Common use of Properties and Assets Clause in Contracts

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Each Subject Company has a valid and enforceable leasehold interest in each of the leased premises in which it currently conducts its business, except as may be affected by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or general equitable principles. Section 2.12(a) of the Seller Disclosure Letter identifies, as of the date hereof, all of the leases for real property to which each Subject Company is a party (the “Leases”). Except as set forth in Section 2.12(a) of the Disclosure Letter, the Leases constitute all real property owned, leased, subleased, licensed or otherwise used in the operation of the Business. The Sellers have previously provided or otherwise made available to Apollo true, complete and correct copies of such Leases. As of the date hereof, except as would not reasonably be expected to have have, individually or in the aggregate, be Material to a Royale Material Adverse EffectReasonable Investor, there is no default by the lessee or, to the Sellers’ Knowledge, the Royale Parties lessor under any such lease and their Subsidiaries to the Sellers’ Knowledge the use and operation of the property subject to the Leases does not violate any Applicable Law. Except as may be affected by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or general equitable principles, (i) each Lease is the legal, valid and binding obligation of the Subject Company party thereto and, to the Knowledge of the Sellers, each other party to such Lease and (ii) each Lease is enforceable against such Subject Company and, to the Knowledge of the Sellers, each other party to such Lease. No Subject Company owns any real property. (b) Except as set forth in Section 2.12(a) of the Disclosure Letter, the Subject Companies own and have either (and as of the Closing, shall own and have) good, valid and marketable title to or, in the case of leased property, good and valid title in fee leasehold interests in, or a valid leasehold interestotherwise have (and as of the Closing, Right of Way shall have) full or other sufficient and legally enforceable rights to use, all of the landproperties, mineral assets and other subsurface rightsrights (tangible or intangible, buildingsand real, structures personal or mixed) used or held for use in connection with, necessary for the conduct of, or otherwise material to the operations of, the Business as it is conducted as of the date hereof and other improvements thereon and fixtures thereto necessary as it will be conducted immediately prior to permit it to conduct its business as currently conductedthe Closing, in each case free and clear of all liens (except in all cases for any Lien other than Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any failure to have any such preferential purchasetitle, consent interest or similar rights right that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedulesnot, none of the Royale Interests are subject to any Tax partnership agreement individually or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherlandaggregate, ▇▇▇▇▇▇ & Associatesbe Material to a Reasonable Investor. The Subject Companies have maintained in all material respects all tangible assets in good repair, Inc. as of December 31working order and operating condition, 2015subject only to ordinary wear and tear, and dated February 1except for any failure to be in good repair, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedulesworking order or operating condition that would not, no Royale Party is engaged in any oil, natural gas individually or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepaymentaggregate, advance payment, take-or-pay or similar obligations without then or thereafter being entitled be Material to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securitiesa Reasonable Investor. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except for properties and assets disposed of in the ordinary course of business or as would not reasonably be expected to have a Royale Material Adverse Effectpermitted by this Agreement, the Royale Parties Buyer or one of its Subsidiaries has good, valid, and their Subsidiaries own and have either good and valid marketable title in fee or a to, valid leasehold interest, Right of Way interests in or other otherwise legally enforceable rights to use all of the landpersonal property, mineral and other subsurface rightsassets (tangible or intangible), buildingsused, structures occupied, and other improvements thereon and fixtures thereto necessary to permit operated or held for use by it to conduct in connection with its business as currently conducted, presently conducted in each case case, free and clear of any Lien, except for (i) statutory Liens for amounts not yet delinquent and (ii) Liens incurred in the ordinary course of business or imperfections of title, easements, and encumbrances, if any, that, individually and in the aggregate, are not material in character, amount or extent, and do not materially detract from the value and do not materially interfere with the present use, occupancy, or operation of any material asset. (b) Buyer or one of its Subsidiaries (a) has good record, insurable and marketable title to all real property (by name and location) owned by Buyer or any of its Subsidiaries (the “Buyer Owned Real Property”), free and clear of all material Liens, except for Permitted Liens. Buyer (or its applicable Subsidiary) has an existing owner’s title insurance policy for each property constituting the Buyer Owned Real Property insuring said owner’s title to such property free and clear of all liens except ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and has disclosed such policies to Company prior to the date hereof. No portion of the Buyer Owned Real Property is subject to any right of first offer or right of first refusal or any other option to purchase said Buyer Owned Real Property. (except in all cases for Permitted Liens). Except as would not reasonably be expected c) Neither Buyer nor any of its Subsidiaries has received a written notice of, and otherwise has no Knowledge of any, material default with respect to have a Royale Material Effect, all any of the leases, Rights of Way subleases, licenses or other agreements entered into by Buyer (the “Buyer Leases”) under which Buyer uses or occupies or has the right to use or occupy, now or in the future, real property (the “Buyer Leased Real Property,” and together with the Buyer Owned Real Property, the “Buyer Real Property”) is valid, binding, and in full force and effect and neither Buyer nor any Royale Party of its Subsidiaries has received a written notice of, and otherwise has no Knowledge of any, material default or termination with respect to any Buyer Lease. There has not occurred any event and no condition exists that would constitute a termination event or a material breach by Buyer or any of their its Subsidiaries leaseof, access or use material default by Buyer or any of its Subsidiaries in, the performance of any covenant, agreement, or condition contained in any Buyer Lease, and to Buyer’s Knowledge, no lessor under a Buyer Lease is in material breach or default in the performance of any material covenant, agreement, or condition contained in such Buyer Lease, and Buyer (or its applicable Subsidiary) has not received written notice from any landlord alleging any of the foregoing. To Buyer’s Knowledge, there is no pending or threatened in writing legal, administrative, arbitral or other proceeding, claim, action, or governmental or regulatory investigation of any nature with respect to the Buyer Real Property, including without limitation a pending or threatened taking of any real property by eminent domain. Buyer and each of its Subsidiaries has paid all rents and other charges to the extent due under the Buyer Leases. To Buyer’s Knowledge, there are no material pending or threatened condemnation proceedings against any Buyer Real Property. The Buyer Leases constitute all leases in which Buyer and its Subsidiaries has any interest in as lessee, sublessee or sub-licensee in any real property. The Buyer Leases are legal, valid, binding and are in force and effect against the Royale Parties upon Buyer (or any of their Subsidiaries its Subsidiary, as applicable) and, to the Knowledge of each Royale PartyBuyer, the counterparties all other parties thereto, in accordance with their respective termsenforceable, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general principles of equity, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party full force and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which effect and have not had and would not reasonably be expected to have a Royale Material Adverse Effectbeen modified or amended. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any To each of the Rights Buyer Leases, Buyer (or its applicable Subsidiary) has not exercised or given any notice of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder exercise of any such Rights option, right of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned first offer or operated by the Royale Parties and their Subsidiaries are subject to Rights right of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time first refusal contained in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure SchedulesBuyer Leases, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under including any such Contractoption or right pertaining to purchase, expansion, renewal, extension or relocation (collectively, “Buyer Lease Options”). Buyer (or its applicable Subsidiary) has the full right to exercise any Buyer Lease Options contained in the Buyer Leases on the terms and conditions contained therein and upon due exercise would be entitled to enjoy the full benefit of such options with respect thereto. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇w▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇w▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇w▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇S▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇h▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇h▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect, the Royale Parties Partnership or a Subsidiary of the Partnership each respectively owns and their Subsidiaries own and have has either good and valid title in fee or a valid leasehold interest, Right of Way (defined below) or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Partnership Material Effect, all leases, Rights of Way or other agreements under which any Royale Party the Partnership or any of their its Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties Partnership or any of their its Subsidiaries and, to the Knowledge of each Royale Partythe Partnership, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties Partnership nor any of their its Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party of the Partnership and its Subsidiaries has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Partnership Material Adverse Effect. Each Royale Party of the Partnership and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Partnership Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries Partnership are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that materially affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party the Partnership, Matrix Operator, Matrix or any of their its Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Partnership Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect, the Royale Parties Partnership and their its Subsidiaries, as applicable, have defensible title to all of the Royale Property Interests forming the basis for the reserves reflected in the Royale Audited Financial Statements except for such Royale Property Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect or as set forth on Section 5.10(c4.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Property Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or or, preferential rights to purchase Hydrocarbons and neither the Royale Parties Partnership nor any of their its Subsidiaries are not is obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect, the Royale Parties Partnership and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Property Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties Partnership and their its Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties Partnership and their its Subsidiaries or otherwise associated with the Royale Property Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Partnership Material Adverse Effect. No well owned, leased, operated or used by any Royale Party the Partnership or any of their its Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Property Interests operated by the Royale Parties Partnership and their its Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Partnership Material Adverse Effect. None of the Interests of the Royale Parties Partnership or their its Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Partnership Material Adverse Effect. Except as set forth on Section 5.10(e4.10(e) of Royale Disclosure Schedules, none of the Royale Property Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report Summary Projection of Netherland, ▇▇▇▇▇▇ & Associates, Inc. Reserves and Revenues as of December March 31, 20152016, and dated February 1of the Partnership, with run date June 10, 2016, a correct and complete copy of which the Partnership has made available to Royale prior to the date of this Agreement. (g) Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, no Royale Party the Partnership is not engaged in any oil, natural gas or other futures or option options trading in respect of which it has any material future liability, nor is any Royale Party it a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g4.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party the Partnership for the delivery of Hydrocarbons attributable to any of the Royale Property Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party the Partnership is not bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h4.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Partythe Partnership, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties Partnership or any of their its Subsidiaries within one year of the Royale Merger Effective Time Closing Date in any of the Royale Property Interests or any of the contracts governing any of the Royale Property Interests. (i) Except as set forth on Section 5.10(i4.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Property Interests contain any minimum volume or throughput provisions or require the Royale Parties Partnership or any of their its Subsidiaries to pay for services regardless of whether the Royale Parties Partnership or any of their its Subsidiaries deliver delivers such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j4.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Property Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Property Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i4.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect, the Royale Parties Partnership or a Subsidiary of the Partnership each respectively owns and their Subsidiaries own and have has either good and valid title in fee or a valid leasehold interest, Right of Way (defined below) or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Partnership Material Effect, all leases, Rights of Way or other agreements under which any Royale Party the Partnership or any of their its Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties Partnership or any of their its Subsidiaries and, to the Knowledge of each Royale Partythe Partnership, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties Partnership nor any of their its Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party of the Partnership and its Subsidiaries has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Partnership Material Adverse Effect. Each Royale Party of the Partnership and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Partnership Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries Partnership are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that materially affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party the Partnership, Matrix Operator, Matrix or any of their its Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Partnership Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect, the Royale Parties Partnership and their its Subsidiaries, as applicable, have defensible title to all of the Royale Property Interests forming the basis for the reserves reflected in the Royale Audited Financial Statements except for such Royale Property Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect or as set forth on Section 5.10(c4.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Property Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or or, preferential rights to purchase Hydrocarbons and neither the Royale Parties Partnership nor any of their its Subsidiaries are not is obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Partnership Material Adverse Effect, the Royale Parties Partnership and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Property Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇w▇▇▇▇ owned, leased, operated or used by the Royale Parties Partnership and their its Subsidiaries and all water, carbon dioxide or injection ▇w▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties Partnership and their its Subsidiaries or otherwise associated with the Royale Property Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇w▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Partnership Material Adverse Effect. No well owned, leased, operated or used by any Royale Party the Partnership or any of their its Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Property Interests operated by the Royale Parties Partnership and their its Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Partnership Material Adverse Effect. None of the Interests of the Royale Parties Partnership or their its Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Partnership Material Adverse Effect. Except as set forth on Section 5.10(e4.10(e) of Royale Disclosure Schedules, none of the Royale Property Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report Summary Projection of Netherland, ▇▇▇▇▇▇ & Associates, Inc. Reserves and Revenues as of December March 31, 20152016, and dated February 1of the Partnership, with run date June 10, 2016, a correct and complete copy of which the Partnership has made available to Royale prior to the date of this Agreement. (g) Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, no Royale Party the Partnership is not engaged in any oil, natural gas or other futures or option options trading in respect of which it has any material future liability, nor is any Royale Party it a party to any price swaps, ▇h▇▇▇▇▇, futures or similar instruments. Section 5.10(g4.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party the Partnership for the delivery of Hydrocarbons attributable to any of the Royale Property Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party the Partnership is not bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h4.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Partythe Partnership, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties Partnership or any of their its Subsidiaries within one year of the Royale Merger Effective Time Closing Date in any of the Royale Property Interests or any of the contracts governing any of the Royale Property Interests. (i) Except as set forth on Section 5.10(i4.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Property Interests contain any minimum volume or throughput provisions or require the Royale Parties Partnership or any of their its Subsidiaries to pay for services regardless of whether the Royale Parties Partnership or any of their its Subsidiaries deliver delivers such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j4.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Property Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇h▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Property Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i4.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Neither the Company nor any of its Subsidiaries owns, or has ever owned, any real property. (b) None of the Company Leases has been assigned by the Company or a Subsidiary in favour of any person. The current uses of each property subject to a Company Lease comply with applicable Law. Except as would disclosed in Section 14(b) of the Company Disclosure Letter, no consent is required nor is any notice required to be given under any Company Lease by any party thereto or any other person in connection with the completion of the Transactions in order to maintain all rights of the Company or a Subsidiary, as the case may be, under such Company Lease. The completion of the Transactions will not reasonably be expected afford any party to have any of the Company Leases or any other person the right to terminate any Company Lease nor will the completion of such transactions result in any additional or more onerous obligation on the Company or a Royale Material Adverse EffectSubsidiary, as the Royale Parties case may be, under any Company Lease. (c) The machinery, equipment, furniture, fixtures and other tangible personal property and assets owned, leased or used by the Company or any of its Subsidiaries (the “Assets”) are in good operating condition and repair, ordinary wear and tear excepted, in the aggregate, sufficient and adequate to carry on their respective businesses in all material respects as presently conducted or over the last twelve months prior to the date hereof, and the Company and its Subsidiaries own are in possession of and have either good and valid title in fee to, or a valid leasehold interestinterests in or valid rights under contract to use, Right of Way or other rights such Assets that are material to the landCompany and its Subsidiaries, mineral and other subsurface rightstaken as a whole, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way Permitted Liens and defects in title that, individually or in the absence of which have aggregate, are not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party be material to the Company and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of WaySubsidiaries, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising taken as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effectwhole. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse EffectSection 3.15(a) of the Company Disclosure Letter sets forth the address of each parcel of real property owned by the Company or its Subsidiaries (collectively, the Royale Parties and their "Owned Real Property"). The Company or one of its Subsidiaries own and have either has good and valid marketable title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral Owned Real Property and other subsurface rights, to all of the buildings, structures and other improvements thereon and fixtures thereto necessary except to permit it the extent that not having such title would not, individually or in the aggregate, be reasonably expected to materially interfere with its ability to conduct its business as presently conducted. Neither the Company nor any of its Subsidiaries has leased, licensed or otherwise granted any Person the right to use or occupy the Owned Real Property. Neither the Company nor any of its Subsidiaries has collaterally assigned or granted any other security interest in the Owned Real Property, except (i) to the extent that such collateral assignment or grant would not, individually or in the aggregate, be reasonably expected to materially interfere with its ability to conduct its business as presently conducted or (ii) in connection with any Lien to be released at or prior to the Effective Time. (b) Section 3.15(b) of the Company Disclosure Letter sets forth the address of each parcel of all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixture or other interest in real property held by or for the Company or its Subsidiaries (the "Leased Real Property"). Section 3.15(b) of the Company Disclosure Letter sets forth all sublicenses, licenses and other grants by the Company or any of its Subsidiaries to any person of the right to use or occupy such Leased Real Property or any portion thereof involving, in any such case, payments of more than $750,000 annually. (c) The Company and each of its Subsidiaries has such good and valid title to, or such valid rights by lease, license, other agreement or otherwise to use, all assets and properties (other than the Owned Real Property which is the subject of the representation contained in Section 3.15(a) hereof) (in each case, tangible and intangible) necessary to enable the Company and its Subsidiaries to conduct their business as currently conducted, except defects in each case free title, easements, restrictive covenants and clear of all liens (except similar encumbrances that, individually or in all cases for Permitted Liens). Except as the aggregate, would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance materially interfere with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient ability to conduct its business as currently presently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Company Material Adverse Effect, the Royale Parties Company or a Subsidiary of the Company owns and their Subsidiaries own and have has either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens Liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Company Material EffectAdverse Effect and except as may be limited by the Bankruptcy and Equity Exception, all leases, Rights of Way or other agreements under which any Royale Party the Company or any of their its Subsidiaries lease, access or use any real property are valid, binding and are in full force and effect against the Royale Parties Company or any of their its Subsidiaries and, to the Knowledge of each Royale Partythe Company, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties Company nor any of their its Subsidiaries are in default under any of such leases, Rights of Way or other agreements. (b) Each Royale Party of the Company and its Subsidiaries has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Company Material Adverse Effect. Each Royale Party of the Company and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Company Material Adverse Effect. All pipelines owned or operated by the Royale Parties Company and their its Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that materially affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party the Company or any of their its Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Company Material Adverse Effect. (ci) Except as would not reasonably be expected to have a Royale Company Material Adverse Effect, the Royale Parties Company and their its Subsidiaries, as applicable, have good and defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, 2015 in the ordinary course of business, free and clear of all liens Liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens)Liens. Except as would not reasonably be expected to have a Royale Company Material Adverse Effect or as set forth on Section 5.10(c3.14(c)(i) of the Royale Company Disclosure SchedulesSchedule, (i) none of the all proceeds from the sale of Hydrocarbons produced from the Royale Interests are being received by them in any producing well a timely manner and are not being held in suspense for any reason, reason and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and neither the Royale Parties Company nor any of their its Subsidiaries are not is obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such leasedelivery. Except as would not reasonably be expected to have a Royale Company Material Adverse Effect, the Royale Parties Company and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (dii) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties Company and their its Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties Company and their its Subsidiaries or otherwise associated with an Interest of the Royale Interests Company or its Subsidiaries have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Company Material Adverse Effect. No To the Knowledge of the Company, no well owned, leased, operated or used by any Royale Party the Company or any of their its Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (eiii) All Royale Interests operated by the Royale Parties Company and their its Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Company Material Adverse Effect. None of the Interests of the Royale Parties Company or their its Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Company Material Adverse Effect. Except as set forth on Section 5.10(e3.14(c)(iii) of Royale the Company Disclosure SchedulesSchedule, none of the Royale Interests of Company or its Subsidiaries are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (fd) There To the Knowledge of the Company, there are no material inaccuracies in the report of NetherlandWexpro Reserves Report, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1January 28, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect a correct and complete copy of which it the Company has any material future liability, nor is any Royale Party a party made available to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable Parent prior to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except Other than the properties and assets disposed of by Parent and its Subsidiaries in the ordinary course of business since the Parent’s Most Recent Balance Sheet Date, Parent and its Subsidiaries have good and valid title to or, with respect to leased property, valid leasehold interests in, all of their respective properties, interests in material properties and assets, real and personal, in each case free and clear of Liens, except in each case in this Section 4.17 as would not reasonably be expected to have a Royale Parent Material Adverse Effect, . (b) Section 4.17(b) of the Royale Parties Parent Disclosure Schedule sets forth a complete and their correct list of each parcel of real property owned or leased by the Parent or any of its Subsidiaries own and have either good and valid title in fee (the “Parent Leased Facilities,” with the leases pursuant to which the Parent or any of its Subsidiaries is a valid leasehold interest, Right tenant of Way or other rights any such Parent Leased Facility being hereinafter referred to as the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens“Parent Leases”). Except As of the date of this Agreement, except as would not reasonably be expected to have a Royale Parent Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and Adverse Effect (i) the Parent Leases are in full force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither (ii) the Royale Parties nor Parent is not in default of any of their Subsidiaries its obligations under the Parent Leases and (iii) to the Parent’s knowledge, the landlords under the Leases are not in default of the landlords’ obligations under the Parent Leases. The Parent has not been in default of any of its obligations under any Parent Lease on more than three occasions in the twelve months preceding the date of this Agreement. No event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such leasesa breach or default, Rights or permit the termination, modification or acceleration of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate rent under any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse EffectParent Leases. (c) Except as would not reasonably be expected to have a Royale Parent Material Adverse Effect, the Royale Parties all personal property and their Subsidiariesequipment owned, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out leased or otherwise disposed used by the Parent or any of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, its Subsidiaries (i) none are in a good state of maintenance and repair, free from material defects and in good operating condition (subject to normal wear and tear), (ii) comply with the proceeds from the sale of Hydrocarbons produced from the Royale Interests applicable Parent Leases and with all applicable Laws in any producing well are being held in suspense for any reasonall material respects, and (iiiii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except suitable for the rights of any lessor to take free gas under the terms of any applicable lease purposes for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) which they are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statementspresently used. (d) All of To the ▇▇▇▇▇ ownedParent’s knowledge, leasedthere is no condemnation, operated expropriation or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide appropriation proceeding pending or injection ▇▇▇▇▇ located on threatened against any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party Parent Leased Facility or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Lawthe improvements thereon. (e) All Royale Interests True and correct copies of the documents under which the Parent Leased Facilities are leased or subleased to or utilized and/or operated by the Royale Parties Company and their its Subsidiaries (the “Parent Lease Documents”) have heretofore been operated in accordance with reasonable, prudent field practices delivered or made available to Company. The Parent Lease Documents are unmodified and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Returnfull force and effect. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except Schedule 2.12(a) sets forth a true, complete and correct list of all real property owned by the Company or any of its Subsidiaries (including any real property subject to (i) an installment sale contract pursuant to which the Company or any of its Subsidiaries will acquire fee simple title to the applicable real property upon compliance with the terms of such installment sale contract or (ii) a lease between the Company, as would not reasonably tenant, and a governmental agency, as landlord, in connection with bond financing pursuant to which the Company has an option to purchase the applicable real property and which lease may be expected to have terminated by the Company, as tenant, upon payment of the bonds (a Royale Material Adverse Effect“Bond Lease”)) (which real property, together with all appurtenances thereto, all Improvements thereon and all fixtures affixed thereto, collectively, the Royale Parties “Owned Real Property”) and their all real property leased by the Company and any of its Subsidiaries own (which real property, together with all appurtenances thereto, all Improvements thereon and all fixtures affixed thereto, collectively, the “Leased Real Property”). The Company and each of its Subsidiaries, respectively, have either (x) good and valid fee simple title (subject only to Permitted Liens or the terms of the applicable installment sale contract or Bond Lease) to all of the Owned Real Property and good and valid title (subject only to Permitted Liens or the terms of the applicable installment sale contract or Bond Lease) to all inventories, furnishings, fixtures, vehicles, equipment, machinery, supplies and all other tangible personal property and Assets physically located at, or used in fee connection with, the Owned Real Property (other than the Leased Personalty) (collectively, the “Owned Personalty”), all of which is reflected on the Balance Sheet or a which has been acquired since the Balance Sheet Date, and (y) valid and insurable leasehold interestinterests and estates in the Leased Real Property and good and valid title (subject only to Permitted Liens) to all inventories, Right furnishings, fixtures, vehicles, equipment, machinery, supplies and all other tangible personal property and Assets physically located at, or used in connection with, the Leased Real Property (other than the Leased Personalty) (collectively, the “Other Personalty” and together with the Owned Personalty, collectively, the “Personalty”), all of Way which is reflected on the Balance Sheet or other rights which has been acquired since the Balance Sheet Date. The Company and the Subsidiaries hold title to the land, mineral Owned Real Property and other subsurface rights, buildings, structures the Personalty and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conductedleasehold estates in the Leased Real Property which are, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of businesscase, free and clear of all liens Liens except for: (1) Liens consisting of zoning or planning restrictions, easements, agreements, rights-of-way, covenants, permits and Production Burdens other than Production Burdens restrictions or limitations on the use of real property or irregularities in title thereto appearing of record provided they do not materially impair the use of such property as it is presently used in the Ordinary Course of Business; (2) Liens for current Taxes not yet earneddue and payable or which are being contested in good faith and for which appropriate reserves in accordance with GAAP have been created; (3) mechanic’s, materialmen’s and similar Liens arising in the Ordinary Course of Business (including by operation of Law) which are not yet due and payable or payable which are being contested in good faith and Permitted Liens for which appropriate reserves in accordance with GAAP have been created; (other than Production Burdens). Except 4) standard exceptions which would be contained in an ALTA Form extended coverage owner’s policy of title insurance (or the locally available form of title insurance policy, as applicable) relating to (A) laws, ordinances and governmental regulations, (B) police power and (C) eminent domain, in each instance, to the extent the same would not reasonably be expected constitute a material breach of the other representations made by the Company under this Agreement; (5) any Liens granted pursuant to have a Royale Material Adverse Effect or as permitted under the Credit Facility and the Notes (including Liens for after-acquired collateral); and (6) any Liens set forth on Section 5.10(cSchedule 2.12(a)(6) hereto (collectively, the “Permitted Liens”). (b) True and correct copies of all of the Royale Disclosure Schedulesleases for the Leased Real Property have been made available to Buyer by the Company via its virtual data room (collectively, (i) none the “Leases”). The Leases, together with the Personalty Leases, constitute all leases, subleases or other occupancy agreements to which the Company and its Subsidiaries are a party. Each of the proceeds from Company and its Subsidiaries other than the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reasonDesignated Subsidiaries, and to the knowledge of the Company each of the Designated Subsidiaries, is in compliance in all material respects with the terms of all Leases to which each is a party, respectively, and all such Leases are valid and enforceable in all material respects in accordance with their terms. Neither the Company nor any of its Subsidiaries has received any notice (iiwritten or oral) from any landlord under any Lease alleging that the Company or any of its Subsidiaries is in default or in breach of any such Lease and to the knowledge of the Company, the landlords under the Leases are in compliance in all material respects with their obligations under the Leases. (c) Neither the Company nor its Subsidiaries has received written notice of a pending proceeding in eminent domain or other similar proceedings affecting any Owned Real Property or Leased Real Property and, to the Company’s knowledge, there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statementsthreatened proceedings. (d) All The Owned Real Property and the Leased Real Property include all the real property and Improvements necessary and sufficient to enable the Company and its Subsidiaries to conduct the Business operations of the ▇▇▇▇▇ owned, leased, operated or used by Company and its Subsidiaries in the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, same manner as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effectcurrently conducted. Except as set forth on Section 5.10(e) Schedule 2.6, the Company and its Subsidiaries have not sold or disposed of Royale Disclosure Schedulesany Assets since September 7, none 2007 except sales of inventory in the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax ReturnOrdinary Course of Business. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (je) Except as set forth in Section 5.10(jthe FM Global Risk Reports (which the Company has made available to the Buyer and Merger Sub via its virtual data room), the improvements located on each parcel of Owned Real Property and Leased Real Property (collectively, the “Improvements”) are generally in good working order and repair, ordinary wear and tear excepted, and no material repairs, replacements or regularly scheduled maintenance relating to such Personalty has been deferred (with materiality for this purpose to be determined based on the scope of operations conducted at such location). All water, gas, electrical, steam, compressed air, telecommunication, sanitary and storm sewage lines and systems and other similar systems serving each parcel of Owned Real Property and Leased Real Property are installed and operating and are sufficient to enable the Improvements thereon to continue to be used and operated in the manner currently being used and operated and to permit the conduct of the Royale Disclosure Schedules, none Businesses of the Contracts relating Company and the Subsidiaries as currently conducted. (f) The Personalty and Leased Personalty constitute all personal property necessary and sufficient to conduct the Business operations of the Company and its Subsidiaries in the same manner as currently conducted. (g) The Company or its Subsidiaries have good and valid leasehold title and interest to all Personalty which is leased to the Royale Interests Company or its Subsidiaries (including “Leased Personalty”), free and clear of any and all oilLiens, gas other than Permitted Liens. Each of the Company and mineral its Subsidiaries is in compliance in all material respects with the terms of all leases for Leased Personalty (“Personalty Leases”) to which each is a party, respectively, and similar Contractsall such Personalty Leases are valid and enforceable in all material respects in accordance with their terms. Neither the Company nor any of its Subsidiaries has received any notice (oral or written) contain from any provision (i) requiring lessor under a Personalty Lease alleging the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas Company or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting any of its Subsidiaries is in a loss, in whole default or in part, breach of any such Personalty Lease and to the knowledge of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to Company the consummation of lessors under the transactions of Personalty Leases are in compliance in all material respects with their obligations under the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure SchedulesPersonalty Leases.

