Exhibit 10.1

 

FARMOUT AGREEMENT

 

THIS AGREEMENT (this “Agreement”) is made, entered into and effective this 23th
day of July 2010 by and between, BLACK RAVEN ENERGY, INC., a Nevada corporation
(“FARMOR”), and ATLAS RESOURCES, LLC, a Pennsylvania limited liability company
(“FARMEE”).

 

RECITALS

 

A.                                    FARMEE plans to engage in drilling for
hydrocarbons in the area of mutual interest in Phillips and Sedgwick Counties,
Colorado, and Perkins, Chase and Dundy Counties Nebraska, as further described
in Schedule A  (the “AMI”).

 

B.                                    FARMOR owns the working interest and the
net revenue interest in certain hydrocarbon interests listed on Schedule B, as
the same may be amended from time to time to reflect FARMOR’s acquisition of
other such interests in the AMI (the “Leases”).  The Leases include Drilling
Units (as defined below) for six (6) wells (the “Initial Wells”) identified on
Schedule B-1 (the “Initial Drilling Units”) as to which FARMOR has not commenced
drilling. FARMOR may in the future acquire additional working interests and net
revenue interests in hydrocarbon interests in the AMI. For avoidance of doubt,
the Leases do not include the wells in the AMI that were in production by FARMOR
or had already been drilled and cased before the date of this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and intending to be bound hereby, the parties
hereby agree as follows:

 

I.                                         DEFINITIONS

 

Terms used but not otherwise defined herein shall have the following meanings:

 

“AFE” means an Authority for Expenditure for a Well.

 

“Affiliate” means, with respect to any person or entity, any other person or
entity that directly or indirectly (through one or more intermediaries or
otherwise) controls, is controlled by, or is under common control with the first
person or entity; provided however, that West Coast Opportunity Fund, LLC and
West Coast Asset Management, Inc. will not be considered an “Affiliate” of
FARMOR and the Partnerships will not be considered an “Affiliate” of FARMEE.

 

“Drilling Unit” means 40 acres of a Lease around a wellbore, planned or actual,
from the surface to the center of the earth or such depths as to which FARMOR
has an interest.

 

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“Earning Well” means a Well which FARMEE has determined to be capable of
producing hydrocarbons in commercial quantities.

 

“Force Majeure Event” means an event beyond a party’s reasonable control that
prevents such party from performing its obligations hereunder, including natural
disasters, unavailability of materials, conditions arising out of or
attributable to war, rebellion or acts of terrorism, epidemics, strikes, labor
disturbances and lockouts (other than strikes and labor disturbances that result
from violation of agreements with employees, or lockouts that are in violation
of such agreements, by the party claiming such Force Majeure Event, or its
Affiliates).

 

“Initial Projects” means the 3D Seismic Shoots, Railroad Crossing, Sales Meter
Upgrade, Change Out Compressors and Upgrade Dehydrator at Facility as defined in
the initial Work Plan (as defined below).

 

“Well” means a well drilled for FARMEE’s account pursuant to this Agreement.

 

II.                                     REPRESENTATIONS

 

A.                                    FARMOR’S Representations and Warranties

 

FARMOR makes the following representations, warranties and covenants to FARMEE:

 

1.                                       FARMOR is the present owner of the
acreage, working interest and net revenue interest attributed to each Lease on
Schedule B, and warrants its title thereto against anyone claiming by, from,
through or under FARMOR. Such Leases are in full force and effect in accordance
with their terms; there are no defaults by lessee thereunder; except as set
forth on Schedule B, the lessee has no obligation under any such Lease to drill
any well for the production of any hydrocarbons; all amendments to each such
Lease are identified in Schedule B; and all consents required under such Leases
to permit FARMEE to exercise its rights, contemplated hereby, have been or will
be obtained prior to the assignment thereof to FARMEE, including consents to the
assignment of such Leases.  At the time of assignment pursuant to Article IV,
the Leases will be free and clear of any and all encumbrances, liens and other
interests. Upon request, FARMOR shall furnish FARMEE copies of all lease and
title and other data in FARMOR’s files or its Affiliates’ files concerning the
Leases and the AMI.

 

2.                                       FARMOR has obtained all governmental
and other approvals and permits to drill, complete and operate the Initial Wells
within the Initial Drilling Units and all surface use rights necessary or

 

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appropriate to drill, complete, produce and operate the Initial Wells. FARMOR
shall use its reasonable best efforts to obtain all governmental and other
approvals and permits to drill, complete and operate Wells within the Drilling
Units and all surface use rights necessary or appropriate to drill, complete,
produce and operate the such Wells.  FARMOR has the exclusive right to drill,
complete, produce and operate hydrocarbon wells on the property covered by each
Lease, and FARMOR agrees not to grant, assign or otherwise transfer to any
person, corporation or other entity, except to FARMEE or as otherwise provided
herein, the right to explore for or produce hydrocarbons from any properties
covered by any Lease.

 

3.                                       There are no claims, demands, actions,
suits, governmental inquiries, or proceedings pending or to FARMOR’s knowledge
threatened against FARMOR which would have an adverse effect upon the
consummation of the transactions contemplated by this Agreement.

 

4.                                       FARMOR and its Affiliates are not party
to any marketing, financial or physical hedge, forward sale or similar agreement
affecting production from the Leases.    Except as set forth on Schedule C,
FARMOR and its Affiliates are not party or subject to any joint operating
agreement or other agreement affecting the Leases.  Except as permitted herein,
FARMOR shall not enter into any such agreement during the term of this Agreement
affecting the Leases or production therefrom without the consent of FARMEE, such
consent not to be unreasonably withheld.

 

5.                                       FARMOR shall from time to time, but not
more frequently than once every six (6) months, provide to FARMEE a revised
Schedule B reflecting all Leases acquired after the date hereof.

 

6.                                       Prior to the commencement of drilling
on any Drilling Unit subject to assignment hereunder, FARMOR shall provide
FARMEE with a drilling title opinion (prepared by an attorney reasonably
satisfactory to FARMEE) regarding the relevant Drilling Unit demonstrating that
such Drilling Unit is free and clear of all liens and encumbrances of whatsoever
kind and character.

 

7.                                       FARMOR has provided FARMEE with a copy
of the written consent of the holder of the Amended and Restated Senior Secured
Debenture dated as of February 2, 2009 to West Coast Opportunity Fund, LLC (as
amended through the date hereof) to the transactions contemplated by this
Agreement.

 

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B.                                    FARMEE’S Representations and Warranties

 

FARMEE represents and warrants to FARMOR that there are no claims, demands,
actions, suits, governmental inquiries, or proceedings pending or to FARMEE’s
knowledge threatened against FARMEE which would have an adverse effect upon the
consummation of the transactions contemplated by this Agreement.

