# OCTOBER 2005 CROW TRIBAL LEGISLATURE

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URL: https://www.frixlaw.com/law-library/documents/tribal%3Acrow_montana%3A31cc2a474fd64165

## Record

- **Collection:** Tribal code
- **Document type:** Tribal code

## Text

OCTOBER 2005 CROW TRIBAL LEGISLATURE

JOINT ACTION RESOLUTION NO. JAR 05-09

INTRODUCED BY CARL E. VENNE, CHAIRMAN
CROW TRIBAL EXECUTIVE BRANCH

JOINT ACTION RESOLUTION OF THE CROW TRIBAL LEGISLATURE AND
THE CROW TRIBAL EXECUTIVE BRANCH ENTITLED:

“FINAL APPROVAL OF THE OIL AND GAS LEASE BETWEEN THE CROW TRIBE
OF INDIANS AND GPE ENERGY INC.”

WHEREAS, the Chairman of the Executive Branch has authority and responsibility
pursuant fo the “enuinerated powers” in Article IV, Section 3(f) of the Constitution and Bylaws
of the Crow Tribe of Indians to “negotiate and approve or prevent any sale, disposition, lease or
encumbrance of Tribal lands, interests in lands or other Tribal assets, including buffalo,
minerals, gas and oil with final approval granted by the Legislative Branch,” and in Article IV
Section 3(k) to “negotiate and approve limited waivers of sovereign immunity when such a
waiver is necessary for business purposes in accordance with Article V, Section 2(f) of [the]
Constitution;” and

WHEREAS, GPE Energy Inc. has worked with PIC Production, Inc., on evaluating the
prospects for oil and gas production on an 1840-acre area of the Crow Reservation in which the
Tribe holds mineral rights, pursuant to certain Oil and Gas Mining Leases approved by the U.S.
Secretary of the Interior on March 6, 2000, which leases have now expired; and

WHEREAS, the Chairman of the Executive Branch, with the delegated assistance of
the Oil and Gas Committee headed by the Secretary of the Executive Branch, has negotiated a
new Oil'and Gas Lease Between the Crow Tribe of Indians and GPE Energy Inc. (the “Lease”),
for the exploration and production of oil and gas on approximately 1,840 acres within the Crow
Reservation, a copy of which is attached hereto and incorporated by reference; and

WHEREAS, the Legislative Branch has authority and responsibility pursuant to its
“powers and duties” in Article V, Section 2(d) of the Constitution “to grant final approval or
disapproval of items negotiated by the Executive Branch of Government pertinent to the sale,
disposition, lease or encumbrance of Tribal lands, interests in lands or mineral assets,” and in
Article V, Section 2(f) to “grant final approval or disapproval of limited waivers of sovereign
immunity by the Executive Branch when waivers are necessary for business purposes;” and

WHEREAS, at the time this Joint Action Resolution was submitted to the Legislature
in order to comply with Article V, Section 7 of the Constitution, the parties had reached
agreement on the substantive terms of the Lease, and were in the process of finalizing the legal
terms of the Lease, and the final Lease attached hereto has been submitted to and reviewed by
the Legislature; and

October 2005
JAR GPE Energy Lease
Page 1 of 3

WHEREAS, exploration for and development of Tribal oil and gas resources is in the
best interests of the Tribe and Tribal members, and the Lease provides for such exploration and
development on a fair, environmentally responsible, and commercially sound basis, and the
limited waiver of the Tribe’s sovereign immunity in the Lease is necessary for business
purposes; and

WHEREAS, after approval by the Legislature and Executive Branch of the Crow
Tribe, the Lease is subject to approval by the Secretary of the Interior or her designee, pursuant
to the Indian Mineral Development Act of 1982 (25 U.S.C. § 2101, ef seq.) and other
applicable Federal law;

NOW THEREFORE, BE IT RESOLVED BY THE LEGISLATURE AND THE
EXECUTIVE BRANCH OF THE CROW TRIBE:

Section 1. That the “Oil and Gas Lease Between the Crow Tribe of Indians and
GPE Energy Inc.”, including the limited waiver of sovereign immunity contained therein,
attached hereto and incorporated by this reference, is hereby granted final approval
pursuant to Article V, Sections 2(d) and 2(f) of the Constitution and Bylaws of the Crow
Tribe.

Section 2. That the Chairman of the Executive Branch is authorized to sign and
execute the above-referenced Lease on behalf of the Crow Tribe, and to take such further
actions as are necessary to implement and administer the Lease.

Section 3. That the final approval granted herein is effective on the date of
approval of this Resolution, and is subject only to such further approvals as are required
by Federal law.

CERTIFICATION

[hereby certify that this Joint Action Resolution granting final approval of the Oil and
Gas Lease between the Crow Tribe and GPE Energy Inc. was duly approved by the Crow
Tribal Legislature with a vote of 12. in favor,_2_ opposed, and 1_abstained and that a quorum
was present on this 12th day of October, 2005.

KW Oe

Speaker of the House _)
Crow Tribal Legislat

ATTEST:

cretary, Crow Tribal Legislature

October 2005
JAR GPE Energy Lease
Page 2 of 3

EXECUTIVE ACTION

Thereby
approve,

veto

this Joint Action Resolution granting final approval of the Oil and Gas Lease between the Crow
Tribe and GPE Energy Inc. pursuant to the authority vested in the Chairman of the Crow Tribe
by Article V, Section 8 and Article IV, Sections 3(f) and 3(k) of the Constitution and Bylaws of

the Crow Tribe of Indians on this Lt. day of Am , 2005.

Chairmamt, Executive Branch
Crow Tribe of Indians

October 2005
JAR GPE Energy Lease
Page 3 of 3

Fined Approval of the. Or) * Gas Lease.
bebweenthe Goastribe. 6 f Tradians and GPE Enevgy, \nc.

Bill or Resolution NumberJar 05.0q Introduced by: Fyecucki ye Date of vote (rt cher \2, 200 5

Representative
No Abstain

s

B. Cloud .

C. Goes Ahead
O. Costa

V. Crooked Arm
R. Iron

J. Stewart

E. Fighter

SAIN RIN IAIL A

L. Costa
L. Hogan Va
D. Old Elk Aan
K. Real Bird ae ee
E. Pease _ aan
S. Medicine Horse _-
L. Not Afraid
P. Real Bird
_ D. Wilson

J. Stone
Secretary of the House

W. Plain Feather
Speaker of the House

wa
aa oe a
Totals: | py a a

Results of Vote:
Not Pass Tabled Veto Override

Signature of Officer tS . Date: lol i oF

Legislative Branch

Pryor:

Arrow

Benjamin Cloud, HI
Oliver Costa
Carison Goes Ahead

Big Horn:
Valley of the Give
Away

Vincent Crooked Arm
Ralph Iron, Ir.
Willie Plainfeather,
Speaker of the House

Dunmore:
Black Lodge
Jared Stewart

Larry Costa
Ertis Fighter, Sr.

Reng:

Cen £

Lloyd Hogan, Jr.
Danie} Old Elk, Sr.
Kennard Real Bird

Lodge Grass:
Valley of the Chief
Eloise W. Pease
Scott Medicine Horse
Leroy Not Afraid

Wyola:

Mighty Few

Pius Real Bird
Dana Wilson

3.D. Stone,
Secretary of the House

Staff

Jackie Blacksmith,
Administrator

Freda J. Knows Gun,
Adm. Assistant/
Accounts Payable

Thomas .J. Half,
interpreter/Office Assistant

Nellie Moccasin,
Office Assistant

Kenny Pretty On Top
Maintenance/Custodian

Ronald Ameson, Esq.,
Attorney At Law

LEGISLATIVE BRANCH OF THE
CROW TRIBAL GOVERNMENT

P.O. Box 309 — MAKAWASHA Avenue
Crow Agency, Montana 59022
Phone: (406) 638-2023/2025/2238 Fax: (406) 638-2030

OFFICIAL CERTIFICATE OF DELIVERY

I, Jonathan D. Stone, Secretary of the Legislative Branch of the Crow Tribal
Government hereby this Transitional Action do deliver a True and Correct Official copy
Of the Final Approval for the following Bill:

JOINT ACTION RESOLUTION “FINAL APPROVAL OF THE OIL AND GAS

| LEASE BETWEEN THE CROW TRIBE OF INDIANS AND GPE ENERGY INC”

| Bill No. JAR0S-09 to
Position of: y ut enck
Patio ot — Oe e Branch. .

| Done and dated this_ J" day or_(er- _, 2005 @ld “35 _amifim)

(Lae d ele .

in the
for the

Secretary of the House
Legislative Branch of the
Crow Tribal Government

| Served by:

| Legislative Branch Staff

Delivered on this day of . 2005 @ a.m./p.m.

