Document:

apex-ex107_183.htm

Exhibit 10.7

SIXTH AMENDMENT TO FINANCING AGREEMENT
AND FORBEARANCE AGREEMENT

This SIXTH AMENDMENT TO FINANCING AGREEMENT AND FORBEARANCE AGREEMENT, dated as of December 15, 2020 (this “Amendment”), is entered into by and among Apex Global Brands Inc. (formerly known as Cherokee Inc.), a Delaware corporation (the “Parent” and the “U.S. Borrower”), Irene Acquisition Company B.V., a private company with limited liability incorporated under the laws of the Netherlands, having its statutory seat (statutaire zetel) in Amsterdam, the Netherlands and registered with the Dutch trade register under number 67160921 (the “Dutch Borrower” and, together with the U.S. Borrower, each a “Borrower” and collectively, the “Borrowers”), each Guarantor party hereto, the Lenders party hereto which constitute all of the Lenders party to the Financing Agreement as of the date hereof, Callodine Commercial Finance, LLC, a Delaware limited liability company (as successor to Gordon Brothers Finance Company, a Delaware corporation) (“Callodine”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”), and Callodine, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent” and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”).

W I T N E S S E T H:

WHEREAS, the Parent, the Borrowers, the Guarantors, the lenders from time to time party thereto (collectively, the “Lenders” and each individually, a “Lender”) and the Agents are parties to that certain Financing Agreement, dated as of August 3, 2018 (as amended by that certain First Amendment to Financing Agreement, dated as of December 28, 2018, as further amended by that certain Second Amendment to Financing Agreement, dated as of January 29, 2019, as further amended by that certain Third Amendment to Financing Agreement and Forbearance Agreement, dated as of December 20, 2019, as further amended by that certain Fourth Amendment to Financing Agreement and Forbearance Agreement, dated as of April 30, 2020 (the “Fourth Amendment”), as further amended by that certain Fifth Amendment to Financing Agreement and Forbearance Agreement, dated as of September 1, 2020 (the “Fifth Amendment”) and as further amended, modified or otherwise supplemented from time to time prior to the date hereof, the “Financing Agreement”);

WHEREAS, (x) Events of Default have occurred and are continuing under the Financing Agreement pursuant to (i) Section 9.01(c) of the Financing Agreement as a result of the Borrowers breach of Section 7.03(b) of the Financing Agreement for the period ended October 31, 2019 and January 31, 2020 and (ii) Section 9.01(c) of the Financing Agreement as a result of the Borrowers breach of Section 7.03(c) of the Financing Agreement (collectively, the “Financing Agreement Events of Default”) and (y) an Event of Default has occurred under the Fifth Amendment pursuant to Section 2(c) of the Fifth Amendment Fee Letter (the “Forbearance Event of Default” and, together with the Financing Agreement Events of Default, collectively, the “Existing Events of Default”).

WHEREAS, as a result of the Forbearance Event of Default, a Termination Event under (and as defined in) the Fifth Amendment has occurred.

WHEREAS, as a result of the Existing Events of Default and the Termination Event under (and as defined in) the Fifth Amendment, the Secured Parties have certain rights and remedies under the terms of the Financing Agreement and the other Loan Documents as well as applicable law, including, without limitation, the right to (a) declare that all Obligations are immediately due and payable; (b) declare that all outstanding Obligations accrue interest at the Post-Default Rate; and (c) exercise any other rights and remedies afforded under any Loan Document or by law, at equity or otherwise;

WHEREAS, the Borrowers have requested the Agents and Lenders forbear from exercising the Agents’ rights and remedies granted pursuant to the Financing Agreement and other Loan Documents in order to provide the Borrowers an opportunity to consider various business alternatives.  The Agents and Lenders have agreed to forbear from exercising their rights and remedies solely in accordance with the terms and conditions of this Amendment; and

WHEREAS, the Borrowers have requested that the Agents and the Lenders effect certain amendments to the Financing Agreement, in each case, as more specifically set forth herein, and the Agents and the Lenders are willing, as applicable, to effect such amendments to the Financing Agreement, in each case, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed by and between the Agents, the Lenders, the Borrowers and the Guarantors, as follows:

1.Defined Terms.  Except as otherwise defined in this Amendment, capitalized terms used herein that are not otherwise defined shall have the meanings given to those terms in the Financing Agreement (as amended hereby).

2.Effect on Loan Documents; Ratification and Reaffirmation.  The Financing Agreement and the other Loan Documents, after giving effect to this Amendment, shall be and remain in full force and effect in accordance with their terms and hereby are ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of any right, power, or remedy of the Agents or any other Secured Party under the Financing Agreement or any other Loan Document.  Each Loan Party party hereto hereby ratifies and confirms in all respects all of its obligations under the Loan Documents to which it is a party and each Loan Party party hereto hereby ratifies and confirms in all respects any prior grant of a security interest under the Loan Documents to which it is party and acknowledges that all of such security interests, and all collateral heretofore pledged as security for such indebtedness, continues to be and remains collateral for such indebtedness from and after the date hereof.  Each Loan Party further acknowledges and agrees that none of the Loan Parties have any defense (whether legal or equitable), set-off or counterclaim to the payment or performance of the Obligations in accordance with the terms of the Loan Documents.

3.Representations and Warranties.  Each Loan Party hereby represents and warrants to the Agents and the Lenders as follows:

a.other than the Existing Events of Default, no Default or Event of Default has occurred and is continuing on the date hereof.

b.the execution, delivery and performance by each Loan Party of this Amendment (i) have been duly authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable material Requirement of Law or (C) any material Contractual Obligation binding on or otherwise affecting it or any of its properties, and (iii) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties, except (solely for the purposes of subclause (iii)), to the extent where such contravention, default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal could not reasonably be expected to have a Material Adverse Effect;

c.no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of this Amendment;

d.this Amendment has been duly executed and delivered by each Loan Party and this Amendment constitutes a legal, valid and binding obligation of each such Loan Party, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity; and

e.all representations and warranties contained in the Financing Agreement and each other Loan Document are true and correct in all material respects (except for those representations and warranties that (i) are conditioned by materiality, which shall be true and correct in all respects and (ii) expressly relate to an earlier date or to the Existing Events of Default) on and as of the date hereof.

4.Acknowledgment of Indebtedness.  Each Loan Party acknowledges and agrees that, as of December 14, 2020, the Loan Parties are indebted, jointly and severally, (a) to the Tranche A Term Loan Lenders for the Tranche A Term Loans in an aggregate outstanding principal amount equal to $ $4,957,263.88 plus accrued and unpaid interest thereon, as provided in the Financing Agreement and the other Loan Documents, $1,238,759.62 of which is payable to Callodine Commercial Finance SPV, LLC (f/k/a Gordon Brothers Finance Company, LLC), $1,277,633.93 of which is payable to Gordon Brothers Brands, LLC and $2,440,870.33 of which is payable 1903 Partners, LLC; (b) the Tranche B Term Loan Lenders for the Tranche B Term Loans in an aggregate outstanding principal amount equal to $34,700,847.25 plus accrued and unpaid interest thereon, as provided in the Financing Agreement and the other Loan Documents, $8,671,317.37 of which is payable to Callodine Commercial Finance SPV, LLC, $8,943,437.61 of which is payable to Gordon Brothers Brands, LLC and $17,086,092.27 of which is payable 1903 Partners, LLC; (c) the Tranche C Term Loan Lenders for the Tranche C Term Loans in an aggregate 

outstanding principal amount equal to $841,820.01 plus accrued and unpaid interest thereon, as provided in the Financing Agreement and the other Loan Documents; (d) the Tranche D Term Loan Lenders for the Tranche D Term Loans in an aggregate outstanding principal amount equal to $5,050,920.00 plus accrued and unpaid interest thereon, as provided in the Financing Agreement and the other Loan Documents and (e) for accrued and unpaid fees and expenses of Agents and Lenders (and any other amounts due under the Financing Agreement and the other Loan Documents, including but not limited to reasonable fees and disbursements of counsel).

5.Acknowledgment of Existence of Events of Default.  Each Loan Party acknowledges and agrees that the Existing Events of Default have occurred and are continuing.  Each Loan Party acknowledges and agrees that the Agents and the Lenders have not waived the Existing Events of Default or any other Event of Default.  Each Loan Party further acknowledges and agrees that, as a result of the occurrence of the Existing Events of Default:  (a) all of such Loan Party’s obligations, liabilities and indebtedness to the Agents and the Lenders under the Financing Agreement and the other Loan Documents may at any time, subject to the terms of this Amendment, the Financing Agreement and the other Loan Documents, be declared due and payable in full, (b) the Agents and the Lenders have no further commitment to extend credit to the Borrowers and (c) the Agents and the Lenders, subject to the terms of this Amendment, are entitled to proceed to enforce any and all of their rights and remedies under the terms of the Financing Agreement and the other Loan Documents.

6.Conditions Precedent to Effectiveness.  This Amendment shall not be effective until each of the following conditions precedent have been satisfied:

a.the Agents shall have received this Amendment, duly executed by each of the parties hereto;

b.the Agents shall have received the First Amendment to Fifth Amendment Fee Letter, dated as of the date hereof, by and among the Borrowers, the Agents, and the Lenders;

c.the Borrowers shall have paid in full all invoiced cost and expenses incurred in connection with the preparation, execution, delivery and administration of this Amendment;

d.each of the representations and warranties set forth in Section 3 hereof shall be true and correct on and as of the date hereof; and

e.all action on the part of the Loan Parties necessary for the valid execution, delivery and performance by the Loan Parties of this Amendment shall have been duly and effectively taken.

7.[Reserved].

8.Covenants and Agreements.  Without any prejudice or impairment whatsoever to any of the rights and remedies of the Agents or any Lender contained in the Financing Agreement or any of the other Loan Documents or in any agreement, document or instrument executed in connection therewith, each of the Loan Party’s covenants and agrees with the Agents and the Lenders that so long as the Existing Events of Default have not been waived by the Required Lenders (it being understood and agreed that, unless otherwise explicitly set forth herein, the terms of this Section 8 shall survive the termination of the Forbearance Period so long as the Existing Events of Default are continuing):

a.Approved Budget.  The Borrowers have delivered to the Agents on December 14, 2020 a weekly budget March 31, 2021, prepared by the Administrative Borrower, which budget shall include information on a line item basis as to (w) projected cash receipts, (x) projected disbursements (including ordinary course operating expenses, capital expenditures, asset sales, credit party expenses and any other fees and expenses relating to the Loan Documents), (y) a calculation of the Borrowing Base and (z) the amount of Qualified Cash, which shall be in form and substance acceptable to the Agents (the “Approved Budget”) and each such Approved Budget to be consistent with past practice.  At all times during the Forbearance Period, the Borrowers shall deliver to the Agents on or before 2:00 p.m. (Boston time) on Friday (or, if such day is not a Business Day, on the next succeeding Business Day) an updated Approved Budget for the thirteen (13) week period commencing as of the Sunday of such week, in form and substance satisfactory to the Agents (it being understood that each subsequent Approved Budget shall only add projections for the last week of the thirteen (13) week period covered thereby and shall not modify any prior periods, and no such updated, modified or supplemented budget shall be effective until so approved by the Agents and only once so approved by the Agents shall it be deemed an “Approved Budget”).

b.Budget Variance Report.  The Loan Parties shall continue to comply with the Budget Variance Report obligations set forth in the Fifth Amendment and, as such, on or before 2:00 p.m. (Boston time) on Friday of each week, the Borrowers shall deliver to the Agents a Budget Variance Report.  As used herein “Budget Variance Report” means a weekly report provided by the Borrowers to the Agents, showing amount of Qualified Cash as of Saturday of each week and the actual receipts and disbursements for each line item compared to the Approved Budget, as applicable, on a cumulative basis from the date hereof of until the fourth (4th) week after the date hereof and then on a rolling four (4) week basis at all times thereafter, noting therein all variances, on a line-item basis, from amounts set forth for such period in the Approved Budget, and shall include or be accompanied by explanations for all material variances and certified by an Authorized Officer of the Parent.

c.[Reserved].