 

C.                                    Mutual Representations and Warranties

 

Each of FARMOR and FARMEE makes the following representations and warranties to
the other:

 

1.                                       It is duly organized and validly
existing under the laws of the jurisdiction where it is organized.  To the
extent required, each party is qualified to conduct business in the jurisdiction
as necessary to perform this Agreement. It has all requisite corporate or
limited liability company power and authority to enter into this Agreement, to
perform its obligations hereunder, and to consummate the transactions
contemplated hereby.  This Agreement has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms.

 

2.                                       The execution, delivery, and
performance of this Agreement by it, the consummation of the transactions
contemplated hereby, and the compliance with the provisions hereof will not:

 

a.                                       violate any applicable laws or
regulations, judgment, decree or award;

 

b.             contravene its organizational documents; or

 

c.                                       result in a violation of a term or
provision, or constitute a default or accelerate the performance of an
obligation under any contract or agreement to which it is a party.

 

D.                                    Timing of Representations and Warranties

 

The representations, warranties and covenants made by the parties in this
Article II shall be deemed given as of the date hereof and as of the date of
each assignment under Article IV.

 

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III.           WELLS

 

A.            Development Obligations

 

FARMEE shall be obligated to drill and complete or drill, plug and abandon
Initial Wells in the Initial Drilling Units and complete the Initial Projects.

 

B.                                    Development Rights

 

Subject to Article V, C, 1 and 3, FARMEE shall have the exclusive right, but not
an obligation, to drill Wells on the Leases in accordance with the Work Plans
approved by FARMEE.

 

C.            Well-Site Fee

 

FARMEE shall pay FARMOR a well-site fee in the amount of Sixty Thousand Dollars
($60,000) (the “Well-Site Fee”) for each Well drilled on the Leases, including
the Initial Drilling Units. Upon FARMEE’s approval of an AFE for a Well as
provided in Article V, B, 1, FARMEE shall pay the Well-Site Fee with respect to
the Well to FARMOR, and FARMOR shall simultaneously deliver to FARMEE an
executed assignment in recordable form for the Drilling Unit on which such Well
will be located in accordance with Article IV, B.

 

D.            Ingress and Egress

 

FARMOR hereby grants FARMEE such rights of ingress and egress from and to the
Leases and any other property of FARMOR within the AMI as are necessary for and
incidental to the rights and obligations under this Agreement.

 

IV.                                ASSIGNMENT

 

A.                                    Assignment Upon Execution of this
Agreement

 

1.                                       Upon the execution of this Agreement,
FARMOR shall execute and deliver to FARMEE an assignment of all of FARMOR’s
right, title and interest in the Lease(s) covering the Initial Drilling Units,
but insofar as, and only insofar as, the Lease(s) covers the lands comprising
the Initial Drilling Units and all depths covered by such Lease(s) in respect of
such lands, together with FARMOR’s right, title and interest in all permits,
licenses, franchises, easements, servitudes and rights-of-way, and other
instruments, contracts and agreements, of every character to the extent they
cover or affect such assigned lands and depths. Such assignment shall be in the
form of the assignment attached hereto as Schedule D.  If FARMEE does not
complete any of the Initial Wells as Earning Wells, FARMEE may quitclaim and
release to FARMOR the

 

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applicable Initial Drilling Unit, without additional consideration or warranty
of title, and shall receive credit therefor as set forth in Article V, C, 5.

 

2.                                       In consideration of FARMOR’s agreements
hereunder, upon the execution of this Agreement, FARMEE shall pay FARMOR cash in
the amount of One Million Dollars ($1,000,000).

 

3.                                       Upon the execution of this Agreement,
FARMOR and FARMEE shall enter into an agreement with respect to FARMEE’s use of
FARMOR’s midstream facilities (the “Gathering Agreement”) in the form attached
hereto as Schedule E.

 

B.                                    Assignment Upon Delivery of AFE

 

Except as provided in Article IV, A, upon receipt by FARMOR of (i) the Well-Site
Fee for such Well from FARMEE and (ii) an AFE approved by FARMEE as described in
Article V, B, 1, FARMOR shall execute and deliver to FARMEE an assignment of all
of FARMOR’s right, title and interest in the Lease(s) covering the Drilling Unit
established for such Well, but insofar as, and only insofar as, the
Lease(s) covers the lands comprising the relevant Drilling Unit and all depths
covered by such Lease(s) in respect of such lands, together with FARMOR’s right,
title and interest in all permits, licenses, franchises, easements, servitudes
and rights-of-way, and other instruments, contracts and agreements, of every
character to the extent they cover or affect such assigned lands and depths. 
The assignment will not release FARMOR from any obligation that should have been
performed by it or any liability that may have accrued to it prior to that
assignment.  Such assignment shall be in the form of the assignment attached
hereto as Schedule D.  If FARMEE does not complete any such Wells as Earning
Wells, FARMEE may quitclaim and release to FARMOR the applicable Drilling Unit,
without additional consideration or warranty of title, and shall receive credit
therefor as set forth in Article V, C, 5.

 

C.            Lease Administration

 

At all times during the term of this Agreement, FARMOR shall be solely
responsible for lease administration of the Leases, including, without
limitation, payment of all delay rentals, minimum royalties, shut-in royalties
and other amounts required to be paid under the Leases and to keep them in full
force and effect, and, within twenty (20) days after the end of each month,
FARMOR shall provide evidence of such payment in such detail as FARMEE may
reasonably request and shall provide a list of Leases subject to expiration
within the next sixty (60) days.  FARMOR shall not be entitled to recoup such
delay rentals, minimum royalties

 

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and/or other amounts as may be provided in any Lease.  Additionally, FARMOR
shall comply with all other provisions of the Leases and shall use its
reasonable and economic best efforts to otherwise keep them in full force and
effect, with respect to the property.   Promptly after receipt of any notice, or
any document or other writing, from any lessor of a Lease, any governmental or
regulatory authority or agency or any other person, corporation or authority
relating to any such Lease or Well or any activities conducted on the property
subject to the Leases or relating to any other matter concerning the drilling,
completion or operation of one or more Wells, or the transportation,
compression, processing, marketing or sale of hydrocarbons produced therefrom
that may reasonably be expected to adversely affect the Lease or Well, FARMOR
shall provide the FARMEE with such notice, or document or other writing.

 

FARMOR shall not agree to any amendment or other modification of any Lease
without the prior written consent of FARMEE, such consent not to be unreasonably
withheld.

