Exhibit 2.1 ASSET PURCHASE AND SALE AGREEMENT by and between CHAPARRAL ENERGY, L.L.C. and CHAPARRAL CO2, L.L.C. and CHAPARRAL REAL ESTATE, L.L.C. (Collectively Seller) and PERDURE PETROLEUM, LLC (Purchaser) dated October 13, 2017 TABLE OF CONTENTS

PURCHASE AND SALE1

Agreement to Sell and Purchase1

Assets1

Effective Date4

Gauging and Strapping4

Records4

Excluded Assets5

SALE AND PURCHASE6

Purchase and Sale6

Purchase Price6

Performance Deposit7

Determination of Adjusted Purchase Price7

Payment of Adjusted Purchase Price9

Tax Purchase Price Allocations9

TITLE MATTERS9

Access to Records and Assets9

Definitions10

Notice of Title Defect13

Remedies for Title Defects14

Procedure for Resolving Title Defects14

Value of Defects15

Interest Additions16

Right to Terminate Agreement16

Expert Determination.17

Preferential Purchase Rights and Consents to Assign18

CASUALTY LOSS.19

Casualty Loss19

ENVIRONMENTAL CONDITION20

Physical Condition of the Assets20

Environmental Assessment.20

Environmental Defect Notice22

Remedies for Environmental Defects22

Procedure for Resolving Environmental Defects23

Definitions24

REPRESENTATIONS OF SELLER25

Disclaimers, Waivers and Agreements of the Parties.25

Representations and Warranties26

Knowledge30

REPRESENTATIONS OF PURCHASER30

Representations and Warranties30

Knowledge32

PRE-CLOSING OBLIGATIONS OF SELLER32

Operations32

Contracts33

Compensation of Seller33

Permissions34

Defaults34

Operatorship34

Geological and Geophysical Information35

PRE-CLOSING OBLIGATIONS OF PURCHASER35

Return of Data35

Efforts35

CONDITIONS OF SELLER TO CLOSING35

Representations35

Performance36

Governmental Consents36

Injunction36

Pending Matters36

Title and Environmental Defects36

CONDITIONS OF PURCHASER TO CLOSING36

Representations36

Performance36

Governmental Consents37

Injunction37

Pending Matters37

Title and Environmental Defects37

Release of Liens37

CLOSING37

Time and Place of the Closing37

Change of the Closing Date37

Calculation of Adjusted Purchase Price37

Failure to Close38

Closing Obligations38

Conveyance40

POST-CLOSING OBLIGATIONS40

Post-Closing Adjustments.40

Receipts and Credits41

Assumption and Indemnification.42

Disclaimers44

Method of Asserting Claims44

Payment45

Recording45

Cooperation and Further Assurances46

BUREAU OF INDIAN AFFAIRS LEASES46

BIA Leases46

BIA Lease Revenues46

Operation of BIA Leases46

TERMINATION47

Right of Termination47

Effect of Termination47

TAXES48

Apportionment of Ad Valorem and Property Taxes48

Sales Taxes48

Other Asset Taxes49

Income Taxes49

Cooperation49

Tax Indemnity49

MISCELLANEOUS49

Entire Agreement49

Waiver50

Headings50

Assignment50

No Third Party Beneficiaries50

Governing Law50

Notices50

Execution in Counterparts51

Expenses51

Confidentiality.51

Exhibits and Schedules51

Publicity; Public Disclosure52

Use of Seller’s Names52

Severability52

Affiliate52

Survival; Certain Limitations.52

Attorney’s Fees53

Certain Limitations53

Exchange54

Written Instructions54

-Pending Claims and Litigation

-Violations of Law

All mineral interests, royalty interests, oil, gas and mineral leases, leasehold interests, subleases, overriding royalty interests, net profits interests, production payments, operating rights, carried interests, reversionary interests, conversion rights and options, and other similar interests of whatever kind or character, whether legal or equitable, vested or contingent (collectively, “Hydrocarbon Interests”), which authorize or relate to the exploration for and production of Hydrocarbons in and under, or the right to share in production or the proceeds of production of Hydrocarbons produced from, the lands described in Exhibit A attached hereto, including, without limitation, those Hydrocarbon Interests described in Exhibit A and other Hydrocarbon Interests covering lands pooled, unitized or communitized with the lands described in Exhibit A.  All such Hydrocarbon Interests described in this Section 1.2.1 are hereinafter collectively called the “Properties” and singularly a “Property.”

All crude oil, natural gas, condensate, casinghead gas, distillate, natural gasoline, natural gas liquids, plant products, refined petroleum products, other liquid or gaseous hydrocarbons of any type and chemical composition (including, without limitation,

coalbed methane), sulphur, other gases (including, without limitation, hydrogen and carbon dioxide), and every other mineral or substance, or any of them, the right to explore for which, or an interest in which, is granted pursuant to the Properties (collectively “Hydrocarbons”) (i)  produced from or allocable to the interests of Seller in the Properties and existing in pipelines, storage tanks, or other processing or storage facilities upstream of the delivery points to the relevant purchasers on the Effective Date, and (ii) produced from or allocable to such interests of Seller on and after the Effective Date.

To the extent assignable, all currently existing contracts, agreements and instruments, to the extent applicable to the Oil and Gas Properties, including, without limitation, any and all surface leases; rights-of-way and easements; operating agreements; consulting agreements; exploration agreements; Hydrocarbon purchase, sales, exchange, processing, gathering, storage, treatment, compression, transportation and balancing agreements; farmout and farmin agreements; dry hole, bottom hole, acreage contribution, purchase and acquisition agreements; area of mutual interest agreements; salt water injection and disposal agreements; service contracts; unitization, communitization or pooling agreements; permits; licenses; servitudes; and all other similar contracts and agreements and any amendments thereto relating to the Properties (collectively, the “Existing Contracts”); provided, however, that (i) where an Existing Contract covers and relates to the Properties and to other properties, rights or interests owned by Seller, the term Existing Contract shall be limited to such rights thereunder that relate exclusively to the Properties and (ii) “Existing Contracts” shall exclude (A) any master services agreements, and (B) any Property, Easement, Permit and the assignments or conveyances in Seller’s chain of title to the Properties.

Pooled, communitized or unitized acreage which includes all or any part of the lands covered by the Properties, and all tenements, hereditaments, and appurtenances belonging thereto, together with all units formed under orders, rules, regulations, or other official acts of any Governmental Body having jurisdiction, voluntary unitization agreements, designations and/or declarations, and so-called “working interest units” created under operating agreements or otherwise relating to the Properties (the “Units”).

All (i) surface and subsurface machinery, equipment, platforms, facilities, pipelines, supplies and other personal property and fixtures of whatsoever kind or nature used or held for use with the operation of the Oil and Gas Properties or the production, treatment, storage, disposal or transportation of Hydrocarbons or water produced from the Oil and Gas Properties, including the pipeline systems set forth on Exhibit C (the “Pipeline Assets”), (ii) all oil wells, gas wells, water wells, salt water disposal wells, CO² wells, and injection wells, whether producing, non-producing, plugged and abandoned or temporarily abandoned wells located on the Properties or used or operated exclusively in connection with the operation of the Properties (collectively, the “Wells”), including, without limitation, the Wells listed on Exhibit B attached hereto, and (iii) all wellhead equipment, casing, tubing, rods, pumping units and engines, christmas trees, derricks, separators, compressors, dehydration units, heater-treaters, boilers, valves, gauges, meters, pumps, generators, motors, gun barrels, flow

lines, tanks and tank batteries, water lines, gas lines, gas processing plants and other plants, gathering lines, laterals and trunklines, gas systems (for gathering, treating and compression), chemicals, solutions, water systems (for treating, disposal and/or injection), power plants, poles, lines, transformers, starters, controllers, machine shops, tools, storage yards and equipment stored therein, buildings and camps, telegraph, telephone and other communication systems, loading docks, loading racks and shipping facilities, equipment and facilities, and any and all additions, accessions to, substitutions and replacements of any of the foregoing, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto, located on or used exclusively in connection with the operation of the Oil and Gas Properties (all such machinery, equipment, platforms, facilities, supplies and other property, excluding, however, the Wells, being collectively called the “Personal Property”).

All rights and obligations with respect to Hydrocarbon overproduction and underproduction from the Properties, including, without limitation, the right and obligation to balance in kind or by cash payment, together with all plant and transportation imbalances to the extent attributable to the Properties and all make up rights with respect to take-or-pay payments.

All (i) trade credits, accounts receivable, notes receivable, take-or-pay amounts receivable, and other receivables and general intangibles, attributable to the Assets with respect to periods of time from and after the Effective Date and (ii) liens and security interests in favor of Seller or its Affiliates, whether choate or inchoate, under any Applicable Law or Existing Contract to the extent arising from, or relating to, the ownership, operation or sale or other disposition on or after the Effective Date of any of the Assets or to the extent arising in favor of Seller as the operator or non-operator of any of the Oil and Gas Properties.

All rights of Seller to audit the records of any person and to receive refunds or payments of any nature, and all amounts of money relating thereto, whether before, on or after the Effective Date, to the extent relating to obligations assumed by Purchaser pursuant to this Agreement.

To the extent transferable, all Permits, approvals, consents, certificates and other authorizations, and other rights granted by third parties, and all certificates for convenience or necessity immunities, privileges, grants, and other similar rights that are required for, or used or held for use in, the ownership or operation of the Assets.

All easements, licenses, servitudes, rights-of-way, surface leases, right of use and easement and other rights to use the surface and subsurface appurtenant thereto, to the extent used or held for use in connection with the Assets (the “Easements”).

To the extent held, used or held for use in the operation of the Assets, (i) all inventories of pipe, equipment and other Personal Property and (ii) all cars, trucks, trailers, backhoes, graders and other similar rolling stock and equipment.

The fee surface acreage set forth on Exhibit E.

