit A; (ii) the Allocated Value of the Title Defect Property;
(iii) the portion of the Title Defect Property affected by the Title Defect; (iv) the
legal effect of the Title Defect; (v) the values placed upon the Title Defect by Buyer
and Seller and (vi) such other reasonable factors as are necessary to make a proper
evaluation.

Notwithstanding anything to the contrary in this Article 4, the aggregate Title Defect
Amounts attributable to the effects of all Title Defects upon any Title Defect Property
shall not exceed the Allocated Value of the Title Defect Property.

          (h) Title Deductibles. Notwithstanding anything to the contrary, (i) in no event shall
there be any adjustments to the Purchase Price or other remedies provided by Seller for any
individual Title Defect for which the Title Defect Amount does not exceed $20,000 (“Individual
Title Deductible”); and (ii) in no event shall there be any adjustments to the Purchase Price or
other remedies provided by Seller for any Title Defect that exceeds the Individual Title Deductible
unless the Title Defect Amounts of all such Title Defects, in the aggregate, excluding any Title
Defects cured by Seller, exceeds a deductible in an amount equal to Two Million Dollars
($2,000,000) (“Aggregate Title Deductible”), after which point Buyer shall be entitled to
adjustments to the Purchase Price or other remedies only with respect to such Title Defects in
excess of such Aggregate Title Deductible.

          (i) Title Benefit Amount. The Title Benefit Amount resulting from a Title Benefit
shall be determined in accordance with the same methodology, terms and conditions for determining
the Title Defect Amount. Any Title Benefit Amount shall be offset against any Title Defect Amount.
In the event the Title Benefit Amounts exceeds the Title Defect Amounts then in no event shall
there be any adjustments to the Purchase Price or other remedies provided by Buyer for any Title
Benefit that exceeds the Individual Title Deductible unless the Title Benefit amounts of all such
Title Benefits, in the aggregate, exceed the Aggregate Title Deductible, after which point Seller
shall be entitled to an adjustment to the Purchase Price only with respect to Title Benefits in
excess of such Aggregate Title Benefit Deductible.

          (j) Title Adjustment Amount. The amount by which the Purchase Price is adjusted under
this Article 4 for a Title Defect Amount or a Title Benefit Amount shall be referred to as the
“Title Adjustment Amount,” provided, however, that Buyer, at its sole discretion, may elect to
waive all or any portion of any Title Defect as to the Buyer, so as to reduce the aggregate Title
Adjustment Amount below such percentage which would prevent termination of this Agreement pursuant
to Section 11.1.

     4.3 Title Dispute Resolution. The Parties agree to resolve disputes concerning the
following matters pursuant to this Section 4.3: (i) the existence and scope of a Title Defect,
Title Benefit or Title Adjustment Amount, (ii) the Title Defect Amount of that portion of the Asset
affected by a Title Defect and (iii) the adequacy of Seller’s Title Defect curative materials and
Buyer’s reasonable satisfaction thereof (the “Title Disputed Matters”). The Parties agree to
attempt to initially resolve all disputes through good faith negotiations. If the Parties cannot
resolve disputes regarding items (i), (ii) and (iii) on or before Closing, the asset will be
excluded from the Closing and the Purchase Price reduced by the Allocated Value of the affected
Asset. Further, the Title Disputed Matters will be finally determined by binding arbitration
pursuant to Section 15.15 but the independent arbitrator appointed pursuant to Section 15.15 shall
be

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qualified by education, knowledge and experience with title defects affecting the types of
properties which are subject to the disputed Title Defect and have a minimum of ten years
experience with such types of defects and properties. The arbitrator shall employ such independent
attorneys, petroleum engineers and/or other consultants as deemed necessary. On or before
forty-five (45) days after Closing, Buyer and Seller shall present their respective positions in
writing to the arbitrator, together with such evidence as each Party deems appropriate. The
arbitrator shall be instructed to resolve the dispute through a final decision within sixty (60)
days after Closing and the final decision may be reflected in the Final Settlement Statement. To
the extent that the arbitrator so rules, Seller will convey to Buyer the affected Asset in
accordance with the terms and conditions of the decision rendered by the arbitrator.

     4.4 Preferential Rights and Consents. Except for Permitted Encumbrances, all
preferential rights to purchase and consents to assign are listed on Schedule 4.4. The
remedies set forth in this Section 4.4 are the exclusive remedies under this Agreement for consents
to assign and preferential rights to purchase that are disclosed on Schedule 4.4 or are
discovered prior to Closing.

          (a) Consents. Promptly after execution hereof, Seller shall use reasonable best
efforts to send notices to those persons necessary to request all required consents to assignment
of the Assets. If prior to Closing Seller fails to obtain a consent to assign that would
invalidate the conveyance of the Asset affected by the consent to assign or materially affect the
value or use of the Asset (“Affected Asset”), then Seller shall retain the Affected Asset and the
Purchase Price shall be reduced by the Allocated Value of the Affected Asset. If such consent has
been obtained as of the Final Settlement Date, Seller shall convey the Affected Asset to Buyer
effective as of the Effective Time and Buyer shall pay Seller the Allocated Value of the Affected
Asset, in accordance with the terms and conditions of this Agreement. If such consent has not been
obtained as of the Final Settlement Date, the Affected Asset shall be excluded from the sale and
the Purchase Price shall be deemed to be reduced by an amount equal to the Allocated Value of the
Affected Asset. Buyer shall reasonably cooperate with Seller in obtaining any required consent
including providing assurances of reasonable financial conditions, but Buyer shall not be required
to expend funds or make any other type of financial commitments as a condition of obtaining such
consent.

          (b) Ranch 74 Consents. Schedule 4.4 identifies ten contracts associated with the 74
Ranch (“74 Ranch Properties”) that contain a consent to assign provision. Seller will not be able
to obtain the necessary consents to assign 100% of these interests prior to Closing. At Closing,
Seller shall assign all of the 74 Ranch Properties but retain an undivided 25% interest in the
Leases for the 74 Ranch and the associated surface use agreement. Seller shall cooperate with
Buyer to promptly contact 74 Ranch to seek approval of an assignment of all of the 74 Ranch
Properties including providing assurances of reasonable financial conditions, but Buyer shall not
be required to expend funds or make any other type of financial commitments as a condition of
obtaining such consent. If the consent to assign all of the 74 Ranch Properties is obtained on or
before the Final Settlement Date, then Seller shall convey to Buyer the remainder of the 74 Ranch
Properties effective as of the Effective Time in accordance with the terms and conditions of this
Agreement. If the 74 Ranch consent is not obtained on or before the Final Settlement Date, then
that portion of the 74 Ranch Properties for which a consent is not obtained

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shall be reassigned to Seller and Seller shall pay Buyer the Allocated Value of the reassigned
Properties.

          (c) Preferential Purchase Rights. Seller shall use reasonable best efforts to give
notices required in connection with preferential purchase rights prior to Closing. If any
preferential right to purchase any portion of the Assets is exercised prior to the Closing Date,
then 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 Buyer to give notice. If by Closing,
either (i) the time frame for the exercise of a preferential purchase right has not expired and
Seller has not received notice of an intent not to exercise or a waiver of the preferential
purchase right, or (ii) a third party exercises its preferential right to purchase, but fails to
consummate the purchase prior to the Closing, then Seller shall retain the affected Assets and the
Purchase Price shall be adjusted downward by an amount equal to the Allocated Value of such
affected Assets. As to any Assets retained by Seller hereunder, following Closing if a
preferential right to purchase is not consummated within the time frame specified in the
preferential purchase right, or if the time frame for exercise of the preferential purchase right
expired without exercise after the Closing, Seller shall promptly convey the affected Asset to
Buyer effective as of the Effective Time, and Buyer shall pay the Allocated Value thereof pursuant
to the terms of this Agreement up to and through the Final Settlement Date and in connection with
the payments to be made with respect to the Final Settlement Statement as set forth in Section
13.1, below.

ARTICLE 5

ENVIRONMENTAL MATTERS

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

     “Condition” means any circumstance, status or defect that requires Remediation to comply with
Environmental Laws.

     “Environmental Defect” means a Condition in, on, under or relating to a particular Asset
(including, without limitation, air, land, soil, surface and subsurface strata, surface water,
groundwater, or sediments) that causes a particular Asset to be in violation of an Environmental
Law and the costs of Remediation of the Asset exceeds $20,000.00 per Condition, but excluding any
Plugging and Abandonment Obligations (which shall not constitute an Environmental Defect).

     “Environmental Law” or “Environmental Laws” shall mean shall mean any federal, tribal, state,
local or foreign law (including common law), statute, rule, regulation, requirement, ordinance and
any writ, decree, bond, authorization, approval, license, permit, registration, binding criteria,
standard, consent decree, settlement agreement, judgment, order, directive or binding policy issued
by or entered into with a Governmental Entity pertaining or relating to: (a) pollution or
pollution control, including, without limitation, storm water; (b) protection of human health from
exposure to Hazardous Materials or protection of the environment; (c) employee safety in the
workplace; or (d) the management, presence, use, generation,

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processing, extraction, treatment, recycling, refining, reclamation, labeling, transport,
storage, collection, distribution, disposal or release or threat of release of Hazardous Materials.
“Environmental Laws” shall include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., the Solid Waste Disposal Act (as amended
by the Resource Conservation and Recovery Act), 42 U.S.C. § 6901 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. § 1801 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601
et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Federal Safe
Drinking Water Act, 42 U.S.C. §§ 300f-300, the Federal Air Pollution Control Act, 42 U.S.C. § 7401
et seq., the Oil Pollution Act, 33 U.S.C. § 2701 et seq., the Occupational Safety and Health Act,
29 U.S.C. § 651 et seq., the Endangered Species Act, and the regulations and orders respectively
promulgated thereunder, each as amended, or any equivalent or analogous state or local statutes,
laws or ordinances, any regulation promulgated thereunder and any amendments thereto.