d.Modified Principal and Interest Payments During the Forbearance Period.  During the Forbearance Period (as hereinafter defined) only and subject to the provisions of Section 8(h) hereof:  (i) the U.S. Borrower and the Dutch Borrower, as applicable, shall not be required to make the regularly scheduled cash amortization payments on the Tranche A Term Loans or the Tranche B Term Loans pursuant to Section 2.03(a) and (b) of the Financing Agreement, (ii) (x) interest in respect of the Loans which accrues on the Loans held by Callodine Commercial Finance SPV, LLC and its successors and assigns shall be paid in cash on the 

applicable interest payment date at a rate per annum equal to the LIBOR Rate plus 7.95% (it being understood and agreed that the LIBOR Rate will be no less than 2.00% as set forth in the definition of “LIBOR Rate”) and (y) all other interest (including the balance of the interest in respect of the Loans which accrues on the Loans held by Callodine Commercial Finance SPV, LLC and its successors and assigns) shall be automatically paid-in-kind on the applicable interest payment date by capitalizing and adding such amounts to the principal amount of the applicable Loans on which such interest accrued (the interest under this clause (y), the “Capitalized Interest”) and (iii) the Loans shall not accrue interest at the Post-Default Rate.  The Capitalized Interest shall be treated as principal of the applicable Loans on which such interest accrued for all purposes of the Loan Documents and thereafter bear interest as provided in Section 2.04 of the Financing Agreement.  For the avoidance of doubt, (i) this Section 8(d) only modifies the Financing Agreement as explicitly set forth herein, (ii) after the Initial Tax Refunds (as hereinafter defined) and Subsequent Tax Refunds (as hereinafter defined) in an aggregate amount of at least $4,900,000 have been received by the Loan Parties (which are required to be applied to the Obligations in accordance with the provisions of Section 8(h) hereof), clauses (i) and (ii) in the first sentence of this Section 8(d) shall no longer apply and all of the payment and repayment provisions in the Financing Agreement with respect thereto shall govern, and (iii) after the Forbearance Period ends (but subject to the provisions of Section 8(h) hereof), this Section 8(d) shall no longer apply and all of the payment and repayment provisions in the Financing Agreement with respect thereto shall govern.

e.Consolidated EBITDA Definition.  During the Forbearance Period only, Section 1.01 of the Financing Agreement shall be amended by deleting “$750,000” in sub-clause (ix) of the definition of “Consolidated EBITDA” and inserting “$1,200,000.00” in lieu thereof.

f.Qualified Cash.  During the Forbearance Period only, Section 7.03(a) of the Financing Agreement shall be amended by deleting “$700,000” and inserting “$100,000.00” in lieu thereof.

g.Consolidated EBITDA.  During the Forbearance Period only, Section 7.03(b) of the Financing Agreement shall be amended by deleting “$9,500,000” where it appears opposite “January 31, 2020 and thereafter” and inserting “$6,500,000” in lieu thereof.

h.Application of Tax Refunds.  The Loan Parties shall promptly (and in any event within five (5) Business Days of receipt thereof), use the proceeds of any tax (or similar) refund received by the Loan Parties from the IRS or any other Governmental Authority with respect to the Loan Parties’ tax return(s) relating to the 2018 or 2019 Fiscal Year as follows:

i.With respect to any Initial Tax Refunds (as hereinafter defined), (x) 30% of the proceeds of such Initial Tax Refunds may be retained by the Loan Parties for working capital and other general corporate purposes; and (y) 70% of the proceeds of such Initial Tax Refunds shall repay the Obligations as follows:  (A) first, to any Capitalized Interest that has accrued on the Tranche A Term Loan and Tranche B Term Loan (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) and to any “Payables” due to Callodine Commercial Finance, LLC (successor to Gordon Brothers Finance Company) pursuant to that 

certain amended and restated letter agreement, dated as of September 1, 2020 (as may be amended), by and among, among others, the Parent and Gordon Brothers Finance Company (as assigned by Gordon Brothers Finance Company to Callodine Commercial Finance, LLC, pursuant to that certain assignment letter agreement, dated as of December [__], 2020, the “Payable Letter”), until such amounts under this clause have been paid in full, (B) second, to any Capitalized Interest that has accrued on the Tranche C Term Loan and Tranche D Term Loan (on a pro rata basis between the Tranche C Term Loan and the Tranche D Term Loan) but only to the extent of such Capitalized Interest which would not have been capitalized but for the provisions of Section 8(d) hereof, the provisions of Section 8(d) of the Fifth Amendment, and the provisions of Section 8(d) of the Fourth Amendment until such Capitalized Interest has been paid in full, (C) third, towards the regularly scheduled cash amortization payments on the Tranche A Term Loans and the Tranche B Term Loans which were required to be paid on May 1, 2020 pursuant to Section 2.03(a) and (b) of the Financing Agreement (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) but for the provisions of Section 8(d) of the Fourth Amendment until such principal payments have been paid in full, (D) fourth, towards the regularly scheduled cash amortization payments on the Tranche A Term Loans and the Tranche B Term Loans required to be paid on November 1, 2020 pursuant to Section 2.03(a) and (b) of the Financing Agreement (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) but for the provisions of Section 8(d) of the Fifth Amendment until such principal payments have been paid in full, (E) fifth, to the extent not previously paid, towards the regularly scheduled cash amortization payments on the Tranche A Term Loans and the Tranche B Term Loans required to be paid on February 1, 2021 pursuant to Section 2.03(a) and (b) of the Financing Agreement (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) but for the provisions of Section 8(d) of this Amendment until such principal payments have been paid in full, and (F) sixth, in the manner provided in Section 2.05(d) of the Financing Agreement.  For purposes hereof, the “Initial Tax Refunds” shall mean all tax or similar refunds received by the Loan Parties from the IRS or other Governmental Authority up to an aggregate amount of $2,400,000.

ii.With respect to any other refunds received by the Loan Parties from the IRS or other Governmental Authority after the Initial Tax Refunds (each a “Subsequent Tax Refund”), (x) 40% of the proceeds of each such Subsequent Tax Refund may be retained by the Loan Parties for working capital and other general corporate purposes and (y) 60% of the proceeds of each such Subsequent Tax Refund shall repay the Obligations, in either case under this clause (y), as follows:  (A) first, to any Capitalized Interest that has accrued on the Tranche A Term Loan and the Tranche B Term Loan (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) and to any “Payables” due to Callodine Commercial Finance, LLC (successor to Gordon Brothers Finance Company) pursuant to the Payable Letter, until such amounts under this clause have been paid in full, (B) second, to any Capitalized Interest that has accrued on the Tranche C Term Loan and the Tranche D Term Loan (on a pro rata basis between the 

Tranche C Term Loan and the Tranche D Term Loan) but only to the extent of such Capitalized Interest which would not have been capitalized but for the provisions of Section 8(d) hereof, the provisions of Section 8(d) of the Fifth Amendment, and the provisions of Section 8(d) of the Fourth Amendment until such Capitalized Interest has been paid in full, (C) third, towards the regularly scheduled cash amortization payments on the Tranche A Term Loans and the Tranche B Term Loans required to be paid on May 1, 2020 pursuant to Section 2.03(a) and (b) of the Financing Agreement (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) but for the provisions of Section 8(d) of the Fourth Amendment until such principal payments have been paid in full, (D) fourth, towards the regularly scheduled cash amortization payments on the Tranche A Term Loans and the Tranche B Term Loans required to be paid on November 1, 2020 pursuant to Section 2.03(a) and (b) of the Financing Agreement (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) but for the provisions of Section 8(d) of the Fifth Amendment until such principal payments have been paid in full, (E) fifth, to the extent not previously paid, towards the regularly scheduled cash amortization payments on the Tranche A Term Loans and the Tranche B Term Loans required to be paid on February 1, 2021 pursuant to Section 2.03(a) and (b) of the Financing Agreement (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) but for the provisions of Section 8(d) of this Amendment until such principal payments have been paid in full, and (G) sixth, in the manner provided in Section 2.05(d) of the Financing Agreement.  Once the Initial Tax Refunds and Subsequent Tax Refunds received aggregate to at least $4,900,000, the provisions in clauses (i) and (ii) of the first sentence in Section 8(d) hereof shall no longer be applicable.

Any payments of the Obligations made pursuant to this Section 8(h) shall not be subject to the Applicable Premium.  Notwithstanding the foregoing, if the Administrative Agent, Collateral Agent, or Required Lenders, as applicable, have elected to apportion the payments as set forth in, and in accordance with the terms of, Section 4.03(b) of the Financing Agreement, then the provisions of such Section 4.03(b) shall control.  The provisions of this Section 8(h) amend and restate the provisions of Section 8(h) of the Fifth Amendment in their entirety and Section 8(h) of the Fifth Amendment shall be superseded by this Section 8(h).  All references to Section 8(h) of the Fifth Amendment in any Loan Document or other document or instrument delivered in connection therewith shall be deemed to refer to this Section 8(h) and the provisions hereof.

i.Board Observer.  Each Loan Party will continue to permit the Agents to have a representative (the “Board Observer”) present (whether in person or by telephone) in an observer capacity at all duly convened meetings of the Board of Directors or managers of each Loan Party and any committee meetings thereof.  The Board Observer must be approved by the U.S. Borrower (such approval not to be unreasonably withheld, conditioned or delayed).  Each Loan Party shall provide the Board Observer representative with a notice and agenda of each duly convened meeting of the Board of Directors and any committee thereof at least seven (7) days (or such lesser time as agreed to by the Board Observer) in advance of such meeting, and all of the information and other materials that are distributed to the Board of Directors or any committee thereof, as applicable, at the same time and in the same manner as such notices, agendas, information and other materials are provided to the members of the Board of Directors or any 

committee thereof; provided, however, that the Loan Parties reserve the right to withhold any information and to exclude the Board Observer from any meeting or portion thereof if (x) access to such information or attendance at such meeting would, upon advice of the Loan Parties’ counsel, adversely affect the attorney-client privilege between the Loan Parties and their counsel or (y) in the reasonable judgment of the Loan Parties, access to such information or attendance at such meeting could result in a conflict of interest between the Secured Parties and the Loan Parties.  The Loan Parties shall reimburse the Board Observer for the reasonable out-of-pocket expenses (including travel expenses) incurred by the Board Observer in connection with the Board Observer attending any meetings of the Board of Directors or any committees thereof.  The Parent shall hold at least one meeting of its Board of Directors each month.

j.Tax Returns.  The Loan Parties shall (i)  deliver to the Administrative Agent and the Lenders copies of all written correspondence sent to or received from the IRS related to the Loan Parties’ 2018 and 2019 Fiscal Year federal tax filings (including, without limitation, any such correspondence related to the anticipated tax (or similar) refunds related thereto) together with each weekly Budget Variance Report delivered by the Loan Parties and (ii) use their best efforts to collect any and all anticipated tax (or similar) refunds in respect of the Loan Parties’ 2018 and 2019 Fiscal Year tax filings from the IRS or other applicable Governmental Authority as soon as possible.  Additionally, the Loan Parties shall notify the Administrative Agent and the Lenders of any conversations (including telephonic conversations), and describe the substance of such conversations, that a representative of the Loan Parties has with a representative of the IRS related to the Loan Parties’ 2018 and 2019 Fiscal Year federal tax filings together with each weekly Budget Variance Report delivered by the Loan Parties.  With respect to any state tax filings and solely to the extent requested by any Agent or any Lender, the Loan Parties shall (i) promptly deliver to the Administrative Agent and the Lenders copies of all written correspondence sent to or received from the applicable Governmental Authority related to the Loan Parties’ 2018 and 2019 Fiscal Year state tax filings (including, without limitation, any such correspondence related to the anticipated tax (or similar) refunds related thereto) and (ii) notify the Administrative Agent and the Lenders of any conversations (including telephonic conversations), and describe the substance of such conversations, that a representative of the Loan Parties has with a representative of the applicable Governmental Authority related to the Loan Parties’ 2018 and 2019 Fiscal Year state tax filings, in each case, together with each weekly Budget Variance Report delivered by the Loan Parties.

9.Forbearance by Agents and Lenders.  In consideration of the Loan Parties performance in accordance with this Amendment (including, without limitation, the requirement of the Loan Parties to perform their obligations under the Financing Agreement (as hereby amended), the other Loan Documents, the Fee Letter, and the Fifth Amendment Fee Letter), the Agents and Lenders shall forbear from enforcing their rights and remedies under the Financing Agreement and other Loan Documents until the earlier of (i) December 31, 2020 at 5:00 p.m. (Boston time); provided, however, if a Purchase Agreement (as defined in the Fifth Amendment Fee Letter) is executed and delivered to the Agents and the Lenders on or before December 31, 2020 in accordance with the terms of the Fifth Amendment Fee Letter, then such date shall be extended to March 1, 2021 at 5:00 p.m. (Boston time); provided, further, however, if the Sale Closing Extension Event under (and as defined in) the Fifth Amendment Fee Letter has occurred, such date shall be further extended to March 31, 2021 at 5:00 p.m. (Boston time) (the then-applicable date under this clause (i), the “Termination Date”) or (ii) the occurrence of a Termination Event (the period from the Fifth Amendment Effective Date until the earlier to occur of the Termination Date and the occurrence of a Termination Event, the “Forbearance Period”).  Notwithstanding the foregoing:

a.Nothing contained in this Amendment shall constitute:  (i) a waiver by the Agents or Lenders of any Event of Default under the Financing Agreement or Loan Documents, whether now existing or hereafter arising; or (ii) a waiver of any of the Agents’ or Lenders’ contractual and legal rights and remedies.

b.This Amendment shall only constitute an agreement by the Agents and Lenders to forbear from enforcing its rights and remedies upon the terms and conditions expressly set forth herein.