All of the applicable files, records and data directly relating to the items described in subsections 1.2.1 through 1.2.12 (but including only copies of the hereinafter described Tax and accounting records), including, without limitation, joint interest billings, check receipts and third party disbursement records, copies of records relating to Property Taxes and severance, sales, excise, and other production-related Taxes, legal files, land and lease files, title records, title opinions, property ownership reports, maps, abstracts, regulatory records, division order records, contracts, geological, geophysical and seismic data, and except where the transfer or disclosure of such data and records is restricted by agreement with third parties or excluded by the terms of this Agreement (as more fully set forth in Sections 1.6 and 8.7; provided, however, that Seller shall use commercially reasonable efforts to obtain waivers to any such transfer or disclosure restrictions), production records, electric logs, core data, pressure data and decline curves and graphical production curves, and all related matters in the possession of Seller (collectively the “Records”); provided, however, that Seller has the rights with respect to such Records as provided in Section 1.5 below.

Additional Consideration

The Purchase Price;

Plus the amount of the value of all merchantable Hydrocarbons produced from or allocable to the Properties existing in pipelines, storage tanks (other than tank bottoms below the load flange), or other processing or storage facilities (including, without limitation, unsold inventories of plant products owned by Seller, if any) upstream of the delivery points to the relevant purchasers as of the Effective Date, the value to be based on the contract price applicable to such Hydrocarbons in effect as of the Effective Date (or the market value, if there is no contract price, in effect as of the Effective Date), less (i) amounts payable as severance, sales, excise, and other production-related Taxes, royalties, overriding royalties, and other similar burdens upon such Hydrocarbons, (ii) transportation fees and post-production costs and (iii) gravity adjustments deducted by purchasers of such Hydrocarbons;

Plus the amount of all Property Costs incurred by Seller prior to the Closing which are attributable to periods on and after the Effective Date, including, without limitation:  rentals, shut-in well payments, and other lease maintenance payments; capital costs not otherwise prohibited by the terms of this Agreement (including, without limitation, drilling costs, completion costs, acreage expenditures, acquisition expenditures, seismic expenditures, and waterflood expenditures); to the extent authorized pursuant to Section 8.3, Seller charges and overhead reimbursements and operating costs chargeable under applicable operating agreements or otherwise and consistent with the standards established by COPAS; provided, however, there shall be no adjustment for costs and expenses incurred by Seller (i) to cure any Title Defect or Environmental Defect under this Agreement, (ii) with respect to any gas imbalances, (iii) with respect

to any Casualty Loss, (iv) related to any violation of Applicable Law and (v) in respect of any Retained Liabilities;

Plus the amount of all accounts receivable accruing on or after the Effective Date for amounts paid on behalf of co-working interest owners and which, as of the Closing Date, have been perfected by an operator’s lien relating to the Properties but which remain uncollected as of the Closing Date;

Plus the total amount of Taxes described in Sections 16.1 and 16.3 paid by Seller, for its or other’s account, relating to the Assets and attributable to any period of time on and after the Effective Date, but only to the extent same are not included under Section 2.4.3 above;

Less the amount of the actual proceeds received by Seller in the ordinary course of business that are attributable to Hydrocarbon production from the Properties on and after the Effective Date (net of any royalties and of any Taxes described in Sections 16.1 and 16.3 actually paid by or on behalf of Seller), together with any other monies or credits attributable to the ownership or operation of the Assets on and after the Effective Date;

Less any Taxes allocable to Seller under Sections 16.1 and 16.3 paid by or on behalf of Purchaser;

Less the amount of the Performance Deposit and any interest and/or income accumulated thereon and all other advances and deposits relating to the Assets that are received by Seller prior to the Closing Date and attributable to periods of time on or after the Effective Date;

Less an amount equal to the aggregate of all Title Defect Adjustments made in accordance with Article 3;

Less an amount equal to the aggregate of all Environmental Defect Adjustments made in accordance with Article 5;

Less an amount equal to the Allocated Value of (i) the Assets with respect to which preferential purchase rights have been exercised prior to the Closing Date, or (ii) Assets excluded for failure to obtain a Required Consent prior to the Closing Date, each in accordance with Section 3.10;

Less the value of Seller’s prorated shares of all accrued but unpaid Taxes described in Sections 16.1 and 16.3 relating to the Assets for the period prior to the Effective Date;

Less an amount equal to the reduction in value of the Assets as the result of Casualty Losses in accordance with Article 4;

Less or plus, as the case may be, an amount equal to the Gas Imbalance Adjustment determined pursuant to Section 13.1.4;

Less an amount equal to the net proceeds related to the Assets which are payable to third parties and are held in suspense by Seller on the Closing Date; and

Less an amount equal to the Allocated Value of any Assets excluded from the transaction pursuant to Sections 3.6.2, 4.1, 5.2.1 and 5.4.

Plus or less any other amount provided for in this Agreement or agreed upon in writing by Seller and Purchaser.

“Good and Defensible Title” shall mean, as to each of the Wells and Units, that, as of the Effective Date and the Closing Date, (i) Seller (and upon Closing, Purchaser), by virtue of its ownership interests therein, are entitled to receive a fractional decimal interest in Hydrocarbons produced from the Properties (and in the proceeds from the sale of such production) of not less than the interest identified in Exhibit B-1 as the “Net Revenue Interest” for each of the Wells and Units, without reduction, suspension, or termination throughout the productive life of each such Wells and Units (the “Net Revenue Interest”); (ii) Seller is obligated to bear (and after the Closing shall obligate Purchaser to bear) a fractional decimal interest of not more than the “Working Interest” set forth for each Well and Unit on Exhibit B-1 of the costs and expenses related to the maintenance, development, drilling, equipping, testing, completing, sidetracking, reworking and operation of each such Well and Unit, without increase throughout the productive life thereof (unless otherwise shown on Exhibit B-1); and (iii) the Wells and Units are subject to no liens, encumbrances, obligations or defects except those that are Permitted Encumbrances (as defined below).

“Permitted Encumbrances” shall mean:

lessors’ royalties, overriding royalties, payments out of production, reversionary interests and other similar payments out of production affecting Seller’s Net Revenue Interest if the net cumulative effect of such burdens does not operate to (a) reduce the Net Revenue Interest of Seller in any of the Wells or Units to less

than the Net Revenue Interest set forth for such Well or Unit in Exhibit B-1; or (b) increase the Working Interest of Seller in any such Well or Unit to greater than the Working Interest therefor set forth in Exhibit B-1 (unless Seller’s Net Revenue Interest therein is increased in the same proportion);

preferential rights to purchase, required third party consents to assignment, and similar agreements with respect to which, prior to the Closing, (a) waivers or consents are obtained from the appropriate parties; (b) the appropriate time for asserting such rights has expired without an exercise of such rights; (c) with respect to consents, such consents need not be obtained prior to assignment; or (d) with respect to consents, the failure to obtain such consents will not have an adverse effect on the value of the Well or Unit;

all rights to consent by, required notices to, filings with, or other actions by Governmental Bodies in connection with the sale or conveyance of the Assets if the same are customarily obtained subsequent to such sale or conveyance (including without limitation consents to assign contained in BIA Leases) (“Customary Post-Closing Consents”);

non-consent penalties applied against the interest of Seller arising under applicable operating agreements which are taken into account in the calculation of the interests shown on Exhibit B-1 and reflected thereon;

easements, rights-of-way, servitudes, permits, surface leases, and other rights in respect of surface operations which do not and will not materially interfere with or detract from the operation, value, or use of the Assets by Purchaser;

such Title Defects as Purchaser has waived or released or is deemed to have waived pursuant to the terms of this Agreement, excluding, however, any Title Defects that would constitute a breach of the special warranty of  title contained in the General Assignment  (as hereinafter defined);

the terms and conditions of all Properties and Existing Contracts, provided the effect of same is taken into account in the calculation of the Net Revenue Interests and the Working Interests set forth for the Wells and Units in Exhibit B-1 to the extent they do not materially detract from the value of or materially interfere with the use, development or ownership of the Assets by Purchaser (as currently used and operated by Seller);

rights of reassignment, to the extent any exist as of the date of this Agreement, upon the surrender or expiration of any lease attributable to a Well or Unit;

liens for Taxes set forth on Schedule 3.2.2(ix) not yet due or not yet delinquent or, if due or delinquent, that are being contested in good faith and for which adequate cash reserves are maintained for the payment thereof in accordance with the Existing Contracts;  

materialman’s, mechanic’s, repairman’s, employee’s, contractor’s, operator’s, and other similar liens or charges arising in the ordinary course of business and for which adequate cash reserves are maintained for the payment thereof in accordance with the Existing Contracts (a) if they have not been filed pursuant to Applicable Law or (b) if filed, they have not yet become due and payable or payment is being withheld as provided by Applicable Law;

all rights reserved to or vested in any Governmental Body to control or regulate any of the Wells or Units in any manner, and all Applicable Laws;

defects or irregularities resulting from or related to heirship, administration or probate proceedings or the lack thereof, absent reasonable evidence of an actual claim of superior title from a third party;

defects based solely on the existence of prior oil and gas leases relating to the interests covered by any lease that are expired and no longer in force and legal effect but not surrendered of record;

defects arising from a mortgage encumbering the oil, gas or mineral estate of any lessor (unless a complaint of foreclosure has been filed or any similar action taken by the mortgagee thereunder and in such case such mortgage has not been subordinated to the interests affected thereby);

defects based solely on lack of information in Seller’s files or references to documents if such documents are not in Seller’s files;

all defects and irregularities of title that would not reasonably be expected to result in claims that would materially and adversely affect Seller’s title to, or ownership, operations, or value of, the Assets, including, without limitation (a) defects in the early chain of title consisting of the failure to recite marital status unless the Purchaser provides evidence that the failure or omission has resulted in another party’s superior claim of title; (b) defects or irregularities arising out of the lack of a survey unless a survey is expressly required by applicable Laws; (c) defects or irregularities arising out of or relating to the lack of powers of attorney from corporations to execute and deliver documents on their behalf or lack of spousal joinder, which defects or irregularities have been outstanding for ten (10) years or more; (d) defects of title which result from the failure to file assignments or other documents in the state or federal records so long as such assignments or other documents are properly recorded in the county records; and (e) irregularities cured by possession under applicable statutes of limitation and statutes relating to acquisitive (or liberative) prescription; and

all other liens, charges, encumbrances, instruments, obligations, defects and irregularities affecting the Assets which, individually or in the aggregate, do not prior to Closing: (a) interfere with the operation, value, or use of any of the Assets; (b) do not prevent Purchaser from receiving the proceeds of production from any of the Oil and Gas Properties; (c) do not reduce the Net Revenue

Interest of Seller in any of the Wells or Units below the Net Revenue Interest set forth for such Well or Unit on Exhibit B-1; and (d) do not increase the Working Interest of Seller in any of the Wells or Units to greater than the Working Interest set forth for such Well or Unit in Exhibit B-1 without a proportionate increase in the Net Revenue Interest for such Well or Unit.