     “Governmental Entity” means any national, state, local, native or tribal government or any
subdivision, agency, court, commission, department, board, bureau, regulatory authority or other
division or instrumentality thereof.

     “Hazardous Materials” shall mean, without limitation, any waste, substance, product, or other
material (whether solid, liquid, gas or mixed), which is or becomes identified, listed, published,
or defined as a hazardous substance, hazardous waste, hazardous material, toxic substance,
radioactive material, oil, or petroleum waste, or which is otherwise regulated or restricted under
any Environmental Law.

     “Plugging and Abandonment Obligations” means any and all responsibility and liability for the
following, arising out of or relating to the Assets, whether before, on, or after the Effective
Time: (i) the necessary and proper plugging, replugging, and abandonment of all Wells; (ii) the
necessary and proper removal, abandonment, and disposal of all structures, pipelines, equipment,
operating inventory, abandoned property, trash, refuse, and junk located on or comprising part of
the Assets; (iii) the necessary and proper capping and burying of all associated flow lines located
on or comprising part of the Assets; and (iv) the necessary and proper restoration of the surface
and subsurface to the condition required by applicable laws, permits, orders, and contracts.

     “Remediation” or “Remediate” means investigation, assessment, characterization, delineation,
monitoring, sampling, analysis, removal action, remedial action, response action, corrective
action, mitigation, treatment or cleanup of Hazardous Materials or other similar actions as
required by any applicable Environmental Laws from soil, land surface, groundwater, sediment,
surface water, or subsurface strata or otherwise for the general protection of human health and the
environment.

     5.2 Environmental Representation and Warranty. For the period of Seller’s ownership
of the Assets, Seller represents and warrants to Buyer that to Seller’s Knowledge (i) the Assets
have been operated in material compliance with all Environmental Laws, (ii) Seller has not received
a written notice of a material violation of an Environmental Law with respect to the Assets, and is
not aware of any condition that could be the cause of such a material violation

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of Environmental Law, and (iii) Seller has Remediated any material violations for which it has
received notice.

     5.3 Environmental Liabilities and Obligations.

          (a) Seller’s Environmental Liabilities. Upon Closing, and subject to Section 14.2,
Seller agrees to retain and pay, perform, fulfill and discharge all claims, cost, expenses,
liabilities and obligations accruing or relating to and release Buyer (but no other third parties)
from all Losses (as defined in Section 14.3) (including any civil fines, penalties, costs of
Remediation and expenses for the modification, repair or replacement of facilities on the Lands)
brought or assessed by any and all persons, including any Governmental Entity, as a result of any
personal injury, illness or death, any damage to, destruction or loss of property, and any damage
to natural resources (including soil, air, surface water or groundwater) to the extent any of the
foregoing directly or indirectly is caused by or otherwise involves any Condition relating to the
Assets and attributable to periods of time prior to the Effective Time that Seller had ownership of
the Assets, excluding any Plugging and Abandonment Liabilities (collectively, “Seller’s
Environmental Liabilities”).

          (b) Buyer’s Environmental Liabilities. Upon Closing, Buyer agrees to assume and pay,
perform, fulfill and discharge all claims, costs, expenses, liabilities and obligations accruing or
relating to and release Seller, its stockholders, directors, officers, employees, agents and
representatives, and their respective successors and assigns (but no other third parties) from all
Losses (including any civil fines, penalties, costs of assessment, clean-up, removal and
Remediation, and expenses for the modification, repair or replacement of facilities on the Lands)
brought or assessed by any and all persons, including any Governmental Entity, as a result of any
personal injury, illness or death, any damage to, destruction or loss of property, and any damage
to natural resources (including soil, air, surface water or groundwater) to the extent any of the
foregoing directly or indirectly involves any Condition relating to the Assets, including Plugging
and Abandonment Obligations, but excluding Seller’s Environmental Liabilities, expressly provided
that if Seller retains an undivided interest in any Asset, the provisions of Section 14.2
concerning the assumption of liabilities by Buyer after the expiration of the periods of time set
forth in Section 15.13 will not apply and Seller will continue to remain liable with respect to the
Assets for which it owns an undivided interest for those periods prior to the Closing Date
(collectively, “Buyer’s Environmental Liabilities”). Any Environmental Defect raised by Buyer in
an Environmental Defect Notice shall be a Buyer’s Environmental Liability, if the Buyer acquires
all of the undivided interest in the Asset from the Seller in accordance with the terms hereof.

     5.4 Environmental Defect Notice. On or before the Defect Notice Date, Buyer shall
formally advise Seller in writing of any matters that in Buyer’s reasonable opinion constitute an
Environmental Defect (“Environmental Defect Notice”). The Environmental Defect Notice shall be in
writing and contain the following: (i) a clear, complete and accurate description of the alleged
Environmental Defect(s), (ii) the Assets affected by the alleged Environmental Defect(s), (iii) the
Allocated Value of each Asset subject to the alleged Environmental Defect(s), (iv) supporting
documents reasonably necessary for Seller (as well as any consultant hired by Seller) to verify the
existence of the alleged Environmental Defect(s), and (v) the amount by which Buyer reasonably
believes the Allocated Value of each Title Defect Property is reduced by

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the alleged Title Defect(s) and the computations and information upon which Buyer’s belief is
based.

     5.5 Defect Adjustments. Upon delivery of a timely Environmental Defect Notice, the
Parties shall proceed as follows:

          (a) With respect to each Environmental Defect timely asserted by Buyer, Seller may, at its
sole discretion, elect, on or before the date that is two (2) days prior to the Closing Date, to
(1) reach agreement with Buyer on the existence of the Environmental Defect and an adjustment to
the Purchase Price which shall be reflected on the Preliminary Settlement Statement, which
adjustment shall reflect the cost to Remediate such Environmental Defect (“Environmental Defect
Value”); (2) with the consent of the Buyer, remove the affected Asset(s) from this Agreement and
reduce the Purchase Price by the Allocated Value of such Asset(s) (an “Environmental Defect
Exclusion”); or (3) elect to challenge the existence and/or scope of the Environmental Defect
and/or Environmental Defect Value asserted by Buyer pursuant to Section 5.6. If Buyer is unwilling
to consent or Seller elects to challenge the existence of an Environmental Defect and/or
Environmental Defect Value and such dispute has not been resolved as of the Closing Date, at the
Closing the affected Asset will be excluded from the Closing, the Purchase Price will be reduced by
the Allocated Value of the affected Asset, and in the event that the Buyer and the Seller can
complete the arbitration or otherwise reach agreement on or before the Final Settlement Date, and
there is a positive Allocated Value for the affected Asset, the Seller will convey the affected
Asset to the Buyer pursuant to the terms and conditions of this Agreement at the Allocated Value
less the Environmental Defect Value.

          (b) There shall be no reduction to the Purchase Price except to the extent that the total of
all amounts of Environmental Defect Values exceed Two Million Dollars ($2,000,000), which amount
shall be a deductible not a threshold. The amount by which the Purchase Price is reduced pursuant
to this Article 5 shall be deemed the “Environmental Defect Adjustment.”

     5.6 Contested Environmental Defects. If, pursuant to Section 5.5, Seller elects to
proceed under this Section with respect to an Environmental Defect, the following matters shall be
determined pursuant to this Section: (a) the existence and scope of an Environmental Defect, and
(b) the Environmental Defect Value. The Parties agree to attempt to initially resolve all disputes
through good faith negotiations. If the Parties cannot resolve disputes regarding items (a) or (b)
no later than the Closing Date, the disputed matters will be finally determined by binding
arbitration in accordance with the procedures set forth in Section 15.15. With respect to disputes
concerning Environmental Defects, the arbitrator shall be qualified by education, knowledge and
experience with environmental defects affecting the types of properties which are subject to the
disputed Environmental Defect or Environmental Defect Value and have a minimum of ten years
experience with such types of defects and properties.

     5.7 Exclusive Remedies. The rights and remedies granted each Party in this Article
together with the rights of the parties set forth in Articles 11 and 14 are the exclusive rights
and remedies against the other Party related to any Environmental Defect.

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ARTICLE 6

SELLER’S REPRESENTATIONS AND WARRANTIES

     Seller makes the following representations and warranties as of Closing except where otherwise
indicated. The term “Seller’s Knowledge” has the meaning set forth in Section 15.11(a). The term
“Material Adverse Effect” shall mean any change, development, or effect (individually or in the
aggregate) which is, or is reasonably likely to be, materially adverse to the Assets, as a whole,
or with respect to any Asset, as the context may require.

