Document:

ex_4-4.htm

    
      

      

    

    Exhibit
      4.4

     

    

     

    

     

    

     

    

     

    

     

    

     

    

    REGISTRATION
      RIGHTS AGREEMENT

     

    NIELSON  &
      ASSOCIATES, INC.

     

    APRIL
      16, 2007

     

    

     

    *
      * * * * * * * * *

     

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    REGISTRATION
      RIGHTS AGREEMENT

     

    TABLE
      OF CONTENTS

     

    Page

    
      	
              Article
                1

            	 	 
	
              Defined
                Terms

            	 	 
	 	 	 
	
              Article
                2

            	 	 
	
              Registration
                Rights

            	 	 
	
                  2.1

            	
              Piggyback
                Registration.

            	
              5

            
	
                  2.2

            	
              Demand
                Registration.

            	
              7

            
	
                  2.3

            	
              Underwritten
                Offerings.

            	
              10

            
	
                  2.4

            	
              Postponements.

            	
              10

            
	 	 	 
	
              Article
                3

            	 	 
	
              Registration
                Procedures

            	 	 
	
                  3.1

            	
              Obligations
                of the MLP.

            	
              11

            
	
                  3.2

            	
              Seller
                Information.

            	
              16

            
	
                  3.3

            	
              Notice
                to Discontinue.

            	
              16

            
	 	 	 
	
              Article
                4

            	 	 
	
              Registration
                Expenses

            	 	 
	 	 	 
	
              Article
                5

            	 	 
	
              Free
                Writing Prospectus

            	 	 
	 	 	 
	
              Article
                6

            	 	 
	
              Indemnification

            	 	 
	
                  6.1

            	
              Indemnification
                by the MLP.

            	
              18

            
	
                  6.2

            	
              Indemnification
                by Holders.

            	
              18

            
	
                  6.3

            	
              Conduct
                of Indemnification Proceedings.

            	
              19

            
	
                  6.4

            	
              Contribution.

            	
              20

            
	
                  6.5

            	
              Other
                Indemnification.

            	
              21

            
	
                  6.6

            	
              Indemnification
                Payments.

            	
              21

            
	
                  6.7

            	
              Survivability.   The
                obligations of the Company and Holders under this Article 6 shall
                survive
                the completion of any offering of Registrable Securities and the
                termination of this Agreement for any reason.

            	
              21

            
	
                  6.8

            	
              Conflicting
                Provisions.

            	
              21

            
	 	 	 
	
              Article
                7

            	 	 
	
              Compliance
                with Rule 144

            	 	 
	 	 	 
	
              Article
                8

            	 	 
	
              Miscellaneous

            	 	 
	
                  8.1

            	
              Notices.

            	
              22

            
	
                  8.2

            	
              Assignment
                of Rights.

            	
              22

            
	
                  8.3

            	
              Limitation
                of Rights.

            	
              23

            
	
                  8.4

            	
              Recapitalization,
                Exchanges, etc. Affecting the Units.

            	
              23

            
	
                  8.5

            	
              Specific
                Performance.

            	
              23

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
                  8.6

            	
              Counterparts.

            	
              23

            
	
                  8.7

            	
              Headings.

            	
              23

            
	
                  8.8

            	
              Governing
                Law.

            	
              24

            
	
                  8.9

            	
              Severability
                of Provisions.

            	
              24

            
	
                  8.10

            	
              Entire
                Agreement.

            	
              24

            
	
                  8.11

            	
              Amendment.

            	
              24

            
	
                  8.12

            	
              No
                Presumption.

            	
              24

            

    

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    REGISTRATION
      RIGHTS AGREEMENT

     

    This
      REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into
      on the 16th day
      of April, 2007 (the “Effective Date”), by and among Nielson
& Associates, Inc., a Wyoming corporation (“Nielson”),
      Legacy Reserves LP, a Delaware limited partnership (the “MLP”),
      and Legacy Reserves GP, LLC, a Delaware limited liability company (the
“General Partner”), for itself and on behalf of the MLP in its
      capacity as general partner.  The above-named entities are sometimes
      referred to in this Agreement each as a “Party” and collectively
      as the “Parties.”  Terms that are capitalized but not
      defined shall have the meanings assigned to such terms in Article 1 hereof.

     

    RECITALS

     

    WHEREAS,
      on March 15, 2006, the MLP completed a private placement (the
“Private Placement”) of units representing limited partner
      interests in the MLP (“Units”) to the purchasers (the
“Investors”) identified in the purchase/placement
      agreement
      dated March 6, 2006 between the MLP and Friedman, Billings, Ramsey &
Co., Inc. (“FBR”) (the “Placement Agreement”);
      and

     

    WHEREAS,
      pursuant to the Placement Agreement and as an inducement to the Investors to
      purchase the Units in the Private Placement, the MLP and the General Partner
      entered into a Registration Rights Agreement with the Investors (the
“Investors Registration Rights Agreement”) providing
      registration rights to the Investors as more particularly provided therein;
      and

     

    WHEREAS,
      the MLP and the General Partner entered into a registration rights agreement
      dated March 15, 2006 ( the “Founders Registration Rights
      Agreement”) with the other parties thereto (the
“”Founders”) providing registration rights to the Founders
      as
      more particularly provided therein; and

     

    WHEREAS,
      pursuant to the Investors Registration Rights Agreement on May 12, 2006 the
      MLP filed with the Commission two registration statements on Form S-1, one
      each
      for the Investors and FBR (the “FBR Registration Statement”);
      and

     

    WHEREAS,
      the MLP and the General Partner entered into a registration rights agreement
      dated June 29, 2006 (the “Henry Registration Rights
      Agreement”) with Henry Holding LP (“Henry”) providing
      registration rights to Henry as more particularly provided therein;
      and

     

    WHEREAS,
      Legacy Reserves Operating LP, a Delaware limited partnership and subsidiary
      of
      the MLP (“Operating”) and Nielson have entered into a purchase
      and sale agreement (the “Purchase Agreement”) dated March 20,
      2007; and

     

    WHEREAS,
      the Purchase Agreement contemplates that Units will be issued to Nielson
      (“Purchase Price Units”) as partial consideration for the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Purchase
      Price (as such term is defined in the Purchase Agreement) and that the parties
      hereto will execute this Agreement to more fully set forth the registration
      rights of Nielson.

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Parties hereby agree as follows:

     

    

     

    ARTICLE
      1

     

    DEFINED
      TERMS

     

    .

     

    When
      used
      in this Agreement, the following terms shall have the respective meanings set
      forth below:

     

    “Affiliate”
      has the meaning specified in Rule 12b-2 under the Exchange Act.  The
      term “Affiliates” has a correlative meaning.

     

    “Agent”
      is defined in Section 6.1.

     

    “Agreement”
      is defined in the introductory paragraph of this Agreement.

     

    “Blackout
      Notice” is defined in Section 2.4.

     

    “Blackout
      Period” is defined in Section 2.4.

     

    “Board”
      means the board of directors of the General Partner.

     

    “Business
      Day” means with respect to any act to be performed hereunder, each Monday,
      Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
      institutions in New York, New York or other applicable places where such act
      is
      to occur are authorized or obligated by applicable law, regulation or executive
      order to close.

     

    “Claims”
      is defined in Section 6.1.

     

    “Commission”
      means the Securities and Exchange Commission.

     

    “Demand
      Registration” is defined in Section 2.2.1(a).

     

    “Demand
      Registration Statement” means a Registration Statement of the MLP which
      covers the Registrable Securities requested to be included therein pursuant
      to
Section 2.2.

     

    “Effective
      Date” is defined in the introductory paragraph of this
      Agreement.

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended, and the rules
      and regulations of the Commission promulgated thereunder.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    “FBR
      Registration Statement” is defined in the Recitals to this
      Agreement.

     

     “Form
      S-3” means such form under the Securities Act as in effect on the date
      hereof or any registration form under the Securities Act subsequently adopted
      by
      the Commission that permits incorporation of substantial information by
      reference to other documents filed by the MLP with the Commission.

     

    “Founders”
      is defined in the Recitals to this Agreement.

     

    “Founders
      Registration Rights Agreement” is defined in the Recitals to this
      Agreement.

     

    “Free
      Writing Prospectus” means a free writing prospectus, as defined in
      Rule 405 under the Securities Act.

     

    “General
      Partner” is defined in the introductory paragraph of this
      Agreement.

     

    “Henry”
      is defined in the Recitals to this Agreement.

     

    “Henry
      Registration Rights Agreement” is defined in the Recitals to this
      Agreement.

     

    “Holders”
      means each of (i) Nielson for so long as it owns any Registrable Securities
      and
      (ii) Nielson’s Permitted Transferees and (iii) their respective heirs,
      successors and permitted assigns who acquire or are otherwise the transferee
      of
      the Registrable Securities, directly or indirectly from Nielson (or any
      subsequent Holder), for so long as such Permitted Transferee, heir, successor
      and permitted assign owns any Registrable Securities.

     

    “Initiating
      Holder(s)” means with respect to a particular Demand Registration, the
      Holder or Holders who initiated the Request for such registration.

     

    “Immediate
      Family Member” means a child, stepchild, grandchild, parent, stepparent,
      grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
      daughter-in-law, brother-in-law, or sister-in-law, including adoptive
      relationships, of a natural person referred to herein.

     

     “Inspector”
      and “Inspectors” are defined in
Section 3.1(g).

     

    “Investors”
      is defined in the Recitals to this Agreement.

     

    “Investors
      Registration Rights Agreement” is defined in the Recitals to this
      Agreement.

     

    “Issuer
      Free Writing Prospectus” means an issuer free writing prospectus, as
      defined in Rule 433 under the Securities Act.

     

    “Majority
      Holders of the Registration” means with respect to a particular
      registration, one or more holders of securities who would hold a majority of
      the
      securities to be included in such registration.

     

    “Market
      Price” means the price of the Units sold in the Private
      Placement.

     

    “MLP”
      is defined in the introductory paragraph of this Agreement.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    “National
      Securities Exchange” means an exchange registered with the Commission under
      Section 6(a) of the Securities Exchange Act of 1934, as amended, supplemented
      or
      restated from time to time, and any successor to such statute.

     

    “Nielson”
      is defined in the introductory paragraph to this Agreement.

     

    “Operating”
      is defined in the Recitals to this Agreement.

     

    “Partnership
      Group” means the MLP, the General Partner, Operating, and Legacy Operating
      GP, LLC, a Delaware limited liability company.

     

    “Party”
      and “Parties” are defined in the introductory paragraph of this
      Agreement.

     

    “Permitted
      Free Writing Prospectus” is defined in Article 5.

     

    “Permitted
      Transferees” is defined in Section 8.2.

     

    “Person”
      means any individual, corporation, company, voluntary association, partnership,
      joint venture, trust, limited liability company, unincorporated organization,
      government or any agency, instrumentality or political subdivision thereof,
      or
      any other form of entity.

     

    “Piggyback
      Registration” is defined in Section 0.

     

    “Piggyback
      Registration Statement” means a Registration Statement of the MLP which
      covers the Registrable Securities requested to be included therein pursuant
      to
      the provisions of Section 2.1.

     

    “Placement
      Agreement” is defined in the Recitals to this Agreement.

     

    “Private
      Placement” is defined in the Recitals to this Agreement.

     

    “Prospectus”
      means the prospectus included in the Registration Statement at each such time
      as
      the Registration Statement is filed with the Commission and at the time such
      Registration Statement is declared effective, as amended or supplemented by
      any
      prospectus supplement and by all other amendments thereof, including
      post-effective amendments, and all material incorporated by reference into
      such
      Prospectus.

     

    “Purchase
      Agreement” is defined in the Recitals to this Agreement.

     

    “Purchase
      Price” is defined in the Purchase Agreement.

     

    “Purchase
      Price Units” is defined in the Recitals to this Agreement.

     

    “Registrable
      Securities” means (i) the Purchase Price Units beneficially owned by
      Nielson, (ii) the Purchase Price Units beneficially owned by the Permitted
      Transferees and (iii) any other securities of the MLP (or successor or assign
      of
      the MLP, whether by merger, consolidation, sale of assets or otherwise) which
      may be issued or issuable with respect to, in exchange for, or in substitution
      of, any Purchase Price Units referenced in clauses (i) and (ii) 

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    whether
      by reason of any dividend or split, combination of securities, merger,
      consolidation, recapitalization, reclassification, reorganization, sale of
      assets or similar transaction.  As to any particular Registrable
      Securities, such securities shall cease to be Registrable Securities when (A)
      a
      Registration Statement with respect to the sale of such securities shall have
      been declared effective under the Securities Act and such securities shall
      have
      been disposed of in accordance with such Registration Statement, (B) such
      securities are sold pursuant to Rule 144 (or any successor provision) under
      the
      Securities Act, (C) such securities have been otherwise transferred and
      subsequent public distribution of them shall not require registration under
      the
      Securities Act or (D) such securities shall cease to be
      outstanding.

     

    “Registration
      Expenses” is defined in Article 4 of this Agreement.

     

    “Registration
      Statement” means a registration statement of the MLP concerning the sale of
      its securities to the public, on an appropriate form under the Securities Act,
      including the Prospectus included therein, all amendments thereof and
      supplements thereto (including post-effective amendments) and all exhibits
      and
      all material incorporated therein.

     

    “Request”
      is defined in Section 2.2.1(a).

     

     “Securities
      Act” means the Securities Act of 1933, as amended, and the rules and
      regulations of the Commission promulgated thereunder.

     

    “Shelf
      Registration” is defined in Section 2.2.1(a).

     

    “Transfer”
      means any sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage,
      exchange or any other disposition by law or otherwise.

     

    “Underwritten
      Offering” means a sale of Units to an underwriter or underwriters for
      reoffering to the public.

     

    “Units”
      is defined in the Recitals of this Agreement.

     

    “Withdrawn
      Demand Registration” is defined in Section
2.2.1(b).

     

    “Withdrawn
      Request” is defined in Section 2.2.1(b).

     

    ARTICLE
      2

     

    REGISTRATION
      RIGHTS

     

    2.1           Piggyback
      Registration.

     

      Right
      to Include Registrable Securities.  If the MLP, at any time or
      from time to time proposes to register the offering and sale of any of its
      securities under the Securities Act  (A) on Form S-3 (or any successor
      to such form) or (B) on Form S-1 (or any successor to such form) in order to
      effectuate an offering of Units to be newly issued by and for the account of
      the
      MLP and files (i) such a Registration Statement or (ii) proposes to do
      a take down off of an effective shelf Registration Statement, other than the
      FBR
      Registration Statement, whether or not pursuant to registration rights granted
      to other holders of its securities and whether or not for sale for its own
      account, the MLP shall deliver prompt written notice (which notice shall be
      given, to the extent 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    reasonably
      practicable, at least 45 days prior to the filing of such Registration Statement
      or ten (10) days prior to the filing of any preliminary prospectus supplement
      pursuant to Rule 424(b), or the prospectus supplement pursuant to
      Rule 424(b) (if no preliminary prospectus supplement is used)) to all
      Holders of Registrable Securities of its intention to undertake such
      registration or offering, describing in reasonable detail the proposed
      registration and distribution (including the anticipated range of the proposed
      offering price, the class and number of securities proposed to be registered
      and
      the distribution arrangements) and of such Holders’ right to participate in such
      registration under this Section 2.1 as hereinafter
      provided.  Subject to the other provisions of this
Section 2.1, upon the written request of any Holder made
      within 20 days with respect to the filing of a registration statement, and
      within seven (7) days with respect to the filing of any preliminary prospectus
      supplement pursuant to Rule 424(b), or the prospectus supplement pursuant
      to Rule 424(b) (if no preliminary prospectus supplement is used), after the
      receipt of such written notice (which request shall specify the amount of
      Registrable Securities to be registered and the intended method of disposition
      thereof), the MLP shall effect the registration under the Securities Act of
      all
      Registrable Securities requested by Holders to be so registered (a
“Piggyback Registration”), to the extent required to permit the
      disposition (in accordance with the intended methods thereof as aforesaid)
      of
      the Registrable Securities so to be registered, by inclusion of such Registrable
      Securities in the Registration Statement which covers the securities which
      the
      MLP proposes to register and shall cause such Registration Statement to become
      and remain effective with respect to such Registrable Securities for the period
      provided in Section 3.1(b).  If a Piggyback Registration
      involves an Underwritten Offering, immediately upon notification to the MLP
      from
      the underwriter of the price at which such securities are to be sold, the MLP
      shall so advise each participating Holder.  The Holders requesting
      inclusion in a Piggyback Registration may, at any time up to and including
      the
      time of pricing of the Piggyback Registration Statement (and for any reason),
      revoke such request by delivering written notice to the MLP revoking such
      requested inclusion.

     

    If
      at any
      time after giving written notice of its intention to register any securities
      and
      up to and including the time of effectiveness or, if applicable, pricing of
      the
      Piggyback Registration Statement filed in connection with such registration,
      the
      MLP shall determine for any reason not to register or to delay registration
      of
      such securities, the MLP may, at its election, give written notice of such
      determination to each Holder of Registrable Securities and, thereupon,
      (i) in the case of a determination not to register, the MLP shall be
      relieved of its obligation to register any Registrable Securities in connection
      with such registration (but not from its obligation to pay the Registration
      Expenses incurred in connection therewith), without prejudice, however, to
      the
      rights of Holders to cause such registration to be effected as a Demand
      Registration under Section 2.2, subject, however, to the
      provisions of Section 2.4 and (ii) in the case of a
      determination to delay such registration, the MLP shall be permitted to delay
      the registration of such Registrable Securities for the same period as the
      delay
      in registering such other securities; provided, however, that if such delay
      shall extend beyond 120 days from the date the MLP received a request to include
      Registrable Securities in such Piggyback Registration, then the MLP shall again
      give all Holders the opportunity to participate therein and shall follow the
      notification procedures set forth in the preceding paragraph.  There
      is no limitation on the number of such Piggyback Registrations pursuant to
      this
Section 2.1 which the MLP is obligated to
      effect.

     

    The
      registration rights granted pursuant to provisions of this Section 2.1
      shall be in addition to the registration rights granted pursuant to the other
      provisions of Article 2 hereof.

     

    2.1.1           Priority
      in Incidental Registration.  If a Piggyback Registration involves
      an Underwritten Offering, and the sole or the lead managing underwriter, as
      the
      case may be, of such Underwritten Offering shall advise the MLP in writing
      on or
      before the date ten (10) days prior to the date then scheduled for such offering
      that, in its opinion, the amount of securities (including Registrable
      Securities) requested to be included in such registration exceeds the amount
      which can be sold in such offering without materially interfering with the
      successful marketing of the securities being offered, the MLP shall include
      in
      such registration, to the extent of the number which the MLP is so advised
      may
      be included in such offering without such effect (subject to the Investors’
pro rata allocation rights set forth in the Investors Registration
      Rights Agreement and the Founders’ allocation rights set forth in the Founders
      Registration Rights Agreement and Henry’s allocation rights set forth in the
      Henry Registration Rights Agreement) (i) first, the number of Registrable
      Securities requested to be included therein by the Holders allocated pro
      rata among such Holders and based, for each such selling Holder, on the
      percentage derived by dividing (A) the number of Registrable Securities proposed
      to be sold by such Holder, by (B) the aggregate number of Registrable Securities
      proposed to be sold by each such Holder in such Piggyback Registration, and
      (ii) second, only if all of the Registrable Securities in clause (i)
      have been included, any other securities requested to be included
      therein.  

     

    2.1.2           Selection
      of Underwriters.  If any Piggyback Registration involves an
      Underwritten Offering, the sole or managing underwriters and any additional
      investment bankers and managers to be used in connection with such registration
      shall be subject to the approval of the Majority Holders of the
      Registration.

     

    2.2           Demand
      Registration.

     

    2.2.1           Request
      for Registration.

     

    (a)           Subject
      to the terms of this Agreement and Section 2.2.7 of the Founders
      Registration Rights Agreement, each Holder at any time commencing after the
      expiration of a six-months period following the Closing under the Purchase
      Agreement, may request registration by the MLP under the Securities Act of
      all
      or a part of such Holder’s Registrable Securities; provided, however
      that the MLP is eligible to file a registration statement on Form S-3 (or any
      successor to such form).  Any such registration requested pursuant to
      this Section 2.2 is referred to herein as a
“Demand Registration.”  Any request
      for a Demand Registration (each, a “Request”)
      shall specify (i) the amount of Registrable Securities proposed to be registered
      (provided,however that the amount of Registrable Securities
      specified must be expected to result in aggregate gross proceeds to the Holders
      of at least $5 million), and (ii) the intended method or methods and plan of
      distribution thereof, including whether such requested registration is to
      involve an Underwritten Offering.  As promptly as practicable, but no
      later than ten (10) days after receipt of a Request, the MLP shall give written
      notice of such requested registration to all Holders of Registrable
      Securities.  Subject to Section 2.2.2, the MLP shall
      include in a Demand Registration (i) the Registrable Securities intended to
      be
      disposed of by the Initiating Holders and (ii) the Registrable Securities
      intended to be disposed of by any other Holder which shall have made a written
      request (which request shall specify the amount of Registrable Securities to
      be
      registered and the intended method of disposition thereof) to the MLP for
      inclusion thereof in such registration 

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    within
      20
      days after the receipt of such written notice from the MLP.  Promptly
      following such a Request, the MLP shall thereafter as soon as practicable but
      in
      any event within 90 days file with the Commission, or otherwise designate an
      existing filing as, a Demand Registration Statement providing for the
      registration under the Securities Act of the Registrable Securities which the
      MLP has been so requested to register by all such Holders, to the extent
      necessary to permit the disposition of such Registrable Securities to be so
      registered in accordance with the intended methods of disposition thereof
      requested in such Request or further Request (including, without limitation,
      by
      means of a shelf registration pursuant to Rule 415 under the Securities Act
      (a
“Shelf Registration”) if so requested and if the MLP is then eligible to use
      such a registration).  The MLP shall thereafter (i) use its
      commercially reasonable efforts to cause such Demand Registration Statement
      promptly to be declared effective under (A) the Securities Act and (B) the “blue
      sky” laws of such jurisdictions as any seller of Registrable Securities being
      registered under such Demand Registration Statement or any other underwriter,
      if
      any, reasonably requests; or (ii) otherwise make available for use by such
      Holders a previously filed effective Registration Statement for the offer and
      sale of the Registrable Securities.

     

    (b)           A
      Request may be withdrawn prior to the filing of the Demand Registration
      Statement by the Initiating Holders (a “Withdrawn
      Request”) and a Demand Registration Statement may be withdrawn
      up to the time of effectiveness or, if applicable, pricing, by the Initiating
      Holders of the registration (a “Withdrawn Demand
      Registration”), and such withdrawal shall be treated as a
      Demand Registration which shall have been effected pursuant to this Section
2.2, unless the Initiating Holders reimburse the MLP for its
      reasonable out-of-pocket Registration Expenses relating to the preparation
      and
      filing of such Demand Registration Statement (to the extent actually incurred);
      provided, however, that if a Withdrawn Request or Withdrawn Demand Registration
      is made (A) because of a material adverse change in the business, financial
      condition or prospects of the MLP, or (B) because the sole or lead managing
      underwriter advises that the amount of Registrable Securities to be sold in
      such
      offering be reduced pursuant to Section 2.2.2 by more than twenty
      percent (20%) of the Registrable Securities to be included in such Registration
      Statement, or (C) because of the postponement of such registration pursuant
      to
Section 2.4, then such withdrawal shall not be treated as a Demand
      Registration effected pursuant to this Section 2.2 (and shall not
      be counted toward the number of Demand Registrations), and the MLP shall pay
      all
      Registration Expenses in connection therewith.  Any Holder requesting
      inclusion in a Demand Registration may, at any time up to the time of
      effectiveness or, if applicable, pricing of the offering related to the Demand
      Registration Statement revoke such request by delivering written notice to
      the
      MLP revoking such requested inclusion.

     

    (c)           The
      registration rights granted pursuant to provisions of this Section
2.2 shall be in addition to the registration rights granted pursuant
      to the other provisions of Article 2 hereof.