Properties and Assets. (a) Except as would not reasonably be expected to have Since their inception, neither the Company nor any Subsidiary has owned any real property. Section 3.15 of the Company Disclosure Letter sets a Royale Material Adverse Effect, the Royale Parties true and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear complete list of all liens real property (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party the “Real Property”) leased by the Company or any of their its Subsidiaries pursuant to leases (collectively, the “Leases”), and the name of the lessor, the date of the Lease and each amendment to the Lease, and the aggregate annual rental or other fees payable under any such Lease. The Real Property has access, sufficient for the conduct of the business of the Company and its Subsidiaries as now conducted to public roads and to all utilities used in the operation of the business at that location. (b) The Company holds a valid and existing leasehold interest under each of the Leases. The Company has delivered to Parent complete and accurate copies of each of the Leases (including all notices exercising renewal, expansion, termination or other material rights under the Leases), and none of the Leases has been modified in any material respect, except to the extent that the copies delivered to Parent disclose such modifications. Neither the Company nor any Subsidiary has leased or sublet, as lessor, sublessor, licensor or the like, any of the Real Property. No Lease is subject to any prime, ground or master lease, access mortgage, deed of trust or use other encumbrance or interest which would entitle the interest holder to interfere with or disturb the Company’s or any real property are validSubsidiary’s rights under the Lease while the Company or such Subsidiary is not in default under the Lease. Neither the Company nor any Subsidiary is in material default, binding and are no circumstances exist which, if unremedied, would, either with or without notice or the passage of time or both, result in force and effect against such material default by the Royale Parties Company or any of their its Subsidiaries andunder any of the Leases; nor, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor Company or any of their Subsidiaries are in default under its Subsidiaries, is any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient party to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result Leases in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effectmaterial default. (c) Except as would not reasonably be expected to have a Royale Material Adverse EffectThe Company or its Subsidiaries own, the Royale Parties and their Subsidiariesor lease under valid leases, as applicable, have defensible title to all of the Royale Interests forming the basis buildings, fixtures, leasehold improvements, computers, equipment and other tangible assets, including, without limitation, all trucks, cabs and other rolling stock, necessary for the reserves reflected conduct of the business of the Company or its Subsidiaries as now conducted and presently proposed to be conducted, substantially all of which, collectively, are in the Royale Financial Statements except for such Royale Interests soldgood condition and repair, usedordinary wear and tear excepted, farmed out or otherwise disposed of since December 31, 2015, and are usable in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected for leased or licensed property, the Company and its Subsidiaries own good and marketable title to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) each of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, properties and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or assets used by the Royale Parties and their Subsidiaries and all waterCompany or its Subsidiaries, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None premises of the Interests of the Royale Parties Company or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Returnits Subsidiaries. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not not, individually or in the aggregate, reasonably be expected to have a Royale Material Adverse EffectEffect on Company, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party Company and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had good and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Oil and Gas Interests forming the basis for the reserves reflected in the Royale Financial Statements Company Reserve Reports as attributable to interests owned by Company and its Subsidiaries, except for such Royale Oil and Gas Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, 2013 in the ordinary course of business, free and clear of all liens Liens other than Permitted Liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not not, individually or in the aggregate, reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure SchedulesCompany, (i) each Oil and Gas Lease to which Company or any of its Subsidiaries is a party is valid and in full force and effect, (ii) none of Company or any of its Subsidiaries has violated any provision of, or taken or failed to take any act which, with or without notice, lapse of time, or both, would constitute a default under the provisions of such Oil and Gas Lease, and (iii) none of Company or any of its Subsidiaries has received written notice from the other party to any such Oil and Gas Lease that Company or any of its Subsidiaries, as the case may be, has breached, violated or defaulted under any Oil and Gas Lease. (b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Company, (i) either Company or a Subsidiary of Company has good and valid title to each real property (and each real property at which operations of Company or any of its Subsidiaries are conducted) owned by Company or any Subsidiary (but excluding the Oil and Gas Interests) (such owned property collectively, the “Company Owned Real Property”) and (ii) either Company or a Subsidiary of Company has a good and valid leasehold interest in each lease, sublease and other agreement under which Company or any of its Subsidiaries uses or occupies or has the right to use or occupy any real property (or real property at which operations of Company or any of its Subsidiaries are conducted) (but excluding the Oil and Gas Interests) (such property subject to a lease, sublease or other agreement, the “Company Leased Real Property” and such leases, subleases and other agreements are, collectively, the “Company Real Property Leases”), in each case, free and clear of all Liens other than any Permitted Liens, and other than any conditions, encroachments, easements, rights-of-way, restrictions and other encumbrances that do not adversely affect the existing use of the real property subject thereto by the owner (or lessee to the extent a leased property) thereof in the operation of its business. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Company, (A) each Company Real Property Lease is valid, binding and in full force and effect and (B) no uncured default of a material nature on the part of the Company or, if applicable, its Subsidiary or, to the Company’s knowledge, the landlord thereunder, exists under any Company Real Property Lease, and no event has occurred or circumstance exists which, with the giving of notice, the passage of time, or both, would constitute a material breach or default under a Company Real Property Lease. (c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Company, (i) there are no leases, subleases, licenses, rights or other agreements affecting any portion of the Company Owned Real Property or the Company Leased Real Property that would reasonably be expected to adversely affect the existing use of such Company Owned Real Property or the Company Leased Real Property by Company or its Subsidiaries in the operation of its business thereon, (ii) except for such arrangements solely among the Company and its Subsidiaries or among Company’s Subsidiaries, there are no outstanding options or rights of first refusal in favor of any other party to purchase any Company Owned Real Property or any portion thereof or interest therein that would reasonably be expected to adversely affect the existing use of the Company Owned Real Property by the Company in the operation of its business thereon, and (iii) neither Company nor any of its Subsidiaries is currently subleasing, licensing or otherwise granting any person the right to use or occupy a material portion of a Company Owned Real Property or Company Leased Real Property that would reasonably be expected to adversely affect the existing use of such Company Owned Real Property or Company Leased Real Property by the Company or its Subsidiaries in the operation of its business thereon. (d) Except as would not be material to Company and its Subsidiaries, taken as a whole, all proceeds from the sale of Hydrocarbons produced from the Royale Oil and Gas Interests of Company and its Subsidiaries are being received by them in any producing well a timely manner and are not being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (reason other than gas balancing arrangements), except awaiting preparation and approval of division order title opinions for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statementsrecently drilled ▇▇▇▇▇. (de) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide CO2 or injection ▇▇▇▇▇ located on any property owned, leased, operated the Oil and Gas Leases or used by the Royale Parties Units of Company and their its Subsidiaries or otherwise associated with the Royale Interests an Oil and Gas Interest of Company or its Subsidiaries have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights Oil and Gas Contracts and applicable Law, and all drilling and completion (and plugging and abandonment) of the ▇▇▇▇▇ and such other ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not not, individually or in the aggregate, reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties Effect on allowables because of overproduction or violation of any applicable LawCompany. (ef) All Royale Oil and Gas Interests operated by the Royale Parties Company and their its Subsidiaries have been operated in accordance with reasonable, prudent oil and gas field practices and in compliance with the applicable ContractsOil and Gas Leases and applicable Law, except where the failure to so operate would not not, individually or in the aggregate, reasonably be expected to have a Royale Material Adverse Effect. Effect on Company. (g) None of the material Oil and Gas Interests of the Royale Parties Company or their its Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactionstransactions contemplated by this Agreement, except for any such preferential purchase, consent or similar rights that would not not, individually or in the aggregate, reasonably be expected to have a Royale Material Adverse Effect. Except as set forth Effect on Section 5.10(eCompany. (h) of Royale Disclosure Schedules, none None of the Royale Oil and Gas Interests of Company or its Subsidiaries are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report Return to be filed under Subchapter K of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as Chapter 1 of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) Subtitle A of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securitiesCode. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. The Company and its subsidiaries have good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of their material tangible properties and assets, real and personal, used or held for use in their businesses located on their premises or shown on the consolidated balance sheet of the Company and its subsidiaries as of December 31, 2004 or acquired thereafter, free and clear of any Liens (other than Permitted Liens), except (a) Except for such as are no longer used or useful in the conduct of their businesses or as have been disposed of in the ordinary course of business, (b) for defects in title, easements, restrictive covenants and similar encumbrances that individually or in the aggregate could not reasonably be expected to have a Company Material Adverse Effect and (c) as set forth in Section 3.25 of the Company Disclosure Schedule. For purposes of this Agreement, the term “Permitted Liens” means (i) inchoate mechanics’ and materialmen’s Liens for construction in progress, and workmen’s, repairmen’s, warehousemen’s and carriers’ Liens arising in the ordinary course of business of the Company or any subsidiary consistent with past practice, (ii) Liens for taxes not yet due and payable or which are otherwise being contested in good faith for which adequate reserves, as applicable, have been established in the Company’s financial statements in accordance with United States generally accepted accounting principles, (iii) Liens which do not, individually or in the aggregate, materially interfere with or materially impair the conduct of the business of the Company or any of its subsidiaries and (iv) all matters of record and Liens which have not had, and could not reasonably be expected to have, a Company Material Adverse Effect. The real property listed in Section 3.25 of the Company Disclosure Schedule constitutes all of the real property owned, used or occupied by the Company or any of its subsidiaries as of the date hereof. The Company’s and each of its subsidiaries’ buildings, equipment and other tangible assets are in good operating condition (normal wear and tear excepted). All material leases pursuant to which the Company or any of its subsidiaries are a party are in good standing, valid and effective in accordance with their respective terms, and there is not under any of such leases, to the Company’s knowledge, any existing default or event of default (or event which with notice or lapse of time, or both, would constitute a default), except where the lack of such good standing, validity and effectiveness or the existence of such default or event of default would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Company Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not The Company and its Subsidiaries have good record and marketable fee title to all real Property and all other Property and assets, whether tangible or intangible, owned by them and reasonably be expected to have a Royale Material Adverse Effectnecessary in the conduct of business of the Company or such Subsidiaries. All of the leases necessary in any material respect for the operation of their respective properties and assets, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party the Company or any of their its Subsidiaries leaseholds any Property or assets, access real or use any real property personal, are valid, binding subsisting and are in force enforceable and effect against afford peaceful and undisturbed possession of the Royale Parties subject matter of the lease, and no material default by the Company or any of their its Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor exists under any of their the provisions thereof. All buildings, machinery and equipment of the Company and its Subsidiaries are in default under any good repair and working order, except for ordinary wear and tear. All material current and proposed uses of such leases, Rights Property of Way or other agreements. (b) Each Royale Party the Company and its Subsidiaries has as set forth in the Company SEC Documents and the Information Memorandum are permitted as of right and no such Rights Law interferes with such current or proposed uses. To the knowledge of Way from each person as are sufficient to conduct its business as currently conductedthe Company, except for there is no pending or formally proposed change in any such Rights of Way the absence of Laws, which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party Effect on the Company and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in on a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effectconsolidated basis. Except as set forth on Section 5.10(e) of Royale Disclosure SchedulesSchedule 5.21, none no condemnation proceeding is pending or, to the knowledge of the Royale Interests are subject to Company, threatened against the Company or any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) its Subsidiaries. All Property of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of Company and its Subsidiaries are free from all Liens except for (i) Liens which it has any material future liability, nor is any Royale Party would not have a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(gMaterial Adverse Effect on the Company and its Subsidiaries on a consolidated basis; (ii) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future Liens disclosed on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value thereforSchedule 5.21 hereto; and (iii) Permitted Liens. Except as set forth on Section 5.10(g) Schedule 5.21 hereto and except as entered into pursuant to the Transaction Documents neither the Company nor any of the Royale Disclosure Schedulesits Subsidiaries has signed any material financing statement, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option debtor or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbonslessee, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, any security agreement authorizing any secured party thereunder to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under file any such Contractfinancing statement. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected Parent or one of the Parent Subsidiaries have, and immediately following the Effective Time will continue to have a Royale Material Adverse Effecthave, the Royale Parties good, valid and their Subsidiaries own and have either good and valid marketable title in fee to, or a valid leasehold interestinterest in, Right of Way or other rights a valid right under Contract to use, all the land, mineral properties and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business assets reflected in the latest audited balance sheet included in the Parent Public Reports as currently conductedbeing owned by Parent or such Parent Subsidiary or acquired after the date thereof, in each case free and clear of all liens that are material to Parent’s business on a consolidated basis (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out properties sold or otherwise disposed of since December 31, 2015, the date thereof in the ordinary course of business), free and clear of all liens and Production Burdens Liens other than Production Burdens not yet earned, due or payable and Permitted Liens Liens. (other than Production Burdens)b) Neither Parent nor any of the Parent Subsidiaries owns any real property. Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c4.21(b) of the Royale Parent Disclosure Schedules, Letter contains (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reasona true, correct and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedulescomplete list, as of the date hereofAgreement Date, no Royale Party is bound by futuresof all of the existing leases, hedgesubleases, swap, collar, put, call, floor, cap, option licenses or other Contracts that are intended agreements pursuant to benefit from, relate to which Parent or reduce any Parent Subsidiary uses or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbonsoccupies, or securities. has the right to use or occupy any real property, in each case involving payments in excess of $250,000 per annum (h) Except as provided each property, a “Parent Leased Real Property” and the agreements relating there to, the “Parent Leases”). With respect to each Parent Lease listed or required to be listed in Section 5.10(h4.21(b) of the Royale Parent Disclosure SchedulesLetter: (A) to the Knowledge of Parent, there are no mandatory drilling or completion obligations and there are no pending or, disputes with respect to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except Parent Lease, except as set forth in Section 5.10(j) of the Royale Disclosure Scheduleswould not, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole individually or in partthe aggregate, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is reasonably be expected to result in a mandatory payment material liability to Parent and the Parent Subsidiaries, taken as a whole; and (B) Parent or expenditure not otherwise disclosed in Section 5.10(i) one of the Royale Disclosure SchedulesParent Subsidiaries that is either the tenant or licensee named under the Parent Lease has a good and valid leasehold interest in each parcel of real property which is subject to a Parent Lease and is in possession of the properties purported to be leased or licensed thereunder, except in each case as would not, individually or in the aggregate, reasonably be expected to result in a material liability to Parent or any of the Parent Subsidiaries.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect, the Royale Parties Corporation or a Subsidiary of the Corporation each respectively owns and their Subsidiaries own and have has either good and valid title in fee or a valid leasehold interest, Right of Way (defined below) or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Corporation Material Effect, all leases, Rights of Way or other agreements under which any Royale Party the Corporation or any of their its Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties Corporation or any of their its Subsidiaries and, to the Knowledge of each Royale Partythe Corporation, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties Corporation nor any of their its Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party of the Corporation and its Subsidiaries has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Corporation Material Adverse Effect. Each Royale Party of the Corporation and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Corporation Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries Corporation are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that materially affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party the Corporation, the Matrix LPs, Matrix or any of their its Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Corporation Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect, the Royale Parties Corporation and their its Subsidiaries, as applicable, have defensible title to all of the Royale Property Interests forming the basis for the reserves reflected in the Royale Audited Financial Statements except for such Royale Property Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect or as set forth on Section 5.10(c4.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Property Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or or, preferential rights to purchase Hydrocarbons and neither the Royale Parties Corporation nor any of their its Subsidiaries are not is obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect, the Royale Parties Corporation and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Property Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇w▇▇▇▇ owned, leased, operated or used by the Royale Parties Corporation and their its Subsidiaries and all water, carbon dioxide or injection ▇w▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties Corporation and their its Subsidiaries or otherwise associated with the Royale Property Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇w▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Corporation Material Adverse Effect. No well owned, leased, operated or used by any Royale Party the Corporation or any of their its Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Property Interests operated by the Royale Parties Corporation and their its Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Corporation Material Adverse Effect. None of the Interests of the Royale Parties Corporation or their its Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Corporation Material Adverse Effect. Except as set forth on Section 5.10(e4.10(e) of Royale Disclosure Schedules, none of the Royale Property Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report Summary Projection of Netherland, ▇▇▇▇▇▇ & Associates, Inc. Reserves and Revenues as of December March 31, 20152016, and dated February 1of the Corporation, with run date June 10, 2016, a correct and complete copy of which the Corporation has made available to Royale prior to the date of this Agreement. (g) Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, no Royale Party the Corporation is not engaged in any oil, natural gas or other futures or option options trading in respect of which it has any material future liability, nor is any Royale Party it a party to any price swaps, ▇h▇▇▇▇▇, futures or similar instruments. Section 5.10(g4.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party the Corporation for the delivery of Hydrocarbons attributable to any of the Royale Property Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party the Corporation is not bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h4.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Partythe Corporation, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties Corporation or any of their its Subsidiaries within one year of the Royale Merger Effective Time Closing Date in any of the Royale Property Interests or any of the contracts governing any of the Royale Property Interests. (i) Except as set forth on Section 5.10(i4.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Property Interests contain any minimum volume or throughput provisions or require the Royale Parties Corporation or any of their its Subsidiaries to pay for services regardless of whether the Royale Parties Corporation or any of their its Subsidiaries deliver delivers such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j4.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Property Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇h▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Property Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i4.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Section 4.15(a) of the Disclosure Letter sets forth a true, correct and complete list of all real property owned by each Subject Entity (excluding for this purpose WV Alloys) or an affiliate thereof in connection with the Brazilian Business or the Alloy Business (the “Owned Real Property”). Each Subject Entity (or the applicable affiliate thereof) has good and marketable title to or other legal right to use the Owned Real Property. None of the Owned Real Property is subject to any Liens except Permitted Liens. Globe has provided or made available to DCC true and correct copies of all title reports and title policies (including all exception documents referenced therein) and surveys in its possession or control regarding the Owned Real Property. (b) Section 4.15(b)(i) of the Disclosure Letter sets forth a true, correct and complete list of all real property and interests in real property leased, licensed or otherwise occupied by each Subject Entity or an affiliate thereof in connection with the Brazilian Business or the Alloy Business (the “Leased Real Property” and together with the Owned Real Property, the “Real Property”). Globe has delivered or made available to DCC true, correct and complete copies of all Leases. Except as would not reasonably be expected set forth in Section 4.15(b)(ii) of the Disclosure Letter and Schedule B to have a Royale Material Adverse Effectthe Title Commitment, there are no leases, ground leases, licenses or other occupancy agreements granting to any party or parties (other than any of the Royale Parties and their Subsidiaries own and have either good and valid title in fee Subject Entities) the right of use or occupancy of any portion of the Real Property. Each Subject Entity, as applicable, has a valid leasehold interestinterest to each of the Leased Real Property, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (Liens, except in all cases for Permitted Liens). Except as would None of Globe, GMI nor any Subject Entity has received notice of default under any Lease that has not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way been cured or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries waived and, to the Knowledge of each Royale Partythe Globe Knowledge Parties, no event has occurred and no condition exists that, with notice or lapse of time or both, will constitute a default under any Lease. To the counterparties theretoKnowledge of the Globe Knowledge Parties, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are no other party is in default under any Lease and no party to such leaseslease has exercised any termination rights with respect thereto. Except as set forth on Section 4.15(b)(ii) of the Disclosure Letter, Rights no Subject Entity has received any written notice in the last twelve (12) months (i) from any Governmental Authority that it is imposing a general or special assessment relating to any of Way the Real Property, (ii) from any Governmental Authority indicating that any of the Real Property or any Improvements (as defined below) is not in compliance with applicable zoning laws or that the Governmental Authority will be seeking modification of any variances, special exceptions, conditions or agreements pertaining to such Real Property or that such Governmental Authority intends to modify, in any material respect, the zoning of, or other agreements. governmental rules or restrictions applicable to, the Real Property or the use thereof, or (biii) Each Royale Party and its Subsidiaries has such Rights requiring or calling attention to the need for any work, repair, construction, alteration or installation on, or in connection with, any of Way from each person as are sufficient to conduct its business as currently conductedthe Real Property, except for in the case of (i), (ii) or (iii) above, where the imposition of the assessment, the failure to comply with such Rights of Way zoning laws or the absence of which have failure to perform such work, repair, construction, alteration or installation, as applicable, has not had resulted and would not reasonably be expected to have a Royale Globe Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business Except as set forth in a manner that does not violate any Section 4.15(b)(iii) of the Rights Disclosure Letter, no Subject Entity has received a written notice of Wayany pending condemnation or eminent domain proceeding against any Real Property and to the Knowledge of the Globe Knowledge Parties, no such condemnation or eminent domain proceeding is threatened. All of the properties and assets of the Subject Entities consisting of buildings, fixtures, building systems, and no event has occurred that allows, equipment (whether owned or after notice or lapse of time would allow, revocation or termination thereof or would result leased) included in any impairment the Real Property (the “Improvements”) currently used in the normal operations of the rights of Brazilian Business or the holder of any such Rights of WayAlloy Business have been maintained by the Subject Entities and are in good operating condition, subject to normal wear and tear, and are free from material defects, except for where such revocations, terminations and impairments that have not had and defects would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Globe Material Adverse Effect. (c) No Subject Entity has granted, and no Globe Knowledge Party has any Knowledge of, any outstanding options, rights of first offer, rights of refusal or similar preemptive rights to purchase or lease any of the Real Property, or any portion thereof or interest therein (other than any such rights in favor of a Subject Entity). (d) The present use of the Real Property (including the Improvements) is, and the Improvements themselves are, in substantial conformity with all applicable Laws and with all recorded deeds, restrictions of record and other agreements affecting such Real Property other than any violations or failures to conform that do not materially and adversely affect the use and operation of the Real Property, and none of Globe, GMI or any Subject Entity has received any written notice of any violation thereof currently outstanding, and the Globe Knowledge Parties have no Knowledge of any violation thereof currently outstanding. The Real Property includes all land, Improvements, easements and other rights and interests appurtenant thereto materially necessary for use by the Subject Entities in the conduct of the Brazilian Business and the Alloy Business as presently conducted. To the Knowledge of the Globe Knowledge Parties, none of the items set forth Section 1.1(c) and/or Section 4.15(b) of the Disclosure Letter or items set forth in Schedule B to the Title Commitment have had a material adverse effect, individually or in the aggregate, on the use of the Real Property. (e) Except as would not reasonably be expected contemplated by this Agreement and the Restructuring Transactions, no Subject Entity has entered into any Contract or other obligation, and no Globe Knowledge Party has any Knowledge of any Contract or other obligation, that is currently in effect for the sale, exchange, encumbrance or transfer of any of the Real Property. (f) Section 4.15(f) of the Disclosure Letter sets forth all leases of personal property involving annual payments in excess of U.S. $100,000 relating to have personal property used in the Brazilian Business or the Alloy Business and to which any Subject Entity is a Royale Material Adverse Effectparty or by which its properties or assets is bound (the “Personal Property Leases”). Globe has delivered or made available to DCC true, correct and complete copies of the Royale Parties Personal Property Leases, together with all amendments, modifications or supplements thereto. The applicable Subject Entity has a valid leasehold interest under each of the Leases under which it is a lessee, subject to applicable bankruptcy, insolvency, reorganization, moratorium and their Subsidiariessimilar Laws affecting creditors’ rights and remedies generally and subject, as applicableto enforceability, have defensible to general principles of equity. None of Globe, GMI nor any Subject Entity has received any written notice of default under any Personal Property Lease that has not been cured or waived and, to the Knowledge of the Globe Knowledge Parties, no event has occurred and no condition exists that, with notice or lapse of time or both, will constitute a default under any Personal Property Lease. To the Knowledge of the Globe Knowledge Parties, no other party is in default under any Personal Property Leases and no party to the Personal Property Leases has exercised any termination rights with respect thereto. Each Subject Entity has good and marketable title to all of the Royale Interests forming items of personal property reflected on the basis for Brazilian Balance Sheet or the reserves reflected in the Royale Financial Statements except for such Royale Interests soldAlloy Balance Sheet, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of businessas applicable, free and clear of any and all liens and Production Burdens Liens other than Production Burdens not yet earned, due or payable and the Permitted Liens (other than Production Burdens)Liens. Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) All such items of personal property which are used in the normal operation of the Royale Disclosure SchedulesBrazilian Business or Alloy Business, as applicable, are in good condition and in a state of good maintenance and repair (iordinary wear and tear excepted) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well and are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except suitable for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statementspurposes used. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (ci) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c5.10(c)(i) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (dii) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (eiii) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e5.10(c)(iii) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (fd) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (ge) Except as set forth on Section 5.10(g5.10(e) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g5.10(e) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g5.10(e) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (hf) Except as provided in Section 5.10(h5.10(f) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (ig) Except as set forth on Section 5.10(i5.10(g) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (jh) Except as set forth in Section 5.10(j5.10(h) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i4.10(g) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected material to have Company and its Subsidiaries, taken as a Royale Material Adverse Effectwhole, the Royale Parties and their Subsidiaries own and have either good Company or a Subsidiary of Company has good, marketable and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against set forth on Section 2.18(a) of the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale PartyCompany Disclosure Letter (such owned property collectively, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business“Company Owned Real Property”), free and clear of all liens and Production Burdens Liens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights free of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance material infractions with all applicable Laws exceptLaws, including those relating to zoning and building matters, and is the sole legal and beneficial owner thereof. The assets necessary for the conduct of the businesses as presently conducted and as proposed to be conducted are in each casereasonably good and serviceable operating condition and repair, as would not reasonably be expected to have a Royale Material Adverse Effect. No well ownedordinary wear and tear excepted, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015well maintained, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged conform in any oil, natural gas or other futures or option trading in respect of which it has any all material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instrumentsrespects with all applicable Laws. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there There are no pending or, to the Knowledge of each Royale PartyCompany’s knowledge, expected proposals contemplated or elections for drillingthreatened condemnation, completingexpropriation, recompletingrescission, reworkingcancellation requisition action (“action en rescision, facilities résolution, réquisition”) or similar activities that would require such commitment on behalf proceedings or actions with respect to all or any portion of the Royale Parties Company Owned Real Property. For purposes of this Agreement, any reference to “real property” shall mean and include “immoveable property” and any reference to “personal property” shall mean and include “moveable property.” (b) Except as would not be material to Company and its Subsidiaries, taken as a whole, either Company or a Subsidiary of Company has a good, marketable and valid leasehold interest in each lease, sublease and other agreement under which Company or any of their its Subsidiaries within one year of uses or occupies or has the Royale Merger Effective Time in any of right to use or occupy the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as real property set forth on Section 5.10(i2.18(b) of the Royale Company Disclosure SchedulesLetter (such property subject to a lease, none sublease or other agreement, the “Company Leased Real Property” and such leases, subleases and other agreements are, collectively, the “Company Real Property Leases”), in each case, free and clear of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain all Liens other than any minimum volume or throughput provisions or require the Royale Parties or Permitted Liens. Neither Company nor any of their its Subsidiaries to pay for services regardless of whether the Royale Parties is in material breach or any of their Subsidiaries deliver such production for use of the services provided for default under any Company Real Property Lease, nor does Company have knowledge of any condition that with the passage of time or the giving of notice or both would result in such Contracta breach or default. To the knowledge of Company, there is no material breach or default under, nor does there exist any condition that with the passage of time or the giving of notice or both would result in such a breach or default by any other party thereto. (jc) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee as would not be material to pay royalties on ▇▇▇▇▇▇Company and its Subsidiaries, taken as a whole, and (ii) causing for arrangements solely among Company and its Subsidiaries or among Company’s Subsidiaries, there are no leases, subleases, licenses, rights or other agreements affecting the oilCompany Owned Real Property or the Company Leased Real Property. Neither Company nor any of its Subsidiaries is currently subleasing, gas licensing or mineral lease otherwise granting any person the right to use or contract occupy any portion of a Company Owned Real Property or Company Leased Real Property. There are no outstanding options or rights of first refusal in favor of any other party to terminate without advance notice purchase any Company Owned Real Property or any portion thereof or interest therein. (d) The Company Owned Real Property and the opportunity to cure resulting Company Leased Real Property have been used and operated in a loss, all material respects in whole or in part, compliance with applicable Laws (including town planning documents and the provisions of any articles L. 631-7 et seq. of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure SchedulesFrench Building and Housing Code).

Properties and Assets. SCHEDULE 4.15 hereto sets forth a complete and correct list of (a) Except as would not reasonably be expected all real property owned by the Company, (b) any lease pursuant to have a Royale Material Adverse Effect, which the Royale Parties Company is the lessee of real property and their Subsidiaries own and have either (c) each item of tangible personal property used in or relating to the conduct of the business of the Company that has been capitalized for accounting purposes. The Company has (a) good and valid title to all of its personal assets and property, including, without limitation, all those listed on SCHEDULE 4.15, reflected in fee the Interim Financials or a acquired after the date of the Interim Balance Sheet (except for inventories and other assets sold or otherwise disposed of in the Ordinary Course of Business since such date), and (b) good and marketable title to all the real property listed in SCHEDULE 4.15 as owned by it, and valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business interests in all real properties listed in SCHEDULE 4.15 as currently conductedleased by it, in each case free and clear of all liens Encumbrances other than (except i) those reflected in all cases for Permitted Liens). Except the Interim Financials or listed in SCHEDULE 4.15 and (ii) those which do not, individually or in the aggregate, (x) materially interfere with the operation of its business as would not presently conducted or (y) otherwise have, or could reasonably be expected to have have, a Royale Material Adverse Effect, . The Company enjoys peaceful and undisturbed possession under all leases, Rights of Way or other agreements real property leases under which any Royale Party it operates. The Company has not received written notice that the ownership or any lease of their Subsidiaries lease, access or use any real property are validby the Company and the use thereof, binding and are in force and effect against as presently used by the Royale Parties Company, violates any local zoning or similar land use laws or governmental regulations. The Company has not received written notice of violation of or noncompliance with any covenant, condition, restriction, order or easement affecting the real property owned or leased by the Company. The Company has not received written notice of their Subsidiaries and, condemnation or threatened condemnation affecting the real property owned or leased by it. The Company has made available to the Knowledge Purchaser complete and correct copies of each Royale Partythe lease agreements referred to in SCHEDULE 4.15. The personal property, equipment, plants, buildings, structures, facilities and all other assets and properties that will be owned or leased by the counterparties theretoCompany after the Closing Date will include all personal property, in accordance with their respective termsequipment, plants, buildings, structures, facilities and neither all other assets and properties necessary to permit the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient Company to conduct its business as currently presently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries changes as are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable LawSECTION 6.2. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to The Company and its Subsidiaries have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid marketable title in fee or a to, valid leasehold interestinterests in, Right of Way or other rights the legal right to the landuse, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case hold free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material EffectLiens and Encumbrances, all leasesof the assets, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding properties and are leasehold interests reflected in force and effect against the Royale Parties or any of their Subsidiaries and, to Financial Statements (the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted“Assets”), except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out those sold or otherwise disposed of since December 31, 2015, the date of the Financial Statements in the ordinary course of businessbusiness consistent with past practice and not in violation of this Agreement, free and clear except for Permitted Encumbrances. All Assets of the Company and its Subsidiaries that are material to the operations of their respective businesses are in good operating condition and repair, subject to normal wear and tear. The Company and its Subsidiaries have delivered to Parent or otherwise made available, correct and complete copies of all liens leases, subleases and Production Burdens other than Production Burdens not yet earned, due material agreements or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected material instruments relating to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) all real property used in conducting the businesses of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons Company and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons which the Company or proceeds from the sale thereof at Subsidiaries is a future point in time without receiving payment therefor at or after party (collectively, the time of delivery (other than gas balancing arrangements“Real Property”), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instrumentsare identified on Schedule 3.7. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there There are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests Company or any of the contracts governing Subsidiaries, threatened condemnation proceedings relating to any of the Royale Interests. (i) Real Property. Except as set forth on Section 5.10(i) of the Royale Disclosure SchedulesSchedule 3.7, none of the Contracts in respect of gatheringreal property improvements (including leasehold improvements), processing, storage equipment and other Assets owned or transportation used by the Company or its Subsidiaries is subject to any commitment or other arrangement for their sale or use by any Affiliate of the production Company or its Subsidiaries, or by third parties. To the Knowledge of Hydrocarbons from the Royale Interests contain Principal Shareholder, the Company’s leased real estate is free and clear of any minimum volume zoning or throughput provisions use or require the Royale Parties building restriction or any of their Subsidiaries to pay for services regardless of whether pending, proposed or threatened zoning or use or building restriction which would interfere with the Royale Parties present or any of their Subsidiaries deliver such production for intended use of by the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, Company of any of such leased real estate. Such leases are valid and binding and in full force and effect, and the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent Company is not in default thereunder as to the payment of rent or otherwise. The consummation of the transactions contemplated by this Agreement will not constitute an event of default under any of said leases and the type continuation, validity and effectiveness of such leases will not be adversely affected by the transactions contemplated under by this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise assets disposed of since December 31, 2015, in the ordinary course of businessbusiness consistent with past practice since the Interim Balance Sheet Date, the Acquired Companies own good and marketable title to, or hold pursuant to valid and enforceable leases, all of the material personal property shown to be owned or leased by it on the balance sheet included in the Interim Financial Statements, in each case, free and clear of all liens and Production Burdens other than Production Burdens not yet earnedEncumbrances, due or payable and except for Permitted Liens Encumbrances. (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on b) Section 5.10(c3.16(b) of the Royale Disclosure SchedulesSchedule sets forth a true, (i) none correct and complete list of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reasonall leasing, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements)sublease, except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas license or other futures or option trading in respect of occupancy agreements under which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in Acquired Companies leases, uses or occupies real property, along with all amendments, modifications and supplements thereto (each, a “Lease” and, collectively, the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g“Leases”) and a description of the Royale Disclosure Schedules, as real property demised under each of the date hereofLeases, no Royale Party is bound by futures(each, hedgea “Leased Property” and, swapcollectively, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) “Leased Properties”). Each Acquired Company has a valid and enforceable leasehold interest under each of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations Leases to which it is a party and there are no pending each of such Leases is in full force and effect. No Acquired Company or, to the Knowledge of the Seller Parties, any other party thereto, is in default or breach in any material respect under the terms of any such Lease nor has any event occurred that, with notice or lapse of time or both, would constitute a material breach of any Lease by any Acquired Company. True and correct copies of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf Lease (including all amendments and supplements thereto) as in effect as of the Royale Parties date of this Agreement have been made available to the Purchaser or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interestsits representatives. (ic) Except No Acquired Company has leased or otherwise granted to any Person the right to use or occupy any Leased Property or any portion thereof. (d) No Acquired Company owns any real property. (e) At the Closing, the assets and properties of the Acquired Companies will, taking into account the consummation of the Transactions and assuming the receipt as of the Closing of all consents and the making of all filings and notifications set forth on Section 5.10(i) 3.04 of the Royale Disclosure Schedules, none Schedule and Section 3.05 of the Contracts in respect of gatheringDisclosure Schedule, processing, storage or transportation constitute all of the production of Hydrocarbons from assets and properties necessary to conduct the Royale Interests contain any minimum volume or throughput provisions or require Business immediately following the Royale Parties or any of their Subsidiaries to pay for services regardless of whether Closing in all material respects as presently carried on by the Royale Parties or any of their Subsidiaries deliver such production for use Acquired Companies, consistent with the past practice of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating Acquired Companies with respect to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure SchedulesBusiness.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that materially affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i5.10(j) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party The Company and its Subsidiaries has have good record and marketable fee title to (or, in the case of licensed Property, valid licenses to) all real Property and all other Property and assets, whether tangible or intangible, owned by them and reasonably necessary in the conduct of business of the Company or such Rights of Way from each person as are sufficient to conduct its business as currently conductedSubsidiaries, except for such Rights of Way the absence of defects in title which have do not had and would will not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by of the Royale Parties leases necessary in any material respect for the operation of their respective properties and their Subsidiaries are subject to Rights of Wayassets, there are no encroachments or other encumbrances on under which the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party Company or any of their its Subsidiaries holds any Property or assets, real or personal, are valid, subsisting and enforceable and afford peaceful and undisturbed possession of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all subject matter of the Royale Interests forming lease, and no material default by the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out Company or otherwise disposed any of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) its Subsidiaries exists under any of the Royale Disclosure Schedulesprovisions thereof. All buildings, (i) none machinery and equipment of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, Company and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their its Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements)good repair and working order, except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except ordinary wear and tear, and except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated All material current and proposed uses of such Property or used by any Royale Party or any assets of their the Company and its Subsidiaries are subject to material penalties on allowables because permitted as of overproduction right and no regulation or violation ordinance interferes with such current or proposed uses. To the knowledge of the Company, there is no pending or formally proposed change in any applicable Law. (e) All Royale Interests operated by the Royale Parties such laws, regulations and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate ordinances which would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure SchedulesSCHEDULE 4.20, none no condemnation proceeding is pending or, to the knowledge of the Royale Interests are subject to Company, threatened against the Company or any Tax partnership agreement of its Subsidiaries. All Property and assets of any kind (real or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherlandpersonal, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(gtangible or intangible) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of Company and its Subsidiaries are free from all Liens except for (a) Liens which it has any material future liability, nor is any Royale Party would not have a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(gMaterial Adverse Effect; (b) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future Liens disclosed on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value thereforSCHEDULE 4.20 hereto; and (c) Permitted Liens. Except as set forth on Section 5.10(g) SCHEDULE 4.20 hereto, neither the Company nor any of the Royale Disclosure Schedulesits Subsidiaries has signed any material financing statement, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option debtor or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbonslessee, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, any security agreement authorizing any secured party thereunder to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under file any such Contractfinancing statement. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except Neither the Company nor any of its Subsidiaries has transferred, sold or otherwise disposed of or destroyed any KSO Unit Installations. Each of the Company and its Subsidiaries has good, valid and marketable title to all of (i) the KSO Unit Installations in the possession of or under the control of the KSO Unit and (ii) as would not reasonably be expected to have a Royale Material Adverse Effectof the date of execution of this Agreement (except as set forth in Schedule 4.19 of the Signing Disclosure Schedule), and as of the Closing Date, the Royale Parties properties and their Subsidiaries own assets in the possession of the Company and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conductedSubsidiaries, in each case free and clear of all liens Encumbrances whatsoever (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Partycollectively, the counterparties thereto"Assets"), provided however that between the date hereof and the Closing Date, the Company intends to sell or transfer to one or more third parties the assets listed in accordance with their respective terms, and neither Schedule 4.17(e) of the Royale Parties Signing Disclosure Schedule. Neither the Company nor any of their its Subsidiaries are in default under owns any such leases, Rights of Way land or other agreementsbuildings. (b) Each Royale Party and its Subsidiaries has such Rights Except for the Arbitration Proceeding, there is no Proceeding pending, or to the Knowledge of Way from each person as are sufficient to conduct its business as currently conductedthe Selling Shareholders, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate threatened against, involving or affecting any of the Rights Assets. Neither the Company nor any of Wayits Subsidiaries is a party to any lease, and no event has occurred that allows, assignment or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of similar arrangement under which the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party Company or any of their its Subsidiaries is a lessor or assignor of, or otherwise makes available for use by any third-party, any of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse EffectAssets. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all Each of the Royale Interests forming Company and its Subsidiaries has obtained all appropriate certificates, licenses, easements and rights of way required to use and operate the basis for the reserves reflected Assets in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, manner in which the ordinary course of business, free Assets are currently being used and clear operated. True and complete copies of all liens such certificates, permits and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens)licenses in respect of any Real Property have been furnished to Purchaser by the Selling Shareholders. Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) Each of the Royale Disclosure SchedulesCompany and its Subsidiaries has all approvals, (i) none of permits and licenses necessary to own or operate the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reasonAssets as currently owned and operated, and (ii) there are no calls on production such approvals, permits or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements)licenses will be required, except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably to be expected issued after the date hereof in order to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none permit each of the Royale Interests are subject Company and its Subsidiaries, following the Closing, to any Tax partnership agreement continue to own or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies operate the Assets in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. same manner as of December 31, 2015, and dated February 1, 2016heretofore. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, Neither PIC nor any of its Subsidiaries owns any real property. Section 4.19(a) of the Royale Parties PIC Disclosure Letter sets forth the address or other description of all leasehold or subleasehold estates and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to use or occupy any land or buildings held by or for PIC or its Subsidiaries (the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens"Leased Real Property"). Except as would not reasonably be expected PIC has delivered or made available to have Parent a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding true and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge complete copy of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse EffectLeases. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j4.19(a) of the Royale PIC Disclosure SchedulesLetter, none with respect to each of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision Leases: (i) requiring the lessee there are no material disputes with respect to pay royalties on ▇▇▇▇▇▇, such Lease; (ii) causing the oil, gas no security deposit or mineral lease portion thereof deposited with respect to such Lease has been applied in respect of a breach or contract to terminate without advance notice and the opportunity to cure resulting default under such Lease that has not been redeposited in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, full; (iii) requiring lessor’s consent neither PIC or any of its Subsidiaries owes, nor will they owe in the future, any brokerage commissions or finder's fees with respect to the consummation of the transactions of the type contemplated under this Agreement, or such Lease; (iv) the other party to such Lease is expected not an affiliate of, and otherwise does not have any economic interest in, PIC or any of its Subsidiaries; (v) PIC and its Subsidiaries have not subleased, licensed or otherwise granted any Person the right to result use or occupy such Leased Real Property or any portion thereof; (vi) PIC and its Subsidiaries have not collaterally assigned or granted any other security interest in a mandatory payment such Lease or expenditure not otherwise disclosed any interest therein; and (vii) there are no Liens granted by PIC and its Subsidiaries, except for Permitted Liens, on the estate or interest created by such Lease. (b) PIC and its Subsidiaries have, and following the Closing will continue to have, good and valid title to their owned assets (except for Permitted Liens), or in Section 5.10(ithe case of assets and properties that they lease, license or have other rights in, valid rights by lease, license or other agreement to use, all assets and properties (in each case, tangible and intangible) of the Royale Disclosure Schedulesnecessary and desirable to permit PIC and its Subsidiaries to conduct their business as currently conducted. The assets and properties (in each case, tangible and intangible) owned or used by PIC are adequate in all material respects for their current use.

Properties and Assets. (a) Except as would not reasonably be expected to Graphite and its Subsidiaries have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid marketable title in fee or a to, valid leasehold interestinterests in, Right of Way or other rights the legal right to the landuse, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case hold free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material EffectLiens and Encumbrances, all leasesof the assets, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding properties and are leasehold interests reflected in force and effect against the Royale Parties or any of their Subsidiaries and, to Financial Statements (the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted"Assets"), except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out those sold or otherwise disposed of since December 31, 2015, the date of the Financial Statements in the ordinary course of businessbusiness consistent with past practice and not in violation of this Agreement. All Assets of Graphite and its Subsidiaries that are used in the operations of their respective businesses are in good operating condition and repair, free subject to normal wear and clear tear. Graphite and its Subsidiaries have delivered to BPK or otherwise made available, correct and complete copies of all liens leases, subleases and Production Burdens other than Production Burdens not yet earnedmaterial agreements or other material instruments relating to all real property used in conducting the businesses of Graphite and the Subsidiaries to which Graphite or the Subsidiaries is a party (collectively, due or payable and Permitted Liens (other than Production Burdensthe "Real Property"), all of which are identified on Schedule 3.7. Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there There are no calls on production or preferential rights pending or, to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party Graphite's or any of their Subsidiaries are subject the Subsidiaries' knowledge, threatened condemnation proceedings relating to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse EffectReal Property. Except as set forth on Section 5.10(e) of Royale Disclosure SchedulesSchedule 3.7, none of the Royale Interests are real property improvements (including leasehold improvements), equipment and other Assets owned or used by Graphite or its Subsidiaries is subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas commitment or other futures arrangement for their sale or option trading in respect use by any Affiliate of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures Graphite or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbonsits Subsidiaries, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to by third parties. To the Knowledge of each Royale PartyPrincipal Shareholder, expected proposals the leased real estate is free and clear of any zoning or elections for drilling, completing, recompleting, reworking, facilities use or similar activities that would require such commitment on behalf of the Royale Parties building restriction or any of their Subsidiaries within one year of pending, proposed or threatened zoning or use or building restriction which would interfere with the Royale Merger Effective Time in any of the Royale Interests present or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for intended use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, by Graphite of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereundersuch leased real estate. Said leases are valid and binding and in full force and effect, (iii) requiring lessor’s consent and Graphite is not in default thereunder as to the payment of rent or otherwise. The consummation of the transactions contemplated by this Agreement will not constitute an event of default under any of said leases and the type continuation, validity and effectiveness of such leases will not be adversely affected by the transactions contemplated under by this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as expressly contemplated by the Spin-Off Agreements or as would not reasonably be expected to have have, individually or in the aggregate, a Royale Company Material Adverse Effect, the Royale Parties Company and their each of the Company Subsidiaries own have, and have either immediately following the Effective Time will continue to have, good and valid title in fee or a valid leasehold interestto their owned material assets and properties, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens Liens (except in all cases for other than Permitted Liens), or in the case of material assets and properties they lease, license, or have other rights in, good and valid rights by lease, license or other agreement to use, all material assets and properties (in each case, tangible and intangible), in each case, necessary to permit the Company and each of the Company Subsidiaries to conduct their respective businesses in all material respects as currently conducted. Except as would not reasonably be expected to have have, individually or in the aggregate, a Royale Company Material Adverse Effect, all leasesthe material assets and properties (in each case, Rights of Way tangible or other agreements under which any Royale Party intangible) owned or any of their Subsidiaries lease, access used by the Company or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Company Subsidiaries are in default under any such leasessatisfactory condition for their continued use as they have been used and adequate in all material respects for their current use, Rights of Way or other agreementssubject to reasonable wear and tear. (b) Each Royale Party The assets of the Company and its Subsidiaries has such Rights as at and immediately following the Effective Time, together with the sources of Way from each person cash to be available to the Company after the Effective Time as are arranged by the Buyer, and the services to be provided pursuant to the Transition Services Agreement, will be sufficient to conduct its business as currently conducted, except for such Rights of Way permit the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party Surviving Corporation and its Subsidiaries has fulfilled and performed all its obligations with respect subsidiaries to such Rights of Way and conducts their business in a manner that does not violate any carry on the functional operation of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of Television Business immediately following the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, Effective Time (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, all material respects and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and in a manner consistent with the Royale Parties nor any operation of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect business immediately prior to the Royale Interests Effective Time. Notwithstanding the foregoing, it is understood and each other royaltyagreed that the immediately preceding sentence shall not be deemed a representation or warranty as to any revenue, Tax costs or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise expenses associated with the Royale Interests have been drilledconduct of the Surviving Corporation’s or its Subsidiaries’ business immediately following the Effective Time, completed and operated within the limits permitted immediately preceding sentence assumes the receipt of all necessary authorizations, approvals, consents or waivers required by law or by Governmental Authorities in connection with the transactions contemplated by the applicable Contract granting such rights Spin-Off Agreements and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, The Seller is the Royale Parties legal and their Subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any beneficial owner of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps Purchased Assets (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (cthe Owned Real Property) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible with good title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of businessthereto, free and clear of all liens and Production Burdens Liens other than Production Burdens not yet earned, due Permitted Liens. No other Person owns any assets which are being used in the Operations except for the Leased Real Properties and personal or payable moveable property leased to the Seller pursuant to the Material Contracts. (b) Section 3.1(31)(b) of the Disclosure Letter identifies for each Owned Real Property its registered and Permitted Liens (other than Production Burdens). Except beneficial owner and except as would not reasonably be expected material to have the Operations, such registered and beneficial owners own the Owned Real Property in such capacity, free and clear of all Liens other than the Permitted Liens. (c) The interests in each lease, sublease, license and other agreement under which the Seller uses or occupies or has the right to use or occupy the real or immovable property are set forth in Section 3.1(31)(c) of the Disclosure Letter (such property subject to a Royale Material Adverse Effect lease, sublease or other agreement, the “Leased Real Property” and such leases, subleases and other agreements are, collectively, the “Real Property Leases”). The Real Property Leases are valid and binding on the Seller and, to the knowledge of the Seller, on each other party thereto, and in full force and effect and other than as set forth on in Section 5.10(c3.1(31)(c) of the Royale Disclosure SchedulesLetter, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights consents required in order to purchase Hydrocarbons assign the Seller’s right, title and the Royale Parties nor interest in any of their Subsidiaries are the Real Property Leases. The Seller is not obligated to deliver Hydrocarbons in material breach or proceeds from default under any Real Property Lease, nor does the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights Seller have knowledge of any lessor to take free gas under condition that with the terms passage of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law time or the terms giving of notice or both would result in such a material breach or default. To the knowledge of the applicable Contract Seller, there is no material breach or as reserved against default under, nor does there exist any condition that with the passage of time or the giving of notice or both would result in the Royale Financial Statementssuch a breach or default by any other party thereto. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, Except as would not reasonably be expected material to have the Operations, there are no leases, subleases, licenses, rights or other agreements affecting the Owned Real Property or, other than the Real Property Leases, the Leased Real Property. The Seller is currently not leasing, subleasing, licensing or otherwise granting any person the right to use or occupy any portion of an Owned Real Property or a Royale Material Adverse EffectLeased Real Property. No well owned, leased, operated There are no outstanding options or used by rights of first refusal in favour of any Royale Party other party to purchase any Owned Real Property or any of their Subsidiaries are subject to material penalties on allowables because of overproduction portion thereof or violation of any applicable Lawinterest therein. (e) All Royale Interests operated Since November 17, 2017, there has been no off-title transfer of the ownership of the Owned Real Property located in Québec by the Royale Parties and their Subsidiaries Seller which would have been operated in accordance with reasonable, prudent field practices and in compliance with triggered the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None payment of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax ReturnTransfer Taxes. (f) There are no material inaccuracies in the report All municipal taxes, rates, levies and assessments of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas every nature or other futures or option trading kind in respect of which it has the Owned Real Property and the Leased Real Property for the calendar year 2019 and all preceding calendar years have been paid in full or will be reflected in the Statement of Adjustments, and the Seller does not have any material future liability, nor is any Royale Party a party overdue obligation to pay moneys to any price swapsGovernmental Entity in connection with services, ▇▇▇▇▇▇utilities or the like, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring Owned Real Property or the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure SchedulesLeased Real Property.

