Common use of Covenants and Agreements of Buyer Clause in Contracts

Covenants and Agreements of Buyer. Buyer covenants and agrees with Seller that: (a) Buyer shall use its best efforts to ensure that as of the Closing Date it will not be under any material legal or contractual restriction that would prohibit or delay the timely consummation of such transaction. (b) Buyer shall, subject to the applicable terms of existing operating agreements, take over operations as of 7:00 a.m. local time at the wellsites on the Closing Date, with respect to Seller-operated Wellx xxxluded in the Interests assigned to Buyer at the Closing. Upon taking over operations, Buyer will post all necessary state, federal and local bonds and shall assist Seller in having Seller's existing bonds released, or in the alternative, having the wellx xxxrated by Buyer released from Seller's existing bond. (c) Certain of the Leases are burdened or encumbered by and subject to that certain Member Gas Purchase Agreement dated effective January 1, 1996, ("Member Agreement") among Apache Corporation and MW Petroleum Corporation, as Sellers, and Producers Energy Marketing, LLC, as Buyer, as described on EXHIBIT "C" hereto. Before Closing, Seller will make good faith, commercially reasonable efforts to obtain releases of certain requirements insofar as they affect such Leases. If such releases are not obtained, such Leases shall remain subject to the terms and conditions of the Member Agreement, and as of the Effective Time, Seller shall assume all duties and obligations of Buyer thereunder insofar as they affect such Leases. (d) Purchaser acknowledges and confirms that it has been advised by Apache of and has received information concerning the following: (1) Apache and The Municipal Gas Authority of Georgia ("MGAG"), entered into an agreement dated December 20, 1994, wherein Apache, in exchange for the advance payment of certain consideration, agreed to sell MGAG certain volumes of natural gas with the incremental delivery of same to occur annually for a period of years set forth therein ("MGAG-2 Transactions"). To ensure the delivery of the pre-purchased natural gas volumes by Apache to MGAG, MGAG received from Apache a security interest in Apache's interest in certain wellx xxx/or properties more specifically described in exhibits to the MGAG-2 Transactions documents. (2) Apache and MGAG entered into an agreement dated effective September 1, 1997, wherein Apache, in exchange for the advance payment of certain consideration, agreed to sell MGAG certain volumes of natural gas with the incremental delivery of same to occur annually for a period of years set forth therein ("MGAG-3 Transactions"). To ensure the delivery of the pre-purchased natural gas volumes by Apache to MGAG, MGAG received from Apache a security interest in Apache's interests in certain wellx xxx/or Interests more specifically described in exhibits to the MGAG-3 Transactions documents. (3) The MGAG-2 Transactions and MGAG-3 Transactions, and Seller's interests in the wellx xxx Interests which are the subject matter thereof, are subject to the terms and conditions contained in the applicable documents and agreements attendant thereto, in their entirety. No party to the MGAG-2 Transactions or MGAG-3 Transactions can assign its respective rights under the documents and agreements thereto without the express written consent of the other parties. Seller and MGAG are required to maintain the contents of all documents and agreements related to the aforedescribed transactions and matters in the strictest confidence, and to obtain the prior written consent of the other parties before disclosing any portion of same to any third party. (4) All or a portion of Seller's interests in one or more of the Wellx and/or Interests which are the subject matter of the transactions contemplated in this Agreement, shall, unless fully released by MGAG prior to the assignment thereof to Buyer, be subject to and burdened by, and Buyer shall assume, all of the rights enjoyed by, and obligations in favor of, MGAG as fully set forth in each of the documents and agreements that govern and concern the particular MGAG transaction and/or matter affecting Seller's interests in said Well and/or Interests. (5) Certain of the Leases are burdened or encumbered by and subject to that certain Amended and Restated Gas Purchase Agreement dated effective July 1, 1998, ("Gas Purchase Agreement") among Apache Corporation and MW Petroleum Corporation, as Sellers, and Producers Energy Marketing, LLC, as Buyer, as described on Exhibit "C" hereto. Before Closing, Seller will make good faith, commercially reasonable efforts to obtain releases of certain requirements insofar as they affect such Leases. If such releases are not obtained, such Leases shall become subject to a Restricted Gas Purchase Agreement, and as of the