 

D.            Overriding Royalty Interest

 

1.                                       FARMOR shall reserve unto itself, its
successors and assigns an overriding royalty interest on all of the hydrocarbons
produced and sold that is attributable to the assigned Leases equal to an
undivided six percent of eight eighths (6% of 8/8ths); provided, that such
overriding royalty interest shall be proportionately reduced to the extent the
leasehold interest under the Lease covers less than a one hundred percent (100%)
mineral leasehold interest in the lands covered thereby, and provided, further,
that (unless otherwise agreed in writing by FARMEE) such overriding royalty
interest shall be reduced so that FARMEE’s net revenue interest in the Lease
shall never be less than eighty percent of eight eighths (80% of 8/8ths), taking
into account the existing burdens along with such overriding royalty interest.
Such overriding royalty interest shall be free and clear of all costs and
expenses of drilling and completion, but shall be burdened by FARMOR’s pro-rata
share of (a) reasonable volume deductions for line loss and fuel usage,
(b) post-production charges incurred by FARMEE for processing, gathering,
transportation, marketing, dehydration, compression, and any other charges
(which may include charges payable to Affiliates of FARMEE) required to deliver
the hydrocarbons for sale, and (c) ad valorem, severance and other similar
taxes.  FARMEE shall use its reasonable best efforts to pay to FARMOR from funds
received from the sale or other disposition of hydrocarbons produced from the
Wells such overriding royalty interest within forty five (45) days after receipt

 

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of such funds, but in any case shall pay FARMOR within sixty (60) days after
receipt of such funds.

 

2.                                       Unless FARMOR shall elect to take the
overriding royalty interest in kind or otherwise arranges for the sale of the
related hydrocarbons, FARMEE shall have exclusive charge and control of the
marketing of all hydrocarbons, shall market FARMOR’s interest proportionately
and shall collect and receive the proceeds of the sale of all such production.
FARMEE shall advise FARMOR of the terms and conditions of the marketing
contracts to sell hydrocarbons from the overriding royalty interest.
Notwithstanding the foregoing sentence, FARMOR shall have the right to take the
overriding royalty interest in kind and, subject to any existing production
sales contracts and upon at least thirty (30) days’ written notice from FARMOR,
FARMEE shall deliver the hydrocarbons to FARMOR at the tanks or pipeline inlet,
as the case may be, where FARMEE delivers the hydrocarbons to the purchaser
thereof; provided, however, that that if FARMOR exercises its right and
privilege to take in kind, such exercise shall be for one hundred percent (100%)
of its overriding royalty share of the production and FARMOR shall use its best
efforts to actually take in kind one hundred percent (100%) of such overriding
royalty, and provided further, that FARMOR shall be responsible for the payment
of all costs and expenses incurred by FARMOR, FARMEE or otherwise in connection
with FARMOR’s receipt in kind and failure, if any, to take in kind one hundred
percent (100%) of such overriding royalty.

 

E.                                      Recording of Assignment

 

Upon delivery of the assignments, FARMEE agrees to file said instruments of
record in the appropriate county offices and to furnish FARMOR with a copy of
the recorded and/or approved instruments.

 

F.                                      Assignment by FARMEE

 

FARMOR acknowledges and agrees that FARMEE intends to, and hereby permits FARMEE
to, assign the Leases or portions thereof assigned to it hereunder to investment
partnerships sponsored by FARMEE and its Affiliates (the “Partnerships”) or to
any of its Affiliates, provided that such assignment shall not relieve FARMEE of
its obligations under this Agreement.

 

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V.            DEVELOPMENT OPERATIONS

 

A.            Designation and Responsibilities

 

1.                                       FARMEE shall register as the “Operator”
of record with respect to the Drilling Unit operations with the appropriate
governing regulatory agency or authority, and shall comply with all rules and
regulations established by such governing agency or authority to maintain itself
in good standing.  Subject to clause 3 of this Article V, A and the provisions
of the applicable Operating Contract (as defined below), FARMEE hereby
designates FARMOR to conduct, as subcontractor for FARMEE, all drilling,
completing, producing and superintendant/maintenance operations for all Wells
and the Initial Projects in accordance with the Work Plan.  FARMOR and FARMEE
shall enter into an operating contract, in substantially the same form as
Schedule F (an “Operating Contract”), with respect to each project, comprising
such number of Wells as they shall agree.

 

FARMOR shall conduct its activities hereunder as a reasonably prudent
contractor, in a good and workmanlike manner, with due diligence and dispatch,
in accordance with good oilfield practice, and in compliance with applicable
laws and regulations.

 

2.                                       FARMEE shall have access to the Wells
and to any information in the possession of FARMOR pertaining to the Wells, and
shall be entitled to inspect and observe operations of every kind and character
upon the property covered by any Lease. Upon reasonable notice to FARMOR and
during normal business hours, FARMEE shall also have access to, and be entitled
to receive copies of, the records and other documents on file at FARMOR’s or any
of its Affiliates’ office relating to the drilling, completion and operation of
the Wells, including all well logs and production records. In addition, during
the drilling and completion of a Well, such number (as FARMEE or its designated
agent may reasonably request) of copies of drilling reports, logs, completion
reports and other data produced in connection with such activities shall, upon
request, be made available and provided to FARMEE or such agent, as they are
produced or promptly thereafter.

 

3.                                       In the event of a Service Event of
Default, as defined below, FARMEE shall have the right to terminate FARMOR’s
duties, obligations and rights to perform the services provided under this
Article V and the Operating Contracts (collectively, “FARMOR’s Services”), and
FARMEE, or its designee, shall have the right to perform such services as are
consistent with its desired or required activities provided for hereunder, in
accordance with the following terms:

 

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Any of the following shall be an event of default (a “Services Event of
Default”) by FARMOR: (i) FARMOR commits gross negligence or willful misconduct
in connection with any of FARMOR’s Services, or (ii) in respect of FARMOR’s
Services, FARMOR is in breach of, or fails to meet, the standards of operation
set out in this Agreement or any Operating Contract in any material respect, or
FARMOR fails or is unable to perform its obligations under this Agreement  or
any Operating Contract in any material respect, and, in any such case, FARMOR
fails to cure any such breach, failure or inability within thirty (30) days
after written notice thereof is given by FARMEE to FARMOR, or (iii) (x) if, at
any time on or prior to the second anniversary of this Agreement, either Tom
Riley or Bill Hayworth ceases to be employed by FARMOR in the same position held
by him as of the date of this Agreement, with the same duties and
responsibilities as of the date of this Agreement, or (y) if, at any time after
the second anniversary of this Agreement, both Tom Riley and Bill Hayworth cease
to be employed by FARMOR in the same positions held by them, respectively, as of
the date of this Agreement, with the same respective duties and responsibilities
as of the date of this Agreement, or (iv) if FARMOR breaches any financial
covenant under any financing agreement or arrangement to which it or any of its
Affiliates is a party, and such breach is not cured within sixty (60) days after
the occurrence thereof and notice from the lender (if required by the financing
agreement or arrangement), or if the lender or other party under any such
agreement or arrangement accelerates the maturity date of any such financing as
a result of such breach or other default by FARMOR thereunder.