“Title Defect” shall mean any matter (i) that would cause the title to any Well or Unit to fail to qualify as Good and Defensible Title and (ii) for which the Title Defect Amount (as hereinafter defined) is greater than the Individual Title Defect Threshold.

“Individual Title Defect Threshold” shall mean the sum of $40,000.

“Title Defect Property” shall mean a Property affected by a Title Defect timely and properly asserted by Purchaser.

“Title Defect Amount” shall mean, with respect to a Title Defect Property, the amount by which the value of such Title Defect Property is impaired by reason of the existence of one or more Title Defects.

“Allocated Value” means, with respect to each Well or Unit, the amount set forth on Exhibit B-1 under the column styled “Allocated Value” for such Well or Unit.  Seller and Purchaser agree that the Allocated Values set forth in Exhibit B-1 represent a fair and reasonable allocation of the Purchase Price among the Properties and have been established solely for use in connection with the administrative provisions of this Agreement, including the calculation of adjustments to the Purchase Price as provided herein, and not for purposes of federal, state, local, or foreign income taxation.

Seller shall furnish to Purchaser a notice (a “Rejection Notice”) in writing on or before five (5) business days after Seller’s receipt of the Title Defect Notice.  The Rejection Notice shall state with reasonable specificity the basis of Seller’s rejection of the Title Defect or the proposed Title Defect Amount.  No later than five (5) business days following Purchaser’s receipt of the Rejection Notice, representatives of Purchaser and Seller, knowledgeable in title matters, shall meet and either:  (i) agree to mutually reject the particular Title Defect, or (ii) agree on the validity of such Title Defect and the Title Defect Amount attributable thereto, in which case Seller may elect pursuant to Section 3.4(i) to cure such Title Defect at its own expense or, failing such cure, agree to reduce the Purchaser Price by the Title Defect Adjustment attributable thereto, subject to the limitations set forth in Section 3.5.3; provided, however, that if the Parties cannot agree on either option (i) or (ii), then the Closing shall proceed as scheduled, the Property affected by the asserted Title Defect shall be conveyed to Purchaser at Closing without adjustment to the Purchase Price, the Title Defect Amount Purchaser reasonably asserted in its Title Defect Notice shall be deposited with the Escrow Agent, and the existence of the Title Defect or the Title Defect Amount subject to the Rejection Notice shall be submitted to dispute resolution in accordance with the procedures set forth in Section 3.9.

Seller shall have the right, but not the obligation, upon delivering written notice to Purchaser in accordance with Section 3.4(i), to attempt, at Seller’s sole cost, to cure or remove any Title Defects on or before the expiration of ninety (90) days counted from and after the Closing Date (the “Cure Period”).  Upon the expiration of the Cure Period, (i) if the Parties agree as to whether any such Title Defect has been cured, the Parties shall jointly instruct the Escrow Agent to release the funds attributable to such Title Defect to the appropriate Party or (ii) if the Parties dispute whether the Title Defect has been cured or if any dispute remains regarding such Title Defect or the cure

or Title Defect Amount thereof, the Parties shall submit the dispute to the Defect Expert in accordance with Section 3.9.

Notwithstanding the provisions of Section 3.5.1, there shall be no adjustment to the Purchase Price, nor shall any Title Defect Amount be deposited with the Escrow Agent, for Title Defects affecting any Property unless the aggregate Title Defect Adjustments for asserted Title Defects with respect to all of the Properties exceeds an amount equal to three percent (3%) of the Purchase Price (the “Aggregate Title Deductible”), and then only to the extent the sum of the Title Defect Adjustments exceeds the Aggregate Title Deductible.

If, because of the Title Defect, title to a particular Title Defect Property fails completely with the effect that Seller has no ownership interest in the relevant Property, the adjustment to the Purchase Price attributable to such Title Defect shall be the Allocated Value of that Property.

If the Title Defect consists of a lien, encumbrance or other charge upon the Title Defect Property which is liquidated in amount, the adjustment to the Purchase Price attributable to such Title Defect shall be the amount necessary to pay the obligee to remove such Title Defect.  If such amount, however, is in excess of the Allocated Value of that Property, Seller may elect to exclude the Property from the transaction contemplated herein, and the Purchase Price shall be reduced by the Allocated Value of such Well or Unit.  If Seller does not elect to exclude the Property from the transaction contemplated herein, then Seller shall indemnify Purchaser for such Title Defect to the extent such Title Defect exceeds the Allocated Value of such Title Defect Property.

If Seller’s actual Net Revenue Interest in a Well or Unit is less than the Net Revenue Interest set forth for such Well or Unit in Exhibit B-1 throughout the remaining productive life of such Well or Unit, the adjustment to the Purchase Price attributable to such Title Defect shall be an amount equal to (i) the ratio of (x) the difference obtained by subtracting the actual Net Revenue Interest for such Well or Unit from the Net Revenue Interest set forth for such Well or Unit on Exhibit B-1, to (y) the Net Revenue Interest set forth for such Well or Unit on Exhibit B-1, (ii) multiplied by the Allocated Value for such Well or Unit.

If  Seller’s actual Net Revenue Interest in a Well or Unit is less than the Net Revenue Interest set forth for such Well or Unit in Exhibit B-1 for less than the remaining productive life of the Well or Unit, or if Seller’s actual Working Interest in a Well or Unit is greater than the Working Interest set forth for such Well or Unit in Exhibit B-1 without a proportionate increase in the relevant Net Revenue Interest, then the adjustment to the Purchase Price attributable to such Title Defect shall be determined by agreement of the Parties, or if they are unable to agree, pursuant to the dispute resolution procedures set out in the Section 3.9; and

If the Title Defect is one other than described in subparagraphs 3.6.1 through 3.6.4, the adjustment to the Purchase Price attributable to such Title Defect shall be the amount agreed to by Seller and Purchaser or, failing such agreement, the Title Defect Adjustment shall be determined pursuant to Section 3.9 below.

If Seller and Purchaser are unable to agree, as herein provided, regarding the existence of a Title Defect, Environmental Defect, or Casualty Loss, the adjustment to the Purchase Price attributable to a Title Defect, the Remediation Amount (as hereinafter defined) attributable to an Environmental Defect, or reduction in value resulting from a Casualty Loss, or any other matter to be resolved under this Article 3 or Article 4 or 5, the Parties shall promptly refer the matter for determination in the manner hereinafter provided to a person selected by mutual agreement of the Parties who possesses the requisite knowledge, skill and experience to determine the issue in question; provided, however, that all disputes shall be submitted at the latest by the day that is ten (10) days after the end of the Cure Period (the “Defect Expert”).  Neither Party shall propose as a Defect Expert a person who (i) is currently working as an employee or consultant for such Party or any Affiliate of such Party, or is in discussions about potential future work for such Party or any such Affiliate, (ii) has worked or been engaged as an employee, attorney, accountant or consultant for such Party or any such Affiliate during the two year period preceding the Closing Date, or (iii) has any financial interest in the transaction contemplated by this Agreement other than compensation for services as a Defect Expert.  In the event the Parties are unable to agree upon a Defect Expert, then each Party shall designate in writing to the other an independent person having the qualifications necessary to determine the issue in question, and the two persons so identified shall, without direction from or prior approval of the Party appointing such person, select an independent third party having the requisite qualifications to serve as the Defect Expert.  The Defect Expert may enlist the advice of attorneys, geologists, and landmen, or any petroleum engineer or environmental consultant mutually agreed upon by the Parties or any neutral expert selected by the Defect Expert.

Within five (5) business days of referral to the Defect Expert, the Parties shall each deliver to the other and the Defect Expert a notice setting forth in adequate detail the issues to be determined by the Defect Expert and the decision (on a word-for-word basis) that such Party wishes the Defect Expert to make with respect to the issues to be determined (the “Decision Notice”); provided, however, in preparing their Decision Notice, each Party (as well as the Defect Expert) shall be bound by the terms of this Agreement.  Within two (2) business days after the giving of the two Decision Notices, one or more representatives of each Party shall attend a meeting with the Defect Expert at a mutually acceptable time and place to discuss fully the content of such Decision Notice and, based thereon, determine whether either or both wish to modify their Decision Notices in any way.  Any such modifications shall be discussed, so that when each Party finalizes its Decision Notice, it shall do so with full knowledge of the

content of the other Party’s final Decision Notice.  The finalization of such Decision Notices and the delivery of same by each Party to the other shall occur at the meeting unless the Parties agree to have one or more additional meetings for such purposes.  The Defect Expert shall be required to adopt the decision set forth in either final Decision Notice and shall have no power whatsoever to reach any other result.  The Defect Expert shall adopt the decision that, in his or her judgment, is the more fair and equitable and in conformity with this Agreement and industry standards.