     

    2.2.2           Priority
      in Demand Registrations.  If a Demand Registration involves an
      Underwritten Offering, and the sole or lead managing underwriter, as the case
      may be, of such Underwritten Offering shall advise the MLP in writing, with
      a
      copy to each Holder requesting 

     

    
      
        
        

      

      
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    registration,
      on or before the date ten (10) days prior to the date then scheduled for such
      offering that, in its opinion, the amount of Registrable Securities requested
      to
      be included in such Demand Registration exceeds the number which can be sold
      in
      such offering within a price range acceptable to the Initiating Holders, the
      MLP
      shall include in such Demand Registration, to the extent of the number which
      the
      MLP is so advised may be included in such offering, the Registrable Securities
      requested to be included in the Demand Registration by the Holders allocated
      as
      follows (subject to the Investors’ pro rata allocation rights set forth
      in the Investors Registration Rights Agreement and the Founders’ allocation
      rights set forth in the Founders Registration Rights Agreement and Henry’s
      allocation rights set forth in the Henry Registration Rights Agreement), (i)
      first, the number of Registrable Securities requested to be included therein
      by
      the Holders allocated pro rata among such Holders and based, for each
      such selling Holder, on the percentage derived by dividing (A) the number of
      Registrable Securities proposed to be sold by such Holder in excess of the
      number of Registrable Securities included in clause (i), by (B) the aggregate
      number of Registrable Securities not included in clause (i) proposed to be
      sold
      by each such Holder in such Demand Registration, and (ii) second, only if all
      of
      the Registrable Securities in clause (i) have been included, any other
      securities requested to be included therein.

     

    2.2.3           Limitations
      on Demand Registrations.  The MLP shall not be obligated to
      effect more than two Demand Registrations in any 12-month period.

     

    2.2.4           Underwriting;
      Selection of Underwriters. Notwithstanding anything to the contrary
      contained in this Section 2.2, if the Initiating Holders so elect,
      the offering of such Registrable Securities pursuant to such Demand Registration
      shall be in the form of a firm commitment Underwritten Offering; and such
      Initiating Holders may require, in accordance with Section 2.3
      below, that all Holders participating in such registration sell their
      Registrable Securities to the underwriters at the same price and on the same
      terms of underwriting applicable to the Initiating Holders.  Except to
      the extent the MLP has otherwise already agreed to hire designated underwriters
      as required by the terms of the Private Placement, if any Demand Registration
      involves an Underwritten Offering, the sole or managing underwriters and any
      additional investment bankers and managers to be used in connection with such
      registration shall be selected by the Initiating Holders, subject to the
      approval of the MLP (such approval not to be unreasonably
      withheld).

     

    2.2.5           Effective
      Registration Statement; Suspension. A Demand Registration Statement shall
      not be deemed to have become effective (and the related registration will not
      be
      deemed to have been effected) (i) unless it has been declared effective by
      the
      Commission and remains effective in compliance with the provisions of the
      Securities Act with respect to the disposition of all Registrable Securities
      covered by such Demand Registration Statement for the period provided in
Section 3.1(b), (ii) if the offering of any Registrable Securities
      pursuant to such Demand Registration Statement is interfered with by any stop
      order, injunction or other order or requirement of the Commission or any other
      governmental agency or court, or (iii) if, in the case of an Underwritten
      Offering, the conditions to closing specified in an underwriting agreement
      to
      which the MLP is a party are not satisfied other than by the sole reason of
      any
      breach or failure by the Holders of Registrable Securities or are not otherwise
      waived.

     

    
      
        
        

      

      
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    2.2.6           Registration
      Statement Form.  Demand Registrations under this Section
2.2 shall be on such appropriate registration form of the
      Commission
      (i) as shall be selected by the Initiating Holders, and (ii) which shall be
      available for the sale of Registrable Securities in accordance with the intended
      method or methods of disposition specified in the requests for
      registration.  The MLP agrees to include in any such Registration
      Statement all information which any selling Holder, upon advice of counsel,
      shall reasonably request.

     

    2.3           Underwritten
      Offerings.

     

    2.3.1           Demand
      Underwritten Offerings.  If requested by the sole or lead
      managing underwriter for any Underwritten Offering effected pursuant to a Demand
      Registration, the MLP shall enter into a customary underwriting agreement with
      the underwriters for such offering, such agreement to be reasonably satisfactory
      in substance and form to the Majority Holders of the Registration and to contain
      such representations and warranties by the MLP, and such other terms as are
      generally prevailing in agreements of that type, including, without limitation,
      indemnification and contribution to the effect and to the extent provided in
      Article 6.

     

    2.3.2           Holders
      of Registrable Securities to be Parties to Underwriting
      Agreement.  The Holders of Registrable Securities to be
      distributed by underwriters in an Underwritten Offering contemplated by this
      Article 2 shall be parties to the underwriting agreement between the MLP
      and such underwriters and may, at such Holders’ option, require that any or all
      of the representations and warranties by, and the other agreements on the part
      of, the MLP to and for the benefit of such underwriters shall also be made
      to
      and for the benefit of such Holders of Registrable Securities and that any
      or
      all of the conditions precedent to the obligations of such underwriters under
      such underwriting agreement be conditions precedent to the obligations of such
      Holders of Registrable Securities; provided, however, that the MLP shall not
      be
      required to make any representations or warranties with respect to written
      information specifically provided by a selling Holder for inclusion in the
      Registration Statement.  No Holder shall be required to make any
      representations or warranties to, or agreements with, the MLP or the
      underwriters other than representations, warranties or agreements regarding
      such
      Holder, such Holder’s Registrable Securities and such Holder’s intended method
      of disposition.

     

    2.3.3           Participation
      in Underwritten Registration.  Notwithstanding anything herein to
      the contrary, no Person may participate in any underwritten registration
      hereunder unless such Person (i) agrees to sell its securities on the same
      terms and conditions provided in any underwritten arrangements approved by
      the
      Persons entitled hereunder to approve such arrangement and (ii) accurately
      completes and executes in a timely manner all questionnaires, powers of
      attorney, indemnities, custody agreements, underwriting agreements and other
      documents reasonably and customarily required under the terms of such
      underwriting arrangements.

     

    2.4           Postponements.

     

      The
      MLP shall be entitled to postpone a Demand Registration and to require the
      Holders of Registrable Securities to discontinue the disposition of their
      securities covered by a Shelf Registration during any Blackout Period (i) if
      the
      Board determines in good faith that effecting 

     

    
      
        
        

      

      
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    such
      a
      registration or continuing such disposition at such time would have a material
      adverse effect upon a proposed sale of all (or substantially all) of the assets
      of the Partnership Group or a merger, reorganization, recapitalization or
      similar current transaction materially affecting the capital structure or equity
      ownership of the Partnership Group, or (ii) if the MLP is in possession of
      material information which the Board determines in good faith it is not in
      the
      best interests of the MLP to disclose in a Registration Statement at such time;
      provided, however, that the MLP may only delay a Demand Registration pursuant
      to
      this Section 2.4 by delivery of a Blackout Notice within thirty
      (30) days of delivery of the Request for such Demand Registration, and may
      delay
      a Demand Registration and require the Holders of Registrable Securities to
      discontinue the disposition of their securities covered by a Shelf Registration
      only for a reasonable period of time not to exceed ninety (90) days (or such
      earlier time as such transaction is consummated or no longer proposed or the
      material information has been made public) (the “Blackout
      Period”), and provided further that the MLP shall not register any
      securities for its own account or that of any other Person during such ninety
      (90) day period.  There shall not be more than one Blackout Period in
      any 12-month period.  The MLP shall promptly notify the Holders in
      writing (a “Blackout Notice”), of any decision to postpone a
      Demand Registration or to discontinue sales of Registrable Securities covered
      by
      a Shelf Registration pursuant to this Section 2.4 and shall
      include a general statement of the reason for such postponement, an
      approximation of the anticipated delay and an undertaking by the MLP promptly
      to
      notify the Holders as soon as a Demand Registration may be effected or sales
      of
      Registrable Securities covered by a Shelf Registration may resume.  In
      making any such determination to initiate or terminate a Blackout Period, the
      MLP shall not be required to consult with or obtain the consent of any Holder,
      and any such determination shall be the MLP’s sole
      responsibility.  Each Holder shall treat all notices received from the
      MLP pursuant to this Section 2.4 constituting material inside
      information in the strictest confidence and shall not trade on or disseminate
      such information.  If the MLP shall postpone the filing of a Demand
      Registration Statement, the Initiating Holders shall have the right to withdraw
      the request for registration.  Any such withdrawal shall be made by
      giving written notice to the MLP within thirty (30) days after receipt of the
      Blackout Notice.  Such withdrawn registration request shall not be
      treated as a Demand Registration effected pursuant to Section 2.2
      (and shall not be counted towards the number of Demand Registrations effected),
      and the MLP shall pay all Registration Expenses in connection
      therewith.

     

    ARTICLE
      3

     

    REGISTRATION
      PROCEDURES

     

    3.1           Obligations
      of the MLP.

     

     Whenever
      the MLP is required to effect the registration of Registrable Securities under
      the Securities Act pursuant to Article 2 of this Agreement, the MLP shall
      use its commercially reasonable efforts to:

     

    (a)           promptly
      prepare and file with the Commission, or designate an existing filing as, a
      Registration Statement to effect such registration, which Registration Statement
      shall comply as to form in all material respects with the requirements of the
      applicable form and include all financial statements required by the Commission
      to be filed therewith, and the MLP shall use its commercially reasonable efforts
      to cause such Registration Statement to become effective (provided, that the
      MLP
      may discontinue any 

     

    
      
        
        

      

      
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          registration
      of its securities
      that are not Registrable Securities, and, under the circumstances specified
      in
Section 0, its securities that are Registrable Securities);
      provided, however, that before filing a Registration Statement or Prospectus
      or
      any amendments or supplements thereto, or comparable statements under securities
      or blue sky laws of any jurisdiction, the MLP shall (i) provide Holders’ counsel
      and any other Inspector with an adequate and appropriate opportunity to
      participate in the preparation of such Registration Statements and each
      Prospectus included therein (and each amendment or supplement thereto or
      comparable statement) to be filed with the Commission, which documents shall
      be
      subject to the review and comment of Holders’ counsel, and (ii) not file any
      such Registration Statement or Prospectus (or amendment or supplement thereto
      or
      comparable statement) with the Commission to which Holder’s counsel, any selling
      Holder or any other Inspector shall have reasonably objected on the grounds
      that
      such filing does not comply in all material respects with the requirements
      of
      the Securities Act or of the rules or regulations thereunder;

     

    (b)           prepare
      and file with the Commission such amendments and supplements to such
      Registration Statement and the Prospectus used in connection therewith as may
      be
      necessary (i) to keep such Registration Statement effective, and
      (ii) to comply with the provisions of the Securities Act with respect to
      the disposition of all Registrable Securities covered by such Registration
      Statement, in each case until such time as all of such Registrable Securities
      have been disposed of in accordance with the intended methods of disposition
      by
      the seller(s) thereof set forth in such Registration Statement; provided, that
      except with respect to any Shelf Registration, such period need not extend
      beyond nine months after the effective date of the Registration Statement;
      and
      provided, further, that with respect to any Shelf Registration, such period
      need
      not extend beyond the time when all Registrable Securities covered by such
      shelf
      registration may be sold pursuant to Rule 144(k) under the Securities Act,
      and
      which periods, in any event, shall terminate when all Registrable Securities
      covered by such Registration Statement have been sold (but not before the
      expiration of the 90-day period referred to in Section 4(3) of the
      Securities Act and Rule 174 thereunder, if applicable);

     

    (c)           furnish,
      without charge, to each selling Holder of such Registrable Securities and each
      underwriter, if any, of the securities covered by such Registration Statement,
      such number of copies of such Registration Statement and the Prospectus included
      in such Registration Statement (including each preliminary Prospectus), any
      Issuer Free Writing Prospectuses, and each amendment and supplement to any
      of
      the foregoing (in each case including all exhibits), in conformity with the
      requirements of the Securities Act, and such other documents as such selling
      Holder and underwriter may reasonably request in order to facilitate the public
      sale or other disposition of the Registrable Securities owned by such selling
      Holder (the MLP hereby consenting to the use in accordance with applicable
      law
      of each such Registration Statement (or amendment or post-effective amendment
      thereto), each such Prospectus (or preliminary prospectus or supplement thereto)
      and any Issuer Free Writing Prospectus by each such selling Holder of
      Registrable Securities and the underwriters, if any, in connection with the
      offering and sale of the Registrable Securities covered by such Registration
      Statement or Prospectus);

     

    
      
        
        

      

      
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    (d)           prior
      to any public offering of Registrable Securities, to register or qualify all
      Registrable Securities and other securities covered by such Registration
      Statement under such other securities or blue sky laws of such jurisdictions
      as
      any selling Holder of Registrable Securities covered by such Registration
      Statement or the sole or lead managing underwriter, if any, may reasonably
      request to enable such selling Holder to consummate the disposition in such
      jurisdictions of the Registrable Securities owned by such selling Holder and
      to
      continue such registration or qualification in effect in each such jurisdiction
      for as long as such Registration Statement remains in effect (including through
      new filings or amendments or renewals), and do any and all other acts and things
      which may be necessary or advisable to enable any such selling Holder to
      consummate the disposition in such jurisdictions of the Registrable Securities
      owned by such selling Holder; provided, however, that the MLP shall not be
      required to (i) qualify generally to do business in any jurisdiction where
      it would not otherwise be required to qualify but for this
Section 3.1(d), (ii) subject itself to taxation
      in any such jurisdiction, or (iii) consent to general service of process in
      any such jurisdiction;

     

    (e)           to
      obtain all other approvals, consents, exemptions or authorizations from such
      governmental agencies or authorities as may be necessary to enable the selling
      Holders of such Registrable Securities to consummate the disposition of such
      Registrable Securities;

     

    (f)           promptly
      notify Holders’ counsel, each Holder of Registrable Securities covered by such
      Registration Statement and the sole or lead managing underwriter, if
      any:  (i) when the Registration Statement, any pre-effective
      amendment, the Prospectus or any prospectus supplement related thereto, Issuer
      Free Writing Prospectus, or post-effective amendment to the Registration
      Statement has been filed and, with respect to the Registration Statement or
      any
      post-effective amendment, when the same has become effective, (ii) of any
      request by the Commission or any state securities or blue sky authority for
      amendments or supplements to the Registration Statement, the Prospectus or
      the
      Issuer Free Writing Prospectus related thereto or for additional information,
      (iii) of the issuance by the Commission of any stop order suspending the
      effectiveness of the Registration Statement or the initiation or threat of
      any
      proceedings for that purpose, (iv) of the receipt by the MLP of any
      notification with respect to the suspension of the qualification of any
      Registrable Securities for sale under the securities or blue sky laws of any
      jurisdiction or the initiation of any proceeding for such purpose, (v) of
      the existence of any fact of which the MLP becomes aware or the happening of
      any
      event which results in (A) the Registration Statement containing an untrue
      statement of a material fact or omitting to state a material fact required
      to be
      stated therein or necessary to make any statements therein not misleading,
      or
      (B) the Prospectus included in such Registration Statement or any Issuer
      Free Writing Prospectus containing an untrue statement of a material fact or
      omitting to state a material fact required to be stated therein or necessary
      to
      make any statements therein, in the light of the circumstances under which
      they
      were made, not misleading, (vi) if at any time the representations and
      warranties contemplated by Section 2.3.1 cease to be true and
      correct in all material respects, and (vii) of the MLP’s reasonable
      determination that a post-effective amendment to a Registration Statement would
      be appropriate or that there exists circumstances not yet disclosed to the
      public which make further sales under such 

     

    
      
        
        

      

      
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    Registration
      Statement inadvisable pending such disclosure and post-effective amendment;
      and,
      if the notification relates to an event described in any of the
      clauses (ii) through (vii) of this
Section 3.1(f), the MLP shall promptly prepare a
      supplement or post-effective amendment to such Registration Statement, related
      Prospectus or Issuer Free Writing Prospectus or any document incorporated
      therein by reference or file any other required document so that (1) such
      Registration Statement shall not contain any untrue statement of a material
      fact
      or omit to state a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading, and (2) as thereafter delivered
      to the purchasers of the Registrable Securities being sold thereunder, such
      Prospectus shall not include an untrue statement of a material fact or omit
      to
      state a material fact required to be stated therein or necessary to make the
      statements therein in the light of the circumstances under which they were
      made
      not misleading (and shall furnish to each such Holder and each underwriter,
      if
      any, a reasonable number of copies of such Prospectus or Issuer Free Writing
      Prospectus so supplemented or amended); and if the notification relates to
      an
      event described in clause (iii) of this
Section 3.1(f), the MLP shall take all reasonable
      action required to prevent the entry of such stop order or to remove it if
      entered;

     

    (g)           make
      available for inspection by any selling Holder of Registrable Securities, any
      sole or lead managing underwriter participating in any disposition pursuant
      to
      such Registration Statement, Holders’ counsel and any attorney, accountant or
      other agent retained by any such seller or any underwriter (each, an
“Inspector” and, collectively, the
“Inspectors”), all financial and other records, pertinent
      corporate documents and properties of the MLP and any subsidiaries thereof
      as
      may be in existence at such time as shall be necessary, in the opinion of such
      Holders’ and such underwriters’ respective counsel, to enable them to exercise
      their due diligence responsibility and to conduct a reasonable investigation
      within the meaning of the Securities Act, and cause the MLP’s and any
      subsidiaries’ officers, directors and employees, and the independent public
      accountants of the MLP, to supply all information reasonably requested by any
      such Inspectors in connection with such Registration Statement;

     

    (h)           if
      requested by the Majority Holders of the Registration, obtain an opinion from
      the MLP’s counsel and a “cold comfort” letter from the MLP’s independent public
      accountants who have certified the MLP’s financial statements included or
      incorporated by reference in such Registration Statement, in each case dated
      the
      effective date of such Registration Statement (and if such registration involves
      an Underwritten Offering, dated the date of the closing under the underwriting
      agreement), in customary form and covering such matters as are customarily
      covered by such opinions and “cold comfort” letters delivered to underwriters in
      underwritten public offerings, which opinion and letter shall be reasonably
      satisfactory to the sole or lead managing underwriter, if any, and to the
      Majority Holders of the Registration, and furnish to each Holder participating
      in the offering and to each underwriter, if any, a copy of such opinion and
      letter addressed to such Holder (in the case of the opinion) and underwriter
      (in
      the case of the opinion and the “cold comfort” letter);

     

    (i)           provide
      a CUSIP number for all Registrable Securities and provide and cause to be
      maintained a transfer agent and registrar for all such Registrable Securities
      covered by such Registration Statement not later than the effectiveness of
      such
      Registration Statement;

     

    
      
        
        

      

      
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    (j)           otherwise
      use its best efforts to comply with all applicable rules and regulations of
      the
      Commission and any other governmental agency or authority having jurisdiction
      over the offering, and make available to its security holders, as soon as
      reasonably practicable but not later than 90 days after the end of any 12-month
      period, an earnings statement (i) commencing at the end of any month in
      which Registrable Securities are sold to underwriters in an Underwritten
      Offering and (ii) commencing with the first day of the MLP’s calendar month
      next succeeding each sale of Registrable Securities after the effective date
      of
      a Registration Statement, which statement shall cover such 12-month periods,
      in
      a manner which satisfies the provisions of Section 11(a) of the Securities
      Act and Rule 158 thereunder;

     

    (k)           if
      so requested by the Majority Holders of the Registration, use its best efforts
      to cause all such Registrable Securities to be listed on each National
      Securities Exchange on which the MLP’s securities are then listed or proposed to
      be listed;

     

    (l)           keep
      each selling Holder of Registrable Securities advised in writing as to the
      initiation and progress of any registration under Article 2
      hereunder;

     

    (m)           enter
      into and perform customary agreements (including, if applicable, an underwriting
      agreement in customary form) and provide officers’ certificates and other
      customary closing documents;

     

    (n)           cooperate
      with each selling Holder of Registrable Securities and each underwriter
      participating in the disposition of such Registrable Securities and their
      respective counsel in connection with any filings required to be made with
      the
      NASD and make reasonably available its employees and personnel and otherwise
      provide reasonable assistance to the underwriters (taking into account the
      needs
      of the MLP’s businesses and the requirements of the marketing process) in the
      marketing of Registrable Securities in any Underwritten Offering;

     

    (o)           furnish
      to each Holder participating in the offering and the sole or lead managing
      underwriter, if any, without charge, a least one manually-signed copy of the
      Registration Statement and any post-effective amendments thereto, including
      financial statements and schedules, all documents incorporated therein by
      reference and all exhibits (including those deemed to be incorporated by
      reference);

     

    (p)           cooperate
      with the selling Holders of Registrable Securities and the sole or lead managing
      underwriter, if any, to facilitate the timely preparation and delivery of
      certificates not bearing any restrictive legends representing the Registrable
      Securities to be sold, and cause such Registrable Securities to be issued in
      such denominations and registered in such names in accordance with the
      underwriting agreement prior to any sale of Registrable Securities to the
      underwriters or, if not an Underwritten Offering, in accordance with the
      instructions of the selling Holders of Registrable Securities at least three
      (3)
      business days prior to any sale of Registrable Securities;

     

    
      
        
        

      

      
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    (q)           if
      requested by the sole or lead managing underwriter or any selling Holder of
      Registrable Securities, immediately incorporate in a prospectus supplement,
      Issuer Free Writing Prospectus or post-effective amendment such information
      concerning such Holder of Registrable Securities, the underwriters or the
      intended method of distribution as the sole or lead managing underwriter or
      the
      selling Holder of Registrable Securities reasonably requests to be included
      therein and as is appropriate in the reasonable judgment of the MLP, including,
      without limitation, information with respect to the number of shares of the
      Registrable Securities being sold to the underwriters, the purchase price being
      paid therefor by such underwriters and with respect to any other terms of the
      Underwritten Offering of the Registrable Securities to be sold in such offering;
      make all required filings of such Prospectus supplement, Issuer Free Writing
      Prospectus or post-effective amendment as soon as notified of the matters to
      be
      incorporated in such Prospectus supplement, Issuer Free Writing Prospectus
      or
      post-effective amendment; and supplement or make amendments to any Registration
      Statement if requested by the sole or lead managing underwriter of such
      Registrable Securities; and

     

    (r)           use
      its best efforts to take all other steps necessary to expedite or facilitate
      the
      registration and disposition of the Registrable Securities contemplated
      hereby.

     

    3.2           Seller
      Information.

     

    The
      MLP
      may require each selling Holder of Registrable Securities as to which any
      registration is being effected to furnish to the MLP such information regarding
      such Holder, such Holder’s Registrable Securities and such Holder’s intended
      method of disposition as the MLP may from time to time reasonably request in
      writing; provided that such information shall be requested and used only in
      connection with such registration.

     

    If
      any
      Registration Statement or comparable statement under blue sky laws refers to
      any
      Holder by name or otherwise as the Holder of any securities of the MLP, then
      such Holder shall have the right to require (i) the insertion therein of
      language, in form and substance satisfactory to such Holder and the MLP, to
      the
      effect that the holding by such Holder of such securities is not to be construed
      as a recommendation by such Holder of the investment quality of the MLP’s
      securities covered thereby and that such holding does not imply that such Holder
      will assist in meeting any future financial requirements of the MLP, and
      (ii) in the event that such reference to such Holder by name or otherwise
      is not in the judgment of the MLP, as advised by counsel, required by the
      Securities Act or any similar federal statute or any state blue sky or
      securities law then in force, the deletion of the reference to such
      Holder.

     

    3.3           Notice
      to Discontinue.

     

    Each
      holder of Registrable Securities agrees that, upon receipt of any notice from
      the MLP of the happening of any event of the kind described in
Section 3.1(f) through (vii), such Holder shall
      forthwith discontinue disposition of Registrable Securities pursuant to the
      Registration Statement covering such Registrable Securities until such Holder’s
      receipt of the copies of the supplemented or amended prospectus contemplated
      by
Section 3.1(f) and, if so directed by the MLP, such Holder
      shall deliver to the MLP (at the MLP’s expense) all copies, other than permanent
      file copies, then in such Holder’s possession of the Prospectus or any Issuer
      Free Writing Prospectus covering such Registrable Securities which is current
      at
      the time of receipt of such notice.  If the MLP shall give any such
      notice, the MLP shall extend the period during which such Registration Statement
      shall be maintained effective pursuant to this Agreement (including, without
      limitation, the period referred to in Section 3.1(b)) by the
      number of days during the period from and including the date of the giving
      of
      such notice pursuant to Section 3.1(f) to and including the
      date when the Holder shall have received the copies of the supplemented or
      amended prospectus contemplated by and meeting the requirements of
Section 3.1(f).