 

If a Services Event of Default occurs, FARMEE shall have the right to terminate
FARMOR’s Services under this Agreement and terminate any or all of the Operating
Contracts effective on the date which is ninety (90) days following the giving
of written notice thereof by FARMEE to FARMOR, unless FARMEE selects a successor
to perform FARMOR’s Services and such successor assumes FARMOR’s Services at an
earlier date, then FARMOR’s termination or removal with respect to FARMOR’s
Services shall be effective on such earlier date. Upon the termination of
FARMOR’s Services, FARMOR shall submit to FARMEE a final accounting of its
operations hereunder and transfer all the records, reports, books, data and
other material(s) related to the performance of FARMOR’s Services that are in
the possession of FARMOR and its Affiliates as promptly as possible.  All
special tools, supplies, spare parts, equipment, consumables, and any other
items furnished or maintained under this Agreement (the costs of which have been
reimbursed by FARMEE to FARMOR) shall

 

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remain the property of FARMEE without additional charge.  To the extent
permitted by the relevant third parties, FARMOR shall assign to FARMEE, and
FARMEE shall assume and become liable for, any contracts or obligations
(including subcontracts) that FARMOR may have undertaken with third parties that
are not Affiliates of FARMOR in connection with FARMOR’s Services and in
accordance with this Agreement, and FARMOR shall execute all documents and take
all other reasonable steps required by FARMEE which may be required to assign to
and vest in FARMEE all rights, benefits, interests and title in connection with
such contracts or obligations.  Effective as of the termination of FARMOR’s
Services, FARMOR shall terminate any contracts or obligations (including
subcontracts) that FARMOR may have undertaken with Affiliates of FARMOR in
connection with FARMOR’s Services.  FARMOR will cooperate with FARMEE and any
successor contractor to cause an orderly transition of operations to the
successor contractor.

 

B.            Development and Operating Costs

 

1.                                       At least forty-five (45) days, but not
more than sixty (60) days, prior to the spud date of a Well, FARMOR shall
provide FARMEE an AFE therefor.  Each AFE shall include all costs necessary to
drill and complete the applicable Well (including a line item for overhead of
not more than $15,000 for each of the first 220 Wells and $10,000 per Well
thereafter) and shall be prepared in accordance with the charging procedures
provided for in the applicable Operating Contract.  FARMEE shall approve or
reject an AFE within fifteen (15) days of its receipt.  The AFEs for the Initial
Drilling Units and the Initial Projects are attached as Schedule G.  FARMEE
shall pay its pro rata share, under the relevant Lease and related documents, of
the costs set forth in each approved AFE as provided in the applicable Operating
Agreement.

 

2.                                       FARMOR shall be entitled to receive
payment from FARMEE for direct costs incurred by the FARMOR for the services of
FARMOR pursuant to the applicable Operating Contract.  Such charges shall be
invoiced on a monthly basis, and FARMEE shall make such payments as are
consistent with this Agreement within thirty (30) days after receipt of such
invoice.

 

3.                                       If FARMEE fails to timely make payments
under this Article V, B or Article IV, D, and such failure shall remain uncured
for thirty (30) days, FARMEE shall be obligated to pay FARMOR interest on such
amount equal to the greater of twelve percent (12%) per annum or the prime
interest rate as published in the Wall Street

 

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Journal.

 

C.            Work Plan

 

1.                                       No later than January 15 and July 15 of
each year, beginning January 15, 2011, FARMEE shall provide FARMOR with written
notice setting forth the number of wells it proposes to drill for the following
six-month period beginning May 1 and November 1, respectively (a “Drill
Proposal”).  If a Drill Proposal proposes less than sixty (60) Wells, FARMOR
shall have the right to drill for its own account, during the relevant period,
that number of wells equal to the difference between sixty (60) wells and the
number of Wells set forth in the Drill Proposal  FARMOR may engage third parties
in development operations, farmout arrangements or other similar activities with
respect to any such well.

 

2.                                       No later than February 15 and August 15
of each year, FARMOR shall provide FARMEE a development plan, in a form
substantially similar to Schedule H, for the following six-month period
beginning May 1 and November 1, respectively, for the number of Wells set forth
in the Drill Proposal (a “Work Plan”), which shall include the following:

 

a.                                       well names, locations and target
formations

 

b.                                      permit numbers, if available

 

c.                                       proposed spud dates, frac dates and
turn into line dates

 

In addition, FARMOR shall provide FARMEE a proposed monthly budget, including
estimated production from Wells, and a form of AFE expected for the Work Plan,
in substantially the same forms as Schedule I.  The initial Work Plan covering
the period from the date hereof through April 30, 2011 is attached as Schedule
J.

 

3.                                       Within fifteen (15) days of receipt of
the Work Plan, FARMEE shall approve or request changes thereto.  Within fifteen
(15) days of receipt of written notice of FARMEE’s requested changes, if any,
FARMOR shall provide FARMEE with a revised Work Plan.    In the event the
parties do not agree on all the terms of the revised Work Plan, the last version
proposed by FARMEE, with such changes therein approved by FARMEE, shall govern
and be carried out by FARMOR.  In the event FARMEE determines not to drill at
least sixty (60) Wells in the course of any six-month period, FARMEE shall
provide FARMOR with written notice at least

 

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forty five (45) days prior to the date indicated in the Work Plan for the
commencement of drilling on the affected Well(s) and FARMOR shall have the right
to drill for its own account, during the relevant period, that number of wells
equal to the difference between sixty (60) wells and the number of Wells to be
drilled for FARMEE. FARMOR may engage third parties in development operations,
farmout arrangements or other similar activities with respect to any such well.

 

4.                                       No later than the fifteenth (15th) day
of each month, FARMOR shall provide FARMEE with a report for the previous
month’s development operations, which shall include a reconciliation of spud
dates, frac dates, turn into line dates, budget and production to the relevant
Work Plan.