10.Termination Events.  The occurrence of any one or more of the following events shall constitute a termination event (hereinafter, a “Termination Event”) under this Amendment:

a.The failure of the Loan Parties to promptly, punctually, or faithfully perform any term, condition, or covenant of this Amendment as and when due, it being expressly acknowledged and agreed that TIME IS OF THE ESSENCE.

b.Except as otherwise expressly set forth therein, the failure of the Loan Parties to promptly, punctually, or faithfully perform any term, condition, or covenant of the Fifth Amendment Fee Letter as and when due thereunder, it being expressly acknowledged and agreed that TIME IS OF THE ESSENCE.

c.The occurrence of any Event of Default under the Financing Agreement or any other Loan Document, other than the Existing Events of Default.

d.The commencement, assistance, cooperation, or participation as an adverse party or adverse witness by Loan Party in any suit or other proceeding against the Agents or any Lenders or any Affiliates of the Agents or any Lenders, relating to the Obligations or any of the transactions contemplated by the Financing Agreement, the other Loan Documents, this Amendment, or any other documents, agreements or instruments executed in connection with the Loan Documents.

e.The occurrence of any Proposed Transaction Termination Event (as defined in the Fifth Amendment Fee Letter).

f.The termination or expiration of the Purchase Agreement (as defined in the Fifth Amendment Fee Letter).

11.Rights Upon Termination.  Upon the Termination Date or the occurrence of any Termination Event, the forbearance as set forth in this Amendment shall terminate upon notice to the Administrative Borrower, and thereafter the Agents and Lenders may immediately commence enforcing their rights and remedies pursuant to the Financing Agreement and Loan Documents and otherwise without notice or demand.

12.Amendments to Financing Agreement.  Subject to the satisfaction of the conditions precedent specified in Section 6, the Financing Agreement is hereby amended by:

a.amending Section 1.01 thereof by amending and restating the definition of “Fifth Amendment Fee Letter” therein as follows:

““Fifth Amendment Fee Letter” means that certain fee letter, dated as of September 1, 2020, by and between the Borrowers, the Agents, and the Lenders, as amended by that certain First Amendment to Fifth Amendment Fee Letter, dated as of December 15, 2020, by and between the Borrowers, the Agents, and the Lenders.”

b.amending Section 1.01 thereof by amending and restating the definition of “Final Maturity Date” therein as follows:

““Final Maturity Date” means December 31, 2020; provided, however, if a Purchase Agreement (as defined in the Fifth Amendment Fee Letter) is executed and delivered to the Agents and the Lenders on or before December 31, 2020 in accordance with the terms of the Fifth Amendment Fee Letter, but such Purchase Agreement terminates or expires on or after December 31, 2020, then the Final Maturity Date shall mean the date that such Purchase Agreement terminates or expires; provided, further, however, if a Purchase Agreement is executed and delivered to the Agents and the Lenders on or before December 31, 2020 in accordance with the terms of the Fifth Amendment Fee Letter and so long as such Purchase Agreement does not terminate or expire, then the Final Maturity Date shall mean March 31, 2021.”

c.amending Section 2.05(c)(iv) thereof by deleting such Section in its entirety and replacing it with the following:

“(iv) Upon the receipt by any Loan Party or any of its Subsidiaries of any Extraordinary Receipts, the Borrowers shall immediately (and in any event within one (1) Business Day) prepay the outstanding principal of the Loans, to be applied in accordance with Section 2.05(d), in an amount equal to 100% of the Net Cash Proceeds received by such Person; provided, however, with respect to any Extraordinary Receipts payable to a Loan Party constituting a termination fee or similar payment under any acquisition, merger, sale or similar agreement, the Loan 

Parties shall direct that the obligor of such termination fee or similar payment pay such fee directly to the Administrative Agent, which the Administrative Agent shall apply towards the Obligations in accordance with the terms hereof and the other Loan Documents.”

13.Release.

a.Each Loan Party hereby releases and forever discharges the Agents, the Lenders and each of their parents, subsidiaries and affiliates, past or present, and each of them, as well as each of Agents’ and Lenders’ directors, officers, agents, servants, employees, shareholders, representatives, attorneys, administrators, executors, heirs, assigns, predecessors and successors in interest, and all other persons, firms or corporations with whom any of the former have been, are now, or may hereafter be affiliated, and each of them (collectively, the “Releasees”), from and against any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action in law or equity, obligations, controversies, debts, costs, expenses, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether known or unknown, fixed or contingent, suspected or unsuspected by any Loan Party, and whether concealed or hidden (collectively, “Claims”), which any Loan Party now owns or holds or has at any time heretofore owned or held, which are based upon or arise out of or in connection with any matter, cause or thing existing at any time prior to the date hereof or anything done, omitted or suffered to be done or omitted at any time prior to the date hereof in connection with the Financing Agreement, the other Loan Documents or this Amendment (collectively the “Released Matters”).  Each Loan Party represents, warrants and agrees that in executing and entering into this release, they are not relying and have not relied upon any representation, promise or statement made by anyone which is not recited, contained or embodied in this Amendment or the Loan Documents.  Each Loan Party has reviewed this release with the Loan Parties’ legal counsel, and understands and acknowledges the significance and consequence of this release and of the specific waiver thereof contained herein.  Each Loan Party understands and expressly assumes the risk that any fact not recited, contained or embodied therein may turn out hereafter to be other than, different from, or contrary to the facts now known to any Loan Party or believed by any Loan Party to be true.  Nevertheless, each Loan Party intends by this release to release fully, finally and forever all Released Matters and agrees that this release shall be effective in all respects notwithstanding any such difference in facts, and shall not be subject to termination, modification or rescission by reason of any such difference in facts.

b.Each Loan Party acknowledges that it has been informed by its respective counsel of the provisions of Section 1542 of the California Civil Code and the possible applicability of those provisions to this Amendment.  With the advice of its respective counsel, to the extent the releases in this Amendment are deemed to be general releases in connection with the matters they encompass, the Borrowers and each Guarantor hereby expressly waives and relinquishes all rights and benefits which they have or may in the future have under Section 1542 of the California Civil Code which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

Each Loan Party acknowledges that it may hereafter discover facts which are different from or in addition to those which they now know or believe to be true with respect to the Loan Documents or to the matters herein released, and they agree that the Loan Documents shall be and remain in full force and effect in all respects notwithstanding any such different or additional facts.  The foregoing references to California law shall not in any way derogate from the provisions of Section 19 below, it being understood and agreed by all parties hereto that, as provided for in Section 19, New York law shall govern this Amendment.

c.The provisions of this Section 13 shall survive the termination of the Forbearance Period.

14.No Novation; Entire Agreement.  This Amendment evidences solely the specified terms and obligations of the Loan Parties under the Financing Agreement and is not a novation or discharge of any of the other obligations of the Loan Parties under the Financing Agreement.  There are no other understandings, express or implied, among the Loan Parties, the Agents and the Lenders regarding the subject matter hereof or thereof, and the forbearance terms herein supersede all prior forbearance agreements entered into between the Agents, the Lenders, and the Loan Parties.

15.Severability.  Any provision of this Amendment 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 portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

16.Headings.  Headings and captions used in this Amendment are included for convenience of reference only and shall not be given any substantive effect.

17.Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by telecopier or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by telecopier or electronic mail also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

18.Miscellaneous.  The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their permitted successors and assigns.  For the avoidance of doubt, the Loan Parties hereby agree that they shall reimburse, and pay in full in cash, all unpaid and invoiced fees, costs and expenses of counsel to the Agents required to be paid pursuant to the terms of the Loan Documents.

19.Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

20.WAIVER OF JURY TRIAL, ETC.  EACH LOAN PARTY, EACH AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AMENDMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AMENDMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  EACH LOAN PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.  EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AMENDMENT.

21.Informed Execution.  Each of the Loan Parties represents and warrants to the Agents and Lenders that:

a.Each Loan Party has read and understands all of the terms and conditions of this Amendment;

b.The Loan Parties intend to be bound by the terms and conditions of this Amendment; and

c.The Loan Parties are executing this Amendment freely and voluntarily, without duress, after consultation with independent counsel of the Loan Parties own selection.

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

 

IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

BORROWERS:

APEX GLOBAL BRANDS, INC. (f/k/a Cherokee Inc.), as U.S. Borrower

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

 

IRENE ACQUISITION COMPANY B.V., as Dutch Borrower

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

 

By:  /s/ Kimberly Doyle
Name:Kimberly Doyle
Title: Managing Director    

 

[Signature Page to Sixth Amendment to Financing Agreement and Forbearance Agreement]

 

GUARANTORS:

APEX GLOBAL BRANDS, INC.

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

SPELL C. LLC

By:  APEX GLOBAL BRANDS, INC., its sole member

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

CHEROKEE BRANDS LLC

By:  APEX GLOBAL BRANDS, INC., its sole member

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

HAWK 900 BRANDS LLC

By:  APEX GLOBAL BRANDS, INC., its sole member

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

 

[Signature Page to Sixth Amendment to Financing Agreement and Forbearance Agreement]

 

EDCA LLC

By:  APEX GLOBAL BRANDS, INC., its sole member

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

FFS HOLDINGS, LLC

By:  APEX GLOBAL BRANDS, INC., its sole member

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

FLIP FLOP SHOES FRANCHISE COMPANY, LLC

By:  FFS HOLDINGS, LLC, its sole member

By:  APEX GLOBAL BRANDS, INC., its sole member

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

  

HI-TEC SPORTS INTERNATIONAL HOLDINGS B.V.

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

 

[Signature Page to Sixth Amendment to Financing Agreement and Forbearance Agreement]

 

HI-TEC SPORTS PLC

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

HI-TEC INTERNATIONAL HOLDINGS B.V.

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

HI-TEC SPORTS UK LIMITED

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

HI-TEC NEDERLAND B.V.

 

By:  /s/ Henry Stupp
Name:  Henry Stupp
Title:    Chief Executive Officer

 

[Signature Page to Sixth Amendment to Financing Agreement and Forbearance Agreement]

 

COLLATERAL AGENT AND ADMINISTRATIVE AGENT:

CALLODINE COMMERCIAL FINANCE, LLC (as successor to Gordon Brothers Finance Company)

 

By: /s/ Caitlin Sanders
Name:  Caitlin Sanders
Title:    Managing Director

LENDERS:

CALLODINE COMMERCIAL FINANCE SPV, LLC (f/k/a Gordon Brothers Finance Company, LLC)

 

By: /s/ Caitlin Sanders
Name:  Caitlin Sanders 

Title:    Managing Director    

 

[Signature Page to Sixth Amendment to Financing Agreement and Forbearance Agreement]

 

GORDON BROTHERS BRANDS, LLC

 

By: /s/ Rafael Klotz
Name:  Rafael Klotz
Title:    Vice President

1903 PARTNERS, LLC

 

By: /s/ Leslie Zmugg
Name:  Leslie Zmugg
Title:    Secretary

[Signature Page to Sixth Amendment to Financing Agreement and Forbearance Agreement]Exhibit
10.1

 

ASSET
PURCHASE AND SALE AGREEMENT

 

THIS
ASSET PURCHASE AND SALE AGREEMENT (the “Agreement”) is made and entered into as of the 14th day of December,
by and between CORE ENERGY, LLC, a Kansas limited liability company and the members of CORE ENERGY, LLC; Mandalay LLC and
Coal Creek Energy, LLC (collectively, “Seller”) and INFINITY ENERGY RESOURCES, INC., a Delaware corporation
(“Purchaser”). Seller and Purchaser are sometimes herein referred to as the “Parties”.

 

WHEREAS,;
on September 2, 2020, Purchaser acquired an option (the “Option”)
from Core to purchase the production and mineral rights to and a leasehold interest in certain oil and gas properties in the Central
Kansas Uplift geological formation, as set forth on Exhibit A (the “Properties”). The Option granted Purchaser
the right to acquire 100% of the working and leasehold interests in the Properties upon payment to Core of $900,000 any time prior
to November 1, 2020, which has been extended by mutual agreement to January 11, 2021 in order to finalize the terms of
this Agreement and to facilitate due diligence. On September 2, 2020, Purchaser issued 500,000 shares (the “Option Shares”)
of its common stock, par value $0.0001 per share, to Core in consideration for the Option.; and 

 

WHEREAS,
Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Properties, upon the terms and conditions
set forth herein.

 

NOW,
THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.
Transaction. Upon the terms and subject to the conditions hereinafter set forth, Purchaser hereby agrees to purchase from
Seller and Seller hereby agrees to sell to Purchaser, all of Seller’s right, title, interest and estate, real or personal,
recorded or unrecorded, movable or immovable, tangible or intangible, in and to the Assets as defined below (but excluding the
Excluded Assets).

