3.                                        The “Lawsuit:”   Plaintiffs have pursued, on their own behalf and for the Trust and its Unit Holders, based upon, among other things, the Trust Fund Doctrine and as authorized by the Trustee, claims in the case styled MOSH Holding, L.P. v. Pioneer Natural Resources Company; Pioneer Natural Resources USA, Inc.; Woodside Energy (USA) Inc.; and JPMorgan Chase Bank, N.A., as Trustee of the Mesa Offshore Trust ; Cause No. 2006-01984; pending in the 334 th  Judicial District Court of Harris County, Texas (“Lawsuit” or “Suit”).  This settlement disposes of all claims that were raised or that could have been raised in this Lawsuit, and Plaintiffs hereby acknowledge and agree that all of the claims they have pursued  (or could have pursued) in the Lawsuit, including claims known or unknown to the Plaintiffs, are settled as set forth below.

 

4.                                        No Admission of Liability:   This settlement is made for the purpose of avoiding the expense, uncertainty, and inconvenience of litigation and is the result of the compromise of disputed claims.  This settlement shall not be offered or construed as an admission of liability by any Party, and all Parties expressly deny any liability to any Party to the Lawsuit.

 

5.                                        Execution Date:   The Execution Date of this Settlement Agreement is May 18, 2009.

 

B.                                     Consideration

 

1.                                        Sufficiency :  The Parties agree that good and sufficient consideration has been exchanged pursuant to this Agreement.

 

2.                                        Pioneer Settlement Sum and Settlement Interests :  Pioneer will pay to the Trust the sum of $13 million (“Pioneer Settlement Sum”).  The timing for payment by Pioneer of the Pioneer Settlement Sum is set forth in paragraph D(2) below.  Pioneer will also sell its interests in Brazos Block A-39 (“Pioneer Settlement Interests”), which were identified in Pioneer’s tender letter of October 10, 2008 to Plaintiffs and JPMorgan, and Pioneer will contribute to the Trust all proceeds earned from this sale.  The Pioneer Settlement Interests are identified in the two Sales Assignments attached as Exhibits A-1 and A-2 to this Agreement.  The Pioneer Settlement Interests will be sold pursuant to the terms set forth in paragraph D(1) below.

 

3.                                        JPMorgan Settlement Sum :  JPMorgan will pay to the Trust the sum of $5 million (“JPMorgan Settlement Sum”).  The timing for payment by JPMorgan of the JPMorgan Settlement Sum is set forth in paragraph D(2) below.  JPMorgan will also release all claims for and forgive repayment of the existing $5 million loan provided by JPMorgan to the Trust; however, notwithstanding anything to the contrary provided for herein, JPMorgan may use the remaining balance of the credit facility and any other Trust income to pay Trust liabilities and expenses as permitted under the Royalty Trust Indenture (“Indenture”) prior to receipt of the Settlement Proceeds (defined in paragraph D(2)) below) and the Final Distribution to the Unit Holders (defined in paragraph D(4) below).

 

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4.                                        Woodside Settlement Sum :  Woodside will pay to the Trust the sum of $1 million (“Woodside Settlement Sum”).  The timing for payment by Woodside of the Woodside Settlement Sum is set forth in paragraph D(2) below.

 

5.                                        Settlement Proceeds:   The Woodside Settlement Sum, the JPMorgan Settlement Sum, and the Pioneer Settlement Sum will together be referred to as the  “Settlement Proceeds.”

 

6.                                        Release of Pioneer by all Parties :  Plaintiffs in all of their capacities, as alleged or otherwise, including on behalf of the Trust and/or the Partnership and/or the Unit Holders as authorized by the Trust Fund Doctrine and otherwise; the Trustee (on behalf of the Trust and its Unit Holders); the Trustee (in its capacity as general partner of the Partnership); JPMorgan (individually); and Woodside each agree to fully, finally and forever release, acquit, and discharge Pioneer (individually, as managing general partner of the Partnership, and as Subject Lessee and/or operator under the Conveyance), its predecessors, successors and assigns, from any and all claims, causes of action, demands and liabilities known or unknown, contingent or direct, that arise from or relate in any way to the claims, matters, or theories that have been or could have been asserted in the Lawsuit including, without limitation, any and all claims relating to or concerning in any way the acts and/or omissions of Pioneer or of any of the Parties.  These releasing parties expressly warrant and represent that no promise or agreement which has not herein been expressed has been made to or relied upon by them in executing this release and that the releasing parties are relying upon their own judgment and are not relying upon any statement or representation of Pioneer or any of the other Parties.  This release shall include and encompass any such claims, causes of action, demands, liabilities, matters or theories, including, but not limited to, those based in contract or in tort and whether based on alleged breaches of fiduciary duty, misapplication of fiduciary property, fraud, negligence or gross negligence, breach of contract, conspiracy, or aiding or abetting.  This release will also include, without limiting the foregoing, any claim by any releasing party for reimbursement of attorney’s fees or of any costs, other than as provided for in paragraph D(3).

 

7.                                        Release of JPMorgan a/k/a the Trustee:   Plaintiffs in all of their capacities, as alleged or otherwise, including on behalf of the Trust and/or the Partnership and/or the Unit Holders as authorized by the Trust Fund Doctrine and otherwise; Pioneer (individually, as managing general partner of the Partnership, and as Subject Lessee and/or operator under the Conveyance); and Woodside each agree to fully, finally and forever release, acquit, and discharge the Trustee, its predecessors, successors, and assigns from any and all claims, causes of action, demands and liabilities, known or unknown, contingent or direct, that arise from or relate in any way to the claims, matters, or theories that have been or could have been asserted in the Lawsuit including, without limitation, any and all claims relating to or concerning in any way the acts and/or omissions of JPMorgan or of any of the Parties.  These releasing parties expressly warrant and represent that no promise or agreement which has not herein been expressed has been made to or relied upon by them in executing this release and that the releasing parties are relying upon their own judgment and are not relying upon any statement or

 

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representation of JPMorgan or any of the other Parties.  This release shall include and encompass any such claims, causes of action, demands, liabilities, matters or theories, including, but not limited to, those based in contract or in tort and whether based on alleged breaches of fiduciary duty, misapplication of fiduciary property, fraud, negligence or gross negligence, breach of contract, conspiracy, or aiding or abetting.  This release will also include, without limiting the foregoing, any claim by any releasing party for reimbursement of attorney’s fees or of any costs, other than as provided for in paragraph D(3).

 

8.                                        Release of Plaintiffs :  JPMorgan (individually, as Trustee on behalf of the Trust and its Unit Holders and as general partner of the Partnership); Pioneer (individually, as managing general partner of the Partnership, and as Subject Lessee and/or operator under the Conveyance); and Woodside each agree to fully, finally and forever release, acquit, and discharge Plaintiffs, their predecessors, successors, and assigns from any and all claims, causes of action, demands and liabilities, known or unknown, contingent or direct, that arise from or relate in any way to the claims, matters, or theories that have been or could have been asserted in the Lawsuit including, without limitation, any and all claims relating to or concerning in any way the acts and/or omissions of Plaintiffs or of any of the Parties.  These releasing parties expressly warrant and represent that no promise or agreement which has not herein been expressed has been made to or relied upon by them in executing this release and that the releasing parties are relying upon their own judgment and are not relying upon any statement or representation of Plaintiffs or any of the other Parties, subject to paragraph E(5) below.  This release shall include and encompass any such claims, causes of action, demands, liabilities, matters or theories, including, but not limited to, those based in contract or in tort and whether based on alleged breaches of fiduciary duty, misapplication of fiduciary property, fraud, negligence or gross negligence, breach of contract, conspiracy, or aiding or abetting.  This release will also include, without limiting the foregoing, any claim by any releasing party for reimbursement of attorney’s fees or of any costs, other than as provided for in paragraph D(3).

 

9.                                        Release of Woodside :  Plaintiffs in all of their capacities, as alleged or otherwise, including on behalf of the Trust and/or the Partnership and/or the Unit Holders as authorized by the Trust Fund Doctrine and otherwise; Pioneer (individually, as managing general partner of the Partnership, and as Subject Lessee and/or operator under the Conveyance); and JPMorgan (individually, as general partner of the Partnership, and as Trustee on behalf of the Trust and its Unit Holders) each agree to fully, finally and forever release, acquit, and discharge Woodside, its predecessors, successors, and assigns from any and all claims, causes of action, demands and liabilities, known or unknown, contingent or direct, that arise from or relate in any way to the claims, matters, or theories that have been or could have been asserted in the Lawsuit including, without limitation, any and all claims relating to or concerning in any way the acts and/or omissions of Woodside or of any of the Parties.  These releasing parties expressly warrant and represent that no promise or agreement which has not herein been expressed has been made to or relied upon by them in executing this release and that the releasing parties are relying upon their own judgment and are not relying upon any statement or representation

 

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of Woodside or any of the other Parties.  This release shall include and encompass any such claims, causes of action, demands, liabilities, matters or theories, including, but not limited to, those based in contract or in tort and whether based on alleged breaches of fiduciary duty, misapplication of fiduciary property, fraud, negligence or gross negligence, breach of contract, conspiracy, or aiding or abetting.  This release will also include, without limiting the foregoing, any claim by any releasing party for reimbursement of attorney’s fees or of any costs, other than as provided for in paragraph D(3).

 

10.                                  Release of Trust and Partnership:    Plaintiffs in all of their capacities, as alleged or otherwise, including on behalf of the Trust and/or the Partnership and/or the Unitholders as authorized by the Trust Fund Doctrine and otherwise; Pioneer (individually, as managing general partner of the Partnership, and as Subject Lessee and/or operator under the Conveyance); JPMorgan (individually, as general partner of the Partnership, and as Trustee on behalf of the Trust and its Unit Holders); and Woodside each agree to fully, finally and forever release, acquit, and discharge the Trust and the Partnership from any and all claims, causes of action, demands and liabilities, known or unknown, contingent or direct, that arise from or relate in any way to the claims, matters, or theories that have been or could have been asserted in the Lawsuit including, without limitation, any and all claims relating to or concerning in any way the acts and/or omissions of the Trust and/or the Partnership or of any of the Parties.  These releasing parties expressly warrant and represent that no promise or agreement which has not herein been expressed has been made to or relied upon by them in executing this release and that the releasing parties are relying upon their own judgment and are not relying upon any statement or representation of the Trust, the Partnership or any of the other Parties.  This release shall include and encompass any such claims, causes of action, demands, liabilities, matters or theories, including, but not limited to, those based in contract or in tort and whether based on alleged breaches of fiduciary duty, misapplication of fiduciary property, fraud, negligence or gross negligence, breach of contract, conspiracy, or aiding or abetting.  This release will also include, without limiting the foregoing, any claim by any releasing party for reimbursement of attorney’s fees or of any costs, other than as provided for in paragraph D(3).

 

11.                                  Release by the Trust and Partnership :  The Trust (through the Trustee and through Plaintiffs in their representative capacity, as alleged or otherwise, under the Trust Fund Doctrine and otherwise) and the Partnership (through the Trustee as general partner, Plaintiffs in their representative capacity, as alleged or otherwise, under the Trust Fund Doctrine and otherwise, and Pioneer as managing general partner) agree to fully, finally and forever release, acquit, and discharge Plaintiffs and Defendants, their predecessors, successors, and assigns from any and all claims, known or unknown, contingent or direct,  that arise from or relate in any way to the claims, causes of action, demands and liabilities, known or unknown, that have been or could have been asserted in the Lawsuit including, without limitation, any and all claims relating to or concerning in any way the acts and/or omissions of Plaintiffs or Defendants.  These releasing parties expressly warrant and represent that no promise or agreement which has not herein been expressed has been made to or relied upon by them in executing this release and that the releasing

 

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parties are not relying upon any statement or representation of Plaintiffs or Defendants.  This release shall include and encompass any such claims, causes of action, demands, liabilities, matters or theories, including, but not limited to, those based in contract or in tort and whether based on alleged breaches of fiduciary duty, misapplication of fiduciary property, fraud, negligence or gross negligence, breach of contract, conspiracy, or aiding or abetting.  This release will also include, without limiting the foregoing, any claim by any releasing party for reimbursement of attorney’s fees or of any costs, other than as provided for in paragraph D(3).