The decision, made in writing and signed by the Defect Expert, shall determine such dispute.  Such decision shall be made, signed and delivered to the Parties within two (2) business days after the meeting, unless otherwise agreed by the Parties.  The expenses of the Defect Expert and any other experts retained by the Defect Expert under this Agreement shall be borne by the Party whose final Decision Notice was not chosen by the Defect Expert, except that each Party shall bear the compensation and expense of its own counsel, witnesses and employees.  The determination and award of the Defect Expert shall be final and binding upon the Parties, shall not be subject to appeal or judicial review of any nature whatsoever and shall be taken into account in preparing the Post-Closing Adjustment Statement.  Upon final resolution of a dispute relating to a Title Defect or Environmental Defect, the Parties shall jointly instruct the Escrow Agent to release the funds attributable to such Title Defect or Environmental Defect to the appropriate Party in accordance with the decision of the Defect Expert.

Promptly, but no later than five (5) business days, after the date hereof, Seller shall send notices to all holders of preferential rights to purchase affecting the Assets.  If an Asset is subject to a preferential right to purchase, right of first refusal, right of first offer, or similar right that is exercised prior to the Closing, Seller shall be deemed to have suffered a complete failure of title with respect to the affected Asset, such Asset shall be excluded from the Assets conveyed to Purchaser at the Closing, such Assets shall be Excluded Assets for all purposes hereunder, the Purchase Price shall be reduced by an amount equal to the full Allocated Value of the affected Asset, and, in the case of such a preferential right to purchase or similar right, Seller shall be entitled to retain all proceeds paid for the affected Asset by the person exercising such preferential right to purchase or similar right.  Such a reduction of the Purchaser Price shall be without regard to the $40,000 Individual Title Defect Threshold otherwise applicable to individual Title Defects under Section 3.2.3 or the 3% Aggregate Title Deductible otherwise applicable to Title Defect Amounts for uncured Title Defects under Section 3.5.3, and no reduction of the Purchase Price pursuant to this Section 3.10 shall be taken into account in determining whether the Aggregate Title Deductible has been met.  If Purchaser purchases at the Closing an Asset burdened by a preferential right to purchase or similar right that has not been exercised as of the Closing Date, regardless of whether the time period for the exercise of such right has expired, no reduction of the Adjusted Purchase Price paid at the Closing shall be made with respect thereto.  If, for any reason, such preferential right to purchase or similar right is successfully exercised by the holder thereof after the Closing, Purchaser shall

be entitled to retain all proceeds paid for the affected Asset by the holder of the relevant preferential right to purchase or similar right.

Promptly, but no later than five (5) business days, after the date hereof, Seller shall send notices to all holders of consents to assign affecting the Assets.  If Seller fails to obtain any consent necessary for the transfer of any Asset to Purchaser, Seller’s failure shall be handled as follows:

If the consent is a not a Required Consent, then the affected Assets shall nevertheless be conveyed at the Closing as part of the Assets with no adjustment to the Purchase Price.  Except with respect to any consents denied in writing by the consent holder prior to Closing, any Costs that arise due to the failure to obtain such consent shall be borne by Purchaser, and Purchaser shall defend, release, indemnify and hold harmless Seller from and against the same.

If the consent is a Required Consent, the Purchase Price shall be adjusted downward by the Allocated Value of the affected Assets (which affected Assets shall include all Properties and Wells affected by the Existing Contract or Property for which a consent is refused), and the affected Assets shall be treated as Excluded Assets.

Notwithstanding the provisions of this Section 3.10.2, if Seller obtains a Required Consent described in Section 3.10.2(ii) within one hundred eighty (180) days after the Closing, then Seller shall promptly deliver conveyances of the affected Asset(s) to Purchaser and Purchaser shall pay to Seller an amount equal to the Allocated Value of the affected Asset(s) in accordance with wire transfer instructions provided by Seller (subject to the adjustments set forth in Section 2.4).

Prior to the Closing, and upon reasonable, prior notice to Seller and the operator(s) of the Properties, Purchaser and any third party environmental consulting firm approved by Seller (which consent shall not be unreasonably withheld) and retained by Purchaser (the “Purchaser’s Environmental Consultant”), to the same extent Seller has such right, shall have the right, at Purchaser’s sole cost and expense, to enter upon the Assets and all buildings and improvements thereon, inspect the same, conduct soil and water tests and borings, and generally conduct such tests, examinations, investigations, and studies as may be necessary or appropriate for the preparation of appropriate engineering and other reports, judgments, and environmental assessments in relation to the Assets, their environmental condition, and the existence of Environmental Defects (as hereinafter defined) (such inspection and investigation being called herein “Purchaser’s Environmental Assessment”) provided, however, that Purchaser shall not conduct any environmental sampling, testing, or monitoring activities, including any Phase II Environmental Site Assessments (collectively “Phase II Activities”), without prior

notice to and written consent of Seller.  Purchaser's notice to Seller of Phase II Activities shall be accompanied by a written report from Purchaser's Environmental Consultant that specifically identifies (i) the environmental condition that dictates the necessity of Phase II Activities and (ii) the Phase II Activities required to more specifically determine the scope or extent of such condition.  Seller's consent to Phase II Activities may be withheld in Seller’s sole and absolute discretion; provided, however, that if Seller does not give its consent for a Phase II Environmental Assessment pursuant to this sentence, then (i) Purchaser shall have the right, at its sole discretion, upon delivery of written notice to Seller prior to Closing, to exclude such Asset from the transaction contemplated by this Agreement, (ii) the Purchase Price shall be reduced by the Allocated Value of the Asset if it is so excluded and (iii) such Asset shall become an Excluded Asset for all purposes hereunder.  Notwithstanding anything herein to the contrary, Purchaser shall not have access to, and shall not be permitted to conduct Purchaser’s Environmental Assessment with respect to the Assets where Seller does not have the authority to grant access for such due diligence; provided, however, that Seller shall use all commercially reasonable efforts to obtain required consents of third parties, including third party operators of the Assets, in order to obtain such authority.  Seller shall have the right to be present during any activities conducted as a part of Purchaser’s Environmental Assessment and shall have the right, at its option and expense, to split samples with Purchaser.  Purchaser and its officers, employees, representatives, agents, and Environmental Consultant shall abide by Seller’s and any third party operator’s health and safety rules, policies, and procedures that are provided to Purchaser in advance while conducting Purchaser’s Environmental Assessment.  Purchaser shall by the end of the Due Diligence Period provide to Seller a copy of Purchaser’s Environmental Assessment, including any reports, data, and conclusions.  Purchaser and Seller shall keep strictly confidential any data or information acquired from such examinations and the results of all analyses of such data and information and shall not disclose same to any person or Governmental Body without the prior written approval of the other Party, except such disclosure as may be required by Applicable Law; provided, however, that if the Closing occurs, Seller shall, upon request of Purchaser (and to the extent not prohibited by Applicable Laws), destroy all such data or information in its possession and Purchaser shall no longer be bound by such confidentiality obligation. The obligation of confidentiality of Seller shall survive the Closing.

With respect to Purchaser’s Environmental Assessment, Purchaser shall indemnify and hold harmless the Seller Group from any and all Costs resulting from the acts or omissions of Purchaser or Purchaser’s Environmental Consultant, including, without limitation, Costs relating to (i) any and all statutory or common-law liens or other encumbrances for labor or materials furnished in connection with such tests, samplings, studies, or surveys as Purchaser or Purchaser’s Environmental Consultant may conduct with respect to the Assets, property damage, (iii) personal injury, and (iv) claims asserted by Purchaser, its Affiliates, and their respective partners, shareholders, members, officers, directors, employees, agents and representatives (collectively the “Purchaser Group”), regardless of whether such Costs are attributable, in whole or in part, to the negligence, sole or concurrent, of the Seller Group, excepting

only Costs to the extent actually resulting (i) on the account of the gross negligence or willful misconduct of a member of Seller Group or (ii) from matters discovered or uncovered by Purchaser and Purchaser’s Environmental Consultant in the course of such due diligence investigation to the extent such discoveries are of pre-existing conditions (including any Environmental Defects) not caused or exacerbated (which term shall specifically exclude the discovery of such conditions) by Purchaser or Purchaser’s Environmental Consultant.

If Seller contests the existence of an Environmental Defect or the proposed Remediation Amount attributable thereto, Seller shall provide Purchaser a Rejection Notice with respect thereto on or before five (5) days after Seller’s receipt of the Environmental Defect Notice.  The Rejection Notice shall state with reasonable specificity the basis of Seller’s rejection of the Environmental Defect or the proposed Remediation Amount.  No later than five (5) days following Purchaser’s receipt of the Rejection Notice, representatives of Purchaser and Seller, knowledgeable in environmental matters, shall meet and either:  (i) agree to mutually reject the particular Environmental Defect, or (ii) agree on the validity of such Environmental Defect and the Remediation Amount attributable thereto, in which case Seller may elect under Section 5.4(i) to cure such Environmental Defect at its own expense and, if required, to the satisfaction of the appropriate Governmental Body prior to the Closing or, failing such cure, agree to reduce the Purchase Price by the Environmental Defect Adjustment attributable thereto, subject to the limitation set forth in Section 5.5.3.  If the Parties cannot agree on either option (i) or (ii), then, subject to Seller’s and Purchaser’s right to remove Properties from the sale under this Agreement pursuant to Section 5.4, the Property affected by the asserted Environmental Defect shall be conveyed to Purchaser at Closing without adjustment to the Purchase Price, the Remediation Amount Purchaser reasonably asserted in its Environmental Defect Notice shall be deposited with the Escrow Agent, and the existence of the Environmental Defect or the Remediation Amount subject to the Rejection Notice shall be submitted to dispute resolution in accordance with the procedures set forth in Section 3.9.