 

2.
Assets. For purposes of this Agreement, “Assets” means:

 

a.
All of the oil and gas leases, subleases and other leaseholds, carried interests, farmout rights, options, and other properties
and interests, including producing an non-producing interests, as specifically described on Exhibit 2a-1, subject to such
depth limitations and other restrictions as described herein (collectively, the “Leases”), together with each
and every kind and character of right, title, claim, and interest that Seller has in and to the Leases or the lands currently
pooled, unitized, communitized or consolidated therewith; INSOFAR AND ONLY INSOFAR, however, as the Leases cover the lands depicted
on Exhibit 2a-2 (the “Lands”), subject to the royalty interests of third parties as agreed to by Purchaser
and specifically set forth on Exhibit 2a-3, attached hereto; for the avoidance of doubt, Purchaser covenants not to object
to any scheduled Lease that expires prior to the Closing Date in accordance with their respective terms;

 

    	1

     

    

 

b.
All oil, gas, water or injection wells located on the Lands, whether producing, shut- in, or abandoned, including the working
and net revenue interests in the wells agreed to by Purchaser and shown on Exhibit 2b attached hereto, consisting
of three producing wells, one horizontal injection well and one water supply well (collectively, the “Wells”);

 

c.
All interest of Seller in or to any currently existing pools or units which include any Lands or all or a part of any Leases or
include any Wells, including those pools or units agreed to by Purchaser and shown on Exhibit 2c as the “Units”;
and including all interest of Seller in production of hydrocarbons from any such Unit, whether such Unit production of hydrocarbons
comes from Wells located on or off of a Lease, and all tenements, hereditaments and appurtenances belonging to the Leases and
Units;

 

d.
All contracts, agreements and instruments without duplication by which the Properties are bound, or that relate to or are otherwise
applicable to the Properties agreed to by Purchaser and comprised of, (i) the certain CHS Purchase Agreement attached hereto as
Exhibit 2d-1; the certain Operating Agreement attached hereto as Exhibit 2d-2, the month-to-month lease of the building
occupied by Seller on the Land that has all-in monthly rent of $800 and is subject to termination on demand and any other operating
agreements, unitization, pooling and communitization agreements, declarations and orders, joint venture agreements, farming and
farmout agreements, exploration agreements, participation agreements, exchange agreements, transportation or gathering agreements,
agreements for the sale and purchase of oil, gas, casinghead gas or processing agreements to the extent applicable to the Properties
or the production of hydrocarbons produced in association therewith from the Properties, as agreed to by Purchaser and specifically
set forth on Exhibit 2d-3 (the “Contracts”), but excluding any contracts, agreements and instruments
to the extent transfer is restricted by third-party agreement or applicable law as agreed to by Purchaser and specifically set
forth on Exhibit 2d-3. To the extent the required consents to transfer are not obtained prior to Closing, Seller shall
use its commercially reasonable best efforts to obtain the applicable consent promptly after Closing;

 

e.
All easements, permits, licenses, servitudes, rights-of-way, surface leases and other surface rights (the “Surface Contracts”)
appurtenant to, and used or held for use primarily in connection with the Properties, as agreed to by Purchaser and as attached
hereto as Exhibit 2e. To the extent any permit or other rights are not obtained prior to Closing, Seller shall use its
commercially reasonable best efforts to obtain the applicable permit or right promptly after Closing.;

 

f.
All equipment, machinery, fixtures and other tangible personal property and improvements located on the Properties or used or
held for use primarily in connection with the operation of the Properties, including, but not limited to the equipment, etc. agreed
to by Purchaser and as specifically set forth on Exhibit 2f, attached hereto (the “Equipment”);

 

g.
All flow lines, saltwater disposal lines, pipelines, gathering systems and appurtenances thereto located on the Properties or
used, or held for use, primarily in connection with the operation of the Properties as specifically described in the Leases (the
“Pipelines”);

 

    	2

     

    

 

h.
All hydrocarbons produced from or attributable to the Leases, Lands, and Wells from and after the Closing Date (as defined below),
together with over-production of hydrocarbons or under-production of hydrocarbons or over-deliveries or under- deliveries with
respect to hydrocarbons produced from or allocated to the Assets, regardless of whether such arise at the wellhead, pipeline,
gathering system, transportation or other location associated with the Properties; and

 

i.
Originals of all reports, surveys, financials lease files, land files, well files; gas and oil sales contract files; gas processing
files; division order files, abstracts, title opinions, land surveys, non-confidential logs, maps, and other books, records, data,
files, and accounting records, in each case to the extent directly related to the Assets, or used or held for use primarily in
connection with the maintenance or operation thereof, but excluding (i) [reserved], (ii) [reserved], (iii) attorney-client
privileged communications and work product of Seller’s legal counsel (other than title opinions), (iv) [reserved], and (v)
records relating to the negotiation and consummation of the sale of the Assets (subject to such exclusions, the “Records”).

 

3.
Excluded Assets. The Assets shall not include, and there is excepted, reserved and excluded from the purchase and sale
contemplated hereby (collectively, the “Excluded Assets”) those items listed below and are specifically set
forth on Exhibit 3c; notwithstanding the foregoing, Purchase shall have reasonable access to and right to copy such records,
etc. for regulatory compliance purposes or to effectuate the transactions contemplated hereby:

 

a.
any corporate, financial, income and franchise tax and legal records of Seller that relate to (i) Seller’s business other
than as described herein and (ii) the Excluded Assets;

 

b.
all rights to any refund of taxes or other costs or expenses borne by Seller or Seller’s predecessors in interest and title
attributable to periods prior to the Closing Date;

 

c.
[reserved];

 

d.
all trade credits, account receivables, note receivables, take-or-pay amounts receivable, and other receivables attributable to
the Assets with respect to any period of time prior to the Closing Date; provided that, Seller shall, as of the Closing Date,
empty all oil storage tanks located on the Properties, sell the oil otherwise stored therein, and the accounts receivable generated
thereby shall be Excluded Assets;

 

e.
all rights, titles, claims and interests of Seller or any affiliate of Seller (i) to or under any policy or agreement of insurance
or any insurance proceeds, and (ii) to or under any bond or bond proceeds; provided that, to the best of Seller’s knowledge,
the sole bond outstanding is the bond in place securing Seller’s use of electricity on the Properties for any claim arising
prior to the Effective Date;

 

4.
Option; Share Option. If the Closing contemplated hereby does not occur for any reason other than Seller’s willful
uncured breach of this Agreement, the Option Shares shall be retained by Seller as consideration for the grant of the Option.
If the Closing contemplated hereby does not occur by reason of the Seller’s willful uncured breach of this Agreement, the
Option Shares shall upon demand be returned to Purchaser.

 

    	3

     

    

 

5.
Purchase Price. The purchase price to be paid by Purchaser to Seller with respect to the Assets shall be Nine Hundred Thousand
Dollars ($900,000) less the holdback of $50,000 (the “Holdback”) and any adjustment for a Title Defect (the
“Purchase Price”). The Purchase Price shall be paid in cash at closing, as set forth herein. In addition to
the foregoing, the Purchase Price will be adjusted for the proration of costs and revenues in a manner customary for a transaction
to this sort.

 

6.
Deposit. Aside from the Holdback, no deposit has been made by Purchaser hereunder.

 

7.
Diligence Period; Defects; Termination. During the period of time between the execution of this Agreement and up to and
through the Closing Date (the “Termination Date”), Purchaser may, at Purchaser’s sole cost and risk shall
the right to accomplish due diligence to its satisfaction, including, without limitation, (i) conduct one or more inspections
of Seller’s operated Properties subject to coordination with Seller’s field personnel, (ii) review and copy Seller’s
HSE and regulatory compliance records (which will be transferred to Purchaser at Closing), (iii) review Seller’s title to
the Leases and may notify Seller in writing if a material claim exists or if Seller owns less than what is represented in this
Agreement (“Defect Notice”), and (iv) otherwise have access and right to copy Seller’s books and records
and interview Seller and its representatives, including, without limitation, Seller’s accountants. If Purchaser provides
Seller with a Defect Notice, then Seller and Purchaser shall negotiate in good faith and reasonably attempt to agree by Closing
on the final Purchase Price to be paid to Seller and Assets being conveyed to Purchaser at Closing. In the event the sum of the
unresolved values attributed to Defect Notices, then Purchaser may terminate this Agreement by written notice delivered to Seller
prior to the Closing Date; in which case this Agreement and any and all rights, obligations, duties and privileges of the Parties
hereunder shall terminate and be of no further force or effect, as set forth in Section 21, below or deduct the amount set forth
in the Defect Notice from the Purchase Price, up to the maximum amount of Fifty Thousand Dollars ($50,000), in which case, the
amount so deducted will be retained by Purchaser and the remainder, if any will be distributed to Seller in accordance with the
terms hereof.

 

8.
Closing Date. The effective date of the sale and purchase shall be 7:00 AM Central Standard Time on January 1, 2021 (the
“Closing Date”).

 

9.
Closing. The closing shall occur when all the conditions to the Closing have been satisfied or otherwise waived by the
affected party. The tentative Closing is scheduled to occur on the business day prior to January 1, 2021, effective as of January
11, 2021 (the “Closing Date”) at such place as the Purchaser may determine; provided that the Parties
may elect to close via the electronic exchange of a fully executed copy of this Agreement, the Haas Petroleum -Core Energy, LLC
Settlement Agreement (the “Settlement Agreement”), and any ancillary definitive legal documentation contemplated
herein, including, without limitation, such certificates, documents of title and transfer, opinions, and other writings as Purchaser
may reasonably require.

 

    	4

     

    

 

10.
Assumed and Retained Obligations. Purchaser will assume all liabilities and obligations related to the Assets to the extent
arising after the Closing Date (the “Assumed Obligations”). Seller will retain liability for all third-party
claims asserted with respect to the Assets as well as all claims taxes, and expenses pertaining to the operation of the Properties
to the extent such claims arose prior to the Closing Date (the “Retained Obligations”). Retained Obligations
shall also include Seller’s liability for all third-party claims asserted with respect to the Excluded Assets as well as
all claims taxes, and expenses pertaining to the operation of Seller’s business other than those pertaining to the Assumed
Liabilities. 

 

11.
Assignment; Oil, Gas and Mineral Lease. At the Closing, the parties will execute an Assignment and Bill of Sale in the
form of Exhibit 11. Purchaser shall be responsible for filing such agreement in the appropriate public records of the county
where such Leases are located.

 

12.
Purchaser’s Representations and Warranties. Purchaser represents and warrants to Seller as follows, each of which
is materially true and correct as of the date of this Agreement and shall be materially true and correct as of Closing:

 

a.
Existence. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State
of Delaware and is duly qualified to carry on its business in the State of Kansas.

 

b.
Power. Purchaser has all requisite power and authority to carry on its business as presently conducted, to enter into this
Agreement and any other documents and agreements contemplated hereby, and to perform its obligations under the Leases and this
Agreement.

 

c.
Authorization. The execution, delivery, and performance by Purchaser of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized and approved by all necessary action of Purchaser and will not violate
or be in conflict with, or result in a breach, or trigger a default (or an event that, with the lapse of time or notice, would
constitute a default) under the provisions of, (i) any material note, bond, mortgage, indenture, contract, agreement, or instrument
to which Purchaser is a party and as disclosed in Purchaser’s SEC Reports, (ii) the organizational and governing documents
of Purchaser, or (iii) any judgment, decree, order, law, statute, rule, or regulation applicable to Purchaser or any Asset, the
non-compliance with which would have a material adverse effect on Purchaser or the ability of Purchaser to consummate the transactions
contemplated herein. This Agreement has been, and the other documents provided for herein to be executed and delivered by Purchaser
to Seller will be, duly executed and delivered on behalf of Purchaser and constitute or shall constitute the legal, valid, and
binding obligations of Purchaser, enforceable in accordance with their respective terms, subject to the effects of bankruptcy,
insolvency, reorganization, moratorium, and similar laws, as well as principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

 

d.
Brokers. Purchaser has not incurred any obligation or liability, contingent or otherwise, for brokers’ or finders’
fees relating to the matters provided for in this Agreement which will be the responsibility of Seller; and any such obligation
or liability of Purchaser is Purchaser’s sole obligation.

 

e.
Claims and Litigation. There is no claim, legal, or administrative proceeding or investigation now pending or, to the actual
knowledge of Purchaser, threatened before any court or any administrative body against Purchaser that would, if determined adversely
to Purchaser, restrain, prohibit, or impose damages on Purchaser or otherwise materially impair Purchaser’s ability to consummate
the transaction contemplated by this Agreement.

 

    	5

     

    

 

f.
Financial Ability to Perform. [Reserved].

 

13.
Seller’s Representations and Warranties. Seller represents and warrants to Purchaser as follows, each of which is
materially true and correct as of the date of this Agreement and shall be materially true and correct as of Closing:

 

a.
Existence. Seller is duly organized, validly existing, and in good standing under the laws of the State of Kansas.