     

    
      
        
        

      

      
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    ARTICLE
      4

     

    REGISTRATION
      EXPENSES

     

    All
      reasonable expenses incident to the MLP’s performance of or compliance with this
      Agreement, including, but not limited to, (i) all registration, filing and
      listing fees of the National Association of Securities Dealers, Inc.;
      (ii) all registration, filing, qualification and other fees and expenses of
      complying with securities or blue sky laws; (iii) all word processing,
      duplicating, printing, messenger and delivery expenses; (iv) the reasonable
      fees and disbursements of counsel for the MLP and of its independent registered
      public accountants, including, without limitation, the expenses of any “comfort
      letters” required by or incident to such performance and compliance;
      (v) any reasonable fees and disbursements of underwriters customarily paid
      by issuers or sellers of securities (but excluding underwriting discounts and
      commissions and transfer taxes, if any, relating to securities being sold by
      any
      Holder or that are otherwise not being sold or disposed of by the MLP),
      including, without limitation, reasonable fees and disbursements of counsel
      for
      the underwriter(s) in connection with blue sky qualifications of the Registrable
      Securities and determination of their eligibility for investment under the
      laws
      of such jurisdictions; and (vi) reasonable fees and expenses of other
      Persons retained or employed by the MLP (all such expenses being herein called
      “Registration Expenses”), shall be borne by the
      MLP.  In addition, the MLP shall pay its internal expenses (including,
      but not limited to, all salaries and expenses of any officers and employees
      of
      the Partnership Group performing legal or accounting duties), the expense of
      any
      annual audit or quarterly review, the expense of any insurance obtained by
      the
      MLP against liabilities arising out of the public offering of the Registrable
      Securities being registered and the expenses and fees for listing the securities
      to be registered on each securities exchange.

     

    ARTICLE
      5

     

    FREE
      WRITING PROSPECTUS

     

    Each
      Holder executing this Agreement represents that it has not prepared or had
      prepared on its behalf or used or referred to, and agrees that it will not
      prepare or have prepared on its behalf or use or refer to, any Free Writing
      Prospectus, and has not distributed and will not distribute any written
      materials in connection with the offer or sale of the Registrable Securities
      without the prior express written consent of the MLP and, in connection with
      any
      Underwritten Offering, the underwriters.  Any such Free Writing
      Prospectus consented to by the MLP and the underwriters, as the case may be,
      is
      hereinafter referred to as a “Permitted Free Writing
      Prospectus.”  The MLP represents and agrees that it has
      treated and will treat, as the case may be, each Permitted Free Writing
      Prospectus as an Issuer Free Writing Prospectus, including in respect of timely
      filing with the Commission, legending and record keeping.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      6

     

    INDEMNIFICATION

     

    6.1           Indemnification
      by the MLP.

     

    The
      MLP
      agrees to indemnify and hold harmless, to the fullest extent permitted by law,
      each Holder of Registrable Securities, its officers, directors, partners,
      members, shareholders, employees, Affiliates and agents (collectively,
“Agents”) and each Person who controls such Holder (within the
      meaning of the Securities Act) and its Agents with respect to each registration
      which has been effected pursuant to this Agreement, against any and all losses,
      claims, damages or liabilities, joint or several, actions or proceedings
      (whether commenced or threatened) in respect thereof, and expenses (as incurred
      or suffered and including, but not limited to, any and all expenses incurred
      in
      investigating, preparing or defending any litigation or proceeding, whether
      commenced or threatened, and the reasonable fees, disbursements and other
      charges of legal counsel) in respect thereof (collectively,
“Claims”), insofar as such Claims arise out of or are based upon
      any untrue or alleged untrue statement of a material fact contained in any
      Registration Statement, Prospectus (including any preliminary, final or summary
      prospectus), any Issuer Free Writing Prospectus and any amendment or supplement
      to the foregoing related to any such registration or any omission or alleged
      omission to state a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading, or any violation by the MLP of
      the
      Securities Act, the Exchange Act, any state securities laws or any rule or
      regulation under the foregoing applicable to the MLP and relating to action
      or
      inaction required of the MLP in connection with any such registration, or any
      qualification or compliance incident thereto; provided, however, that the MLP
      will not be liable in any such case to the extent that any such Claims arise
      out
      of or are based upon any untrue statement or alleged untrue statement of a
      material fact or omission or alleged omission of a material fact so made in
      reliance upon and in conformity with written information furnished to the MLP
      in
      an instrument duly executed by such Holder specifically stating that it was
      expressly for use therein.  The MLP shall also indemnify any
      underwriters of the Registrable Securities, their Agents and each Person who
      controls any such underwriter (within the meaning of the Securities Act) to
      the
      same extent as provided above with respect to the indemnification of the Holders
      of Registrable Securities.  Such indemnity shall remain in full force
      and effect regardless of any investigation made by or on behalf of any Person
      who may be entitled to indemnification pursuant to this
Section 6.1 and shall survive the transfer of securities by
      such Holder or underwriter.

     

    6.2           Indemnification
      by Holders.

     

    Each
      Holder, if Registrable Securities held by it are included in the securities
      as
      to which a registration is being effected, agrees to, severally and not jointly,
      indemnify and hold harmless, to the fullest extent permitted by law, the MLP,
      the General Partner, the Board and their respective officers, each other Person
      who participates as an underwriter in the offering or sale of 

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    such
      securities and its Agents and each Person who controls the MLP or any such
      underwriter (within the meaning of either Section 15 of the Securities Act
      or Section 20 of the Exchange Act) and its Agents against any and all
      Claims, insofar as such Claims arise out of or are based upon (i) any
      untrue or alleged untrue statement of a material fact contained in any
      Registration Statement or Prospectus (including any preliminary, final or
      summary prospectus), any Issuer Free Writing Prospectus and any amendment or
      supplement to the foregoing related to such registration, or any omission or
      alleged omission to state therein a material fact required to be stated therein
      or necessary to make the statements therein not misleading, to the extent,
      but
      only to the extent, that such untrue statement or alleged untrue statement
      or
      omission or alleged omission was made in reliance upon and in conformity with
      written information furnished to the MLP in an instrument duly executed by
      such
      Holder specifically stating that it was expressly for use therein and
      (ii) any Free Writing Prospectus used by such Holder without the prior
      written consent of the Holder; provided, however, that the aggregate amount
      which any such Holder shall be required to pay pursuant to this
Section 6.2 shall in no event be greater than the amount of
      the net proceeds received by such Holder upon the sale of the Registrable
      Securities pursuant to the Registration Statement giving rise to such Claims
      less all amounts previously paid by such Holder with respect to any such
      Claims.  Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such indemnified party
      and shall survive the transfer of such securities by such Holder or
      underwriter.

     

    6.3           Conduct
      of Indemnification Proceedings.

     

    Promptly
      after receipt by an indemnified party of notice of any Claim or the commencement
      of any action or proceeding involving a Claim under this Article 6, such
      indemnified party shall, if a claim in respect thereof is to be made against
      the
      indemnifying party pursuant to Article 6, (i) notify the
      indemnifying party in writing of the Claim or the commencement of such action
      or
      proceeding; provided, that the failure of any indemnified party to provide
      such
      notice shall not relieve the indemnifying party of its obligations under this
      Article 6, except to the extent the indemnifying party is materially and
      actually prejudiced thereby and shall not relieve the indemnifying party from
      any liability which it may have to any indemnified party otherwise than under
      this Article 6, and (ii) permit such indemnifying party to assume
      the defense of such claim with counsel reasonably satisfactory to the
      indemnified party; provided, however, that any indemnified party shall have
      the
      right to employ separate counsel and to participate in the defense of such
      claim, but the fees and expenses of such counsel shall be at the expense of
      such
      indemnified party unless (A) the indemnifying party has agreed in writing
      to pay such fees and expenses, (B) the indemnifying party shall have failed
      to assume the defense of such claim and employ counsel reasonably satisfactory
      to such indemnified party within ten (10) days after receiving notice from
      such
      indemnified party that the indemnified party believes it has failed to do so,
      (C) in the reasonable judgment of any such indemnified party, based upon
      advice of counsel, a conflict of interest may exist between such indemnified
      party and the indemnifying party with respect to such claims (in which case,
      if
      the indemnified party notifies the indemnifying party in writing that it elects
      to employ separate counsel at the expense of the indemnifying party, the
      indemnifying party shall not have the right to assume the defense of such claim
      on behalf of such indemnified party) or (D) such indemnified party is a
      defendant in an action or proceeding which is also brought against the
      indemnifying party and reasonably shall have concluded that there may be one
      or
      more legal defenses available to such indemnified party which are not available
      to the indemnifying party.  

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    No
      indemnifying party shall be liable for any settlement of any such claim or
      action effected without its written consent, which consent shall not be
      unreasonably withheld.  In addition, without the consent of the
      indemnified party (which consent shall not be unreasonably withheld), no
      indemnifying party shall be permitted to consent to entry of any judgment with
      respect to, or to the effect the settlement or compromise of any pending or
      threatened action or claim in respect of which indemnification or contribution
      may be sought hereunder (whether or not the indemnified party is an actual
      or
      potential party to such action or claim), unless such settlement, compromise
      or
      judgment (1) includes an unconditional release of the indemnified party
      from all liability arising out of such action or claim, (2) does not
      include a statement as to or an admission of fault, culpability or a failure
      to
      act, by or on behalf of any indemnified party, and (3) does not provide for
      any action on the part of any party other than the payment of money damages
      which is to be paid in full by the indemnifying party.

     

    6.4           Contribution.

     

    If
      the
      indemnification provided for in Sections 6.1 or 6.2
      from the indemnifying party for any reason is unavailable to (other than by
      reason of exceptions provided therein), or is insufficient to hold harmless,
      an
      indemnified party hereunder in respect of any Claim, then the indemnifying
      party, in lieu of indemnifying such indemnified party, shall contribute to
      the
      amount paid or payable by such indemnified party as a result of such Claim
      in
      such proportion as is appropriate to reflect the relative fault of the
      indemnifying party, on the one hand, and the indemnified party, on the other
      hand, in connection with the actions which resulted in such Claim, as well
      as
      any other relevant equitable considerations.  The relative fault of
      such indemnifying party and indemnified party shall be determined by reference
      to, among other things, whether any action in question, including any untrue
      or
      alleged untrue statement of a material fact or omission or alleged omission
      to
      state a material fact, has been made by, or relates to information supplied
      by,
      such indemnifying party or indemnified party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action.  If, however, the foregoing allocation is not permitted by
      applicable law, then each indemnifying party shall contribute to the amount
      paid
      or payable by such indemnified party in such proportion as is appropriate to
      reflect not only such relative faults but also the relative benefits of the
      indemnifying party and the indemnified party as well as any other relevant
      equitable considerations.

     

    The
      parties hereto agree that it would
      not be just and equitable if contribution pursuant to this
Section 6.4 were determined by pro rata allocation
      or by any other method of allocation which does not take into account the
      equitable considerations referred to in the immediately preceding
      paragraph.  The amount paid or payable by a party as a result of any
      Claim referred to in the immediately preceding paragraph shall be deemed to
      include, subject to the limitations set forth in Section 6.3,
      any legal or other fees, costs or expenses reasonably incurred by such party
      in
      connection with any investigation or proceeding.  Notwithstanding
      anything in this Section 6.4 to the contrary, no indemnifying
      party (other than the MLP) shall be required pursuant to this
Section 6.4 to contribute any amount in excess of the net
      proceeds received by such indemnifying party from the sale of the Registrable
      Securities pursuant to the Registration Statement giving rise to such Claims,
      less all amounts previously paid by such indemnifying party with respect to
      such
      Claims.  No person guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    6.5           Other
      Indemnification.

     

    Indemnification
      similar to that specified in the preceding Sections 6.1 and
6.2 (with appropriate modifications) shall be given by
      the MLP and each
      selling Holder of Registrable Securities with respect to any required
      registration or other qualification of securities under any Federal or state
      law
      or regulation of any governmental authority, other than the Securities
      Act.  The indemnity agreements contained herein shall be in addition
      to any other rights to indemnification or contribution which any indemnified
      party may have pursuant to law or contract.

     

    6.6           Indemnification
      Payments.

     

    The
      indemnification and contribution required by this Article 6 shall be made
      by periodic payments of the amount thereof during the course of any
      investigation or defense, as and when bills are received or any expense, loss,
      damage or liability is incurred.

     

    6.7           Survivability.  
      The obligations of the Company and Holders under this Article 6 shall survive
      the completion of any offering of Registrable Securities and the termination
      of
      this Agreement for any reason.

     

    6.8           Conflicting
      Provisions.

     

      Notwithstanding
      the foregoing, to the extent that the provisions on indemnification and
      contribution contained in the underwriting agreement entered into in connection
      with an underwritten offering are in conflict with the foregoing provisions,
      the
      provisions in the underwriting agreement shall control.

     

    ARTICLE
      7

     

    COMPLIANCE
      WITH RULE 144

     

    With
      a
      view to making available the benefits of certain rules and regulations of the
      Commission that may permit the sale of the Registrable Securities to the public
      without registration, the MLP agrees to use its commercially reasonable efforts
      to:

     

    (a)           make
      and keep public information regarding the MLP available, as those terms are
      understood and defined in Rule 144 of the Securities Act, at all times from
      and
      after the date hereof;

     

    (b)           file
      with the Commission in a timely manner all reports and other documents required
      of the MLP under the Securities Act and the Exchange Act at all times from
      and
      after the date hereof; and

     

    (c)           provide
      a written statement as to the MLP’s compliance with clauses (a) and (b) above to
      Holders reasonably requesting such statement in connection with such Holders’
sale of Registrable Securities to the public without registration.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      8

     

    MISCELLANEOUS

     

    8.1           Notices.

     

      All
      notices and other communications provided for or permitted hereunder shall
      be
      deemed to be sufficient if contained in a written instrument and shall be deemed
      to have been duly given when delivered in person, by telecopy, by facsimile,
      by
      nationally-recognized overnight courier, or by first class registered or
      certified mail, postage prepaid, addressed to such party at the address set
      forth below or such other address as may hereafter be designated in writing
      by
      the addressee as follows:

     

    
      	
               

            	
              (i)

            	
              if
                to the MLP, to:

            

    

     

    

     

    
      	
               

            	
              Legacy
                Reserves LP

            

    

     

    
      	
               

            	
              303
                W. Wall, Suite 1600

            

    

     

    
      	
               

            	
              Midland,
                Texas  79701

            

    

     

    
      	
               

            	
              Attention:  Chief
                Executive Officer

            

    

     

    
      	
               

            	
              Fax
                Number:  (432) 686-8318

            

    

     

    

     

    
      	
               

            	
              With
                a copy to:

            

    

     

    

     

    
      	
               

            	
              Andrews
                Kurth LLP

            

    

     

    
      	
               

            	
              600
                Travis Street, Suite 4200

            

    

     

    
      	
               

            	
              Houston,
                Texas  77002

            

    

     

    
      	
               

            	
              Attention:  Gislar
                Donnenberg

            

    

     

    
      	
               

            	
              Fax
                Number:  (713) 238-7167

            

    

     

    
      	
               

            	
              (ii)

            	
              If
                to Nielson, to the address of Nielson set forth in the records of
                the
                MLP.

            

    

     

    
      	
               

            	
              (iii)

            	
              If
                to any subsequent Holder, to the address of such Person set forth
                in the
                records of the MLP.

            

    

     

    All
      such
      notices, requests, consents and other communications shall be deemed to have
      been delivered (a) in the case of personal delivery or delivery by telecopy
      or facsimile, on the date of such delivery, (b) in the case of a
      nationally-recognized overnight courier, on the next Business Day and
      (c) in the case of mailing, on the third Business Day following such
      mailing if sent by certified mail, return receipt requested.

     

    8.2           Assignment
      of Rights.

     

      Nielson
      may transfer and assign all or a portion of its rights hereunder to any (i)
      of
      its partners, members, shareholders or other Affiliates, or (ii) any Immediate
      Family Member of the foregoing who shall acquire at least 10% of the Registrable
      Securities held by the assigning Holder, to which Nielson transfers its
      ownership of all or any of its Registrable Securities and any such partner,
      member, shareholder or other Affiliate or Immediate Family Member may further
      transfer and assign all or a portion of its rights hereunder to any of its
      partners, members, shareholders or other Affiliates or Immediate Family Members
      to whom it transfers its 

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    ownership
      of all or any of its Registrable Securities (collectively, the “Permitted
      Transferees”); provided, that no such assignment shall be binding upon
      or obligate the MLP to any such Permitted Transferee unless and until the MLP
      shall have received notice of such assignment and a written agreement of such
      Permitted Transferee to be bound by the provisions of this
      Agreement.  Except as provided above, no Holder may transfer and
      assign all or any portion of its rights hereunder to any Person without the
      prior written consent of the MLP that shall not be unreasonably
      withheld.  In no event shall the MLP be required to file a
      post-effective amendment to a Registration Statement for the benefit of such
      transferee(s) or assignee(s) unless the MLP agrees to do so and such Permitted
      Transferee or other successor agrees in writing that it will pay all of the
      additional Registration Expenses incurred by the MLP in connection with filing
      a
      post-effective amendment to a Registration Statement or a new Registration
      Statement for the benefit of such transferee(s) or assignee(s).

     

    8.3           Limitation
      of Rights.

     

      This
      Agreement shall not be construed to vest any rights under this Agreement to
      any
      individual or entity other than the Holders and their Permitted
      Transferees.

     

    8.4           Recapitalization,
      Exchanges, etc. Affecting the Units.

     

      The
      provisions of this Agreement shall apply to the full extent set forth herein
      with respect to any and all Units of the MLP or any successor or assign of
      the
      MLP (whether by merger, consolidation, sale of assets or otherwise) which may
      be
      issued in respect of, in exchange for or in substitution of, the Registrable
      Securities, and shall be appropriately adjusted for combinations,
      recapitalizations and the like occurring after the date of this
      Agreement.

     

    8.5           Specific
      Performance.

     

      Damages
      in the event of breach of this Agreement by a Party hereto may be difficult,
      if
      not impossible, to ascertain, and it is therefore agreed that each such Person,
      in addition to and without limiting any other remedy or right it may have,
      will
      have the right to seek an injunction or other equitable relief in any court
      of
      competent jurisdiction, enjoining any such breach, and enforcing specifically
      the terms and provisions hereof, and each of the Parties hereto hereby waives
      any and all defenses it may have on the ground of lack of jurisdiction or
      competence of the court to grant such an injunction or other equitable relief.
      The existence of this right will not preclude any such Person from pursuing
      any
      other rights and remedies at law or in equity which such Person may
      have.

     

    8.6           Counterparts.

     

      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which counterparts, when so executed
      and delivered, shall be deemed to be an original and all of which counterparts,
      taken together, shall constitute but one and the same Agreement.

     

    8.7           Headings.

     

      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    8.8           Governing
      Law.

     

      The
      laws of the State of Texas shall govern this Agreement without regard to
      principles of conflict of laws.

     

    8.9           Severability
      of Provisions.

     

      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof or affecting or impairing the validity or enforceability
      of
      such provision in any other jurisdiction.

     

    8.10           Entire
      Agreement.

     

      This
      Agreement is intended by the parties as a final expression of their agreement
      and intended to be a complete and exclusive statement of the agreement and
      understanding of the Parties hereto in respect of the subject matter contained
      herein. There are no restrictions, promises, warranties or undertakings, other
      than those set forth or referred to herein. This Agreement supersedes all prior
      agreements and understandings between the Parties with respect to such subject
      matter.

     

    8.11           Amendment.

     

      This
      Agreement may be amended only by means of a written amendment signed by all
      Parties to this Agreement.

     

    8.12           No
      Presumption.

     

      In
      the event any claim is made by a Party relating to any conflict, omission,
      or
      ambiguity in this Agreement, no presumption or burden of proof or persuasion
      shall be implied by virtue of the fact that this Agreement was prepared by
      or at
      the request of a particular Party or its counsel.

     

     [Signature
      page follows]

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    

    

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

     

    
      	 	NIELSON
&
ASSOCIATES,
              INC.	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Thomas
              Fitzsimmons	 
	 	 	Thomas
              Fitzsimmons	 
	 	 	Executive
              Vice President and
              Chief Operating Officer	 
	 	 	 	 

    

    
      	 	LEGACY
              RESERVES GP, LLC	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Steven
              H. Pruett	 
	 	 	Steven
              H. Pruett	 
	 	 	President,
              Chief Financial Officer and Secretary	 
	 	 	 	 

    

    
      	 	
              LEGACY
                RESERVES LP

               

              By:  Legacy Reserves GP, LLC, its general
                partner

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Steven
              H. Pruett	 
	 	 	Steven
              H. Pruett	 
	 	 	President,
              Chief Financial Officer and Secretary	 
	 	 	 	 

    

    
      
        
        

      

      
        -24-ex_10-1.htm

     

    
      

      

    

    Exhibit
      10.1

     

     

     

     

    
 

     

    BINGER
      PURCHASE, SALE AND CONTRIBUTION AGREEMENT

    

    BY
      AND BETWEEN

     

    NIELSON
      & ASSOCIATES, INC.

    AS
      SELLER

     

    AND

     

    LEGACY
      RESERVES OPERATING LP

    AS
      BUYER

     

    

    
      
        PSA
          - Binger Sale

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF
      CONTENTS

    
      
        
          
            
              
                 

                  
                    
                      
                        
                          
                            
                              
                                	
                                        1.

                                      	
                                        SALE
                                          AND PURCHASE OF THE ASSETS.

                                      	
                                        1

                                      
	
                                        1.1

                                      	
                                        Acquired
                                          Assets

                                      	
                                        1

                                      
	
                                        1.2

                                      	
                                        Assumed
                                          Liabilities

                                      	
                                        2

                                      
	
                                        2.

                                      	
                                        PURCHASE
                                          PRICE.

                                      	
                                        3

                                      
	
                                        2.1

                                      	
                                        Purchase
                                          Price

                                      	
                                        3

                                      
	
                                        2.2

                                      	
                                        Deposit.

                                      	
                                        3

                                      
	
                                        2.3

                                      	
                                        Adjustments
                                          to the Base Purchase Price

                                      	
                                        4

                                      
	
                                        2.4

                                      	
                                        Allocation

                                      	
                                        5

                                      
	
                                        3.

                                      	
                                        CLOSING.

                                      	
                                        5

                                      
	
                                        3.1

                                      	
                                        Closing

                                      	
                                        5

                                      
	
                                        3.2

                                      	
                                        Delivery
                                          by Seller

                                      	
                                        5

                                      
	
                                        3.3

                                      	
                                        Delivery
                                          by Buyer

                                      	
                                        6

                                      
	
                                        3.4

                                      	
                                        Further
                                          Cooperation

                                      	
                                        6

                                      
	
                                        4.

                                      	
                                        ACCOUNTING
                                          ADJUSTMENTS.

                                      	
                                        6

                                      
	
                                        4.1

                                      	
                                        Closing
                                          Adjustments

                                      	
                                        6

                                      
	
                                        4.2

                                      	
                                        Strapping
                                          and Gauging.

                                      	
                                        7

                                      
	
                                        4.3

                                      	
                                        Taxes

                                      	
                                        7

                                      
	
                                        4.4

                                      	
                                        Post-Closing
                                          Adjustments

                                      	
                                        8

                                      
	
                                        4.5

                                      	
                                        Suspended
                                          Funds

                                      	
                                        8

                                      
	
                                        4.6

                                      	
                                        Audit
                                          Adjustments

                                      	
                                        8

                                      
	
                                        4.7

                                      	
                                        Cooperation

                                      	
                                        9

                                      
	
                                        5.

                                      	
                                        DUE
                                          DILIGENCE: TITLE MATTERS.

                                      	
                                        9

                                      
	
                                        5.1

                                      	
                                        General
                                          Access

                                      	
                                        9

                                      
	
                                        5.2

                                      	
                                        Defensible
                                          Title

                                      	
                                        9

                                      
	
                                        5.3

                                      	
                                        Defect
                                          Letters.

                                      	
                                        11

                                      
	
                                        5.4

                                      	
                                        Effect
                                          of Title Defect

                                      	
                                        12

                                      
	
                                        5.5

                                      	
                                        Possible
                                          Upward Adjustment

                                      	
                                        14

                                      
	
                                        5.6

                                      	
                                        Preferential
                                          Rights and Consents.

                                      	
                                        14

                                      
	
                                        6.

                                      	
                                        ENVIRONMENTAL
                                          ASSESSMENT.

                                      	
                                        16

                                      
	
                                        6.1

                                      	
                                        Physical
                                          Condition of the Assets

                                      	
                                        16

                                      
	
                                        6.2

                                      	
                                        Inspection
                                          and Testing.

                                      	
                                        16

                                      
	
                                        6.3

                                      	
                                        Notice
                                          of Adverse Environmental Conditions

                                      	
                                        17

                                      
	
                                        6.4

                                      	
                                        Rights
                                          and Remedies for Adverse Environmental
                                          Conditions.