Seller shall have the right, but not the obligation, upon delivering written notice to Purchaser in accordance with Section 5.4(i), to attempt, at Seller’s sole cost, to cure or remove any Environmental Defects on or before the expiration of the Cure Period. Upon the expiration of the Cure Period, (i) if the Parties agree as to whether any such Environmental Defect has been cured, the Parties shall jointly instruct the Escrow Agent to release the funds attributable to such Environmental Defect to the appropriate Party or (ii) if the Parties dispute whether the Environmental Defect has been cured or if any dispute remains outstanding regarding such Environmental Defect or the cure or Remediation Amount thereof, the Parties shall submit the dispute to the Defect Expert in accordance with Section 3.9.  

Notwithstanding the provisions of Section 5.5.1, there shall be no adjustment to the Purchase Price, nor shall any amounts be deposited with the Escrow Agent, for Environmental Defects affecting any Property unless the aggregate Environmental Defect Adjustment for all asserted Environmental Defects with Remediation Amounts exceeding the Individual Environmental Defect Threshold with respect to all of the Properties exceeds an amount equal to three percent (3%) of the Purchase Price (the “Aggregate Environmental Deductible”), and then only to the extent the sum of the Environmental Defect Adjustments exceed the Aggregate Environmental Deductible.

“Applicable Laws” shall mean all laws, statutes, treaties, rules, codes, ordinances, regulations, certificates, orders, interpretations, licenses and permits of any Governmental Body, including the common or civil law, (including, without limitation, those pertaining to occupational health and safety, consumer product safety, employee benefits, the environment, securities or zoning) and all judgments, decrees, injunctions, writs, orders, or like action of any court, arbitrator, or other Governmental Body of competent jurisdiction.

“Environmental Defect” shall mean a condition that exists as of the Effective Date with respect to the air, land, soil, surface, subsurface strata, surface water, ground water or sediments which causes an Asset to be subject to Remediation under Environmental Laws in effect as of the Effective Date, other than those matters set forth on Schedule 5.6.2.

“Environmental Laws” shall mean any and all Applicable Laws pertaining to safety, health, hazardous materials, or conservation or protection of the environment, wildlife, or natural reserves in effect in any and all jurisdictions in which the Assets are located, including, without limitation, the Clean Air Act, as amended, the Federal Water Pollution Control Act, as amended, the Safe Drinking Water Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act, as amended  (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, as amended (“SARA”), the Resource Conservation and Recovery Act, as amended (“RCRA”), the Hazardous and Solid Waste Amendments Act of 1984, as amended, the Toxic Substances Control Act, as amended, the Occupational Safety and Health Act, as amended (“OSHA”), and any applicable state, tribal, or local counterparts, but shall not include any Applicable Law associated with Plugging and Abandonment (as hereinafter defined).  The terms “hazardous substance,” “release,” and “threatened release” shall have the meanings specified in CERCLA; provided, however, that to the extent the laws of the state in which the Assets are located are applicable and have established a meaning for “hazardous substance,” “release,” “threatened release,” “solid waste,” “hazardous waste,” and “disposal” that is broader than that specified in CERCLA or RCRA, such broader meaning shall apply with respect to the matters covered by such laws.

“Governmental Body” shall mean any Federal, state, tribal, county, parish, municipal, or other federal, state or local governmental authority or judicial or regulatory agency, board, body, department, bureau, commission, instrumentality, court, tribunal or quasi-governmental authority in any jurisdiction (domestic or foreign).

“Individual Environmental Defect Threshold” shall mean the sum of $40,000.

“Remediation” shall mean the response required or allowed under Environmental Laws that cures, remediates, removes or remedies the applicable present condition alleged in

an Environmental Defect Notice that would be sufficient to comply with Environmental Laws.

“Remediation Amount” shall mean, with respect to any Environmental Defect, the cost of Remediation of such Environmental Defect.

Warranty Disclaimers; “As Is, Where Is”.  Except as specifically set forth in this Article 6 or in the General Assignment, Seller makes no representations or warranties, express or implied, in connection with the Assets.  Subject to this Section 6.1, Seller makes the representations and warranties set forth in Section 6.2.  To the extent required by Applicable Law to be operative, the disclaimers of certain warranties contained in this Section 6.1 are “conspicuous disclaimers” for purposes of any Applicable Law.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 6.2, SELLER’S REPRESENTATIONS IN SECTIONS 6.2.10 AND 6.2.16, SELLER’S CERTIFICATE DELIVERED PURSUANT TO SECTION 12.5.9 AND THE PROCEDURES AND REMEDIES APPLICABLE TO TITLE DEFECTS UNDER ARTICLE 3, CASUALTY LOSS UNDER ARTICLE 4, AND ENVIRONMENTAL DEFECTS UNDER ARTICLE 5, AND EXCEPT TO THE EXTENT REPRESENTATIONS AND WARRANTIES ARE CONTAINED IN THE GENERAL ASSIGNMENT, INCLUDING THE SPECIAL WARRANTY OF TITLE, PURCHASER AGREES THAT SELLER IS CONVEYING THE ASSETS WITHOUT REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED AT COMMON LAW, BY STATUTE, OR OTHERWISE (ALL OF WHICH SELLER HEREBY DISCLAIMS), RELATING TO (i) TITLE, (ii) OPERATING CONDITION, (iii) MERCHANTABILITY, DESIGN, OR QUALITY, (iv) FITNESS FOR ANY PARTICULAR PURPOSE, (v) ABSENCE OF LATENT DEFECTS, (vi) ENVIRONMENTAL CONDITION OF THE ASSETS, (vii) VALUE, OR (viii) ANY OTHER MATTER WHATSOEVER, IT BEING UNDERSTOOD THAT, EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT AND THE GENERAL ASSIGNMENT, SELLER IS CONVEYING TO PURCHASER, AND PURCHASER IS ACCEPTING, THE ASSETS “AS IS,” “WHERE IS,” “WITH ALL FAULTS,” AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR, AND PURCHASER IS ASSUMING ALL RISK WITH RESPECT TO THE ASSETS, INCLUDING, WITHOUT LIMITATION, ALL RISK ASSOCIATED WITH THE ENVIRONMENTAL CONDITION OF THE ASSETS.

Texas DTPA.  TO THE EXTENT APPLICABLE TO THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, PURCHASER WAIVES ITS RIGHTS, IF ANY, UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41, ET SEQ., TEXAS

BUSINESS AND COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, PURCHASER VOLUNTARILY CONSENTS TO THIS WAIVER.

Existence.  Seller is a limited liability company, duly organized, validly existing, and in good standing under the laws of the State of Oklahoma.  Seller is duly qualified to carry on its business in the states in which the Assets are located.

Power.  Seller has 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.

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 note, bond, mortgage, indenture, contract, agreement, or instrument to which Seller is a party or is binding on the Assets, (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.  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 its 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).

Brokers.  Seller has incurred no 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 Purchaser; and any such obligation or liability of Seller shall be the sole obligation of Seller.

Certain Tax Matters.  Seller has duly and timely filed all Tax returns with respect to the Assets that it was required to file, and all such Tax returns are true, correct and complete in all material respects.  Seller has timely paid when due all Taxes (whether or not shown on any Tax return) with respect to the Assets.  Other than Permitted Encumbrances, there are no liens on any of the Assets attributable to Taxes.  With respect to any Taxes relating to the Assets, (a) there are not currently in effect any extensions or waivers of any statute of limitations of any jurisdiction regarding the assessment or collection of any such Tax and (b) there are no pending or, to Seller’s knowledge, threatened audits, examinations or other proceedings against the Assets or Sellers.  None of the Assets is or shall be subject to any contractual arrangement that is

treated, for federal income Tax purposes, as a partnership, and no transfer of any part of the Assets pursuant to this Agreement will be treated as a transfer of an interest in a partnership for federal income Tax purposes.

Pending Claims and Litigation.  Except as set forth on Schedule 6.2.6, there are no suits, actions or other legal, administrative, or arbitration proceedings (i) in the case of Assets for which Seller has been designated operator, that are pending or, to Seller’s knowledge, threatened in writing against Seller, or any of such Assets, and (ii) in the case of Assets for which Seller has not been designated operator, to Seller’s knowledge, that are pending or threatened in writing against Seller, the operator of such Assets, or any of such Assets.

Violations.  Except as set forth on Schedule 6.2.7, to the knowledge of Seller, Seller has not violated any laws, statutes, regulations, Permits or orders applicable to any of its Assets or the operation thereof which violation may reasonably be expected to have a material effect on the value of the Assets affected thereby or the ownership, operation or use thereof (other than Environmental Laws, which are governed exclusively by Sections 6.2.10 and 6.2.16 and Article 5, and laws related to Taxes, as to which Seller’s sole representations and warranties are set forth in Section 6.2.5).

Gas Imbalances.  Except for those listed on Schedule 6.2.8, as of the Effective Date, there exist no production imbalances or imbalances with respect to any pipeline, storage or processing facility, or other conditions regarding Hydrocarbons taken or marketed from the Assets or any portion thereof which could result in:

a portion of any Seller’s interest in such Hydrocarbon production being taken or delivered after the Closing without Purchaser receiving payment therefor or at the price it would have received absent such imbalance; or

Seller or Purchaser being obligated to make payment to any person or entity as a result of such imbalance; or

Seller being obligated, by virtue or any prepayment arrangement, take-or-pay agreement, or similar arrangement, to deliver Hydrocarbons produced from the Assets at some future time without then receiving full payment therefor.