 

b.
Power. Seller has the full capacity, power, and authority to carry on its business as presently conducted, to enter into
this Agreement and any other documents and agreements contemplated hereby, and to perform its obligations under this Agreement.

 

b.
Authorization. The execution, delivery, and performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized and approved by all necessary action of Seller and will not violate
or be in conflict with, or result in a breach, or trigger a default (or an event that, with the lapse of time or notice, would
constitute a default) under the provisions of, (i) any material note, bond, mortgage, indenture, contract, agreement, or instrument
to which Seller is a party, (ii) the organizational and governing documents of Seller, or (iii) any judgment, decree, order, law,
statute, rule, or regulation applicable to Seller or any Asset, the non-compliance with which would have a material adverse effect
on Seller, the ownership or operation of any of the Assets, or the ability of Seller to consummate the transactions contemplated
herein. This Agreement has been, and the other documents provided for herein to be executed and delivered by Seller to Purchaser
will be, duly executed and delivered on behalf of Seller and constitute or shall constitute the legal, valid, and binding obligations
of Seller, enforceable in accordance with their respective terms, subject to the effects of bankruptcy, insolvency, reorganization,
moratorium, and similar laws, as well as principles of equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

 

c.
Brokers. Seller has not incurred any obligation or liability, contingent or otherwise, for brokers’, finders’,
or similar fees relating to the matters provided for in this Agreement which will be the responsibility of Purchaser; and any
such obligation or liability of Seller is the sole obligation of Seller.

 

e.
Pending Claims and Litigation. Except as set forth in Exhibit 13e, there are no suits, actions or other legal, administrative,
or arbitration proceedings that are pending and in which Seller has been served or threatened in writing against Seller, its business
or any of such Assets, in each case that would, if determined adversely to Seller, (a) result in the impairment or loss of Seller’s
title to the relevant Assets, (b) hinder or impede the operation of all or any material portion of any Asset, or (c) that would,
if determined adversely to the Parties, restrain, prohibit, or impose damages on Seller with respect to the Assets, or otherwise
impair Seller’s ability to consummate the transactions contemplated by this Agreement.

 

    	6

     

    

 

f.
Material Contracts. Except as listed on Exhibit 13f, there are no unrecorded material contracts and agreements affecting
the Assets, including without limitation any joint operating agreements.

 

g.
Current Abandonment Obligations. Except as listed on Exhibit 13g, there are no dry holes, or shut in or otherwise
inactive oil or gas wells, located on the Assets or on lands pooled or unitized therewith, except for oil or gas wells that, have
been properly plugged and abandoned or that Seller is not currently obligated to plug or abandon.

 

h.
Areas of Mutual Interest. Except as listed on Exhibit 13h, none of the Assets are subject to (or have related to
them) any unrecorded “area of mutual interest” provisions or agreements.

 

i.
preferential purchase rights; Required consents. Except as listed on Exhibit 13i none of the Assets are subject
to any unrecorded preferential purchase rights or required consents in favor of third parties that must be satisfied or waived
in order to give effect to this Agreement and the accompanying Assignment.

 

j.
No Agreement to Sell to Third Party. Seller represents and warrants that Seller has not agreed to sell or encumber the
Assets, in whole or in part, to any party other than Purchaser.

 

k.
Seller covenants to provide Purchaser such assistance, support, and such access to its records (inclusive of financial and other
information) and personnel and representatives as required by Purchaser to the end that Purchaser is able to accomplish an audit
of the Lands, Properties, Leases, Contracts and Assets so that Purchaser is able to comply with its obligations under the federal
securities law, by, among other things, preparing and timely filing a Current Report on Form 8-K with the SEC. To this end, Seller
shall provide to Purchaser audited financial statements for 2019 and 2020 within 40 days of the Closing Date.

 

l.
Additional representations, warranties, covenants of Seller are set forth in Appendix 1 and are incorporated herein by this reference.

 

14.
Knowledge: As used in this Agreement, words “to Seller’s knowledge,” “to the knowledge of Seller,”
or other words of similar import mean that the statement so qualified is true to the knowledge after due inquiry by the officers,
directors, mangers, and key employees of Seller; in this regard, John Loeffelbein and Michael Burstein, shall be deemed to be
the officers, etc. of Seller.

 

15.
Payment. At Closing, Purchaser will deliver, or cause to be delivered to Seller, the Purchase Price net of the Hold-Back.
The Purchase Price will be delivered to Seller using the wire information provided by Seller to Purchaser.

 

16.
Confidentiality. See Appendix 2.

 

17.
Seller Indemnity. Seller shall indemnify, defend and hold Purchaser harmless from and in accordance with the section
entitled Seller Indemnity set forth in Appendix 2.

 

    	7

     

    

 

18.
Purchaser Indemnity. Purchaser shall indemnify, defend and hold Seller harmless from and against any and all Losses
incurred by Seller and their respective partners, officers, directors, employees, consultants and advisors caused by (i) any of
the Assumed Obligations or (ii) any inaccuracy in or (ii) for a period of ninety (90) days following Closing, any inaccuracy in
or breach of any of the representations and warranties set forth in Section 12.

 

19.
Exclusive Remedy; Release. 

 

a.
[Reserved]. 

 

b.
[Reserved].

 

20.
Miscellaneous.

 

a.
Waiver. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly
provided.

 

b.
No Third Party Beneficiaries. Aside for the indemnity obligations set forth in this Agreement, nothing in this Agreement
shall entitle any party other than Purchaser and Seller and their duly authorized successors or assigns to any claim, cause of
action, remedy, or right of any kind.

 

c.
Governing Law; Venue; Jury Trial Waiver. This Agreement, the other documents delivered pursuant hereto, and the legal relations
between the Parties shall be governed and construed in accordance with the laws of the State of Delaware (excluding any choice
of law provision which would refer to the laws of another state). The validity of the various assignments or conveyances affecting
the title to the Assets (and the warranties of title thereunder) shall be governed by and construed in accordance with the laws
of the State of Kansas. The Parties agree that in the event litigation arises in connection with this Agreement, proper venue
for such proceeding shall be in the Federal or State courts with jurisdiction in Johnson County, Overland Park, State of Kansas
and the Parties waive and agree not to assert any claim that the above-named courts do not have personal jurisdiction over the
Parties or that the proceeding is brought in an inconvenient forum. EACH OF THE PARTIES TO THIS AGREEMENT UNCONDITIONALLY AND
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTER-CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY DOCUMENT DELIVERED IN CONNECTION HEREWITH. EACH PARTY ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO CONSULT WITH INDEPENDENT
COUNSEL AND THAT IT HAS KNOWINGLY AND VOLUNTARILY AGREED TO THIS WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

    	8

     

    

 

d.
Notices. Any notice, communication, request, instruction or other document required or permitted by this Agreement shall
be given in writing by prepaid nationally recognized overnight express, hand delivery, e-mail, or facsimile (except that notice
given by facsimile or email shall be effective upon acknowledged receipt only if received during normal business hours, and if
received after normal business hours, such notice shall be deemed given at the commencement of normal business hours on the next
business day) as follows:

 

		
	If
    to Seller and the members	 	If
    to Purchaser:
	Of
    Seller:	 	
	Core
    Energy, LLC	 	Infinity
    Energy Resources, Inc.
	14208
    Neiman Road	 	11900
    College Boulevard, Suite 310
	Overland
    Park, Kansas 66221	 	Overland
    Park, Kansas 66210
	Attention:
    John Loeffelbein, Member	 	Attention:
    Stanton E. Ross, Chairman, CEO and President
	 	 	 
	 	 	with
    a copy (which shall not constitute notice) to: 
	 	 	Sullivan
    & Worcester LLP
	 	 	1633
    Broadway, 32nd Fl
	 	 	New
    York, NY 10019
	 	 	Email:
    ddanovitch@sullivanlaw.com 
	 	 	Attn:
    David E. Danovitch

 

e.
Expenses. Except as otherwise provided in this Agreement, each Party shall be solely responsible for all expenses incurred
by it in connection with the transaction contemplated herein (including, without limitation, fees and expenses of its own counsel
and accountants) and shall not be entitled to reimbursement therefor from the other Party.

 

f.
Exhibits, Appendices, and Schedules. All references in this Agreement to Exhibits, Appendices, and Schedules shall be deemed
to be references to such Exhibits, Appendices, and Schedules as the same may be amended and supplemented by mutual agreement of
the Parties through and as of the Closing, and all such Exhibits, Appendices, and Schedules, as amended and supplemented, are
hereby incorporated into this Agreement by reference.

 

g.
Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the contemplated transactions is not affected in any material adverse manner
to either Party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced,
the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely
as possible in an acceptable manner to the end that the contemplated transactions are fulfilled to the extent possible.

 

h.
Entire Agreement. This Agreement, the documents to be executed pursuant to this Agreement, and the attached Exhibits, Appendices
and Schedules constitute the entire agreement between the Parties pertaining to the subject matter of this Agreement and supersede
all prior agreements, understandings, negotiations and discussions of the Parties, whether oral or written, and there are no warranties,
representations or other agreements between the Parties in connection with the subject matter of this Agreement except as specifically
set forth herein or in documents delivered pursuant hereto. No supplement, amendment, alteration, modification, or waiver of this
Agreement shall be binding unless executed in writing by the Parties.

 

    	9

     

    

 

i.
Execution in Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart shall
be deemed to be an original instrument, but such counterparts together shall constitute for all purposes one agreement. Either
Party’s delivery of an executed counterpart signature page by facsimile (or email) is as effective as executing and delivering
this Agreement in the presence of the other Party.

 

j.
Disclaimers.

 

(i).
[Reserved].

 

(ii).
[Reserved].

 

k.
Material Adverse Effect. [Reserved]

 

l. Waiver
of Conflict. It is acknowledged and agreed by the Parties that John Loeffelbein,
a Member of Seller, is Chief Operating Officer of Purchaser and that the Parties do hereby, by these presents, waive and forgive
any conflict of interest that such positions may present to the Parties. In connection therewith, John Loeffelbein has not participated
on behalf of Purchaser in connection with the transaction contemplated hereby.

 

m.
Non-Competition. Seller does hereby agree that upon the Closing of the transaction contemplated hereby, it will not, itself,
or through an affiliate, engage in the development of properties or the production of oil and gas in any area within five (5)
miles of the Lands, for the later of (i) two years after the Closing Date or (ii) so long as John Loeffelbein is an officer or
director of Purchaser. At the option of Purchaser, the Parties shall execute and enter into a Non-Competition Agreement embodying
the terms and conditions of this Section 22m.

 

n.
Additional Agreements. Additional agreements of the Parties are set forth in Appendix 2, which are incorporated herein
by this reference. For the avoidance of doubt, the Parties will use their respective good faith efforts to interpret the provisions
set forth in the body of this Agreement and the additional agreements set forth in the Appendices in a consistent manner; to the
extent there be any inconsistency between the terms set forth in the body of this Agreement and the provisions in the Appendices,
the applicable provision of the Appendix shall control.

 

    	10

     

    

 

IN
WITNESS WHEREOF, the undersigned have executed this Asset Purchase and Sale Agreement as of the day and year first above written.

 

	CORE
    ENERGY, LLC	 	INFINITY
    ENERGY RESOURCES, INC.
	 	 	 
	By:	Mandalay,
    LLC	 	By:	 
	 	 	 	 	Stanton
    E. Ross, Chairman, CEO, President

 

	By:
    	 	 
	 	Harvey
    M. Burstein, Member	 
	 	 	 
	By:
    	Coal
    Creek Energy, LLC	 
	 	 	 
	By:
    	 	 
	 	John
    Loeffelbein, Member	 
	 	 	 
	Members
    of Seller:	 
	 	 	 
	Mandalay
    LLC	 
	 	 	 
	By:
    	 	 
	Name:	 	 
	Title:	 	 
	 	 	 
	Coal
    Creek Energy, LLC	 
	 	 	 
	By:
    	 	 
	Name:	 	 
	Title:	 	 

 

    	11

     

    

 

Appendix
1

Additional
Representations, Warranties, and Covenants

 

In
addition to the representations and warranties set forth in the body of this Agreement, Seller
hereby represents and warrants to Purchaser, as of the execution date and as of the Closing Date, as follows: 

 

(a)
Organization, Standing and Power. Seller is duly qualified and in good standing to do business in each jurisdiction in which the
business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification necessary, other
than, solely with respect to this clause, in such jurisdictions where the failure so to qualify or be in good standing would not
be reasonably expected to have, individually or in the aggregate, a material adverse effect. 

 

(b)
Authority; No Violations. 

 

(i)
The execution and delivery of this Agreement by Seller and any other agreement with respect to which Seller is a party and the
consummation by Seller of the transactions have been duly authorized by all necessary action. 