Properties and Assets. (a) Except as would not reasonably be expected with respect to have a Royale Material Adverse EffectIntellectual Property, which is the Royale Parties subject of Section 4.10 below, each of the Company and their is Subsidiaries own and have either has good and valid marketable title or leasehold title, as the case may be, to all of its assets and properties that it purports to own or lease, including without limitation all those reflected in fee the Company’s Balance Sheet (except for properties or a valid leasehold interestassets sold, Right consumed, or otherwise disposed of Way or other rights to in the landordinary course of business since the date of the Company’s Balance Sheet), mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case all free and clear of all liens (except in all cases for Permitted Liens)Liens on the there respective interest therein. Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding All such properties and assets are in force good condition and effect against the Royale Parties or any of their Subsidiaries repair, reasonable wear-and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms-tear excepted, and neither are, and as of the Royale Parties nor any Closing Date will be, adequate and sufficient to carry on the business of their the Company and its Subsidiaries are in default under any such leases, Rights as presently conducted. Schedule 4.9 of Way or other agreementsthe Company Disclosure Schedule sets forth a complete and correct list of all capital assets of the Company and its Subsidiaries. (b) Each Royale Party and Neither the Company nor any of its Subsidiaries owns any real property. Neither the Company nor any of its Subsidiaries has received any written notice or otherwise has knowledge that either the whole or any portion of any real property leased by it is to be condemned, requisitioned, or otherwise taken by any public authority or is to be the subject of any public improvements that may result in special assessments against or otherwise affect such Rights real property. Schedule 4.9 of Way from each person as are sufficient the Company Disclosure Schedule sets forth a complete and correct description of all leases of real property to conduct which the Company or any of its business as currently conducted, except for Subsidiaries is a party. Complete and correct copies of all such Rights of Way the absence of which leases have not had and would not reasonably be expected been delivered to have a Royale Material Adverse EffectParent. Each Royale Party such lease is valid and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, subsisting and no event has occurred or condition exists that allowsconstitutes, or after notice or lapse of time would allowor both could constitute, revocation a default thereunder by the Company or termination thereof any of its Subsidiaries, or would result in to the best of its knowledge, any impairment other person. The leasehold interests of the rights of the holder of any such Rights of Way, except for such revocations, terminations Company and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their its Subsidiaries are subject to Rights of Wayno Lien, there are no encroachments and the Company or other encumbrances on its Subsidiary, as the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries case may be, is in quiet possession of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands properties covered by such leaseleases. Except as would not reasonably be expected to have a Royale Material Adverse Effect, Company has notified the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All lessor of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by Lease that Company is terminating the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December Lease when it expires on July 31, 2015, and dated February 1, 20162009. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Matrix Material Adverse Effect, Matrix or a Subsidiary of Matrix and the Royale Parties Matrix LPs each respectively owns and their Subsidiaries own and have has either good and valid title in fee or a valid leasehold interest, Right of Way (defined below) or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Matrix Material Effect, all leases, Rights of Way or other agreements under which any Royale Party Matrix or any of their its Subsidiaries or the Matrix LPs lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties Matrix or any of their its Subsidiaries or the Matrix LPs and, to the Knowledge of each Royale PartyMatrix, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties Matrix nor any of their its Subsidiaries or the Matrix LPs are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party of Matrix and its Subsidiaries and the Matrix LPs has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Matrix Material Adverse Effect. Each Royale Party of Matrix and its Subsidiaries and the Matrix LPs has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Matrix Material Adverse Effect. All pipelines owned or operated by Matrix Operator, Matrix and its Subsidiaries and the Royale Parties and their Subsidiaries Matrix LPs are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party Matrix Operator, Matrix or any of their its Subsidiaries or the Matrix LPs of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Matrix Material Adverse Effect. (ci) Except as would not reasonably be expected to have a Royale Matrix Material Adverse Effect, Matrix and its Subsidiaries and the Royale Parties and their SubsidiariesMatrix LPs, as applicable, have defensible title to all of the Royale Matrix Interests forming the basis for the reserves reflected in the Royale Audited Financial Statements except for such Royale Matrix Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of businessbusiness and the Matrix Interests owned by Matrix Royalty, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Matrix Material Adverse Effect or as set forth on Section 5.10(c4.10(c)(i) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Matrix Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or or, preferential rights to purchase Hydrocarbons and the Royale Parties neither Matrix nor any of their its Subsidiaries are not is obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Matrix Material Adverse Effect, the Royale Parties Matrix and each applicable Subsidiary and the Matrix LPs (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Matrix Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (dii) All of the ▇▇▇▇▇ owned, leased, operated or used by Matrix and its Subsidiaries and the Royale Parties and their Subsidiaries Matrix LPs and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties Matrix and their its Subsidiaries or otherwise associated with the Royale Matrix Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Matrix Material Adverse Effect. No well owned, leased, operated or used by any Royale Party Matrix or any of their its Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (eiii) All Royale Matrix Interests operated by Matrix and its Subsidiaries and the Royale Parties and their Subsidiaries Matrix LPs have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Matrix Material Adverse Effect. None of the Interests of the Royale Parties Matrix or their its Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Matrix Material Adverse Effect. Except as set forth on Section 5.10(e4.10(c) of Royale Disclosure Schedules, none of the Royale Matrix Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (fd) There are no material inaccuracies in the report Summary Projection of Netherland, ▇▇▇▇▇▇ & Associates, Inc. Reserves and Revenues as of December March 31, 20152016, and dated February 1of Matrix, with run date June 10, 2016, a correct and complete copy of which Matrix has made available to Royale prior to the date of this Agreement. (ge) Except as set forth on Section 5.10(g4.10(e) of the Royale Disclosure Schedules, no Royale Party Matrix is not engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party it a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g4.10(e) of the Royale Disclosure Schedules sets forth obligations of each Royale Party Matrix for the delivery of Hydrocarbons attributable to any of the Royale Matrix Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g4.10(e) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party Matrix is not bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (hf) Except as provided in Section 5.10(h4.10(f) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale PartyMatrix, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties Matrix or any of their its Subsidiaries or the Matrix LPs within one year of the Royale Matrix Merger Effective Time in any of the Royale Matrix Interests or any of the contracts governing any of the Royale Matrix Interests. (ig) Except as set forth on Section 5.10(i4.10(g) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Matrix Interests contain any minimum volume or throughput provisions or require the Royale Parties Matrix or any of their its Subsidiaries to pay for services regardless of whether the Royale Parties Matrix or any of their its Subsidiaries deliver delivers such production for use of the services provided for under any such Contract. (jh) Except as set forth in Section 5.10(j4.10(h) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Matrix Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Matrix Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i4.10(g) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Company Material Adverse Effect, (i) the Royale Parties Company and their the Subsidiaries own and of the Company have either good and valid title to, or, in fee or a the case of leased properties and assets, valid leasehold interestinterests in, Right all of Way their tangible properties and assets, real and personal, used or other rights held for use in their businesses as currently conducted or shown on the most recent consolidated balance sheet of the Company included in the Company SEC Documents prior to the landdate hereof or acquired thereafter (except for properties and assets disposed of in the ordinary course of business consistent with past practice after the date of such balance sheet), mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (any Liens, except in all cases for Permitted Liens, (ii) the assets and properties of the Company and its Subsidiaries, taken as a whole, constitute all of the assets and properties which are necessary to conduct the business and operations of the Company and its Subsidiaries as currently conducted and (iii) all of the property, plant and equipment of the Company and each of its Subsidiaries has been maintained in reasonable operating condition and repair, ordinary wear and tear excepted, and is sufficient to permit the Company and its Subsidiaries to conduct their operations as currently conducted. (b) Section 3.16(b) of the Company Disclosure Schedule sets forth a complete and correct list of all real property owned in fee by the Company or any Subsidiary of the Company (collectively, the “Owned Real Property”). Neither the Company nor any Subsidiary of the Company is obligated under, or a party to, any option, right of first refusal or other contractual right to sell, assign or dispose of any Owned Real Property or any portion thereof. Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Company Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its , the obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, Company and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms Company with regard to all applicable covenants, easements and restrictions affecting the Owned Real Property have been and are being performed in a proper and timely manner by the Company or a Subsidiary of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse EffectCompany, as applicable. (c) Except Section 3.16(c) of the Company Disclosure Schedule sets forth a complete and correct list of all real property leased, subleased or licensed by the Company or any Subsidiary of the Company (collectively, the “Leased Real Property” and together with the Owned Real Property, the “Real Property”). The Company has heretofore made available to Parent true and complete copies of all leases, subleases, licenses and other agreements under which the Company and/or any Subsidiary of the Company uses or occupies or has the right to use or occupy, now or in the future, any Leased Real Property, including all modifications, amendments and supplements thereto (collectively, the "Real Property Leases”). With respect to the Leased Real Property, except as would not reasonably be expected to have a Royale Company Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, : (i) none the Company or the applicable Subsidiary of the proceeds from Company enjoys peaceful and undisturbed possession of the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and premises leased pursuant to each Real Property Lease; (ii) there are no calls on production with respect to any Real Property Leases that were assigned (or preferential rights deemed assigned pursuant to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of such Real Property Lease) or subleased to the Company or any applicable lease for its use on Subsidiary of the lands covered Company by a third party, all consents to such lease. Except as would not reasonably be expected to assignments (or deemed assignments) or subleases have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements been obtained which were required with respect to Production Burdenssuch assignments (or deemed assignments) or subleases; (iii) the current use of the premises leased, and (B) have paid subleased or will cause to be paid when due all Production Burdens licensed under each Real Property Lease complies with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of such Real Property Lease; (iv) no Real Property Lease has been assigned, mortgaged, hypothecated or otherwise encumbered; and (v) neither the applicable Contract Company nor any Subsidiary of the Company has, nor, to the Company’s knowledge, has any other party thereto (including the lessor or as reserved against in the Royale Financial Statementssublessor thereunder) waived any terms or conditions of any Real Property Lease. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g3.16(d) of the Royale Company Disclosure SchedulesSchedule sets forth a true, no Royale Party is engaged in any oilcorrect and complete list of each lease, natural gas sublease, license or other futures agreement executed by the Company or option trading in respect any Subsidiary of which it has any material future liability, nor is any Royale Party a party the Company granting to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, third party a right to the Knowledge use, occupancy or enjoyment of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties any Real Property or any portion thereof (the “Real Property Subleases”). The Company has heretofore made available to Parent true and complete copies of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests all Real Property Subleases (including all oilamendments, gas modifications, supplements, and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedulesextensions thereof).