Covenants and Agreements of Buyer. Buyer covenants and agrees with Seller that: (a) Buyer shall use its best efforts to ensure that as of the Closing Date it will not be under any material legal or contractual restriction that would prohibit or delay the timely consummation of such transaction. (b) Buyer shall, subject to the applicable terms of existing operating agreements, take over operations become the working or other interest owner of the Interests as of 7:00 12:01 a.m. local time at the wellsites on the Closing Date, with respect to Seller-operated Wellx xxxluded in effective as of the Interests assigned to Buyer at the Closing. Upon taking over operations, Buyer will post all necessary state, federal and local bonds and shall assist Seller in having Seller's existing bonds released, or in the alternative, having the wellx xxxrated by Buyer released from Seller's existing bondEffective Time. (c) Certain After this Agreement is signed, Buyer shall provide reasonable assistance to Seller to solicit from Seller’s Debenture holders Debenture Exchange Subscription Agreements (in the form approved by both parties and attached hereto as EXHIBIT F, hereafter the “Exchange Agreements”) pursuant to which the holders shall agree to exchange the Debentures for Common Stock of Buyer (as described in Section 7.1(a) (2) below), subject to Closing of the Leases are burdened Agreement in a manner which is intended to be exempt from registration under Rule 506 of Regulation D adopted under the Securities Act. Buyer shall prepare, with reasonable assistance from Seller, a disclosure document for delivery to the holders. Buyer and Seller shall take reasonable steps to comply with Regulation D; however Buyer shall have no obligation to Seller or encumbered by to any such holder with respect to the number of holders who enter into the Exchange Agreements. At the Closing of the transaction, Buyer shall issue the appropriate number of shares of Buyer’s Common Stock as determined under Section 2.1(a) above. Such shares shall be issued to Seller and subject to that certain Member Gas Purchase Agreement dated effective January 1, 1996, ("Member Agreement") among Apache Corporation and MW Petroleum Corporationthe holders of Seller’s Debentures, as Sellers, and Producers Energy Marketing, LLC, as Buyer, as described directed in writing by Seller on EXHIBIT "C" heretoor before the Closing Date. (d) Buyer shall cause the Common Stock of Buyer that is issued pursuant to this Agreement to be registered on Form S-3 (or other appropriate form) for resale by the holders of such stock within 60 days following the Closing Date. Before Closing, Seller will make good faith, commercially Buyer shall use reasonable commercial efforts to obtain releases of certain requirements insofar as they affect have the registration statement covering the Common Stock declared effective by the United States Securities and Exchange Commission within a reasonable time after filing such Leasesregistration statement. If such releases are not obtained, such Leases shall remain subject to the The terms and conditions of the Member Registration Rights Agreement, and attached hereto as EXHIBIT G, which shall run to the benefit of the Effective Timeformer holders of the Debentures, shall govern the obligations of the Buyer and the rights of the holders of the Common Stock. (e) If Buyer issues Common Stock to Seller under Section 11.2 of this Agreement, or in accordance with its obligations under the Contingent Payment Agreement, then in either such case, Buyer shall assume all duties file a registration statement to register such shares for resale within three (3) months after 7 issuance and the obligations of Buyer thereunder insofar as they affect such Leases. (d) Purchaser acknowledges and confirms that it has been advised by Apache under the Registration Rights Agreement shall be deemed to be obligations of and has received information concerning the following: (1) Apache and The Municipal Gas Authority of Georgia ("MGAG"), entered into an agreement dated December 20, 1994, wherein Apache, in exchange for the advance payment of certain consideration, agreed to sell MGAG certain volumes of natural gas with the incremental delivery of same to occur annually for a period of years set forth therein ("MGAG-2 Transactions"). To ensure the delivery of the pre-purchased natural gas volumes by Apache to MGAG, MGAG received from Apache a security interest in Apache's interest in certain wellx xxx/or properties more specifically described in exhibits Buyer to the MGAG-2 Transactions documentsholders in any such registration. (2) Apache and MGAG entered into an agreement dated effective September 1, 