     6.1 Status. Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is qualified to carry on its business in such
other jurisdictions as may be necessary.

     6.2 Power. Seller has all requisite corporate power and authority to carry on its
business as presently conducted, to enter into this Agreement, and to perform its obligations
hereunder. The execution and delivery of this Agreement does not, and the performance of Seller’s
obligations hereunder will not, as of Closing, violate, or be in conflict with, any material
provision of Seller’s governing documents, or any judgment, decree, order, statute, rule or
regulation applicable to Seller.

     6.3 Authorization and Enforceability. This Agreement constitutes Seller’s legal,
valid and binding obligation, enforceable in accordance with its terms, subject, however, to the
effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws
for the protection of creditors, as well as to general principles of equity, regardless whether
such enforceability is considered in a proceeding in equity or at law.

     6.4 Liability for Brokers’ Fees. Seller has not incurred any liability, contingent
or otherwise, for investment bankers’, brokers’ or finders’ fees relating to the transactions
contemplated by this Agreement for which Buyer shall have any responsibility whatsoever.

     6.5 No Bankruptcy. The Purchase Price and terms and conditions of this Agreement
constitute reasonably equivalent value in exchange for the Assets, and Seller is not transferring
the Assets with any intent to hinder, delay or defraud any entity to which Seller is indebted.
There are no bankruptcy proceedings pending, being contemplated by or, to the Knowledge of Seller,
threatened against Seller.

     6.6 Litigation. Except as provided on Schedule 6.6, there are no actions,
suits or proceedings pending or, to the Knowledge of Seller, threatened, against the Seller or any
of the Assets in the future, in any court or by or before any federal, state, municipal or other
governmental agency that would have a Material Adverse Effect on the Seller or the Assets or impair
Seller’s ability to consummate the transactions contemplated hereby; nor is Seller in default under
any material order, writ, injunction, or decree of any court or federal, state, municipal or other
governmental agency.

     6.7 Material Agreements. Except for the Leases, Exhibit C sets forth all of
the following contracts (the “Material Agreements”) which are included in the Assets or by which
any of the Assets will be bound following the Closing: (a) any agreement with any affiliate of
Seller; (b) any agreement or contract for the sale, exchange, or other disposition of Hydrocarbons

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produced from or attributable to Seller’s interest in the Assets or for the purchase,
processing or transportation of any Hydrocarbons, in each case that is not cancelable without
penalty or other payment on not more than ninety (90) days prior written notice, other than terms
of operating agreements or gas balancing agreements which permit an operator or other co owner to
take or market production of a non taking co owner; (c) any agreement of or binding upon Seller to
sell, lease, farmout, or otherwise dispose of any interest in any of the Assets after the date
hereof, other than non consent penalties for nonparticipation in operations under operating
agreements, conventional rights of reassignment arising in connection with Seller’s surrender or
release of any of the Assets; (d) any tax partnership agreement of or binding upon Seller affecting
any of the Assets; (e) any agreement which creates any area of mutual interest or similar provision
with respect to the acquisition by Seller or its assigns of any interest in any Hydrocarbons, land
or asset or contains any restrictions on the ability of Seller or its assigns to compete with any
other individual or entity, including, without limitation, any corporation, limited liability
company, partnership (general or limited), joint venture, association, joint stock company, trust,
unincorporated organization or government (including any board, agency, political subdivision or
other body thereof) (“Person”); (f) any agreement (other than joint operating agreements, unit
operating agreements and similar agreements) that could reasonably be expected to result in
aggregate payments by Seller with respect to the Assets in excess of Fifty Thousand Dollars
($50,000) during the current or any subsequent year; (vii) any agreement that could reasonably be
expected to result in aggregate revenues to Seller with respect to the Assets in excess of Fifty
Thousand Dollars ($50,000) during the current or any subsequent year. To Seller’s Knowledge,
Seller is not (and to Seller’s Knowledge, no other Person is) in material default (or with the
giving of notice or the lapse of time or both, would not be in default) under any Material
Agreement except as disclosed on Exhibit C. Prior to execution of this Agreement, Seller
has provided Buyer or made available to Buyer, true, correct and complete copies of the Material
Agreements. To Seller’s Knowledge, the Material Agreements are in full force and effect in
accordance with their terms, and valid and binding obligation of the Seller, and to the Seller’s
Knowledge, each of the other parties thereto, and enforceable in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditor’s rights generally and by equitable principles.

     6.8 Capital Projects. The capital projects of Seller related to the Assets which are
in progress are those provided on Schedule 6.8 (the “Capital Projects”).

     6.9 Taxes and Assessments. Except as set forth on Schedule 6.9, all material
taxes and assessments pertaining to the Assets based on or measured by the ownership of property
for all taxable periods prior to the taxable period in which this Agreement is executed that were
required to be paid prior to the Effective Time, have been properly paid. All income taxes and
obligations relating thereto that could result in a lien or other claim against any of the Assets
have been properly paid, unless contested in good-faith by appropriate actions. Except as set
forth on Schedule 6.10, Seller has not received written notice nor has Knowledge of any
pending claim or audit against Seller from any applicable taxing authority for assessment of taxes
with respect to the Assets.

     6.10 Audits. Except as provided on Schedule 6.10, there are no audits
currently being conducted by Seller of the joint account under any operating agreements related to
the Assets nor are there any such audits of Seller currently underway or to Seller’s Knowledge
imminent.

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     6.11 Judgments. There are no unsatisfied judgments or injunctions issued by a court
of competent jurisdiction or other governmental agency outstanding against Seller related to the
Assets.

     6.12 Compliance with Law And Government Authorizations. Except as would not,
individually or in the aggregate, have a Material Adverse Effect: (a) Seller has obtained and is
maintaining all federal, state and local governmental licenses, permits, franchises, orders,
exemptions, variances, waivers, authorizations, certificates, consents, rights, privileges and
applications therefore (the “Governmental Authorizations”) that are presently necessary or required
for the ownership and operation of the Assets as currently owned and operated; (b) Seller is
operating the Assets in accordance with the conditions and provisions of all Governmental
Authorizations that are presently necessary or required for the ownership and operation of the such
Assets as currently owned and operated, and (c) no written notices of violation have been received
by Seller from a Governmental Entity, and no proceedings are pending (with service of process on
Seller) or, to Seller’s Knowledge, threatened (or pending without service of process on Seller)
that might result in any modification, revocation, termination or suspension of any such
Governmental Authorizations or which would require any corrective or remediation action by such
Person.

     6.13 Lease Status/Rentals/Royalties/Taxes. To Seller’s Knowledge, all rentals,
royalties and operating expenses payable with respect to the Assets prior to the Effective Time,
have been duly and properly paid in all material respects by Seller, as applicable, in accordance
with applicable law, except as would not, individually or in the aggregate, have a Material Adverse
Effect. To Seller’s Knowledge, there are no currently pending requests or demands for payments,
adjustments of payments or performance pursuant to obligations under the Leases, to the extent that
non-compliance with the forgoing by Seller would have a Material Adverse Effect on any of the
Assets. Seller has not received a written notice of default with respect to the payment or
calculation of any material amount of any rentals, royalties and/or Production Taxes attributable
to the Assets.

     6.14 Status and Operation of Assets. To Seller’s Knowledge, there are no documents or
other agreements included in or pertaining to the Assets which require any further material
expenditure on the part of Seller, except for any Capital Projects described in
Schedule 6.8 and for obligations set forth in the Leases and the Material Contracts.

     6.15 Suspense. Except as set forth on Schedule 6.15, and in accordance with
the agreements set forth in Section 13.4 with respect to Assets operated by Seller, proceeds from
the sale or use of Hydrocarbons produced from, or attributable to, the Assets are being paid by
Seller in compliance with the terms of the Leases without suspension.

     6.16 Well Status. Except as set forth in Schedule 6.16, to the Knowledge of
Seller, there are no wells located on the Assets that: (a) Seller is not obligated by Law or
contract to currently plug and abandon; or (b) have been plugged and abandoned but have not been
plugged in accordance with all applicable requirements of each regulatory authority having
jurisdiction over the Assets.

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     6.17 Calls on Production. Except as set forth on Schedule 6.17, Seller has
not (i) received any material advance, “take-or-pay” or other similar payments under production
sales contracts that entitle the purchasers to “make up” or otherwise receive deliveries of
Hydrocarbons without paying at such time the contract price therefore or (ii) taken or received
any amount of Hydrocarbons under any gas balancing agreements or any similar arrangements not
accounted for in a purchase price adjustment that permit any person thereafter to receive any
portion of the interest of Seller to “balance” any disproportionate allocation of Hydrocarbons.
Except as set forth on Schedule 6.17, no Hydrocarbons attributable to the Assets are
subject to a sales contract (other than contracts terminable on no more than thirty (30) days’
notice) and no person has any call upon, option to purchase or similar rights with respect to the
production from the Assets; production from the Assets is not bound by any gas dedications or
subject to any monetary or in kind through-put fees or charges in connection with gathering or
transportation; and the Assets are not bound by futures, hedge, swap, collar, put, call, floor,
cap, option or other contracts that are intended to benefit from, relate to or reduce or eliminate
the risk of fluctuations in the price of commodities, including Hydrocarbons, securities, foreign
exchange rates or interest rates that will continue after Closing. Proceeds from the sale of oil,
condensate, and gas from the Assets are being received in all respects by Seller, as applicable, in
a timely manner and are not being held in suspense for any reason.