Ce: file

REVISED 9/26/05

Contract No.

Allotment No. :

OIL AND GAS LEASE
BETWEEN

THE CROW TRIBE. OF INDIANS
AND

GPE ENERGY INC.

TABLE OF CONTENTS

DEFINITIONS occu ieccccceeeseeseceeeeeeeeeseeeseeeteeesteaeeceeeenaeasenteneneneaeees 4
1.1. “Actual Drilling” ....... a 1
1.2 “Authorized Officer" . 4
1.3. “Effective Date" oo... cece eres ceeeeerseneetesnsees |
6 eR Cr (creer . 2
1.5. “Hazardous Materials” . 2
1.6 “Minimum Depth” .......... 2
1.7 (“OM Lee 2
1.8. "Paying Quantities" .................. we 2
1.9 "Radioactive Materials”... ic ccceeeeserereeeeeneeseesnenennereees 3
1.10 "Reclamation Activities" ............cccecssseesssnecneeeeneneesneeeteaneeeteeeenaes 3
1.11 "RESOPVATION ooo ccc cccccese cence cneeceeeeeaeeeneeeseteeeseeseesnesasaaesneennensnaeees 3
1.12 "Secretary" oo... csecsassaseesseessnsesesenesseesesceseeendenenes 3
1.13 "Tribal Minerals Department? 2... cece ce eeeeeeeeeseeteneneeeees 3
1.14 "Tribe" occ ccc cccccseceeseceeeeescesedsnaeeeeacecaeeeseedneesseneeseaneaneeaaee 3
LEASED: PREMISES. uuu.....ccccccccescesccecsececceseeceeeeeeeeenaeeseeenseesenaeesseneneaenaeens 3
2.1 — Lease of PreMise@S ............cccccecccseeceeeeeeeeeeeeeeereeeeseeesseseneenteeesneees 3
2.2 Limitation on Use of Leased Premises: Additional Purposes. ....... 4
2.3 -RESErVatiONS 0... csccecsnsceeececeeeeeeseeeteneesaeeseeeseeaeesseeesneenensnaes 4

2.3.1 Mineral Estate .... 4

2.3.2 Surface Estate 4
CONDITION OF LEASED PREMISES. ............cc:ccccesecssscecsseesersesneneneeseene 4
3.1. Examination of Leased Premises: No Warranties ...............006 4
3.2. Access to Leased Premises ..............c:ccecceseecseeceeeseeeseeeeeaeceaseenees 4
TERM oo cececccecscssssccccscusessscsceenseesseeceeeseneessecseeseaesdeeeeeesaeeensaetenetsanteeeeees 5
4.1. Term 5
4.2 Drilling At Expiration of The Term ........cccccecessessseseeseeeseeteeneenes 5
4.3. Temporary Cessation of Production... cesses serene eenenes 5
PAYMENTS TO LESSOR ou... ..ccccsccscsssesecescseeessesseeeeesetseneeaeeneeeaenaesneeenaiee 6
5.1. Annual Rental and Bonus ou... .cccecccececeeeeeeeeenceeeneeeaeeteareeaeeeaees 6
5.2 Royalty once cece ceeeeescsecesessneesseaesesenseeeesaesesesasesaseesessneeseegeees 6
5.3. Payments ........... eee . 7
5.4 Inspections and Audits .. 7
5.5 Administrative Fees .......... ccc ceeeceeeceeeeceeeeeeeneeeesseesenseatesneneeenas 7
WELLS oii ccccccsccsseesseecseeseseeeteeteeeeeeentereeee i 8
6.1. Obligation to File APD and Drill Wells ... aw «=8
6.2 Diligent Development .............. ee — 8
6.3. Development of Horizons ............... 9

6.4 — Drilling and Producing Restrictions 0.0.00... eee 9

10.
11.

12.

13.

14.

15.

16.

OPERATIONS. .........c:cceceseeeeeereerees coeeeeasesseseseeaanenetenseracass 9

Ti LOGS ieeeeceeecceeeeeeeessenteeseeseseeseeesescseseseseseeeeeensenersneenceseenentennenatenis 9
7.2 Prevention of Waste 20.0.0... ccc cece cece eesneneseseeeersesneneeaneeeeneseneeaees 10
7.3: Drainage .......... ww. = 10
7.4 Umit Operation oo... cc eeeescesesenetssenenseseeeeeentenenstereeeeeseaennnes 11
7.5 Water Well Conditioning ................... wee 11
7.6 Shut-In Gas Wells oo... cece ccc ecseceeeceeeceeeceneeseneesnensseeeneseaensaees 41
WATER USE AND FACILITIES. ...0.......cccccccccececeeeseeeeeeenneseeeeceeesestannneesaeeee 12
8.1 ~ Water Use 0... cece ereseeeees 12
8.2 _ Water Metering 12
PROPERTY BELONGING TO LESSE. ..........eeeeeeeeeesseeteesenteerneerensseaeas 13
ASSIGNMENT,SUBLEASE, OR TRANSFER ..........ccssceecceseesesseteeteeeee 13
INDEMNIFICATION AGREEMENT. ...........:...::cccceeeceseeeeneeneseeerensesseeeees 14
41.1 Indemnification .o..ccccc eee csceeecceseeceeeeeneeseneesaeereaeseassesaeegensareessseees 14
11.1.1 LOSSES ooocceeccccccccceceeseeeeteeeee reer ee ecdnesennsedacaueceseeesessseeasnseeasenes 14
11.1.2 Remedial Work .........ccccssecesseseeeeerteeerteenees wee 14
11.2. Defense or Prosecution of Claims ........0.... cee eee oe 1)
11.3 Payment of LOSSES oo... essceccceseeseeeeeseteeseeeseesseeeeesestenesenriees 16
11.4 Identification of Hazardous Materials .........00. eect eeeeeeeeeees 16
14.5 Hold Harmless: ...............ccccccccsessnnseeeeseseneneeeeesesseeeensecsenesmeenentesseaes 16
11.6 Survival of Section .o.......ccecceccesccccseeceeeneeeteaeterteneeteeeenasenaeerseesenes 17
NON-RESPONSIBILITY NOTICES. .........cccccseseeeeeeeeeeeeenereeeeeestenenneeeaes 17
BONDS AND INSURANCE
13.1 Performance Bonds ............cccccccsesssseceseeeeeeeeetonsnebenaeeeseesenseunneess 7
13.2 Cash in Lieu of Performance Bond ww «17
13.3 Public Liability Insurance ................ we 18
13.4. Fire and Damage Insurance... ccc eeeeeeseceerereneesteenseennensnerses 18
13.5 Workers' Compensation and Occupational Disease Insurance:
Applicable Law oo... sccsscscsscersssseseteseeeseesnenseenessereeensssasniees 18
13.6 Form and Copies of PolicieS ............cccccscnessesseneceesceeeeeseeneenerenees 18
13.7 Self-INSUPANCE ooo. cee ccc cc esse cece ceeeeeeseeceeeteeetcaeetieereseeeeserenenenaseaes 19
13.8 Periodic Review of Bonds and Insurance .............ccecccee eee 19
COMPANIES BONDING AND INSURING ......... cece eeceeceeceneeeeeeeeeeenteee 19
FORCE MAJEURE ouue..cccccccccscsesssccseestcsceseseensnenseesaceneecaeseesseessesessnerereanaes 19
LIENS. TAXES, ASSESSMENTS AND UTILITY CHARGES .................. 20
16.1 TAXCS ooicccccsccccsccccssscsssesseescseceseeeseescaeeeaeeenetsaeesceesansecaessaneenneatasess 20

ii

16.2 Lessee to Discharge Liens and Taxes Prior to Enforcement

OF Delinquency ............ccceecesseeseeecneeeeeeeeneeeeeneteeeeansentecenenseeenatoes 20