Material Contracts.  Schedule 6.2.9 sets forth a list of all Material Contracts (as hereinafter defined) that exist as of the date of this Agreement and Seller has made available to Purchaser as of the date hereof all true and correct copies of all such agreements in Seller’s possession along with all amendments thereto.  Except as set forth on Schedule 6.2.9, each Material Contract is a valid and binding agreement of Seller, enforceable against Seller in accordance with its terms, and, to Seller’s

knowledge, enforceable against each other party thereto in accordance with its terms, subject, in each case, to (i) applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application with respect to creditors, (ii) general principles of equity and (iii) the power of a court to deny enforcement of remedies generally based upon public policy.  Except as set forth on Schedule 6.2.9, to Seller’s knowledge, no event has occurred that would, with the passage of time or compliance with any applicable notice requirements or both, constitute a material breach, violation or default by Seller or any other party thereto, under any of the Material Contracts.  As used herein, the term “Material Contract” shall mean, to the extent binding upon the Assets and Purchaser’s ownership thereof or operations with respect thereto from and after Closing, any Existing Contract which is one or more of the following types:

Any contract or agreement with any Affiliate of Seller;

Any contract or agreement for the sale, balancing, gathering, transportation, treatment, processing, storage or other disposition or marketing of Hydrocarbons having a term extending beyond the date that is one hundred eighty (180) days after the Effective Date and that is not cancelable without penalty on sixty (60) days or less prior written notice;

Any contract that constitutes 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 any area of mutual interest agreement;

Any contract or agreement pursuant to which any third party has the right to earn or acquire any portion of the Properties (other than pursuant to customary non-consent provisions);

Any contract  or agreement that could reasonably be expected to require aggregate payments by Seller in an amount greater than $100,000 during the current or any subsequent calendar year, other than routine operating, unitization, pooling or communitization agreements;

Any indentures, mortgages or deeds of trust, loans, credit or note purchase agreements, sale lease back agreements, guarantees, bonds, letters of credit or similar financial agreements that constitute a lien on the Assets that will not be satisfied or released at or before the Closing Date, other than Permitted Encumbrances;

Any participation agreement, partnership, joint venture and/or exploration agreement, development agreement, joint operating agreement, unit operating agreement, unit agreement or similar contract entered into by Seller;

Any pooling, unitization and/or communitization agreements, declarations and/or orders or pre-pooling agreements or similar instruments pertaining to or affecting the Assets; and

contracts to sell, lease, farmout, exchange, or otherwise dispose of all or any part of the Assets, but excluding conventional rights of reassignment upon intent to abandon or release a Well or Property.

Environmental Law. Insofar as it pertains to the Assets, except as set forth on Schedule 6.2.10, to Seller’s knowledge, (i) there are no suits, actions or other legal, administrative, or arbitration proceedings against Seller or its Affiliates relating to an alleged or actual breach of Environmental Laws on or with respect to the Assets, (ii) Seller has not received written notice of any material release, spill, disposal, event, condition or circumstance concerning any of the Assets that materially interferes with or prevents compliance with Environmental Law, and (iii) Seller has not received any written notice of any environmental, health or safety claim, demand, filing, investigation, administrative proceeding, or other proceeding relating to the Assets or notice of any alleged or actual violation or non-compliance with any Environmental Law.

Consents.  Schedule 6.2.11 lists all Required Consents applicable in connection with the transfer of the Assets to Purchaser in accordance with the terms of this Agreement.

Preferential Purchase Rights.  Except as set forth on Schedule 6.2.12, there are no preferential rights to purchase any of the Assets that are applicable to the transfer of the Assets to Purchaser in accordance with the terms and conditions of this Agreement.

Leases and Royalties.  To Seller’s knowledge, the applicable operator has timely and properly paid all accrued bonuses, delay rentals, minimum royalties, and royalties due with respect to Seller’s interest in the Properties, in each case, in accordance with the Properties and Applicable Law.

Wells and Personal Property.  To Seller’s knowledge, except as set forth on Schedule 6.2.14,

all Wells have been drilled and completed at legal locations and within the limits permitted by all applicable Properties, Existing Contracts, and pooling or unit agreements;

no Well is subject to penalties on allowables on or after the Effective Date because of any overproduction or any other violation of Existing Law, and there are no Wells that (a) Seller is currently obligated by any Applicable Law or Existing Contract to currently plug, dismantle or abandon, (b) have been plugged, dismantled or abandoned during Seller’s period of ownership in a manner that does not comply in all material respects with Applicable Laws or (c) are on expired leases or leases in which Seller has no interest and are, or which solely with the passage of time will be, required to be plugged, dismantled or abandoned; and

all currently producing Wells and the Personal Property are in an operable state of repair adequate to maintain normal operations in accordance with past practice, ordinary wear and tear excepted, and, without limiting the foregoing, do not

contain, junk, fish, or other obstructions which could reasonably be expected to materially interfere with drilling, completion, recompletion, stimulation, or other operations on, with respect to, or affecting the Assets; and

Seller has (and Purchaser, as successor-in-interest to Seller, will have) (a) title to the Personal Property free and clear of liens, encumbrances, obligations, and defects, other than Permitted Encumbrances, or (b) with respect to rented Personal Property, a good and valid leasehold interest in such Personal Property.

Pipelines.  To Seller’s knowledge, Seller has all of the Easements as are necessary for the continued operation of the Pipeline Assets as currently conducted. To Seller’s knowledge, except (i) as set forth on Schedule 6.2.15, or (ii) as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect with respect to the Assets, Seller has valid title to such Easements, free and clear of all encumbrances, other than Permitted Encumbrances, and all obligations required to be fulfilled or performed by Seller or any of its Affiliates with respect to the Easements and any other party to the Easements with respect to the Easements have been fulfilled and performed and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in impairment of the rights of Seller or any of its Affiliates to the Easements.

Permits.  To Seller’s knowledge, except as set forth on Schedule 6.2.16, (i) Seller has acquired all material Permits from appropriate Governmental Bodies to conduct operations on the Assets, (ii) all such Permits are in full force and effect and no action, claim or proceeding is pending or threatened, to suspend, revoke or terminate any such Permit or declare any such Permit invalid, (iii) there are no material violations of any such Permit that would (or could with notice or lapse of time) result in the termination of such Permit and (iv) the transactions contemplated by this Agreement will not adversely affect the validity of any such Permit or cause a cancellation of or otherwise adversely affect such Permit.  

Existence.  Purchaser is a Delaware limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware and will be duly qualified at the Closing to carry on its business in all states where the Assets are located.

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

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, (ii) the organizational and governing documents of Purchaser, or (iii) any material judgment, decree, order, law, statute, rule, or regulation applicable to Purchaser, the non-compliance with which would have a material adverse effect on Seller or its ownership or operation, on or before the Closing, of any of the Assets, or the ability of Purchaser to consummate the transactions contemplated herein.  This Agreement has been, and the 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).

Brokers.  Purchaser has incurred no 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 any Seller; and any such obligation or liability of Purchaser that might exist shall be the sole obligation of Purchaser.

Sophistication; No Distribution.  Purchaser is an experienced and knowledgeable investor in the oil, gas and mineral resources industry that has previously expended substantial amounts in the acquisition and development of oil and gas properties.  Prior to entering into this Agreement, Purchaser has been advised by its counsel and such other persons as it has deemed appropriate concerning this Agreement.  The Assets to be acquired by Purchaser pursuant to this Agreement are being acquired by Purchaser for its own account, for investment, and not with a view to distribution or resale of securities within the meaning of the Securities Act of 1933, or any other applicable securities law, rule, regulation, or order that could impose any liability on Seller.

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

Financial Ability to Perform.  Purchaser has, or has arranged to have at the Closing, sufficient funds and credit arrangements to consummate the transactions contemplated by this Agreement.

Bonds.  Purchaser has obtained, or will obtain by the Closing, all of the bonds or sureties required by Applicable Laws to own and, where applicable, operate the Properties.

Non-Reliance.  Except with respect to the representations and warranties of Seller set forth in Section 6.2 and the certificate delivered by Seller at Closing pursuant to Section 12.5.9, Purchaser has not relied upon any oral or written statements, representations, or warranties that may have been made by or on behalf of Seller or any of their Affiliates concerning the condition, operation, performance, or prospects of the Assets, or upon any written reports, financial data, business plans, projections, or forecasts, any audits, studies, or assessments, or any other written materials, copies of which may have been furnished to Purchaser or as to which Purchaser may have been provided access in connection with the transactions contemplated by this Agreement.  EXCEPT AS PROVIDED ELSEWHERE HEREIN TO THE CONTRARY, TO THE EXTENT THAT PURCHASER HAS BEEN FURNISHED COPIES OF OR PROVIDED ACCESS TO ANY OF THE FOREGOING, PURCHASER ACKNOWLEDGES THAT SELLER, NOR ANY OF ITS AFFILIATES, NOR ANY OF SELLER’S OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS OR RICHARDSON BARR SECURITIES, INC., HAVE MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION OR ANY OTHER INFORMATION, DATA, OR MATERIALS (WHETHER WRITTEN OR ORAL) THAT MAY HAVE BEEN FURNISHED TO PURCHASER OR ITS REPRESENTATIVES, AGENTS OR RICHARDSON BARR SECURITIES, INC. BY OR ON BEHALF OF SELLER OR ANY OF ITS AFFILIATES IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT, EXCEPT THAT SELLER HAS ACTUAL KNOWLEDGE THAT ANY OF SUCH INFORMATION, DATA, OR MATERIALS ARE MATERIALLY FALSE OR MISLEADING.

Seller shall use all reasonable efforts to determine whether such item of geological and geophysical information is subject to a contractual restriction on transfer or confidentiality obligation (including, without limitation, contacting appropriate parties in cases where Seller’s files are not clear in this regard).

Where geological and geophysical data is restricted, no access shall be permitted to such data and the same shall not be delivered to Seller at the Closing.

Seller shall retain pursuant to Section 1.6 certain of its other geological and geophysical information, and the Parties shall mutually agree as to the method of handling the balance of such information.