 

(ii)
The execution and delivery of this Agreement and any other agreement to which it is a party does not and will not, and the consummation
of the transactions will not, result in any violation of, or default (with or without notice or lapse of time, or both) under,
or acceleration of any material obligation or the loss, suspension, limitation or impairment of a material benefit under, or result
in (or give rise to) the creation of any encumbrance (other than permitted encumbrances) or any rights of termination, cancellation,
first offer or first refusal, in each case, with respect to any of the Properties under any provision of (A) the organizational
documents of Seller; (B) any Contract or any loan or credit contract, note, bond, indenture, security agreement, guarantee, pledge,
mortgage, lease or other contract or agreement, permit, franchise or license to which Seller is a party or by which Seller or
the Properties are bound or (C) any law applicable to Seller or any of its Properties. 

 

(iii)
No vote or consent of the holders of the equity interests of Seller that has not been taken or obtained is necessary to approve
this Agreement or the transactions. 

 

(c)
Governmental consents. Except for the filing of the T1 Transfer of Ownership Notice and Ownership, as set forth on Schedule (c),
no governmental consent is required to be obtained by Seller in connection with the execution and delivery of this Agreement or
any other agreement to which it is a party, or the consummation of the transactions. 

 

(d)
Litigation. None of the Properties is or are subject to any order that would result in impairment or loss of Seller’s interest
in any part of the Properties. 

 

(f)
Suspense funds. Schedule (f) sets forth all suspense funds held for distribution by Seller, as of the date set forth in such Schedule.

 

    	1

     

    

 

(g)
Taxes. Except as set out on Schedule (g), (i) all material tax returns relating to the Properties that are required to be filed
by Seller has been timely filed, (ii) all taxes shown as due on such tax returns have been paid or provided for, except those
being contested in good faith, (iii) there are no material tax liens (other than taxes that are not yet due or are not yet delinquent)
on any of the Properties, (iv) to Seller’s knowledge there is no claim pending or threatened in writing by any taxing authority
in connection with any tax related to the Properties, (v) none of the Properties is “tax exempt use property” within
the meaning of Section 168(h) of the Code or “tax exempt bond financed property” within the meaning of Section 168(g)(5)
of the Code, (vi) with respect to any tax that could result in a lien or other claim against any of the Properties or Purchaser
or its affiliates, (A) Seller has not entered into any agreement or arrangement with any tax authority that requires Seller to
take any action or to refrain from taking any action, (B) Seller is not a party to any agreement with any tax authority that would
be terminated or adversely affected as a result of the transactions contemplated by this Agreement, (C) there is not in force
any extension of time with respect to the due date for the filing of any tax return relating to the Properties (other than any
tax return related to any Income tax) of or with respect to Seller or any waiver or agreement for any extension of time for the
assessment or payment of any tax of or with respect to Seller and no request for any such waiver is pending, and (D) Seller is
not a party to or bound by any allocation, sharing or indemnity agreements or arrangements, and (vii) no Properties are subject
to any partnership within the meaning of subchapter K of Chapter 1 of Subtitle A of the Code. 

 

(h)
Permits. (i) Seller has (and, with respect to non-operated Properties, to Seller’s Knowledge, the operator has) obtained
all federal, state and local permits required for the operation and ownership of the Properties; (ii) to Seller’s Knowledge
there is no violation with respect to any of the Permits that has not been (or will not be prior to Closing) corrected or settled
and (iii) Seller has not received written notice of any proceeding that has been threatened or is pending that might result in
the modification, revocation, termination or suspension of any permit. 

 

(i)
No Bankruptcy. There are no bankruptcy proceedings pending, being contemplated by, or threatened against Seller. 

 

(j)
Compliance with law. Seller has not received any written notice of a violation of any law, in each case, that is applicable to
the Properties or operations on the Properties and that has not been (or will not be prior to Closing) corrected or settled. Seller’s
and its affiliates’ ownership of the Properties, Seller’s and its affiliates’ operation of the Properties operated
by Seller or its affiliates, and to Seller’s Knowledge, the operation of the Properties that are operated by a third person
are currently in compliance in all material respects with the provisions and requirements of all laws; provided, however, that
the foregoing shall not be applicable for wells that are not in operation as of the date hereof. This Section (j) does not relate
in any way to (i) the existence or status of any Permits, it being understood and agreed that such matters are covered by and
dealt with exclusively in Section (h) hereof or (ii) matters arising under environmental laws, it being understood and agreed
that such matters are covered by and dealt with exclusively in Section (z) hereof. 

 

(k)
Rights in Third Parties. 

 

(i)
There are no preferential purchase rights. 

 

(ii)
Except as set out on Schedule (k), there are no consents. Schedule (k) sets forth a description of the instrument giving rise
to such consents. 

 

    	2

     

    

 

(l)
Hydrocarbon Sales. Except as set forth on Schedule (m) and to the extent cancelable without penalty or other material payment
on not more than thirty (30) days prior written notice, Seller is not obligated by virtue of, (i) a production payment or (ii)
any other arrangement, other than gas balancing arrangements, to deliver hydrocarbons produced from the Properties at some future
time without then or thereafter receiving full payment therefor. 

 

(m)
Condemnation. As of the execution date, Seller has not received any written notice of any pending or threatened taking and there
is no actual taking (whether permanent, temporary, whole or partial) of any portion of the Properties by reason of condemnation
or the threat of condemnation. 

 

(n)
Contracts. 

 

(i)
Except (y) as set forth on Schedule n-1, or (z) to the extent cancelable without penalty or other material payment on not more
than thirty (30) days prior written notice, there are no (A) contracts for the purchase, sale or exchange of hydrocarbons, (B)
contracts for the gathering, treatment, processing, handling, storage or transportation of hydrocarbons or any other contracts
containing acreage dedications, (C) purchase agreements, farmin or farmout agreements, exploration agreements, participation agreements,
contracts that constitute a non-competition agreement or any agreement that purports to restrict, limit or prohibit the manner
in which, or the locations in which, Seller conducts business (including area of mutual interest agreements), or similar agreements
providing for the earning of any equity interest, (D) partnership agreements, joint venture agreements or similar agreements,
(E) operating agreements, unit agreements or unit operating agreements, (F) contracts that could be reasonably expected to result
in aggregate payments by or revenues to Seller in excess of $50,000 per calendar year or in the aggregate over the term of such
contract, (G) contracts that constitute a lease under which Seller is the lessor or the lessee of any real property (other than
a Lease), (H) contracts with any affiliate of Seller, or (I) contracts that constitute hedge Contracts, in each case of subparts
(A) through (I) that will be binding on the Purchaser or encumber or bind any of the Properties after Closing. 

 

(ii)
With respect to the Contracts: (A) Seller is in compliance, in all material respects, with the terms and conditions of the Contracts
and, to Seller’s Knowledge, each counterparty to the Contracts is in compliance, in all material respects, with the terms
and conditions of the Contracts; (B) Seller has received a written notice of a default under such Contract; (C) each Contract
contains no preferential purchase rights, has not been terminated, abandoned, put into suspense and is in full force and effect
and binding in accordance with its applicable terms; (D) all expenses that are the responsibility of Seller have been paid by
Seller as of the execution date and will be paid as of the Closing Date; and (E) prior to the execution of this Agreement, Seller
has made available to Purchaser true and complete copies of each Contract, including all amendments thereto. 

 

(o)
Outstanding Capital Commitments. As of the execution date, there are no outstanding contractual commitments to make capital expenditures
that are binding on the Properties or Seller and which Seller reasonably anticipates will individually require expenditures by
Purchaser after Closing in excess of $50,000 (net to Seller’s interest), other than those set forth in Schedule (o). 

 

    	3

     

    

 

(p)
Regulatory Matters. Seller (i) is not a “natural gas company” engaged in the transportation of natural gas in interstate
commerce under the Natural Gas Act of 1938, as amended; and (ii) has not operated, or provided services, using any of the Properties
in a manner that subjects it, any third person operator of the Properties or any future owner of the Properties to the jurisdiction
of, or regulation by, the Federal Energy Regulatory Commission (A) as a natural gas company under the Natural Gas Act of 1938
(other than pursuant to a certificate of limited jurisdiction as described below), or (B) as a common carrier pipeline under the
Interstate Commerce Act; or (iii) holds any general or limited jurisdiction certificate of public convenience and necessity issued
by the Federal Energy Regulatory Commission other than a blanket sale for resale certificate issued by operation of law or a blanket
certificate issued to permit participation in capacity release transactions. 

 

(q)
Personal Property and Equipment. Seller has good title to the personal property, equipment, and fixtures included within the Properties,
free and clear of all encumbrances other than those to be released at Closing and permitted encumbrances. To Seller’s Knowledge,
the equipment included within the Properties is adequate in type and in operable condition for the operation of the Properties
consistent with Seller’s past practices. Except for the foregoing representation, such equipment is being purchased on an
“As Is” basis.

 

(r)
Pipeline Facilities. Seller either has the contractual right to use or is the exclusive or non-exclusive legal and beneficial
owner of the pipeline facilities. Except as set forth on Schedule r, to Seller’s Knowledge, the surface on which each pipeline
facility is located are contiguous, are in full force and effect and are sufficient to access, construct, operate, maintain, and
repair the pipeline facilities in the ordinary course as currently conducted. Except as set forth on Schedule r, to Seller’s
Knowledge each pipeline facility is located on or beneath land covered by a surface lease, surface permit, surface right-of-way,
surface license, surface easement, oil and gas lease, unit agreement or other surface rights agreements. 

 

(s)
Plugging and Abandonment Obligations. Other than as set forth on Schedule (s), all of the Wells have been permanently plugged
and abandoned and all of the Wells which have been plugged and abandoned have been plugged and abandoned in a manner that complies
in all material respects with laws.

 

(t)
Wells. (i) With respect to all Wells drilled and completed by the Seller, and (ii) with respect to all Wells drilled and completed
by any person not the Seller, to Seller’s Knowledge, all such Wells, with respect to clauses (i) and (ii), have been drilled
and completed within the limits permitted by all applicable Leases or Contracts. 

 

(u)
Non-Consent Operation; Payout Balances. Seller has not elected to participate in any operation or activity proposed with respect
to the Properties which could result in Seller’s interest in any Properties becoming subject to a reduction, penalty or
forfeiture as a result of such election not to participate in such operation or activity, except to the extent reflected in the
net revenue interest and Working Interest columns set forth in Schedule (u). Schedule (u) sets forth, to Seller’s Knowledge,
the correct payout balances as of the dates set forth therein for each well subject to payout. 

 

(v)
Security Arrangements. Schedule (v) sets forth all various bonds, letters of credit, guarantees and/or cash deposits (collectively,
“Security Arrangements”) posted or entered into by Seller specifically in connection with the ownership or
operation of the Properties, excluding state-wide operator bonds or other security posted with any applicable Kansas governmental
body. 

 

    	4

     

    

 

(w)
Surface Restrictions. Except as set forth on Schedule (w), to Seller’s Knowledge, none of the Leases are subject to any
restrictions that prohibit access to the surface of the lands covered by the Lease. 

 

(x)
Payment of Royalties. Except for such items that are not yet due or are being held in suspense as permitted pursuant to applicable
law, to Seller’s Knowledge the third party purchaser of the oil produced hereunder, has paid in all material respects all
Lease burdens due by Seller with respect to the Properties. 

 

(y)
Drilling Obligations. Except to the extent of those obligations previously fulfilled by Seller or any of its predecessors, none
of the Leases or Contracts contains any express provisions obligating Seller to drill any wells on the Properties (other than
provisions requiring optional drilling as a condition of maintaining or earning all or a portion of a presently non-producing
Lease). 

 

(z)
Environmental Matters. 

 

(i)
Except as set forth on Schedule (z): 

 

(A)
Seller has not entered into any order, permit, conditions, or other directives of or with any governmental bodies based on any
prior violations of environmental laws that relate to the future use of any of the Properties or that require any remediation;

 

(B)
the Properties and Seller’s ownership and operation of the Properties are and, during the surviving periods of all applicable
statutes of limitation, have been in compliance in all material respects with applicable environmental laws and Permits; 

 

(C)
Seller has not received any written notice of any claims, demands, suits, investigations, requests for information, orders, or
proceedings pending or threatened under environmental law against Seller with respect to the Properties or its ownership or operation
thereof; and 

 

(D)
to Seller’s Knowledge there has been no release of hazardous substances on or from the Properties that could reasonably
be expected to result in a material liability, liability, or remediation obligation of Seller (or Purchaser following the Closing)
under environmental laws. 

 

(ii)
Except as permitted under applicable laws (including environmental laws), Seller has not disposed of any produced water or hazardous
substances generated on the Properties, or used on the Properties, at sites off of the Properties. 

 

    	5

     

    

 

Appendix
2

Additional
Agreements between the Parties

 

Conduct
of Business by Seller. 

