Agreement and First Amendment to the Securities Purchase Agreement, dated as of August 15, 2023, by and among Novo Oil & Gas Legacy Holdings, LLC, Novo Intermediate, LLC, Novo Oil & Gas Holdings, LLC and Earthstone Energy Holdings, LLC

This AGREEMENT AND FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “First Amendment”) is dated as of August 15, 2023 (the “Amendment Execution Date”), by and among Novo Oil & Gas Legacy Holdings, LLC, a Delaware limited liability company (“Novo Legacy Holdings”), Novo Intermediate, LLC, a Delaware limited liability company (together with Novo Legacy Holdings, each a “Seller” and collectively, “Sellers”), Novo Oil & Gas Holdings, LLC, a Delaware limited liability company (the “Company”), and Earthstone Energy Holdings, LLC, a Delaware limited liability company (“Purchaser”). Each Seller, Company, and Purchaser are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.”

A.    The Parties entered into that certain Securities Purchase Agreement dated June 14, 2023 (as amended by this First Amendment, and as may be further amended from time to time, the “Purchase Agreement”), whereby, among other things, Sellers agreed to sell, and Purchaser agreed to acquire, the Subject Securities.

B.    The Parties desire to amend the Purchase Agreement and to set forth certain covenants and agreements with respect to certain regulatory matters pertaining to the operation of the Company, in each case, as more specifically set forth in this Amendment.

NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations, warranties, covenants, conditions, and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound by the terms hereof, agree as follows:

1.    Defined Terms. Capitalized terms used but not defined in this First Amendment shall have the meanings ascribed to them in the Purchase Agreement.

2.    Amendment to Section 2.7(b) of the Purchase Agreement. The last sentence in Section 2.7(b) of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:

“Within five (5) Business Days after the earlier of (A) the expiration of the Dispute Period without delivery of a Dispute Notice or (B) the date on which the Parties or the Accounting Referee finally determine the Adjusted Purchase Price, (1) if the Adjusted Purchase Price, as finally determined pursuant to this Section 2.7, exceeds the sum of the Closing Payment, plus the Deposit, plus the Specified Matters Deposit Amount, plus the Defect Deposit (if any), Purchaser shall pay to the Persons as directed by Sellers’ Representative by wire transfer of immediately available funds to an account(s) designated by Sellers’ Representative in writing an amount in cash equal to such excess or (2) if the sum of the Closing Payment plus the Deposit, plus the Specified Matters Deposit Amount, plus the Defect Deposit (if any) exceeds the Adjusted Purchase Price, as finally determined pursuant to this Section 2.7, then Sellers shall collectively pay to Purchaser by wire transfer of immediately available funds to an account(s) designated by Purchaser in writing an amount in cash equal to such excess.”

3.    Amendment to Schedule 5.13(a) to the Purchase Agreement. Effective as of the Execution Date, Schedule 5.13(a)(g) to the Purchase Agreement is hereby amended and supplemented to include the following disclosure below the heading “Continuous Drilling/Development Obligations”:

4.    Confirmation; Compliance with Purchase Agreement. The Parties acknowledge and agree that this Amendment amends and supplements the original terms of the Purchase Agreement, and that, except as otherwise provided herein, the Purchase Agreement shall continue in full force and effect in accordance with its terms. By executing this First Amendment, each of the Parties certifies on its own behalf that this First Amendment has been executed and delivered in compliance with Section 14.9 of the Purchase Agreement.

5.    Incorporation by Reference. Sections 1.2, 14.1, 14.2, 14.3, 14.4, 14.5, 14.6, 14.7, 14.8, 14.9, 14.10, 14.11, 14.12, 14.13, 14.14 and 14.16 of the Purchase Agreement are incorporated herein by reference and shall apply to the terms and provisions of this First Amendment and the Parties mutatis mutandis.

IN WITNESS WHEREOF, the Parties have executed this First Amendment as of the Amendment Execution Date.

    SELLERS:

    By: /s/ Tim Fahler________________________

    Name:     Tim Fahler

    Title:     Chief Executive Officer

    By: /s/ Tim Fahler________________________

    Name:     Tim Fahler

    Title:     Chief Executive Officer

    

        

    By: /s/ Tim Fahler________________________

    Name:     Tim Fahler

    Title:     Chief Executive Officer

    

    PURCHASER:

    Earthstone Energy Holdings, LLC

    By: /s/ Robert J. Anderson

    Name:     Robert J. Anderson

    Title:     President & Chief Executive Officer