 

12.                                  Limitations on Releases :  The claims released pursuant to this section are referred to hereafter as “Released Claims.”  The following is carved out from the scope of the Released Claims:

 

a.                                        JPMorgan/Pioneer Commercial Lending:   Any claims to enforce the rights and obligations owed between and amongst Pioneer, in its individual capacity, and JPMorgan, in its individual capacity, arising out of any commercial lending and/or non-Trust related relationships and contracts existing between them;

 

b.                                       JPMorgan/Woodside Commercial Lending:   Any claims to enforce the rights and obligations owed between and amongst Woodside, in its individual capacity, and JPMorgan, in its individual capacity, arising out of any commercial lending and/or non-Trust related relationships and contracts existing between them;

 

c.                                        Pioneer/Woodside Ordinary Course:   Any claims to enforce the day-to-day rights and obligations owed between and amongst Pioneer, in its individual capacity, and Woodside, arising out of the ordinary course, operating-based relationship set forth in the Offshore Operating Agreement during the time such agreement is effective between Pioneer and Woodside, and in particular does not include any obligations that may exist associated with Pioneer’s assignment of its interests in the South Half of Brazos Block A-39 to occur as part of the sales process described below.  However, this limitation does not in any way exclude from the scope of coverage of the releases provided between and amongst Pioneer and Woodside any claims, causes of action, demands and liabilities, known or unknown, contingent or direct, that arise from or relate in any way to the claims, matters, or theories that have been or could have been asserted in the Lawsuit.

 

d.                                       Enforcement Rights:   Any claims to enforce the rights and obligations set forth pursuant to the Final Settlement Agreement between the Parties or the terms of the Final Agreed Judgment.

 

C.                                     Conditions Precedent

 

1.                                        Court Approval of the Terms of the Settlement Agreement :  The consideration by the Parties set forth in Part B (Consideration) is subject to and contingent upon the approval by the Court of the Settlement Agreement.  The Settlement Agreement will be presented to the Court for consideration and approval and a settlement

 

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hearing will be scheduled so as to provide adequate time for the Trustee to notify the Unit Holders in accordance with the notice provisions set forth in the Indenture and the Texas Trust Code.  The Parties will cooperate in submitting  a Joint Motion for Approval and/or any other reasonably necessary filing to support the approval of the Settlement Agreement and entry of the Final Agreed Judgment.  Should the Court within a reasonable time fail to approve this Settlement Agreement pursuant to the terms set forth in the Final Agreed Judgment (attached hereto as Exhibit B), subject to paragraph C(2), below, any party to this Settlement Agreement will have the right to declare the Settlement Agreement void and unenforceable.

 

2.                                        Entry by the Court of the Final Agreed Judgment:   The consideration by the Parties set forth in Part B (Consideration) is also subject to and contingent upon entry by the Court of the Final Agreed Judgment in the form attached as Exhibit B to this Settlement Agreement, subject to the terms of this paragraph C(2).  For purposes of this Settlement Agreement, the Final Agreed Judgment means and includes findings of fact and conclusions of law (that may be filed separately pursuant to Tex. R. Civ. P. 299(a) accompanying the Final Agreed Judgment, which are likewise attached hereto as Exhibit C).  Should the Court materially modify the Final Agreed Judgment, any party to this Settlement Agreement will have the right to declare the Settlement Agreement void and unenforceable as to that party.  Material modifications would include (but would not be limited to) modifications altering the releases (or their scope); the termination procedures; the scope and enforceability of the Final Agreed Judgment; and/or if the Court fails to find that the Settlement Agreement is fair to and in the best interest of the Trust and its Unit Holders.  The Parties further agree that they will cooperate in submitting any redrafted Agreed Final Judgment (including any finding of fact or conclusion of law) containing non-material modifications as may be requested by the Court.

 

3.                                        Appeal of the Final Agreed Judgment:   Should any party, person or entity appeal the Court’s entry of the Final Agreed Judgment, the release of Settlement Proceeds held in escrow to the Trust, as described in (D)(2) below, will not occur until such time as the Final Agreed Judgment becomes final and non-appealable.  Should the Final Agreed Judgment be reversed or modified, any party to this Settlement Agreement will have the right to declare the Settlement Agreement void and unenforceable.

 

D.                                     Liquidation and Funding Process

 

1.                                        Sale of Partnership Assets and Pioneer Settlement Interests:

 

a.                                        Timing of Sale:   After the Settlement Agreement is approved and the Final Agreed Judgment entered, the Trustee will complete the liquidation and wind up process for the Trust and will instruct Pioneer to do the same with respect to the Partnership.  As part of this liquidation process, the Pioneer Settlement Interests and the Partnership Assets will be offered for sale via a public auction.  The sale will be conducted by Pioneer consistent with the terms contained herein as approved by the Court and the instructions of the Trustee.  The sale shall be conducted promptly

 

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following the approval of the Settlement Agreement and entry of the Agreed Final Judgment.  In conducting the sale, Pioneer may utilize the services of the Oil & Gas Asset Clearinghouse or, as necessary, any other auction service selected by Pioneer.  The effective date of the sale of the Pioneer Settlement Interests and the Partnership Interests will be 7:00 a.m. CT of the first day of the month in which the auction occurs subject to the procedures of the auction service.

 

b.                                       Sale by Lot:   The Partnership Assets and the Pioneer Settlement Interests will be offered in two lots (“Sales Lots” or “Lots”) as follows:

 

(i)                                      the “West Delta Lot” comprised of the Partnership’s West Delta 61 overriding royalty interest together with any other interests of the Partnership in West Delta Block 61.  The interests comprising the West Delta Lot are described in the West Delta Lot Assignment, which together with the ancillary sales documentation is attached hereto as Exhibit A-1;

 

(ii)                                   the “Brazos A-39 Lot” comprised of (a) Pioneer’s record title and operating rights in and to the Brazos A-39 lease, (b) the $1.6 million dedicated plugging and abandonment escrow fund earmarked for the Brazos A-39 lease, which will remain escrowed until abandonment of the lease is complete (the Abandonment Agreement and Abandonment Escrow Agreement are attached hereto as Exhibits D and E, respectively), and (c) certain interests that burden Pioneer’s record title and/or operating rights including Pioneer’s and the Partnership’s overriding royalty interest in the Midway and the Nimitz wells created under the Pioneer-Woodside 2003 farmout and the Pioneer-Hydro Gulf of Mexico 2006 farmout and the royalty interest under the Overriding Royalty Conveyance as to the areas not covered by the Pioneer-Woodside farmout.  The Brazos A-39 Lot interest will be sold subject to the operating rights in and to the south half of the Brazos A-39 lease assigned to Woodside in that Partial Assignment of Operating rights made effective January, 2003.   The interests comprising the Brazos A-39 Lot are described in the Brazos A-39 Lot Assignment, which together with the ancillary sales documentation is attached hereto as Exhibit A-2.

 

c.                                        Minimum Bid/Right of First Refusal Agreements: Plaintiffs have designated MOSH, LLC as a “Qualified Bidder” for the West Delta Lot and the Brazos A-39 Lot. The Qualified Bidder will have the right (but not the obligation) within five (5) business days following the entry of the Agreed Final Judgment by the Court to enter into a separate Right of First Refusal Agreement pertaining to the public auction of the Sales Lots as set forth below and in the Right of First Refusal Agreement attached hereto as Exhibit F.  To constitute a “Qualified Bidder,” so as to be able to enter into the Right of First Refusal Agreement within the time specified above, the person or entity identified by Plaintiffs must demonstrate to Pioneer that the person or entity meets the following requirements:  (a) with respect to both Sales Lots, the Qualified Bidder must place in escrow pursuant to the terms of the Right of First Refusal Escrow Agreement (attached hereto as Exhibit G) $375,000 (“Escrow Sums”) for each Sales Lot (i.e., $750,000 in the aggregate) within five (5) business days following the date the trial court enters an Agreed Final Judgment approving the terms of the Final Settlement; and (b) with respect

 

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to the Brazos A-39 Lot, demonstrate its qualification with the Minerals Management Service of the US Department of the Interior (“MMS”) to hold record title interest in and be a qualified and bonded operator for offshore interests pursuant to the regulations and requirements of the MMS.  Should the Qualified Bidder exercise its right to enter into the Right of First Refusal Agreement, it will become obligated to provide a minimum bid on each lot of $375,000 and in the event no higher bid is received, the Qualified Bidder will be obligated to purchase the Lot for the $375,000 sum escrowed or the Lots for the $750,000 sum escrowed.  Should bid(s) be received that are higher than the $375,000 sums escrowed by the Qualified Bidder, the Qualified Bidder will have the right (but not the obligation) to match the bids and purchase the Lot(s).

 

d.                                       Completion of Sale :  The Lot(s) will be sold to the highest bidder(s) subject to the exercise by the Qualified Bidder of its Right of First Refusal.  Should the Qualified Bidder choose not to exercise its Right of First Refusal, then the Lot(s) will be sold to the highest bidder(s).  In the event the Qualified Bidder exercises its Right of First Refusal, but then fails to close for any reason, Pioneer will offer the Lot(s) to the highest remaining bidder(s) and close the sale(s) should such bidder(s) agree to purchase the Lots at the price offered during the bidding process, and shall continue such offers to bidders in order to close a sale or sales for the highest available cash price.  If such bidders are unwilling to purchase the Lot(s) at the prices they bid during the auction, or if this liquidation process does not result, for any reason, in a sale of both of the Lots, Pioneer is entitled (at its sole option and its sole discretion) to dispose of the Pioneer Settlement Interests in any manner it sees fit.  In such event, Pioneer will have the absolute right, in its sole discretion, to cancel, extinguish, or otherwise dispose of all or part of such interest(s).  For example, and not by way of limiting Pioneer’s options, Pioneer may withdraw from its participation in and ownership in Brazos Block A-39 pursuant to the terms of the Offshore Operating Agreement governing Brazos Block A-39.  It is further agreed and understood that if any of the Partnership’s assets remain after the sales process for which no buyer can be found, Pioneer will have the absolute right, in its sole discretion, to cancel, extinguish, or otherwise dispose of all or part of such interest(s).  Up until the time of any sale or other disposition of the Partnership’s assets, Pioneer, as managing general partner of the Partnership, shall continue to operate the Partnership’s assets and distribute in the normal course any net proceeds to the Trustee for the benefit of the Trust.

 

2.                                        Payment of Sales Proceeds and Settlement Proceeds:   Pioneer will tender the proceeds obtained from the sale of both Lots (“Sales Proceeds”) to the Trustee promptly upon receipt by Pioneer.  Upon payment of the Sales Proceeds to the Trustee, the Partnership will be deemed terminated, liquidated, and wound up in all respects.  Within seven (7) business days after the sales auction is held, Defendants will tender the Settlement Proceeds to JPMorgan to be held in escrow at JPMorgan in interest bearing accounts.  Once the Final Agreed Judgment becomes final and non-appealable, but not before, the Settlement Proceeds will be released to the Unit Holders by the Trustee for distribution in accordance with the terms set forth below in paragraph D(4).  The combined sum of the Settlement Proceeds and Sales Proceeds, after they have been released to the Trustee for distribution, is referred to as the “Gross Resolution Proceeds.”

 

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Should the Final Agreed Judgment be reversed, the Settlement Proceeds (together with accrued interest) will be remitted by JPMorgan to Defendants.

 

3.                                        Plaintiffs’ Counsel’s Attorney’s Fees :  Plaintiffs’ counsel will seek recovery of attorney’s fees of six million two hundred fifty thousand dollars ($6,250,000.00) and expenses of approximately two million five hundred thousand dollars ($2,500,000.00).  The actual amount awarded will be subject to Court approval.  Should the Court determine that a different amount should be awarded for attorney’s fees and expenses to Plaintiffs’ counsel, such a determination will not constitute grounds for voiding this Settlement Agreement.  The fees and expenses will be paid by the Trustee out of the Gross Resolution Proceeds after (but not before) the Settlement Proceeds are released to the Trust in accordance with paragraph D(4) below.  If the Settlement Proceeds are not released to the Trust from the JPMorgan escrow accounts referred to in D(2) above (for example if the Agreed Final Judgment is reversed on appeal), no attorney’s fees or expenses will be paid to Plaintiffs’ counsel under this Settlement Agreement.

