Common use of Title and Environmental Defects Clause in Contracts

Title and Environmental Defects. The Purchase Price will be (a) decreased for any uncured Title Defects and uncured Environmental Defects in excess of the respective Individual Defect Thresholds and the Aggregate Defect Threshold and (b) increased for Title Benefits, in each case, in accordance with this Section 2.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Party. The Buyer must deliver to the Sellers, on or before May 31, 2013 (the “Defect Notice Date”), one or more written notices specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together with data and information reasonably necessary for the Sellers to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”). Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified by the Buyer by such date in accordance with the foregoing, shall be deemed to have been waived by the Buyer for all purposes. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:

Title and Environmental Defects. The Purchase Price will be (a) decreased for any uncured Title Defects (net of Title Benefits) and uncured Environmental Defects in excess of that exceed, individually, the respective Individual Defect Thresholds and and, collectively, the Aggregate Defect Threshold and (b) increased for Title Benefits, in each caseThreshold, in accordance with this Section 2.11.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Party. The Buyer must deliver to the SellersSeller, on or before May 31, 2013 (the “Defect Notice Date”), one or more written notices specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together with data and information reasonably necessary for the Sellers to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”)Notices. Any matters that may otherwise constitute Title Defects or Environmental Defects, but of with respect to which the Sellers have Seller has not been specifically notified received a Defect Notice from Buyer by the Buyer by such date in accordance with the foregoingDefect Notice Date, shall be deemed to have been conclusively waived by the Buyer for all purposespurposes except the special warranty contained in the Assignment. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. In no event will the aggregate amount of Title Defect adjustments with respect to a Property exceed the Allocated Value of such Property. If the aggregate of all adjustments to the Purchase Price required under this Agreement in respect of any Property would equal or exceed the entire Allocated Value of such Property, then at Seller’s option and in lieu of such adjustment, Seller may PURCHASE AND SALE AGREEMENT 1 exclude such Property from the purchase and sale hereunder or, if already assigned to Buyer, Buyer will execute and deliver to Seller an assignment (in the form of the Assignment) of such Property, and in each such case such Property shall be an Excluded Asset and the Purchase Price will be reduced in an amount equal to the entire Allocated Value of such Property (subject to repayment of any Purchase Price adjustments having been in respect thereof, if any). Upon timely delivery of a Defect Notice under this Section 2.11.1, the Buyer and the Sellers Seller will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:

Title and Environmental Defects. The Purchase Price will be (a) decreased for any the value, determined as provided herein, of uncured Title Defects and uncured unremedied and unindemnified Environmental Defects that are in excess of the respective Individual Defect Thresholds and the Aggregate Defect Threshold and (b) increased for Title Benefits, in each case, in accordance with this Section 2.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Party. The Buyer must deliver to the SellersCELLC, on or before May 31, 2013 (the “Defect Notice Date”), one or more written notices specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect defect and its method of calculating such adjustment, together with all data and information evidencing the Buyer’s review of public record or other information proving the existence of such defect reasonably necessary for the Sellers CELLC to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”). Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have CELLC has not been specifically so notified in writing by the Buyer by such date in accordance with the foregoingDefect Notice Date, shall be deemed to have been waived by the Buyer for all purposes. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice under this Section 2.1Notice, the Buyer and the Sellers Parties will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:. PURCHASE AND SALE AGREEMENT 13