ARTICLE 7

BUYER’S REPRESENTATIONS AND WARRANTIES

     Buyer makes the following representations and warranties as of Closing and as of the Effective
Time. The term “Buyer’s Knowledge” has the meaning set forth in Section 15.11(b).

     7.1 Organization and Standing. Buyer is a limited liability company corporation duly
organized, validly existing and in good standing under the laws of Delaware and is duly qualified
to carry on its business in such other jurisdictions as may be necessary.

     7.2 Power. Buyer has all requisite power and authority to carry on its business as
presently conducted. The execution and delivery of this Agreement does not, and the fulfillment of
and compliance with the terms and conditions hereof will not, as of Closing, violate, or be in
conflict with, any material provision of Buyer’s governing documents, or, to the Buyer’s Knowledge,
any judgment, decree, order, statute, rule or regulation applicable to Buyer.

     7.3 Authorization and Enforceability. This Agreement constitutes Buyer’s legal, valid
and binding obligation, enforceable in accordance with its terms, subject, however, to the effects
of bankruptcy, insolvency, reorganization, moratorium and other laws for the protection of
creditors, as well as to general principles of equity, regardless whether such enforceability is
considered in a proceeding in equity or at law.

     7.4 Liability for Brokers’ Fees. Buyer has not incurred any liability, contingent or
otherwise, for investment bankers’, brokers’ or finders’ fees relating to the transactions
contemplated by this Agreement for which Seller shall have any responsibility whatsoever.

     7.5 Litigation. There is no action, suit, proceeding, claim or investigation by any
person, entity, administrative agency or governmental body pending or, to Buyer’s Knowledge,

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threatened against it before any governmental authority that impedes or is likely to impede
its ability to consummate the transactions contemplated by this Agreement and to assume the
liabilities to be assumed by it under this Agreement.

     7.6 Financial Resources. Buyer has the financial resources available to close the
transaction contemplated by this Agreement without the need to obtain financing.

     7.7 Buyer’s Evaluation.

          (a) Review. Buyer is experienced and knowledgeable in the oil and gas business and is
aware of its risks. Buyer has been afforded the opportunity to examine the Records and materials
made available to it by Seller in Seller’s offices with respect to the Assets. Buyer acknowledges
that Seller has not made any representations or warranties as to the Records or otherwise except as
expressly and specifically provided herein and that Buyer may not rely on any of Seller’s estimates
with respect to reserves, the value of the Assets, projections as to future events or other
internal analyses or forward looking statements.

          (b) Independent Evaluation. In entering into this Agreement, Buyer 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 without limitation its own
estimate and appraisal of the extent and value of the Hydrocarbon reserves of the Assets.

ARTICLE 8

COVENANTS AND AGREEMENTS

     8.1 Covenants and Agreements of Seller. Seller covenants and agrees with Buyer as
follows:

          (a) Operations Prior to Closing. Except as otherwise consented to in writing by Buyer
or provided in this Agreement, from the Effective Time to the Closing, Seller will operate the
Assets as a reasonable and prudent operator, in good faith, in compliance in all material respects
with the law, and use reasonable efforts to cause the Assets to be operated in a good and
workmanlike manner consistent with past practices. From the date of execution of this Agreement to
the Closing Date, Seller shall pay or cause to be paid its proportionate share of all costs and
expenses incurred in connection with such operations and Seller will notify Buyer of ongoing
activities and major capital expenditures in excess of $50,000 per activity conducted on the
Assets, exclusive of the Capital Projects listed on Schedule 6.8 and shall consult with
Buyer regarding all such matters and operations involving such expenditures. All costs and expenses
incurred by the Parties with respect to the Capital Projects will be apportioned between the
Parties as of the Effective Time, with Buyer assuming all post-Effective Time costs and expenses
and Seller retaining all pre-Effective Time costs and expenses.

          (b) Restriction on Operations. Subject to Section 8.1(a), unless Seller obtains the
prior written consent of Buyer to act otherwise, which consent shall not be unreasonably withheld,
Seller will use good-faith efforts within the constraints of the applicable operating agreements
and other applicable agreements not to (i) abandon any part of the Assets (except in

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the ordinary course of business or the abandonment of Leases upon the expiration of their
respective primary terms or if not capable of production in paying quantities, provided Seller
first notifies Buyer and obtains consent for the proposed abandonment), (ii) except for the Capital
Projects listed on Schedule 6.8, and operations consistent with the existing drilling plan
attached hereto as Schedule 8.1(b), approve any operations on the Assets anticipated in any
instance to cost the owner of the Assets more than $50,000 per activity (excepting emergency
operations required under presently existing contractual obligations, ongoing commitments under
existing AFEs and operations undertaken to avoid a monetary penalty or forfeiture provision of any
applicable agreement or order all of which shall be deemed to be approved, provided Seller
immediately notifies Buyer of any emergency operation or operation to avoid monetary penalty or
forfeiture excepted herein), (iii) convey or dispose of any part of the Assets (other than
replacement of equipment or sale of Hydrocarbons produced from the Assets in the regular course of
business), (iv) enter into any farm-out, farm-in or other contract affecting the Assets,
(v) consent to letting lapse any insurance now in force with respect to the Assets, or
(vi) materially modify or terminate any contract material to the operation of the Assets.

          (c) Consents. For the purposes of obtaining the written consents for AFEs required in
this Section 8.1, Buyer designates the following contact person: Robert W. Kirkland, at the
address and telephone number for Buyer set forth in Section 15.3. Such consents may be obtained in
writing by overnight courier or given by telecopy or facsimile transmission.

          (d) Status. Seller shall use all reasonable efforts to assure that as of the Closing
Date, Seller will not agree to any material legal or contractual restriction that would prohibit or
materially delay the timely consummation of the transactions contemplated hereby.

          (e) Notices of Claims. Seller shall promptly notify Buyer, if, between the date of
execution of this Agreement and the Closing Date, Seller receives written notice of any claim,
suit, action or other proceeding or written notice of any material default under any material
contracts affecting the Assets, and prompt notice of any event that would have a Material Adverse
Effect on any of the Assets, or the Transaction.

          (f) Compliance with Laws. During the period from the date of execution of this
Agreement to the Closing Date, Seller shall cause the Assets to be operated in compliance in all
material respects with all applicable statutes, ordinances, rules, regulations and orders,
including Environmental Laws.

          (g) Drag Along Rights. If Buyer proposes to sell all of its interest in the 50%
Assets to an unaffiliated third party transferee, in one transaction or a series of related
transactions (a “Drag Along Sale”), then Buyer shall have the right to include the Seller Retained
Interests in such Drag Along Sale on the following terms:

          (1) Buyer shall give Seller not less than ten (10) days prior written notice of its
intention, identifying (subject to reasonable confidentiality provisions) (i) the price
offered, (ii) all other materials terms and conditions of the Drag Along Sale and the name
of the third party purchaser, and (iii) if the consideration payable pursuant to the Drag
Along Sale consists in whole or in part of consideration other than cash, such information
relating to such other consideration as Seller may reasonably request;

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          (2) In connection with the Drag Along Sale, Buyer shall have the right to sell the
Seller Retained Interests to the third party purchaser, for the same consideration and on
the same terms as the sale of Buyer’s interest in the 50% Assets. . Seller shall take all
actions necessary in connection with the consummation of the Drag Along Sale as requested by
the Buyer, including the execution of such agreements and such other actions reasonably
necessary to execute the transfer documents, provided such transfer documents are applied
equally on an equivalent basis to Buyer and Seller. Seller acknowledges that such transfer
documents are expected to provided representations warranties indemnities and escrow
arrangements related to the Drag Along Sale; and

          (3) Seller will not be required to sell the Seller Retained Interests in the Drag Along
Sale if the consideration payable by the third party purchaser does not meet a minimum price
or allocated value of a PV15 value for the PDP on the 50% Assets (based on the report of the
Buyer’s independent petroleum engineers, W. D. Von Gonten & Associates) based on the NYMEX
strip with the proper differentials applied for the PDP assets, but the Seller may elect to
participate, notwithstanding this minimum price provision. Seller will also not be required
to participate in any Drag Along Sale unless at least 75% of the purchase price paid for the
Seller Retained Interests in payable in cash.

          (h) Right of First Offer. If Seller wishes to dispose of all or a portion of the
Seller Retained Interests at any time following the Closing Date, Seller first shall give written
notice of such intention to Buyer (the “Sale Intention Notice”). The Sale Intention Notice shall
include a description of the properties and assets to be offered. Buyer may, at its option, submit
to Seller within ten (10) days following its receipt of the Sale Intention Notice (the “Acceptance
Period”) its irrevocable written offer (the “Offer”) to purchase all (but not less than all) of the
Seller Retained Interests described in the Sale Intention Notice for cash at a to be stated in such
Offer (the “Offer Price”). Seller shall be entitled to accept or reject the Offer in its sole
discretion. If Seller accepts the Offer, completion of the sale and the purchase of all of the
Seller Retained Interests described in the Sale Intention Notice shall take place within ten (10)
Business Days following Seller’s receipt of the Offer. If Seller rejects the Offer, or if Buyer
fails to submit an offer to purchase all of the Seller Retained Interests described in the Sale
Intention Notice within the Acceptance Period, Seller shall be free to sell all or a portion of the
Seller Retained Assets described in the Sale Intention Notice to any third party or third parties
in its sole discretion.