 

4.                                        Liquidation of Trust and Partnership :  The Trustee will pay Plaintiffs’ counsel’s attorney’s fees and expenses awarded by the Court pursuant to the terms of the Final Agreed Judgment out of the Gross Resolution Proceeds per the paragraph above.  In addition, the Trustee will deduct the reasonable costs incurred subsequent to April 27, 2009 of effecting the sales of the Lots (including without limitation any commission or sales administrative charges) and other fees and expenses relating to the administration of the Trust for which the Trustee is entitled to pay or to receive payment under the Indenture, notwithstanding anything to the contrary provided herein.  The remaining sum, which will include any other ordinary course proceeds received by the Trust (“Net Resolution Proceeds”) will be distributed by check to the Unit Holders, as of the future Record Date as provided below and approved by the Court in the Agreed Final Judgment.  This distribution, which shall take place promptly after, but in no event later than the 30 th  day following, the Record Date, is referred to as the “Final Distribution.”  Plaintiffs will share in the Final Distribution based solely upon their pro rata beneficial interest in the Trust as of the Record Date.  The Record Date shall be twenty (20) days after the last of the following events to occur: (1) the payment of the Sales Proceeds to the Trustee, or (2) the day this Final Agreed Judgment becomes final and non-appealable, or (3) if appealed, and the appeal does not result in a reversal or modification, the day on which no further appeal or petition for review to a higher court can be taken.  Once the Final Distribution has been made by the Trustee, the Trust will be deemed terminated, liquidated, and wound up in all respects.  Should any Unit Holder’s share of the Final Distribution be retained (for example, as a result of the failure of Unit Holders to accept and/or cash their distribution checks), the retained sums will escheat as provided for under Texas Law.

 

E.                                       Miscellaneous Terms

 

1.                                        Dispute Resolution:   The Parties agree that if any dispute arises between the Parties under the Settlement Agreement prior to the date that the Trustee makes the Final Distribution, Grant Cook will serve as the sole arbitrator, and he will resolve any

 

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such disputes in accordance with the arbitration procedures he believes (in his sole discretion) to be appropriate.  Mr. Cook’s decision will be final and binding; however, Mr. Cook is not empowered to alter any of the express terms of this Settlement Agreement.  This provision, among others, will be included in the Court’s Agreed Final Judgment.  Should any dispute between the Parties arise after the Final Distribution is made by the Trustee, or should Mr. Cook be unable to act as an arbitrator for any dispute arising prior to the Final Distribution, such dispute(s) will be resolved by binding arbitration with a single arbitrator that must be an attorney admitted to practice law in Texas under the administration of the American Arbitration Association pursuant to its Commercial Arbitration Rules.

 

2.                                        Construction of Agreement: The Parties agree that the terms of this Settlement Agreement were negotiated and reviewed by the Parties and their counsel and that all participated in the drafting.  To that point, the terms of this Settlement Agreement are not to be construed against any of the drafters.

 

3.                                        Reasonable Cooperation:   The Parties will reasonably cooperate with each other with respect to the preparation of additional settlement documentation (and related materials) necessary to effectuate the completion of this settlement in accordance with the terms set forth in this Settlement Agreement.

 

4.                                        Final Agreement:  This Settlement Agreement supersedes any prior discussions and/or agreements (whether oral, written or other) including, without limitation, the Term Sheet.  No modifications or amendments will be enforced unless such modifications are in writing signed by the Party to be charged.

 

5.                                        No Reliance:   The Parties disclaim any reliance upon any representations (or omissions) by any other party, with the exception of Plaintiffs’ representation that neither MOSH Holding, L.P. and Dagger-Spine nor any of their owners, officers, or affiliates have any ownership, direct or indirect, or interest, direct or indirect, in MOSH, LLC.  The Parties and their counsel have had the full and complete opportunity to litigate the issues (and/or related issues) and have agreed to the terms set forth in this Settlement Agreement.  The Parties further disclaim any right to assert any claim for fraudulent inducement (or similar legal theory used to set aside releases) and agree that the releases provided herein are enforceable to the fullest extent permissible under Texas law.

 

6.                                        Texas Law:   The enforcement, application, and interpretation of this Settlement Agreement is subject to Texas Law without regard to any conflicts of law principles.

 

Executed by	/s/ William F. Hannes
Printed	William F. Hannes
Date	May 18, 2009

 

On behalf of Pioneer Natural Resources Company and Pioneer Natural Resources Company USA, Inc., both individually, and as Managing General

 

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Partner of the Mesa Offshore Royalty Partnership, and as Subject Lessee and/or operator under the Overriding Royalty Conveyance

 

Executed by	/s/ Timothy M. Roberson
Printed	Timothy M. Roberson
Date	May 18, 2009

 

On behalf of MOSH Holding, L. P. in its individual capacity, and for the limited purposes set forth herein, on behalf of the Mesa Offshore Trust and its Unit Holders and the Mesa Offshore Royalty Partnership

 

Executed by	/s/ Loyd W. Powell, Jr.
Printed	Loyd W. Powell, Jr.
Date	May 18, 2009

 

On behalf of Dagger-Spine Hedgehog Corporation in its individual capacity, and for the limited purposes set forth herein, on behalf of the Mesa Offshore Trust and its Unit Holders and the Mesa Offshore Royalty Partnership

 

Executed by	/s/ T.J. Foley
Printed	T.J. Foley
Date	May 18, 2009

 

On behalf of JPMorgan Chase Bank, N.A., as Trustee of the Mesa Offshore Trust and its Unit Holders, as General Partner of the Mesa Offshore Royalty Partnership, and individually

 

Executed by	/s/ Richard O’Loughlin
Printed	Richard O’Loughlin
Date	May 18, 2009

 

On behalf of Woodside Energy (USA) Inc.

 

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Exhibit A-1

 

This Assignment and Bill of Sale contains provisions requiring one party to be responsible
for the negligence, strict liability or other fault of the other party.

 

Notice of Confidentiality Rights: If you are a natural person, you may remove or strike any of the following information from this instrument before it is filed for record in public records: your social security number or your driver’s license.

 

ASSIGNMENT AND BILL OF SALE

(West Delta)

 

OFFSHORE LOUISIANA
PARISH OF PLAQUEMINES	§
	§
STATE OF LOUISIANA	§

 

This Assignment and Bill of Sale (“ Assignment ”) dated effective as of the      day of                         , 2009, is executed by and between Pioneer Natural Resources USA, Inc., a Delaware corporation (“ Pioneer USA ”), individually and on behalf of the Mesa Offshore Royalty Partnership (the “ Mesa Partnership ”) in its capacity of Managing General Partner, with the address of 5205 N. O’Connor Blvd., Suite 900, Irving, Texas 75039-3746, (Pioneer and Mesa Offshore being collectively called the “ Assignor ”), and

 

(“ Assignee ”), hereafter sometimes referred to individually as a “ Party ”, or collectively as the “ Parties ”.

 

I.

 

Assignor desires to sell and transfer to Assignee the assets described herein further to the bid by Assignee in Sale No. 231 in The Oil & Gas Asset Clearinghouse’s July 8, 2009 auction.[(Insert if Applicable), all pursuant to that certain RIGHT OF FIRST REFUSAL AGREEMENT dated the      day of                , 2009, between Assignor and Assignee.]    The assets include certain interests owned by Pioneer USA and/or certain interests owned by the Mesa Partnership, as specified herein.  The sale and transfer shall occur as of the Effective Time (as defined hereinafter) and the benefits and responsibilities associated with the assets shall be owned and held by Assignee as of and after the Effective Time, as specified herein.  Therefore, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and of the performance by Assignee of the covenants, agreements, obligations and conditions hereinafter contained, to be kept and performed by Assignee, effective as of July 1, 2009 at 7:00 a.m., (“ Effective Time ”), Assignor assigns unto Assignee, all of Assignor’s rights, titles and interests, in and to the following described assets, less and except the Excluded Assets (the “ Assets ”):

 

 

An undivided 90% of that certain after payout twelve and one-half percent of six-sixths (12.5% of 6/6ths) overriding royalty interest reserved in that certain Assignment of Operating Rights dated effective May 13, 1998, between Pioneer USA and Basin Exploration, Inc., recorded in C.O.B. 940 at Folio 820 of the records of Plaquemines Parish, Louisiana and in that certain Assignment of Operating Rights dated effective as of April 1, 2004, between Pioneer USA and Stone Energy Corporation, et al ., recorded in C.O.B. 1088, at Folio 372 of the records of Plaquemines Parish, Louisiana, covering the oil and gas lease listed on Exhibit “A” (the “ Lease ”)  (the “ Conveyed Overriding Royalty Interest ”).

 

II.

 

(a) Notwithstanding anything in this Assignment to the contrary, the Assets do not include, and Pioneer USA, individually, hereby reserves and retains unto itself, all of its rights, titles and interests in and to the following: (i) an undivided ten percent (10%) of that certain after payout twelve and one-half percent of six-sixths (12.5% of 6/6ths) overriding royalty interest reserved in that certain Assignment of Operating Rights dated effective May 13, 1998, between Pioneer USA and Basin Exploration, Inc., recorded in C.O.B. 940 at Folio 820 of the records of Plaquemines Parish, Louisiana and in that certain Assignment of Operating Rights dated effective as of April 1, 2004, between Pioneer USA and Stone Energy Corporation, et al ., recorded in C.O.B. 1088, at Folio 372 of the records of Plaquemines Parish, Louisiana (the “Retained Overriding Royalty Interest”); and (ii) all rights of reassignment of interest in the Lease as expressly provided for in paragraph 10 of the Basin Farmout (as identified on Exhibit “B” hereto) and all rights of reassignment of interest in the Lease provided for in paragraph 4.9 of the Stone Farmout (as defined in said Exhibit “B”) ( the “Retained Reassignment Rights”); and

 

(b) notwithstanding anything is this Assignment to the contrary, the Assets do not include, and each Assignor herby reserves and retains unto itself, any and all of such Assignor’s rights, titles and interests in and to the following:  (i) seismic, geologic and geophysical records, information, and interpretations relating to the Assets; (ii) any and all records which consist of previous, contemporaneous or subsequent offers, discussions, or analyses associated with the purchase, sale or exchange of the Assets or any part thereof, proprietary information, personnel information, tax information, information covered by a non-disclosure obligation of a third party and information or documents covered by a legal privilege; (iii) originals or copies of all records, files, contracts and agreements pertaining to the Assets; (iv) all oil and gas produced prior to the Effective Time and the proceeds therefrom pertaining to the Assets; (v) any refund of taxes, costs or expenses borne by Assignor or Assignor’s predecessors in title pertaining to the Assets attributable to the period of time prior to the Effective Time; (vi) any and all proceeds receivable from the settlement or final adjudication of contract disputes with lessors, insurers, co-owners, or operators of the Assets or with assignors, gatherers processors or transporters of hydrocarbons from or attributable to the Assets, including without limitation, settlement of royalty, take-or-pay, pricing or volume adjustments disputes, insofar as said proceeds are attributable to periods

 

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of time prior to the Effective Time; (vii) all rights of use of Assignor’s or any Affiliate’s name, marks, trade dress or insignia and all of Assignor’s intellectual property; and (viii) all rights and claims of such Assignor against third parties (including rights and claims of such Assignor against the other Assignor), asserted and unasserted, known and unknown, relating to the period prior to the Effective Time relating to the Assets.  The properties described in clauses (i) through (viii) above, together with the Retained Overriding Royalty Interest and the Retained Reassignment Rights, are collectively referred to herein as the “Excluded Assets.”

 

III.

 

(a)           Prior Use of Lease .  ASSIGNEE ACKNOWLEDGES AND AGREES THAT: THE LEASE AND REAL PROPERTY HAVE BEEN USED OR MAY HAVE BEEN USED FOR EXPLORATION, DEVELOPMENT, PRODUCTION, STORAGE, TREATMENT, PROCESSING, DISPOSAL, INJECTION AND TRANSPORTATION OF OIL OR GAS AND OTHER SUBSTANCES AND RELATED OIL AND GAS FIELD OPERATIONS.  POLLUTION, SUBSIDENCE, FRACTURES OR PHYSICAL CHANGES IN THE REAL PROPERTY MAY HAVE OCCURRED AS A RESULT OF SUCH USES.  THE LEASE OR THE REAL PROPERTY ALSO MAY INCLUDE BURIED PIPELINES, WASTES AND OTHER EQUIPMENT, WHETHER OR NOT OF A SIMILAR NATURE, THE LOCATIONS OF WHICH MAY BE HIDDEN OR NOT NOW BE KNOWN OR NOT READILY APPARENT BY A PHYSICAL INSPECTION OF THE AFFECTED LEASE OR REAL PROPERTY.  HYDROCARBONS AND OTHER SUBSTANCES, INCLUDING HAZARDOUS SUBSTANCES, MAY HAVE COME TO BE RELEASED OR LOCATED ON OR BENEATH THE SURFACE OF THE LEASE OR THE REAL PROPERTY.