                                      	
                                        18

                                      
	
                                        6.5

                                      	
                                        Remediation
                                          by Seller

                                      	
                                        19

                                      
	
                                        7.

                                      	
                                        REPRESENTATIONS
                                          AND WARRANTIES OF SELLER.

                                      	
                                        20

                                      
	
                                        7.1

                                      	
                                        Seller’s
                                          Representations and Warranties

                                      	
                                        20

                                      
	
                                        7.2

                                      	
                                        Scope
                                          of Representations of Seller.

                                      	
                                        22

                                      
	
                                        8.

                                      	
                                        REPRESENTATIONS
                                          AND WARRANTIES OF BUYER.

                                      	
                                        23

                                      
	
                                        8.1

                                      	
                                        Buyer’s
                                          Representations and Warranties

                                      	
                                        23

                                      
	
                                        9.

                                      	
                                        CERTAIN
                                          AGREEMENTS OF SELLER

                                      	
                                        24

                                      
	
                                        9.1

                                      	
                                        Maintenance
                                          of Assets

                                      	
                                        24

                                      
	
                                        9.2

                                      	
                                        Records

                                      	
                                        25

                                      

                              

                            

                          

                        

                      

                    

                  

                
                  
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                      9.3

                    	
                      Audit
                        Rights

                    	
                      25

                    
	
                      10.

                    	
                      CERTAIN
                        AGREEMENTS OF BUYER

                    	
                      26

                    
	
                      10.1

                    	
                      Plugging
                        Obligation

                    	
                      26

                    
	
                      10.2

                    	
                      Plugging
                        Bond

                    	
                      26

                    
	
                      10.3

                    	
                      Seller’s
                        Logos

                    	
                      26

                    
	
                      10.4

                    	
                      Like-Kind
                        Exchanges

                    	
                      26

                    
	
                      11.

                    	
                      CONDITIONS
                        PRECEDENT TO OBLIGATIONS OF BUYER

                    	
                      27

                    
	
                      11.1

                    	
                      No
                        Litigation

                    	
                      27

                    
	
                      11.2

                    	
                      Representations
                        and Warranties

                    	
                      27

                    
	
                      12.

                    	
                      CONDITIONS
                        PRECEDENT TO THE OBLIGATIONS OF SELLER

                    	
                      27

                    
	
                      12.1

                    	
                      No
                        Litigation

                    	
                      27

                    
	
                      12.2

                    	
                      Representations
                        and Warranties

                    	
                      27

                    
	
                      13.

                    	
                      TERMINATION.

                    	
                      27

                    
	
                      13.1

                    	
                      Causes
                        of Termination

                    	
                      27

                    
	
                      13.2

                    	
                      Effect
                        of Termination.

                    	
                      28

                    
	
                      14.

                    	
                      INDEMNIFICATION.

                    	
                      29

                    
	
                      14.1

                    	
                      Indemnification
                        by Seller

                    	
                      29

                    
	
                      14.2

                    	
                      Indemnification
                        by Buyer

                    	
                      31

                    
	
                      14.3

                    	
                      Physical
                        Inspection

                    	
                      31

                    
	
                      14.4

                    	
                      Notification

                    	
                      31

                    
	
                      15.

                    	
                      MISCELLANEOUS.

                    	
                      32

                    
	
                      15.1

                    	
                      Casualty
                        Loss.

                    	
                      32

                    
	
                      15.2

                    	
                      Confidentiality.

                    	
                      32

                    
	
                      15.3

                    	
                      Notices

                    	
                      33

                    
	
                      15.4

                    	
                      Press
                        Releases and Public Announcements

                    	
                      34

                    
	
                      15.5

                    	
                      Compliance
                        with Express Negligence Test

                    	
                      34

                    
	
                      15.6

                    	
                      Governing
                        Law

                    	
                      34

                    
	
                      15.7

                    	
                      Exhibits

                    	
                      34

                    
	
                      15.8

                    	
                      Fees,
                        Expenses, Taxes and Recording.

                    	
                      35

                    
	
                      15.9

                    	
                      Assignment

                    	
                      35

                    
	
                      15.10

                    	
                      Entire
                        Agreement

                    	
                      35

                    
	
                      15.11

                    	
                      Severability

                    	
                      35

                    
	
                      15.12

                    	
                      Captions

                    	
                      36

                    
	
                      15.13

                    	
                      Time
                        of the Essence

                    	
                      36

                    
	
                      15.14

                    	
                      Amendments.

                    	
                      36

                    
	
                      15.15

                    	
                      Counterparts

                    	
                      36

                    

            

          

        

      

    

    
 

    
      
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    EXHIBITS

    

    
      
        
          
            	
                    1.1(A)

                  	
                    Oil
                      and Gas Leases and Land

                  
	
                    1.1(B)

                  	
                    Deeded
                      Land

                  
	
                    1.1(C)

                  	
                    Vehicles
                      and Other Personal Property

                  
	
                    1.1(G)

                  	
                    Assignment
                      of Membership Interests

                  
	
                    2.1(A)

                  	
                    Registration
                      Rights Agreement

                  
	
                    2.4

                  	
                    Allocation

                  
	
                    3.2(A)

                  	
                    Form
                      of Assignment and Bill of Sale

                  
	
                    3.2(G)

                  	
                    Form
                      of Warranty Deed

                  
	
                    7.1(E)

                  	
                    AFE’s

                  
	
                    7.1(G)

                  	
                    Pending
                      Litigation

                  
	
                    7.1(K)

                  	
                    Material
                      Agreements

                  
	
                    7.1(L)

                  	
                    Consents
                      and Preferential Purchase Rights

                  
	
                    7.1(M)

                  	
                    Gas
                      Imbalances

                  

          

        

      

    

    
      
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    INDEX
      OF DEFINED TERMS

    
      
         

          
            
              
                	
                        DEFINED
                          TERM

                      	
                        PAGE

                      	
                        SECTION

                      
	
                        Adverse
                          Environmental Condition

                      	
                        16

                      	
                        6.3

                      
	
                        Agreement

                      	
                        1

                      	
                        Preamble

                      
	
                        Allocated
                          Value

                      	
                        4

                      	
                        2.4

                      
	
                        Allocated
                          Values

                      	
                        4

                      	
                        2.4

                      
	
                        Assets

                      	
                        1

                      	
                        1.1

                      
	
                        Assumed
                          Liabilities

                      	
                        2

                      	
                        1.2

                      
	
                        Base
                          Purchase Price

                      	
                        3

                      	
                        2.1

                      
	
                        Buyer

                      	
                        1

                      	
                        Preamble

                      
	
                        Buyer
                          Group

                      	
                        27

                      	
                        14.1

                      
	
                        Buyer's
                          Response

                      	
                        10

                      	
                        5.3(C)(ii)

                      
	
                        Casualty

                      	
                        30

                      	
                        15.1(A)

                      
	
                        Casualty
                          Loss

                      	
                        30

                      	
                        15.1(B)

                      
	
                        Closing

                      	
                        4

                      	
                        3.1

                      
	
                        Closing
                          Adjustment Statement

                      	
                        5

                      	
                        4.1

                      
	
                        Closing
                          Date

                      	
                        4

                      	
                        3.1

                      
	
                        Confidential
                          Information

                      	
                        31

                      	
                        15.2(A)

                      
	
                        Deeded
                          Land

                      	
                        1

                      	
                        1.1(B)

                      
	
                        Deposit

                      	
                        3

                      	
                        2.2(A)(iii)

                      
	
                        Easements

                      	
                        1

                      	
                        1.1(A)

                      
	
                        Effective
                          Time

                      	
                        3

                      	
                        2.3(A)(iii)

                      
	
                        Environmental
                          Consultant

                      	
                        18

                      	
                        6.4(F)

                      
	
                        Environmental
                          Defect Threshold

                      	
                        16

                      	
                        6.3

                      
	
                        Environmental
                          Defect Notice

                      	
                        16

                      	
                        6.3

                      
	
                        Environmental
                          Defect Value

                      	
                        16

                      	
                        6.3

                      
	
                        Environmental
                          Laws

                      	
                        16

                      	
                        6.2(C)

                      
	
                        Equipment

                      	
                        1

                      	
                        1.1(B)

                      
	
                        Exclusion
                          Adjustment

                      	
                        13

                      	
                        5.6(A)

                      
	
                        Indemnity
                          Threshold

                      	
                        28

                      	
                        14.1(D)(iv)

                      
	
                        Interest
                          Addition

                      	
                        12

                      	
                        5.5

                      
	
                        Land

                      	
                        1

                      	
                        1.1(A)

                      
	
                        Leases

                      	
                        1

                      	
                        1.1(A)

                      
	
                        Loss

                      	
                        27

                      	
                        14.1(A)

                      
	
                        Losses

                      	
                        27

                      	
                        14.1(A)

                      
	
                        Net
                          Revenue Interest

                      	
                        8

                      	
                        5.2(A)(i)

                      
	
                        NORM

                      	
                        15

                      	
                        6.1(B)

                      
	
                        Notice

                      	
                        10

                      	
                        5.3(A)

                      
	
                        Oil
                          and Gas

                      	
                        2

                      	
                        1.1(D)

                      
	
                        Parties

                      	
                        1

                      	
                        Preamble

                      
	
                        Party

                      	
                        1

                      	
                        Preamble

                      
	
                        Permits

                      	
                        1

                      	
                        1.1(A)

                      
	
                        Permitted
                          Encumbrances

                      	
                        8

                      	
                        5.2(C)

                      
	
                        Post-Closing
                          Adjustment Statement

                      	
                        6

                      	
                        4.4(A)

                      
	
                        Property
                          Taxes

                      	
                        6

                      	
                        4.3(A)

                      

              

            

          

        

      

    

     

    
      
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                    Purchase
                      Price

                  	
                    3

                  	
                    2.3

                  
	
                    Records

                  	
                    2

                  	
                    1.1(F)

                  
	
                    Remediate

                  	
                    17

                  	
                    6.4(E)

                  
	
                    Remediation

                  	
                    17

                  	
                    6.4(E)

                  
	
                    Rights-of-Way

                  	
                     

                  	
                    1

                  
	
                    1.1(A)

                  	
                     

                  	
                     

                  
	
                    Seller

                  	
                    1

                  	
                    Preamble

                  
	
                    Seller’s
                      Group

                  	
                    15

                  	
                    6.2(B)

                  
	
                    Seller’s
                      Response

                  	
                    10

                  	
                    5.3(C)(i)

                  
	
                    Severance
                      Taxes

                  	
                    6

                  	
                    4.3(C)

                  
	
                    Survival
                      Period

                  	
                    28

                  	
                    14.1(D)(i)

                  
	
                    Title
                      Consultant

                  	
                    10

                  	
                    5.3(C)(iii)

                  
	
                    Title
                      Defect

                  	
                    10

                  	
                    5.3(A)

                  
	
                    Title
                      Defect Threshold

                  	
                    10

                  	
                    5.3(A)

                  
	
                    Title
                      Defect Value

                  	
                    12

                  	
                    5.4(B)

                  
	
                    Value
                      of Interest Addition

                  	
                    13

                  	
                    5.5

                  
	
                    Wells

                  	
                    1

                  	
                    1.1(B)

                  
	
                    Working
                      Interest

                  	
                    8

                  	
                    5.2(A)(ii)

                  

          

        

      

    

     

    
      
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    PURCHASE,
      SALE AND CONTRIBUTION AGREEMENT

     

    This
      Purchase, Sale and Contribution Agreement (this “Agreement”) is entered into
      this 20th day of March, 2007, by and between Nielson & Associates, Inc., a
      Wyoming Corporation, (“Seller”) and Legacy Reserves Operating LP, a Delaware
      limited partnership (“Buyer”), a wholly-owned subsidiary of Legacy Reserves LP,
      a Delaware limited partnership.  Buyer and Seller are collectively
      referred to herein as the “Parties” and sometimes individually referred to as a
“Party.”

     

    RECITALS:

     

    
      	
              A.

            	
              Seller
                desires to sell to Buyer certain oil, gas and mineral properties
                and other
                assets on the terms and conditions set forth in this
                Agreement.

            

    

     

    
      	
              B.

            	
              Buyer
                desires to purchase from Seller such oil, gas and mineral properties
                and
                other assets on the terms and conditions set forth in this
                Agreement.

            

    

     

    WITNESSETH:

     

    In
      consideration of the mutual agreements contained in this Agreement, Buyer and
      Seller agree as follows:

     

    1.           SALE,
      PURCHASE AND CONTRIBUTION OF THE ASSETS.

     

    1.1           Acquired
      Assets

     

    Subject
      to the terms and conditions of this Agreement, Seller agrees to sell, convey,
      contribute and deliver to Buyer and Buyer agrees to purchase, acquire and assume
      from Seller the following (collectively, the “Assets”):

     

    
      	
              (A)

            	
              All
                of Seller’s right, title, interest and obligations in, to and under the
                oil and gas leases described in Exhibit 1.1(A) attached hereto (the
                “Leases”), covering the land described in Exhibit 1.1(A) (the
                “Land”), whether or not such interests or land are accurately or
                completely described on Exhibit 1.1(A),  together with
                all the property and rights incident thereto, including without limitation
                Seller’s rights and obligations in, to and under all operating agreements;
                pooling, communitization and unitization agreements; farmout agreements;
                joint venture agreements; product purchase and sale contracts;
                transportation, processing, treatment or gathering agreements; leases;
                permits (the “Permits”); rights-of-way (the “Rights-of-Way”); surface use
                agreements; surface leases; easements (the “Easements”); licenses;
                options; declarations; orders; contracts; and instruments in any
                way
                relating to the Leases;

            

      
        	
                (B)

              	
                All
                  of Seller’s right, title and interest in and to the wells (“Wells”)
                  situated on or used in conjunction with operations on the Leases
                  and Land
                  or on land pooled, communitized or unitized therewith (“Pooled Land”), and
                  the real property described in Exhibit 1.1(B) (the “Deeded Land”),
                  together with all of Seller’s interests in and to all of the personal
                  property, fixtures, improvements and other property, whether real,
                  personal or mixed, now or as of the Effective Time on, appurtenant
                  to or
                  used or obtained by Seller in connection with the Leases, Land,
                  Pooled
                  Land or Wells or with the production, injection, treatment, sale
                  or
                  disposal of hydrocarbons and all other substances produced
                  therefrom

              

      

      
        
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       or
        attributable thereto (collectively, the “Equipment”), including, without
        limitation, producing and non-producing wells, injection wells, disposal
        wells,
        water supply wells, well equipment, casing, tubing, tanks, generators, boilers,
        buildings, pumps, motors, machinery, pipelines, gathering systems, power
        lines,
        telephone and telegraph lines, roads, field processing plants, field offices
        and
        other furnishings related thereto, equipment leases, trailers, inventory
        in
        storage, storage yards, and all other improvements or appurtenances thereunto
        belonging;

    

     

    
      	
              (C)

            	
              All
                of Seller’s right, title and interest in and to the vehicles and other
                personal property described in Exhibit 1.1(C) attached
                hereto;

            

    

     

    
      	
              (D)

            	
              All
                of the oil and gas and associated hydrocarbons (“Oil and Gas”) in and
                under or otherwise attributable to the Leases, Land, and Pooled Land
                or
                produced from the Wells;

            

    

     

    
      	
              (E)

            	
              To
                the extent assignable, all governmental permits, licenses and
                authorizations, as well as any applications for the same, related
                to the
                Leases, Land, Pooled Land and Wells or the use
                thereof;

            

    

     

    
      	
              (F)

            	
              All
                of the files, records, and data of Seller relating to the items described
                in subsections (A), (B), (C), (D) and (E) above (the “Records”),
                including, without limitation, lease records, well records, and division
                order records; well files and prospect files; title records (including
                abstracts of title, title opinions and memoranda, and title curative
                documents related to the Leases and Wells); contracts and contract
                files;
                correspondence; computer data files; micro-fiche data files; geological,
                geophysical and seismic records, interpretations, data, maps and
                information, subject to the provisions of Section 1.3 regarding the
                licensing of proprietary seismic data; production records, electric
                logs,
                core data, pressure data, decline curves and graphical production
                curves;
                and accounting records, to the extent only that the Records can be
                transferred without violation of any third-party restriction and
                are not
                protected by Seller’s attorney-client privilege.  The Records do
                not include any appraisals or other evaluation materials related
                to
                Seller’s preparation of the Assets for sale hereunder, any reservoir
                and/or development studies prepared by or on behalf of
                Seller,  nor any of Seller’s income tax returns or files related
                thereto; and

            

    

     

    
      	
              (G)

            	
              All
                of Seller’s right, title and interest in Binger Operations, LLC, an
                Oklahoma limited liability company, with such transfer being evidenced
                by
                an assignment of membership units substantially in the form as set
                forth
                in Exhibit 1.1(G)

            

    

     

    1.2           Assumed
      Liabilities

     

    .  On
      the Closing Date, Buyer shall assume and agree to timely and fully pay, perform
      and otherwise discharge, without recourse to Seller or its affiliates, all
      of
      the liabilities and obligations of Seller and its affiliates, predecessors,
      successors, assigns or representatives, direct or indirect, known or unknown,
      asserted or unasserted, absolute or contingent, accrued or unaccrued, which
      relate, directly or indirectly, to the Assets (other than the Excluded Assets),
      whether such liabilities and obligations accrue before, on or after the
      Effective Time (collectively, the “Assumed
      Liabilities”).  Notwithstanding the foregoing, Assumed Liabilities
      shall not include, and there is excepted, reserved and excluded from
      such

     

    
      
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     liabilities
      assumed by Buyer, the liabilities and obligations for which Seller indemnifies
      Buyer pursuant to Section 14.1.

     

    2.           PURCHASE
      PRICE.

     

    2.1           Purchase
      Price.

     

      The
      purchase price for the Assets is FORTY FIVE MILLION DOLLARS ($45,000,000.00)
      (the “Base Purchase Price”), subject to the adjustments provided for
      herein.  The Base Purchase Price shall be paid as
      follows:

     

    (A)           Legacy
      Units.  In return for property contributed by Seller under this
      Agreement, Buyer shall cause the issuance of not less than six hundred eleven
      thousand two hundred forty seven (611,247) Units of Legacy Reserves LP
      (“Legacy”) to Seller (the “Legacy Units”).  There shall be a
“Registration Rights Agreement” substantially in the form attached hereto as
      Exhibit 2.1(A), as it relates to the Legacy Units.

     

    (B)           Cash
      Consideration.  Buyer shall pay cash consideration in the amount of
      THIRTY MILLION DOLLARS ($30,000,000.00), with any adjustments to the Base
      Purchase Price to be adjusted against the cash consideration and not the Legacy
      Units.

     

    (C)           Allocation.  The
      Parties agree that the payment set forth in this Section 2.1 shall be allocated
      as follows:

     

    (i)          The
      value of that amount of eighteen and 487183/1000000 percent
      (18.487183%) working interest owned by Seller in the East Binger Unit (as
      described in Exhibit 1.1(A) hereto) that is equal to the total value of the
      Legacy Units as determined in Section 2.1(A), shall be deemed Seller’s
      contribution to Legacy Reserves LP for purposes of Section 721 of the Internal
      Revenue Code (26 U.S.C. § 721); and

     

    (ii)          The
      value of the amount of the remaining thirty-six and
      50007/1000000 percent (36.05007%) working interest owned by Seller in the
      East Binger Unit (as described in Exhibit 1.1(A) hereto) that exceeds the value
      of the Legacy Units as determined in Section 2.1(A), plus the cash consideration
      as set forth in Section 2.1(B), subject to any adjustments to the Base Purchase
      Price, shall be deemed consideration for the sale under this Agreement of the
      Assets less the amount of the working interest allocated as Seller’s
      contribution to Legacy Reserves LP, as set forth in Section
      2.1(C)(i).

    

    2.2           Deposit.

     

    Within
      one (1) day of the execution of this Agreement, Buyer shall pay to Seller,
      in
      cash by wire-transfer in immediately available funds, a non-refundable Deposit
      in an amount equal to TWO MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 Dollars
      ($2,250,000.00)  (five percent [5%] of the Base Purchase Price) (the
“Deposit”).  The Deposit, together with interest thereon, shall be
      distributed to Seller and credited to the Base Purchase Price at Closing, or
      if
      this Agreement is terminated, shall be distributed or retained pursuant to
      Article 13.  In the event the Deposit is not paid to Seller as
      prescribed, this Agreement shall be terminated.

    

    
      
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    2.3           Adjustments
      to the Base Purchase Price.

     

      At
      Closing, appropriate adjustments to the Base Purchase Price shall be made as
      follows in accordance with Section 4.1 (as adjusted, the “Purchase
      Price”):

     

    
      	
              (A)

            	
              The
                Base Purchase Price shall be adjusted upward
                by:

            

    

     

    
      	
                 
                (i)

            	
              any
                amount determined to be due Seller pursuant to Section
                4.2;

            

    

     

    
      	
                
                (ii)

            	
              Property
                Taxes and Severance Taxes related to the Assets paid by Seller for
                the
                period following the Effective Time as determined pursuant to Section
                4.3;

            

    

     

    
      	
               
                (iii)

            	
              an
                amount equal to the costs, expenses and other expenditures (whether
                capitalized or expensed) paid by Seller in accordance with this Agreement
                that are attributable to the Assets for the period from and after
                7:00
                a.m. (Central Time) on February 1, 2007 (the “Effective
                Time”);

            

    

     

    
      	
               
                (iv)

            	
              a
                fixed monthly rate, prorated if necessary, per active Well, as provided
                in
                the applicable operating agreement, for operation and maintenance
                expenses
                (excluding workover costs, plugging and abandoning costs, and major
                costs)
                incurred by Seller while operating the Assets from and after the
                Effective
                Time.

            

    

     

    
      	
                 (v)

            	
              any
                amount related to the Value of Interest Additions as determined pursuant
                to Section 5.5;

            

    

     

    
      	
               
                (vi)

            	
              an
                amount equal to the amount of proceeds derived from the sale of Oil
                and
                Gas, net of royalties and severance taxes paid by Buyer, actually
                received
                by Buyer and directly attributable to the Wells which are, in accordance
                with generally accepted accounting principles, attributable to the
                period
                of time prior to the Effective Time;
                and

            

    

     

    
      	
               (vii)

            	
              any
                other amount agreed upon in writing by Seller and
                Buyer.

            

    

     

    
      	
              (B)

            	
              The
                Base Purchase Price shall be adjusted downward
                by:

            

    

     

    
      	
                 
                (i)

            	
              an
                amount equal to the amount of proceeds derived from the sale of Oil
                and
                Gas, net of royalties and severance taxes paid by Seller, actually
                received by Seller and directly attributable to the Wells which are,
                in
                accordance with generally accepted accounting principles, attributable
                to
                the period of time from and after the Effective
                Time;

            

    

     

    
      	
                
                (ii)

            	
              an
                amount equal to all expenditures, liabilities and costs relating
                to the
                Assets (other than Taxes related to the Assets) that are unpaid as
                of the
                Closing Date and assessed for or attributable to periods of time
                or the
                ownership of production prior to the Effective Time regardless how
                such
                expenditures, liabilities and costs are calculated provided that
                to the
                extent the actual amounts cannot be determined prior to the agreement
                of
                Buyer and Seller with respect to the Closing Adjustment Statement,
                a
                reasonable estimate of such expenditures, liabilities and costs shall
                be
                used (and to such extent Buyer shall assume the liability and
                responsibility for payment
                therefor);

            

    

     

    
      
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                (iii)

            	
              all
                amounts related to Title Defects as determined pursuant to Section
                5.4,
                consents and preferential rights as determined pursuant to Section
                5.6,
                Adverse Environmental Conditions as determined pursuant to Section
                6.4,
                Exclusion Adjustments as determined pursuant to Sections 5.6 or 6.4,
                and
                Casualty Losses as determined pursuant to Section
                15.1;

            

    

     

    
      	
               
                (iv)

            	
              Property
                Taxes and Severance Taxes related to the Assets to be paid by Buyer
                for
                the period prior to the Effective Time as determined pursuant to
                Section
                4.3;  and,

            

    

     

    
      	
                
                (v)

            	
              any
                other amount agreed upon in writing by Seller and
                Buyer.

            

    

     

    
      	
               
                (vi)

            	
              the
                amount of any cash distribution to be made by Legacy in May, 2007,
                that
                relates to the first quarter distribution for owners of
                record.