1997, wherein Apache, in exchange for the advance payment of certain consideration, agreed to sell MGAG certain volumes of natural gas with the incremental delivery of same to occur annually for a period of years set forth therein ("MGAG-3 Transactions"). To ensure the delivery of the pre-purchased natural gas volumes by Apache to MGAG, MGAG received from Apache a security interest in Apache's interests in certain wellx xxx/or Interests more specifically described in exhibits to the MGAG-3 Transactions documents. (3) The MGAG-2 Transactions and MGAG-3 Transactions, and Seller's interests in the wellx xxx Interests which are the subject matter thereof, are subject to the terms and conditions contained in the applicable documents and agreements attendant thereto, in their entirety. No party to the MGAG-2 Transactions or MGAG-3 Transactions can assign its respective rights under the documents and agreements thereto without the express written consent of the other parties. Seller and MGAG are required to maintain the contents of all documents and agreements related to the aforedescribed transactions and matters in the strictest confidence, and to obtain the prior written consent of the other parties before disclosing any portion of same to any third party. (4) All or a portion of Seller's interests in one or more of the Wellx and/or Interests which are the subject matter of the transactions contemplated in this Agreement, shall, unless fully released by MGAG prior to the assignment thereof to Buyer, be subject to and burdened by, and Buyer shall assume, all of the rights enjoyed by, and obligations in favor of, MGAG as fully set forth in each of the documents and agreements that govern and concern the particular MGAG transaction and/or matter affecting Seller's interests in said Well and/or Interests. (5) Certain of the Leases are burdened or encumbered by and subject to that certain Amended and Restated Gas Purchase Agreement dated effective July 1, 1998, ("Gas Purchase Agreement") among Apache Corporation and MW Petroleum Corporation, as Sellers, and Producers Energy Marketing, LLC, as Buyer, as described on Exhibit "C" hereto. Before Closing, Seller will make good faith, commercially reasonable efforts to obtain releases of certain requirements insofar as they affect such Leases. If such releases are not obtained, such Leases shall become subject to a Restricted Gas Purchase Agreement, and as of the

Covenants and Agreements of Buyer. Buyer covenants and agrees with Seller that: (a) Buyer shall use its best efforts to ensure that as of the Closing Date it will not be under any material legal or contractual restriction that would prohibit or delay the timely consummation of such transaction. (b) Buyer shall, subject to the applicable terms of existing operating agreements, take over operations become the working or other interest owner of the Interests as of 7:00 12:01 a.m. local time at the wellsites on the Closing Date, with respect to Seller-operated Wellx xxxluded in effective as of the Interests assigned to Buyer at the Closing. Upon taking over operations, Buyer will post all necessary state, federal and local bonds and shall assist Seller in having Seller's existing bonds released, or in the alternative, having the wellx xxxrated by Buyer released from Seller's existing bondEffective Time. (c) Certain After this Agreement is signed, Buyer shall provide reasonable assistance to Seller to solicit from Seller's Debenture holders Debenture Exchange Subscription Agreements (in the form approved by both parties and attached hereto as EXHIBIT F, hereafter the "Exchange Agreements") pursuant --------- to which the holders shall agree to exchange the Debentures for Common Stock of Buyer (as described in Section 7.1(a) (2) below), subject to Closing of the Leases are burdened Agreement in a manner which is intended to be exempt from registration under Rule 506 of Regulation D adopted under the Securities Act. Buyer shall prepare, with reasonable assistance from Seller, a disclosure document for delivery to the holders. Buyer and Seller shall take reasonable steps to comply with Regulation D; however Buyer shall have no obligation to Seller or encumbered by to any such holder with respect to the number of holders who enter into the Exchange Agreements. At the Closing of the transaction, Buyer shall issue the appropriate number of shares of Buyer's Common Stock as determined under Section 2.1(a) above. Such shares shall be issued to Seller and subject to that certain Member Gas Purchase Agreement dated effective January 1, 1996, ("Member Agreement") among Apache Corporation and MW Petroleum Corporationthe holders of Seller's Debentures, as Sellers, and Producers Energy Marketing, LLC, as Buyer, as described directed in writing by