Common use of Required Financial Information Clause in Contracts

Required Financial Information. (a) Seller shall deliver (i) true and complete copies of audited Statements of Revenue and Direct Operating expenses of the Assets for the years ended as of December 31, 2021 and December 31, 2020, and for each of the two years in the period ended December 31, 2021 (including any supplemental oil and gas disclosures satisfying the requirements of Financial Accounting Standards Board Accounting Standards Codification ▇▇▇-▇▇▇-▇▇, et seq.) and prepared in accordance with GAAP and Regulation S-X, and audited in accordance with the auditing standards generally accepted in the United States of America (“GAAS”) (the “Audited Financials”) not later than five (5) days prior to the Target Closing Date; and (ii) true and complete copies of unaudited Statements of Revenue and Direct Operating Expenses for the Assets for the six months ended June 30, 2022, prepared in accordance with GAAP and reviewed in accordance with GAAS applicable to reviews of interim financial information (the “Unaudited Interim Financials”) not later than five (5) days prior to the Target Closing Date. In addition, from and after the Execution Date until the Closing Date, Seller shall use reasonable efforts to direct its consultants, accountants, reserve engineers, agents and other representatives to, during customary business hours, cooperate with the Earthstone Parties and independent auditors chosen by the Earthstone Parties (“Earthstone’s Auditor”) in connection with any audit by Earthstone’s Auditor of any financial statements of the Assets or reserve reports with respect to the Assets, in each case, relating to the period prior to the Closing Date, or other actions that the Earthstone Parties reasonably require to comply with the requirements under state and federal securities laws. Such cooperation will include (A) reasonable access to Seller’s officers, managers, employees, consultants, agents and representatives who were responsible for preparing or maintaining the financial records and work papers and other supporting documents used in the preparation of such financial statements as may be required by Earthstone’s Auditor to perform an audit or conduct a review in accordance with generally accepted auditing standards or to otherwise verify such financial statements; (B) using commercially reasonable efforts to obtain the consent of the independent auditor(s) and reserve engineer(s) of Seller that conducted any audit of such financial statements or prepared any reserve reports to be named as an expert in (I) any filings that may be made by the Earthstone Parties under the Securities Act or required by the SEC under securities laws applicable to the Earthstone Parties or any report required to be filed by the Earthstone Parties under the Exchange Act in connection with the transactions contemplated by this Agreement or (II) any prospectus or offering memorandum for any equity or debt offering of Earthstone or any holder of Earthstone equity interests that have registration rights with respect to such equity interests; (C) providing information in connection with the Earthstone Parties’ preparation of responses to any inquiries by regulatory authorities relating to the foregoing financial statements and/or reserve reports; (D) providing information with respect to property descriptions of the Properties necessary to execute and record a deed of trust for any financing activities or in any prospectus or offering memo; (E) using reasonable efforts to provide, at least ten (10) Business Days prior to the Closing, all documentation and other information about Seller as is reasonably requested by the Earthstone Parties which relates to applicable “know your customer” and anti-money laundering rules and regulations (including without limitation the USA PATRIOT ACT); (F) delivery of one or more customary representation letters from Seller to the auditor of the Audited Financials that are reasonably requested by the Earthstone Parties to allow such auditors to complete an audit (or review of any financial statements) and to issue an opinion with respect to an audit of those financial statements required pursuant to this Section 6.12; and (G) using commercially reasonable efforts to cause the independent auditor(s) or reserve engineer(s) of Seller that conducted any audit of such financial statements to provide customary “comfort letters” to any underwriter or purchaser in connection with any equity or debt offering of Earthstone or any holder of Earthstone equity interests that have registration rights with respect to such equity interests. All of the information provided by Seller and its Affiliates pursuant to this Section 6.12 is given without any representation or warranty, express or implied, and neither Seller nor any of its Affiliates or its or their respective accountants shall have any liability or responsibility with respect thereto. The Earthstone Parties shall promptly reimburse Seller for all Third Party costs and expenses incurred by Seller or its Affiliates in compliance with this Section 6.12 including, without limitation, all fees and expenses of the public accounting firm conducting the audit of the Audited Financials and the review of the Unaudited Interim Financials contemplated by this Section 6.12. (b) Notwithstanding anything to the contrary, the access to be provided to Purchaser pursuant to this Section 6.12 shall not interfere with Seller’s or any of its Affiliates’ ability to prepare their own financial statements or Seller’s or such Affiliates’ regular conduct of business and shall be made available during Seller’s normal business hours. Such cooperation shall not require Seller to take any action that Seller reasonably believes could result in a violation of applicable Law, any material agreement or any confidentiality arrangement or the waiver of any legal or other applicable privilege. (c) Notwithstanding anything to the contrary contained in this Section 6.12, nothing in this Section 6.12 shall require any cooperation to the extent that it would (i) require Seller or its Affiliates or any of their respective representatives, as applicable, to agree to pay any commitment or other similar fee, or incur any liability (excluding the expenses in connection with the preparation of the Audited Financials and the Unaudited Interim Financials for which the Earthstone Parties have agreed to reimburse Seller) or give any indemnities or otherwise commit to take any similar action, (ii) require Seller or its Affiliates or any of their respective representatives to provide any information that is not reasonably available to Seller or such representative, or (ii) require Seller or its Affiliates or any of their respective representatives to take any action that will conflict with or violate such Person’s organizational documents, as applicable, or any applicable Law or result in a violation or breach of, or default under, any contract with a non-Affiliate to which such Person, as applicable, is a party, or result in any officer or director of any such Person incurring any personal liability. Purchaser shall indemnify, defend and hold harmless the Indemnified Persons affiliated with Seller and each of their respective representatives from and against all liabilities suffered by, incurred by, or asserted against such Indemnified Persons arising from the cooperation provided by such Indemnified Person pursuant to this Section 6.12 (other than to the extent such liabilities arose from the actual fraud, willful misconduct or gross negligence of Seller or its Affiliates or any of their respective Representatives as determined in in a final, non-appealable judgment of a court of competent jurisdiction) and any information utilized in connection therewith. (d) Notwithstanding anything in this Agreement to the contrary, in no event will any failure by Seller to comply with this Section 6.12 be used by Purchaser as a basis to (i) terminate this Agreement pursuant to Article 10 or (ii) to assert the failure of the condition set forth in Section 7.2(b) to be satisfied.