          (i) Debt Repayment. Seller covenants and agrees that it will use the proceeds of the
Purchase Price to pay down indebtedness outstanding under its senior secured credit facility.

     8.2 Covenants and Agreements of Buyer. Buyer covenants and agrees with Seller as
follows:

          (a) Status. Buyer shall use all reasonable efforts to assure that as of the Closing
Date it will not be under any material legal or contractual restriction that would prohibit or
delay the timely consummation of the transaction contemplated hereby.

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          (b) Confidentiality. The Parties are currently subject to a Confidentiality Agreement
dated December 31, 2009 that will remain in full force and effect following execution of this
Agreement, and will control in the event of a termination of this Agreement.

     8.3 Covenants and Agreements of the Parties.

          (a) Communication Between the Parties Regarding Breach. If Buyer or Seller develops
information during its due diligence that leads either Party to believe that the other Party has
materially breached a representation or warranty under this Agreement, the non-breaching Party
shall inform the alleged breaching Party in writing of such potential breach as soon as possible,
but in any event, at or prior to Closing.

          (b) Cure Period for Breach. If any Party to this Agreement believes the other Party
has materially 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 that Party
two (2) business days to cure. Notwithstanding the foregoing, this Section 8.3(b) shall not apply
to breach of the Parties’ obligations at Closing and shall not operate to delay Closing.

          (c) Casualty Loss. Prior to Closing, if a portion of the Assets is destroyed by fire
or other casualty or if a portion of the Assets is taken or threatened to be taken in condemnation
or under the right of eminent domain (“Casualty Loss”), Buyer shall not be obligated to purchase
such Asset. If Buyer declines to purchase such Asset, the Purchase Price shall be reduced by the
Allocated Value of such Asset. If Buyer elects to purchase such Asset, the Purchase Price shall be
reduced by the estimated cost to repair such Asset (with equipment of similar utility), less all
insurance proceeds which shall be payable to Buyer, up to the Allocated Value thereof (the
reduction being the “Net Casualty Loss”). Seller, at its sole option, may elect to cure such
Casualty Loss and, in such event, Seller shall be entitled to all insurance proceeds. If Seller
elects to cure such Casualty Loss, Seller may replace any personal property that is the subject of
a Casualty Loss with equipment of similar grade and utility, or replace any real property with real
property of similar nature and kind if such property is acceptable to Buyer in its sole discretion.
If Seller elects to cure the Casualty Loss, Buyer shall purchase the affected Asset at Closing for
the Allocated Value thereof.

          (d) PGR Partners. Seller shall use good faith efforts to cause PGR Partners to obtain
any third party consents necessary to transfer that portion of the Assets held by PGR Partners to
Buyer at Closing as set forth in Section 4.4. In the event that Seller is not able to obtain the
third party consents necessary to transfer that portion of the Assets held by PGR Partners, Seller
and Buyer hereby agree that Buyer will purchase Seller’s ownership interest in PGR Partners at
Closing pursuant to the terms and conditions of the PGR Partners Interest Purchase Agreement
attached hereto as Exhibit K, and the Parties will take all reasonable actions to effectuate such
transfer, including the amendment of Schedule 2.2 to reflect the acquisition of the Properties held
by PGR Partners through the acquisition of interests in PGR Partners.

          (e) Cooperation and Good Faith. The Parties agree to cooperate and act in good faith
in carrying out each of its respective obligations hereunder, including the preparation and filing
of any notices, disclosures, reports or other documents that may be necessary to the consummation
of the transaction contemplated by this Agreement

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          (f) Successor Operator. Seller is currently operating certain Assets pursuant to
joint operating agreements with third parties. Buyer acknowledges that such third parties may not
agree to allow Buyer to succeed Seller as operator under such joint operating agreements or
otherwise exercise other rights they may have that would preclude Buyer from succeeding Seller as
operator. Buyer specifically acknowledges and agrees that Seller has made no representation or
guarantee that Buyer will succeed Seller as operator under any joint operating agreement, but for
so long as it owns an undivided interest in any of the Properties, agrees to vote all of its
interests in favor of the appointment of the Buyer as the operator.

ARTICLE 9

TAX MATTERS

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

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

          (b) “Production Taxes” shall mean all ad valorem, property, production, excise, net proceeds,
severance, windfall profit 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.

     9.2 Production Tax Liability. Subject to the treatment of ad valorem taxes provided
below, all Production Taxes shall be prorated between Buyer and Seller as of the Effective Date for
all taxable periods that include the Effective Date based upon relative days of ownership of the
Assets during the relevant taxable period. The Parties acknowledge that in certain states, such as
Colorado, ad valorem taxes assessed against the Assets are measured by the value of the preceding
year’s production. Ad valorem taxes shall be the responsibility of the Party who owned the Asset
when the production which is the basis for the tax assessment occurred. By way of illustration, in
Colorado, 2011 ad valorem taxes payable in 2012 are based on the value of 2010 production so shall
be the liability of and shall be paid by the Party with respect to the time that it owned the
Assets in 2010. Each Party shall promptly furnish to the other copies of any ad valorem tax
assessments and tax statements (or invoices therefore from the operator of the Assets) received by
it pertaining to the respective Asset. Each Party shall timely pay all ad valorem taxes for which
it has liability under this Section and shall furnish to the other Party evidence of such payment.

     9.3 Sales Taxes. All sales, use or other taxes (other than taxes on gross income, net
income or gross receipts) and duties, levies, recording fees or other governmental charges incurred
by or imposed with respect to the property transfers undertaken pursuant to this Agreement shall be
the responsibility of, and shall be paid by, Buyer.

     9.4 Tax Reports and Returns. For tax periods in which the Effective Time occurs,
Seller agrees to immediately forward to Buyer copies of any tax reports and returns received by
Seller after Closing and provide Buyer with any information Seller has that is necessary for Buyer
to file any required tax reports and returns related to the Assets. Buyer agrees to file all tax
returns and reports applicable to the Assets that Buyer is required to file after the Closing

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and, subject to the provisions of Section 9.2, to pay all required Production Taxes payable
with respect to the Assets.

ARTICLE 10

CONDITIONS PRECEDENT TO CLOSING

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

          (a) All representations and warranties of Buyer contained in this Agreement are true in all
material respects (except for such representations and warranties that are qualified by materiality
or Material Adverse Effect or words of similar import, which shall be true and correct in all
respects) on the date hereof and as of the Closing Date in accordance with their terms as if such
representations and warranties were remade at and as of the Closing Date, and Buyer has performed
and satisfied all covenants and agreements required by this Agreement to be performed and satisfied
by Buyer or jointly by Buyer and Seller at or prior to the Closing in all material respects and
Buyer shall deliver a certificate to Seller confirming the foregoing; and

          (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 the purchase and sale
contemplated by this Agreement and that remains in effect at Closing.

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

          (a) All representations and warranties of Seller contained in this Agreement are true in all
material respects (except for such representations and warranties that are qualified by materiality
or Material Adverse Effect or words of similar import, which shall be true and correct in all
respects) on the date hereof and as of the Closing Date in accordance with their terms as if such
representations and warranties were remade at and as of the Closing Date and Seller has performed
and satisfied all covenants and agreements required by this Agreement to be performed and satisfied
by Seller or jointly by Buyer or Seller at or prior to the Closing in all material respects and
Seller shall deliver a certificate to Buyer confirming the foregoing; and

          (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 the purchase and sale
contemplated by this Agreement and that remains in effect at the time of Closing.

ARTICLE 11

RIGHT OF TERMINATION

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

          (a) by mutual consent of Seller and Buyer;

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          (b) by Seller, if Seller’s conditions set forth in Section 10.1 are not satisfied through no
fault of Seller, or are not waived by Seller, as of the Closing Date;

          (c) by Buyer, if Buyer’s conditions set forth in Section 10.2 are not satisfied through no
fault of Buyer, or are not waived by Buyer, as of the Closing Date;

          (d) by Seller, if, through no fault of Seller, the Closing does not occur on or before August
4, 2010;

          (e) by Buyer, if, through no fault of Buyer, the Closing does not occur on or before August 4,
2010;

          (f) by Buyer or Seller, if the sum of (i) the Title Defect Amounts (as may be offset by the
Title Benefit Amounts), (ii) the Environmental Defect Values, (iii) the Allocated Value of Affected
Assets retained by Seller under Section 4.5, and (iv) any Casualty Loss associated with an Asset
retained at Closing under Section 8.3(c) exceeds ten percent (10%) of the Purchase Price in the
aggregate.