 

(b)           Limitation and Disclaimer of Representations and Warranties .  ASSIGNEE ACKNOWLEDGES THAT ASSIGNOR HAS NOT MADE, AND ASSIGNOR HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE CONDITION OF ANY WELL, IMMOVABLE PROPERTY, MOVABLE PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY SITUATED ON OR CONSTITUTING ANY PART OF THE LEASE (INCLUDING, WITHOUT LIMITATION, (a) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (d) ANY RIGHTS OF ASSIGNEE UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, (e) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM REDHIBITORY VICES OR DEFECTS OR OTHER VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN, (f) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, (g) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, AND (h) ANY IMPLIED OR EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS OR SUBSTANCES INTO THE ENVIRONMENT OR THE PRESENCE OF MATERIALS OR SUBSTANCES IN, ON OR UNDER THE LEASE OR REAL PROPERTY OR PROTECTION OF THE ENVIRONMENT OR HEALTH. IN ADDITION, ASSIGNOR

 

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SPECIFICALLY NEGATES AND MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, INTERPRETATIVE INFORMATION, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO ASSIGNEE IN CONNECTION WITH THIS ASSIGNMENT, THE ASSETS OR THE CONTEMPLATED TRANSACTIONS, INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF THE ASSETS, PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE ASSETS OR THE ABILITY OR POTENTIAL OF THE LEASE TO PRODUCE HYDROCARBONS OR THE ENVIRONMENTAL CONDITION OF THE LEASE OR PROPERTY OR ANY OTHER MATTERS CONTAINED IN CONFIDENTIAL INFORMATION OR ANY OTHER MATERIALS FURNISHED OR MADE AVAILABLE TO ASSIGNEE BY ASSIGNOR OR BY ASSIGNOR’S REPRESENTATIVES (DEFINED BELOW).  ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION AND OTHER MATERIALS FURNISHED BY ASSIGNOR OR BY ASSIGNOR’S REPRESENTATIVES OR OTHERWISE MADE AVAILABLE TO ASSIGNEE OR ASSIGNEE’S REPRESENTATIVES OR ASSIGNEE’S AFFILIATES ARE PROVIDED AS A CONVENIENCE, AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST ASSIGNOR, ASSIGNOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES.  ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT ASSIGNEE’S (AND ITS SUCCESSORS AND ASSIGNS’) SOLE RISK.

 

For purposes of Articles III and Article IV of this Assignment, “ Real Property ”, “ Real Properties ”, “ REAL PROPERTY ” or “ REAL PROPERTIES ” mean the real property or properties, surface and subsurface, in which and on which the Assets, or any portion thereof, are located, operated, pertain, or relate and includes the land, if any, described or referred to in Exhibit “A”.

 

IV.

 

(a)   Claims/Laws/Affiliates Defined .  As used in this Assignment, “ Claims ”  or “ CLAIMS ” shall include costs, expenses, obligations, claims, demands, lawsuits, causes of action, liabilities, damages, fines, penalties and judgments of any kind or character, whether matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, and all costs, expenses and fees (including without limitation, interest, attorneys’ fees, costs of experts, court costs, arbitration costs and costs of investigation) incurred in connection therewith, including, but not limited to claims arising from or directly or indirectly related to personal or bodily injury, death, property damage or loss, environmental damage or the remediation thereof, contract, royalty, and suspense obligations attributable or relating in any way to the Assets.  “ Laws ” means laws, statutes, ordinances, permits, decrees, orders, judgments, rules or regulations which are promulgated, issued or enacted by a governmental entity (whether federal, state or local) or tribal authority having appropriate jurisdiction. “ Affiliate ” or “ Affiliates ” means, as to any entity, corporation, partnership, company or person, each other entity, corporation, partnership, company or person that directly or indirectly (through one or more intermediaries or otherwise) controls, is controlled by, or is under common control with, such entity, corporation, partnership, company or person.

 

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(b)           (i) IT IS THE EXPRESS INTENT AND AGREEMENT OF ASSIGNOR AND ASSIGNEE THAT ASSIGNEE SHALL ACCEPT THE ASSETS IN THEIR “AS IS” AND “WHERE IS” CONDITION, SUBJECT TO AND WITH ANY AND ALL FAULTS, DEFECTS, DEFICIENCIES, IRREGULARITIES AND CLAIMS RELATED OR ATTRIBUTABLE IN ANY MANNER THERETO, INCLUDING, WITHOUT LIMITATION, TITLE DEFECTS, LEASE TERMINATION, ENVIRONMENTAL DEFECTS, CESSATIONS IN PRODUCTION OR ANY OTHER MATTER AFFECTING IN ANY RESPECT THE TITLE OR PHYSICAL CONDITION OF, OR THE RIGHT TO OWN, USE, OPERATE, POSSESS, DEVELOP OR ENJOY, THE ASSETS, WHETHER KNOWN OR UNKNOWN, LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, DIRECT OR INDIRECT .

 

(ii) WITHOUT FURTHER ACTION OR DOCUMENTATION, ASSIGNEE, ITS SUCCESSORS AND ASSIGNS HEREBY, (1) ASSUMES, SHALL BE RESPONSIBLE FOR AND SHALL COMPLY WITH ALL DUTIES AND OBLIGATIONS, EXPRESS OR IMPLIED, ARISING AT ANY TIME WITH RESPECT TO THE ASSETS, WHETHER ARISING BEFORE, ON OR AFTER THE EFFECTIVE TIME, INCLUDING, WITHOUT LIMITATION (I) THOSE ARISING UNDER OR BY VIRTUE OF ANY RELATED AGREEMENT, LEASE, CONTRACT, AGREEMENT, DOCUMENT, PERMIT, LAW, STATUTE, RULE, REGULATION OR ORDER OF ANY GOVERNMENTAL AUTHORITY OR COURT (SPECIFICALLY INCLUDING, WITHOUT LIMITATION, ANY GOVERNMENTAL REQUEST OR (II) CLAIMS IN CONNECTION WITH THE MISPAYMENT OF THE CONVEYED OVERRIDING ROYALTY INTEREST;

 

(iii)    FURTHER, WITHOUT FURTHER DOCUMENTATION AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING ASSIGNEE, ITS SUCCESSORS AND ASSIGNS, SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS ASSIGNOR, ASSIGNOR’S AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES FROM ANY AND ALL CLAIMS ARISING AT ANY TIME ON OR AFTER THE EFFECTIVE TIME MADE BY ANY PERSON AND ARISING OUT OF OR RESULTING FROM:

 

(1)           THE REVIEW, INSPECTION AND ASSESSMENT OF THE ASSETS OR THE REAL PROPERTY;

 

(2)           THE OWNERSHIP OR OPERATION OF THE ASSETS OR THE REAL PROPERTY;

 

(3)           RIGHTS AND OBLIGATIONS OF THE PARTIES OR THIRD PARTIES UNDER THE RELATED AGREEMENTS;

 

(4)           FAILURE BY THIRD PARTIES TO APPROVE OR CONSENT TO ANY ASPECT OF THE TRANSACTION CONTEMPLATED IN THIS ASSIGNMENT

 

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OR THE SALE OR TRANSFER OF THE ASSETS OR ANY PORTION THEREOF;

 

(5)           GAS IMBALANCES AND PAYMENTS, ROYALTIES OR DISBURSEMENTS PAYABLE TO THIRD PARTIES RELATING TO THE ASSETS;

 

(6)           INABILITY OR FAILURE TO OBTAIN THE TRANSFER OF A PERMIT OR AUTHORIZATION OR THE INABILITY TO OBTAIN A PERMIT OR AUTHORIZATION RELATING TO THE ASSETS.

 

(c)           ASSIGNEE’S RELEASE OF ASSIGNOR .  WITHOUT FURTHER ACTION OR DOCUMENTATION, ASSIGNEE RELEASES AND DISCHARGES, TO THE MAXIMUM EXTENT ALLOWED BY LAW (BUT NO FURTHER), ASSIGNOR AND ASSIGNOR’S AFFILIATES AND THEIR RESPECTIVE, SUCCESSORS AND ASSIGNS AND REPRESENTATIVES FROM ALL CLAIMS RELATING IN ANY WAY TO THE ASSETS, THE REAL PROPERTY OR THE TRANSACTIONS CONTEMPLATED BY THIS ASSIGNMENT, REGARDLESS OF WHEN OR HOW THE CLAIMS AROSE OR ARISE, OR WHETHER THE CLAIMS WERE FORESEEABLE OR UNFORESEEABLE. ASSIGNEE’S RELEASE OF ASSIGNOR AND ITS AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS AND ASSIGNS, INCLUDES CLAIMS RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT LIABILITY OF ASSIGNOR AND ITS AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS AND ASSIGNS, WHETHER THE NEGLIGENCE OR STRICT LIABILITY IS ACTIVE, PASSIVE, JOINT, CONCURRENT, OR SOLE. THERE ARE NO EXCEPTIONS TO ASSIGNEE’S RELEASE OF ASSIGNOR AND ITS AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS AND ASSIGNS, AND THIS RELEASE IS BINDING ON ASSIGNEE AND ITS SUCCESSORS AND ASSIGNS. WITHOUT LIMITING THE FOREGOING, THIS RELEASE EXPRESSLY COVERS AND INCLUDES ANY AND ALL CLAIMS RELATING IN ANY WAY TO THE CLAIMS THAT WERE ASSERTED, OR THAT COULD HAVE BEEN ASSERTED, WHETHER KNOWN OR UNKNOWN, IN THE CASE STYLED MOSH HOLDING, L.P. V. PIONEER NATURAL RESOURCES COMPANY; PIONEER NATURAL RESOURCES USA, INC.; WOODSIDE ENERGY (USA), INC.; AND JPMORGAN CHASE BANK, N.A., AS TRUSTEE OF THE MESA OFFSHORE TRUST; CAUSE NO. 2006-01984; IN THE 334 TH  JUDICIAL DISTRICT COURT OF HARRIS COUNTY, TEXAS. ASSIGNEE EXPRESSLY WARRANTS AND REPRESENTS AND DOES HEREBY STATE AND REPRESENT THAT NO PROMISE OR AGREEMENT WHICH IS NOT HEREIN EXPRESSED HAS BEEN MADE TO ASSIGNEE IN EXECUTING THIS ASSIGNMENT OR AGREEING TO THIS RELEASE AND THAT ASSIGNEE IS NOT RELYING UPON ANY STATEMENT OR REPRESENTATION OF ASSIGNOR OR ANY AFFILIATE OF ASSIGNOR OR ANY OF THEIR RESPECTIVE REPRESENTATIVES. ASSIGNEE HAS BEEN REPRESENTED BY LEGAL COUNSEL AND SAID COUNSEL HAS READ AND EXPLAINED TO ASSIGNEE THE ENTIRE

 

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CONTENTS OF THIS ASSIGNMENT AND THIS RELEASE AND EXPLAINED THE LEGAL CONSEQUENCES THEREOF.

 

(d)           Inducement to Assignor .  Assignee acknowledges that it evaluated its obligations under this Article IV and understands its assumption of these obligations is a material inducement to Assignor to enter into this Assignment.

 

(e)           Inurement . This Assignment is made subject to governmental and regulatory agency laws, rules and regulations and subject to all the terms and the express and implied covenants and conditions of the Lease described in said Exhibit “A”.  Further, the terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment shall be binding upon and shall inure to the benefit of the Assignor and the Assignee and their respective successors and assigns, and such terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment are effective as stated, shall be covenants running with the lands and the leasehold estates herein assigned and with each transfer or assignment of said lands and leasehold estates, whether or not the terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment are memorialized in future assignments or other instruments. No future action, agreement or assignment pertaining, all or in part, to this Assignment, the Assets or any rights thereto or thereunder by Assignee or any of its successors or assigns shall relieve Assignee or any of its successors or assigns of any responsibility or liability for the performance of Assignee’s obligations under this Assignment unless expressly agreed to in writing by an authorized officer of Assignor.