            

    

     

    
      	
              (C)

            	
              Seller
                shall have the right to collect any receivable, refund or other amounts
                associated with periods prior to the Effective Time.  To the
                extent that Buyer collects any such receivable, refund or other amounts,
                then Buyer shall promptly remit any such amounts to
                Seller.

            

    

     

    2.4           Allocation.

     

      The
      Base Purchase Price shall be allocated to the Assets as set forth in Exhibit
      2.4.  The Parties agree that the values allocated to various portions
      of the Assets, which are set forth on Exhibit 2.4 (singularly with respect
      to
      each item, the “Allocated Value” and collectively, the “Allocated Values”),
      shall be binding on Seller and Buyer and shall be used only for the purposes
      of
      adjusting the Base Purchase Price pursuant to Sections 4.3 (relating to Taxes),
      5.4 (relating to Title Defects), 15.1 (relating to Casualty Losses), and 6
      (relating to Adverse Environment Conditions), and are not intended as a measure
      of value for any other purpose.

     

    3.           CLOSING.

     

    3.1           Closing.

     

      The
      sale and purchase of the Assets (“Closing”) shall be held on or before April 2,
      2007 (“Closing Date”).  The Closing will take place at the offices of
      Nielson & Associates, Inc., in Cody, WY.  In the event that Buyer
      is unable to close on the sale and purchase of the Assets on or before April
      2
      2007, Buyer shall pay to Seller the amount of FIVE THOUSAND DOLLARS ($5,000.00)
      per calendar day for each and every day until Buyer is able to close on the
      sale, said amount representing non-refundable daily interest on the Base
      Purchase Price.  In the event Buyer is not able to close on or before
      April 30, 2007, the parties agree that they shall consider Buyer to be in breach
      of this Agreement, pursuant to Section 13.2(A).

     

    3.2           Delivery
      by Seller.

     

      At
      Closing, Seller shall deliver to Buyer:

     

    
      	
              (A)

            	
              An
                Assignment and Bill of Sale, substantially in the form attached hereto
                as
                Exhibit 3.2(A), effecting the sale, transfer, conveyance and
                assignment of the Assets, with (i) a special warranty of the real
                property title by, through and under Seller but not otherwise, and
                (ii) with all personal property and fixtures conveyed “AS IS, WHERE
                IS,” with no warranties whatsoever, express, implied or
                statutory.

            

    

     

    
      
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              (B)

            	
              Any
                governmental forms required to effect transfer in accordance with
                applicable regulations;

            

    

     

    
      	
              (C)

            	
              Letters
                in lieu of transfer orders instructing purchasers of production to
                pay to
                Buyer the proceeds of sales of Oil and Gas from the
                Assets;

            

    

     

    
      	
              (D)

            	
              Executed
                change of operator forms as required by applicable governmental
                regulation;

            

    

     

    
      	
              (E)

            	
              Releases
                of the mortgages in favor of any bank or other third party that may
                be
                currently encumbering the Assets;

            

    

     

    
      	
              (F)

            	
              The
                Closing Adjustment Statement;

            

    

     

    
      	
              (G)

            	
              A
                Warranty Deed, substantially in the form attached hereto as Exhibit
                3.2(G), effecting the sale, transfer and conveyance of the Deeded
                Land;

            

    

     

    
      	
              (H)

            	
              Possession
                of the Records and all other
                Assets;

            

    

     

    
      	
              (I)

            	
              Letters
                of resignation as operator of these Assets, as appropriate, along
                with
                ballot forms to the partners as directed by the operating
                agreements.

            

    

     

    3.3           Delivery
      by Buyer.

     

      At
      Closing, Buyer shall deliver to Seller or Seller’s designee the Purchase Price
      set forth in the Closing Adjustment Statement by wire transfer in immediately
      available funds, less the Deposit and interest earned on the
      Deposit.  Buyer shall also deliver evidence that it has provided
      replacement instruments for each guaranty, bond, letter of credit or similar
      contingent obligation given by Seller as required by law or the provisions
      of
      any Lease or other agreement along with the appropriate instruments necessary
      to
      receive immediate approval as Operator of these Assets, as appropriate. Buyer
      shall execute and deliver the Assignment and Bill of Sale, Closing Adjustment
      Statement and other closing documents as necessary or appropriate.

     

    3.4           Further
      Cooperation.

     

      At
      the Closing and thereafter as may be necessary, Seller and Buyer shall execute
      and deliver such other instruments and documents and take such other actions
      as
      may be reasonably necessary to evidence and effectuate the transactions
      contemplated by this Agreement.

     

    4.           ACCOUNTING
      ADJUSTMENTS.

     

    4.1           Closing
      Adjustments.

     

      With
      respect to matters that can be determined as of the Closing, Seller shall
      prepare, in accordance with the provisions of this Article 4, a statement (the
      “Closing Adjustment Statement”) with relevant supporting information setting
      forth each adjustment to the Base Purchase Price submitted by
      Seller.  Seller shall submit the Closing Adjustment Statement to
      Buyer, together with all records or data supporting the calculation of amounts
      presented on the Closing Adjustment Statement, no later than five (5) business
      days prior to the scheduled Closing Date.  Prior to the Closing, Buyer
      and Seller shall review the adjustments proposed by Seller in the Closing
      Adjustment Statement.  Agreed adjustments shall be taken into account
      in computing any adjustments to be made to the Base Purchase Price at the
      Closing.  When available, actual figures will be used for the
      adjustments at Closing.  To the extent actual 

     

    
      
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    figures
      are not available, estimates shall be used subject to final adjustments as
      described in Section 4.4 below.

     

    4.2           Strapping
      and Gauging.

     

    Seller
      will cause the Oil and Gas in the storage facilities located on, or utilized
      in
      connection with, the Leases to be measured, gauged or strapped as of the
      Effective Time.  Seller will cause the production meter charts (or if
      such do not exist, the sales meter charts) on the pipelines transporting Oil
      and
      Gas from the Leases to be read as of such time.  The Oil and Gas in
      such storage facilities above the load line or through the meters on the
      pipelines as of the Effective Time shall belong to Seller and shall be valued
      based on the price actually paid for Oil and Gas produced from the Assets for
      the month prior to the Effective Time, and the Oil and Gas placed in such
      storage facilities after the Effective Time and production upstream of the
      aforesaid meters shall belong to Buyer and become part of the
      Assets.  Buyer or Buyer’s representative shall have the option to
      witness the gauging by Seller.  In the event Buyer or Buyer’s
      representative exercises the option to witness the gauging by Seller, Buyer
      agrees that the waiver and release provisions set forth in Section 5.1(A) of
      this Agreement shall apply thereto.

     

    4.3           Taxes.

     

     

    

    
      	
              (A)

            	
              Property
                Taxes.  All ad valorem taxes, real property taxes, personal
                property taxes and similar obligations assessed on the Assets (“Property
                Taxes”) shall be apportioned as of the Effective Time between Buyer and
                Seller.  Buyer shall file or cause to be filed all required
                reports and returns incident to Property Taxes which are due on or
                after
                the Closing, and shall pay or cause to be paid to the taxing authorities
                all such taxes reflected on such reports and returns.  The
                Post-Closing Adjustment Statement shall settle all liability for
                Property
                Taxes, using estimates based on previous assessments to the extent
                current
                assessments are not known.  For clarification purposes, the 2007
                ad valorem tax bill that is based on 2006 production will be for
                the
                account of Seller.  The 2008 ad valorem tax bill that is based
                on 2007 production will be for the account of Buyer, prorated to
                the
                Effective Date between the parties.

            

    

     

    
      	
              (B)

            	
              Sales
                Taxes, Filing Fees, Etc. The Base Purchase Price is net of any sales
                taxes or other transfer taxes.  Buyer shall be liable for any
                sales tax or other transfer tax as well as any applicable conveyance,
                transfer and recording fees, and real estate transfer stamp or taxes
                imposed upon the sale pursuant to this Agreement.  If Seller is
                required by applicable state law to report and pay these taxes or
                fees,
                Buyer shall promptly reimburse Seller in full payment of the
                invoice.

            

    

     

    
      	
              (C)

            	
              Severance
                Taxes.  All production, severance or excise taxes,
                conservation fees and other similar such taxes or fees (other than
                income
                taxes) payable on a current basis with respect to Oil and Gas produced
                and
                sold from the Assets (“Severance Taxes”) shall be borne by Seller to the
                extent the production on which such taxes are based occurs during
                Seller’s
                ownership prior to the Effective Time and shall be borne by Buyer
                to the
                extent such production occurs after the Effective
                Time.

            

    

     

    
      
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    4.4           Post-Closing
      Adjustments

     

    
      	
              (A)

            	
              A
                post-closing adjustment statement (the “Post-Closing Adjustment
                Statement”) based on the actual income and expenses shall be prepared and
                delivered by Seller to Buyer within ninety (90) days after the Closing,
                proposing further adjustments to the calculation of the Purchase
                Price
                based on the information then available.  Seller or Buyer, as
                the case may be, shall be given access to and shall be entitled to
                review
                and audit the other Party’s records pertaining to the computation of
                amounts claimed in such Post-Closing Adjustment
                Statement.

            

    

     

    
      	
              (B)

            	
              Within
                thirty (30) days after receipt of the Post-Closing Adjustment Statement,
                Buyer shall deliver to Seller a written statement describing in reasonable
                detail its objections (if any) to any amounts or items set forth
                on the
                Post-Closing Adjustment Statement.  If Buyer does not raise
                objections within such period, then the Post-Closing Adjustment Statement
                shall become final and binding upon the Parties at the end of such
                period.

            

    

     

    
      	
              (C)

            	
              If
                Buyer raises objections, the Parties shall negotiate in good faith
                to
                resolve any such objections.  If the Parties are unable to
                resolve any disputed item within thirty (30) days after Buyer’s receipt of
                the Post-Closing Adjustment Statement, any disputed accounting item
                shall
                be submitted to a nationally recognized independent accounting firm
                mutually agreeable to the Parties who shall be instructed to resolve
                such
                disputed item within thirty (30) days.  The resolution of
                disputes by the accounting firm so selected shall be set forth in
                writing
                and shall be conclusive, binding and non-appealable upon the Parties
                with
                respect to the accounting matters submitted and the Post-Closing
                Adjustment Statement shall become final and binding upon the Parties
                on
                the date of such resolution.  The fees and expenses of such
                accounting firm shall be paid one-half by Buyer and one-half by
                Seller.

            

    

     

    
      	
              (D)

            	
              After
                the Post-Closing Adjustment Statement has become final and binding
                on the
                Parties, Seller or Buyer, as the case may be, shall pay to the other
                such
                sums as are due to settle accounts between the Parties due to differences
                between the estimated Purchase Price paid pursuant to the Closing
                Adjustment Statement and the actual Purchase Price set forth on the
                Post-Closing Adjustment Statement.

            

    

     

    4.5           Suspended
      Funds.

     

      At
      the Closing, Seller shall provide to Buyer a listing showing all proceeds from
      production attributable to the Leases which are currently held in suspense
      and
      shall transfer to Buyer all of those suspended proceeds.  Buyer shall
      be responsible for proper distribution of all the suspended proceeds, to the
      extent turned over to it by Seller, to the parties lawfully entitled to them
      and
      any claims related thereto, and Buyer hereby agrees to indemnify, defend and
      hold harmless Seller from and against any and all claims, liabilities, losses,
      costs and expenses arising out of or relating to those suspended proceeds and
      any claims related thereto after the Effective Time.  Seller shall
      remain responsible and liable for any claims, liabilities, losses, costs and
      expenses arising out of or relating to those suspended proceeds and any claims
      related thereto through the Effective Time.

     

    4.6           Audit
      Adjustments.

     

      Seller
      retains all rights to adjustments resulting from any operating agreement and
      other audit claims asserted against third party operators on transactions
      occurring

     

    
      
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     prior
      to the Effective Time (which includes Buyer, if applicable).  Any
      credit received by Buyer pertaining to such an audit claim shall be paid to
      Seller within thirty (30) days after receipt.

     

    4.7           Cooperation.

     

      Each
      Party covenants and agrees to promptly inform the other with respect to amounts
      owing under Sections 4.4 and 4.6 hereof.

     

    5.           DUE
      DILIGENCE: TITLE MATTERS.

     

    5.1           General
      Access.

     

     

    

    
      	
              (A)

            	
              During
                reasonable business hours, Seller agrees to grant Buyer physical
                access to
                the Leases and Wells to allow Buyer to conduct, at Buyer’s sole risk and
                expense, on-site inspections and environmental assessments of the
                Leases
                and Wells. Buyer agrees not to enter onto the Leases or contact field
                employees without Seller’s prior knowledge. In connection with any such
                on-site inspections, Buyer agrees not to interfere with the normal
                operation of the Leases and Wells and agrees to comply with all
                requirements of the operators of the Wells.  If Buyer or its
                agents prepares an environmental assessment of any Lease or Well,
                Buyer
                agrees to keep such assessment confidential and to furnish copies
                thereof
                to Seller.  In connection with granting such access, Buyer
                represents that it is adequately insured and waives, releases and
                agrees
                to indemnify the Seller against all claims for injury to, or death
                of,
                persons or for damage to operations or 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.

            

    

    

    
      	
              (B)

            	
              Upon
                the execution of this Agreement, Seller shall give Buyer and its
                representatives, employees, consultants, independent contractors,
                attorneys and other advisors reasonable access to the Records during
                regular office hours for any and all inspections and
                copying.

            

    

    

    5.2           Defensible
      Title.

     

      As
      used herein the term Defensible Title shall mean:

     

    
      	
              (A)

            	
              As
                to the Assets, that record title or operating rights of Seller
                which:

            

    

     

    
      	
                 
                (i)

            	
              entitles
                Seller to receive not less than the interests shown in Exhibit 2.4
                as the
                “Net Revenue Interest” of all Oil and Gas produced, saved and marketed
                from or allocated to the formations in the associated Wells which
                are
                producing as of the date of this Agreement or which have otherwise
                been
                given Allocated Value, all without reduction, suspension or termination
                except as stated in such Exhibit or otherwise permitted as Permitted
                Encumbrances; and

            

    

     

    
      	
                
                (ii)

            	
              obligates
                Seller to bear a percentage of the costs and expenses relating to
                the
                maintenance and development of, and operations relating to, the producing
                formations in each associated Well not greater than the “Working Interest”
                shown in Exhibit 2.4 (without a proportionate increase in the Net
                Revenue
                Interest), all without increase except as stated in such Exhibit
                or
                otherwise permitted as Permitted Encumbrances;
                and

            

    

     

    
      
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              (B)

            	
              That
                title of Seller to the Assets is free and clear of liens, encumbrances
                and
                defects that materially and adversely affect the ownership, operation
                or
                use of the Assets, except for Permitted
                Encumbrances.

            

    

     

    
      	
              (C)

            	
              As
                used herein, the term “Permitted Encumbrances” shall mean any one or more
                of the following:

            

    

     

    
      	
                
                (1)

            	
              The
                provisions of the Leases and any lessors’ royalties, overriding royalties,
                net profits interests, carried interests, production payments,
                reversionary interests and similar burdens reflected in the public
                records
                or in the Records, if the net cumulative effect of the burdens does
                not
                operate to reduce the Net Revenue Interest of Seller below the interests
                described in Section 2.4;

            

    

     

    
      	
                
                (2)

            	
              Any
                increase in lessor’s royalty occasioned by the repeal or suspension of any
                governmental regulation providing for the reduction of royalty for
                wells
                producing below defined threshold
                amounts;

            

    

     

    
      	
                
                (3)

            	
              Division
                orders and production sales contracts terminable without penalty
                upon no
                more than ninety (90) days notice to the
                purchaser;

            

    

     

    
      	
                
                (4)

            	
              Preferential
                Rights and required third party consents to assignment and similar
                agreements with respect to which waivers or consents are obtained
                from the
                appropriate parties, or the appropriate time period for asserting
                any such
                right has expired without an exercise of the
                right;

            

    

     

    
      	
                
                (5)

            	
              Materialman’s,
                mechanic’s, repairman’s, employee’s, contractor’s, operator’s and other
                similar liens or charges arising in the ordinary course of business
                for
                obligations that are not delinquent or that will be paid and discharged
                in
                the ordinary course of business, or if delinquent, that are being
                contested in good faith by appropriate action of which Buyer is notified
                in writing before Closing;

            

    

     

    
      	
                
                (6)

            	
              All
                rights to consent by, required notices to, filings with, or other
                actions
                by governmental entities in connection with the sale or conveyance
                of oil
                and gas leases or interests therein if they are routinely obtained
                subsequent to the sale or
                conveyance;

            

    

     

    
      	
                
                (7)

            	
              Easements,
                rights-of-way, servitudes, permits, surface leases and other rights
                in
                respect of surface operations that do not materially interfere with
                the
                oil and gas operations to be conducted on any Well or
                Lease;

            

    

     

    
      	
                
                (8)

            	
              All
                operating agreements, unit agreements, unit operating agreements,
                pooling
                agreements and pooling designations affecting the Assets that are
                either
                (i) of record in Seller’s chain of title or (ii) reflected or
                referenced in the Records or (iii) included as Material Agreements on
                Exhibit 7.1(K);

            

    

     

    
      	
                
                (9)

            	
              Conventional
                rights of reassignment prior to release or surrender requiring notice
                to
                the holders of the rights;

            

    

     

    
      
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               (10)

            	
              All
                rights reserved to or vested in any governmental, statutory or public
                authority to control or regulate any of the Assets in any manner,
                and all
                applicable laws, rules and orders of governmental
                authority;

            

    

     

    
      	
               (11)

            	
              All
                agreements affecting the Assets that are of record in Seller’s chain of
                title, or are reflected or referenced in the
                Records;

            

    

     

    
      	
               (12)

            	
              Defects
                that are defensible by possession under applicable statutes of limitation
                for adverse possession or for prescription; and

            

    

     

    
      	
               (13)

            	
              All
                other liens, charges, encumbrances, contracts, agreements, instruments,
                obligations, defects and irregularities affecting the Assets that
                individually or in the aggregate are not such as to materially interfere
                with the operation, value or use of any of the Assets or have not
                prevented, and cannot reasonably be expected to prevent, Buyer from
                receiving the proceeds of production from the affected
                Assets.

            

    

     

    5.3           Defect
      Letters.

     

    
      	
              (A)

            	
              Buyer
                may from time to time and no later than five (5) business days prior
                to
                Closing notify Seller in writing (a “Notice”) of any matter which would
                cause title to all or part of the Assets not to be Defensible Title
                (“Title Defect”), provided that no Title Defect shall be deemed to exist
                unless the Title Defect Value thereof exceeds Seventy-Five Thousand
                Dollars ($75,000.00). Further, there shall be no adjustment to the
                Base
                Purchase Price unless the aggregate Title Defect Values of all Title
                Defects satisfying the condition in clause (i) exceed one percent
                (1%) of the Base Purchase Price (the “Title Defect Threshold”) (such
                amount being a threshold , not a deductible).  In order to
                provide Seller a reasonable opportunity to cure any Title Defects
                prior to
                Closing, Buyer shall use reasonable efforts to provide the Notice
                as soon
                as reasonably possible after becoming aware of or making its determination
                of the Title Defect.

            

    

     

    
      	
              (B)

            	
              In
                the Notice, Buyer must describe with reasonable detail each alleged
                Title
                Defect it has discovered and the steps required to cure each Title
                Defect,
                include Buyer’s reasonable estimate of the Title Defect Value attributable
                to each, and include all data and information in Buyer’s possession or
                control bearing thereon.  Buyer shall be deemed to have
                conclusively waived all Title Defects not disclosed to Seller in
                a Notice
                before five (5) business days prior to Closing.  Buyer waives
                any remedy against Seller for Title Defects that do not exceed the
                Title
                Defect Threshold or for which timely notice is not given as provided
                hereunder or for which adjustment is made as hereafter
                provided.

            

    

     

    
      	
              (C)

            	
              Upon
                timely delivery of a Notice by
                Buyer:

            

    

     

    
      	
                 
                (i)

            	
              within
                three (3) business days after Seller’s receipt of the Title Defects
                Notice, Seller shall notify Buyer whether Seller agrees with Buyer’s
                claimed Title Defects and/or the proposed Title Defect Values therefore
                (“Seller’s Response”).  If Seller does not agree with any
                claimed Title Defect and/or the proposed Title Defect Value therefor,
                then
                the Parties shall enter into good faith negotiations and shall attempt
                to
                agree on such matters;

            

    

     

    
      
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                (ii)

            	
              within
                one (1) business day after Seller’s notice of its cure of a Title Defect,
                Buyer shall notify Seller whether Buyer agrees with Seller’s proposed cure
                of a Title Defect (“Buyer’s Response”).  If Buyer does not agree
                with any such cure, then the Parties shall enter into good faith
                negotiations and shall attempt to agree on such
                matters;

            

    

     

    
      	
               
                (iii)

            	
              if
                the Parties cannot reach agreement concerning either the existence
                of a
                Title Defect, Seller’s proposed cure of a Title Defect, or a Title Defect
                Value within ten (10) days after Buyer’s receipt of Seller’s Response or
                Seller’s receipt of Buyer’s Response, as applicable, upon either Party’s
                request, the Parties shall mutually agree on and employ an attorney
                experienced in title examination in the state where the Assets are
                located
                (“Title Consultant”) to resolve all points of disagreement relating to
                Title Defects and Title Defect Values; provided that Seller or Buyer
                may
                elect not to proceed to Closing with regard to such Assets and adjust
                the
                Base Purchase Price in the amount of the Allocated Value and not
                submit
                such matter to arbitration;

            

    

     

    
      	
               
                (iv)

            	
              if
                at any time any Title Consultant so chosen fails or refuses to perform
                hereunder, a new Title Consultant shall be chosen by the
                Parties.  The cost of any such Title Consultant shall be borne
                fifty percent (50%) by Seller and fifty percent (50%) by
                Buyer.  Each Party shall present a written statement of its
                position on the Title Defect and/or Title Defect Value in question
                to the
                Title Consultant within five (5) days after the Title Consultant
                is
                selected, and the Title Consultant shall make a determination of
                all
                points of disagreement in accordance with the terms and conditions
                of this
                Agreement within ten (10) business days of receipt of such position
                statements.  The determination by the Title Consultant shall be
                conclusive and binding on the Parties, and shall be enforceable against
                any Party in any court of competent jurisdiction.  If necessary,
                the Closing Date shall be deferred only as to those Assets affected
                by any
                unresolved disputes regarding the existence of a Title Defect and/or
                the
                Title Defect Value until the Title Consultant has made a determination
                of
                the disputed issues with respect thereto and all subsequent dates
                and
                required activities with respect to any such Assets having reference
                to
                the Closing Date shall be correspondingly deferred; provided, however,
                that, unless Seller and Buyer mutually agree to the contrary, the
                Closing
                Date shall not be deferred in any event for more than thirty (30)
                days
                beyond the scheduled Closing Date in Section 3.1.  Once the
                Title Consultant’s determination has been expressed to both Parties, if
                applicable, Seller shall have five (5) days in which to advise Buyer
                in
                writing which of the options available to Seller under Section 5.4
                that
                Seller elects regarding each of the Assets as to which the Title
                Consultant has made a determination.  In evaluating whether a
                Title Defect exists, due consideration shall be given to the length
                of
                time that the particular Asset has been producing Oil and Gas and
                whether
                such fact, circumstance or condition is of the type expected to be
                encountered in the area involved and is usual and customarily acceptable
                to reasonable and prudent operators, working interest owners and/or
                purchasers engaged in the business of the exploration, development,
                and
                operation of oil and gas
                properties.

            

    

     

    5.4           Effect
      of Title Defect

     

    
      	
              (A)

            	
              In
                the event Buyer provides Seller with a timely Notice and the Title
                Defects
                are valid and exceed the Title Defect Threshold, for those Title
                Defects
                not cured by Closing, Seller may, at its sole
                discretion:

            

    

     

    
      
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                (i)

            	
              adjust
                the Base Purchase Price in the amount of the Title Defect Value of
                the
                Asset to which such Title Defect relates and proceed to Closing on
                all
                Assets; provided that Seller shall not be obligated to transfer any
                Assets
                for which the Title Defect Value equals or exceeds such Asset’s Allocated
                Value; or

            

    

     

    
      	
                
                (ii)

            	
              proceed
                with (a) Closing on those Assets not affected by the valid Title
                Defects
                and such Assets to which a Title Defect relates but for which Seller
                has
                elected to proceed to Closing with an adjustment of the Base Purchase
                Price in the amount of the Title Defect Value of such Assets and
                (b) defer Closing on those other Assets to which a Title Defect
                relates and for which Seller has elected to attempt to cure such
                Title
                Defect and to not proceed to Closing, for which Buyer shall place
                into
                escrow an amount equal to the Allocated Values of the Assets affected
                by
                the valid Title Defects, which withheld amount shall be paid to Seller
                when the Asset affected by any valid Title Defect is cured or the
                Title
                Defect is waived by Buyer and the affected Asset is conveyed from
                Seller
                to Buyer.  If neither of the above occurs and if Seller later
                determines it will not cure a Title Defect on or before six (6) months
                from the Closing Date, the amount in the escrow account attributable
                to
                such Title Defect will be returned to Buyer and Seller shall retain
                such
                Asset affected by such Title
                Defect.