16.3 Lessor May Pay-Liens or Charges Payable to Lessee .. wv 20

16.4 Lessee's Right to Challenge or Defend... tener eeeees 21

917. SURRENDER iu... .cccceececcesececeeeceeeeeeceeeeeeetansesceeveeeseesesenasenevaeeranrerdeneeess 21

18. DISPUTES ooo .cccccccccsescscesececseseetseetecesetsesateerseesetesseseeeeeseeneesesiesaesnesansase 21

18.1 Arbitration oo... cece eenteeeeeee ae 24

18.1.1 Disputes Subject to Arbitration i... we 21

18.1.2 Initiation of Arbitration Selection of Arbitrators 0.00.0... 21

18.1.3 Arbitration Procedures ..........cecccceeeceseseeeeeteeeteeeteneestenatansnaees 22

18.2. Cancellation and Noncompliance ... .. 22

18.3. Recourse to Other Remedies .............0 vw. 22

18.4 Bankruptcy, Dissolution, or Receivership ..... a. 23

18.5 Expenses of Dispute Resolution oo... essences 23

919. ANTIQUITIES oo. ccccccscensecceeeeeeseeseneesaetesecoeseneaceseetteenenestesseeserseeneeeaee 23

20. TRIBAL JURISDICTION ........... ceseeeteeaaeaseneeeeaeeaeeaneaeeneeeneees vecteutuetieneeen 24

21. GOVERNING LAW: CHOICE OF LAW. ....00.. ct eer eeeeeeeeeeeeees 24

22. LIMITED WAIVER OF SOVEREIGN IMMUNITY ........0.000. eee 24

23. CONTESTS AFFECTING SOVEREIGNTY ouu....cccccssssssssseesssssssseteestessssees 25

24. NOTICES ooo. cccccccccesceseseeceeeseeeecsceneeeeeesesecearseeneesssenseeetsevaecasseseensasteneeeesas 25

25. TERMINATION OF FEDERAL TRUST ....00. eee eeeseeeeteteeteneenene 26

26. | LESSEE'S OBLIGATION TO THE UNITED STATES OF AMERICA ....... 26

27. DELIVERY OF PREMISES oun... cece ceteeceeeceeceeeeeteeeessesacenseneneeeneeeeee 27

28. RESTRICTION OF LEASE INTERESTS. ......0........ceesceeeeseseereeeeeeereeeeeeee 27

29. LEASE BINDING ou... ee eeececsceeeteeeeneeneeeetaeeaecasaesaetaesaenestetsetaeees 27

30. CONFIDENTIALITY. 0... cecccesececceececeecesesseseeseecncesseaeenesessesseenssesseaseaesas 27

31. DELAY OR OMISSION 00.0... ccc eeesseseceeeceesesceeesceeseecetecaeseseasaetensaccctecnees 27
32.

33.

35.

36.

ENTIRE AGREEMENT. .........ccccccccesccseseseeseeseasesdeceeeeeseseeesaeeesensesatacaceesas 28
34.1 Entire Agreement ...0.0... eee eee ww 28

34.2. No Amendment Except as Provided Herein 28
SEVERABILITY oio.e.sesccccesseceeceseseseeeesteeceeteaeseeacsseatacaeeensecavanesensnaesareeensas 29
SECRETARY'S APPROVAL 00.0... ceececeeesetsetecteceebeseesbeseesetaneantenineeaiae 29
CROW TRIBE OF INDIANS OF THE CROW INDIAN RESERVATION

U.S. DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
Crow Agency, Montana 59022

Contract No. :
Allotment No. :

OIL AND GAS LEASE BETWEEN THE CROW TRIBE OF INDIANS
AND GPE ENERGY INC.

THIS LEASE is made and entered into in quintuplicate this day of :
2005, by and. between the Crow Tribe of the Crow Reservation, a sovereign government
and federally recognized Indian tribe, whose address is P.O. Box 159, Crow Agency,
Montana 59022 (hereinafter referred to as "Lessor"), and GPE Energy Inc., a Nevada
corporation, whose address is 9800 Mount Pyramid Court, Suite 400, Englewood,

‘Colorado . 80112, (hereinafter referred to as "Lessee"). This lease is entered into
pursuant to the Indian Mineral Development Act of 1982 (25 U.S.C. § 2101 et seq.), the
Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. § 1701 et. seg.), other
applicable federal laws. and regulations, including but not limited to 43 C.F.R. Part 3160,
Onshore Oil and Gas Operations: General, and 30 C.F.R. Part 200, Royalty
Management, and the laws of the Crow Indian Reservation, including all amendments to
all of the above.

1. DEFINITIONS

1.1 "Actual Drilling" means spudding in a well on the Leased Premises and
continuing diligent drilling practices to the Minimum Depth.

1.2 "Authorized Officer’ means any entity or individual authorized by the
Secretary to perform duties with respect to this Lease or the regulations applicable
hereto.

1.3 “Effective Date" means the first day of the month following the date of
approval of this Lease by the Secretary.

1.4 "Gas". means any fluid, either combustible or noncombustible,
hydrocarbon or nonhydrocarbon, which is extracted from a reservoir and which has
neither independent shape nor volume, but tends to expand indefinitely. It is a
substance that exists in a gaseous or rarified state under standard temperature and
pressure conditions. Gas does not include gaseous substances derived, produced, or
manufactured from coal, oil shale, tar sands, or hydrocarbons classified as synthetic
fuels. Gaseous substances produced or manufactured from coal (coalbed gas) means
gas composed primarily of methane and which is created as a byproduct of coal
formation and is stored in coal by (a) being absorbed onto the surface of the micropore
system of the coal or is present in the macropore system (or cleats) of the coal either as
a free gas-or dissolved in water. Any gas produced from a sandstone, limestone, shale,
or other-conventional gas formation shall be presumed not to be coalbed methane gas.

1.5 "Hazardous Materials" means any substance, material, or waste,
excluding Oil and Gas, now or hereafter determined by any federal, state, or tribal
governmental authority to pose an actual risk of injury to health, safety, or property and
including, but not limited to, any substance, material, or waste: (1) containing asbestos
or Radioactive Materials, but excluding any preexisting naturally occurring Radioactive
Materials: (ii) now or hereafter defined as a “hazardous waste, "hazardous material,”
"hazardous substance," "extremely hazardous waste;" or "restricted hazardous waste"
under any provision of applicable federal, state, or tribal late: (iii) now or hereafter
defined as "hazardous waste" pursuant to § 1004 of the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. § 6903: or (iv) now or hereafter defined as.a
"hazardous substance” pursuant to § 101 of the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et se q.
Hazardous Materials shall-not include materials used routinely in the development and
production of Oil and-Gas.

1.6 "Minimum Depth" means for (a) a wildcat, or step out well a depth
sufficient to test the Tensleep Formation; or (b) a development well a depth sufficient to
test the known producing formations. A wildcat or step out well shall mean a well
completed at a distance of not less than two (2) miles from existing or previous
production.

1.7 "Oil" means a mixture of hydrocarbons that existed in a liquid phase in
natural underground reservoirs and remains liquid at atmospheric pressure after
passing through surface separating facilities and is marketed or used as such.
Condensate recovered in lease separators or field facilities is considered to be oil. Oil
does not include liquid substances derived, produced, or manufactured from coal, oil
shale, tar sands, or other hydrocarbons classified as synthetic fuels.

1.8 "Paying Quantities" means a well producing, or capable of producing as
provided in Section 7.6, sufficient Oil and Gas to produce income in an amount
necessary to (a) operate and maintain the well, (b) maintain this Lease, (c) market the
product, and (d) result in a reasonable profit.

1.9 "Radioactive Materials" means any material which exhibits the
phenomenon of spontaneously emitting radiation resulting from changes in the nuclei of
atoms of the element.

1.10 "Reclamation Activities" shall mean those actions required under
applicable law to close each well or unit, including, but not limited to, plugging or
abandoning of wells, or those actions required to close Lessee's activities in and on the
entire leasehold in compliance with applicable laws and regulations, as the context

requires.

1.11 "Reservation" means those lands encompassed within the exterior
boundaries of the Crow Reservation, of Montana.

1.12 "Secretary" means the Secretary of the Interior of the United States of
America or-his duly authorized representative.

4.13 "Tribal Minerals Department" means the Minerals Department of the Tribe.

1.14 "Tribe" means the Crow Tribe of the Crow Reservation.

2. LEASED PREMISES
2.1 Lease of Premises

For and in consideration of the payments to Lessor herein provided and the
covenants of Lessee herein contained, Lessor hereby grants, leases, and lets
exclusively unto Lessee for the purposes of investigating, exploring, prospecting,
drilling, mining for, and producing Oil and Gas, including all associated hydrocarbons
produced in liquid or gaseous form, laying pipe lines, building roads, tanks, power
stations, telephone fines, and other structures thereon to produce, save, take care of,
treat, transport, market and own such products, and performing any required
Reclamation Activities, Lessor’s mineral interests on the following-described tracts of
land situated in the Reservation, and more particularly described as follows:

Township 3 South, Range 31East, M.P:M.