 

(f)            BENEFIT OF INDEMNITIES AND RELEASES .            THE BENEFIT OF THE INDEMNITIES AND RELEASES PROVIDED IN THIS ASSIGNMENT BY ASSIGNEE, ITS SUCCESSORS AND ASSIGNS, TO ASSIGNOR SHALL EXTEND TO ASSIGNOR AND ITS CORPORATE PARENT, SUBSIDIARIES, PARTNERS AND AFFILIATES AND TO ANY PERSON WHO AT ANY TIME HAS SERVED OR IS SERVING AS A DIRECTOR, OFFICER, TRUSTEE, EMPLOYEE, CONSULTANT (INCLUDING, BUT NOT LIMITED TO THE OIL & GAS ASSET CLEARINGHOUSE AND ITS RESPECTIVE PARTNERS OR AFFILIATED ENTITIES AND THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES) OR AGENT OF ANY OF THE FOREGOING (EACH A “ REPRESENTATIVE ” AND ANY TWO OR MORE BEING “ REPRESENTATIVES ”), AND EACH OF THEIR RESPECTIVE HEIRS, EXECUTORS, SUCCESSORS AND ASSIGNS, AND SHALL APPLY TO ALL CLAIMS SUBJECT TO INDEMNITY HEREUNDER, INCLUDING, TO THE MAXIMUM EXTENT ALLOWED BY LAW (AND NO FURTHER), THOSE BASED ON NEGLIGENCE OF ANY NATURE, INCLUDING SOLE NEGLIGENCE, SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE NEGLIGENCE, PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ASSIGNOR (OR ANY OTHER INDEMNIFIED PARTY OR REPRESENTATIVE) OR ANY OTHER THEORY OF LIABILITY OR FAULT, WHETHER OF LAW (WHETHER COMMON OR STATUTORY) OR IN EQUITY.

 

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V.

 

Disclaimer of Warranties . ASSIGNOR MAKES NO, AND EXPRESSLY DISCLAIMS ANY, WARRANTY OF TITLE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION RIGHTS TO RETURN OF ANY CONSIDERATION OR PURCHASE PRICE.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL IMPLIED COVENANTS AND WARRANTIES ARISING FROM THE USE OF THE WORDS “GRANTS,” “BARGAINS,” “ASSIGNS” AND “CONVEYS” ARE HEREBY EXPRESSLY DISCLAIMED AND NEGATED . THIS ASSIGNMENT IS MADE WITHOUT ANY EXPRESS, IMPLIED, STATUTORY OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER, INCLUDING, WITHOUT LIMITATION, WARRANTY OF TITLE.

 

VI.

 

(a)           Governing Law .  This Assignment executed in accordance herewith shall be governed by and interpreted in accordance with the laws of the State of Texas, without regard to conflict of law rules that would direct application of the laws of another jurisdiction, except to the extent that it is mandatory that the law of the jurisdiction wherein the Assets are located shall apply.

 

(b)           Captions .  The captions in this Assignment are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Assignment.

 

(c)           WAIVER OF CONSUMER RIGHTS/DTPA WAIVER .  TO THE EXTENT THE PROVISIONS ARE APPLICABLE TO THE ASSETS OR ANY PORTION THEREOF, ASSIGNEE HEREBY VOLUNTARILY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT (DTPA), CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED), TEX. BUS. & COM. CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER, ASSIGNEE HEREBY REPRESENTS AND WARRANTS TO ASSIGNOR THAT IT (i) IS IN THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR COMMERCIAL OR BUSINESS USE; (ii) HAS CONSULTED WITH AN ATTORNEY OF ASSIGNEE’S OWN CHOOSING; (iii) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL, BUSINESS AND OIL AND GAS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED HEREBY; (iv) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION; AND (v) UNDERSTANDS THAT THIS WAIVER IS A MATERIAL AND INTEGRAL PART OF THIS ASSIGNMENT AND THE CONSIDERATION THEREOF.  IN ADDITION, ASSIGNEE WAIVES ITS RIGHTS UNDER ALL OTHER CONSUMER PROTECTION STATUTES OF TEXAS OR ANY OTHER STATE APPLICABLE TO THIS TRANSACTION THAT MAY BE WAIVED. ASSIGNEE EXPRESSLY RECOGNIZES THAT THE PURCHASE PRICE FOR WHICH ASSIGNOR HAS AGREED TO PERFORM ITS OBLIGATIONS UNDER THIS ASSIGNMENT HAS BEEN PREDICATED UPON THE INAPPLICABILITY OF THE DTPA AND THE WAIVER

 

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OF ASSIGNEE OF ITS RIGHTS UNDER CONSUMER PROTECTION STATUTES AND ASSIGNEE FURTHER RECOGNIZES THAT ASSIGNOR IN DETERMINING TO PROCEED WITH THE ENTERING INTO OF THIS ASSIGNMENT, HAS EXPRESSLY RELIED ON THIS WAIVER AND THE INAPPLICABILITY OF THE DTPA AND THE CONSUMER PROTECTION STATUTES.

 

(d)           No Sale of Fractional Undivided Interests.  Assignee is Accredited Investor .  Assignee has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Assets; it is acquiring the Assets for its own account for investment and not with a view to or for the subdivision, resale, distribution or fractionalization thereof; it has no contract, undertaking, or arrangement with any person to sell, transfer or pledge to any person the Assets and it has no present plans to enter into any such contract, undertaking, agreement or arrangement; it understands that the Assets may not have been and will not be registered under the Securities Act of 1933, as amended (the “ Act ”), or under any state securities laws, and that transferability and sale of the Assets may be restricted without registration under the Act and applicable state securities laws, or an exemption therefrom.  Assignee is an “accredited investor” as that item is defined in Regulation D promulgated under the Act.

 

(e)           Severability .   The provisions of this Assignment are severable.  If a court of competent jurisdiction finds any part of this Assignment to be void, invalid, or otherwise unenforceable (except for the release, waiver, defense and indemnity provisions), such holding will not affect other portions that can be given effect without the invalid or void portion.

 

 (f)           Related Agreements .  Unless specifically provided otherwise in this Assignment, the sale of the Assets is made subject to all of the contracts and agreements identified on Exhibit “B” (the “ Related Agreements ”).

 

(g)           Ejusdem Generis   The word “includes ” and “ including” and their syntactical variants mean “includes, but not limited to” and its corresponding syntactical variants.  The rule of ejusdem generis may not be invoked to restrict or limit the scope of the general term or phrase followed or proceeded by an enumeration of particular examples.

 

(h)           No Ratification.   Recitation of or reference to any agreement or other instrument in this Assignment, including its exhibits, does not operate to ratify, confirm, revise, or reinstate the agreement or instrument if it has previously lapsed or expired.

 

(i)            Not to be Construed Against Drafter .  Assignor and Assignee acknowledge that they have read this Assignment, have had the opportunity to review it with an attorney of their respective choice, and have agreed to all its terms.  Under these circumstances, Assignee and Assignor agree that the rule of construction that a contract be construed against the drafter shall not be applied in interpreting this Assignment and that in the event of any ambiguity in any of the terms or conditions of this Assignment, including any exhibits hereto and whether or not placed of record, such ambiguity shall not be construed for or against any party hereto on the basis that such party did or did not author the same.

 

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(j)            Waiver of Jury Trial .  ASSIGNOR AND ASSIGNEE DO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING BASED UPON, ARISING OUT OF OR RELATING TO THIS ASSIGNMENT THE RIGHTS AND OBLIGATIONS UNDER THIS ASSIGNMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(k)           Express Negligence Rule; Conspicuousness .  ASSIGNEE ACKNOWLEDGES THAT THE PROVISIONS IN THIS ASSIGNMENT THAT ARE SET OUT IN ITALICS, IN BOLD, UNDERLINE OR CAPITALS (OR ANY COMBINATION THEREOF) SATISFY THE REQUIREMENTS FOR THE EXPRESS NEGLIGENCE RULE AND/OR ARE CONSPICUOUS.

 

(l)            Counterparts .  This Assignment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(m)          Compliance with Laws.   Assignee will comply with all rules, laws, regulations and statutes applicable to Assignee’s ownership of the Assets.

 

(n)           References .           References herein to the singular includes the plural, and vice versa. Reference to any Exhibit means an Exhibit to this ASSIGNMENT, all of which are incorporated into and made a part of this ASSIGNMENT. Unless expressly provided to the contrary, “hereunder”, “hereof”, “herein” and words of similar import are references to this ASSIGNMENT as a whole and not any particular Article, Section or other provision of this ASSIGNMENT.

 

(o)         Waiver of Louisiana Rights in Redhibition.     ASSIGNEE EXPRESSLY WAIVES THE WARRANTY OF FITNESS FOR INTENDED PURPOSES OR GUARANTEE AGAINST HIDDEN OR LATENT REDHIBITORY VICES UNDER LOUISIANA LAW, INCLUDING LOUISIANA CIVIL CODE ARTICLES 2520 (1870) THROUGH 2548 (1870), AND THE WARRANTY IMPOSED BY LOUISIANA CIVIL CODE ARTICLE 2476; WAIVES ALL RIGHTS IN REDHIBITION PURSUANT TO LOUISIANA CIVIL CODE ARTICLE 2520, ET SEQ ., (INCLUDING ANY AMENDMENTS OR REVISIONS OF THE FOREGOING), ACKNOWLEDGES THAT THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF THIS SALE AND THE CONSIDERATION THEREOF; AND ACKNOWLEDGES THAT THIS WAIVER HAS BEEN BROUGHT TO THE ATTENTION OF THE ASSIGNEE AND EXPLAINED IN DETAIL AND THAT ASSIGNEE HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF WARRANTY OF FITNESS AND/OR WARRANTY AGAINST REDHIBITORY  VICES AND DEFECTS FOR THE ASSETS, TO THE EXTENT THE ASSETS ARE LOCATED IN OR ADJACENT TO LOUISIANA.

 

(p)           Proceeds and Expenses .  Except as otherwise provided herein, all proceeds, receipts and credits and all income attributable to the Assets for all periods on or before the Effective Time shall belong to Assignor and all proceeds, receipts and credits and all income

 

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attributable to the Assets for all periods after the Effective Time shall belong to Assignee. Except as otherwise provided herein, all costs and expenses relating to the Assets and attributable to the periods prior to the Effective Time shall be the responsibility of Assignor and all costs and expenses relating to the Assets and attributable to the periods on and after the Effective Time shall be the responsibility of Assignee. Assignor may, but is not obligated to, send out a Final Settlement Statement to account for the items in this paragraph and the parties shall utilize reasonable efforts to reach agreement on such matters. There shall be no interest or penalties due from or owed to Assignor or Assignee arising from this paragraph or under the Final Settlement Statement. If Assignor sends an invoice to Assignee pursuant to a Final Settlement Statement, Assignee shall pay such invoice within ten (10) days of receipt.

 

(q)           Other Instruments .        A copy of this Assignment may be filed with the U.S. Department of the Interior, Minerals Management Service. Assignee represents and warrants that it is qualified to own the Assets in accordance with applicable Laws. The Bidder/Buyer Terms and Conditions and Qualified Bidder Registration of The Oil & Gas Asset Clearinghouse are also binding on Assignee with respect to the Assets and are not merged into or with this Assignment.

 

(r)            Binding Effect .        Subject to the terms herein, this Assignment is binding upon and shall inure to the benefit of the successors and assigns of the Parties hereto, however, Assignee shall remain responsible for the performance of its obligations hereunder along with its successors and assigns and subsequent assignees.

 

TO HAVE AND TO HOLD the Assets unto Assignee, its successors and assigns, subject to the terms, covenants and conditions hereinabove set forth.

 

EXECUTED in the presence of the undersigned witnesses on the dates indicated below in the acknowledgments of each signatory to be effective in all respects as of the Effective Time.

 

[REMAINDER OF PAGE LEFT BLANK]

 

 

		ASSIGNOR :
WITNESSES :		Pioneer Natural Resources USA, Inc., individually
Print Name:		By:
			William F. Hannes
			Executive Vice President
Print Name:			Business Development

 

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		ASSIGNOR :
WITNESSES :		Mesa Offshore Royalty Partnership
		By: Pioneer Natural Resources USA, Inc., in its capacity as
		Managing General Partner
Print Name:
		By:
		William F. Hannes
Print Name:		Executive Vice President
		Business Development

 

 

ACKNOWLEDGMENT

 

 

STATE OF TEXAS	§
	§
COUNTY OF DALLAS	§

 

This instrument was acknowledged before me on the          day of             , 2009, by                             as                              , of Pioneer Natural Resources (USA), Inc., a Delaware corporation, on behalf of said corporation.