     11.2 Liabilities Upon Termination.

          (a) Buyer’s Default. If Closing does not occur because Buyer wrongfully failed to
tender performance at Closing, or otherwise breached this Agreement prior to Closing, and all of
the conditions to Closing under Section 10.2 have been satisfied or waived (other than those
conditions involving deliveries at Closing) and Seller is ready to close, Seller shall be entitled
to enforce the remedy of specific performance against Buyer hereunder in addition to any and all
other rights and remedies to which Seller may be entitled at law or in equity, including without
limitation the right of Seller to receive the full Purchase Price therefor and Seller shall be
entitled to recover from Buyer all court costs and attorneys’ fees incurred by Seller. Buyer’s
failure to close shall not be considered wrongful if (i) Buyer’s conditions under Section 10.2 are
not satisfied through no fault of Buyer and are not waived; or (ii) Buyer has terminated this
Agreement as of right under Section 11.1.

          (b) Seller’s Default; Other Termination. If Closing does not occur because Seller
wrongfully failed to tender performance at Closing, or otherwise breached this Agreement prior to
Closing, and all of the conditions to Closing under Section 10.1 have been satisfied or waived
(other than those conditions involving deliveries at Closing) and Buyer is ready to close, Buyer
shall be entitled to enforce the remedy of specific performance against Seller hereunder, and Buyer
shall be entitled to recover from Seller all court costs and attorney’s fees incurred by Buyer, in
addition to any and all other rights and remedies to which Buyer may be entitled at law or in
equity. Seller’s failure to close shall not be considered wrongful if (i) Seller’s conditions
under Section 10.1 are not satisfied through no fault of Seller and are not waived; or (ii) Seller
has terminated this Agreement as of right under Section 11.1.

ARTICLE 12

CLOSING

     12.1 Date of Closing. The “Closing” of the transactions contemplated hereby shall be
held on July 30, 2010. The date the Closing actually occurs is called the “Closing Date.” If

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Closing does not occur on July 30, 2010, the Parties shall make a good faith effort to
determine a mutually acceptable alternative Closing Date.

     12.2 Place of Closing. The Closing shall be held at the offices of Seller at
9:00 a.m. or at such other time and place as Buyer and Seller 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) Seller and Buyer shall execute, acknowledge and deliver to Buyer (i) an Assignment, Bill
of Sale and Conveyance of Assets effective as of the Effective Time substantially in the form of
Exhibit D with a special warranty of title by, through and under Seller but not otherwise
and with no warranties, express or implied, as to the personal property, fixtures or condition of
the Assets which are conveyed “as is, where is”; (ii) such other assignments, bills of sale,
certificates of title, or deeds necessary to transfer the Assets to Buyer including, without
limitation, federal and state forms of assignment; and (iii) an Assignment and Assumption Agreement
in the form attached as Exhibit E under which Seller assigns and Buyer assumes Seller’s
interest in the contracts included in the Assets in accordance with the terms of this Agreement;

          (b) Seller and Buyer shall deliver the certificates required in Sections 10.2(a) and 10.1(a),
respectively.

          (c) Seller and Buyer shall execute and deliver the Preliminary Settlement Statement;

          (d) Buyer shall cause the Closing Amount to be paid by wire transfer of immediately available
funds;

          (e) Seller and Buyer shall execute and deliver all required change of operator forms and
notices;

          (f) Seller shall execute, acknowledge and deliver transfer orders or letters in lieu thereof
notifying all purchasers of production of the change in ownership of the Assets and directing all
purchasers of production to make payment to Buyer of proceeds attributable to production from the
Assets;

          (g) Seller shall execute and deliver to Buyer an affidavit of non-foreign status and no
requirement for withholding under Section 1445 of the Code in the form of Exhibit F;

          (h) Seller shall execute and deliver a Transition Services Agreement in the form attached as
Exhibit I;

          (i) Seller shall deliver a written release of all of the liens on the Assets from its secured
lender in a form to be approved by the Buyer;

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          (j) Seller and Buyer shall execute two joint operating agreements, and related Memoranda of
Operating Agreements (to be filed of record in the applicable counties) one for the “Newton”
properties and one for the “Golden Prairie” properties, each in the form attached hereto as
Exhibit H (the “Operating Agreements”) (it is understood that the “Contract Area” is blank
on the attached Exhibit H, but will be added to the execution copies signed at Closing);

          (k) Seller and Buyer shall complete the transactions required by the stock purchase agreement
providing for Buyer’s purchase of 100% of the issued and outstanding shares of capital stock of
Piper Petroleum Company, a Colorado corporation and wholly owned subsidiary of Seller, in the form
attached hereto as Exhibit J;

          (l) If applicable, Seller and Buyer shall complete the transactions required by the interest
purchase agreement for the interests owned by Seller in PGR Partners, in the form attached hereto
as Exhibit K; and

          (m) Seller and Buyer shall take such other actions and deliver such other documents as are
contemplated by this Agreement.

ARTICLE 13

POST-CLOSING OBLIGATIONS

     13.1 Post-Closing Adjustments.

          (a) Final Settlement Statements. As soon as practicable after the Closing, but in no
event later than ninety (90) days after Closing, Seller, with the assistance of Buyer’s staff and
with access to such records as necessary, will cause to be prepared and delivered to Buyer, in
accordance with customary industry accounting practices, (i) the final settlement statement (the
“Final Settlement Statement”) setting forth each adjustment to the Purchase Price in final form in
accordance with Section 2.3 and showing the calculation of such adjustments and the resulting final
purchase price (the “Final Purchase Price”). As soon as practicable after receipt of the Final
Settlement Statement but in no event later than on or before thirty (30) days after receipt of such
statement, Buyer shall deliver to Seller a written report containing any changes that Buyer
proposes to make to the Final Settlement Statement. Buyer’s failure to deliver to Seller a written
report detailing proposed changes to the Final Settlement Statement by that date shall be deemed an
acceptance by Buyer of the Final Settlement Statement as submitted by Seller. The Parties shall
agree with respect to the changes proposed by Buyer, if any, no later than forty-five (45) days
after receipt of Seller’s proposed Final Settlement Statement. The date upon which such agreement
is reached or upon which the Final Purchase Price is established shall be herein called the “Final
Settlement Date.” If the Final Purchase Price is more than the Closing Amount, Buyer shall pay to
Seller the amount of such difference by wire transfer in immediately available funds no later than
five (5) days after the Final Settlement Date. If the Final Purchase Price is less than the
Closing Amount, Seller shall pay the additional amount to Buyer by wire transfer in immediately
available funds no later than five (5) days after the Final Settlement Date

          (b) Dispute Resolution. If the Parties are unable to resolve a dispute as to the
Final Purchase Price within sixty (60) days after Buyer’s receipt of Seller’s proposed Final

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Settlement Statement, the Parties shall submit the dispute to binding arbitration to be
conducted in accordance with the provisions of Section 15.15.

     13.2 Records. Seller shall make the Records available for pick up by Buyer at Closing
to the extent possible, but in any event, within ten (10) days after Closing. Seller may retain
copies of the Records and Seller shall have the right to review and copy the Records during
standard business hours upon reasonable notice for so long as Buyer retains the Records. Buyer
agrees that the Records will be maintained in compliance with all applicable laws governing
document retention.

     13.3 Further Assurances. From time to time after Closing, Seller and Buyer 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 the
transactions contemplated by this Agreement, including assurances that Seller and Buyer are
financially capable of performing any indemnification required hereunder.

     13.4 Suspense Accounts and Division of Interest. At least three (3) days prior to the
Closing, Seller will supplement Schedule 6.15 to provide to Buyer (a) information regarding
all of Seller’s accounts holding moneys in suspense together with a written explanation (as
contained in Seller’s files) of why such moneys are held in suspense or other information
identifying the proper disposition of such moneys and (b) Seller’s division of interest and all
supporting documentation regarding those royalty owners and working interest owners in the Leases
for whom Seller disburses proceeds of production, together with all accounts holding funds payable
to such third parties. Upon Closing Buyer agrees to distribute the suspense moneys in a manner
consistent with prudent oil and gas business practices and the information supplied by Seller and
to indemnify Seller against any claim relating to the failure to pay such funds after the Closing.

     13.5 Agreements concerning the Operating Agreements and Future Joint Operating
Agreements. Buyer and Seller agree that in connection with the Closing, Buyer will be entitled
to record a Memorandum of Operating Agreement and related Form UCC-1 in connection with the liens
of Buyer as operator under the Operating Agreement. It is understood and agreed that certain of
the Assets in which Seller and Buyer will own interests together upon Closing will not be subject
to a joint operating agreement once the Closing is completed. In the event the parties wish to
proceed with the development of any such property after Closing, they shall first enter into a
joint operating agreement in the form of Exhibit H. The “Contract Area” of each such
future joint operating agreement shall cover a single drilling and spacing unit or one proration
unit and any increased density drilling that may be subsequently permitted on such drilling and
spacing unit or proration unit.

     13.6 Future Payments Made Directly to Seller. The Parties acknowledge that the Seller
Retained Interests are not conveyed by Seller in the transactions contemplated by this Agreement.
Upon Closing, Buyer shall use its best efforts to ensure that all purchasers of production from the
50% Assets pay all proceeds of production attributable to the Seller Retained Interests directly to
the Seller, provided Seller affirmatively agrees to pay all actual third party expenses related
thereto, unless Seller designates otherwise.

