Exhibit 10.2

 

 

 

 

 

CONTRIBUTION AGREEMENT

 

by and between

 

ANTERO RESOURCES CORPORATION

 

and

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I

 

 

 

DEFINITIONS

 

 

 

 

Section 1.1

Definitions

1

 

 

 

ARTICLE II

 

 

 

CONTRIBUTION

 

 

 

 

Section 2.1

Contribution

9

Section 2.2

Consideration

10

Section 2.3

Closing

10

Section 2.4

Revenues and Expenses

11

 

 

 

ARTICLE III

 

 

 

CONTRIBUTOR’S REPRESENTATIONS AND WARRANTIES

 

 

 

 

Section 3.1

Organization and Good Standing

12

Section 3.2

Authority; Authorization of Agreement

12

Section 3.3

No Violations

12

Section 3.4

No Liens

13

 

 

 

ARTICLE IV

 

 

 

ANTERO MIDSTREAM’S REPRESENTATIONS AND WARRANTIES

 

 

 

 

Section 4.1

Organization and Good Standing

13

Section 4.2

Authority; Authorization of Agreement

13

Section 4.3

No Violations

13

 

 

 

ARTICLE V

 

 

 

COVENANTS

 

 

 

 

Section 5.1

Conduct of Business

14

Section 5.2

Records

14

Section 5.3

Bonds

14

Section 5.4

Required Consents; Carved-Out Assets

14

Section 5.5

Customary Post-Closing Consents

15

Section 5.6

Casualty Loss

15

 

 

 

ARTICLE VI

 

 

 

TAX MATTERS

 

 

 

 

Section 6.1

Tax Matters

16

 

 

 

ARTICLE VII

 

 

 

ASSUMPTION; DISCLAIMER

 

 

 

 

Section 7.1

Assumption by Antero Midstream

16

Section 7.2

Disclaimer

17

 

 

 

ARTICLE VIII

 

 

 

MISCELLANEOUS PROVISIONS

 

 

 

 

Section 8.1

Notices

18

Section 8.2

Assignment; Successors in Interest

18

Section 8.3

Governing Law

18

 

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Section 8.4

Consent to Jurisdiction, Etc.; Waiver of Jury Trial

19

Section 8.5

Severability

19

Section 8.6

Counterparts

19

Section 8.7

No Third-Party Beneficiaries

19

Section 8.8

Amendment; Waiver

19

Section 8.9

Entire Agreement

19

Section 8.10

Further Cooperation

20

Section 8.11

Transaction Costs

20

Section 8.12

Construction

20

 

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EXHIBITS

 

Exhibit A

Assets:

 

Systems

 

Non-Hydrocarbon Systems

 

Easements

 

Fee interests and Leases

 

Compressor Stations

 

Equipment

 

Related Contracts

 

Midstream Permits

 

 

Exhibit B-1

Excluded Assets

 

 

Exhibit B-2

Retained Liabilities

 

 

Exhibit B-3

Retained third party midstream agreements

 

 

Exhibit C

Form of Gathering Agreement

 

 

Exhibit D

Form of ROFO Agreement

 

 

Exhibit E

Form of Water Services Agreement

 

 

Exhibit F

Form of License Agreement

 

 

Exhibit G

Required Consents

 

 

Exhibit H

Excluded Wells

 

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CONTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AGREEMENT (this “Agreement”) is dated the 16th day of October,
2013, by and between Antero Resources Corporation, a Delaware corporation
(“Contributor”), and Antero Resources Midstream LLC, a Delaware limited
liability company (“Antero Midstream”). Contributor and Antero Midstream are
sometimes hereinafter referred to individually as a “Party” and collectively as
the “Parties.”