            

    

     

    
      	
              (B)

            	
              The
                diminution in value of an Asset attributable to a valid Title Defect
                (the
                “Title Defect Value”) notified in a Notice shall be determined by the
                following:

            

    

     

    
      	
                 
                (i)

            	
              if
                the valid Title Defect asserted is that the actual Net Revenue Interest
                attributable to the producing or valued formation in any Asset is
                less
                than that stated in the applicable Exhibit, then the Title Defect
                Value is
                the product of the Allocated Value attributed to the affected formation(s)
                in such Asset, multiplied by a fraction, the numerator of which is
                the
                difference between the Net Revenue Interest set forth in the applicable
                Exhibit and the actual Net Revenue Interest, and the denominator
                of which
                is the Net Revenue Interest stated in the applicable Exhibit;
                or

            

    

     

    
      	
                
                (ii)

            	
              if
                the valid Title Defect represents an obligation, encumbrance, burden
                or
                charge upon the affected Asset (including any increase in Working
                Interest
                for which there is not a proportionate increase in Net Revenue Interest),
                the amount of the Title Defect Value is to be determined by taking
                into
                account the Allocated Value of such Asset, the portion of the Asset
                affected by the Title Defect, the legal effect of the Title Defect,
                the
                potential economic effect of the Title Defect over the life of the
                affected Asset, and the Title Defect Values placed upon the Title
                Defect
                by Buyer and Seller.

            

    

     

    
      	
               
                (iii)

            	
              Notwithstanding
                the above, in no event shall the total of the Title Defect Values
                related
                to a particular Asset exceed the Allocated Value of such
                Asset.

            

    

     

    
      	
              (C)

            	
              If
                the aggregate value of (i) the Base Purchase Price adjustment for
                Title Defect Values plus (ii) the Allocated Value of Assets which are
                retained in lieu of cure or adjustment equals or exceeds ten percent
                (10%)
                of the Base Purchase Price, then by notice delivered prior to the
                Closing
                either Party may terminate this Agreement and neither Party shall
                have any
                further obligation to conclude the transfer of the Assets under this
                Agreement.

            

    

     

    
      
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    5.5           Possible
      Upward Adjustment.

     

      Promptly
      on discovery, but no later than five business days prior to Closing, Buyer
      shall
      in good faith notify Seller of any interest that would be an Asset hereunder,
      but that is not listed, including any interest that entitles Seller to receive
      more than the Net Revenue Interest shown on Exhibit 2.4 or obligates Seller
      to
      bear costs and expenses in an amount less than the Working Interest shown on
      Exhibit 2.4 without a proportionate change in Working Interest, and that
      increases the Allocated Value of the affected Asset by more than $25,000, with
      such interest being an “Interest Addition.”  Buyer acknowledges and
      agrees to comply with the affirmative obligation set forth in the preceding
      sentence.  Seller shall give Buyer written notice of Interest
      Additions of which it becomes aware as soon as possible, but in no event later
      than on or before five days prior to the Closing.  Such notices shall
      be in writing and shall include (i) a description of the Interest Addition,
      (ii) the basis for the Interest Addition, (iii) the Allocated Value of
      the Asset affected by the Interest Addition,  (iv) the value of
      the Interest Addition or the amount by which Seller (or Buyer) believes the
      Allocated Value of the Asset has been increased by the Interest Addition (“Value
      of Interest Addition”) and the associated computations and supporting
      documentation.  The Value of the Interest Addition shall be determined
      by the Parties in good faith taking into account all relevant
      factors.  The Purchase Price shall be increased for Interest Additions
      only to the extent that the aggregate of the Value of all Interest Additions
      net
      of the sum of all Title Defect Values for all of the Assets exceeds the Title
      Defect Threshold and then only for the amount exceeding the Title Defect
      Threshold.

     

    5.6           Preferential
      Rights and Consents.

     

    Seller
      shall use its best efforts to obtain all required consents and to give notices
      required in connection with preferential purchase rights, so that the third
      party election date to exercise the preferential right will occur at least
      seven
      (7) business days prior to Closing.  If Buyer discovers other affected
      Assets during the course of Buyer’s due diligence activities, Buyer shall notify
      Seller immediately and Seller shall use its best efforts to obtain such consents
      and to give the notices required in connection with the preferential rights
      prior to Closing.

    

    
      	
              (A)

            	
              Consents.

            

    

     

    Except
      for consents and approvals which are customarily obtained post-Closing and
      those
      consents which would not invalidate the conveyance of the Assets, if a necessary
      consent to assign any Lease has not been obtained as of the Closing that would
      invalidate the conveyance of the Asset, then (i) the portion of the Assets
      for which such consent has not been obtained shall not be conveyed at the
      Closing, (ii) the Allocated Value for that Asset shall not be paid to
      Seller, and (iii) Seller shall use best efforts to obtain such consent as
      promptly as possible following Closing.  If such consent has been
      obtained as of the date on which the Post-Closing Adjustment Statement becomes
      final, 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, less any proceeds from the affected Asset received by Seller attributable
      to the period of time after the Effective Time (calculated in accordance with
      Section 2.3).  If such consent has not been obtained or has not been
      waived by Buyer as of the date on which the Post-Closing Adjustment Statement
      becomes final, Seller shall elect either to (i) challenge in court the
      enforceability of such consent right, in which event Seller shall retain the
      affected Asset until such legal challenge is finally resolved by settlement
      or
      unappealable court order, after which either Seller shall convey the affected
      Asset to Buyer under the terms of this Agreement and Buyer shall pay the
      Allocated Value of the Purchase Price for such Asset, less any proceeds received
      by Seller attributable to such Asset for the period from and after the Effective
      Time 

    
       

      
        
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      (calculated
        in accordance with Section 2.3) or (ii) retain the affected Asset and the
        Purchase Price shall be reduced by an amount equal to the Allocated Value
        of the
        retained Asset (with such adjustment being an “Exclusion
        Adjustment”).  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 a condition of obtaining such
        consent.

    

    

    
      	
              (B)

            	
              Preferential
                Purchase Rights.

            

    

     

    
      	
                 
                (i)

            	
              If
                any preferential right to purchase any portion of the Assets is exercised
                prior to the Closing Date, or if the time frame for the exercise
                of such
                preferential purchase rights has not expired and Seller has not received
                notice of an intent not to exercise or waiver of the preferential
                purchase
                right, 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
                (with
                such adjustment being an “Exclusion Adjustment”). Notwithstanding any
                other provision in this Agreement, if a preferential purchase right
                subject to this Agreement is exercised, Buyer has the right, at its
                sole
                discretion, to terminate this Agreement, provided that the allocated
                value
                of all preferential rights exercised is equal to or exceeds ten percent
                (10%) of the Base Purchase Price.

            

    

     

    
      	
                
                (ii)

            	
              If
                a third party exercises its preferential right to purchase, but fails
                to
                consummate the purchase prior to the Closing, 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 (with
                such
                adjustment being an “Exclusion
                Adjustment”).

            

    

     

    
      	
               
                (iii)

            	
              If
                a third party exercises its preferential right to purchase, but does
                not
                consummate the purchase within the time frame specified in the
                preferential purchase right, Seller agrees to convey the affected
                Asset to
                Buyer effective as of the Effective Time, and Buyer agrees to pay
                Seller
                the Allocated Value of the Affected
                Asset.

            

    

     

    
      	
               
                (iv)

            	
              If
                a preferential purchase right is not discovered prior to Closing,
                and the
                affected Asset is conveyed to Buyer at Closing, and the preferential
                purchase right is exercised and subsequently consummated after Closing,
                Buyer agrees to convey such affected Assets to the party exercising
                such
                right on the same terms and conditions under which Seller conveyed
                such
                Assets to Buyer and retain all amounts paid by the party exercising
                such
                preferential right to purchase.  In the event of such exercise,
                Buyer shall prepare, execute and deliver a form of conveyance of
                such
                Asset to such exercising party, such conveyance to be in form and
                substance as provided in this Agreement, and Seller agrees to hold
                harmless and indemnify Buyer from any and all liabilities and obligations
                associated with such conveyed Asset, and to reimburse Buyer for reasonable
                expenses incurred by Buyer relating to the conveyed
                Asset.

            

    

     

    
      	
              (C)

            	
              Exclusive
                Remedy.

            

    

     

      The
      remedies set forth in this Section 5.6 are the exclusive remedies under this
      Agreement for exercised preferential purchase rights and required consents
      to
      assign the Assets.

    

    
      
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    6.           ENVIRONMENTAL
      ASSESSMENT.

     

    6.1           Physical
      Condition of the Assets.

     

     

     

    
      	
              (A)

            	
              Buyer
                acknowledges that the Assets have been used for oil and gas drilling
                and
                production operations and possibly for the storage and disposal of
                waste
                materials or hazardous substances related to standard oil field
                operations.  Physical changes in or under the Assets or adjacent
                lands may have occurred as a result of such uses.  The Assets
                also may contain previously plugged and abandoned wells, buried pipelines,
                storage tanks and other equipment, whether or not of a similar nature,
                the
                locations of which may not now be known by Seller or be readily apparent
                by a physical inspection of the Assets.  Buyer understands that
                Seller does not have the requisite information with which to determine
                the
                exact nature or condition of the Assets nor the effect any such use
                has
                had on the physical condition of the Assets.  Pursuant to the
                Safe Water Drinking and Toxic Enforcement Act of 1986, Buyer is hereby
                notified and assumes the risk that detectable amounts of chemicals
                known
                to cause cancer, birth defects and other reproductive harm may be
                found
                in, on or around the Assets.  Upon consummation of the Closing
                Buyer shall be deemed to have assumed the risk of expense, claim,
                damage
                or liability arising from any such matter referred to in this section,
                including without limitation the risk that the Assets may contain
                waste or
                contaminants and that adverse physical conditions, including the
                presence
                of waste or contaminants, may not have been revealed by Buyer’s
                investigation.  Consummation of the Closing shall transfer all
                responsibility and liability related to disposal, spills, waste or
                contamination from, on or below the Assets from Seller to
                Buyer.

            

    

     

    
      	
              (B)

            	
              In
                addition, Buyer acknowledges that some oil field production equipment
                located on the Assets may contain asbestos and/or naturally-occurring
                radioactive material (“NORM”).  In this regard, Buyer expressly
                understands that NORM may affix or attach itself to inside of wells,
                materials and equipment as scale or in other forms, and that wells,
                materials and equipment located on the Assets described herein may
                contain
                NORM and that NORM-containing materials may be buried or have been
                otherwise disposed of on the Assets.  Buyer also expressly
                understands that special procedures may be required for the removal
                and
                disposal of asbestos and NORM from the Assets where it may be found,
                and
                that upon consummation of the Closing Buyer shall be deemed to have
                assumed all liability when such activities are
                performed.

            

    

     

    6.2           Inspection
      and Testing.

    
       

      
        	
                (A)

              	
                Prior
                  to Closing, Buyer shall have the right, at its sole cost and risk,
                  to
                  review Seller’s Phase I environmental assessments of the Assets and to
                  conduct any further environmental assessment of the Assets it deems
                  appropriate, to the extent that Seller has the authority to grant
                  such
                  right to Buyer; provided that Seller shall have the right to review
                  and
                  approve any plan to conduct such an environmental assessment, with
                  such
                  approval not to be unreasonably withheld, delayed or conditioned
                  by
                  Seller.  Buyer shall immediately provide to Seller any data
                  obtained from such assessments, including any reports and
                  conclusions.  Seller and Buyer shall keep all information
                  relating to such

              

      

    

     

    
      
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        assessments
        strictly confidential
        whether or not Closing occurs, except as may be required pursuant to any
        Environmental Laws.

    

     

    
      	
              (B)

            	
              Buyer
                waives and releases all claims against Seller, its affiliates, and
                each of
                their respective directors, officers, employees, agents, and other
                representatives and their successors and assigns (collectively, the
                “Seller’s Group”), for injury to or death of persons, or damage to
                property, arising in any way from the exercise of rights granted
                to Buyer
                hereby or the activities of Buyer or its employees, agents or contractors
                on the Assets.  BUYER SHALL INDEMNIFY THE SELLER’S GROUP AGAINST
                AND HOLD THE MEMBERS OF THE SELLER’S GROUP HARMLESS FROM ANY AND ALL LOSS,
                COST, DAMAGE, EXPENSE OR LIABILITY, INCLUDING REASONABLE ATTORNEY’S FEES,
                WHATSOEVER ARISING OUT OF (I) ANY AND ALL STATUTORY OR COMMON LAW
                LIENS OR
                OTHER ENCUMBRANCES FOR LABOR OR MATERIALS FURNISHED IN CONNECTION
                WITH
                SUCH TESTS, SAMPLINGS, STUDIES OR SURVEYS AS BUYER MAY CONDUCT WITH
                RESPECT TO THE ASSETS; AND (II) ANY INJURY TO OR DEATH OF PERSONS OR
                DAMAGE TO PROPERTY OCCURRING IN, ON OR ABOUT THE ASSETS AS A RESULT
                OF
                SUCH EXERCISE OR ACTIVITIES.

            

    

     

    
      	
              (C)

            	
              “Environmental
                Laws” means all applicable local, state, and federal laws, rules,
                regulations, and orders regulating or otherwise pertaining to:
                (i) the use, generation, migration, storage, removal, treatment,
                remedy, discharge, release, transportation, disposal, or cleanup
                of
                pollutants, contamination, hazardous wastes, hazardous substances,
                hazardous materials, toxic substances or toxic pollutants;
                (ii) surface waters, ground waters, ambient air and any other
                environmental medium on or off any Lease; or (iii) the environment,
                habitat protection or health and safety-related matters; including
                the
                following as from time to time amended and all others whether similar
                or
                dissimilar: the Comprehensive Environmental Response, Compensation,
                and
                Liability Act of 1980, as amended by the Superfund Amendments and
                Reauthorization Act of 1986, the Resource Conservation and Recovery
                Act of
                1976, as amended by the Used Oil Recycling Act of 1980, the Solid
                Waste
                Disposal Act Amendments of 1980, and the Hazardous and Solid Waste
                Amendments of 1984, the Hazardous Materials Transportation Act, the
                Toxic
                Substance Control Act, the Clean Air Act, the Clean Water Act, the
                Safe
                Drinking Water Act, the National Environmental Policy Act, the Endangered
                Species Act, the Oil Pollution Act of 1990, and all regulations
                promulgated pursuant thereto.

            

    

     

    6.3           Notice
      of Adverse Environmental Conditions.

     

      No
      later than five (5) business days prior to Closing, Buyer shall notify Seller
      in
      writing of any Adverse Environmental Condition with respect to the
      Assets.  Such notice shall describe in reasonable detail the Adverse
      Environmental Condition and include the estimated Environmental Defect Value
      attributable thereto (the “Environmental Defect Notice”) based on a verifiable
      estimate of the cost to remediate the Adverse Environmental
      Condition.  No Adverse Environmental Condition shall be deemed to
      exist unless the Environmental Defect Value exceeds Twenty Five Thousand Dollars
      ($25,000.00) in each individual case.  Further, there shall be no
      adjustment to the Base Purchase Price unless the aggregate Environmental Defect
      Values of all Adverse Environmental Conditions satisfying the condition in
      clause (i) exceeds one percent (1%) of the Base Purchase Price (the
“Environmental Defect Threshold”) (such amount being a threshold, not a
      deductible).  

     

    
      
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    The
      “Environmental Defect Value” attributable to any Adverse Environmental Condition
      shall be the estimated amount (net to Seller’s interest) of all reasonable costs
      and claims necessary to Remediate the Adverse Environmental Conditions, as
      reasonably determined and estimated by Buyer.  The term “Adverse
      Environmental Condition” means (i) the failure of the Assets to be in
      material compliance with all applicable Environmental Laws; (ii) the Assets
      being subject to any agreements, consent orders, decrees or judgments currently
      in existence based on any Environmental Laws that negatively and materially
      impact the future use of any portion of the Assets or that require any material
      change in the present conditions of any of the Assets; or (iii) the Assets
      being subject to any material uncured notices of violations of or non-compliance
      with any applicable Environmental Laws or any claim of material violation of
      any
      Environmental Laws to the extent not disclosed to Buyer prior to execution
      of
      this Agreement.  Buyer shall be deemed to have conclusively waived
      (i) all Adverse Environmental Conditions not contained in an Environmental
      Defect Notice delivered to Seller at least five (5) business days prior to
      Closing and (ii) any remedy against Seller for Adverse Environmental
      Conditions that do not exceed the Environmental Defect Threshold.

     

    6.4           Rights
      and Remedies for Adverse Environmental Conditions.

     

    
      	
              (A)

            	
              With
                respect to any Adverse Environmental Conditions affecting one or
                more of
                the Assets which exceed the Environmental Defect Threshold, Seller
                may on
                an Asset-by-Asset basis (i) Remediate the Adverse Environmental
                Conditions, but Seller shall have no obligation to do so, and proceed
                to
                Closing with no adjustment of the Base Purchase Price; (ii) proceed
                to Closing and adjust the Base Purchase Price in an amount equal
                to the
                applicable Environmental Defect Value; provided that such adjustment
                shall
                not exceed the Allocated Value for such Asset; or (iii) retain the
                affected Asset and reduce the Base Purchase Price by the Allocated
                Value
                of the affected Asset (“Exclusion
                Adjustment”).

            

    

     

    
      	
              (B)

            	
              Buyer
                waives any Adverse Environmental Condition for which Buyer has received
                an
                adjustment to the Base Purchase Price in accordance with Section
                6.4(A).

            

    

     

    
      	
              (C)

            	
              If
                Buyer delivers a valid Environmental Defect Notice to Seller and
                if the
                aggregate of the Environmental Defects claimed is less than or equals
                the
                Environmental Defect Threshold, Buyer will be deemed to have accepted
                the
                Assets “where-is, as-is” with respect to all Adverse Environmental
                Conditions in, on or under the Assets and the Adverse Environmental
                Condition(s) in, on and under the Assets will be deemed to be part
                of the
                Assumed  Liabilities.  The Environmental Defect
                Threshold is a threshold and not a deductible.  The
                Environmental Defect Threshold and the Title Defect Threshold are
                separate
                and distinct and operate
                independently.

            

    

     

    
      	
              (D)

            	
              If
                the aggregate value of (i) the Base Purchase Price adjustment for
                Adverse Environmental Conditions plus (ii) any Exclusion Adjustments
                in lieu of Remediating any Adverse Environmental Conditions equals
                or
                exceeds ten percent (10%) of the Base Purchase Price, either Party
                may
                terminate this Agreement and neither Party shall have any further
                obligation to conclude the transfer of the Assets under this
                Agreement.

            

    

     

    
      
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              (E)

            	
              The
                term “Remediate” or “Remediation” means, with respect to any valid Adverse
                Environmental Condition, the undertaking and completion of those
                actions
                and activities necessary to eliminate or correct such Adverse
                Environmental Condition to the degree sufficient that such Adverse
                Environmental Condition no longer constitutes an Adverse Environmental
                Condition as defined above.  Seller shall promptly notify Buyer
                at such time as it believes that it has Remediated an Adverse
                Environmental Condition.  Buyer shall promptly notify Seller
                whether it agrees such condition is Remediated.  If Buyer fails
                to notify Seller of its determination with respect to such Remediation
                within ten (10) business days following Seller’s notice, such Adverse
                Environmental Condition shall be deemed
                Remediated.

            

    

     

    
      	
              (F)

            	
              If
                Seller and Buyer are unable to agree on the amount of the Environmental
                Defect Value within ten (10) business days after Seller’s receipt of the
                Environmental Defect Notice or that an Adverse Environmental Condition
                exists, has been Remediated or is required to be Remediated, then
                the
                dispute will be submitted to TRC Consultants or another mutually
                acceptable company with recognized expertise in the oil and gas
                environmental remediation and regulation field (the “Environmental
                Consultant”) whose determination shall be final and binding upon the
                Parties.  Seller and Buyer shall each bear their respective
                costs and expenses incurred in connection with any such dispute,
                and
                one-half (1/2) of the fees, costs and expenses charged by the
                Environmental Consultant.  Each Party shall present a written
                statement of its position on the Adverse Environmental Condition
                and/or
                the Environmental Defect Value in question to the Environmental Consultant
                within five (5) business days after the Environmental Consultant
                is
                selected, and the Environmental Consultant shall make a determination
                of
                all points of disagreement in accordance with the terms and conditions
                of
                this Agreement within ten (10) business days of receipt of such position
                statements.  If necessary, the Closing Date shall be deferred
                only as to those Assets affected by any unresolved disputes regarding
                the
                existence of an Adverse Environmental Condition and/or the Environmental
                Defect Value until the Environmental Consultant has made a determination
                of the disputed issues with respect thereto and all subsequent dates
                and
                required activities with respect to any such Assets having reference
                to
                the Closing Date shall be correspondingly deferred; provided, however,
                that, unless Seller and Buyer mutually agree to the contrary, the
                Closing
                Date shall not be deferred in any event for more than thirty (30)
                days
                beyond the scheduled Closing Date in Section 3.1.  All Assets as
                to which no such dispute(s) exist shall be conveyed to Buyer subject
                to
                the terms of this Agreement at Closing.  Once the Environmental
                Consultant’s determination has been expressed to both Parties, if
                applicable, Seller shall have five (5) business days in which to
                advise
                Buyer in writing which of the options available to Seller under Section
                6.4(A) Seller elects regarding each of the Assets as to which the
                Environmental Consultant has made a
                determination.

            

    

     

    6.5           Remediation
      by Seller.

     

      If
      Seller elects to Remediate an Adverse Environmental Condition or is required
      by
      a governmental or regulatory agency to Remediate an Adverse Environmental
      Condition, the following will govern the Remediation:

     

    
      (A)           Seller
        shall be responsible for all negotiations and contacts with federal, state,
        and
        local agencies and authorities.  Buyer may not make any independent
        contacts with any agency, authority, or other third party with respect to
        the
        Adverse Environmental Condition or

    

     

    
      
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      Remediation
        and shall keep all information regarding the Adverse Environmental Condition
        and
        Remediation confidential, except in each instance to the extent required
        by
        applicable law.

    

     

    
      	
              (B)

            	
              Seller
                shall Remediate the Adverse Environmental Condition to the level
                agreed
                upon by Seller and Buyer (or failing such agreement to the level
                determined by the Environmental Consultant), but in no event shall
                Seller
                be required to Remediate the Adverse Environmental Condition beyond
                the
                level required by the Environmental Laws in effect at the Effective
                Time.

            

    

     

    
      	
              (C)

            	
              Buyer
                shall grant and warrant access and entry to the Assets after Closing
                to
                Seller and third parties conducting assessments or Remediation, to
                the
                extent and as long as necessary to conduct and complete the assessment
                or
                Remediation work, to remove equipment and facilities, and to perform
                any
                other activities reasonably necessary in connection with assessment
                or
                Remediation.

            

    

     

    
      	
              (D)

            	
              Buyer
                shall facilitate Seller’s ingress and egress or assessment or Remediation
                activities after the Closing.  Seller shall make reasonable
                efforts to perform the work so as to minimize disruption to Buyer’s
                business activities.

            

    

     

    
      	
              (E)

            	
              Seller
                shall continue Remediation of the Adverse Environmental Condition
                until
                the first of the following occurs:

            

    

     

    
      	
                 
                (i)

            	
              the
                appropriate governmental authorities provide notice to Seller or
                Buyer
                that no further Remediation of the Adverse Environmental Condition
                is
                required; or

            

    

     

    
      	
                
                (ii)

            	
              the
                Adverse Environmental Condition has been Remediated to the level
                required
                by the Environmental Laws or as agreed by the
                Parties.

            

    

     

    Upon
      the
      occurrence of either (i) or (ii) above, Seller shall notify Buyer that
      Remediation of the Adverse Environmental Condition is complete and provide
      a
      copy of the notification described in (i) above, if
      applicable.  Upon delivery of said notice, Seller shall be released
      from all liability and have no further obligations under any provisions of
      this
      Agreement in connection with an Adverse Environmental Condition.