 

I have hereunto set my hand and official seal this        day of             , 2009.

 

	Notary Public, State of Texas
	My Commission expires on

 

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ACKNOWLEDGMENT

 

STATE OF TEXAS	§
	§
COUNTY OF DALLAS	§

 

This instrument was acknowledged before me on the          day of             , 2009, by                            as                               , of Pioneer Natural Resources (USA), Inc., as Managing General Partner of the Mesa Offshore Royalty Partnership, a Texas general partnership, on behalf of the general partnership.

 

I have hereunto set my hand and official seal this        day of             , 2009.

 

	Notary Public, State of Texas
	My Commission expires on

 

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SIGNATURE PAGE OF ASSIGNEE

 

 

		ASSIGNEE :
WITNESSES :
Print Name:
Print Name:		By:
		Name:
		Title:

 

ACKNOWLEDGMENT

 

STATE OF TEXAS	§
	§
COUNTY OF	§

 

 

This instrument was acknowledged before me on the        day of             , 2009,                               , as                               , of a                          corporation, on behalf of said corporation.

 

I have hereunto set my hand and official seal this        day of               , 2009.

 

	Notary Public, State of Texas
	My Commission expires on

 

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EXHIBIT “A”

 

Attached to and made a part of that certain Assignment and Bill of Sale dated effective             , 2009

 

Oil and Gas Lease bearing Serial No. OCS-G 3186, effective July 1, 1975, by and between the United States of America, as Lessor, and Mesa Petroleum Co., as Lessee, covering all of Block 61, West Delta Area, as shown on OCS Leasing Map, Louisiana, Map, No. 8, containing 5,000 acres, more or less.

 

 

EXHIBIT “B”

 

Attached to and made a part of that certain Assignment and Bill of Sale dated effective             , 2009

 

Farmout Agreement dated February 1, 1998, by and between Pioneer Natural Resources USA, Inc., as Farmor and Basin Exploration, Inc., as Farmee, as amended, and associated assignments or conveyances (the “ Basin Farmout ”).

 

Letter Agreement from Stone Energy Corporation dated June 27, 2002, agreed to and accepted by Pioneer Natural Resources USA, Inc. dated July 2, 2002, evidencing an Amendment To Farmout Agreement dated February 1, 1998, by and between Pioneer Natural Resources USA, Inc., as Farmor and Basin Exploration, Inc., as Farmee, and associated assignments or conveyances.

 

Farmout Agreement made effective July 1, 2003, by and between Pioneer Natural Resources USA, Inc., as Farmor and Stone Energy Corporation, as Farmee, as amended, and associated assignments or conveyances (the “ Stone Farmout ”).

 

Assignment of Operating Rights dated effective May 13, 1998, between Pioneer USA and Basin Exploration, Inc., recorded in C.O.B. 940 at Folio 820 of the records of Plaquemines Parish, Louisiana, to the extent and only to the extent same pertain to the Conveyed Overriding Royalty Interest.

 

Assignment of Operating Rights dated effective as of April 1, 2004, between Pioneer USA and Stone Energy Corporation, et al ., recorded in C.O.B. 1088, at Folio 372 of the records of Plaquemines Parish, Louisiana, to the extent and only to the extent same pertain to the Conveyed Overriding Royalty Interest.

 

 

Exhibit A-2

 

This Assignment and Bill of Sale contains provisions requiring one party to be responsible for the negligence, strict liability or other fault of the other party.

 

Notice of Confidentiality Rights: If you are a natural person, you may remove or strike any of the following information from this instrument before it is filed for record in public records: your social security number or your driver’s license.

 

ASSIGNMENT AND BILL OF SALE

(Brazos A-39)

 

OFFSHORE TEXAS

 

COUNTY OF MATAGORDA	§
	§
STATE OF TEXAS	§

 

This Assignment and Bill of Sale (“ Assignment ”) dated effective as of the      day of                       , 2009, is executed by and between Pioneer Natural Resources USA, Inc., a Delaware corporation (“ Pioneer USA ”), individually and on behalf of the Mesa Offshore Royalty Partnership (the “ Mesa Partnership ”) in its capacity of Managing General Partner, with the address of 5205 N. O’Connor Blvd., Suite 900, Irving, Texas 75039-3746, (Pioneer and Mesa Offshore being collectively called the “ Assignor ”), and

 

(“ Assignee ”), hereafter sometimes referred to individually as a “ Party ”, or collectively as the “ Parties ”.

 

I.

 

Assignor desires to sell and transfer to Assignee the assets described herein further to the bid by Assignee in Sale No. 231 in The Oil & Gas Asset Clearinghouse’s July 8, 2009 auction.  The assets include certain contractual rights, working interests, record title interests, operating rights and/or overriding royalty interests owned by Pioneer USA and certain interests owned by Mesa Offshore, as specified herein.  The sale and transfer is made, however, reserving to Assignor certain rights and claims relating to the period prior to the Effective Time, as specified herein.  Therefore, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and of the performance by Assignee of the covenants, agreements, obligations and conditions hereinafter contained, to be kept and performed by Assignee, effective as of July 1, 2009 at 7:00 a.m., (“ Effective Time ”), Assignor assigns unto Assignee, all of Assignor’s rights, titles and interests, in and to the following described assets, less and except the Excluded Assets (the “ Assets ”):

 

 

(a)            The oil and gas lease listed on Exhibit “A”, including, without limitation, contractual rights, working interests, record title interests, operating rights and/or overriding royalty interests (the “ Lease ”) and the lands covered, as of the Effective Time, by the Lease and or block listed on Exhibit “A” (hereinafter referred to as the “ Lands ”), said Lease and Lands, together with Assignor’s interest in any pooled, communitized or unitized acreage with the Lands and Lease, comprise the “ Subject Properties ”;

 

(b)            To the extent located on the Lands or attributable or allocable to the Subject Properties:  (1) all wells, including, without limitation, all oil, gas, injection, disposal and water wells, whether active, idle, plugged or unplugged and whether abandoned or not (“ Wells ”), and well equipment (surface and subsurface), all materials, fixtures, platforms, facilities, pumps, equipment, electrical distribution systems, flowlines, gathering pipelines, gas facilities, gathering systems, storage, distribution, treating, processing and disposal facilities and tanks, tools, compressors, and all other real or tangible personal property and fixtures which are located in, on or under the Subject Properties and used in connection with the production, disposal, gathering, storing, measuring, compression, injection, treating, operating, maintaining, marketing or transportation of production and substances from the Subject Properties and Wells, and all other improvements located on the Lands and which were acquired for or are used in connection with the operation of the Subject Properties (the “ Equipment ”), but specifically excluding portable tools, inventory, boats and vehicles not used exclusively on or exclusively appurtenant to the Subject Properties or the Wells, and personal property temporarily located on the Subject Properties; (2) all oil, gas, mineral and other hydrocarbon substances produced on or after the Effective Time; (3) all contracts and agreements insofar as they relate to the Subject Properties, Wells and Equipment (but subject to all limitations of assignability or transferability by Assignor and subject to the rights of third parties), including, without limitation, all contracts and agreements identified on Exhibit “B” hereto, and all orders, unit orders, leases, deeds, unitization agreements, pooling agreements, operating agreements, division of interest statements, participation agreements, license agreements, farmin and farmout agreements, oil and gas leases, assignments, compression and/or processing agreements, and oil and gas sales, purchase,  transportation, gathering and processing contracts, pipeline crossing non-objection agreements, and boarding agreements; (4) easements, rights-of-way, licenses, authorizations, permits and similar rights and interests, limited by and subject to the rights of third parties and regulatory agencies;  and (5) all files in the data room for auction Sale No. 231 conducted by The Oil & Gas Asset Clearinghouse on July 8, 2009, 2009 with respect to the Subject Properties (the “ Records ”), and with all the files described in this subsection I (b)(5) being limited by and subject to the rights of third parties and applicable Related Agreements (as defined hereafter) and limitations on transfer contained therein.

 

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II.

 

Excluded Assets .          Notwithstanding anything in this Assignment to the contrary, the Assets do not include and Assignee agrees and acknowledges that Assignor has reserved and retained from the Assets and each Assignor hereby reserves and retains unto itself, any and all of such Assignor’s rights, titles and interests in and to the following (collectively, the “Excluded Assets”): (i) seismic, geologic and geophysical records, information, and interpretations relating to the Assets; (ii) any and all records which consist of previous, contemporaneous or subsequent offers, discussions, or analyses associated with the purchase, sale or exchange of the Assets or any part thereof, proprietary information, personnel information, tax information, information covered by a non-disclosure obligation of a third party and information or documents covered by a legal privilege; (iii) originals or copies of Records retained by Assignor; (iv) boats, trucks, communication equipment,  computers and related switching equipment and software; (v) all oil and gas produced prior to the Effective Time and the proceeds therefrom; (vi) any refund of taxes, costs or expenses borne by Assignor or Assignor’s predecessors in title attributable to the period of time prior to the Effective Time; (vii) any and all proceeds receivable from the settlement or final adjudication of contract disputes with lessors, insurers, co-owners, or operators of the Assets or with assignors, gatherers processors or transporters of hydrocarbons from or attributable to the Assets, including without limitation, settlement of royalty, take-or-pay, pricing or volume adjustments disputes, insofar as said proceeds are attributable to periods of time prior to the Effective Time; (viii) all rights of use of Assignor’s or any Affiliate’s name, marks, trade dress or insignia and all of Assignor’s intellectual property; (ix) all rights and claims of such Assignor against third parties (including rights and claims of such Assignor against the other Assignor), asserted and unasserted, known and unknown, relating to the period prior to the Effective Time relating to the Assets.

 

III.

 

(a)            Prior Use of Assets .  ASSIGNEE ACKNOWLEDGES AND AGREES THAT: THE ASSETS AND REAL PROPERTY HAVE BEEN USED OR MAY HAVE BEEN USED FOR EXPLORATION, DEVELOPMENT, PRODUCTION, STORAGE, TREATMENT, PROCESSING, DISPOSAL, INJECTION AND TRANSPORTATION OF OIL OR GAS AND OTHER SUBSTANCES AND RELATED OIL AND GAS FIELD OPERATIONS.  POLLUTION, SUBSIDENCE, FRACTURES OR PHYSICAL CHANGES IN THE REAL PROPERTY MAY HAVE OCCURRED AS A RESULT OF SUCH USES.  THE ASSETS OR THE REAL PROPERTY ALSO MAY INCLUDE BURIED PIPELINES, WASTES AND OTHER EQUIPMENT, WHETHER OR NOT OF A SIMILAR NATURE, THE LOCATIONS OF WHICH MAY BE HIDDEN OR NOT NOW BE KNOWN OR NOT READILY APPARENT BY A PHYSICAL INSPECTION OF THE AFFECTED ASSETS OR REAL PROPERTY.  HYDROCARBONS AND OTHER SUBSTANCES, INCLUDING HAZARDOUS SUBSTANCES, MAY HAVE COME TO BE RELEASED OR LOCATED ON OR BENEATH THE SURFACE OF THE ASSETS OR THE REAL PROPERTY.