 

5.                                       The following shall apply to any Well
(a “Deep Well”) planned for drilling in any zone below the Niobrara formation
within the AMI (a “Deep Zone”):

 

a.                                       If any Work Plan approved by FARMEE
provides for a Deep Well, and FARMEE requires additional acreage within the AMI
beyond the size of the shallow Well Drilling Unit in order to drill the Deep
Well (a “Deep Well Drilling Unit”), then:

 

(x)            FARMOR may elect to participate in such Deep Well Drilling Unit,
pro-rata, based on the amount of acreage contributed to the Deep Well Drilling
Unit by FARMOR, and if FARMOR so elects, then:

 

(A)          FARMOR shall subject such acreage to a “joint operation” consistent
with Article VI of the AAPL Model Form Joint Operating Agreement and shall pay
its pro-rata share of costs; and

 

(B)           no Work-Site Fee or site fees of any kind shall be payable by
FARMEE to FARMOR;

 

OR,

 

(y)                                     FARMOR may elect not to participate, and
if FARMOR so elects, then:

 

13

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(A)          FARMOR shall assign to FARMEE all of its working interest and other
rights to such additional acreage, together with all depths, as is needed to
complete the Deep Well Drilling Unit;

 

(B)           FARMOR shall not be required to pay any part of the development
cost for such Deep Well;

 

(C)           FARMOR shall receive a site fee equal to the amount obtained when
multiplying its pro-rata share of such additional acreage contributed by it to
FARMEE by $60,000; and

 

(D)          FARMOR shall receive an overriding royalty interest in all
hydrocarbons produced and sold that are attributable to the Deep Well Drilling
Unit equal to the amount obtained when multiplying its pro-rata share of such
additional acreage contributed by it to such drilling unit times 6%, but subject
to the same reductions and burdens set forth in Article IV, D, 1 for the
overriding royalty interest described therein.

 

b.                                      If FARMOR is entitled to drill wells in
the AMI for its own account pursuant to Article V, C and desires to drill a Deep
Well, and in order to drill such Deep Well FARMOR requires some of the acreage
previously assigned to FARMEE pursuant to the terms of this Agreement, and
FARMEE has determined in its sole discretion that it does not wish to develop,
for its own account, the portion of the acreage required by FARMOR, then:

 

(x)            FARMEE may elect to participate in such Deep Well Drilling Unit,
pro-rata, based on amount of acreage contributed to the Deep Well Drilling Unit
by FARMEE, and if FARMEE so elects, then:

 

(A)          FARMEE shall subject such acreage to a “joint operation” consistent
with Article VI of the AAPL Model Form Joint

 

14

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Operating Agreement and shall pay its pro-rata share of costs; and

 

(B)           no Work-Site Fee or site fees  of any kind shall be payable by
FARMOR to FARMEE;

 

OR,

 

(y)        FARMEE may elect not to participate, and if FARMEE so elects, then:

 

(A)         FARMEE shall assign to FARMOR all of its working interest and other
rights to such additional acreage, but only to the extent of the Deep Zone, as
is needed to complete the Deep Well Drilling Unit;

 

(B)           FARMEE shall not be required to pay any part of the development
cost for such Deep Well;

 

(C)           FARMEE shall receive a site fee equal to the amount obtained when
multiplying its pro-rata share of such additional acreage contributed by it to
FARMOR by $60,000; and

 

(D)                                   FARMEE shall receive an overriding royalty
interest in all hydrocarbons produced and sold that are attributable to the Deep
Well Drilling Unit equal to the amount obtained when multiplying its pro-rata
share of such additional acreage contributed by it to such drilling unit times
6%, but subject to the same reductions and burdens set forth in Article IV, D, 1
for the overriding royalty interest described therein;

 

provided however, that the number of wells that FARMOR drills for its own
account, including Deep Wells pursuant to this Article V, C, 5, shall not exceed
in the aggregate the number of wells it is permitted to drill for its own
account pursuant to Article V, C, 3.

 

15

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D.            AMI

 

1.                                       All Leases held by FARMOR as of the
date hereof, and all Leases acquired by FARMOR after the date hereof on acreage
within the AMI that is undeveloped as of the date of acquisition by FARMOR,
shall be included in the AMI.  The AMI shall remain in effect for a period
commencing on the date hereof and continuing until the termination of this
Agreement.  Except as specifically permitted herein, FARMOR shall not engage in
development operations, farmout arrangements or other similar activities for the
account of any person other than FARMEE within the AMI.

 

2.                                       In the event FARMEE identifies a
prospective leasehold interest within the AMI, it shall promptly notify FARMOR
in writing.  FARMOR shall elect whether or not to acquire such leasehold
interest, and pay the acquisition and associated costs therefor, within the time
period set forth in such notice.  If FARMOR acquires the leasehold interest, it
will be subject to the provisions of this Agreement.  If FARMOR does not elect
to acquire the leasehold interest, FARMEE may acquire it for its own account and
it shall not be subject to the provisions of this Agreement.

 

3.                                       Notwithstanding the foregoing, if,
after the date hereof, (A) either of FARMOR or FARMEE, or any of their
respective Affiliates, acquires any acreage in the AMI (i) directly or
indirectly as a result of a consolidation, amalgamation, merger or other
business combination, or through the acquisition of stock or equity interests or
(ii) by acquiring all or substantially all of the assets of a third party
unaffiliated with FARMOR or FARMEE, as the case may be, and any of their
respective Affiliates or (B) FARMOR or FARMEE is acquired by an unaffiliated
third party (“Acquirer”) in a transaction similar to those described in clause
(A) and the Acquirer held acreage in the AMI prior to such transaction (each of
the transactions described in clauses (A) and (B), an “Business Transaction”),
then such acreage acquired in a Business Transaction described in clause (A),
and the acreage held by the Acquirer prior to a Business Transaction described
in clause (B), shall not be deemed included in the AMI and not subject to the
terms hereof.

 

E.             3-D SEISMIC

 

Prior to conducting a 3-D seismic acquisition in the AMI, FARMOR shall submit to
FARMEE in writing a plan and budget for such 3-D seismic acquisition (a “3-D
Seismic Plan”).  Within forty-five (45) days of receipt of a 3-D Seismic Plan,
FARMEE shall provide written notice to

 

16

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FARMOR of its approval or rejection of such 3-D Seismic Plan.  If FARMEE
approves the 3-D Seismic Plan, FARMEE shall make the 3-D seismic acquisition in
its name or, if possible without incurring any additional costs, in the joint
names of both FARMOR and FARMEE, and FARMEE shall pay the costs thereof.  In the
event FARMEE rejects a 3-D Seismic Plan and subsequently desires to drill
Well(s) on any acreage covered in the 3-D Seismic Plan, FARMEE shall reimburse
FARMOR for the costs of the 3-D seismic acquisition pro rata, based on the
number of well locations identified in the 3-D seismic, for each Well FARMEE
desires to drill, plus interest, accruing from the date of FARMOR’s payment for
the 3-D seismic, at the rate of ten percent (10%) per annum, compounded.  The
parties shall use their best efforts to share the 3-D seismic with each other.