Title and Environmental Defects. The Purchase Price will “Title Defect” shall mean a defect exists that (A) causes Seller to not have Defensible Title to the Oil and Gas Properties and (B) for which a Defect Notice has been timely and otherwise validly delivered. Notwithstanding any other provision in this Agreement to the contrary, the following matters shall not constitute, and shall not be asserted as, a Title Defect: (a1) decreased defects or irregularities arising out of lack of corporate or other entity authorization or variation in corporate or entity name; (2) defects or irregularities that have been cured or remedied by the applicable statutes of limitation or statutes for any uncured Title Defects prescription, including adverse possession and uncured Environmental Defects the doctrine of laches or which have existed for more than twenty (20) years and no affirmative evidence shows that another Person has asserted a superior claim of title to the Properties; (3) defects or irregularities in excess the chain of title consisting of the respective Individual Defect Thresholds failure to recite marital status in documents or omissions of heirship proceedings; (4) the absence of any lease amendment or consent by any royalty interest or mineral interest holder authorizing the pooling of any leasehold interest, royalty interest or mineral interest, and the Aggregate Defect Threshold failure of Exhibit A to reflect any lease or any unleased mineral interest where the owner thereof was treated as a non-participating co-tenant during the drilling of any xxxxx; (5) any defect arising out of lack of survey or lack of metes and bounds descriptions, unless a survey is expressly required by Applicable Law; (6) any gap in the chain of title unless affirmative evidence shows that there is a superior chain of title as evidenced by an abstract of title, title opinion or xxxxxxx’x title chain or runsheet; (7) any defect arising from prior oil and gas leases relating to the lands burdened by the Leases that are terminated but are not surrendered or released of record; (8) future adjustments in acreage, Working Interest and Net Revenue Interest as a result of pooling or unitization of the Leases; (9) references in the chain of title to unrecorded agreements, unless affirmative evidence shows that there is a superior chain of title as evidenced by an abstract of title, title opinion or xxxxxxx’x title chain or runsheet; and (b10) increased for Title BenefitsPermitted Encumbrances. Notwithstanding the foregoing, in each case, in accordance with this Section 2.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any each Title Defect that is not cured on or before the Closing (other than a Title Defect caused by Seller or the Company), there shall be no adjustment to the number of the Properties without the prior written consent of the Sellers, which consent may Parent Shares to be granted or withheld by the Sellers in their sole discretion, provided thatissued at Closing, if the Sellers do Title Defect Amount does not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Party. The Buyer must deliver to the Sellers, on or before May 31, 2013 exceed $150,000 (the “Title Defect Notice DateThreshold”), one or more written notices specifying each defect associated with the Properties it being expressly understood that the Buyer asserts constitutes a if any single Title Defect or an Environmental DefectAmount exceeds the Title Defect Threshold, a specific description the entire amount of each such Title Defect or Environmental Defect and Amount shall be included in the basis for such assertion under the terms calculation of this Agreement, the amount of the any applicable adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method number of calculating such adjustment, together with data and information reasonably necessary for the Sellers Parent Shares to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”be issued at Closing pursuant to Section 8.8(a). Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified by the Buyer by such date in accordance with the foregoing, shall be deemed to have been waived by the Buyer for all purposes. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:.

Title and Environmental Defects. (a) The Purchase Price will be (ai) decreased for any uncured the amount of Title Defects and uncured Environmental Defects in excess of which individually exceed the respective Individual Defect Thresholds and that, after offsetting all Title Benefits which individually exceed the Individual Benefit Amount, exceed the Aggregate Defect Threshold and Threshold; or (bii) increased for the amount of Title BenefitsBenefits which individually exceed the Individual Benefit Amount that, after offsetting all Title Defects and Environmental Defects which individually exceed the Individual Defect Thresholds, exceed the Aggregate Benefit Threshold, in each case, in accordance with this Section 2.1; and, (b) any adjustments to the Purchase Price based on subpart (a) (i) or (ii) hereof will be made by the Parties within sixty (60) days after the end of the Cure Period, except that any adjustment related to matters that are submitted to the Consultants for resolution will be made by the Parties as provided in Section 2.1.10. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the non-Buyer Operated Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any non-Buyer Operated Property, then at the Buyer’s option such non-Buyer Operated Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement Closing and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses Losses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Partyinvestigations. The Buyer must deliver to the Sellers, on or before May 316:00 p.m. Central Daylight Time on or before July 29, 2013 (the “Defect Notice Date”), one or more a written notices notice specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together PURCHASE AND SALE AGREEMENT -18- with data and information evidencing the Buyer’s review of public record or other information proving the existence of such Title Defect or Environmental Defect reasonably necessary for the Sellers to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”). The Buyer shall bear the burden of proof to establish each alleged Title Defect or Environmental Defect. Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified in writing by the Buyer by such date the Defect Notice Date in accordance with the foregoing, shall be deemed to have been waived by the Buyer for all purposes, except with respect to Buyer’s (or Buyer Designee’s, as applicable) rights under the special warranty of title contained in the Assignment and without prejudice to the Buyer’s rights under Section 10.2(a) below. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice of a Title Defect or Environmental Defect under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:

Title and Environmental Defects. The Purchase Price will “Title Defect” shall mean a defect exists that (A) causes Seller to not have Defensible Title to the Oil and Gas Properties and (B) for which a Defect Notice has been timely and otherwise validly delivered. Notwithstanding any other provision in this Agreement to the contrary, the following matters shall not constitute, and shall not be asserted as, a Title Defect: (a1) decreased defects or irregularities arising out of lack of corporate or other entity authorization or variation in corporate or entity name; (2) defects or irregularities that have been cured or remedied by the applicable statutes of limitation or statutes for any uncured Title Defects prescription, including adverse possession and uncured Environmental Defects the doctrine of laches or which have existed for more than twenty (20) years and no affirmative evidence shows that another Person has asserted a superior claim of title to the Properties; (3) defects or irregularities in excess the chain of title consisting of the respective Individual Defect Thresholds failure to recite marital status in documents or omissions of heirship proceedings; (4) the absence of any lease amendment or consent by any royalty interest or mineral interest holder authorizing the pooling of any leasehold interest, royalty interest or mineral interest, and the Aggregate Defect Threshold failure of Exhibit A to reflect any lease or any unleased mineral interest where the owner thereof was treated as a non-participating co-tenant during the drilling of any xxxxx; (5) any defect arising out of lack of survey or lack of metes and bounds descriptions, unless a survey is expressly required by Applicable Law; (6) any gap in the chain of title unless affirmative evidence shows that there is a superior chain of title as evidenced by an abstract of title, title opinion or xxxxxxx’x title chain or runsheet; (7) any defect arising from prior oil and gas leases relating to the lands burdened by the Leases that are terminated but are not surrendered or released of record; (8) future adjustments in acreage, Working Interest and Net Revenue Interest as a result of pooling or unitization of the Leases; (9) references in the chain of title to unrecorded agreements, unless affirmative evidence shows that there is a superior chain of title as evidenced by an abstract of title, title opinion or xxxxxxx’x title chain or runsheet; and (b10) increased for Permitted Encumbrances. Notwithstanding the foregoing, no Title Benefits, in each case, in accordance with this Section 2.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent Defect may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct asserted with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to releaselisted on Exhibit G, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of that any Sellers Indemnified Party. The Buyer must deliver to the Sellers, on or before May 31, 2013 (the “Defect Notice Date”), one or more written notices specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and arises from the basis for such assertion under the terms of this Agreement, the amount failure of the adjustment Company to the Purchase Price that the Buyer asserts based on hold record title to such Title Defect or Environmental Defect and its method of calculating such adjustment, together with data and information reasonably necessary for the Sellers to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”). Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified by the Buyer by such date Properties in accordance with the provisions of the joint operating agreements set forth on Exhibit G. Notwithstanding the foregoing, with respect to each Title Defect that is not cured on or before the Closing (other than a Title Defect caused by Seller or the Company), there shall be deemed to have been waived by the Buyer for all purposes. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any no adjustment to the Purchase Price using number of Parent Shares to be issued at Closing, if the following criteria:Title Defect Amount does not exceed $150,000 (the “Title Defect Threshold”), it being expressly understood that if any single Title Defect Amount exceeds the Title Defect Threshold, the entire amount of such Title Defect Amount shall be included in the calculation of any applicable adjustment to the number of Parent Shares to be issued at Closing pursuant to Section 8.8(a).

Title and Environmental Defects. The Subject to the provisions of this Section 2.1 (a) the Purchase Price will be (ai) decreased only for any uncured Title Defects and uncured Environmental Defects which are in excess of the Individual Defect Thresholds that, after offsetting all Title Benefits, exceed the Aggregate Defect Threshold or (ii) increased only for the net amount of Title Benefits which individually are in excess of the Individual Benefit Threshold and that exceed the aggregate amount of all Title Defects in excess of the respective Individual Defect Thresholds and the Aggregate Defect Threshold and Threshold; and, (b) increased any adjustments to the Purchase Price based on subpart (a) (i) or (ii) hereof will be made by the Parties within sixty (60) days after the PURCHASE AND SALE AGREEMENT 17 end of the Cure Period, except that (A) any adjustment related to matters that are submitted to the Consultants for resolution will be made by the Parties as provided in Section 2.1.11 and (B) with respect to any Property as to which the Buyer has asserted an Environmental Defect equal to or in excess of the Allocated Value of such Property, at either Buyer or Sellers election, each Seller’s interest in such Property shall not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value of such Property. Except as otherwise expressly set forth in this Section 2.1, the fact that a Property is subject to an outstanding, uncured and/or disputed (as to amount or existence) Title Benefits, in each case, Defect or Environmental Defect will not cause such Property to be excluded from the conveyance of the Properties from the Sellers to the Buyer at Closing in accordance with this Section 2.1Agreement. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided thatprovided, further, however that if the Sellers do a Seller does not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then then, at the Buyer’s option option, each Seller’s interest in such Property will shall not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereofof such Property), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Seller Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except investigations, other than any losses to the extent caused by attributable to the gross negligence or willful misconduct of any Sellers of the Seller Indemnified PartyParties. The On or before the applicable Defect Notice Date, the Buyer must deliver to CALLC (with a simultaneous copy to the Sellers, on or before May 31, 2013 (the “Defect Notice Date”other Seller), one or more written notices specifying each defect associated with the either Seller’s Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together with all data and information evidencing the Buyer’s review of public record or other information proving the existence of such Title Defect or Environmental Defect reasonably necessary for the Sellers to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”). Any matters (other than those constituting a breach of the special warranty of title set forth in the Assignment or a breach of the representation and warranty in Section 3.12 with respect to PPRs) that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified by the Buyer in writing by such date in accordance with the foregoingDefect Notice Date, shall be deemed to have been waived by the Buyer for all purposes. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:: PURCHASE AND SALE AGREEMENT 18