 

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(b)            Limitation and Disclaimer of Representations and Warranties .  ASSIGNEE ACKNOWLEDGES THAT ASSIGNOR HAS NOT MADE, AND ASSIGNOR HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE CONDITION OF ANY WELL, IMMOVABLE PROPERTY, MOVABLE PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY CONSTITUTING ANY PART OF THE ASSETS (INCLUDING, WITHOUT LIMITATION, (a) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (d) ANY RIGHTS OF ASSIGNEE UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION OR RETURN OF THE PURCHASE PRICE, (e) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM REDHIBITORY VICES OR DEFECTS OR OTHER VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN, (f) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, (g) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, AND (h) ANY IMPLIED OR EXPRESS WARRANTY REGARDING ENVIRONMENTAL LAWS, THE RELEASE OF MATERIALS OR SUBSTANCES INTO THE ENVIRONMENT OR THE PRESENCE OF MATERIALS OR SUBSTANCES IN, ON OR UNDER THE SUBJECT PROPERTIES OR REAL PROPERTY OR PROTECTION OF THE ENVIRONMENT OR HEALTH; IT BEING THE EXPRESS INTENTION OF ASSIGNEE AND ASSIGNOR THAT THE WELLS, IMMOVABLE PROPERTY, MOVABLE PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY SHALL BE CONVEYED TO ASSIGNEE “AS IS” AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND ASSIGNEE ACCEPTS THE WELLS, IMMOVABLE PROPERTY, MOVABLE PROPERTY, EQUIPMENT, INVENTORY, MACHINERY, FIXTURES AND PERSONAL PROPERTY AS IS, IN THEIR PRESENT CONDITION AND STATE OF REPAIR. IN ADDITION, ASSIGNOR SPECIFICALLY NEGATES AND MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA (INCLUDING SEISMIC DATA), INTERPRETATIVE INFORMATION, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO ASSIGNEE IN CONNECTION WITH THIS ASSIGNMENT, THE ASSETS OR THE CONTEMPLATED TRANSACTIONS, INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF THE ASSETS, PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE ASSETS OR THE ABILITY OR POTENTIAL OF THE ASSETS TO PRODUCE HYDROCARBONS OR THE ENVIRONMENTAL CONDITION OF THE ASSETS OR PROPERTY OR ANY OTHER MATTERS CONTAINED IN CONFIDENTIAL INFORMATION OR ANY OTHER MATERIALS FURNISHED OR MADE AVAILABLE TO ASSIGNEE BY ASSIGNOR OR BY ASSIGNOR’S REPRESENTATIVES (DEFINED BELOW).  ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION AND OTHER MATERIALS FURNISHED BY ASSIGNOR OR BY ASSIGNOR’S REPRESENTATIVES OR OTHERWISE MADE AVAILABLE TO ASSIGNEE OR ASSIGNEE’S REPRESENTATIVES OR ASSIGNEE’S AFFILIATES ARE PROVIDED

 

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AS A CONVENIENCE, AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST ASSIGNOR, ASSIGNOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES.  ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT ASSIGNEE’S (AND ITS SUCCESSORS AND ASSIGNS’) SOLE RISK.

 

For purposes of Articles III and Article IV of this Assignment, “ Real Property ”, “ Real Properties ”, “ REAL PROPERTY ” or “ REAL PROPERTIES ” mean the real property or properties, surface and subsurface, in which and on which the Assets, or any portion thereof, are located, operated, pertain, or relate and includes the land, if any, described or referred to in Exhibit “A”.

 

IV.

 

(a)    Claims/Laws/Environmental Laws/Affiliates Defined .  As used in this Assignment, “ Claims ” or “ CLAIMS ” shall include costs, expenses, obligations, claims, demands, lawsuits, causes of action, liabilities, damages, fines, penalties and judgments of any kind or character, whether matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, and all costs, expenses and fees (including without limitation, interest, attorneys’ fees, costs of experts, court costs, arbitration costs and costs of investigation) incurred in connection therewith, including, but not limited to claims arising from or directly or indirectly related to personal or bodily injury, death, property damage or loss, environmental damage or the remediation thereof, contract, royalty, operating, suspense and capital obligations attributable or relating in any way to the Assets or the Real Property.  “ Law ” or “ Laws ” means laws, statutes, ordinances, permits, decrees, orders, judgments, rules or regulations which are promulgated, issued or enacted by a governmental entity (whether federal, state or local) or tribal authority having appropriate jurisdiction. “ Affiliate ” or “ Affiliates ” means, as to any entity, corporation, partnership, company or person, each other entity, corporation, partnership, company or person that directly or indirectly (through one or more intermediaries or otherwise) controls, is controlled by, or is under common control with, such entity, corporation, partnership, company or person.  “ Environmental Laws ” means any and all laws including, but not limited to, those in existence on the Effective Time that relate to: (a) the prevention of pollution or environmental damages, (b) the abatement, remediation or elimination of pollution or environmental damage, (c) the protection of the environment generally, and/or (d) the protection of persons or property from actual or potential exposure (or the effects of exposure) to pollution or environmental damage, including without limitation, the Clean Air Act, as amended, the Clean Water Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substance and Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous and the Solid Waste Amendments Acts of 1984, as amended, and the Oil Pollution Act of 1990, as amended, and all other federal, state and local statutes, regulations, and ordinances serving similar or related purposes.

 

(b)            (i)  IT IS THE EXPRESS INTENT AND AGREEMENT OF ASSIGNOR AND ASSIGNEE THAT ASSIGNEE SHALL ACCEPT THE ASSETS IN THEIR “AS IS”

 

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AND “WHERE IS” CONDITION, SUBJECT TO AND WITH ANY AND ALL FAULTS, DEFECTS, DEFICIENCIES, IRREGULARITIES AND CLAIMS RELATED OR ATTRIBUTABLE IN ANY MANNER THERETO, INCLUDING, WITHOUT LIMITATION, REDHIBITORY VICES, TITLE DEFECTS, ENVIRONMENTAL DEFECTS AND ENVIRONMENTAL LAWS, SUBSIDENCE, DECAY, CESSATIONS IN PRODUCTION OR ANY OTHER MATTER AFFECTING IN ANY RESPECT THE TITLE OR PHYSICAL CONDITION OF, OR THE RIGHT TO OWN, USE, OPERATE, POSSESS, DEVELOP OR ENJOY, THE ASSETS, WHETHER KNOWN OR UNKNOWN, LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, DIRECT OR INDIRECT.

 

(ii) WITHOUT FURTHER ACTION OR DOCUMENTATION, ASSIGNEE, ITS SUCCESSORS AND ASSIGNS HEREBY, (1) ASSUMES, SHALL BE RESPONSIBLE FOR AND SHALL COMPLY WITH ALL DUTIES AND OBLIGATIONS, EXPRESS OR IMPLIED, ARISING AT ANY TIME WITH RESPECT TO THE ASSETS, WHETHER ARISING BEFORE, ON OR AFTER THE EFFECTIVE TIME, INCLUDING, WITHOUT LIMITATION (I) THOSE ARISING UNDER OR BY VIRTUE OF ANY RELATED AGREEMENT, LEASE, CONTRACT, AGREEMENT, DOCUMENT, PERMIT, LAW (INCLUDING ENVIRONMENTAL LAWS), STATUTE, RULE, REGULATION OR ORDER OF ANY GOVERNMENTAL AUTHORITY OR COURT (SPECIFICALLY INCLUDING, WITHOUT LIMITATION, ANY GOVERNMENTAL REQUEST OR OTHER REQUIREMENT TO PLUG, RE-PLUG OR ABANDON OR RE-ABANDON ANY ASSET OR WELL OF WHATSOEVER TYPE, STATUS OR CLASSIFICATION, OR TAKE ANY RESTORATION, CLEAN-UP, REMEDIAL OR OTHER ACTION WITH RESPECT TO THE ASSETS OR REAL PROPERTY), (II) PREFERENTIAL RIGHTS TO PURCHASE, AND (III) THIRD PARTY CONSENTS, AND (IV) CLAIMS IN CONNECTION WITH THE MISPAYMENT OR UNDERPAYMENT OF ROYALTIES OR OTHER BURDENS ON PRODUCTION; AND (2) ASSUMES, SHALL BE RESPONSIBLE FOR AND PAY ALL CLAIMS, DIRECTLY OR INDIRECTLY AFFECTING, OR ARISING IN CONNECTION WITH THE ASSETS, WHETHER ARISING BEFORE, ON OR AFTER THE EFFECTIVE TIME, INCLUDING, WITHOUT LIMITATION, CLAIMS FOR PERSONAL OR PROPERTY INJURY OR DAMAGE, RESTORATION, ENVIRONMENTAL CLEANUP, REMEDIATION, OR COMPLIANCE, OR FOR ANY OTHER RELIEF, ARISING DIRECTLY OR INDIRECTLY FROM OR INCIDENT TO, THE USE, OWNERSHIP, OCCUPATION, OPERATION, MAINTENANCE OR ABANDONMENT OF OR PRODUCTION FROM THE ASSETS, OR THE CONDITION OF THE ASSETS OR REAL PROPERTY, WHETHER LATENT OR PATENT, INCLUDING, WITHOUT LIMITATION, CONTAMINATION OF PROPERTY OR PREMISES WITH NATURALLY OCCURRING RADIOACTIVE MATERIALS (“NORM”) OR ASBESTOS, ENVIRONMENTAL LAWS, AND WHETHER OR NOT ARISING SOLELY FROM OR CONTRIBUTED TO BY THE STRICT LIABILITY, NEGLIGENCE IN ANY FORM, WHETHER ACTIVE OR PASSIVE, OR OF ANY KIND OR NATURE, OF ASSIGNOR OR ITS PREDECESSORS IN TITLE OR THEIR RESPECTIVE AFFILIATES AGENTS, EMPLOYEES OR CONTRACTORS.  NOTWITHSTANDING THE PROVISIONS OF THIS CLAUSE (ii) TO THE

 

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CONTRARY, ASSIGNEE DOES NOT ASSUME ANY OBLIGATIONS TO PAY (1) VENDORS FOR UNPAID AMOUNTS FOR SERVICES PERFORMED FOR THE DAY TO DAY OPERATION OF THE REAL PROPERTIES PRIOR TO THE EFFECTIVE TIME OR (2) ROYALTIES OWED TO THE MINERALS MANAGEMENT SERVICE UNDER THE LEASE AND ATTRIBUTABLE TO PERIODS PRIOR TO THE EFFECTIVE TIME.”

 

(iii)           ASSIGNEE, ITS SUCCESSORS AND ASSIGNS, SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS ASSIGNOR, ASSIGNOR’S AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES FROM AND AGAINST ANY AND ALL CLAIMS AND LOSSES ATTRIBUTABLE TO ENVIRONMENTAL LAWS, ENVIRONMENTAL COMPLIANCE, DAMAGE TO PROPERTY, INJURY TO OR DEATH OF PERSONS OR OTHER LIVING THINGS, NATURAL RESOURCE DAMAGES, CERCLA RESPONSE COSTS, ENVIRONMENTAL REMEDIATION AND RESTORATION COSTS (COLLECTIVELY, “ENVIRONMENTAL CLAIMS”) ARISING OUT OF OR ATTRIBUTABLE TO, IN WHOLE OR IN PART, EITHER DIRECTLY OR INDIRECTLY, TO THE ENVIRONMENTAL CONDITION OR COMPLIANCE OF THE ASSETS AT ANY TIME BEFORE THE EFFECTIVE TIME (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS OR LOSSES RELATED TO ANY CONDITION EXISTING ON, IN OR UNDER, OR RESULTING FROM OPERATION OF, THE ASSETS AT ANY TIME BEFORE THE EFFECTIVE TIME) WHETHER AS A RESULT OF OR CAUSED IN WHOLE OR IN PART BY VIOLATION OF, FAILURE TO FULFILL DUTIES IMPOSED BY OR INCURRENCE OF LIABILITY UNDER, ANY ENVIRONMENTAL LAWS OR UNDER ANY PRINCIPLE OF COMMON LAW RELATING TO DUTIES TO PROTECT OR NOT UNDULY DISTURB HUMAN HEALTH OR ENVIRONMENTAL QUALITY, AND WHETHER OR NOT ARISING SOLELY FROM OR CONTRIBUTED TO BY THE STRICT LIABILITY, NEGLIGENCE IN ANY FORM, WHETHER ACTIVE OR PASSIVE, OR OF ANY KIND OR NATURE, OF ASSIGNOR OR ITS PREDECESSORS IN TITLE OR THEIR RESPECTIVE AFFILIATES, AGENTS, EMPLOYEES OR CONTRACTORS.