Tract No. MT 97-C —SE1/4, Sec. 22, SW1/4, Sec. 23

Tract No. MT 277-E — SE1/4, Sec. 27

Tract No. MT 278-C — N1/2, SW1/4, Sec. 27, SE1/4NE1/4,SE1/4, Sec.28
Tract No. MT 2029-B — E1/2NW 1/4, Sec. 34

Tract No. MT 2030-F — W1/2NW1/4, Sec. 34

Tract No. MT 3276-B —W1/2NE1/4, NW1/4, NW1/4SW1/4, Sec. 26

Tract No. MT3623) - W1/2NE1/4, S1/2NW 1/4, Sec. 23

TractNo. T 6002 -W41/2SE1/4, Sec. 23

containing 1,840 acres, more or less, (hereinafter referred to as "Leased Premises").

2.2 Limitation On Use Of Leased Premises: Additional Purposes

The Leased Premises shall not be used by Lessee for any purpose or purposes
other than those specified above, or specifically granted elsewhere in this Lease, and
Lessee agrees to use the Leased Premises only for these purposes. However, Lessee
may use the Leased Premises for any additional lawful purpose, including but not
limited to seismic work, injecting Gas, water, and other fluids and. air into subsurface
areas, when specifically authorized hereafter by written consent of Lessor and the
Secretary, which consent may be withheld, granted, or granted upon conditions, in the
reasonable discretion of Lessor and the Secretary.

2.3 Reservations
2.3.1 Mineral Estate

The Tribe expressly except from this agreement and reserve to
themselves, all minerals of every kind and character in, on, and under the Leased
Premises, other than the Oil and Gas as herein defined. However, the movement or use
of soils, sand, and rock by Lessee for the purpose of constructing and improving the
Leased Premises as required by this Lease shall be permitted and shall not be
construed as mining.

2.3.2 ‘Surface Estate

The Lessor reserves the right, subject to the superior right of Lessee to
use so much of the surface of the Leased Premises as is necessary for Lessee to
exercise the rights granted under this Lease, to lease, sell; or otherwise dispose of the
surface of the Leased Premises. Lessor may use said land and the surface thereof to
investigate, explore, prospect, drill, and mine for, and produce all such other minerals,
including but not limited to the right to construct, operate, and maintain works, buildings,
plants, waterways, roads, communication lines, pipelines, reservoirs, tanks, pumping
stations, wells, offices, utilities, and other structures necessary or convenient for
enjoyment of the rights excepted and reserved hereunder.

3. CONDITION OF LEASED PREMISES
3.1 Examination of Leased Premises: No Warranties

Lessee has examined and knows the Leased Premises. No warranties or
representations, express or implied, as to the title, condition or status of the Leased
Premises have been made by Lessor or any agent of Lessor prior to or at the time of
execution of this Lease. Lessee warrants that it has not relied on any warranty or
representation made by or for Lessor, but has relied solely upon Lessee's independent
investigation.

3.2 Access to Leased Premises

Lessor hereby grants to Lessee the non-exclusive right for continuous ingress
and egress by motor vehicles (including trucks) and on foot over the lands of Lessor
from any established highway or secondary road to the perimeter of the Leased
Premises as may be reasonably necessary to carry on the work authorized herein;
provided, that Lessor shall not be required to make any expenditure of money to
construct or maintain any such route. Such ingress and egress shall be by the least
damaging route to the Leased Premises and construction of permanent roadways shall
be subject to the prior approval of the Tribe. Lessee shall be responsible for repairing
any material damage done or caused to.be done to Lessor's land by Lessee in
exercising this right and Lessee shall bear the cost and expense of such repair.

4. TERM
44 Term

The term of this Lease shall be three (3) years ("Term"), beginning on the
Effective Date of this Lease, and shall continue so long thereafter as oil or gas is
produced in Paying Quantities from the Leased Premises, subject to the provisions of
Section 6.1, with a preferential right in Lessee to renew this Lease for a successive
period of three (3) years upon such reasonable terms and conditions as may be agreed
to by the Parties hereto and approved by the Secretary, unless otherwise provided by
law, upon the expiration of the Term. There must be production in Paying Quantities
of any Oil and. Gas at the expiration of the Term in order for this Lease to continue
beyond the Term. The environmental releases and indemnifications contained in
‘Section:11 of this Lease shall survive the expiration or termination of this Lease.

4.2 Drilling At Expiration Of The Term.

If at the expiration of the Term, Lessee is engaged in the Actual Drilling of a well
on the Leased Premises and there are no other wells on the Leased Premises, or on
lands pooled, unitized, or communitized therewith, which are producing in Paying
Quantities, this Lease shall not terminate so long as Lessee shall pursue the Actual
Drilling of such well with reasonable diligence to completion or abandonment. If such
well shall produce in Paying Quantities, the well shall be treated as a well producing in
Paying Quantities for purposes of this Lease continuing beyond the Term. If such well
shall not produce in Paying Quantities; this Lease shall terminate on abandonment
according to the Lease terms.

4.3 Temporary Cessation Of Production.

If at the end of the Term a well on the Leased Premises, or on lands pooled,
unitized, or communitized therewith, capable of producing in Paying Quantities,
temporarily has ceased to produce due to mechanical problems or because of
deepening, plugging back, or other operations and there are no other wells on the
Leased Premises, or on lands pooled, unitized, or communitized therewith, which are
producing in Paying Quantities, nevertheless such well shall be deemed to be a well on
the Leased Premises producing in Paying Quantities and this Lease will continue in

force.during all of the time or times this Lease may be held by production. If Lessee
does not commence. operations upon such well or commence drilling operations on a
new weil within ninety (90) days from cessation of production and, after commencing
operations within said period, if production in Paving Quantities has not resumed within
one hundred eighty (180) days from commencing operations, this Lease shall expire.

5. PAYMENTS TO LESSOR

Lessee covenants and agrees to pay to Lessor the following payments ("Lease
Payments") for use of the Leased Premises:

5.1 Annual Rental and Bonus

Lessee shall pay to Lessor, on or before the Effective Date and each anniversary
thereof, an Annual Rental of Five Dollars ($5.00) per acre per annum in advance during
the continuance hereof. The-total annual rental wiil be $9,200.00. for 1840 acres. The
Annual -Rental shall not be credited against Royalty, or prorated or refunded for any
reason whatsoever.

In addition, lessee shall pay to Lessor, on or before the Effective Date of this
lease, a bonus payment of Five Dollars ($5.00) per acre. The total bonus payment for
this lease is $9,200.00 for 1840 acres.

5.2 Royalty

in addition to the.Annual Rental, Lessee shall pay to Lessor a Royalty of Sixteen
and two-thirds percent (16 2/3%) of the value of all. Oil and Gas produced, sold, or
saved from the Leased Premises, save and except Oil and Gas used by Lessee for
development_and operational purposes on the Leased Premises which Oil and Gas
shall be royalty free. Lessor shall have the right to elect on thirty (30) days written notice
to take Lessor's royalty in kind. When paid in value, Royalties shall be due and
payable monthly on the last day of the calendar month following the calendar month in
which produced, sold, or saved.

"Value" may, in the discretion of the Secretary, be calculated on the basis of the
highest price paid (whether calculated on the basis of short-or actual volume) at the
time of production for the major portion of the Oil of the same gravity; and Gas, and/or
natural gasoline, and/or all other hydrocarbon substances produced, sold, and saved
from the area of the Crow Indian Reservation where the Leased Premises are situated,
and the actual volume of the marketable product less the content of foreign substances
as determined by the Authorized Officer. It is understood that in determining the value
for royalty purposes of products such as natural gasoline derived from treatment of Gas,
a reasonable allowance for the cost of manufacture shall be made and that such
allowances for the costs of manufacturing and transportation of such products shall be
no greater than two-thirds of the value of the marketable product.

When Royalty on Oil produced is paid in kind, such royalty Oil shall be delivered,
at such time as may be required by Lessor, in Lessee’s tanks on the premises where
produced as reasonably may be required by Lessor without cost to Lessor, unless
otherwise agreed to by the Parties. Lessee shall not be required to hold such royalty Oil
in storage longer than thirty (30) days after the end of the calendar month in which such
Oil is‘ produced. Lessee in no manner shall be responsible or held liable for loss or
’ destruction of such Oil in storage, unless the loss or destruction is. caused by Lessee's
negligence and/or willful misconduct. When Royalty on Gas produced is paid in kind,
such royalty Gas shall be delivered by Lessee to a mutually acceptable place in the
gathering line or pipeline to which the well is connected at no cost to Lessor.

5.3 Payments

All payments due hereunder shall be paid without prior written notice or demand on
or before their due date in accordance with applicable laws and regulations. Interest
shall be paid on all late payments from the due date to the date of payment, computed
on an annual rate three percentage points above the prime rate as set by the Citibank
N.A. of New York on the first day of the month in which demand is made by Lessor,
provided. that the prime rate for purposes of this subsection shail not be less than six
percent (6%) per annum. Lessee shall furnish to Lessor and the Secretary- monthly
statements in such form as may be prescribed by the Secretary, and furnish Lessor with
any hard copy printout if an automated data processing system is used. Monthly
statements shall be filed with Lessor within sixty (60) days.of the last day of the month
covered by the report.