 

(a)
From and after the execution date until the earlier of the Closing and the termination of this Agreement (the “Interim
Period”), except as consented to in writing by Purchaser or provided for in this Agreement, Seller shall, or shall cause
the operator of the Wells to: 

 

(i)
cause the Properties to be maintained and operated in a good and workmanlike manner consistent with the manner of maintenance
and operations prior to the execution date and operate the Properties in the ordinary course in compliance with applicable laws;
provided, however, that Seller shall not be obligated to complete, recomplete, or rework any of the Wells or drill any additional
wells; 

 

(ii)
pay or cause to be paid all costs and expenses incurred in connection with such operations and Seller will notify Purchaser of
ongoing activities and major capital expenditures in excess of $50,000 per activity and shall consult with Purchaser regarding
all such matters and operations involving such expenditures; 

 

(iii)
pay, as they become due, all expenses related to the Properties, as would be paid by a reasonably prudent lessee or operator;

 

(iv)
notify Purchaser of any election that Seller is required to make under any Contract, specifying the nature and time period associated
with such election, and, if Purchaser does not respond to the notifying Seller within sufficient time to enable Seller to timely
make such election, then Seller shall make such election as would a reasonably prudent lessee or operator; provided, however,
that neither Seller nor any of Seller’s Subsidiaries shall make any election to go non-consent or to not participate in
any operation with respect to the Properties without Purchaser’s prior written consent; 

 

(v)
maintain insurance coverage on the Properties presently furnished by third parties that are not affiliates of Seller in the amounts
and of the types presently in force; 

 

(vi)
use commercially reasonable efforts to keep Purchaser reasonably apprised of any drilling, re-drilling or completion operations
proposed or conducted by Seller with respect to the Properties; 

 

(vii)
use commercially reasonable efforts to maintain in full force and effect all Leases that are presently producing in paying quantities;

 

(viii)
pay any Production taxes related to the Properties as such Production taxes become due and payable, subject to Seller’s
rights under this Agreement to be reimbursed or indemnified by Purchaser for the portion of such Production taxes allocable to
Purchaser pursuant to the terms hereof; and 

 

    	6

     

    

 

(ix)
notify Purchaser if any Lease terminates promptly upon learning of such termination. 

 

(b)
During the Interim Period, except as (w) expressly provided in this Agreement, (x) required by law, (y) consented to in writing
by Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), , or (z) in the ordinary course of business,
Seller shall not: 

 

(i)
except for the transactions described on Schedule (b)(i), take any action to sell, transfer, farmout, dispose of, distribute,
mortgage, encumber, pledge or enter into any agreement or arrangement for the sale, disposition, distribution, mortgage, encumbrance
or pledge of, any of the Properties, other than dispositions of worn-out or obsolete equipment and other personal property in
the ordinary course and of the Conveyed hydrocarbons that are produced from the Properties in the ordinary course; 

 

(ii)
except as otherwise permitted by this Agreement, enter into any transaction, the effect of which would be to cause Seller’s
net revenue interest with respect to the production of hydrocarbons from any Listed Interest to be less than, or Seller’s
Working Interest with respect to the production of hydrocarbons from any Listed Interest to be more than, that shown in Exhibit
__ for such Listed Interest, unless, with respect to any such increase in Working Interest, there is a proportionate increase
in the net revenue interest with respect to such Listed Interest; 

 

(iii)
except for (A) emergencies, or (B) lease operating expenses incurred in the ordinary course enter into any contract or commitment
or assume or incur any obligation with respect to the Properties’ operations involving expenditures in excess of $50,000
in the aggregate; 

 

(iv)
effect a change in the identity of the operator with respect to any Property; 

 

(v)
violate, breach or default under, in any material respect, any Contract or Lease; 

 

(vi)
except as set forth on Schedule (b)(vi), or in the ordinary course of business, enter, or agree to enter, into any agreement that,
if in existence as of the execution date, would be an Contract, or amend or modify any Contract; 

 

(vii)
waive, release, assign, settle or compromise any claim, action or proceeding relating to the Properties, other than waivers, releases,
assignments, settlements or compromises that involve only the payment of monetary damages not in excess of $50,000 individually
or in the aggregate (excluding amounts to be paid under insurance policies); or 

 

(viii)
enter into any agreement to do any of the foregoing prohibited by this Section.

 

(c)
Notwithstanding the foregoing, (i) Purchaser acknowledges and agrees that any acts or omissions of the other working interest
owners (and operators) of the Properties that Seller does not have any contractual right to control shall not constitute a breach
of this Section and (ii) Purchaser’s consent shall not be required with respect to any action taken by Seller as required
by law or as specifically contemplated by other provisions of this Agreement. 

 

    	7

     

    

 

Reports.
Seller and Purchaser agree to cooperate with each other in connection with the preparation by such Parties of any report to any
federal, state or local governmental bodies that are required of such Parties as the result of the execution and delivery of this
Agreement or the consummation of the transactions. 

 

Efforts.
Each Party will use commercially reasonable efforts to take, or to cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions,
including (a) cooperation in determining whether any action by or in respect of, or filing with, any governmental body is required,
or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions; (b) cooperation in seeking and obtaining any such actions, consents, approvals, or
waivers; and (c) the execution of any additional instruments necessary to consummate the transactions. Promptly after the Closing,
Purchaser shall: (i) actively pursue the approval of all customary post-closing consents from the applicable governmental bodies;
(ii) actively pursue all other consents and approvals that may be required in connection with the assignment of the Properties
to Purchaser and the assumption of the rights, interests, obligations and liabilities assumed by Purchaser hereunder that have
not been obtained prior to Closing, at Purchaser’s sole cost and expense; and (iii) except as otherwise set forth herein,
deliver all notices that may be required in connection with the assignment of the Properties to Purchaser and the assumption of
the rights, interests, obligations and liabilities assumed by Purchaser hereunder. 

 

Operatorship.
Seller will, at Purchaser’s request, assist Purchaser in Purchaser’s efforts to succeed Seller as operator of any
Wells included in the Properties. Purchaser shall, promptly following Closing, file all appropriate forms and declarations or
bonds with governmental bodies relative to its assumption of operatorship. For all Properties operated by Seller or any affiliate
of Seller, Seller shall initiate a TI Transfer through the KOLAR Filing System; requiring such new operator to accept that position
within thirty (30) days following the Closing, or shall otherwise cause such affiliate to, execute and deliver to Purchaser, and
Purchaser shall promptly file the appropriate forms with the applicable governmental body transferring operatorship of such Properties
to Purchaser.

 

Purchase
Price Allocation. Purchaser and Seller shall use commercially reasonable efforts to agree on an allocation of the Base Purchase
Price and any other items properly treated as consideration for U.S. federal income tax purposes among the Properties within thirty
(30) days after the Closing Date (the “Purchase Price Allocation”). The Purchase Price Allocation shall be
made in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”) and the
regulations promulgated thereunder by the United States Department of the Treasury (the “Treasury Regulations”).
If Seller and Purchaser reach an agreement with respect to the Purchase Price Allocation, (i) Purchaser and Seller shall use commercially
reasonable efforts to update the Purchase Price Allocation in accordance with Section 1060 of the Code, following any adjustment
to the Purchase Price under this Agreement, and (ii) Purchaser and Seller shall, and shall cause their respective affiliates to,
report consistently with the Purchase Price Allocation, as adjusted, on all tax returns and reports, including Internal Revenue
Service Form 8594, and neither Party nor its affiliates shall take any position on any tax return that is inconsistent with such
Purchase Price Allocation, as adjusted, unless such position is mutually agreed by the Parties or required to be taken pursuant
to a final determination, as defined in Section 1313 of the Code. 

 

    	8

     

    

 

Tax
Returns. Seller shall prepare or cause to be prepared and file or cause to be filed all tax returns for Production taxes required
to be filed on or before the Closing Date. Purchaser shall timely file or cause to be filed all tax returns for Production taxes
required to be filed after the Closing Date and shall timely pay or cause to be paid to the taxing authorities all Production
taxes that become due and payable after the Closing Date. Any penalty, addition to tax, or interest levied or assessed with respect
to any Production tax shall be allocated to, and shall be payable by, the Party to which the tax to which such penalty, addition
to tax or interest relates is allocated, regardless of when such penalty, addition to tax, or interest is levied or assessed;
provided, however, that the liability for any penalty, addition to tax, or interest levied or assessed with respect to any failure
of Purchaser to comply with the previous sentence shall be allocated to, and shall be payable by, Purchaser; provided, further,
that Purchaser shall not be liable for any penalty, addition to tax, or interest levied or assessed with respect to any tax return
that was required to be filed on or before the Closing Date. 

 

Allocation
of Production Taxes. 

 

(a)
severance taxes shall be deemed attributable to the period during which the production of the hydrocarbons with respect to such
Production taxes occurred, and liability therefor shall be allocated to Seller for any severance taxes attributable to any pre-effective
time tax period, and to Purchaser for any severance taxes attributable to any post-effective time tax period. 

 

(b)
Property taxes shall be deemed attributable to the period during which ownership of the applicable Properties gives rise to liability
for such Property taxes, and liability therefor allocated to Seller for (i) all taxable periods ending prior to the Closing Date
and (ii) the portion of any straddle period ending immediately prior to the Closing Date, and to Purchaser for (A) all taxable
periods beginning at or after the Closing Date and (B) the portion of any straddle period beginning at the Closing Date. For purposes
of determining the allocations described in this Section, Property taxes pertaining to a straddle period shall be allocated between
the portion of such straddle period ending immediately prior to the Closing Date and the portion of such straddle period beginning
at the Closing Date by prorating each such Property tax based on the number of days in the applicable straddle period that occur
before the date on which the Closing Date occurs, on the one hand, and the number of days in such straddle period that occur on
or after the date on which the Closing Date occurs, on the other hand. 

 

(c)
To the extent the actual amount of Production tax is not determinable at the time an adjustment to the Purchase Price is to be
made with respect to such Production tax pursuant to this Agreement, (i) the Parties shall utilize the most recent information
available in estimating the amount of such Production tax for purposes of such adjustment, and (ii) upon the later determination
of the actual amount of such Production tax, timely payments will be made from one Party to the other to the extent necessary
to cause each Party to bear the amount of such Production tax that is allocable to such Party hereunder. 

 

(d)
Purchaser shall be entitled to all rights to any refunds of Production taxes allocable to Purchaser pursuant to this Section regardless
of when received, and Seller shall be entitled to all rights to any refunds of Production taxes allocable to Seller pursuant this
Section regardless of when received. If a Party or any of its affiliates receives a refund of Production taxes to which the other
Party is entitled pursuant to this Section, such receiving Party shall forward to the other Party the amount of such refund within
fifteen (15) days after such refund is received, net of any reasonable costs or expenses incurred by such receiving Party in procuring
such refund. If any payment pursuant to this Section is subsequently reduced or disallowed, the Party receiving such payment shall
indemnify and hold harmless the Party making such payment (and its affiliates) from and against any loss that is attributable
to such reduction or disallowance. 

 

    	9

     

    

 

Transfer
taxes. Notwithstanding any requirement of law, and notwithstanding anything else to the contrary in this Agreement, all Transfer
taxes required to be paid in connection with the sale or transfer of the Properties under this Agreement shall be paid 50% by
Seller and 50% by Purchaser. Purchaser shall prepare and timely file all tax returns required to be filed in respect of Transfer
taxes. If required by applicable law, the applicable Seller will join in the execution of any such tax return. and to execute
and deliver any certificates or forms reasonably needed (i) for the preparation and filing of tax returns and other documentation
relating to Transfer taxes as may be required by applicable law and (ii) to mitigate, reduce or eliminate any Transfer taxes required
to be paid in connection with the sale or transfer of the Properties under this Agreement. 

 

Cooperation.
After the Closing Date, each of Seller and Purchaser shall (and shall cause its affiliates to): 

 

(a)
assist the other Party in preparing any tax returns which such other Party is responsible for preparing and filing, and in connection
therewith, provide the other Party with any necessary powers of attorney; 

 

(b)
cooperate fully in preparing for and defending any audits of, or disputes with taxing authorities regarding, any tax with respect
to the Properties; 

 

(c)
make available to the other and to any taxing authority as reasonably requested all information, records, and documents relating
to taxes with respect to the Properties; and 

 

(d)
furnish the other with copies of all correspondence received from any taxing authority in connection with any tax audit or information
request with respect to the Properties.

 

Purchaser’s
Conditions. The obligations of Purchaser at the Closing are, at its option, subject to the satisfaction at or prior to the
Closing of the following conditions: 

 

(a)
(i) The Seller Representations shall be true and correct in all respects at and as of the Closing Date at and as of the Closing
(other than representations and warranties that refer to a specified date, which need only be true and correct in all respects
as of such specified date). 

 

(b)
Seller shall have performed, or complied with, in all material respects, the agreements and covenants required by this Agreement
to be performed and satisfied by Seller prior to or at the Closing. 

 

(c)
No order issued by any governmental body or arbitrator restraining or prohibiting the consummation, in whole or in part, of the
transactions shall be in effect. 