Seller on EXHIBIT "C" heretoor before the Closing Date. (d) Buyer shall cause the Common Stock of Buyer that is issued pursuant to this Agreement to be registered on Form S-3 (or other appropriate form) for resale by the holders of such stock within 60 days following the Closing Date. Before Closing, Seller will make good faith, commercially Buyer shall use reasonable commercial efforts to obtain releases of certain requirements insofar as they affect have the registration statement covering the Common Stock declared effective by the United States Securities and Exchange Commission within a reasonable time after filing such Leasesregistration statement. If such releases are not obtained, such Leases shall remain subject to the The terms and conditions of the Member Registration Rights Agreement, and attached hereto as EXHIBIT ------- G, which shall run to the benefit of the Effective Timeformer holders of the Debentures, - shall govern the obligations of the Buyer and the rights of the holders of the Common Stock. (e) If Buyer issues Common Stock to Seller under Section 11.2 of this Agreement, or in accordance with its obligations under the Contingent Payment Agreement, then in either such case, Buyer shall assume all duties file a registration statement to register such shares for resale within three (3) months after issuance and the obligations of Buyer thereunder insofar as they affect such Leases. (d) Purchaser acknowledges and confirms that it has been advised by Apache under the Registration Rights Agreement shall be deemed to be obligations of and has received information concerning the following: (1) Apache and The Municipal Gas Authority of Georgia ("MGAG"), entered into an agreement dated December 20, 1994, wherein Apache, in exchange for the advance payment of certain consideration, agreed to sell MGAG certain volumes of natural gas with the incremental delivery of same to occur annually for a period of years set forth therein ("MGAG-2 Transactions"). To ensure the delivery of the pre-purchased natural gas volumes by Apache to MGAG, MGAG received from Apache a security interest in Apache's interest in certain wellx xxx/or properties more specifically described in exhibits Buyer to the MGAG-2 Transactions documentsholders in any such registration. (2) Apache and MGAG entered into an agreement dated effective September 1, 1997, wherein Apache, in exchange for the advance payment of certain consideration, agreed to sell MGAG certain volumes of natural gas with the incremental delivery of same to occur annually for a period of years set forth therein ("MGAG-3 Transactions"). To ensure the delivery of the pre-purchased natural gas volumes by Apache to MGAG, MGAG received from Apache a security interest in Apache's interests in certain wellx xxx/or Interests more specifically described in exhibits to the MGAG-3 Transactions documents. (3) The MGAG-2 Transactions and MGAG-3 Transactions, and Seller's interests in the wellx xxx Interests which are the subject matter thereof, are subject to the terms and conditions contained in the applicable documents and agreements attendant thereto, in their entirety. No party to the MGAG-2 Transactions or MGAG-3 Transactions can assign its respective rights under the documents and agreements thereto without the express written consent of the other parties. Seller and MGAG are required to maintain the contents of all documents and agreements related to the aforedescribed transactions and matters in the strictest confidence, and to obtain the prior written consent of the other parties before disclosing any portion of same to any third party. (4) All or a portion of Seller's interests in one or more of the Wellx and/or Interests which are the subject matter of the transactions contemplated in this Agreement, shall, unless fully released by MGAG prior to the assignment thereof to Buyer, be subject to and burdened by, and Buyer shall assume, all of the rights enjoyed by, and obligations in favor of, MGAG as fully set forth in each of the documents and agreements that govern and concern the particular MGAG transaction and/or matter affecting Seller's interests in said Well and/or Interests. (5) Certain of the Leases are burdened or encumbered by and subject to that certain Amended and Restated Gas Purchase Agreement dated effective July 1, 1998, ("Gas Purchase Agreement") among Apache Corporation and MW Petroleum Corporation, as Sellers, and Producers Energy Marketing, LLC, as Buyer, as described on Exhibit "C" hereto. Before Closing, Seller will make good faith, commercially reasonable efforts to obtain releases of certain requirements insofar as they affect such Leases. If such releases are not obtained, such Leases shall become subject to a Restricted Gas Purchase Agreement, and as of the