 

VI.           ADDITIONAL PROVISIONS

 

A.                                    Relationship of Parties

 

This Agreement is not intended to create, and shall not be construed to create,
a relationship of partnership or an association for profit between or among the
parties hereto. If, for Federal income tax purposes, this Agreement and the
operations hereunder are regarded as a partnership, each party hereby affected
elects to be excluded from the application of all of the provisions of
Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code of 1986 as
permitted and authorized by Section 761 of the Code and the regulations
promulgated thereunder. If any present or future income tax laws of the state or
states in which any of the Leases is located or any future income tax laws of
the United States contain provisions similar to those in Subchapter K, Chapter
1, Subtitle A, of the Internal Revenue Code of 1986 under which an election
similar to that provided by Section 761 of the Code is permitted, each party
hereby affected shall make such election as may be permitted or required by such
laws.

 

B.                                    Insurance

 

For as long as this Agreement is in effect, FARMOR shall maintain in effect at
its sole cost and expense the following minimum types and amounts (whether
primary or a combination of primary and excess, as applicable) of insurance
coverage with insurance companies reasonably satisfactory to FARMEE:

 

1.                                       Workers’ Compensation insurance
including Occupational Disease, that is in compliance with all Workers’
Compensation laws that apply.

 

2.                                       Employer’s Liability Insurance with a
limit of not less than One

 

17

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Million Dollars ($1,000,000) per accident.

 

3.                                       Commercial General Liability Insurance,
including contractual liability insuring the indemnity agreement, if any, set
forth in this Agreement, with limits of not less than One Million ($1,000,000)
applicable to bodily injury, sickness or death and property damage in any one
occurrence, and Two Million Dollars ($2,000,000) in the aggregate.

 

4.                                       Business Automobile Liability
Insurance, covering owned, non-owned, hired and all vehicles used by FARMOR with
limits of not less than One Million Dollars ($1,000,000) applicable to bodily
injury, sickness or death of any one person, and property damage in any one
occurrence.

 

5.                                       Other than with respect to the
coverages described in Article VI, B, 1 and 2, all policies shall be endorsed to
provide that FARMEE is an additional insured under such policy and that
underwriters and insurance companies of FARMOR shall not have any right of
subrogation against FARMEE or its Affiliates, subsidiaries, agents, employees,
officers, directors, invitees, co-owners, lessors, servants, contractors,
sub-contractors, insurers, and underwriters.

 

6.                                       Upon request, FARMOR shall furnish
Certificates of Insurance to FARMEE, showing to FARMEE’s satisfaction that the
required insurance coverages are in full force and effect.

 

7.                                       To the extent reasonably practical,
FARMOR shall require (a) all contractors and sub-contractors to obtain and keep
in force similar insurance coverage and, upon request, furnish FARMEE acceptable
evidence of such insurance and (b) all policies of FARMOR’s contractors and
sub-contractors shall be endorsed to provide a waiver of subrogation as set
forth above.

 

8.                                       THE LIABILITY OF FARMOR UNDER THE
PROVISIONS OF THIS AGREEMENT, WHEREBY FARMOR AGREES OR UNDERTAKES TO
DEFEND, INDEMNIFY, PROTECT AND HOLD FARMEE HARMLESS, SHALL NOT BE LIMITED TO OR
BY THE INSURANCE REQUIRED OF FARMOR HEREUNDER.

 

9.                                       Any coverage provided FARMEE by
FARMOR’s insurance under this Agreement is primary insurance and shall not be
considered contributory insurance with any insurance policies of FARMEE.

 

10.                                 No portion of FARMOR’s costs of all the
foregoing insurances

 

18

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shall be chargeable to FARMEE.

 

FARMEE shall maintain, at its sole cost and expense, insurance coverage for its
own Wells, including, but not limited to property and general liability
insurance.

 

C.                                    Compliance with Laws and Lease Obligations

 

FARMOR agrees that it will conduct all of its operations in material compliance
with all the terms, provisions, and covenants, express or implied, of the
Lease(s) upon which any Well is located, and in material compliance with all
applicable Local, State and Federal laws, rules, regulations, and orders.  At
any time after the date hereof, FARMOR agrees to perform any remedial activities
necessary or proper to restore the surface or subsurface of the Leases or to
assume and bear any monetary responsibility for any surface or subsurface
(including groundwater) damages in lieu of or in addition to any such remedial
activities which may be required by any Lease or other contract pertinent
hereto, or as may be required by any applicable law or regulation of any
Federal, State or local governmental body so as to place the Leases in a
condition as near as practicable to its condition as of the date hereof or, with
respect to Leases acquired by FARMOR after the date hereof, the date of
acquisition; provided, however, FARMOR shall not be obligated by the terms of
this Agreement to perform remedial activities except with respect to damages
directly caused by its operations, including, but not limited to, production,
transportation, drilling, work-over, remediation, hauling and related activities
on the Leases.

 

D.                                    Liens and Encumbrances

 

FARMOR agrees that it will keep the Leases that are subject to an assignment
hereunder free and clear of all liens and encumbrances of whatsoever kind and
character, including liens for labor performed and material furnished, AND
AGREES TO INDEMNIFY AND SAVE FARMEE HARMLESS FROM ALL CLAIMS, DEMANDS, LOSSES,
DAMAGES, AND LIABILITY ARISING OUT OF OR RESULTING FROM ANY SUCH LIENS AND
ENCUMBRANCES.

 

E.                                      Claims and Lawsuits

 

FARMOR AGREES TO INDEMNIFY, DEFEND, AND HOLD FARMEE HARMLESS FROM AND AGAINST
ALL CLAIMS, DEMANDS, LOSSES, DAMAGES, OR LIABILITY (INCLUDING REASONABLE
ATTORNEY’S FEES) ARISING OUT OF OR DIRECTLY RELATED TO (i) FARMOR’S PRIOR
OPERATIONS, OCCUPATION, OWNERSHIP OF THE LEASES, (ii) FARMOR’S

 

19

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FUTURE OPERATIONS, OCCUPATION, OWNERSHIP OF THE LEASES NOT ASSIGNED TO FARMEE
HEREUNDER AND THE DEEP WELLS FARMOR DRILLS FOR ITS OWN ACCOUNT, OR
(iii) FARMOR’S FAILURE TO PERFORM HEREUNDER.

 

FARMEE AGREES TO INDEMNIFY, DEFEND, AND HOLD FARMOR HARMLESS FROM AND AGAINST
ALL CLAIMS, DEMANDS, LOSSES, DAMAGES, OR LIABILITY (INCLUDING REASONABLE
ATTORNEY’S FEES) ARISING OUT OF OR DIRECTLY RELATED TO (i) FARMEE’S OPERATIONS
OCCUPATION, OWNERSHIP OF THE LEASES AFTER AND DURING THEIR ASSIGNMENT TO FARMEE
HEREUNDER (EXCEPT TO THE EXTENT FARMOR IS REQUIRED TO INDEMNIFY FARMEE PURSUANT
TO THE OPERATING AGREEMENTS) AND THE DEEP WELLS FARMEE DRILLS FOR ITS OWN
ACCOUNT, OR (ii) FARMEE’S FAILURE TO PERFORM HEREUNDER.