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ARTICLE 14

ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION;

DISCLAIMERS

     14.1 Buyer’s Assumption of Liabilities and Obligations. Upon Closing, Buyer shall assume and pay, perform, fulfill and discharge all claims, costs,
expenses, liabilities and obligations (“Obligations”) accruing or relating to the (a) ownership and
operation of the Assets after the Effective Time including owning, developing, exploring, operating
or maintaining the Assets or the producing, transporting and marketing of Hydrocarbons from the
Assets, the payment of Property Expenses, the make-up and balancing obligations for overproduction
of gas from the Wells, and all liability for royalty and overriding royalty payments and Production
Taxes made with respect to the Assets; (b) the Buyer’s Environmental Liabilities; and (c) all
Obligations accruing or relating to the ownership or operation of the Assets before the Effective
Time, including Seller’s Environmental Liabilities, for which Claims have not been asserted
pursuant to Section 14.4 before the end of the Survival Period, expressly provided that the Buyer
will not assume (and the Assumed Liabilities expressly exclude) any of the Seller’s (i)
Environmental Liabilities arising before the Closing Date pertaining to the undivided interest of
any Assets retained by Seller, (ii) litigation listed on Schedule 6.6, and (iii) any
liabilities for the contracts listed on Schedule 6.17, or any obligation of Seller with
respect to hedging contracts affecting the Assets (collectively, the “Assumed Liabilities”).

     14.2 Seller’s Retention of Liabilities and Obligations. Subject to the provisions of Section 5.5, upon Closing Seller shall retain and pay all
Obligations relating to Seller’s ownership and operation of the Assets prior to the Effective Time,
excluding, however, the Assumed Liabilities (collectively, the “Retained Liabilities”).

     14.3 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 any 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, Buyer and Seller shall indemnify each other as follows:

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

          (b) Buyer’s Indemnification of Seller. Buyer assumes all risk, liability, obligation
and Losses in connection with, and shall defend, indemnify, and save and hold harmless Seller, its
officers, directors, employees and agents, from and against all Losses which

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arise directly or
indirectly from or in connection with (i) the Assumed Liabilities, (ii) any matter for which Buyer
has agreed to indemnify Seller under this Agreement and (iii) any breach by Buyer of any of Buyer’s
representations, warranties or covenants hereunder.

          (c) Limitations on Indemnity. Notwithstanding anything to the contrary set forth
herein, Seller shall have no liability for indemnification hereunder pursuant to Section
14.3(a)(iii) or for any Losses arising in connection with or with respect to Section 14.3(a)(i) or
(ii) until the total of all Losses with respect to such matters exceed one (1%) percent of the
Purchase Price (the “Deductible”). The aggregate liability of Seller for indemnification with
respect to Losses suffered by the Buyer shall not exceed forty (40%) percent of the Purchase Price
(the “Cap”). Notwithstanding the above, the Deductible and the Cap will not apply to a breach of
the Fundamental Representations. From and after the Closing, except as otherwise expressly
provided hereunder, indemnification under Section 14.4 shall be the sole and exclusive remedy
available to any Party hereto against any other Party hereto for any claims arising out of or based
upon the matters set forth in this Agreement and the transactions contemplated hereby, and no Party
shall seek relief against any other Party to this Agreement other than through indemnification
provided in Section 14.4, subject to the limitations provided for in this Section 14.3(c); provided
however, that nothing herein shall limit the nonmonetary equitable remedies of any Party with
respect to any breach of any covenant or other agreement required to be performed after Closing.

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

          (a) 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, to be effective, must be delivered prior to the end of the Survival Period and must
state: (i) the amount of each payment claimed by an Indemnified Party to be owing, (ii) the basis
for such claim, with supporting documentation, and (iii) a list identifying to the extent
reasonably possible 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 thirty (30) days after
receipt of the Claim Notice, or after the amount of such payment has been finally established,
whichever last occurs.

          (b) Information. Promptly after the Indemnified Party receives notice of a claim or
legal action by a third party that may result in a Loss for which indemnification may be sought
under this Article 14 (a “Claim”), the Indemnified Party shall give written notice of such Claim to
the Indemnifying Party. 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
sixty (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; provided, however,
that no such settlement can result in any liability or cost to the Indemnified Party for which it
is entitled to be indemnified hereunder without its consent. If the Indemnifying Party

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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, legal action, or other matter. 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,
and, if the Indemnifying Party fails to assume such defense within the time period provided above,
settle the same in the Indemnified Party’s reasonable discretion at the Indemnifying Party’s
expense with the Indemnifying Party’s consent which shall not be unreasonably withheld. 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. If the Indemnifying Party is entitled to, and
does, assume the defense of any such Claim, the Indemnified Party shall have the right to employ
separate counsel at its own expense and to participate in the defense thereof; provided, however,
that notwithstanding the foregoing, the Indemnifying Party shall pay the reasonable attorneys’ fees
of the Indemnified Party if the Indemnified Party’s counsel shall have advised the Indemnified
Party that there is a conflict of interest that could make it inappropriate under applicable
standards of professional conduct to have common counsel for the Indemnifying Party and the
Indemnified Party (provided that the Indemnifying Party shall not be responsible for paying for
more than one separate firm of attorneys and one local counsel to represent all of the Indemnified
Parties subject to such Claim).

     14.5 No Insurance; Subrogation. The indemnifications provided in this Article 14 shall not be construed as a form of
insurance. Buyer and Seller hereby waive for themselves, their 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, Buyer and Seller shall obtain waiver of such subrogation from its respective
insurers.

     14.6 Reservation as to Non-Parties. Nothing herein is intended to limit or otherwise waive any recourse Buyer or Seller may
have against any non-party for any obligations or liabilities that may be incurred with respect to
the Assets.

     14.7 Disclaimers.

          (a) EXCEPT FOR SELLER’S EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE 6 ABOVE,
AND SELLER’S SPECIAL WARRANTY OF TITLE IN THE ASSIGNMENT DOCUMENTS, THE PROPERTIES ARE BEING
CONVEYED BY SELLER TO BUYER WITHOUT WARRANTY OF ANY KIND, EXPRESS, IMPLIED, STATUTORY, COMMON LAW
OR OTHERWISE, AND THE PARTIES HEREBY EXPRESSLY DISCLAIM, WAIVE AND RELEASE ANY EXPRESS WARRANTY OF
MERCHANTABILITY, CONDITION OR SAFETY AND ANY EXPRESSED WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE; AND BUYER ACCEPTS THE PROPERTIES, “AS IS, WHERE IS, WITH ALL FAULTS, WITHOUT RECOURSE.”
ALL DESCRIPTIONS OF THE WELLS, EQUIPMENT, FACILITIES, PERSONAL PROPERTY, FIXTURES AND STRUCTURES
HERETOFORE OR

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HEREAFTER FURNISHED TO BUYER BY SELLER HAVE BEEN AND SHALL BE FURNISHED SOLELY FOR
BUYER’S CONVENIENCE, AND HAVE NOT CONSTITUTED AND SHALL NOT CONSTITUTE A REPRESENTATION OR WARRANTY
OF ANY KIND BY SELLER. SELLER SHALL HAVE NO LIABILITY TO BUYER FOR ANY CLAIMS, LOSS OR DAMAGE
CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY, INCIDENTALLY OR CONSEQUENTIALLY, BY SUCH
WELLS, EQUIPMENT, FACILITIES, PERSONAL PROPERTY, FIXTURES AND STRUCTURES, BY ANY INADEQUACY THEREOF
OR THEREWITH, ARISING IN STRICT LIABILITY OR OTHERWISE, OR IN ANY WAY ARISING OUT OF BUYER’S
PURCHASE THEREOF. BUYER EXPRESSLY WAIVES THE WARRANTY OF FITNESS AND THE WARRANTY AGAINST VICES AND
DEFECTS, WHETHER APPARENT OR LATENT, IMPOSED BY ANY APPLICABLE STATE OR FEDERAL LAW. THE PARTIES
HEREBY ACKNOWLEDGE AND AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW, THE DISCLAIMERS
CONTAINED IN THIS AGREEMENT ARE “CONSPICUOUS” FOR THE PURPOSES OF SUCH APPLICABLE LAW.

          (b) SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED OR EXPRESS WARRANTY AT COMMON
LAW, BY STATUTE OR OTHERWISE RELATING TO THE ACCURACY OF ANY OF THE INFORMATION FURNISHED WITH
RESPECT TO THE EXISTENCE OR EXTENT OF RESERVES OR THE VALUE OF THE PROPERTIES BASED THEREON OR THE
CONDITION OR STATE OF REPAIR OF ANY OF THE PROPERTIES; THIS DISCLAIMER AND DENIAL OF WARRANTY ALSO
EXTENDS TO ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO THE PRICES BUYER AND SELLER ARE
OR WILL BE ENTITLED TO RECEIVE FROM PRODUCTION OF OIL, GAS OR OTHER SUBSTANCES FROM THE PROPERTIES,
IT BEING ACKNOWLEDGED, AGREED AND EXPRESSLY UNDERSTOOD THAT ALL RESERVE, PRICE AND VALUE ESTIMATES
UPON WHICH BUYER HAS RELIED OR IS RELYING HAVE BEEN DERIVED BY THE INDIVIDUAL AND INDEPENDENT
EVALUATION OF BUYER. BUYER ALSO STIPULATES, ACKNOWLEDGES AND AGREES THAT RESERVE REPORTS ARE ONLY
ESTIMATES OF PROJECTED FUTURE OIL AND/OR GAS VOLUMES, FUTURE FINDING COSTS AND FUTURE OIL AND/ GAS
SALES PRICES, ALL OF WHICH FACTORS ARE INHERENTLY IMPOSSIBLE TO PREDICT ACCURATELY EVEN WITH ALL
AVAILABLE DATA AND INFORMATION.