 

    	10

     

    

 

(d)
Seller shall have delivered (or shall be ready, willing and able to deliver) to Purchaser all of the Seller deliverables. 

 

(e)
Since the execution date, there shall not have occurred and be continuing any material adverse effect. 

 

(f)
Seller has delivered to Purchaser such historical financial information as Purchaser or Purchaser’s Auditor may request
and the results of Purchaser’s due diligence are satisfactory in all respects. 

 

Termination.
This Agreement and the transactions may only be terminated on or before the Closing and only: 

 

(a)
by either Purchaser or Seller if the Closing has not occurred on or before January11, 2021, or such later date as shall be mutually
agreed to in writing by Purchaser and Seller (“Outside Date”); 

 

(b)
by Purchaser, if any condition set forth herein is not satisfied (or waived in writing by Purchaser) as of the scheduled Closing
Date; or 

 

(d)
by the mutual written agreement of Purchaser and Seller.

 

Remedies.

 

(a)
Seller’s Remedies. Notwithstanding anything to the contrary set forth herein, upon Purchaser’s breach of any representation,
warranty, covenant or agreement contained in this Agreement such that Seller would be entitled to terminate this Agreement pursuant
to the terms hereof, Seller may terminate this Agreement and retain the Option Shares as Seller’s sole and exclusive remedy
as liquidated damages. It is expressly stipulated by the Parties that the actual amount of damages resulting from any such termination
would be difficult, if not impossible, to determine accurately because of the unique nature of this Agreement, the unique nature
of the Properties, the uncertainties of applicable commodity markets and differences of opinion with respect to such matters,
and that the liquidated damages provided for herein are a reasonable estimate by the Parties of such damages. 

 

(b)
Purchaser’s Remedies. Notwithstanding anything to the contrary set forth herein, upon Seller’s breach of any representation,
warranty, covenant or agreement contained in this Agreement such that Purchaser would be entitled to terminate this Agreement
pursuant to the terms hereof, Purchaser, at its sole option, may either (i) enforce specific performance of this Agreement or
(ii) (A) terminate this Agreement, (B) if, and only if, in the event that the breach is a Fundamental Breach, receive back the
entirety of the Option Shares, and a sum equal to the Holdback Amount, and the Option Shares within 10 Business Days following
termination of this Agreement, and (C) then, pursue whatever legal rights and remedies may be available to Purchaser, with the
damages thereunder being subject to the appropriate Cap pursuant to the provisions of this Agreement. 

 

(c)
Termination Without Breach. In the event that this Agreement is terminated here other than those described above, neither Party
will have any obligation or liability to one another hereunder other than as expressly provided herein and the Confidentiality
Agreement. 

 

    	11

     

    

 

Confidentiality
Agreements. The Parties acknowledge and agree that certain Confidentiality Agreement dated as of even date herewith, by and between
Purchaser and Seller (the “Confidentiality Agreement”) shall remain in effect following the execution date
and any termination of this Agreement; provided, however, that if the Closing shall occur, then the Confidentiality Agreement
as to Seller shall remain in full force and effect and shall terminate as of the Closing and be of no further force and effect
thereafter as to Purchaser; provided further, however, that nothing contained in this Section or in the Confidentiality Agreement
shall prevent Purchaser from sharing confidential information with a financing source or comply with applicable law.

 

Holdback.

 

(a)
Any amounts due to Purchaser Indemnified Parties for any obligation or liability for indemnification hereunder shall be satisfied
first solely from the Holdback Amount; provided, however, that, Purchaser may seek payment for any other indemnifiable Losses
in excess of the Holdback Amount directly from Seller in accordance with the terms hereof. Any damages payable by Seller hereunder
in indemnification shall be limited by the appropriate Cap pursuant to the provisions of this Agreement.

 

(b)
In the event Seller does not dispute any claim for indemnification made by Purchaser, at Purchaser’s written election, Seller
and Purchaser shall provide written instructions to the Escrow Agent in accordance with the Escrow Agreement to disburse to Purchaser
the amount of the undisputed claim. In the event Seller does dispute any claim for indemnification made by Purchaser, then upon
final determination of liability (or a settlement between the applicable Parties) with respect to such claim, at Purchaser’s
written election, Seller and Purchaser shall provide written instructions to the Escrow Agent to disburse to Purchaser the amount
determined by such final determination or settlement to be due and which amount is then remaining in the Escrow Account. 

 

(c)
On the date that is 3 months from and after the Closing Date, Purchaser and Seller shall instruct the Escrow Agent to release
to Seller the difference between the then existing amount of the Holdback Amount and the aggregate amount of all unsatisfied claims
for indemnification that Purchaser has made in good faith on or before such date and which are to be satisfied (in whole or in
part) from the Holdback Amount. Any amount remaining in the Escrow Account for such unsatisfied claims described in the previous
sentence shall remain in escrow until a final determination of liability (or a settlement between the Parties) with respect to
such claims is made under this Agreement.

 

Retained
Liabilities. Seller shall retain and shall pay, perform, fulfill, and discharge all liabilities resulting from, based upon, or
resulting from (inclusive of the Retained Obligations, collectively, the “Retained Liabilities”): 

 

(a)
the ownership, development, exploration, operation or maintenance of the Properties prior to the Closing Date or the production,
transportation, processing and marketing of hydrocarbons from the Properties prior to the Closing Date, including the payment
of Property expenses, for which Purchaser has made a claim for indemnification hereunder prior to the date that is 3 months after
the Closing Date; 

 

    	12

     

    

 

(b)
the excluded Properties; 

 

(c)
Seller taxes; 

 

(d)
any payments owed from Seller to any of Seller’s affiliates and relating to periods of time prior to Closing; 

 

(e)
the willful misconduct of Seller or Seller’s affiliates with respect to the operation of the Properties prior to Closing;

 

(f)
any personal injury or death occurring on or attributable to Seller’s interest in the Properties prior to Closing; 

 

(g)
those actions relating to the Properties and for which Seller has been served prior to the Closing Date; 

 

(h)
any civil fines or penalties or criminal sanctions imposed on Seller as a result of any pre-Closing violation of law in connection
with the Properties; 

 

(i)
any liabilities that are the result of any off-site transport or disposal, or arrangement for transport or disposal, of any Hazardous
Substances from Seller’s interest in the Properties prior to Closing; 

 

(j)
any liabilities arising in connection with the Settlement Agreement; and 

 

(k)
the accounting for, failure to pay, or the incorrect payment to any Lease burden owner or working interest owner or other interest
holder under the subject oil and gas Interests and escheat obligations insofar as the same are attributable to periods and hydrocarbons
produced and marketed with respect to the Properties prior to the Closing Date for which Purchaser has made a claim for indemnification
hereunder prior to the date that is 2 years from the Closing Date, but excluding any responsibility for the administration and
payment of the Suspense Funds t. 

 

Assumed
liabilities. Except for any Retained liabilities (all of which Purchaser is not assuming) Purchaser shall pay, perform, fulfill,
and discharge all liabilities resulting from, based upon, or resulting from (inclusive of the Assumed
Obligations, collectively, the “Assumed liabilities”): 

 

(a)
the ownership, development, exploration, operation or maintenance of the Properties at and after the Closing Date or the production,
transportation, processing and marketing of hydrocarbons from the Properties at and after the Closing Date, including the payment
of Property expenses; 

 

Seller’s
Indemnity Obligation. If the Closing shall occur, then effective from and after the Closing, subject to the limitations set
forth herein Seller and its successors and assigns, shall be responsible for, shall pay, and will DEFEND, INDEMNIFY and HOLD HARMLESS,
subject to the procedures set forth below, Purchaser and its affiliates, and all of its and their respective equity holders, partners,
members (excluding, in each case, such equity holders, partners or members that are equity holders, partners or members of Purchaser
or any of its affiliates solely by virtue of their holding publicly traded shares, units or partnership interests), directors,
officers, managers, employees, agents and other Representatives (collectively, the “Purchaser Indemnified Parties”)
from and against any and all liabilities arising out of, resulting from, based on, associated with, or relating to: 

 

    	13

     

    

 

(a)
any breach by Seller of Seller’s representations or warranties set forth in this Agreement, subject to the appropriate Cap;

 

(b)
any breach by Seller of Seller’s covenants set forth in this Agreement, subject to the appropriate Cap; or 

 

(c)
the Retained Liabilities; 

 

Deductible
and Cap. There is no deductible with respect to indemnification claims against Seller. The cap on for Fundamental Breaches shall
be in the aggregate $350,000. The Cap for Ordinary Breaches shall be in the aggregate $50,000. 

 

Procedures.
In all cases, subject to the limits of the appropriate Cap hereunder:

 

(a)
In order for a person to be entitled to any indemnification provided for hereunder in respect of, arising out of or involving
a claim made by any person against the indemnified party (a “Third-Party Claim”), such indemnified party must
notify the indemnifying party (which in the case of Seller, shall be Seller) in writing of the Third-Party Claim promptly after
receipt by such indemnified party of written notice of the Third-Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually and
materially prejudiced as a result of such failure. 

 

(b)
If a Third-Party Claim is made against an indemnified party, the indemnifying party shall be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel selected by the indemnifying party; provided, however,
that the indemnifying party shall not be entitled to assume the defense of any Third-Party Claim if (i) the indemnified party
shall have one or more legal or equitable defenses available to it which are different from or in addition to those available
to the indemnifying party, and, in the reasonable opinion of the indemnified party, counsel for the indemnifying party could not
adequately represent the interests of the indemnified party because such interests could be in conflict with those of the indemnifying
party, (ii) such Third-Party Claim involves injunctive or other non-monetary relief (provided, however, that if such Third-Party
Claim includes a request for injunctive or other non-monetary relief, the indemnifying party may assume the defense of such Third-Party
Claim so long as the indemnified party has joint control of the defense of the portion of such Third-Party Claim relating to the
request for injunctive or other non-monetary relief) or (iii) the indemnifying party shall not have assumed the defense of such
Third-Party Claim in a timely fashion (but in any event within 30 days of written notice of such Third-Party Claim). If the indemnifying
party assumes such defense, the indemnified party shall have the right to participate in the defense thereof and to employ counsel,
at its own expense, separate from the counsel employed by the indemnifying party, it being understood that the indemnifying party
shall control such defense. The indemnifying party shall be liable for the fees and expenses of counsel employed by the indemnified
party for any period during which the indemnifying party has not assumed the defense thereof. If the indemnifying party chooses
to defend or prosecute a Third-Party Claim, the indemnifying party shall keep the indemnified party reasonably apprised of the
status of the Third-Party Claim and shall furnish the indemnified party with copies of all notices and documents (including court
papers) received by the indemnifying party relating to the Third-Party Claim, and the indemnified party shall use its commercially
reasonable efforts to cooperate (at the indemnifying party’s sole cost and expense) in the defense or prosecution thereof.
If the indemnifying party assumes the defense of a Third-Party Claim, the indemnifying party shall not admit any liability with
respect to, or settle, compromise or discharge, such Third-Party Claim without the indemnified party’s prior written consent;
provided, however, that the indemnified party shall agree to any settlement, compromise or discharge of a Third-Party Claim that
the indemnifying party may recommend and that by its terms obligates the indemnifying party to pay the full amount of the liability
in connection with such Third-Party Claim, which releases the indemnified party completely and unconditionally from all liability
in connection with such Third-Party Claim and that would not otherwise adversely affect the indemnified party. 

 

    	14

     

    

 

(c)
In the event any indemnified party should have a claim against any indemnifying party hereunder that does not involve a Third-Party
Claim being asserted against or sought to be collected from such indemnified party, the indemnified party may make such claim
directly against any indemnifying party by delivering written notice of such claim to the indemnifying party. If the indemnifying
party does not notify the indemnified party within 10 Business Days following its receipt of such notice that the indemnifying
party disputes its liability to the indemnified party under this Section, such claim specified by the indemnified party in such
notice shall be conclusively deemed a liability of the indemnifying party under this Section and the indemnifying party shall
pay the amount of such liability to the indemnified party on demand or, in the case of any notice in which the amount of the claim
(or any portion thereof) is estimated, on such later date when the amount of such claim (or such portion thereof) becomes finally
determined. 

 

(d)
No person shall be entitled to indemnification hereunder unless it shall have given the Party from which indemnity is sought written
notice of the liabilities for which it seeks indemnification (which notice may be, in the case of Third-Party Claims, notice under
Section (a), and in the case of direct claims, notice under Section (c) within the applicable survival period.

 

(e)
Any environmental claim for indemnification or any claim for indemnification based on fraud, gross negligence, willful misconduct
or willful breach of this Agreement (“Fundamental Breaches”) must be brought within 12 months after the Closing
Date. Subject to the forgoing, all other claims (“Ordinary Breaches”) for indemnification must be brought within
3 months after the Closing Date.

 

    	15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00318-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00318-of-00352.parquet"}]]