Properties and Assets. (a) Except as would not reasonably be expected to PURCHASER and its Subsidiaries have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries own and have either good and valid title in fee to all of their material properties and assets, of every kind, nature and description, tangible or a valid leasehold interestintangible, Right of Way or other rights to the landwherever located, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens mortgages, pledges, liens, security interests, encumbrances, adverse claims and restrictions of any nature whatsoever (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effectincluding, without limitation, all leasesencroachments, Rights boundary disputes, covenants, restrictions, easements, rights of Way way, leases and title objections), except for: (i) title defects or other agreements under matters which would be reflected on a title report which, when considered individually or in the aggregate, do not materially impair the continued operation of PURCHASER or the use by PURCHASER of any Royale Party of its material properties and assets as presently used in its business; (ii) current Taxes or assessments due but not yet payable; or (iii) as set forth on Schedule 5.12(a) or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties other Schedule thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and material Real Property Lease is valid, binding on PURCHASER or its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conductedand in full force and effect, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party all rent and other material sums and charges payable by PURCHASER or its Subsidiaries which is a party thereto as a tenant thereunder are current. No written notice of any default under any Real Property Lease has fulfilled and performed all its obligations been given or received by PURCHASER which has not been cured as of the Effective Date or which cannot promptly be cured without the payment of any sums with respect thereto and, to such Rights the knowledge of Way and conducts their business in a manner that does PURCHASER, no termination event or event of default thereunder has occurred which has not violate any been cured as of the Rights date of Waythis Agreement or which cannot promptly be cured without the payment of any sums with respect thereto, and no event has occurred that allowsnor do any circumstances exist which, with the giving of notice or the passage of time, or after notice or lapse of time both, would allow, revocation or permit the termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse EffectReal Property Lease. (c) Except as disclosed on Schedule 5.12(c), to the Knowledge of PURCHASER there is no proposed, pending or threatened condemnation proceeding, eminent domain action or similar action affecting any of the properties set forth on Schedule 5.12(b) which would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial StatementsPURCHASER. (d) All of the ▇▇▇▇▇ owned, leased, operated Each PURCHASER and its Subsidiaries owns or used by the Royale Parties leases all Real Property and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party Personal Property necessary for the delivery conduct and operation of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except its business as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party it is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securitiespresently conducted. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect, the Royale Parties Corporation or a Subsidiary of the Corporation each respectively owns and their Subsidiaries own and have has either good and valid title in fee or a valid leasehold interest, Right of Way (defined below) or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Corporation Material Effect, all leases, Rights of Way or other agreements under which any Royale Party the Corporation or any of their its Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties Corporation or any of their its Subsidiaries and, to the Knowledge of each Royale Partythe Corporation, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties Corporation nor any of their its Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party of the Corporation and its Subsidiaries has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Corporation Material Adverse Effect. Each Royale Party of the Corporation and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Corporation Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries Corporation are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that materially affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party the Corporation, the Matrix LPs, Matrix or any of their its Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Corporation Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect, the Royale Parties Corporation and their its Subsidiaries, as applicable, have defensible title to all of the Royale Property Interests forming the basis for the reserves reflected in the Royale Audited Financial Statements except for such Royale Property Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect or as set forth on Section 5.10(c4.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Property Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or or, preferential rights to purchase Hydrocarbons and neither the Royale Parties Corporation nor any of their its Subsidiaries are not is obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Corporation Material Adverse Effect, the Royale Parties Corporation and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Property Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties Corporation and their its Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties Corporation and their its Subsidiaries or otherwise associated with the Royale Property Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Corporation Material Adverse Effect. No well owned, leased, operated or used by any Royale Party the Corporation or any of their its Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Property Interests operated by the Royale Parties Corporation and their its Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Corporation Material Adverse Effect. None of the Interests of the Royale Parties Corporation or their its Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Corporation Material Adverse Effect. Except as set forth on Section 5.10(e4.10(e) of Royale Disclosure Schedules, none of the Royale Property Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report Summary Projection of Netherland, ▇▇▇▇▇▇ & Associates, Inc. Reserves and Revenues as of December March 31, 20152016, and dated February 1of the Corporation, with run date June 10, 2016, a correct and complete copy of which the Corporation has made available to Royale prior to the date of this Agreement. (g) Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, no Royale Party the Corporation is not engaged in any oil, natural gas or other futures or option options trading in respect of which it has any material future liability, nor is any Royale Party it a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g4.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party the Corporation for the delivery of Hydrocarbons attributable to any of the Royale Property Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g4.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party the Corporation is not bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h4.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Partythe Corporation, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties Corporation or any of their its Subsidiaries within one year of the Royale Merger Effective Time Closing Date in any of the Royale Property Interests or any of the contracts governing any of the Royale Property Interests. (i) Except as set forth on Section 5.10(i4.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Property Interests contain any minimum volume or throughput provisions or require the Royale Parties Corporation or any of their its Subsidiaries to pay for services regardless of whether the Royale Parties Corporation or any of their its Subsidiaries deliver delivers such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j4.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Property Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Property Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i4.10(i) of the Royale Disclosure Schedules.

Properties and Assets. (a) Except Schedule 2.1.7 sets forth a complete and correct list, as would not reasonably be expected of the date hereof, of all real property leased by any member of the BHC Group, including the names of each of the parties to have a Royale Material Adverse Effectthe applicable lease, the Royale Parties location of the applicable property and their Subsidiaries own and have either good the applicable lease documents. None of the members of the BHC Group owns any real property. Each member of the BHC Group has valid title to all material personal property owned by it, and valid title leasehold interests in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral all real and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conductedmaterial personal property leased by it, in each case free and clear of all liens Liens, except (except i) Liens specified in all cases Schedule 2.1.7 or reflected in the BHC Financial Statements, (ii) Liens for Permitted Liens). Except as would taxes not yet delinquent or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on its books in accordance with GAAP, (iii) statutory Liens incurred in the ordinary course of business consistent with past practices that have not had and could not reasonably be expected to have a Royale Material EffectAdverse Effect on the BHC Group and (iv) Liens which do not materially detract from the value or materially interfere with the use of the properties affected thereby (the exceptions described in the foregoing clauses (i), all leases(ii), Rights (iii) and (iv) being referred to collectively as “BHC Permitted Encumbrances”). Schedule 2.1.7 sets forth a list of Way or other agreements each Lease under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such Rights of Way from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any member of the Rights BHC Group is a lessee as to which the consummation by Seller of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or the transactions contemplated hereby would result in any impairment a violation of, loss of the rights or default under or constitute an event creating rights of acceleration, termination or cancellation under such Lease. The Leases are the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by only documents between the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens parties thereto with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effectsubject matter thereof. No well owned, leased, operated lessor or used by lessee under any Royale Party or real property Lease has exercised any of their Subsidiaries are subject right to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of cancel such Lease or shorten or lengthen the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇▇▇▇▇▇term thereof, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunderadditional premises, (iii) requiring lessor’s consent to reduce, relocate or expand the consummation of the transactions of the type contemplated under this Agreementpremises demised by such Lease, or (iv) purchase any property. No portion of any security deposit has been applied and the landlord is expected to result holding the full amount of any security deposit required under the applicable Lease. All rent, fees and other payments due under each Lease have been fully paid. Each Lease was negotiated at arms’-length and the tenant and landlord thereunder are not affiliated. Each premises demised by a Lease is in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i) good condition and repair. The real property demised by the Leases is the only real property necessary for the business of the Royale Disclosure Schedulesmembers of the BHC Group and no member of the BHC Group uses or occupies other real property other than the Denver Leases.

Properties and Assets. (a) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries subsidiaries own and have either good and valid title in fee or a valid leasehold interest, Right of Way or other rights to the land, mineral and other subsurface rights, buildings, structures and other improvements thereon and fixtures thereto necessary to permit it to conduct its business as currently conducted, in each case free and clear of all liens (except in all cases for Permitted Liens). Except as would not reasonably be expected to have a Royale Material Effect, all leases, Rights of Way or other agreements under which any Royale Party or any of their Subsidiaries lease, access or use any real property are valid, binding and are in force and effect against the Royale Parties or any of their Subsidiaries and, to the Knowledge of each Royale Party, the counterparties thereto, in accordance with their respective terms, and neither the Royale Parties nor any of their Subsidiaries are in default under any such leases, Rights of Way or other agreements. (b) Each Royale Party and its Subsidiaries has such consents, easements, rights of way, permits and licenses (collectively, “Rights of Way Way”) from each person as are sufficient to conduct its business as currently conducted, except for such Rights of Way the absence of which have not had and would not reasonably be expected to have a Royale Material Adverse Effect. Each Royale Party and its Subsidiaries has fulfilled and performed all its material obligations with respect to such Rights of Way and conducts their business in a manner that does not violate any of the Rights of Way, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights of Way, except for such revocations, terminations and impairments that have not had and would not reasonably be expected to have a Royale Material Adverse Effect. All pipelines owned or operated by the Royale Parties and their Subsidiaries are subject to Rights of Way, there are no encroachments or other encumbrances on the Rights of Way that materially affect the use thereof and there are no gaps (including any gap arising as a result of any breach by a Royale Party or any of their Subsidiaries of the terms of any Rights of Way) in the Rights of Way way other than gaps that would not have and would not reasonably be expected to have a Royale Material Adverse Effect. (c) Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and their Subsidiaries, as applicable, have defensible title to all of the Royale Interests forming the basis for the reserves reflected in the Royale Financial Statements except for such Royale Interests sold, used, farmed out or otherwise disposed of since December 31, 2015, in the ordinary course of business, free and clear of all liens and Production Burdens other than Production Burdens not yet earned, due or payable and Permitted Liens (other than Production Burdens). Except as would not reasonably be expected to have a Royale Material Adverse Effect or as set forth on Section 5.10(c) of the Royale Disclosure Schedules, (i) none of the proceeds from the sale of Hydrocarbons produced from the Royale Interests in any producing well are being held in suspense for any reason, and (ii) there are no calls on production or preferential rights to purchase Hydrocarbons and the Royale Parties nor any of their Subsidiaries are not obligated to deliver Hydrocarbons or proceeds from the sale thereof at a future point in time without receiving payment therefor at or after the time of delivery (other than gas balancing arrangements), except for the rights of any lessor to take free gas under the terms of any applicable lease for its use on the lands covered by such lease. Except as would not reasonably be expected to have a Royale Material Adverse Effect, the Royale Parties and each applicable Subsidiary (A) are in compliance with all valuation agreements, and settlement agreements with respect to Production Burdens, and (B) have paid or will cause to be paid when due all Production Burdens with respect to the Royale Interests and each other royalty, Tax or similar payment, except for such amounts that are being held in suspense as permitted pursuant to applicable Law or the terms of the applicable Contract or as reserved against in the Royale Financial Statements. (d) All of the ▇w▇▇▇▇ owned, leased, operated or used by the Royale Parties and their Subsidiaries and all water, carbon dioxide or injection ▇w▇▇▇▇ located on any property owned, leased, operated or used by the Royale Parties and their Subsidiaries or otherwise associated with the Royale Interests have been drilled, completed and operated within the limits permitted by the applicable Contract granting such rights and applicable Law, and all drilling and completion (and plugging and abandonment) of such ▇w▇▇▇▇ and all related development, production and other operations have been conducted in compliance with all applicable Laws except, in each case, as would not reasonably be expected to have a Royale Material Adverse Effect. No well owned, leased, operated or used by any Royale Party or any of their Subsidiaries are subject to material penalties on allowables because of overproduction or violation of any applicable Law. (e) All Royale Interests operated by the Royale Parties and their Subsidiaries have been operated in accordance with reasonable, prudent field practices and in compliance with the applicable Contracts, except where the failure to so operate would not reasonably be expected to have a Royale Material Adverse Effect. None of the Interests of the Royale Parties or their Subsidiaries is subject to any preferential purchase, consent or similar right that would become operative as a result of the Transactions, except for any such preferential purchase, consent or similar rights that would not reasonably be expected to have a Royale Material Adverse Effect. Except as set forth on Section 5.10(e) of Royale Disclosure Schedules, none of the Royale Interests are subject to any Tax partnership agreement or provisions requiring a partnership income Tax Return. (f) There are no material inaccuracies in the report of Netherland, ▇S▇▇▇▇▇ & Associates, Inc. as of December 31, 2015, and dated February 1, 2016. (g) Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, no Royale Party is engaged in any oil, natural gas or other futures or option trading in respect of which it has any material future liability, nor is any Royale Party a party to any price swaps, ▇h▇▇▇▇▇, futures or similar instruments. Section 5.10(g) of the Royale Disclosure Schedules sets forth obligations of each Royale Party for the delivery of Hydrocarbons attributable to any of the Royale Interests in the future on account of prepayment, advance payment, take-or-pay or similar obligations without then or thereafter being entitled to receive full value therefor. Except as set forth on Section 5.10(g) of the Royale Disclosure Schedules, as of the date hereof, no Royale Party is bound by futures, hedge, swap, collar, put, call, floor, cap, option or other Contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, or securities. (h) Except as provided in Section 5.10(h) of the Royale Disclosure Schedules, there are no mandatory drilling or completion obligations and there are no pending or, to the Knowledge of each Royale Party, expected proposals or elections for drilling, completing, recompleting, reworking, facilities or similar activities that would require such commitment on behalf of the Royale Parties or any of their Subsidiaries within one year of the Royale Merger Effective Time in any of the Royale Interests or any of the contracts governing any of the Royale Interests. (i) Except as set forth on Section 5.10(i) of the Royale Disclosure Schedules, none of the Contracts in respect of gathering, processing, storage or transportation of the production of Hydrocarbons from the Royale Interests contain any minimum volume or throughput provisions or require the Royale Parties or any of their Subsidiaries to pay for services regardless of whether the Royale Parties or any of their Subsidiaries deliver such production for use of the services provided for under any such Contract. (j) Except as set forth in Section 5.10(j) of the Royale Disclosure Schedules, none of the Contracts relating to the Royale Interests (including all oil, gas and mineral leases and similar Contracts) contain any provision (i) requiring the lessee to pay royalties on ▇h▇▇▇▇▇, (ii) causing the oil, gas or mineral lease or contract to terminate without advance notice and the opportunity to cure resulting in a loss, in whole or in part, of any of the Royale Interests for lessee’s failure to pay royalties or for lessee’s breach of any covenant thereunder, (iii) requiring lessor’s consent to the consummation of the transactions of the type contemplated under this Agreement, or (iv) is expected to result in a mandatory payment or expenditure not otherwise disclosed in Section 5.10(i5.10(j) of the Royale Disclosure Schedules.