 

F.                                      Notices

 

All notices authorized or required hereunder, unless otherwise specifically
provided, shall be given in writing by mail, postage or charges prepaid, or by
telecopy or electronic mail and confirmed in writing and addressed to the party
to whom the notice is given at the address listed below.

 

If to FARMOR:                     Black Raven Energy, Inc.

Attn: William F. Hayworth

1125 Seventeenth Street, Suite 2300

Denver, CO 80202

Phone:  (303) 308-1330

Fax: (303) 308-1590

E-mail: bhayworth@blackravenenergy.com

 

If to FARMEE:                      Atlas Resources, LLC

Attn:  Jeffrey C. Simmons

1550 Coraopolis Heights Road

Moon Township, PA  15108

Telephone:  (412) 262-2830

Fax:  (412) 262-2820

Email: jsimmons@atlasenergy.com

 

G.            Modifications

 

This Agreement shall not be modified, altered or waived except by prior written
consent of the parties. This Agreement shall be binding upon the successors and
permitted assigns of the parties hereto and shall be deemed

 

20

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a covenant running with the Leases.  Neither party may assign its rights or
obligations hereunder without the prior consent of the other party, not to be
unreasonably withheld, except as provided herein and except that FARMEE may
assign its rights and obligations hereunder to any wholly-owned subsidiary of
its parent, Atlas Energy, Inc.; provided, however, that any such assignment
shall not relieve FARMEE of its obligations hereunder.

 

H.                                    Governing Law

 

This Agreement and any arbitration or dispute resolution conducted pursuant
hereto shall be construed in accordance with, and governed by, the laws of the
State of New York.  Notwithstanding the foregoing, the Law of the state in which
any real property interest covered or created by or granted under this Agreement
is located shall govern the following: (i) whether this Agreement creates an
interest in real property for security purposes or otherwise; (ii) the nature
and attributes of any interest in real property that is covered or created by or
granted under this Agreement; and (iii) the manner and effect of recording or
failing to record memoranda of this Agreement or evidence of any action or
transaction that occurs under this Agreement and that results in the creation or
transfer of any interest in real property.

 

I.              Counterparts

 

This Agreement may be executed in one or more counterparts and by facsimile or
other electronic transmission, which when taken together shall constitute a
single, original document.

 

J.             Memorandum

 

FARMOR agrees that FARMEE may file in local land records relevant to the Leases
and the AMI memoranda of this Agreement.  At the request of FARMEE, FARMOR shall
execute and deliver each memoranda and such further documents and instruments
and shall take such other actions as may be reasonably required or appropriate
in respect of the foregoing.

 

K.            Term

 

1.                                       The term of this Agreement shall
continue until the tenth (10th) anniversary hereof, unless earlier terminated by
(a) mutual written agreement of the parties, (b) by either party immediately
upon the commencement of case or proceeding against the other party under any
bankruptcy, reorganization, insolvency or similar law of any jurisdiction,
(c) by FARMEE pursuant to Article VI, K, 2 below, or (d) by FARMOR pursuant to
Article VI, K, 3 below.  The

 

21

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provisions of Article VI, D, E, L, N and P and the last sentence of Article VI,
K, 3 shall survive termination of this Agreement.

 

2.                                       Subject to Article VI, O, FARMEE may
terminate this Agreement upon thirty (30) days’ prior written notice to FARMOR
upon (i) material breach of any representation or warranty by FARMOR set forth
herein, (ii) gross negligence or willful misconduct of FARMOR in the performance
of its obligations hereunder, or (iii) material default by FARMOR in the
performance or observation of any covenant or obligation hereunder which default
remains uncured for a period of thirty (30) days after written notice thereof is
given to FARMOR by FARMEE.

 

3.                                       Subject to Article VI, O, FARMOR may
terminate this Agreement upon thirty (30) days’ prior written notice to FARMEE
upon:

 

a.                                       Material default by FARMEE in the
performance or observation of any covenant or obligation hereunder which default
remains uncured for a period of thirty (30) days after written notice thereof is
given to FARMEE by FARMOR;

 

b.                                      Failure of FARMEE to make payments in
accordance with Article V, B or any other material payment required by FARMEE
under this Agreement for sixty (60) consecutive days; or

 

c.                                       Failure (other than by reason of
FARMOR’s failure to perform a Work Plan) by FARMEE to drill at least the
cumulative number of Wells set forth below by the date set forth opposite such
cumulative number of Wells:

 

Cumulative No. of Wells

 

Date

 

 

 

120

 

September 30, 2011

160

 

March 31, 2012

240

 

March 31, 2013

320

 

March 31, 2014

400

 

March 31, 2015

480

 

March 31, 2016

540

 

March 31, 2017

600

 

March 31, 2018

 

d.                                      Failure by FARMEE to propose any Wells
in the Drill Proposal to be delivered to FARMEE by January 15, 2011 in
accordance with Article V, D, 1.

 

22

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e.                                       If FARMOR terminates this Agreement
pursuant to this Article VI, K, 3, FARMOR shall, at FARMEE’s request, continue
to provide FARMOR’s Services for up to ninety (90) days after the effective date
of the termination, or such shorter period as FARMEE selects a successor
provider and such provider assumes provision of FARMOR’s Services.

 

L.            Dispute Resolution

 

All controversies, disputes or claims between FARMOR and FARMEE and their
subsidiaries, Affiliates, shareholders, officers, directors, agents and
employees relating to this Agreement or the transactions contemplated hereby
(each, a “Dispute”) shall be submitted to Judicial Arbitration and Mediation
Services (“JAMS”) for mediation. The parties will cooperate with JAMS and with
one another in selecting a mediator from JAMS panel of neutrals, and in promptly
scheduling the mediation proceedings. The parties covenant that they will
participate in the mediation in good faith, and that they will share equally in
its costs. All offers, promises, conduct and statements, whether oral or
written, made in the course of the mediation by any of the parties, their
agents, employees, experts and attorneys, and by the mediator or any JAMS
employee, are confidential, privileged and inadmissible for any purpose,
including impeachment, in any arbitration or other proceeding involving the
parties, provided that evidence that is otherwise admissible or discoverable
shall not be rendered inadmissible or non-discoverable as a result of its use in
the mediation. If the dispute is not resolved within thirty (30) days from the
date of the submission of the dispute to mediation (or such later date as the
parties may mutually agree in writing), the administration of the arbitration
shall proceed forthwith. The mediation may continue, if the parties so agree,
after the appointment of the arbitrators. Unless otherwise agreed by the
parties, the mediator shall be disqualified from serving as arbitrator in the
case. The pendency of a mediation shall not preclude a party from seeking
provisional remedies in aid of the arbitration from a court of appropriate
jurisdiction, and the parties agree not to defend against any application for
provisional relief on the ground that a mediation is pending.