ARTICLE 15

MISCELLANEOUS

     15.1 Schedules. The Schedules to in this Agreement are hereby incorporated in this Agreement by reference
and constitute a part of this Agreement.

     15.2 Expenses. Except as otherwise specifically provided, all fees, costs and expenses incurred by Buyer
or Seller in negotiating this Agreement or in consummating the transactions contemplated by this
Agreement shall be paid by the Party incurring the same, including, without limitation,
engineering, land, title, legal and accounting fees, costs and expenses.

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     15.3 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 duly made and the receiving Party charged with notice (i) if personally delivered,
when received, (ii) if sent by telecopy or facsimile transmission, when received, (iii) if mailed,
five (5) business days after mailing, certified mail, return receipt requested, or (iv) if sent by
overnight courier, one day after sending. All notices shall be addressed as follows:

If to Seller:

Delta Petroleum Corporation

370 17th Street, Suite 4300

Denver, CO 80202

Attn: Ted Freedman

Telephone: (303) 575-0349

Fax: (303) 293-0066

With a copy to:

Davis Graham & Stubbs LLP

1550 17th Street, Suite 500

Denver, CO 80202

Attn: Ronald R. Levine, II

Telephone: (303) 892-7514

Fax: (303) 892-7400

If to Buyer:

Wapiti Oil & Gas, L.L.C.

800 Gessner, Suite 1000

Houston, Texas 77024

Attn: Bart Agee

Telephone: 713-365-8500

Fax: 713-365-8511

With a copy to:

Bond & Smyser, LLP

5505 Jackson

Houston, Texas 77004

Attn: Adrienne Randle Bond

Telephone: 713-524-4200

Fax: 713-524-1196

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

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     15.4 Amendments. 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.

     15.5 Assignment. Buyer shall not assign all or any portion of its respective rights or delegate all or any
portion of its respective duties hereunder without the written consent of Seller, which consent
shall not be unreasonably withheld, expressly provided that the Buyer may assign all or any portion
of this Agreement or any portion of the Assets to an entity wholly owned or controlled by the
Buyer.

     15.6 Headings. The headings of the Articles and Sections of this Agreement are for guidance and
convenience of reference only and shall not limit or otherwise affect any of the terms or
provisions of this Agreement.

     15.7 Counterparts/Fax Signatures. This Agreement may be executed and delivered in one or more counterparts, each of which
when executed and delivered shall be an original, and all of which when executed shall constitute
one and the same instrument. The exchange of copies of this Agreement and of signature pages by
facsimile or by electronic image scan transmission in .pdf format shall constitute effective
execution and delivery of this Agreement as to the Parties and may be used in lieu of the original
Agreement for all purposes. Signatures of the Parties transmitted by facsimile or electronic image
scan transmission in .pdf format shall be deemed to be their original signatures for all purposes.
Any Party that delivers an executed counterpart signature page by facsimile or by electronic scan
transmission in .pdf format shall promptly thereafter deliver a manually executed counterpart
signature page to each of the other Parties; provided, however,
that the failure to do so shall not affect the validity, enforceability, or binding effect of
this Agreement.

     15.8 References. References made in this Agreement, including use of a pronoun, shall be deemed to include
where applicable, masculine, feminine, singular or plural, individuals or entities. As used in
this Agreement, “person” shall mean any natural person, corporation, partnership, trust, limited
liability company, court, agency, government, board, commission, estate or other entity or
authority. The words “include,” “includes,” and “including” are deemed to be followed by “without
limitation” whether or not they are in fact followed by such words or words of similar import.

     15.9 Governing Law. This Agreement and the transactions contemplated hereby and any arbitration or dispute
resolution conducted pursuant hereto shall be construed in accordance with, and governed by, the
laws of the State of Texas, without regards to conflicts of laws principles.

     15.10 Entire Agreement. This Agreement along with the Confidentiality Agreement executed between the Parties dated
December 31, 2009, constitutes the entire understanding among the Parties, their respective
partners, members, trustees, shareholders, officers, directors and employees with respect to the
subject matter hereof, superseding all negotiations, prior discussions and prior agreements and
understandings relating to such subject matter.

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     15.11 Knowledge.

          (a) “Seller’s Knowledge” means the actual knowledge of the Seller’s representatives listed on
Schedule 15.11(a) hereto.

          (b) “Buyer’s Knowledge” means the actual knowledge of the Buyer’s representatives listed on
Schedule 15.11(b) hereto.

     15.12 Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the Parties
hereto, and their respective successors and assigns. Notwithstanding anything to the contrary
herein, this Agreement is not a binding agreement between the Parties hereto unless and until this
Agreement is duly executed in writing by representatives of the Parties and delivered by the
Parties.

     15.13 Survival of Warranties, Representations and Covenants. All representations and warranties, covenants, indemnities and performance obligations in
this Agreement shall survive the Closing and remain in full force and effect until 5:00 p.m.,
Houston, Texas time, on the date that is 12 months after the Closing Date (“Survival Period”),
except for those representations and warranties set forth in Sections 6.1, 6.2, 6.3 with respect to
the Seller, or Sections 7.1, 7.2 or 7.3 with respect to the Buyer, which representations will
survive indefinitely (the “Fundamental Representations”). If a Claim Notice has been properly
delivered before the date any representation, warranty, covenant, or performance obligation would
otherwise expire under this Section alleging a right to indemnification or defense for Losses
arising out, relating to, or attributable to the breach of such representation, warranty, covenant,
or performance obligation, such representation, warranty, covenant, or performance obligation shall
continue to survive until the claims asserted in such Claim Notice that are based on the breach of
such representation, warranty, covenant, or performance obligation have been fully and finally
resolved under the terms of this Agreement or by agreement (including a settlement agreement) of
the Parties.

     15.14 No Third-Party Beneficiaries. This Agreement is intended only to benefit the Parties hereto and their respective
permitted successors and assigns.

     15.15 Dispute Resolution and Arbitration. Unless this Agreement specifically requires the Parties to arbitrate a specific matter
hereunder, the Parties have all of the rights that they would have under law and equity with
respect to any dispute hereunder. If this Agreement specifically requires arbitration, the
following provisions shall apply to any arbitration conducted pursuant to this Agreement:

          (a) Within ten (10) days after written demand by either Party for arbitration, the Parties
shall select a single, independent arbitrator as described in Section 4.3 with respect to Title
Disputed Matter, as described in Section 5.6 with respect to Environmental Defects, and Section
13.1(b) with respect to the Final Settlement Statement. As to disputes involving Title Disputed
Matters pursuant to Section 4.3, the list of arbitrators shall be qualified by education, knowledge
and experience with title defects affecting the types of properties which are subject to the
disputed Title Defect and have a minimum of ten years experience with such types of defects and
properties. With respect to disputes concerning Environmental Defects, the arbitrator shall be
qualified by education, knowledge and experience with environmental defects affecting the

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types of
properties which are subject to the disputed Environmental Defect or Environmental Defect Value and
have a minimum of ten years experience with such types of defects and properties. If the Parties
cannot agree on the selection of such arbitrator, then the arbitrator shall be selected from the
list by the Judicial Arbiter Group.

          (b) The arbitration shall be governed by Texas law but the specific procedure to be followed
shall be determined by the arbitrator. It is the intent of the Parties that the arbitration be
conducted as efficiently and inexpensively as possible, with only limited discovery as determined
by the arbitrator without regard to the discovery permitted under the Texas or Federal Rules of
Civil Procedure.

          (c) The arbitration proceeding shall be held in Houston, Texas , and a hearing shall be held
no later than sixty (60) days after submission of the matter to arbitration, and a written decision
shall be rendered by the arbitrators within thirty (30) days of the hearing.

          (d) 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
arbitrator shall consider any evidence and testimony that he or she determines to be relevant, in
accordance with procedures that it determines to be appropriate.

          (e) Any award entered in the arbitration shall be made by a written opinion stating the
reasons and basis for the award made.

          (f) The costs incurred in employing the arbitrators, including the arbitrators’ retention of
any independent qualified experts, shall be borne 50% by the Seller and 50% by Buyer.

          (g) The arbitrator’s award may be filed in any court of competent jurisdiction and may be
enforced by any Party as a final judgment of such court.

     15.16 Publicity. Neither Buyer or Seller nor any of their respective Affiliates or representatives shall
issue or cause the publication of any press release or other announcement with respect to the
transactions contemplated by this Agreement without the prior consultation of the other Party,
except as may be required by applicable Law, and each Party shall use its reasonable efforts to
provide copies of such release or other announcement to the other Party hereto, and give due
consideration to such comments as each such other Party may have, prior to such release or other
announcement.

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     IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 	 	 

	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 
	 	 	DELTA PETROLEUM CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Carl Lakey
 

	 	 
	 

	 	 	 	Carl Lakey, Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 
	 	 	WAPITI OIL & GAS, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Bart Agee
 

Bart Agee, President
	 	 

-42-

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