Title and Environmental Defects. The Purchase Price will be (a) decreased adjusted for any uncured certain Title Defects, Environmental Defects and uncured Environmental Defects in excess of the respective Individual Defect Thresholds and the Aggregate Defect Threshold and (b) increased for Title Benefits, in each case, in accordance with Benefits pursuant to this Section 2.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. If the Sellers refuse to consent to any Phase II investigations or examinations on any of the Properties, the Buyer will have the option to exclude the Property or Properties that could be affected by the environmental matter that would have been the subject of such investigation or examination from the Properties to be conveyed to it at the Closing (whereupon such excluded Property or Properties shall be considered to constitute “Excluded Assets” for all purposes of this Agreement) and the Purchase Price to be paid at the Closing will be reduced by the Allocated Value of such Property or Properties. In addition, the Buyer may conduct, at its sole cost and expense, such environmental examination or investigation of the Transferred Gathering Systems (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Transferred Gathering Systems without the prior written consent of the Sellers), as it may in its sole discretion choose to conduct in order to determine whether any environmental or other concern exists with respect to any Transferred Gathering System. If the Sellers refuse to consent to any Phase II investigations or examinations on any Transferred Gathering System or if the Buyer determines that for any reason it does not desire to acquire any Transferred Gathering System, the Buyer will have the option to exclude such Transferred Gathering System to be conveyed to it at the Closing (whereupon such excluded Transferred Gathering System shall be considered to constitute “Excluded Assets” for all purposes of this Agreement), provided, however, that notwithstanding the Buyer’s right to exclude a Transferred Gathering System the Purchase Price will not be reduced but will be reallocated among the Properties and other Transferred Gathering Systems. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to caused by the activities of the Buyer or its employees, agents, contractors and other representatives in connection with conducting such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Partyinvestigations. The Buyer must deliver to the Sellers, on or before May 31April 2, 2013 2010 (the “Defect Notice Date”), one or more a written notices notice specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this AgreementDefect, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustmentadjustment (which amount shall be determined by Buyer using the criteria set forth below in this Section 2.1), together with all data and information reasonably necessary for in the Sellers to verify the existence of the alleged Title Defect Buyer’s possession or Environmental Defect control bearing thereon (a “Defect Notice”). Buyer does hereby acknowledge and agree that Buyer cannot assert the existence of a Title Defect based solely on the lack of title information in Sellers’ files. Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified by the Buyer by such date in accordance with the foregoing, shall be deemed to have been waived by the Buyer for all purposespurposes except: (a) for purposes of determining whether the special warranty of title contained in the Assignment has been breached; or (b) to the extent that such Title Defect or Environmental Defect otherwise constitutes a breach by the Sellers of a representation or warranty under Section 3 hereof. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a notice of a Title Defect Notice or Environmental Defect under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:

Title and Environmental Defects. The Purchase Price will be (a) decreased only for any those uncured Title Defects and uncured Environmental Defects in excess of that exceed, individually, the respective Individual Defect Thresholds and, collectively with all other uncured Title Defects and Environmental Defects that exceed the applicable Individual Defect Thresholds, the Aggregate Defect Threshold and (b) increased for Title Benefits, in each case, in accordance with this Section 2.1‎2.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Party. The Buyer must deliver to the SellersSeller, on or before May 31, 2013 (the “Defect Notice Date”), one or more written notices Defect Notices (each meeting all of the requirements set forth in the definition thereof) specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together with data and information reasonably necessary for the Sellers to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”). Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have Seller has not been specifically notified by Buyer pursuant to a valid Defect Notice by the Buyer by such date in accordance with the foregoingDefect Notice Date, shall be deemed to have been waived by the Buyer for all purposes. The term “Defect Notice Date” means 5:00 p.m. Central Time on September 15, 2016. All adjustments to the Purchase Price based on Title Defects and/or any breach of the special warranty contained in the Assignment (other than with respect to a Lien l (other than a Permitted Encumbrance) created by Seller that is liquidated in amount and constitutes a breach of Seller’s special warranty title contained in the Assignment) will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery The defect amount with respect to a Title Defect shall be determined without duplication of a Defect Notice under this Section 2.1any costs or losses included in another defect amount for Title Defects hereunder, or for which Buyer otherwise receives credit in the Buyer and the Sellers will in good faith negotiate the validity calculation of the claim and the amount of any adjustment to the Purchase Price using the following criteria:27242226 18 Asset Purchase Agreement

Title and Environmental Defects. The Purchase Price will be (a) decreased for any uncured Title Defects and uncured Environmental Defects in excess of the respective Individual Defect Thresholds and the Aggregate Defect Threshold and (b) increased for Title Benefits, in each case, in accordance with pursuant to this Section 2.1. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations (provided that the Buyer will not conduct any Phase phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the Sellers, which consent may be granted or withheld by the Sellers in their sole discretion, provided that, if the Sellers do not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Seller Indemnified Parties from and against all liabilities, damages, costs, losses and expenses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to investigations. On or before March, 29, 2010, the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Party. The Buyer must deliver to the Sellers, on or before May 31, 2013 (the “Defect Notice Date”), one or more Sellers a written notices notice specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this AgreementDefect, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together with all data and information reasonably necessary for in the Sellers to verify the existence of the alleged Title Defect Buyer’s possession or Environmental Defect control bearing thereon (a “Defect Notice”). Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified by the Buyer by such date in accordance with the foregoing, shall be deemed to have been waived by the Buyer for all purposes. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a notice of a Title Defect Notice or Environmental Defect under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:

Title and Environmental Defects. (a) The Purchase Price will be (ai) decreased for any uncured the amount of Title Defects and uncured Environmental Defects in excess of which individually exceed the respective Individual Defect Thresholds and that, after offsetting all Title Benefits which individually exceed the Individual Benefit Amount, exceed the Aggregate Defect Threshold and Threshold; or (bii) increased for the amount of Title BenefitsBenefits which individually exceed the Individual Benefit Amount that, after offsetting all Title Defects and Environmental Defects which individually exceed the Individual Defect Thresholds, exceed the Aggregate Benefit Threshold, in each case, in accordance with this Section 2.1; and, (b) any adjustments to the Purchase Price based on subpart (a) (i) or (ii) hereof will be made by the Parties within sixty (60) days after the end of the Cure Period, except that any adjustment related to matters that are submitted to the Consultants for resolution will be made by the Parties as provided in Section 2.1.10. The Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the SellersSeller, which consent may be granted or withheld by the Sellers Seller in their its sole discretion, provided that, if the Sellers do Seller does not consent to the conduct of a Phase II environmental investigation or examination requested by the Buyer with respect to any Property, then at the Buyer’s option such Property will not be sold by the Sellers Seller to the Buyer at the Closing, will constitute an “Excluded Asset” for all purposes of this Agreement Closing and the Purchase Price will be reduced by an amount equal to the Allocated Value thereof), as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Seller Indemnified Parties from and against all liabilities, damages, costs, losses and expenses Losses arising from or related to the activities of the Buyer or its employees, agents, contractors and other representatives in connection with such examinations or investigations except to the extent caused by the gross negligence or willful misconduct of any Sellers Indemnified Partyinvestigations. The Buyer must deliver to the SellersSeller, on or before May 316:00 p.m. Central Daylight Time on or before July 29, 2013 (the “Defect Notice Date”), one or more a written notices notice specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together with data and information evidencing the Buyer’s review of public record or other information proving the existence of such Title Defect or Environmental Defect reasonably necessary for the Sellers Seller to verify the existence of the alleged Title Defect or Environmental Defect (a “Defect Notice”). The Buyer shall bear the burden of proof to establish each alleged Title Defect or Environmental Defect. Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have Seller has not been specifically notified in writing by the Buyer by such date the Defect Notice Date in accordance with the foregoing, shall be deemed to have been waived by the Buyer for all purposes, except with respect to Buyer’s (or Buyer Designee’s, as applicable) rights under the special warranty of title contained in the Assignment and without prejudice to the Buyer’s rights under Section 10.2(a) below. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice of a Title Defect or Environmental Defect under this Section 2.1, the Buyer and the Sellers Seller will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:

Title and Environmental Defects. The Purchase Price will be (a) decreased only for any uncured those un-Cured Title Defects and uncured un-Cured Environmental Defects that are in excess of the respective Individual Defect Thresholds and the Aggregate Defect Threshold and (b) increased for Title BenefitsDeductible, in each case, in accordance with this Section 2.1. The During the period from the Execution Date to the Defect Notice Date, the Buyer may conduct, at its sole cost and expense, such title examination or investigation, and other examinations and investigations as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects exist (provided that the Buyer will not conduct any Phase II environmental investigations or examinations with respect to any of the Properties without the prior written consent of the SellersSeller, which consent may be granted or withheld by the Sellers Seller in their its sole discretion). The Buyer shall, provided thatand shall cause all of its representatives to, if abide by any Third Party operator’s safety rules, regulations and operating policies while conducting its due diligence evaluation of the Sellers do not consent Properties, including any environmental or other inspection or assessment of the Properties, and to the conduct extent required by any Third Party operator, execute and deliver any required bonding agreement of a Phase II environmental investigation such Third Party operator or examination requested maintain insurance as may be required by any Third Party operator, in each case before conducting the Buyer’s assessment on such Property. The Buyer with respect to acknowledges that any Property, then entry into the Seller’s or its Affiliates’ offices or onto the Properties shall be at the Buyer’s option sole risk and, subject to the terms hereof, that none of the Seller Indemnified Parties shall be liable in any way for any injury, Loss or damage arising out of such Property will not be sold by the Sellers entry that may occur to the Buyer at or any of its respective representatives pursuant to this Agreement. The Buyer hereby fully waives and releases any and all Liabilities against all of the ClosingSeller Indemnified Parties for any injury, will constitute an “Excluded Asset” for all purposes death, Loss or damage to any of this Agreement and its representatives or their property in connection with the Purchase Price will be reduced by an amount equal to the Allocated Value thereof)Buyer’s due diligence activities, as it may in its sole discretion choose to conduct with respect to the Properties in order to determine whether any Title Defects or Environmental Defects existEVEN IF SUCH LIABILITIES ARISE OUT OF OR RESULT FROM, IN WHOLE OR IN PART, THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF, OR THE VIOLATION OF LAW BY, A MEMBER OF THE SELLER INDEMNIFIED PARTIES, EXCEPTING ONLY LIABILITIES ACTUALLY RESULTING ON ACCOUNT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A MEMBER OF THE SELLER INDEMNIFIED PARTIES. The Buyer agrees to release, indemnify, defend and hold harmless the Sellers Seller Indemnified Parties from and against all liabilities, damages, costs, losses and expenses Losses arising from or related to the activities of the Buyer or its respective employees, agents, contractors and other representatives in connection with such examinations or investigations except investigations, other than any Losses to the extent caused by attributable to the gross negligence or willful misconduct of any Sellers of the Seller Indemnified PartyParties. The Buyer must may deliver to the SellersSeller, on or before May 31, 2013 (the “Defect Notice Date”), one or more written notices specifying each defect associated with the Properties that the Buyer asserts constitutes a Title Defect or an Environmental Defect, a specific description of each such Title Defect or Environmental Defect and the basis for such assertion under the terms of this Agreement, the amount of the adjustment to the Purchase Price that the Buyer asserts based on such Title Defect or Environmental Defect and its method of calculating such adjustment, together with data and information reasonably necessary for the Sellers to verify the existence a description or copies of the alleged Title Defect or Environmental Defect (a “Defect Notice”). Any matters that may otherwise constitute Title Defects or Environmental Defects, but of which the Sellers have not been specifically notified records and resources relied upon by the Buyer by such date in accordance with the foregoing, shall be deemed to have been waived by the Buyer for all purposes. All adjustments to the Purchase Price based on Title Defects will be based on the Allocated Values attributable to the affected Properties. Upon timely delivery of a Defect Notice under this Section 2.1, the Buyer and the Sellers will in good faith negotiate the validity of the claim and the amount of any adjustment to the Purchase Price using the following criteria:in