     

    
      	
              (F)

            	
              Until
                Seller completes Remediation of an Adverse Environmental Condition,
                Seller
                and Buyer shall each notify the other of any pending or threatened
                claim,
                action, or proceeding by any authority or private party that relates
                to or
                would affect the environmental condition, the assessment, or the
                Remediation of the Assets.

            

    

     

    7.           REPRESENTATIONS
      AND WARRANTIES OF SELLER.

     

    7.1           Seller’s
      Representations and Warranties.

     

      Except
      as set forth in the exhibits to this Agreement or as otherwise expressly
      disclosed to Buyer in writing by Seller, Seller represents and warrants the
      following as of the date of execution of this Agreement and the
      Closing:

     

     

      (A)           Status
        of Incorporation.  Seller is in good standing under the laws of the
        State of Wyoming.  Seller is authorized to do business and in good
        standing in the State of

    

     

    
      
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        Oklahoma.  Seller further represents and warrants that Binger
        Operations, LLC, is in good standing under the laws of the State of
        Oklahoma.

    

     

    
      	
              (B)

            	
              Corporate
                Authority.  Seller owns the Assets and has the requisite
                power and authority to enter into this Agreement, to carry out the
                transactions contemplated hereby, to transfer the Assets in the manner
                contemplated by this Agreement, and to undertake all of the obligations
                of
                Seller set forth in this Agreement.

            

    

     

    
      	
              (C)

            	
              Validity
                of Obligations.  This Agreement and any documents or
                instruments delivered by Seller at the Closing shall constitute legal,
                valid and binding obligations of Seller enforceable in accordance
                with
                their 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.

            

    

     

    
      	
              (D)

            	
              No
                Violation.  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 provision of Seller’s governing documents, or any statute, rule
                or regulation applicable to Seller or any agreement or instrument
                to which
                Seller is a party or by which it is bound, or, to Seller’s knowledge,
                violate, or be in conflict with any judgment, decree or order applicable
                to Seller or require the approval or consent of any third party (subject
                to governmental consents and approvals customarily obtained after
                the
                Closing).

            

    

     

    
      	
              (E)

            	
              AFE’s.  With
                respect to the joint, unit or other operating agreements relating
                to the
                Assets, except as set forth in Exhibit 7.1(E), there are no
                material outstanding calls or payments under authorities for expenditures
                for payments relating to the Assets which are due or which Seller
                has
                committed to make which have not been
                made.

            

    

     

    
      	
              (F)

            	
              Contractual
                Restrictions.  Except to the extent otherwise permitted by
                this Agreement, Seller has not entered into any contracts for or
                received
                prepayments, take-or-pay arrangements, buydowns, buyouts for Oil
                and Gas,
                or storage of the same relating to the Assets which Buyer shall be
                obligated to honor and make deliveries of Oil and Gas or pay refunds
                of
                amounts previously paid under such contracts or
                arrangements.

            

    

     

    
      	
              (G)

            	
              Litigation.  Except
                as set forth in Exhibit 7.1(G), there is no suit or action pending,
                arising out of, or to Seller’s knowledge threatened that would have a
                material adverse affect upon the ownership, operation or value of
                the
                Assets.

            

    

     

    
      	
              (H)

            	
              Permits
                and Consents.  To Seller’s knowledge, with respect to Assets
                for which Seller is the operator, Seller has (i) acquired all
                material permits, licenses, approvals and consents from appropriate
                governmental bodies, authorities and agencies to conduct operations
                on the
                Assets in compliance with applicable laws, rules, regulations, ordinances
                and orders; and (ii) is in material compliance with all such permits,
                licenses, approvals and consents.

            

    

     

    
      	
              (I)

            	
              Broker’s
                Fees.  Seller shall retain the obligation or liability,
                contingent or otherwise, for brokers’ or finders’ fees in respect of the
                matters provided for in this Agreement and Buyer shall have no
                responsibility therefor.

            

    

     

    
      
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              (J)

            	
              Taxes.  (i) Seller
                has filed (with respect to the Assets) all material returns for Property
                Taxes and Severance Taxes that are due, (ii) all payments (with
                respect to the Assets) shown to be due on such returns have been
                paid, and
                (iii) there is no material dispute or claim concerning any Property
                Tax or Severance Tax liability of the Seller (with respect to the
                Assets)
                claimed or raised by any tax authority in
                writing.

            

    

     

    
      	
              (K)

            	
              Material
                Agreements.  To the best of Seller’s knowledge, all
                agreements material to the ownership, operation or value of the Assets
                are
                listed in Exhibit 7.1(K) (“Material
                Agreements”).

            

    

     

    
      	
              (L)

            	
              Consents
                and Preferential Purchase Rights.  To the best of Seller’s
                knowledge, Exhibit 7.1(L) lists all consents and preferential
                purchase rights contained in the Leases or Material
                Agreements.

            

    

     

    
      	
              (M)

            	
              Gas
                Imbalances.  To the best of Seller’s knowledge, Exhibit
                7.1(M) lists all gas imbalances with respect to the Assets as of the
                Effective Time.

            

    

     

    7.2           Scope
      of Representations of Seller.

     

     

      (A)           Information
        About the Assets.  Except as expressly set forth in this Agreement,
        Seller disclaims all liability and responsibility for any representation,
        warranty, statements or communications (orally or in writing) to Buyer,
        including any information contained in any opinion, information or advice
        that
        may have been provided to Buyer by any employee, officer, director, agent,
        consultant, engineer or engineering firm, representative, partner, member,
        beneficiary, owner or contractor of Seller wherever and however made, including
        those made in any data room or internet site and any supplements or amendments
        thereto or during any negotiations with respect to this Agreement or any
        confidentiality agreement previously executed by the Parties with respect
        to the
        Asset.  EXCEPT AS SET FORTH IN ARTICLE 7 OF THIS AGREEMENT, SELLER
        MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, STATUTORY OR IMPLIED, AS TO
        (i)
        THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY DATA, INFORMATION OR RECORDS
        FURNISHED TO BUYER IN CONNECTION WITH THE ASSETS OR OTHERWISE CONSTITUTING
        A
        PORTION OF THE ASSETS; (ii) THE PRESENCE, QUALITY AND QUANTITY OF HYDROCARBON
        RESERVES (IF ANY) ATTRIBUTABLE TO THE ASSETS, INCLUDING WITHOUT LIMITATION
        SEISMIC DATA AND SELLER’S INTERPRETATION AND OTHER ANALYSIS THEREOF; (iii) THE
        ABILITY OF THE ASSETS TO PRODUCE HYDROCARBONS, INCLUDING WITHOUT LIMITATION
        PRODUCTION RATES, DECLINE RATES AND RECOMPLETION OPPORTUNITIES; (iv) IMBALANCE
        OR PAYOUT ACCOUNT INFORMATION, ALLOWABLES, OR OTHER REGULATORY MATTERS; (v)
        THE
        PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS OR PROFITS, IF ANY,
        TO
        BE DERIVED FROM THE ASSETS; (vi) THE ENVIRONMENTAL CONDITION OF THE ASSETS;
        (vii) ANY PROJECTIONS AS TO EVENTS THAT COULD OR COULD NOT OCCUR; (viii)
        THE TAX
        ATTRIBUTES OF ANY ASSET; (ix) ANY OTHER MATTERS CONTAINED IN OR OMITTED FROM
        ANY
        INFORMATION OR MATERIAL

    

     

    
      
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      FURNISHED
        TO BUYER BY SELLER OR OTHERWISE CONSTITUTING A PORTION OF THE ASSETS; AND,
        (x)
        THE COMPLETENESS OR ACCURACY OF THE INFORMATION CONTAINED IN ANY EXHIBIT
        HERETO.  ANY DATA, INFORMATION OR OTHER RECORDS FURNISHED BY SELLER
        ARE PROVIDED TO BUYER AS A CONVENIENCE AND BUYER’S RELIANCE ON OR USE OF THE
        SAME IS AT BUYER’S SOLE RISK.

    

     

    
      	
              (B)

            	
              Independent
                Investigation.  Buyer agrees that it has, or by Closing will
                have, made its own independent investigation, analysis and evaluation
                of
                the Assets and the transaction contemplated by this Agreement (including
                Buyer’s own estimate and appraisal of the extent and value of Seller’s Oil
                and Gas reserves attributable to the Assets and an independent assessment
                and appraisal of the environmental risks and liabilities associated
                with
                the acquisition of the Assets).  Buyer agrees that it has had,
                or will have prior to Closing, access to all information necessary
                to
                perform its investigation and has not relied and will not rely on
                any
                representations by Seller other than those expressly set forth in
                this
                Agreement

            

    

     

    8.           REPRESENTATIONS
      AND WARRANTIES OF BUYER.

     

    8.1           Buyer’s
      Representations and Warranties.

     

      Buyer
      represents and warrants as follows as of the date hereof and the
      Closing:

     

    
      	
              (A)

            	
              Status
                of Incorporation.  Buyer is a limited partnership duly
                organized, validly existing and in good standing under the laws of
                the
                State of Delaware.

            

    

     

    
      	
              (B)

            	
              Corporate
                Authority.  Buyer has the corporate power and authority to
                enter into this Agreement, to carry out the transactions contemplated
                hereby and to undertake all of the obligations of Buyer set out in
                this
                Agreement.

            

    

     

    
      	
              (C)

            	
              Validity
                of Obligations.  The consummation of the transactions
                contemplated by this Agreement will not in any respect violate, nor
                be in
                conflict with, any provision of Buyer’s charter, by-laws or other
                governing documents, or any agreement or instrument to which Buyer
                is a
                party or is bound, or any judgment, decree, order, statute, rule
                or
                regulation applicable to Buyer (subject to governmental consents
                and
                approvals customarily obtained after the Closing).  This
                Agreement and the documents executed and delivered by Buyer in connection
                with the Closing constitute legal, valid and binding obligations
                of Buyer,
                enforceable in accordance with their
                terms.

            

    

     

    
      	
              (D)

            	
              Qualification
                and Bonding.  Buyer is in compliance with the bonding and
                liability insurance requirements of all applicable state or federal
                laws
                or regulations that could affect Buyer’s ability or authority to own and
                operate the Assets and is qualified to own any federal, Indian or
                state
                oil and gas leases that constitute part of the
                Assets.

            

    

     

     

      
        	
                (E)

              	
                Non-Security
                  Acquisition.  Buyer
                  intends to
                  acquire the Assets for its own benefit and account and is not acquiring
                  the Assets with the intent of distributing fractional undivided
                  interests
                  thereof such as would be subject to regulation by federal or state
                  securities laws, and if, in the future, it should sell, transfer
                  or
                  otherwise dispose of the Assets or
                  fractional

              

      

      

      
        
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      undivided
        interests therein, it will do so in compliance with any applicable federal
        and
        state securities laws.

    

     

    
      	
              (F)

            	
              Evaluation.  By
                reason of Buyer’s knowledge and experience in the evaluation, acquisition
                and operation of oil and gas properties, Buyer has evaluated the
                merits
                and risks of purchasing the Assets from Seller and has formed an
                opinion
                based solely upon Buyer’s knowledge and experience and not upon any
                representations or warranties by
                Seller.

            

    

     

    
      	
              (G)

            	
              Financing.  Buyer
                has sufficient cash, available lines of credit or other sources of
                immediately available funds to enable it to pay the Purchase Price
                to
                Seller at the Closing.

            

    

     

    
      	
              (H)

            	
              Broker’s
                Fees.  Buyer has incurred no obligation or liability,
                contingent or otherwise, for brokers’ or finders’ fees in respect of the
                matters provided for in this Agreement, and, if any such obligation
                or
                liability exists, it shall remain an obligation of Buyer, and Seller
                shall
                have no responsibility therefor.

            

    

     

    
      	
              (I)

            	
              No
                Knowledge of Seller’s Breach.  As of the Closing Date, Buyer
                has no knowledge of any breach by Seller of any representation or
                warranty
                of Seller, or of any other fact, event, condition or circumstance
                that
                would excuse Buyer from the timely performance of its obligations
                hereunder.

            

    

     

    
      	
              (J)

            	
              Disregarded
                Entity.  Legacy Reserves Operating LP is a wholly-owned
                subsidiary of Legacy Reserves LP, and therefore qualifies as a disregarded
                entity for purposes of compliance with the Internal Revenue
                Code.

            

    

     

    
      	
              (K)

            	 

    

    

    9.           CERTAIN
      AGREEMENTS OF SELLER.

     

      Seller
      agrees and covenants that, unless Buyer shall have otherwise agreed in writing,
      the following provisions shall apply:

     

    9.1           Maintenance
      of Assets.

     

      From
      the Effective Time until Closing, Seller agrees that, for those Assets which
      it
      operates, it shall:

     

    
      	
              (A)

            	
              Administer
                and operate the Assets in accordance with the applicable operating
                agreements.

            

    

     

    
      	
              (B)

            	
              Not
                introduce any new methods of management, operation or accounting
                with
                respect to any or all of the
                Assets.

            

    

     

    
      	
              (C)

            	
              Use
                commercially reasonable efforts to maintain and keep the Assets in
                full
                force and effect; and fulfill all contractual or other covenants,
                obligations and conditions imposed upon Seller with respect to the
                Assets,
                including, but not limited to, payment of royalties, delay rentals,
                shut-in gas royalties and any and all other required
                payments.

            

    

     

     

      
        	
                (D)

              	
                Except
                  to the extent necessary or
                  advisable to avoid forfeiture or penalties, not enter into agreements
                  to
                  drill new wells or to rework, plug back, deepen, plug or abandon
                  any Well,
                  nor commence any drilling, reworking or completing or other operations
                  on
                  the Leases

              

      

      

      
        
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      which
        requires estimated expenditures exceeding Twenty-Five Thousand Dollars
        ($25,000.00), net to the working interest of Seller, for each operation (except
        for emergency operations and operations required under presently existing
        contractual obligations) without obtaining the prior written consent of Buyer
        (which consent shall not be unreasonably withheld, delayed or conditioned);
        provided that the terms of this paragraph (D) shall not apply to any
        expenditures of Seller which will not be charged to Buyer.

    

     

    
      	
              (E)

            	
              Not
                voluntarily relinquish its position as operator to anyone other than
                Buyer
                with respect to any of the Assets or voluntarily abandon any of the
                Wells
                other than as required pursuant to the terms of a Lease or by
                regulation.

            

    

     

    
      	
              (F)

            	
              Not,
                without the prior written consent of Buyer (which consent shall not
                be
                unreasonably withheld, delayed or conditioned), (i) enter into any
                agreement or arrangement (other than one constituting a Permitted
                Encumbrance) transferring, selling or encumbering any of the Assets
                (other
                than in the ordinary course of business, including ordinary course sales
                of production, inventory or salvage or with respect to any Assets
                with a
                value less than $25,000 or pursuant to any agreements existing on
                the date
                hereof); (ii) grant any preferential or other right to purchase or
                agree to require the consent of any party not otherwise required
                to
                consent to the transfer and assignment of the Assets to Buyer;
                (iii) enter into any new sales contracts or supply contracts which
                cannot be cancelled upon thirty (30) days prior notice; or (iv) incur
                or agree to incur any contractual obligation  (absolute or
                contingent) with respect to the Assets except as otherwise provided
                herein
                (including ordinary course sales of production, inventory or salvage
                or
                with respect to any Assets with a value less than $25,000 net to
                Seller or
                pursuant to any disclosed AFEs covering the
                Assets).

            

    

     

    
      	
              (G)

            	
              To
                the extent known to Seller, provide Buyer with written notice of
                (i) any claims, demands, suits or actions made against Seller which
                materially affect the Assets; or (ii) any proposal from a third party
                to engage in any material transaction (e.g., a farmout) with respect
                to
                the Assets.

            

    

     

    9.2           Records.

     

      Seller
      shall have the right to make and retain copies of the Records as Seller may
      desire prior to the delivery of the Records to Buyer.  Buyer, for a
      period of seven (7) years after the Closing Date, shall make available to Seller
      (at the location of such Records in Buyer’s organization) access to such Records
      as Buyer may have in its possession (or to which it may have access) upon
      written request of Seller, during normal business hours; provided, however,
      that
      Buyer shall not be liable to Seller for the loss of any Records by reason of
      clerical error or inadvertent loss or destruction of Records

     

    9.3     Audit
      Rights.  Prior to Closing, Seller will make available to Buyer’s
      auditors, at reasonable business hours and at the offices of Seller, those
      accounting files, (including but not limited to monthly statements of revenues
      derived from sales of hydrocarbons from the Assets and the operating expenses
      and capital costs related to the Properties, monthly COPAS income statements
      and
      associated expenses, invoices and hydrocarbon purchaser statements related
      to
      the Assets over the period beginning January 1, 2004 through Closing) necessary
      for Buyer to construct a three (3) year history of property level revenues
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    other
      such revenues and expenses as might be required by the Securities and Exchange
      Commission with regard to Rule 3-05 audited financial statements of the
      Assets.   This right shall survive closing until such time that
      all comments by the Securities and Exchange Commission have been answered and
      cleared by the staff of the Securities and Exchange
      Commission.  Unless otherwise mutually agreed upon by the Parties,
      KPMG, LLC, will conduct any audit conducted pursuant to this
      provision.  Seller shall pay the auditor for the services provided as
      part of the audit, and shall immediately present copies of any and all invoices
      from the auditor, and evidence of Seller’s payment of such invoice(s), to Buyer
      at the address set forth herein for provision of notices.  Not less
      than five (5) business days after Seller presents such invoice(s) as set forth
      herein, Buyer shall reimburse Seller for the entire amount(s) paid by Seller
      to
      the auditor.  Buyer’s obligation to reimburse Seller for all payments
      made by Seller to the auditor for or in relation to the asset audit contemplated
      hereunder shall be absolute, and shall not be conditioned upon the results,
      outcome, or findings of the asset audit.

    

    10.           CERTAIN
      AGREEMENTS OF BUYER.

     

      Buyer
      agrees and covenants that unless Seller shall have consented otherwise in
      writing, the following provisions shall apply:

     

    10.1           Plugging
      Obligation.

     

      Upon
      consummation of the Closing, Buyer shall perform and assume all liability for
      the necessary and proper plugging and abandonment of all Wells and all surface
      restoration and reclamation required by law or the Leases.

     

    10.2           Plugging
      Bond.

     

      Buyer
      shall post, prior to Closing, the necessary bonds or letters of credit as
      required by the state in which the Leases are located for the plugging of all
      Wells, and provide Seller with a copy of same, and provide proof satisfactory
      to
      Seller that the applicable state has accepted such bonds or letters of credit
      as
      sufficient assurance to cover the plugging of all Wells and related
      matters.  Further, Buyer shall provide to Seller copies of the
      approval by any applicable regulatory agencies concerning change of operatorship
      of the Assets if Buyer is duly elected Operator.

     

    10.3           Seller’s
      Logos.

     

      Commencing
      no later than thirty (30) days after Closing, Buyer shall promptly cover or
      cause to be covered by decals or new signage any names and marks used by Seller,
      and all variations and derivatives thereof and logos relating thereto, from
      the
      Assets and shall not thereafter make any use whatsoever of such names, marks
      and
      logos.

     

    10.4           Like-Kind
      Exchanges.

     

      Each
      party consents to the other party’s assignment of its rights and obligations
      under this Agreement to its Qualified Intermediary (as that term is defined
      in
      Section 1.1031(k)-1(g)(4)(v) of the Treasury Regulations), or to its Qualified
      Exchange Accommodation Titleholder (as that term is defined in Rev. Proc.
      2000-37), in connection with effectuation of a like-kind
      exchange.  However, Seller and Buyer acknowledge and agree that any
      assignment of this Agreement to a Qualified Intermediary or to a Qualified
      Exchange Accommodation Titleholder does not release either party from any of
      their respective liabilities and obligations to each other under the
      Agreement.  Each party agrees to cooperate with the other to attempt
      to structure the transaction as a like-kind exchange.

     

    
      
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    11.           CONDITIONS
      PRECEDENT TO OBLIGATIONS OF BUYER.

     

      All
      obligations of Buyer under this Agreement are, at Buyer’s election, subject to
      the fulfillment, prior to or at the Closing, of each of the following
      conditions:

     

    11.1           No
      Litigation.

     

      At
      the Closing, no suit, action or other proceeding shall be pending before any
      court or governmental agency which attempts to prevent the occurrence of the
      transactions contemplated by this Agreement.

     

    11.2           Representations
      and Warranties.

     

      All
      representations and warranties of Seller contained in this Agreement shall
      be
      true in all material aspects as of the Closing as if such representations and
      warranties were made as of the Closing Date (except for those representations
      or
      warranties that are expressly made only as of another specific date, which
      representations and warranties shall be true in all material respects as of
      such
      other date) and Seller shall have performed and satisfied in all material
      respects all covenants and fulfilled all conditions required by this Agreement
      to be performed and satisfied by Seller at or prior to the Closing.

     

    12.           CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF SELLER.

     

      All
      obligations of Seller under this Agreement are, at Seller’s election, subject to
      the fulfillment, prior to or at the Closing, of each of the following
      conditions:

     

    12.1           No
      Litigation.

     

      At
      the Closing, no suit, action or other proceeding shall be pending before any
      court or governmental agency which attempts to prevent the occurrence of the
      transactions contemplated by this Agreement.

     

    12.2           Representations
      and Warranties.

     

      All
      representations and warranties of Buyer contained in this Agreement shall be
      true in all material aspects as of the Closing, as if such representations
      and
      warranties were made as of the Closing Date (except for those representations
      or
      warranties that are expressly made only as of another specific date, which
      representations and warranties shall be true in all material respects as of
      such
      other date) and Buyer shall have performed and satisfied in all material
      respects all covenants and fulfilled all conditions required by this Agreement
      to be performed and satisfied by Buyer at or prior to the Closing.

     

    13.           TERMINATION.

     

    13.1           Causes
      of Termination.

     

      This
      Agreement and the transactions contemplated herein may be
      terminated:

     

    
      	
              (A)

            	
              At
                any time by mutual consent of the
                Parties.

            

    

     

    
      	
              (B)

            	
              By
                either Party as provided in Sections 5.4(C) or 6.4(D) pertaining
                to Title
                Defects or Adverse Environmental Conditions,
                respectively.

            

    

     

     

      
        	
                (C)

              	
                By
                  Buyer if, on the Closing Date,
                  any of the conditions set forth in Article 11 hereof shall not
                  have been
                  satisfied or waived; provided, however, that Seller shall have
                  the right
                  to satisfy such condition for a period of twenty (20) days following
                  delivery of notice from Buyer regarding such failure or, if such
                  condition
                  cannot reasonably be satisfied within such 20-day period, Seller
                  shall
                  have the right to commence the actions necessary
                  to

              

      

      

      
        
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      satisfy
        such condition within such 20-day period and thereafter to diligently continue
        such actions beyond such period until such satisfaction has been
        effected.

    

     

    
      	
              (D)

            	
              By
                Seller if, on the Closing Date, any of the conditions set forth in
                Article
                12 hereof shall not have been satisfied or waived; provided, however,
                that
                with respect to any condition other than a material failure of Buyer
                to
                perform its obligations under Section 3.2, as to which the granting
                of any
                cure period shall be entirely within Seller’s sole and absolute
                discretion, Buyer shall have the right to satisfy such condition
                for a
                period of twenty (20) days following delivery of notice from Seller
                regarding such failure or, if such condition cannot reasonably be
                satisfied within such 20-day period, Buyer shall have the right to
                commence the actions necessary to satisfy such condition within such
                20-day period and thereafter to diligently continue such actions
                beyond
                such period until such satisfaction has been
                effected.

            

    

     

    13.2           Effect
      of Termination.

     

    
      	
              (A)

            	
              Buyer’s
                Breach.

            

    

     

    If
      Closing does not occur because Buyer wrongfully fails to tender performance
      at
      Closing or otherwise breaches this Agreement prior to Closing, and Seller is
      ready to close, Seller shall retain the Deposit, together with interest thereon,
      as liquidated damages.  Buyer’s failure to close shall not be
      considered wrongful if (i) conditions to Buyer’s obligation to close under
      Article 11 are not satisfied through no fault of Buyer and are not waived,
      or
      (ii) Buyer has terminated this Agreement as of right under Section
      13.1.  The remedy set forth herein shall be Seller’s sole and
      exclusive remedy for Buyer’s wrongful failure to close hereunder and Seller
      expressly waives any and all other remedies, legal and equitable, that it
      otherwise may have for Buyer’s failure to close, provided, however, that
      Seller’s total damages arising out of or related to Buyer’s breach of any
      provision of this Agreement shall be limited to the amount of the
      Deposit.