5.4 inspections and Audits

Lessee agrees to allow Lessor and its agents or any authorized representative of the
Secretary, to enter, from time to time, upon and into all parts of the Leased Premises for
the purposes of inspection, and shail further agree to keep a full and correct account of
all operations and make reports thereof, as required by the regulations of the Secretary
governing operations on the Leased Premises. Lessee’s books and records pertaining
to the Leased Premises shall be open at all times for audits relating to the scope,
nature, and extent of compliance with this Lease or with applicable laws, regulations, or
orders by Lessor or such officers of the Secretary as shail be instructed in writing by the
Secretary or authorized by regulations to make such audit. Lessor and the Secretary
shall provide reasonable notice to Lessee of its intent to audit Lessee's books and
records. Lessee shall maintain its books and records and they shall be available for
audit for the maximum period required by applicable law or regulations. Duly authorized
representatives of the Tribal Minerals Department shall have the right to issue written
notices of probable violations of applicable federal and tribal laws and regulations.

5.5 Administrative Fee

Lessee shall pay to Lessor on or before the Effective Date of this Lease, a one
time administrative fee of $7,000.00. The administrative fee shall be a separate
payment made directly to the Lessor.

6. WELLS
6.1 Obligation To File APD. and Drill Wells.

Lessee will submit an application for a permit to drill (APD) the initial well within
120 days of approval of this lease. This lease shall terminate prior to the expiration of
the Term if Lessee does not commence or cause to be commenced Actual Drilling. of
the initial well on the Leased Premises within sixty (60) days of the APD approval dates
and diligently drill such wells to the Minimum Depth. Such well shall be compieted as a
well producing Oil and/or Gas in Paying Quantities or plugged or abandoned as a dry
hole. Completion of a well means completion of all "completion operations” that a
reasonable operator would use and employ in a good faith effort to obtain production. A
dry hole shall. mean a well dritled to the Minimum Depth which does not produce Oil &
Gas in Paying Quantities. In the event that the initial well is a success and additional
drilling is justified, the lessee will submit an application for a permit to drill the next well
- within ninety (90) days of release of the completion rig of the successful well. Each
successful well will earn the oil and gas rights to the contiguous 160 acre tract within the
Leased Premised to be designated by Lessee in which the successful well is located for
as long as oil and/or gas is produced from that well, with appropriate consideration for
periods of time when the well may not be producing during its commercial life for normal
operations events or Force Majeure. In the event an APD is not submitted in the 90 day
period described above, all unearned acreage will expire immediately without regard to
the remaining Primary Term.

If Lessee has timely commenced and conducted the drilling of a well to the
satisfaction of the provisions of this Lease and has otherwise complied with all
applicable provisions of this Lease but encounters impenetrable substances or
mechanical difficuities preventing Lessee from reaching the objective depth in said well,
Lessee shall have the right to abandon said well and drill a substitute well at a mutually
agreeable location. The substitute well shall be drilled in the same manner and under
the same conditions required for the well for which it is the substitute. Actual drilling ofa
substitute well will commence within ninety (90) days after the prior well is plugged and
abandoned. In the event a substitute well is commenced within such time and is drilled
and completed in the manner required herein with due diligence and in a good and
workmanlike manner, ‘said substitute well shall be regarded for purposes of this Lease,
as the well for which it is the substitute and all terms and conditions hereof shail apply to
said substitute well.

6.2 Diligent Development

Lessee shall exercise reasonable diligence, as a prudent operator, in drilling and
operating wells for Oil and Gas on the Leased Premises while such products can be
secured in Paying Quantities. At the election of Lessee, Lessee may drill and produce
wells necessary to diligently develop the Leased Premises: provided, that the right to
drill and produce such weils shall be subject to any system of well spacing or production

allotments authorized and approved under applicable law or regulations, approved by
the Secretary, and affecting the field or area in which the Leased Premises are situated.

6.3 Development Of Horizons

Lessee shall have three (3) years from the Effective Date to develop all horizons
on the Leased Premises. At the expiration of such three (3) year period, Lessee shall
have no right to and shall release those horizons below the then deepest horizon
producing in Paying Quantities.

If at the end of the three (3) years a well on the Leased Premises capable of
producing in Paying Quantities, temporarily has ceased to produce due to mechanical
problems or because of deepening, plugging back, or other operations and there. are no
other wells on the Leased Premises, or on lands pooled, unitized, or communitized
therewith, which are producing in Paying Quantities, nevertheless such well shall be
deemed to be a well on the Leased Premises producing in Paying Quantities and this
Lease will continue in force during allof the time or times this Lease may be held by
production; provided, that this Lease shall terminate if Lessee does not commence
operations upon such well or commence drilling operations on a new well within ninety
(90) days from cessation of production and, after commencing operations within said
period, if production in Paying Quantities has not resumed within one hundred eighty
(180) days from commencing operations.

6.4 Drilling And Producing Restrictions

Lessor and Lessee agrees that the Secretary may impose restrictions as to time
or times for drilling of wells and as to the production from any well or wells drilled when,
in his judgment, such action may be necessary or proper for the protection of the natural
resources of the Leased Premises and the interests of Lessor. In the exercise of his
judgment, the Secretary may take into consideration, among other things, federal and
tribal laws and regulations, and lawful agreements among operators regulating either
drilling or production. _In the event that the Secretary imposes any such time
restrictions, the periods of time for drilling wells as set forth in Section 6.1, and the
primary term of this lease, shall be extended for the period of such restriction.

7 OPERATIONS.
7.1 Logs

Lessee shal! maintain and provide to Lessor and the Secretary upon request a
complete set of all seismic data (geological and/or geophysical), any and all data
pertaining to core descriptions, lithology logs, electronic logging surveys, LIS digital
tapes; all final stack seismic data, and all information pertaining to test data of oil, gas,
and/or water (all such information set forth herein is collectively referred to herein as
"logs") which are developed by Lessee or at its direction in connection with Lessee's
activities on the Leased Premises. When requested by Lessor, Lessee shall show and
explain final interpretations to Lessor, but shall not be required to provide copies of such

interpretations to Lessor. All logs shall be made available to a designated representative
of Lessor for inspection, if Lessor so requests, not late: than forty-eight (48) hours after
having been run. Any copies of logs provided to Lessor or the Secretary shall be held
confidential and shail not be released or made available to any other Party until six
months after completion of each well, unless Lessee gives written permission to release

logs sooner.
7.2 Prevention Of Waste

Lessee shail exercise diligence in drilling and operating wells for Oil and Gas on
the Leased Premises while such products can be secured in Paying Quantities; carry on
all operations in a good and workmanlike manner in accordance with approved metheds
and practice, having due regard for the prevention of waste of Oil or Gas developed on
the Leased Premises, or of the entrance of water through wells drilled by Lessee into
the productive sands or Oil or Gas-bearing strata to the destruction or injury of the Oil or
Gas deposits, the preservation and conservation of the Leased Premises for future
productive operations, and to the health and safety of workmen and employees: Lessee
agrees to plug securely all wells before abandoning the same; to shut off effectually all
water from the Oil or Gas bearing strata; not drill any new well within 200 feet of any
then existing house or barn, on or near the Leased Premises without Lessor's written
consent; carry out at Lessee's expense all reasonable orders and requirements of the
Authorized Officer relative to prevention of waste, preservation of the Leased Premises,
and the health and: safety of workmen; bury all pipelines crossing tillable lands below
plow depth, as: determined by the Authorized Officer, unless other arrangements
therefore are made with the Authorized Officer; pay all damages to crops, buildings, and
other improvements on the premises occasioned by Lessee's operations; provided, that
Lessee shall not be held responsible for delays or casualties occasioned or caused by
force majeure.

Lessee must thoroughly clean all vehicles and equipment so that no noxious or
poisonous plants may be introduced or spread on Reservation lands. Should an
infestation of noxious or poisonous plants be found either on a temporary or permanent
base of operations or along access roads or trails used and/or constructed by Lessee.
Lessee shall be required; if responsible for the infestation, to provide control measures
a.. directed by the Authorized Officer or Lessor. The Secretary and Lessor shall bear
the burden of proof on the issue of Lessee's responsibility for the infestation.