 

(iv) FURTHER, WITHOUT FURTHER DOCUMENTATION AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING ASSIGNEE, ITS SUCCESSORS AND ASSIGNS, SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS ASSIGNOR, ASSIGNOR’S AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES FROM ANY AND ALL CLAIMS ARISING AT ANY TIME, ON OR AFTER THE EFFECTIVE TIME, MADE BY ANY PERSON AND ARISING OUT OF OR RESULTING FROM:

 

(1)            THE REVIEW, INSPECTION AND ASSESSMENT OF THE ASSETS OR THE REAL PROPERTY;

 

(2)            THE OWNERSHIP OR OPERATION OF THE ASSETS OR THE REAL PROPERTY;

 

(3)            RIGHTS AND OBLIGATIONS OF THE PARTIES OR THIRD PARTIES UNDER THE RELATED AGREEMENTS;

 

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(4)            FAILURE BY THIRD PARTIES TO APPROVE OR CONSENT TO ANY ASPECT OF THE TRANSACTION CONTEMPLATED IN THIS ASSIGNMENT OR THE SALE OR TRANSFER OF THE ASSETS OR ANY PORTION THEREOF;

 

(5)            OBLIGATIONS TO PLUG, RE-PLUG, ABANDON OR RE-ABANDON WELLS, REMOVE FACILITIES, EQUIPMENT, PIPELINES AND FLOWLINES, DREDGE, AND RESTORE, CLEAN UP AND/OR REMEDIATE THE ASSETS OR REAL PROPERTY;

 

(6)            GAS IMBALANCES AND PAYMENTS, ROYALTIES OR DISBURSEMENTS PAYABLE TO THIRD PARTIES RELATING TO THE ASSETS;

 

(7)            THE PHYSICAL OR ENVIRONMENTAL CONDITION OF OR RELATING TO THE ASSETS OR REAL PROPERTY OR ANY DISPOSAL SITE (WHETHER ON THE ASSETS OR REAL PROPERTY OR OFFSITE) CONTAINING MATERIALS OR WASTES FROM THE OPERATIONS OR ACTIVITIES ON THE REAL PROPERTY OR ASSETS INCLUDING CLAIMS UNDER ANY LAW OR ENVIRONMENTAL LAW;

 

(8)            REMEDIATION ACTIVITIES, INCLUDING DAMAGES INCURRED BY ASSIGNEE DURING OR ARISING FROM REMEDIATION ACTIVITIES RELATING TO THE ASSETS OR REAL PROPERTY; AND

 

(9)            INABILITY OR FAILURE TO OBTAIN THE TRANSFER OF A PERMIT OR AUTHORIZATION OR THE INABILITY TO OBTAIN A PERMIT OR AUTHORIZATION RELATING TO THE ASSETS.

 

(c)            ASSIGNEE’S RELEASE OF ASSIGNOR .  WITHOUT FURTHER ACTION OR DOCUMENTATION, ASSIGNEE RELEASES AND DISCHARGES, TO THE MAXIMUM EXTENT ALLOWED BY LAW (BUT NO FURTHER), ASSIGNOR AND ASSIGNOR’S AFFILIATES AND THEIR RESPECTIVE, SUCCESSORS AND ASSIGNS AND REPRESENTATIVES FROM ALL CLAIMS RELATING IN ANY WAY TO THE ASSETS, THE REAL PROPERTY OR THE TRANSACTIONS CONTEMPLATED BY THIS ASSIGNMENT, REGARDLESS OF WHEN OR HOW THE CLAIMS AROSE OR ARISE, OR WHETHER THE CLAIMS WERE FORESEEABLE OR UNFORESEEABLE. ASSIGNEE’S RELEASE OF ASSIGNOR AND ITS AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS AND ASSIGNS, INCLUDES CLAIMS RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT LIABILITY OF ASSIGNOR AND ITS AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS AND ASSIGNS, WHETHER THE NEGLIGENCE OR STRICT LIABILITY IS ACTIVE, PASSIVE, JOINT, CONCURRENT, OR SOLE. THERE ARE NO EXCEPTIONS TO ASSIGNEE’S RELEASE OF ASSIGNOR AND ITS AFFILIATES AND THEIR

 

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RESPECTIVE REPRESENTATIVES, SUCCESSORS AND ASSIGNS, AND THIS RELEASE IS BINDING ON ASSIGNEE AND ITS SUCCESSORS AND ASSIGNS.   WITHOUT LIMITING THE FOREGOING, THIS RELEASE EXPRESSLY COVERS AND INCLUDES ANY AND ALL CLAIMS RELATING IN ANY WAY TO THE CLAIMS THAT WERE ASSERTED, OR THAT COULD HAVE BEEN ASSERTED, WHETHER KNOWN OR UNKNOWN, IN THE CASE STYLED MOSH HOLDING, L.P. V. PIONEER NATURAL RESOURCES COMPANY; PIONEER NATURAL RESOURCES USA, INC.; WOODSIDE ENERGY (USA), INC.; AND JPMORGAN CHASE BANK, N.A., AS TRUSTEE OF THE MESA OFFSHORE TRUST; CAUSE NO. 2006-01984; IN THE 334 TH  JUDICIAL DISTRICT COURT OF HARRIS COUNTY, TEXAS. ASSIGNEE EXPRESSLY WARRANTS AND REPRESENTS AND DOES HEREBY STATE AND REPRESENT THAT NO PROMISE OR AGREEMENT WHICH IS NOT HEREIN EXPRESSED HAS BEEN MADE TO ASSIGNEE IN EXECUTING THIS ASSIGNMENT OR AGREEING TO THIS RELEASE AND THAT ASSIGNEE IS NOT RELYING UPON ANY STATEMENT OR REPRESENTATION OF ASSIGNOR OR ANY AFFILIATE OF ASSIGNOR OR ANY OF THEIR RESPECTIVE REPRESENTATIVES. ASSIGNEE HAS BEEN REPRESENTED BY LEGAL COUNSEL AND SAID COUNSEL HAS READ AND EXPLAINED TO ASSIGNEE THE ENTIRE CONTENTS OF THIS ASSIGNMENT AND THIS RELEASE AND EXPLAINED THE LEGAL CONSEQUENCES THEREOF.

 

(d)            Inducement to Assignor .  Assignee acknowledges that it evaluated its obligations under this Article IV and understands its assumption of these obligations is a material inducement to Assignor to enter into this Assignment.

 

(e)            Inurement . This Assignment is made subject to governmental and regulatory agency laws, rules and regulations and subject to all the terms and the express and implied covenants and conditions of the Lease described in said Exhibit “A”.  Further, the terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment shall be binding upon and shall inure to the benefit of the Assignor and the Assignee and their respective successors and assigns, and such terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment are effective as stated, shall be covenants running with the lands and the leasehold estates herein assigned and with each transfer or assignment of said lands and leasehold estates, whether or not the terms, covenants, indemnities, releases, requirements, obligations and conditions of this Assignment are memorialized in future assignments or other instruments. No future action, agreement or assignment pertaining, all or in part, to this Assignment, the Assets or any rights thereto or thereunder by Assignee or any of its successors or assigns shall relieve Assignee or any of its successors or assigns of any responsibility or liability for the performance of Assignee’s obligations under this Assignment unless expressly agreed to in writing by an authorized officer of Assignor.

 

(f)             BENEFIT OF INDEMNITIES AND RELEASE . THE BENEFIT OF THE INDEMNITIES AND, RELEASE PROVIDED IN THIS ASSIGNMENT BY ASSIGNEE, ITS SUCCESSORS AND ASSIGNS, TO ASSIGNOR SHALL EXTEND TO ASSIGNOR AND ITS CORPORATE PARENT, SUBSIDIARIES, PARTNERS AND AFFILIATES AND TO ANY PERSON WHO AT ANY TIME HAS SERVED OR IS SERVING AS A

 

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DIRECTOR, OFFICER, TRUSTEE, EMPLOYEE, CONSULTANT (INCLUDING, BUT NOT LIMITED TO THE OIL & GAS ASSET CLEARINGHOUSE AND ITS RESPECTIVE PARTNERS OR AFFILIATED ENTITIES AND THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES) OR AGENT OF ANY OF THE FOREGOING (EACH A “ REPRESENTATIVE ” AND ANY TWO OR MORE BEING “ REPRESENTATIVES ”), AND EACH OF THEIR RESPECTIVE HEIRS, EXECUTORS, SUCCESSORS AND ASSIGNS, AND SHALL APPLY TO ALL CLAIMS SUBJECT TO INDEMNITY HEREUNDER, INCLUDING, TO THE MAXIMUM EXTENT ALLOWED BY LAW (AND NO FURTHER), THOSE BASED ON NEGLIGENCE OF ANY NATURE, INCLUDING SOLE NEGLIGENCE, SIMPLE NEGLIGENCE, CONCURRENT NEGLIGENCE, ACTIVE NEGLIGENCE, PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ASSIGNOR (OR ANY OTHER INDEMNIFIED PARTY OR REPRESENTATIVE) OR ANY OTHER THEORY OF LIABILITY OR FAULT, WHETHER OF LAW (WHETHER COMMON OR STATUTORY) OR IN EQUITY.

 

V.

 

Disclaimer of Warranties . ASSIGNOR MAKES NO, AND EXPRESSLY DISCLAIMS ANY, WARRANTY OF TITLE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION RIGHTS TO RETURN OF ANY CONSIDERATION OR PURCHASE PRICE.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL IMPLIED COVENANTS AND WARRANTIES ARISING FROM THE USE OF THE WORDS “GRANTS,” “BARGAINS,” “ASSIGNS” AND “CONVEYS” ARE HEREBY EXPRESSLY DISCLAIMED AND NEGATED . All equipment and other personal property forming any part of the Assets is hereby transferred subject to normal wear and tear and without warranties of any kind whatsoever, whether statutory, express or implied,  and WITH NO WARRANTY AS TO TITLE, MERCHANTABILITY, FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE . THIS ASSIGNMENT IS MADE WITHOUT ANY EXPRESS, IMPLIED, STATUTORY OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER.

 

VI.

 

(a)            Governing Law .  This Assignment executed in accordance herewith shall be governed by and interpreted in accordance with the laws of the State of Texas, without regard to conflict of law rules that would direct application of the laws of another jurisdiction, except to the extent that it is mandatory that the law of the jurisdiction wherein the Assets are located shall apply.

 

(b)            Captions .  The captions in this Assignment are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Assignment.

 

(c)            WAIVER OF CONSUMER RIGHTS/DTPA WAIVER .  TO THE EXTENT THE PROVISIONS ARE APPLICABLE TO THE ASSETS OR ANY PORTION THEREOF, ASSIGNEE HEREBY VOLUNTARILY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT (DTPA), CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH

 

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IS NOT WAIVED), TEX. BUS. & COM. CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER, ASSIGNEE HEREBY REPRESENTS AND WARRANTS TO ASSIGNOR THAT IT (i) IS IN THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR COMMERCIAL OR BUSINESS USE; (ii) HAS CONSULTED WITH AN ATTORNEY OF ASSIGNEE’S OWN CHOOSING; (iii) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL, BUSINESS AND OIL AND GAS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTIONS CONTEMPLATED HEREBY; (iv) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION; AND (v) UNDERSTANDS THAT THIS WAIVER IS A MATERIAL AND INTEGRAL PART OF THIS ASSIGNMENT AND THE CONSIDERATION THEREOF.  IN ADDITION, ASSIGNEE WAIVES ITS RIGHTS UNDER ALL OTHER CONSUMER PROTECTION STATUTES OF TEXAS OR ANY OTHER STATE APPLICABLE TO THIS TRANSACTION THAT MAY BE WAIVED. ASSIGNEE EXPRESSLY RECOGNIZES THAT THE PURCHASE PRICE FOR WHICH ASSIGNOR HAS AGREED TO PERFORM ITS OBLIGATIONS UNDER THIS ASSIGNMENT HAS BEEN PREDICATED UPON THE INAPPLICABILITY OF THE DTPA AND THE WAIVER OF ASSIGNEE OF ITS RIGHTS UNDER CONSUMER PROTECTION STATUTES AND ASSIGNEE FURTHER RECOGNIZES THAT ASSIGNOR IN DETERMINING TO PROCEED WITH THE ENTERING INTO OF THIS ASSIGNMENT, HAS EXPRESSLY RELIED ON THIS WAIVER AND THE INAPPLICABILITY OF THE DTPA AND THE CONSUMER PROTECTION STATUTES.

 

(d)           No Sale of Fractional Undivided Interests.  Assignee is Accredited Investor .  Assignee has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Assets; it is acquiring the Assets for its own account for investment and not with a view to or for the subdivision, resale, distribution or fractionalization thereof; it has no contract, undertaking, or arrangement with any person to sell, transfer or pledge to any person the Assets and it has no present plans to enter into any such contract, undertaking, agreement or arrangement; it understands that the Assets may not have been and will not be registered under the Securities Act of 1933, as amended (the “ Act ”), or under any state securities laws, and that transferability and sale of the Assets may be restricted without registration under the Act and applicable state securities laws, or an exemption therefrom.  Assignee is an “accredited investor” as that item is defined in Regulation D promulgated under the Act.

 

(e)           Severability .   The