     

    
      	
              (B)

            	
              Seller’s
                Breach.

            

    

     

    If
      Closing does not occur because Seller wrongfully fails to tender performance
      at
      Closing or otherwise breaches this Agreement prior to Closing, and Buyer is
      ready to close, Seller will return the Deposit, together with interest thereon,
      to Buyer immediately after the determination that the Closing will not occur
      and
      Buyer shall retain all legal remedies for Seller’s breach of this Agreement;
      provided, however, that (i) Buyer’s total damages arising out of or related
      to Seller’s breach of any provision of this Agreement shall be limited to the
      amount of the Deposit, and (ii) Seller shall not have any liability to
      Buyer for consequential, special, punitive or exemplary damages arising out
      of
      or related to Seller’s breach of any provision of this Agreement. Seller’s
      failure to close shall not be considered wrongful if (i) conditions to
      Seller’s conditions to close under Article 12 are not satisfied through no fault
      of Seller and are not waived; or (ii) Seller has terminated this Agreement
      as of right under Section 13.1.

     

    
      	
              (C)

            	
              Termination
                Pursuant to Section 13.1.

            

    

     

    If
      Buyer
      or Seller terminates this Agreement pursuant to Section 13.1 in the absence
      of a
      breach by the other Party, Seller shall distribute the Deposit to Buyer and
      neither Buyer nor Seller shall have any liability to the other Party for
      termination of this Agreement.  If Buyer or Seller terminates this

     

    
      
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    Agreement
      pursuant to Section 13.1 and asserts that a breach of this Agreement has
      occurred, the notice of termination shall include a statement describing the
      nature of the alleged breach together with supporting
      documentation.

     

    
      	
              (D)

            	
              Effect
                of Termination.

            

    

     

    In
      the
      event of the termination of this Agreement pursuant to the provisions of this
      Article 13 or elsewhere in this Agreement, this Agreement shall become void
      and
      have no further force and effect and, except for the indemnities provided for
      in
      Sections 6.2(B) and 14.3, any breach of this Agreement prior to such termination
      and any continuing confidentiality requirement, neither Party shall have any
      further right, duty or liability to the other hereunder.  Upon
      termination, Buyer agrees to return to Seller or destroy all materials,
      documents and copies thereof provided, obtained or discovered in the course
      of
      any due diligence investigations of the Assets.

     

    14.           INDEMNIFICATION.

     

    14.1           Indemnification
      by Seller.

     

      UPON
      CLOSING, SELLER SHALL TO THE FULLEST EXTENT PERMITTED BY LAW, RELEASE, DEFEND,
      INDEMNIFY, AND HOLD HARMLESS BUYER, ITS AFFILIATES, AND EACH OF THEIR RESPECTIVE
      DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND OTHER REPRESENTATIVES (COLLECTIVELY
      THE “BUYER GROUP”) FROM AND AGAINST THE FOLLOWING:

     

    
      	
              (A)

            	
              MISREPRESENTATIONS.  ALL
                CLAIMS, DEMANDS, LIABILITIES, JUDGMENTS, LOSSES AND REASONABLE COSTS,
                EXPENSES AND ATTORNEYS’ FEES (INDIVIDUALLY A “LOSS” AND COLLECTIVELY, THE
                “LOSSES”) ARISING FROM THE BREACH BY SELLER OF ANY REPRESENTATION OR
                WARRANTY SET FORTH IN THIS AGREEMENT THAT SURVIVES
                CLOSING;

            

    

     

    
      	
              (B)

            	
              BREACH
                OF COVENANTS.  ALL LOSSES ARISING FROM THE BREACH BY SELLER
                OF ANY COVENANT SET FORTH IN THIS AGREEMENT;
                AND

            

    

     

    
      	
              (C)

            	
              OWNERSHIP
                AND OPERATION.  ALL LOSSES ARISING FROM SELLER’S OWNERSHIP
                AND OPERATION OF THE ASSETS PRIOR TO THE EFFECTIVE TIME DIRECTLY
                ASSOCIATED WITH THE FOLLOWING
                MATTERS:

            

    

     

    
      	
                 
                (i)

            	
              DAMAGES
                TO PERSONS OR PROPERTY FOR CLAIMS ASSERTED BY ANY THIRD PARTY PRIOR
                TO THE
                EFFECTIVE TIME;

            

    

     

    
      	
                
                (ii)

            	
              THE
                VIOLATION BY SELLER OF THE TERMS OF ANY AGREEMENT BINDING UPON SELLER;
                AND

            

    

     

    
      	
               
                (iii)

            	
              CLAIMS
                AGAINST SELLER BY CO-OWNERS, PARTNERS, JOINT VENTURERS AND OTHER
                PARTICIPANTS IN THE WELLS.

            

    

     

    
      	
              (D)

            	
              Notwithstanding
                the above, the following limitations shall apply to Seller’s
                indemnification obligations:

            

    

     

    
      
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                (i)

            	
              Seller
                shall not be obligated to indemnify Buyer for any Loss unless Buyer
                has
                delivered a written notice of such Loss within the Survival Period
                (as
                defined below) applicable to such Loss.  Any Loss for which
                Seller does not receive written notice before the end of the Survival
                Period shall be deemed to be an Assumed Liability.  The
                “Survival Period” applicable to Losses shall
                mean:

            

    

     

    
      	
               

            	
              (1)

            	
              With
                regard to a breach of representations and warranties contained in
                Sections
                7.1(A), (B), (C) and (D), for a period of one (1) year following
                the
                Closing;

            

    

     

    
      	
               

            	
              (2)

            	
              All
                of the other representations and warranties by Seller in this Agreement
                for a period of six (6) months following the
                Closing;

            

    

     

    
      	
               

            	
              (3)

            	
              With
                regard to a breach of covenants, an indefinite period following the
                Closing;

            

    

     

    
      	
               

            	
              (4)

            	
              With
                regard to the matters covered by Section 14.1 (C), for a period of
                six
                months after the Closing.

            

    

     

    
      	
                
                (ii)

            	
              The
                indemnification obligations of Seller pursuant to this Agreement
                shall be
                limited to actual Losses and shall not include incidental, consequential,
                indirect, punitive, or exemplary Losses or
                damages;

            

    

     

    
      	
               
                (iii)

            	
              Seller’s
                aggregate liabilities and obligations under this Article 14 shall
                not
                exceed ten percent (10%) of the Base Purchase
                Price;

            

    

     

    
      	
                (iv)

            	
              Seller
                shall have no liability or obligation for any Losses, unless and
                until the
                aggregate Losses for which Buyer is entitled to recover under this
                Agreement exceeds one percent (1%) of the Base Purchase Price (the
                “Indemnity Threshold”) (such amount being a threshold and not a
                deductible).

            

    

     

    
      	
                
                (v)

            	
              Seller
                shall have no liability in excess of the Allocated Value, less any
                prior
                adjustments to the Base Purchase Price, for any Losses associated
                with the
                claim that Seller does not have Defensible Title associated with
                a
                particular Asset;

            

    

     

    
      	
               
                (vi)

            	
              The
                amount of Losses required to be paid by Seller to indemnify Buyer
                pursuant
                to this Agreement shall be reduced to the extent of any amounts actually
                received by Buyer pursuant to the terms of the insurance policies
                (if any)
                covering such claim and any tax benefits received by
                Buyer.

            

    

     

    
      
        
          	
                   (vii)

                	
                  Seller’s
                    indemnification obligations shall not cover any liabilities,
                    duties and
                    obligations relating to properly plugging and abandoning wells,
                    restoring
                    and reclaiming the surface, removal of all pipelines, equipment, and
                    related facilities now or hereafter located on the Assets, and
                    cleaning
                    up, restoring and Remediation of the Assets in accordance with
                    the
                    Environmental Laws and the relevant Leases, or any other violation
                    or
                    claimed violation of Environmental Laws (including but not limited
                    to the
                    payment of fines, penalties, monetary sanctions or other civil
                    liabilities) or the presence, disposal, release or threatened
                    release of
                    any hazardous substance or hazardous waste from the Assets into
                    the
                    atmosphere

                

        

      

       

      
        
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      or
        into
        or upon land or any water course or body of water, including groundwater,
        whether or not attributable to Seller’s activities or the activities of third
        parties.  All such matters are covered exclusively by Article 6 of
        this Agreement.

       

    

    
      	
              (viii)

            	
              Buyer
                acknowledges and agrees that the indemnification provisions in this
                Article 14 and the termination rights in Article 13 shall be the
                exclusive
                remedies of Buyer with respect to the transactions contemplated by
                this
                Agreement.

            

    

     

    14.2           Indemnification
      by Buyer.

     

      UPON
      CLOSING, BUYER SHALL TO THE FULLEST EXTENT PERMITTED BY LAW, RELEASE, DEFEND,
      INDEMNIFY, AND HOLD HARMLESS SELLER’S GROUP FROM AND AGAINST THE
      FOLLOWING:

     

    
      	
              (A)

            	
              MISREPRESENTATIONS.  ALL
                LOSSES ARISING FROM THE BREACH BY BUYER OF ANY REPRESENTATION OR
                WARRANTY
                SET FORTH IN THIS AGREEMENT THAT SURVIVES
                CLOSING;

            

    

     

    
      	
              (B)

            	
              BREACH
                OF COVENANTS.  ALL LOSSES ARISING FROM THE BREACH BY BUYER
                OF ANY COVENANT SET FORTH IN THIS
                AGREEMENT;

            

    

     

    
      	
              (C)

            	
              ASSUMED
                LIABILITIES.  ALL LOSSES ARISING FROM OR COMPRISING THE
                ASSUMED LIABILITIES.

            

    

     

    14.3           Physical
      Inspection.

     

      BUYER
      INDEMNIFIES AND AGREES TO RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS THE
      SELLER’S GROUP FROM AND AGAINST ANY AND ALL CLAIMS ARISING FROM BUYER’S
      INSPECTING AND OBSERVING THE ASSETS, INCLUDING (A) CLAIMS FOR PERSONAL
      INJURIES TO OR DEATH OF EMPLOYEES OF THE BUYER, ITS CONTRACTORS, AGENTS,
      CONSULTANTS AND REPRESENTATIVES, AND DAMAGE TO THE PROPERTY OF BUYER OR OTHERS
      ACTING ON BEHALF OF BUYER; AND (B) CLAIMS, DEMANDS, LOSSES, DAMAGES,
      LIABILITIES, JUDGMENTS, CAUSES OF ACTION, COSTS OR EXPENSES FOR PERSONAL
      INJURIES TO OR DEATH OF EMPLOYEES OF THE SELLER’S GROUP OR THIRD PARTIES, AND
      DAMAGE TO THE PROPERTY OF THE SELLER’S GROUP OR THIRD PARTIES.  THE
      FOREGOING INDEMNITY INCLUDES, AND THE PARTIES INTEND IT TO INCLUDE, AN
      INDEMNIFICATION OF THE SELLER’S GROUP FROM AND AGAINST CLAIMS ARISING OUT OF OR
      RESULTING, IN WHOLE OR PART, FROM THE CONDITION OF THE ASSETS OR THE SELLER’S
      GROUP’S SOLE, JOINT, COMPARATIVE, OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR
      FAULT.

     

    14.4           Notification.

     

      As
      soon as reasonably practical after obtaining knowledge thereof, the indemnified
      Party shall notify the indemnifying Party of any claim or demand which the
      indemnified Party has determined has given or could give rise to a claim for
      indemnification under this Article 14.  Such notice shall specify the
      agreement, representation or warranty with respect to which the claim is made,
      the facts giving rise to the claim and the alleged basis for the claim, and
      the
      amount (to the extent then determinable) of liability for which indemnity is
      asserted.  In the event any action, suit or proceeding is brought with
      respect to which a Party may be liable under this Article 14, the defense of
      the
      action, suit or proceeding (including all settlement negotiations and
      arbitration, trial, appeal, or other proceeding) shall be at the 

     

    
      
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    discretion
      of and conducted by the indemnifying Party.  If an indemnified Party
      shall settle any such action, suit or proceeding without the written consent
      of
      the indemnifying Party (which consent shall not be unreasonably withheld),
      the
      right of the indemnified Party to make any claim against the indemnifying Party
      on account of such settlement shall be deemed conclusively denied.  An
      indemnified Party shall have the right to be represented by its own counsel
      at
      its own expense in any such action, suit or proceeding, and if an indemnified
      Party is named as the defendant in any action, suit or proceeding, it shall
      be
      entitled to have its own counsel and defend such action, suit or proceeding
      with
      respect to itself at its own expense.  Subject to the foregoing
      provisions of this Article 14, neither Party shall, without the other Party’s
      written consent, settle, compromise, confess judgment or permit judgment by
      default in any action, suit or proceeding if such action would create or attach
      any liability or obligation to the other Party.  The Parties agree to
      make available to each other, and to their respective counsel and accountants,
      all information and documents reasonably available to them which relate to
      any
      action, suit or proceeding, and the Parties agree to render to each other such
      assistance as they may reasonably require of each other in order to ensure
      the
      proper and adequate defense of any such action, suit or proceeding.

     

    15.           MISCELLANEOUS.

     

    15.1           Casualty
      Loss.

     

    
      	
              (A)

            	
              An
                event of casualty means volcanic eruptions, acts of God, fire, explosion,
                earthquake, wind storm, flood, drought, condemnation, the exercise
                of any
                right of eminent domain, confiscation and seizure (a
                “Casualty”).  A Casualty does not include depletion due to
                normal production and depreciation or failure of equipment or
                casing.

            

    

     

    
      	
              (B)

            	
              If,
                prior to the Closing, a Casualty occurs (or Casualties occur) which
                results in a reduction in the value of any of the Assets in excess
                of
                twenty-five percent (25%) of the Allocated Value of the affected
                Assets
                (“Casualty Loss”), (i) Seller may retain such Asset and such Asset
                shall be the subject of an adjustment to the Base Purchase Price
                in the
                same manner set forth in Section 5.4 hereof, or (ii) at the Closing,
                Seller shall assign to Buyer the right to receive all insurance proceeds
                or other sums payable to Seller by reason of such Casualty Loss,
                the Base
                Purchase Price shall not be adjusted by reason of such payment, and
                Seller
                shall convey the affected Assets to
                Buyer.

            

    

     

    
      	
              (C)

            	
              For
                purposes of determining the diminution in value of an Asset as a
                result of
                a Casualty Loss, the Parties shall use the same methodology as applied
                in
                determining the diminution in value of an Asset as a result of a
                Title
                Defect as set forth in Section 5.5.

            

    

     

    15.2           Confidentiality.

     

     

      
        	
                (A)

              	
                Prior
                  to Closing, to the extent not already public, Buyer shall not disclose
                  to
                  any party that it is conducting negotiations with Seller or has
                  entered
                  into this Agreement other than as expressly permitted in the
                  confidentiality agreement executed by Buyer in Seller’s favor prior to the
                  execution of this Agreement, which shall continue to apply until
                  the
                  Closing and thereafter in the event of termination of this Agreement
                  prior
                  to the Closing. Buyer shall exercise all due diligence in safeguarding
                  and
                  maintaining secure all

              

      

       

      
        
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      engineering,
        geological and geophysical data, seismic data, reports and maps, the results
        and
        findings of Buyer with regard to its due diligence associated with the Assets
        (including without limitation with regard to due diligence associated with
        environmental and title matters) and other data relating to the Assets
        (collectively, the “Confidential Information”).  Buyer acknowledges
        that, prior to Closing, all Confidential Information shall be treated as
        confidential. Notwithstanding the foregoing, Seller understands that Buyer
        has
        public reporting obligations that may require public announcement of certain
        information relating to this Agreement.  Seller and Buyer shall
        consult with each other with regard to all publicity and other releases at
        or
        prior to the Closing concerning this Agreement and the transaction contemplated
        hereby and, except as required by applicable law or other applicable rules
        or
        regulations of any governmental body or stock exchange, neither party shall
        issue any publicity or other release without the prior written consent of
        the
        other party, such consent not to be unreasonably withheld.

    

     

    
      	
              (B)

            	
              In
                the event of termination of this Agreement for any reason, Buyer
                shall not
                use or knowingly permit others to use such Confidential Information
                in a
                manner detrimental to Seller, and will not disclose any such Confidential
                Information to any person, firm, corporation, association or other
                entity
                for any reason or purpose whatsoever, except to Seller or to a
                governmental agency pursuant to a valid subpoena or other order or
                pursuant to applicable governmental regulations, rules or
                statutes.

            

    

     

    
      	
              (C)

            	
              The
                undertaking of confidentiality shall not diminish or take precedence
                over
                any separate confidentiality agreement between the
                Parties.  Should this Agreement terminate, such separate
                confidentiality agreement shall remain in full force and
                effect.

            

    

     

    15.3           Notices.

     

      Any
      notice, request, demand, or consent required or permitted to be given hereunder
      shall be in writing and delivered in person or by certified letter, with return
      receipt requested, or by facsimile addressed to the Party for whom intended
      at
      the following addresses:

     

    SELLER:

     

    Nielson
      & Associates, Inc.

    1501
      Stampede Ave.

    Third
      Floor

    PO
      Box
      2850

    Cody,
      WY
      82414

    Tel:  (307)
      587-2445

    Fax:  (307)
      527-4943

     

    Attn:
      Tom
      Fitzsimmons

     

    
      
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    BUYER:

     

    Legacy
      Reserves Operating
      LP

    303
      West Wall, Suite 1600

    Midland,
      Texas 79701

    Attn:                      Mr.
      Kyle A. McGraw

    Tel:
      (432) 682-2516

    Fax:
      (432) 684-3774

    

    
      	
               

            	
              With
                copy to:  Lynch, Chappell &
Alsup

            

    

    
      	
               

            	
              300
                N. Marienfeld, Suite 700

            

    

    
      	
               

            	
              Midland,
                Texas  79701

            

    

    Attention:
      Alan J. Brown

    

    or
      at
      such other address as any of the above shall specify by like notice to the
      other.

     

    15.4           Press
      Releases and Public Announcements.

     

      No
      Party shall issue any press release or make any public announcement relating
      to
      the subject matter of this Agreement prior to the Closing without the prior
      written approval of the other Party; provided, however, that any Party may
      make
      any public disclosure it believes in good faith is required by applicable law
      or
      any listing or trading agreement concerning its or its affiliates’
publicly-traded securities (in which case the disclosing Party shall use all
      reasonable efforts to advise the other Party, and give the other Party an
      opportunity to comment on the proposed disclosure, prior to making the
      disclosure).  Notwithstanding the foregoing, no press release or any
      public announcement shall identify Seller or the principals of Seller without
      Seller’s prior written consent, which consent shall not be unreasonably
      withheld.

     

    15.5           Compliance
      with Express Negligence Test.

     

      THE
      PARTIES AGREE THAT THE INDEMNIFICATION OBLIGATIONS OF THE INDEMNIFYING PARTY
      SHALL BE WITHOUT REGARD TO THE NEGLIGENCE OR STRICT LIABILITY OF THE INDEMNIFIED
      PERSON(S), WHETHER THE NEGLIGENCE OR STRICT LIABILITY IS ACTIVE, PASSIVE, JOINT,
      CONCURRENT OR SOLE.

     

    15.6           Governing
      Law.

     

      This
      Agreement is governed by and must be construed according to the laws of the
      State of Wyoming, excluding any conflicts-of-law rule or principle that might
      apply the law of another jurisdiction.  All disputes related to this
      Agreement shall be submitted exclusively to the jurisdiction of the courts
      of
      the State of Wyoming and venue shall be in the civil district courts of the
      City
      of Cody and County of Park, Wyoming.

     

    15.7           Exhibits.

     

      The
      Exhibits attached to this Agreement are incorporated into and made a part of
      this Agreement.

     

    
      
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    15.8           Fees,
      Expenses, Taxes and Recording.

     

    
      	
              (A)

            	
              Each
                Party shall be solely responsible for all costs and expenses incurred
                by
                it in connection with this transaction (including, but not limited
                to fees
                and expenses of its counsel and accountants) and shall not be entitled
                to
                any reimbursements from the other Party, except as otherwise provided
                in
                this Agreement.

            

    

     

    
      	
              (B)

            	
              Buyer
                shall file all necessary Tax returns and other documentation with
                respect
                to all transfer, documentary, sales, use, stamp, registration and
                other
                similar Taxes and fees, and, if required by applicable law, Seller
                shall
                join in the execution of any such Tax returns and other
                documentation.  Notwithstanding anything set forth in this
                Agreement to the contrary, Buyer shall pay any transfer, documentary,
                sales, use, stamp, registration and other similar Taxes and fees
                incurred
                in connection with this Agreement and the transactions contemplated
                hereby.  Buyer shall also pay any equipment lease transfer fees
                or other fees or expenses incurred in connection with transfer of
                the
                Assets to Buyer except as otherwise provided by this
                Agreement.

            

    

     

    
      	
              (C)

            	
              Buyer
                shall, at its own cost, immediately record all instruments of conveyance
                and sale in the appropriate office of the state and county in which
                the
                lands covered by such instrument are located.  Buyer shall
                immediately file for and obtain the necessary approval of all federal,
                Indian, tribal or state government agencies to the assignment of
                the
                Assets.  The assignment of any state, federal or Indian tribal
                oil and gas leases shall be filed in the appropriate governmental
                offices
                on a form required and in compliance with the applicable rules of
                the
                applicable government agencies.  Buyer shall supply Seller with
                a true and accurate photocopy reflecting the recording information
                of all
                the recorded and filed assignments within a reasonable period of
                time
                after their recording and filing.  In the event that Seller
                undertakes to record and/or file the conveyance instruments and other
                documents associated with this transfer of interest, Buyer shall
                reimburse
                Seller for all associated fees at Post
                Closing.

            

    

     

    15.9           Assignment.

     

      This
      Agreement or any part hereof may not be assigned by either Party without the
      prior written consent of the other Party; provided, however, upon notice to
      the
      other Party, either Party shall have the right to assign all or part of its
      rights (but none of its obligations) under this Agreement in order to qualify
      transfer of the Assets as a “like-kind” exchange for federal tax
      purposes.  Subject to the foregoing, this Agreement is binding upon
      the Parties hereto and their respective successors and assigns.

     

    15.10                      Entire
      Agreement.

     

      This
      Agreement constitutes the entire agreement reached by the Parties with respect
      to the subject matter hereof, superseding all prior negotiations, discussions,
      agreements and understandings, whether oral or written, relating to such subject
      matter. , except that the Confidentiality Agreement dated February 7, 2007,
      between the Parties shall remain in full force and effect in accordance with
      its
      terms through and until the Closing.

     

    15.11                      Severability.

     

      In
      the event that any one or more covenants, clauses or provisions of this
      Agreement shall be held invalid or illegal, such invalidity or unenforceability
      shall not affect any other provisions of this Agreement.

     

    
      
        PSA
          - Binger Sale

        3/20/07

        
        

      

      
        Page
          35 of
          36

        
          

        

      

      
        
        

      

    

     

    15.12                      Captions.

     

      The
      captions in this Agreement are for convenience only and shall not be considered
      a part of or affect the construction or interpretation of any provision of
      this
      Agreement.

     

    15.13                      Time
      of the Essence.

     

      The
      parties recognize and agree that time is of the essence of this
      Agreement.

    15.14                      Amendments.  Except
      as otherwise specifically provided herein, this Agreement shall be amended
      only
      in writing adopted by the Parties hereto

     

    15.15                      Counterparts.  This
      Agreement may be executed by Buyer and Seller in any number of counterparts,
      no
      one of which needs to be executed by all parties.  Each of such
      counterparts shall be deemed an original instrument, and all counterparts shall
      together constituted one and the same instrument.  This Agreement
      shall become operative when each party has executed at least one counterpart,
      which may be evidenced by copy of such executed Agreement delivered via
      facsimile

     

    Executed
      as of the day and year first above written.

     

    
      	 	
              SELLER:

               

              NIELSON & ASSOCIATES, INC.

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Thomas
              Fitzsimmons	 
	 	 	Thomas
              Fitzsimmons	 
	 	 	Executive
              Vice President and
              Chief Operating Officer	 
	 	 	 	 

    

    
      	 	
              BUYER:

               

              LEGACY RESERVES OPERATING LP

              LEGACY RESERVES OPERATING GP, LLC, GENERAL
                PARTNER

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/
              Cary D. Brown	 
	 	 	Cary
              D. Brown 	 
	 	 	Chairman
              & Chief Executive Officer	 
	 	 	 	 

    

    
      
        PSA
          - Binger Sale

        3/20/07

        
        

      

      
        Page
          36 of
          36

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