7.3 Drainage

Lessee shall drill and produce all wells necessary to offset or protect the Leased
Premises from drainage, including from adjoining lands of Lessor which are under lease
to Lessee at a royalty rate less than that called for by this Lease or, in lieu thereof, to
compensate Lessor in full each month for the estimated loss of royalty through
drainage; provided that during the period of supervision by the Secretary the necessity
for offset wells shall be determined by the Authorized Officer after affording Lessor and
Lessee a reasonable opportunity to be heard on the issue and payment in lieu of drilling
and production shall be with the consent of and in an amount determined by, the
Secretary.

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74 Unit Operation

No agreement, nor amendment to any agreement, for the cooperative or unit
development ("pooling") for the field or area affecting the Leased Premises, or any pool
thereof, shall be valid or binding without the advance written consent of Lessor and the
Secretary. Notwithstanding any other provisions herein, upon the pooling of part of the
Leased Premises, this Lease shall be severed and. shall be considered as separate and
distinct leases for all horizons on (a) the pooled acreage and (b) the rest of the Leased
Premises; such severance shail result each time, and from time to time, whenever
pooling occurs; and the term of each resulting lease caused. by any such severance,
and all the rights and obligations of Lessee under each such lease, shall apply
separately to the acreage. attributable to the particular lease under the foregoing
severance, with every resulting lease being considered as separate and independent
from every other lease.

75 Water Well Conditioning

Within sixty (60) days of the filing of a notice of intent to abandon a well not
capable of producing in Paying Quantities, or on reasonable notice for other wells, the
Secretary and Lessor may require Lessee to condition any such well suitable for water
use by Lessor, provided the water produced is in excess of amounts needed for
Lessee's operations on the Leased Premises. The reasonable costs for conditioning the
well will be borne by Lessor. After.a well is conditioned as provided for herein, Lessee
shall be relieved from its plugging and abandonment responsibilities and any such well
shall thereafter be the sole responsibility of Lessor.

7.6 Shut-In Gas Wells

If a well capable of producing Gas or Gas and gas-condensate in Paying
Quantities located on the Leased Premises, or on lands pooled, unitized or
communitized therewith, is at any time shut-in due to market conditions or lack of any
available pipeline, so that no Gas or gas-condensate there from is sold or used off the
Leased Premises or for the manufacture of gasoline or other products, and this Lease is
not otherwise being maintained by another well producing Oi! and/or Gas from the
Leased Premises in Paying Quantities, this Lease shall nevertheless remain in full force
and effect and such shut-in well shall be deemed to be a well on the Leased Premises
producing Oi! and/or Gas in Paying Quantities so long as Lessee remits to Lessor those
shut-in royalty payments called for herein. Lessee, with due diligence as a prudent
operator, shall make reasonable efforts to open markets for production obtainable from
such shut-in well, but Lessee is under no obligation to market production except
pursuant to prudent terms and conditions which will economically benefit both Lessor
and Lessee. Lessee shall use due diligence to market Gas or Gas and gas condensate
capable of being produced from a shut-in weil but shall be under no obligation to market
such products under terms, conditions, or circumstances which, in Lessee’s reasonable
judgment, are unsatisfactory. If a well is shut-in for a continuous period in excess of
thirty (30) consecutive days, or during a calendar year for a cumulative period in excess
of ninety (90) days, Lessee shall pay or tender to Lessor, in addition to all other Lease

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Payments, a shut-in royalty under the conditions and in the amounts hereafter specified,
which shut-in royalty shall be computed as follows:

A) As to each year of the first three years during which a well is shut-in on
one or more occasions for a continuous period in excess of the 30-day
period above stated, or for a cumulative period in excess of the 90-day
period above stated, Lessee shall pay or tender to Lessor within forty-five
(45) days after the next ensuing anniversary date of this Lease a total
amount equal to Five Dollars ($5) per acre;

B) As to each year after the first three years during which a well is shut-in on
one or more occasions for a continuous period in excess of the 30-day
period above stated, or for a cumulative period in excess of 90-day period
above stated, Lessee shall pay or tender to Lessor within forty-five (45)
days after the next ensuing anniversary date of this Lease of a total
amount equal to Ten Dollars ($10) per acre; and

C) All such shut-in payments shall be deemed Royalties under this Lease but
shall not be credited against future Royalties once production resumes.
No such shut-in Royalty payment shall limit or discharge Lessee from its
obligation to develop reasonably the Leased Premises, or serve to extend
any Term of this lease, except as provided herein.

8. WATER USE AND FACILITIES
8.1 Water Use

The Tribe shall provide and Lessee shall obtain a water permit for each water
well drilled or cil or gas well converted to a water source or injection well on the Leased
Premises. The water permit fee shall be One Hundred Seventy-five Dollars ($175) per
well drilled or converted. Water permits shall allow Lessee to use waiter of the Tribe
from the Leased Premises for all drilling related operations. Any water obtained off the
Leased Premises from the Tribe, except water that is produced in conjunction with Oil
and Gas from a hydrocarbon producing formation under lease to Lessee, shall be
purchased by Lessee from Lessor at a rate of five cents ($.05) per barrel. Nothing in this
section shall relieve: Lessee from compliance with federal and tribal laws and
regulations for water use.

8.2 Water Metering

To facilitate the accounting of water use, Lessee shall maintain accurate and
complete records of the sources and amounts of water used on the Leased Premises,
shall furnish such records to Lessor on request, and shall install metering or measuring
devices: capable of measuring produced and injected water from all welis on a monthly
basis, other than wells used solely for groundwater monitoring. Any such metering or
measuring devices shall be nonresettable and certified for accuracy on an annual basis
by an independent technician.

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9. PROPERTY BELONGING TO LESSEE

If Lessor shali so elect in writing within ninety (90) days from the termination or
expiration of this Lease, Lessor may purchase any or all of the buildings, structures,
materials, tools; machinery, appliances, and. equipment, including casing in wells
("Equipment") placed in or upon the Leased Premises by Lessee and shall pay to
Lesser such sum as may be agreed to by the Parties. If the Parties cannot reach
agreement on a purchase price, a reasonable price shall be fixed by a board of three
appraisers, one of whom shall be chosen by Lessor, one by Lessee, and one by the two
so chosen. Pending such purchase, all Equipment shail remain in normal position. If
Lessor elects not to purchase all or a part of the Equipment, Lessee shall remove it

’ within a period of one hundred eighty (180) days following the earlier of the end of the
above-referenced.ninety (90) day period or actual written notice of Lessor's election not
to purchase. If Lessee does not remove the Equipment within the one hundred eighty
(180) day period, Lessor shall have the option to remove the Equipment at Lessee's
sole cost and risk, or to transfer ownership of the Equipment to Lessor at no cost to
Lessor.

10.. ASSIGNMENT, SUBLEASE, OR TRANSFER

Lessee shall not assign this Lease or any interest therein by an operating agreement or
otherwise, shall not sublet any portion of the Leased Premises, and shall not transfer
any interest therein, except with the approval of Lessor and the Secretary, which
approval shall not be unreasonably withheld. No sublease, assignmeni, or transfer shall
’ be valid or binding upon Lessor without Lessor’s written approval, and then only upon
the condition that the sublessee, assignee, or transferee shall agree in writing to be
bound by all provisions of this Lease, including but not limited to the release and
indemnification requirements. If this Lease is divided by the assignment, sublease, or
transfer of an entire interest in any part, including a stratigraphic horizon, each part shall
be considered a separate lease under all the terms and conditions of this original lease,
including any modifications or renewals approved in conjunction with the approval of
such assignment or transfer. Lessor's approval of one sublease, assignment, or transfer
shall not validate a subsequent sublease, assignment, or transfer, and the restrictions of
this Section shall apply to each sublease, assignment, or transfer hereunder and shall
be severally binding upon each and every sublessee, assignee, transferee, and each
and every corporate successor or other successor in interest of Lessee.

Thus Section shall not apply to a mortgage, security interest, or other encumbrance of
this Lease for purposes financing operations related to the Leased Premises. This
Section shall not apply to any assignment or transfer if the assignment or transfer is to
any person, firm, corporation, or other business entity which is owned or controlled by
Lessee, in whole or in part, nor by a subsidiary or affiliate of Lessee and which owns or
control Lessee, in whole or in part, and of which Lessee is a subsidiary or affiliate,
except that Lessee by written notice shall notify Lessor and the Secretary of such

13

assignment or transfer. The term "control" shall mean the direct or indirect power to
direct or cause the direction of the management and policies of Lessee, or its parent
corporation, whether through the ownership of voting securities, by contract, or
otherwise.