Seller and Purchaser shall execute and acknowledge, and Seller shall deliver to Purchaser, (i) a master original of the Assignment, Bill of Sale and Conveyance in substantially the form attached hereto as Exhibit D (the “General Assignment”), together with a complete Exhibit A attached, and (ii) sufficient counterparts of the General Assignment to enable the recording of a counterpart of the General Assignment in each of the counties where the Assets are located.

Seller shall provide to Purchaser a listing showing all net proceeds and receivables related to production attributable to the Assets which are currently held in suspense (together with an analysis containing the names of the owners of such net proceeds and receivables held in suspense (to the extent known at such time), and the amount of such funds) pending completion of a division order title opinion or because of lack of identity or address of owners, title defects, changes of the ownership, or similar reasons.  After the Closing Date, Purchaser shall be responsible for proper distribution of all the suspended funds to the parties lawfully entitled thereto, and Purchaser agrees to indemnify and hold Seller and the Seller Group harmless from and against any Costs associated with Purchaser’s distribution of such suspended funds, but only to the extent of the funds for which the Purchase Price shall have been adjusted pursuant to the provisions of Section 2.4.15.    Seller shall indemnify and hold Purchaser harmless for any penalty, interest, or other assessments arising from Seller’s failure to timely escheat any suspended funds required by Applicable Laws to be escheated prior to the Closing Date.

Purchaser shall pay the Preliminary Amount to Seller and the Escrow Amount, if any, to the Escrow Agent.

Seller and Purchaser shall execute, acknowledge, and deliver federal, state, and Indian forms of lease assignments, if necessary.

Seller shall prepare and deliver and Seller and Purchaser shall execute, acknowledge, and deliver transfer orders or letters-in-lieu thereof directing all purchasers of production and remitters of production proceeds to make payment to Purchaser of proceeds attributable to production from the Assets for the period of time on and after

the Effective Date.  Seller shall furnish to Purchaser any executed letter-in-lieu of transfer/division orders or such other transfer documents that may be required for notifying and amending purchaser records after the BIA/Osage Agency has approved the transfers.

Except as otherwise provided in this Agreement, Seller shall deliver to Purchaser, and Purchaser shall take, possession of the Assets, and, as provided in this Agreement, subject to applicable provisions of the Existing Contracts, take over all operations of the Assets for which any Seller is designated as operator.

Seller shall execute and deliver to Purchaser appropriate change of operator forms for each of the Properties operated by Seller.

Each Seller shall deliver to Purchaser a non-foreign affidavit meeting the requirements of Section 1445(b)(2) of the IRC and the regulations thereunder.

Seller shall deliver a certificate duly executed by an authorized officer of Seller dated as of Closing certifying on behalf of such Seller that the conditions set forth in Sections 11.1 and 11.2 have been fulfilled.

Purchaser shall deliver a certificate duly executed by an authorized officer of Purchaser dated as of Closing certifying on behalf of Purchaser that the conditions set forth in Sections 10.1 and 10.2 have been fulfilled.

Seller shall deliver evidence to the reasonable satisfaction of Purchaser that the liens referenced in Section 11.7 have been released.

Seller and Purchaser shall each execute and deliver a transition services agreement in a form to be mutually agreed by the Parties.

Seller and Purchaser shall each execute, acknowledge and deliver a special warranty deed conveying the surface fee acreage set forth on Exhibit E to Purchaser in a form to be mutually agreed by the Parties.

Seller and Purchaser shall execute such other instruments and take such other actions as may be necessary to carry out their respective obligations under this Agreement.

As soon as reasonably practicable after the Closing, but in no event later than the later of ninety (90) days after the Closing and the date that all outstanding disputes before the Expert under Section 3.9 have been finally resolved, Seller shall prepare, in accordance with this Agreement, and deliver to Purchaser, a statement setting forth each adjustment to the Purchase Price made pursuant hereto (the “Post-Closing Adjustment Statement”).  The Post-Closing Adjustment Statement will include any adjustments necessary in connection with (i) any Title Defect Adjustment, Environmental Defect Adjustment or Casualty Loss determined pursuant to Section 3.9, (ii) any Gas Imbalance Adjustment determined in accordance with Section 13.1.4, and (iii) any other adjustments required under the provisions of Section 2.4 and not taken into account in determining the Closing Adjustment Statement.  As soon as reasonably practicable, but in no event later than thirty (30) days after Purchaser’s receipt of the Post-Closing Adjustment Statement from Seller, Purchaser shall deliver to Seller any objections that Purchaser has to the Post-Closing Adjustment Statement.  If Purchaser fails to object to such Post-Closing Adjustment Statement within such thirty (30) day time period, any changes shall be deemed waived and the Post-Closing Adjustment Statement shall be conclusively deemed to be accepted by both Parties, and will be final and binding on the Parties and not subject to further audit or arbitration.  The Parties shall undertake to agree on the final Adjusted Purchase Price no later than one hundred twenty (120) days after the Closing.

If Purchaser and Seller, acting in good faith, are unable to agree upon the adjustments in the Post-Closing Adjustment Statement required under the provisions of Section 2.4 (other than any Title Defect Adjustment, Environmental Defect Adjustment or Casualty Loss determined pursuant to Section 3.9, which determinations shall be final), within one hundred twenty (120) days after the Closing, the final Post-Closing Adjustment Statement amount shall be determined either (i) by subsequent agreement of the Parties, or (ii) by binding arbitration pursuant to an arbitration proceeding initiated and conducted in accordance with the then in force Commercial Arbitration Rules of the American Arbitration Association (“AAA”).  Either Party may initiate arbitration.  The arbitration proceedings shall be conducted in Oklahoma City, Oklahoma, by a single arbitrator agreed to by the Parties, or if they are unable to agree, selected by the AAA.  The arbitrator shall be a certified public accountant licensed to

practice in the State of Oklahoma with at least (10) years’ experience in the oil and gas business.  In fulfilling its duties hereunder with respect to the Final Settlement Statement, the arbitrator shall be bound by the matters set forth in this Agreement.  The decision of the arbitrator shall be conclusive and binding on the Parties.  The general expenses of arbitration, including the fees and expenses of the arbitrator, shall be borne equally by Seller and Purchaser; however, each Party shall bear and pay the fees and expenses of its own witnesses, legal counsel and of the collection and presentation of its evidence.  The award of the arbitrator shall not be subject to appeal or judicial review of any nature and shall be enforceable in any court of competent jurisdiction.  PURCHASER EXPRESSLY CONSENTS TO THE JURISDICTION OF AND APPROPRIATE VENUE IN ANY STATE DISTRICT COURT OR, SUBJECT TO SATISFYING JURISDICTIONAL REQUIREMENTS, ANY FEDERAL DISTRICT COURT, SITTING IN OKLAHOMA CITY, OKLAHOMA, FOR PURPOSES OF ENFORCING THE ARBITRATION AWARD.

The date upon which the Adjusted Purchase Price is agreed to by the Parties or determined by arbitration pursuant to Section 13.1.2 is referred to herein as the “Final Settlement Date.”  Within five (5) business days after the Final Settlement Date, those credits agreed upon by Purchaser and Seller shall be netted, and the final settlement shall be paid in cash by the Party owing same, via wire transfer as directed in writing by the receiving Party.

If either Party determines, prior to the delivery of the Post-Closing Adjustment Statement, that Hydrocarbon production imbalances or imbalances with respect to any pipeline, storage, or processing facility attributable to Wells included in the Assets as of the Effective Date are other than as set forth in Schedule 6.2.8, subject to verification of the other Party, the Purchase Price shall be adjusted upward or downward in connection with the Post-Closing Adjustment Statement, depending upon whether there is a net overproduction or a net underproduction attributable to such Wells.  The amount to be paid by Purchaser to Seller with respect to any underproduction, or by Seller to Purchaser with respect to any overproduction, shall be based on a value of $2.00 per MMBtu, without adjustment for present value or other discount factors.  Notwithstanding the foregoing, in no event shall any adjustment be made or any amount owing by either Party unless the net amount owed (the “Gas Imbalance Adjustment”) is greater than $50,000.

If the Closing occurs, Purchaser shall assume and agrees to pay, perform, and discharge any and all Assumed Obligations (as hereinafter defined).  As used herein, “Assumed Obligations” means, except for the Retained Liabilities or any matters, obligations and liabilities for which Purchaser would be entitled to indemnity under this Article 13 (without limiting Sections 17.16.1 or 17.16.2), all liabilities, responsibilities, duties, and obligations that arise from or relate to the ownership, use, or operation of the Assets and the production and marketing of Hydrocarbons therefrom, whether arising before, on, or after the Effective Date, including, without limitation, liabilities, responsibilities, duties, and obligations arising out of or relating to: (i) Plugging and Abandonment (as hereinafter defined); (ii) contracts or agreements affecting the Assets in existence as of the Effective Date or the Closing Date, including, but not limited to, the Existing Contracts; (iii) the Environmental Obligations (as hereinafter defined), (iv) imbalances due to overproduction of gas by Seller or pipeline imbalances owed by Seller under transportation agreements; (v) Costs arising in connection with the transfer, ownership or operation of the BIA Leases (including, without limitation, the contract operation arrangement contemplated by Article 14); and (vi) obligations otherwise assumed by Purchaser under this Agreement.  As used herein, “Environmental Obligations” means any claim, obligation, or liability relating to the environmental condition of the Assets, regardless of whether resulting from acts, omissions, events, or conditions occurring before, on, or after the Effective Date, including, without limitation, (u) all Environmental Defects timely and properly asserted by Purchaser pursuant to Article 5, regardless of whether or not an Environmental Defect Adjustment is made with respect thereto, (v) any other environmental pollution or contamination with respect to the air, land, soil, surface, subsurface strata, surface water, ground water, or sediments, (w) underground injection activities and waste disposal, (x) the presence of hazardous substances and /or NORM, (y) the presence of unknown abandoned oil and gas wells, water wells, sumps, pits, pipelines, and other equipment, and (z) necessary Remediation, and the cost of such Remediation, or any control, assessment, or compliance with respect to any pollution or contamination.  As used herein, “Plugging and Abandonment” means all plugging, replugging, abandonment, removal, disposal or restoration associated with the Assets, including, but not limited to, all plugging and abandonment, removal, surface restoration (including, without limitation, wetlands and marsh restoration), site clearance, and disposal of the Wells, well collars, structures and Personal Property located on or associated with the Assets (whether drilled or placed on an Asset prior to,

on, or after the Effective Date), the removal and capping of all associated flowlines, the restoration of the surface, site clearance, and any disposal of related waste materials, including, without limitation, NORM and asbestos, all in accordance with all Applicable Laws and the terms and conditions of the Properties and Existing Contracts; provided, however, this definition of Plugging and Abandonment is not intended to preclude Purchaser from raising an Environmental Defect as provided in Article 5.