 

Following the mandatory mediation procedures all Disputes will be submitted for
binding arbitration to the New York, New York office of JAMS on demand of either
party. Unless otherwise agreed between the parties, such arbitration proceedings
will be conducted in New York, New York, and shall be heard by one arbitrator in
accordance with the then current Commercial Arbitration Rules of JAMS, who shall
be required to deliver to the parties a written opinion with respect to his or
her award.  The award of the arbitrator shall be conclusive and binding on all
parties hereto, and judgment upon the award may be entered in any court of

 

23

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competent jurisdiction.  Each party waives the right to contest the validity or
enforceability of such award, except as allowed under the Federal Arbitration
Act.  The parties to the arbitration shall equally share the costs of the
arbitration proceeding; provided that each party shall bear its own attorneys’
fees and other professional fees; and provided further that, if the arbitrator
shall determine that a party’s position in arbitration is frivolous, that party
shall bear all costs of the arbitration proceeding, including the other party’s
attorneys’ fees.

 

M.           Acknowledgement

 

Each provision of this Agreement shall be construed as though both parties
participated equally in the drafting of the same.  Consequently, the parties
acknowledge and agree that any rule of construction that a document is to be
construed against the drafting party shall not be applicable to this Agreement.
EACH OF THE PARTIES HERETO SPECIFICALLY ACKNOWLEDGES AND AGREES (A) THAT IT HAS
THE DUTY TO READ THIS AGREEMENT AND THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE
OF THE TERMS HEREOF, (B) THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY
INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS
OF THIS AGREEMENT, (C) THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS
AGREEMENT PROVIDE FOR THE ASSUMPTION BY ONE PARTY OF, AND/OR RELEASE OF THE
OTHER PARTY FROM, CERTAIN LIABILITIES ATTRIBUTABLE TO THIS TRANSACTION OR THE
PREMISES COVERED HEREBY THAT SUCH PARTY WOULD OTHERWISE BE RESPONSIBLE FOR UNDER
THE LAW. EACH PARTY HERETO FURTHER AGREES THAT IT WILL NOT CONTEST THE VALIDITY
OR ENFORCEABILITY OF ANY OF SUCH PROVISIONS OF THIS AGREEMENT ON THE BASIS THAT
THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISIONS OR THAT SUCH PROVISIONS
ARE NOT “CONSPICUOUS”.

 

N.            Integral Part/Direct Relationship of Ancillary Agreements

 

FARMOR and FARMEE agree that each and every agreement (and any amendment
thereto) benefiting FARMEE, including without limitation, the Leases, the
Gathering Agreement and the Operating Contracts, ancillary to this Agreement and
related to the Leases and/or preparation of the hydrocarbons for sale, through
and including the sale of said hydrocarbons by FARMEE and/or its representatives
into sales line, shall be deemed an integral part of and directly related to
this Agreement.

 

24

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O.                                   Force Majeure

 

If by reason of a Force Majeure Event either party is rendered unable, wholly or
in part, to carry out its obligations under this Agreement, and if such party
gives notice and the details of such Force Majeure in writing or by facsimile to
the other party within a reasonable time after the occurrence of the cause
relied on, the party giving such notice, so far as and to the extent that its
performance is affected by such Force Majeure Event and during the continuance
of its inability to perform as a result of such Force Majeure Event, shall not
be liable hereunder, including with respect to the obligations set forth in
Article VI, K; provided, however, that the party claiming such Force Majeure
Event shall cause such Force Majeure Event to be remedied with all reasonable
dispatch.

 

P.            Confidentiality

 

Certain terms of this Agreement and of the information that the parties have
shared or will share with each other pursuant hereto is confidential or
proprietary and has not been publicly disclosed (the “Information”).  The
Information, except as permitted herein, will not be disclosed without the prior
written consent of both parties, such consent not to be unreasonably withheld. 
Disclosure of such Information may cause irreparable harm to one or both
parties.  Accordingly, each party represents that it has not, and agrees that it
will not, and will inform its directors, officers, agents, advisors and
Affiliates not to, disclose to any third party any Information or confirm any
statement made by third parties regarding Information unless the other party has
provided its prior written consent to such disclosure. Notwithstanding anything
to the contrary herein, Information shall not include information that:  (i) is
in the public domain; (ii) is previously known or independently developed by a
party; or (iii) is acquired by a party from any third party having a right to
disclose such information. Notwithstanding anything to the contrary herein each
party may disclose Information (x) to the extent such disclosure is required, as
reasonably determined by the disclosing party, by applicable federal or state
securities law or regulations or by the rules of any stock exchange upon which
shares of the disclosing party or any of its Affiliates (which, for the purposes
of this provision, shall include the Partnerships with respect to FARMEE) are
registered or are in the process of being registered, which rules require the
disclosure to be made; provided, however, that the disclosing party, in
consultation with the other party, shall make a confidential treatment request
to the appropriate regulatory authority; and (y) to its partners, shareholders,
investors, lenders, potential investors (including potential investors in the
Partnerships), potential lenders, directors, officers, employees, agents or
representatives, including attorneys, accountants and consultants, in each case
under circumstances

 

25

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in which the disclosing party takes reasonable steps to maintain the
confidentiality of the Information.

 

Q.            Publicity

 

Neither FARMOR nor FARMEE, nor any of their respective Affiliates (which, for
the purposes of this provision, shall include West Coast Opportunity Fund, LLC
and West Coast Management, Inc., in the case of FARMOR) shall issue any press
release or similar public announcement pertaining to this Agreement or the
transactions contemplated hereby without the consulting with the other party
prior to making any such issuance.

 

 

[Remainder of page intentionally left blank; signatures appear on following
page]

 

26

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IN WITNESS WHEREOF, and intending to be legally bound, the parties have caused
this Agreement to be executed by their duly authorized representatives as of the
date first shown above.

 

 

FARMOR:

 

 

 

BLACK RAVEN ENERGY, INC.

 

 

 

By:

/s/ William F. Hayworth

_

 

 

 

Name (printed):

William F. Hayworth

 

 

 

 

Title:

President

 

 

 

FARMEE:

 

 

 

ATLAS RESOURCES, LLC

 

By:

AIC, LLC, its sole member

 

By:

Atlas Energy Operating Company, LLC, its sole member

 

 

By:

Atlas Energy Resources, LLC, its sole member

 

 

By:

/s/ Daniel Herz

 

 

 

 

Name (printed):

Daniel Herz

 

 

 

 

Title:

Senior Vice President

 

 

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