11. INDEMNIFICATION AGREEMENT
11.1. Indemnification

11.1.1 Losses

Lessee agrees to indemnify,. protect, release, and hold harmless Lessor
and the Secretary from and against ail losses, liabilities, damages, costs, investigations,
obligations, claims, penalties, causes of action, monitoring, costs, and expenses
(including but not limited to reasonable attorney fees, consultant fees and costs, expert
fees and costs, laboratory testing, remediation and settlement costs, and claims,
including, without limitation, third-party claims, whether for personal injury or real or
personal property damage or otherwise, or administrative and. informal
proceedings)("Losses"), incurred by Lessor and resulting or arising from Lessee's acts
or omissions in-connection with: (i) any breach of any representation, covenant, or
warranty made by Lessee in thus Lease or in any certificates or other instruments
delivered by or on behalf of Lessee pursuant thereto; (ii) any violation of the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. and the
regulations thereunder (the "WARN Act’); (iii) the use, non-use, storage, release,
disposal, or generation by Lessee, or its agents, employees, contractors, or invitees, of
any Hazardous Material in, on, under, or about the Leased Premises; or (iv) any
accident, injury to, or death of persons, or loss of or damage to property occurring on or
about the Leased Premises or any portion thereof.

The: indemnification referred to above shall specificaily cover Losses
incurred. in connection with the investigation or monitoring of site conditions, any
cleanup, containment, remedial, removal, or restoration work required by applicable law
and performed by any federal, state, or tribal governmental agency or political
subdivision, or performed by any nongovernmental entity or person because of the
presence or suspected presence or release or threatened or suspected release of any
Hazardous Materials in or into the air, soil, groundwater, or surface water at, on, under,
or above the Leased Premises, and Losses arising from any claims of third parties for
loss or damage due to such presence or release of Hazardous Materials, resulting or
arising from Lessee's acts or omissions.

11.1.2 Remedial Work

if any investigation, testing; or monitoring of site conditions or any
cleanup, containment, restoration, removal, or other remedial work (collectively the
"Remedial Work") is required under any applicable law or regulation, by any judicial
order, or by any governmental entity, or is required to comply with any agreements of
Lessee affecting the Leased Premises, then Lessee is obligated to indemnify Lessor,

and Lessee shall either perform or cause to be performed the Remedial Work in
compliance with such law, regulation, order, agreement, or recommendation, or shall
promptly reimburse Lessor for the necessary cost of such Remedial Work. Ail costs and
expenses of such Remedial Work shall be paid either directly, or in the form of
reimbursement to Lessor, by Lessee including, without limitation, the charges of the
contractor(s) and/or the consulting engineer, and Lessor’s reasonable attorney and
paralegal fees and costs incurred in connection with monitoring or reviewing such
Remedial Work. If Lessee: shall fail to timely commence, or cause to be commenced, or
fail to diligently prosecute to completion, such Remedial Work, Lessor may cause such
Remedial Work to be performed, and_all costs and expenses thereof, or incurred in
connection therewith, shall be Losses within the meaning of 11.1.1 above. It is agreed
and understood that such indemnification shall not extend to losses incurred by Lessor
in connection with Section 11.1.1 (i) to (v) and resulting from Lessor's gross negligence
and/or willful misconduct.

11.2 Defense Or Prosecution Of Claims

If the facts giving rise to any indemnification provided for herein shall involve any
actual or threatened claim or demand by any person other than a Party hereto, Lessee
shall be entitled, upon its election, by written notice given to Lessor within fifteen (15)
days of receiving. notice of such claim or demand for, in the case of summary
proceedings, five (5) days after the date on which notice of the claim or demand is given
to Lessee (without prejudice to the right of Lessor to participate at its expense through
counsel of its own choosing)] to assume the defense or prosecution of such claim and
any litigation resulting therefrom at its expense and through counsel of its own
choosing; provided, however, that, if by reason of the claim of such third party, a lien,
attachment, garnishment, or execution is placed upon any of Lessor's property or
assets, Lessee, if it desires to exercise its right to defend or prosecute such claim or
litigation, shall furnish a satisfactory indemnity bond to obtain the prompt release of
such lien, attachment, garnishment, or execution; and provided further, that Lessor shall
control the defense of itself in any litigation instituted against it without prejudice to its
rights to be indemnified hereunder or to participate in such action, if not named as a

party.

If Lessee assumes the defense or prosecution of any such claim or litigation, it
shall take all steps necessary in the defense, prosecution, or settlement of such claim or
litigation and shall hold Lessor harmless from and against all losses caused by or
arising out of any settlement thereof or any judgment in connection therewith (other than
its expenses for participating in such defense, prosecution, or settlement). Lessee shail
not, in the defense or prosecution of such claim or litigation, except with the written
consent of Lessor, consent to the entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving to Lessor by the third party
of a release from all liability regarding such claim or litigation. Lessor shall cooperate in
the defense or prosecution of such claim or litigation. If Lessee fails to assume the
defense or prosecution of any such claim or litigation, Lessor may defend against or
prosecute such claim or litigation in such manner as it may deem appropriate and may
settle such claim or litigation, after giving written notice thereof to Lessee, on such terms

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as Lessor may deem appropriate; and Lessee will promptly reimburse Lessor for the
"losses" incurred as a result of such settiement, together with the amount of all
reasonable legal and other expenses incurred by Lessor in connection with the defense,
prosecution, or settlement of such claim or litigation. If no settlement of such claim or
litigation is made, Lessee shall promptly reimburse Lessor for the amount of any
judgment rendered with respect to such claim or such litigation and for all reasonable
expenses, legal and other, incurred by Lessor in connection with any such judgment.

11.3 Payment Of Losses

Each Loss determined to be payable by Lessee under the terms hereof shall be
paid:to Lessor within thirty (30) days after the date on which Lessee is notified in-writing
of such amount. Each such notice shail contain an itemization of the damages,
expense, costs, and liabilities comprising the Loss, certified to be true and correct by
Lessor or its. legal representative.

11.4 Identification Of Hazardous Materials

if at any time-either Party shall become aware of, or have reasonable cause to
believe, that any Hazardous Materials have come to be located in, on; under, or about
the Leased Premises, the discovering Party shail, immediately upon discovering such
presence or suspected presence of Hazardous Materials, give written notice of that
condition ‘to the other Party. In addition, each Party shall immediately notify the other, in
writing, of. (i) any enforcement, cleanup, removai, or other governmental or regulatory
action instituted, completed, or threatened relating to any Hazardous Materials on the
Leased Premises: (ii) any claim made or threatened by: any person against either Patty
relating to damages, losses, or injury claimed to result from the presence or threat of
Hazardous Material on or to the Leased Premises; and (iii) any reports made to any
tribal, state, or federal environmental agency arising out of or in connection with any
Hazardous Materials on the Leased Premises, including but not limited to any
complaints, notices, warnings, or asserted violations in connection therewith, of which
the Party becomés: aware. Each Party shall also supply the other as promptly as
possible, and in any event within five (5) business days after receiving, such copies of
all claims, reports, complaints, notices, warnings, or asserted violations relating in any
way to the Leased Premises or use thereof.

The provisions of this Section 11.4 shall not apply to Hazardous Materials
brought onto the Leased Premises by Lessee or naturally occurring on the Leased
Premises, and uséd routinely in the development of Oil and Gas. Lessee shall report in
writing to the Lessor during December of each year a description of the Hazardous
Materials brought onto the Leased Premises by Lessee during the previous twelve
months. The report also shall describe the then current location and status of all
Hazardous Materials on the Leased Premises.

11.5 Hold Harmiess

Neither Lessor or the United States, nor their officers, agents, or employees shall
be liable for any loss, damage, death, or injury of any kind whatsoever to the person or

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property of Lessee, any sub lessees, or any other person whomsoever which may be
caused by Lessee's use of the Leased Premises or by any defect in any structure
Lessee may erect thereon, arising from any accident, fire, other casualty on the Leased
Premises, or other cause whatsoever, and Lessee hereby releases and agrees to hold
harmless Lessor, the United States and their officers, agents, and employees from such
liability, except to the extent such loss, damage, death, or injury results from the
negligence of the Lessor, the United States, or their officers, agents, or employees.

11.6 Survival Of Section

Ail provisions of Section 11 shall survive the expiration, or termination, of this
Lease.

12. . NON-RESPONSIBILITY NOTICES

Prior to the commencement of construction of each improvement on the Leased
Premises, any substantial repair or alteration thereto, or substantial work or iabor
thereon, Lessee shall post notices on Lessors and the Secretary's behalf stating that
Lessor and Secretary shall not be responsible for any accident, injury to, or death of
persons, or loss of or damage to property resulting from Lessee's activities. The
language and size of such notices will be approved by Lessor's attorneys. If such
notices are not approved within ten (10) business days of the receipt thereof, the
notices shall be deemed approved.