From and after Closing, Purchaser hereby indemnifies and agrees to defend and hold harmless Seller and the Seller Group from and against all Costs based upon, arising out of, in connection with, or relating to (i) any breach of any representation, warranty, covenant, or agreement of Purchaser contained in this Agreement and (ii) Purchaser’s inspection of the Assets prior to the Closing.  If the Closing occurs, Purchaser shall indemnify, defend, and hold harmless Seller and the Seller Group from and against all Costs based upon, arising out of, in connection with, or relating to the Assumed Obligations.

Subject to the provisions of Sections 17.16.1 and 17.16.2, from and after Closing, Seller hereby indemnifies and agrees to defend and hold harmless Purchaser and the Purchaser Group from and against all Costs based upon, arising out of, in connection with, or relating to (i) any breach of any representation or warranty of Seller contained in this Agreement, (ii) any breach of the covenants and agreements of Seller in this Agreement and (iii) the Retained Liabilities.

“Retained Liabilities” shall mean all Costs arising out of, incident to or in connection with:

to the extent Purchaser submits a claim within the one (1) year period following the Closing Date, failure to pay or the incorrect payment to any royalty owner, overriding royalty owner, or other interest holder under the Oil and Gas Properties with respect to payments out of the proceeds of production and attributable to the period of time prior to the Effective Date; provided, that, this subpart (i) shall automatically expire and be of no further force and effect on the date that is one (1) year after the Closing Date;

Seller’s failure to pay or incorrect payment of any Taxes allocated to a Seller pursuant to this Agreement;

those litigation matters set forth, or to the extent Seller had knowledge thereof as of the execution date of this Agreement and therefore should have been set forth, on Schedule 6.2.6;

Seller’s disposal or transportation prior to the Closing Date of any hazardous materials generated on the Assets that are attributable to Seller’s ownership or operation of the Assets at or to any location not on the Assets;

any Excluded Assets;

Costs owed to any Affiliate of Seller to the extent accruing prior to the Closing Date and relating to the Assets;

third party claims, demands, damages, costs and expenses, obligations or other liabilities with respect to bodily injury or death arising from Seller’s operations on the Assets prior to the Closing Date;

claims asserted by a third party for gross negligence or willful misconduct of Seller or its Affiliates;

all employment relationships of Seller or any Affiliate of Seller, including any of their respective present or former employees or the termination of any such employment relationships, including the compensation or reimbursement for work performed with respect to the Assets to the extent attributable to periods prior to the Closing Date;

penalties, fines and criminal Costs imposed or assessed prior to the Effective Date in connection with Seller’s ownership or operation of the Assets; and

Seller’s obligations pursuant to Section 12.5.2.

If any claim for which a Party providing indemnification (the “Indemnifying Party”) would be liable to a Party or any of its officers, directors, employees, agents or representatives entitled to indemnification hereunder (the “Indemnified Party”) is asserted against or sought to be collected by a third person, the Indemnified Party shall promptly notify the Indemnifying Party of such claim, specifying the nature of such claim and the amount or the estimated amount thereof to the extent then feasible (which estimate shall not be conclusive of the final amount of such claim) (the “Claim Notice”).  The Indemnifying Party shall have thirty (30) days from its receipt of the Claim Notice (the “Notice Period”) to notify the Indemnified Party (i) whether it disputes its liability to the Indemnified Party hereunder with respect to such claim; and (ii) if it does not dispute such liability, whether it desires, at its sole cost and expense, to defend the Indemnified Party against such claim; provided, however, that the Indemnified Party is hereby authorized, prior to and during the Notice Period, to file

any motion, answer, or other pleading, submission or document which it shall deem necessary or appropriate to protect its interests.  If the Indemnifying Party notifies the Indemnified Party within the Notice Period that it does not dispute such liability and desires to defend against such claim or demand, then, except as hereinafter provided, the Indemnifying Party shall have the right to defend such claim or demand by appropriate proceedings, which proceedings shall be promptly settled or prosecuted to a final conclusion, in such a manner as to avoid any risk of the Indemnified Party becoming subject to liability.  If the Indemnified Party desires to participate in, but not control, any such defense or settlement, it may do so at its own cost and expense.  If the Indemnifying Party disputes its liability with respect to such claim, or elects not to defend such claim, whether by not giving timely notice as provided above or otherwise, the Indemnified Party shall have the right, but not the obligation, to defend against such claim, and if the Indemnifying Party is conclusively determined to have the obligation hereunder to provide indemnity with respect to such obligation hereunder, then the Indemnifying Party shall be responsible for paying the cost of such dispute.

If the Indemnified Party shall have a claim against the Indemnifying Party hereunder which does not involve a claim or demand being asserted or sought to be collected from it by a third person, the Indemnified Party shall promptly send a Claim Notice with respect to such claim to the Indemnifying Party.

As a condition to the Indemnifying Party’s obligations hereunder, the Indemnified Party will in good faith cooperate with and assist the Indemnifying Party in the prosecution or defense of such claims at no unreasonable expense to the Indemnified Party.  No Indemnifying Party shall consent to entry of judgment or enter into any settlement with respect to a claim either (i) without the consent of the Indemnified Party, which consent shall not be unreasonably withheld, or (ii) unless such judgment or settlement includes as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability with respect to such claim.  No Indemnified Party shall consent to the entry of judgment or enter the settlement of any such action, the defense of which has been assumed by an Indemnifying Party, without the consent of such Indemnifying Party, which consent shall not be unreasonably withheld.

by mutual consent of the Parties;

by Seller, at Seller’s option, if any of the conditions applicable to Purchaser set forth above in Article 10 have not been satisfied as provided therein or waived by Seller on or before the Closing Date;

by Purchaser, at Purchaser’s option, if any of the conditions applicable to Seller set forth above in Article 11 have not been satisfied as provided therein or waived by Purchaser on or before the Closing Date;

by either Seller or Purchaser if the Closing has not occurred on or before January 12, 2018, or such later date as the Parties may agree upon in writing; and

by Seller or Purchaser pursuant to the provisions of Section 3.8, if applicable.

Seller’s and Purchaser’s respective obligations under the Confidentiality Agreement, to the extent relating to the Assets, shall terminate upon the Closing.  Purchaser agrees that if this Agreement is terminated for any reason whatsoever, Purchaser’s obligations under the Confidentiality Agreement shall continue in accordance with the terms thereof.

After the Closing, Seller agrees not to disclose geological, seismic and other proprietary data related to the Assets, or other information that Seller would treat as confidential if it were the owner of the Assets or any confidential information provided by Purchaser to Seller unless (i) the Purchaser shall have consented thereto in writing, (ii) disclosure is required pursuant to a court order or by subpoena or similar legal process, or (iii) disclosure is made on advice of its counsel, pursuant to a request by a Governmental Body, pursuant to Applicable Laws, or to comply with the rules and regulations of any stock exchange, or (iv) such information has been previously made public (except as a result of a breach of this Agreement); provided, however, Seller may disclose such information to its representatives, agents, attorneys, consultants, and auditors as needed, but in such event, the Seller shall use reasonable efforts to cause such persons to keep such information confidential.

The representations and warranties of Seller contained in (i) Sections 6.2.1, 6.2.2, 6.2.3 and 6.2.4 (the “Fundamental Representations”) shall survive the Closing until barred by the applicable statutes of limitations, (ii) Section 6.2.5 shall survive until sixty (60) days after the expiration of the applicable statute of limitations for assessment of the applicable Tax, and (iii) all other representations of Seller under Section 6.2 shall survive the Closing for a period of two hundred seventy (270) days.  The representations and warranties of Purchaser contained in Article 7 shall survive the Closing until barred by the applicable statutes of limitations.  The respective covenants of the Parties under this Agreement (i) to be performed at or prior to the Closing shall expire and be of no further force or effect after the date that is sixty (60) days following

the Closing, and (ii) to be performed after the Closing shall survive the Closing until fully performed; provided, however, that any covenants of the Parties under this Agreement relating to Taxes shall survive until sixty (60) days after the expiration of the applicable statute of limitations for the assessment of the applicable Tax.

In no event shall Seller have or incur any liability to Purchaser for any Costs incurred by Purchaser arising from a breach of a representation or warranty of Seller that is not a Fundamental Representation or a representation or warranty contained in Section 6.2.5:  (i)  for any individual claim for Costs that does not exceed $50,000.00 (the “Individual Threshold”); (ii) until Purchaser has suffered Costs (including the total amounts of all claims that exceed the Individual Threshold) in the aggregate in excess of an amount equal to three percent (3%) of the Purchase Price (the “Aggregate Indemnity Deductible”), after which point Seller will be obligated only to indemnify Purchaser from and against further Costs including only the total amount of all claims that exceed the Individual Threshold) in excess of the Aggregate Indemnity Deductible; and (iii) in the aggregate in excess of twenty percent (20%) of the Purchase Price.  Notwithstanding anything herein to the contrary, in no event will Seller’s aggregate liability under this Agreement exceed one hundred percent (100%) of the unadjusted Purchase Price.