13. BONDS AND INSURANCE
13.1 Performance Bonds

In order to ensure the performance of any and all obligations of Lessee under
this Lease, and subject to any further requirements of federal law, Lessee shall post on
or before the Effective Date, a performance bond in an amount equal to Thirty Five
Thousand Dollars ($35,000.00), and, before a second well is drilled under this lease, the
bond shall be increased to Seventy Five Thousand Doliars ($75,000.00), which bond
shall be deposited with the Secretary and shall remain in force for the full term of this
Lease, unless sooner released in the discretion of the Lessor and the Secretary. This
bonding requirement may be fulfilled by Lessee complying with federal requirements for
public and Indian leases, provided that the minimum requirements of this Section are
met or exceeded. The amount of the bond may be adjusted during any Term of this
Lease. Should waiver of the bond be granted during any Term of this Lease by Lessor
and the Secretary, Lessor and the Secretary reserve the right to request that Lessee
furnish a bond at a later date if Lessor and the Secretary, in their reasonable discretion,
should themselves insecure, and Lessee hereby agrees to comply with such request.

13.2 Cash In Lieu Of Performance Bond

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In lieu of furnishing a performance bond, Lessee may deposit with the Secretary
cash, negotiable United States Treasury Bonds, other negotiable Treasury obligations,
time certificates of deposit, savings and loan association passbooks, or letters of credit
in an. amount acceptabie to Lessor, together with an appropriate power of attorney
appointing and empowering the Secretary, in the event of Lessee's default in any of the
provisions of this Lease, to pay from any such cash or equivalent, withdraw the funds
from any such savings and loan association account, dispose of any such bond, or
make demand upon any such letter of credit, and retain the proceeds derived there from
to apply to Lessor's darnages subject to Lessee's privilege of curing such default as
hereinafter provided. If United States Treasury Bonds are provided. Lessee agrees to
make up any deficiency in the value deposited that might occur due to a decrease in the
Value of the bonds. Interest on any such Treasury bonds or time certificates of deposit
in excess of damages provided for in this Lease shall be paid to Lessee.

13.3 Public Liability Insurance

At all times during any Term of this Lease, Lessee shall carry public liability
insurance in the primary amount of One Million Dollars ($1,000,000.00), per claim or
incident, with coverage for personal injury, bodily injury, including death and property
damage resulting for each incident.

13.4 Fire And Damage Insurance

Lessee shall not be required to carry vandalism, fire and damage insurance
covering the improvements placed on the Leased Premises by Lessee.

13.5 Workers' Compensation and Occupational Disease insurance: Applicable
Law

Lessee. agrees to carry such insurance covering all Lessee's employees working
in, on; or in connection with the Leased Premises as will fully comply with the provisions
of the statutes of the State of Montana covering workers’ compensation and occupation
disease as. such statutes are now in force or as they may be amended. Further, Lessee
agrees to comply with all the terms and provisions of all applicable laws of Lessor and
the United States, as now exist or as may be amended, pertaining to Social Security,
unemployment compensation; wages, hours, and conditions of labor; and to indemnify
and hold Lessor and the Secretary harmless from payment of any damages occasioned
by Lessee's failure to comply with such law.

13.6 Form And Copies Of Policies

Every insurance policy shall be written to protect Lessor, Lessee, and the
Secretary jointly and shali provide for sixty (60) days written notification to Lessor and
the Secretary prior to its cancellation for any reason including non-payment of
premiums. Lessor and Secretary shall be named as an additional insured and loss
payees on all insurance policies covering Lessee's activities on the Leased Premises,
excluding the policies under Section 13.5. A summary of every policy shall be furnished
Lessor and the Secretary on each anniversary of the Effective Date. Lessee shall pay
all premiums and other charges payable with respect to such insurance.

13.7 Self-Insurance

Lessee may satisfy the requirements of this Section through self-insurance
programs, provided that Lessee shall provide evidence of such self-insurance to Lessor
and the Secretary and Lessor and the Secretary shall approve such self-insurance
program, which approval shall not be unreasonably withheld.

13.8 Periodic Review of Bonds and Insurance

Lessor or the Secretary may make a periodic review, at not less than three (3)
year intervals, of all bonds and insurance policies and coverage amounts held under
this Lease. The review shall give consideration to the economic conditions at the time
and may result in adjustment of the types of bonds or insurance coverage or the
amounts of any coverage whenever in the discretion of Lessor and the Secretary any
such adjustment is necessary for the protection of Lessor or the Secretary.

14. _ COMPANIES BONDING AND INSURING

Every corporate surety bond provided by Lessee in compliance with this Lease shall be
furnished by a company holding a certificate of authority from the Secretary. of the
Treasury as an acceptable surety on federal bonds. Insurance policies shall be
furnished by such responsible companies as are rated A-plus or better in the current
edition of Best's Insurance Guide or equivalent rating system.

15. FORCE MAJEURE

If Lessee is prevented from drilling or conducting other operations for the purpose of
obtaining’ or restoring production or from producing Oil and/or Gas from the Leased
Premises. by fire, flood, storm, act of God, or any cause beyond Lessee's control
(including but not limited to governmental law, order, or regulation, governmental
inaction or delay, labor disputes, war, inability to secure labor, materials, equipment,
drilling rigs, or transportation, or inability to secure a market) then the performance of
any such operations shall be suspended during the period of such prevention; provided
that this provision shall not suspend nor delay the time for the payment of any payments
payable under the provisions of this Lease. If a period of Force Majeure is incurred,
Lessee shall promptly notify the Lessor, including a description of the circumstances
that prevent Lessor's performance, Lessor’s plans and efforts to remedy or mitigate the
Force Majeure, and an estimate of the expected duration of the period of nonperformance. Lessor shall also notify Lessee when a period of Force Majeure has
ended. Lessor shall diligently attempt to remedy, as soon as possible, any Force
Majeure and to mitigate its effects on the implementation of this Lease.

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16. LIENS, TAXES, ASSESSMENTS AND UTILITY CHARGES
16.1 Taxes

Lessee shall comply with all Tribal tax and reporting requirements, provided
however, that the Tribe shall not impose any tax on the production under this
Agreement which exceeds the rate of production taxes currently. imposed by
governmental authorities other than the Tribe, including the State of Montana. Lessee
will work with the Tribe to achieve the primacy of the Tribal production tax, and in the
event the production taxes imposed by governmental authorities other than the Tribe is
vacated by reason of the Tribe’s tax, the Tribe shall not impose any additional tax on
Lessee that is in excess of the otherwise applicable State production tax rate currently
in effect. Lessee shall refer to Lessor and to the Authorized Officer any demand by a
taxing authority for taxes on Lessor's royalty interest in accordance with Section 23.
From time to time, the Parties shall give due consideration to any proposal from the
other party regarding tax relief, restructuring, or other forms of incentives in order to.
obtain values from the premises, including increased production that is limited by dual
taxation by the State & Tribe upon presentation of proposed activities or structures that
may provide mutual benefits to Lessor and Lessee.

16.2 Lessee To Discharge Liens And Taxes Prior To Enforcement Or
Delinquency

Lessee shall pay before delinquent all applicable taxes, assessments, licenses,
fees, and other like charges levied during any Term of this Lease upon or against the
Leased Premises, any interest therein, and property thereon for which either Lessor or
Lessee, as a result of Lessee's action, may become liable. Upon written application,
Lessee shail furnish Lessor and the Secretary written evidence, duly certified; that any
and all applicable taxes required to be paid by Lessee have been paid, satisfied, or
otherwise discharged. Lessee shall not permit to be enforced against the Leased
Premises, or any part thereof, any liens arising from any work performed, materials
furnished, utility charges, or obligations incurred by Lessee. Lessee has the right to
contest any tribal, federal, state or county claim, asserted tax, or assessment against
the Leased Premises in any manner that will not result in enforcement of any lien
resulting therefrom, subject to applicable law. Lessor shail execute and file any
appropriate documents with reference to the applicability of state and local taxes to the
Leased Premises when requested by Lessee. In addition to the Lease Payments, taxes,
and other charges herein described, Lessee shall pay ali charges for water, sewage,
gas, electricity, telephone, and other utility services supplied to Lessee on the Leased
Premises.

16.3 Lessor. May Pay Liens Or Charges Payable to Lessee

Lessor shall have the option to pay any lien or charge payable by Lessee under
this Lease: or settle any action therefore, if Lessee, after written notice from Lessor or
the Secretary, fails to pay, post bond, or take other action to protect against
enforcement. All costs and other expenses incurred by Lessor in so doing shall be paid
to Lessor by Lessee upon demand with interest from the date of demand to the date of

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/tribal%3Acrow_montana%3A31cc2a474fd64165. Public record. Not legal advice.