 

WHEREAS, Contributor owns 100% of the membership interests in Antero Midstream
(other than a special membership interest, which is owned by Antero Resources
Midstream Management LLC);

 

WHEREAS, Contributor intends to contribute to Antero Midstream, or to cause the
transfer to Antero Midstream of, all of the Assets (as defined below), and
Antero Midstream intends to accept all of the Assets and to assume certain
Liabilities (as defined below) as further described herein, in each case in
accordance with this Agreement;

 

NOW, THEREFORE, based on the mutual covenants and agreements herein, the Parties
agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1                                    Definitions.  In this Agreement,
capitalized terms have the meanings provided in this Section 1.1. All references
to Sections refer to Sections in this Agreement and all references to Exhibits
refer to Exhibits attached to this Agreement, each of which is made a part
hereof.

 

“Affiliate” means, with respect to any Person, another Person that, directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, such first Person. The term “control” and its
derivatives with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
other voting interests, by contract or otherwise. Notwithstanding the foregoing,
Antero Midstream and Contributor shall not be deemed to be Affiliates of each
other.

 

“Agreement” has the meaning set forth in the introductory paragraph.

 

“Antero Midstream” has the meaning set forth in the introductory paragraph.

 

“Assets” means all assets in respect of the midstream business of Contributor on
the Closing Date, including the following:

 

(a)                                 all systems held by Contributor or an
Affiliate of Contributor on the Closing Date for the gathering or transportation
of Hydrocarbons, including the systems described on Exhibit A (the foregoing,
collectively, the “Systems”);

 

(b)                                 all assets and systems held by Contributor
or an Affiliate of Contributor on the Closing Date for the gathering or
transportation of water, carbon dioxide or other non-Hydrocarbons, or the
treatment, transportation, handling or disposal of waste water or other fluid
waste, including the systems described on Exhibit A (the foregoing,
collectively, the “Non-Hydrocarbon Systems”);

 

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(c)                                  all easements, surface use agreements,
servitudes, third party permits, licenses, surface leases, sub-surface leases,
rights-of-way, grazing rights, logging rights and other similar interests
relating to surface operations or for use or occupancy of the surface or the
subsurface applicable to the Systems, the Non-Hydrocarbon Systems or the
Compressor Stations, including the instruments and agreements described on
Exhibit A (the foregoing, collectively, the “Easements”), to the extent
reasonably determined by Antero Midstream to be assignable;

 

(d)                                 all fee and leasehold interests in real
property that relate primarily to the ownership or operation of the assets
described in the other clauses of this definition, including the fee and
leasehold interests described on Exhibit A (the Easements and the interests
described in this clause (d), collectively, the “Lands”, and the leases under
which the leasehold interests described in this clause (d) are, collectively,
the “Leases”);

 

(e)                                  all compressor stations used on the
Systems, including the compressor stations described on Exhibit A (the
foregoing, collectively, the “Compressor Stations”);

 

(f)                                   all of the Personal Property, including
the facilities and equipment described on Exhibit A (the foregoing,
collectively, the “Equipment”);

 

(g)                                  all Related Contracts, to the extent
reasonably determined by Antero Midstream to be assignable;

 

(h)                                 all Hydrocarbons comprising line pack or
line fill in any part of the Systems at the Effective Time;

 

(i)                                     all Permits issued to or held by
Contributor or any of its Affiliates in connection with Contributor’s or its
Affiliates’ ownership or operation of the other assets described in this
definition, including those Permits described on Exhibit A (the foregoing,
collectively, the “Midstream Permits”), to the extent reasonably determined by
Antero Midstream to be assignable;

 

(j)                                    all of Contributor’s and its Affiliates
rights, claims and causes of action (including warranty and similar claims that
may be made against a third party vendor under a master service agreement or any
other Related Contract) to the extent, and only to the extent, that such rights,
claims or causes of action (i) are associated with the Assets and relate to the
period of time from and after the Effective Time or (ii) relate to the
liabilities assumed by Antero Midstream pursuant to this Agreement (in each case
excluding any such rights, claims and causes of action that arise from or are
related to the ownership by Contributor or its Affiliates of, or the rights of
Contributor or its Affiliates in respect of, the Excluded Assets) (the
foregoing, collectively, the “Claims”), to the extent reasonably determined by
Antero Midstream to be assignable;

 

(k)                                 all prepaid expenses (other than Taxes)
attributable to the Assets that are paid by or on behalf of Contributor or its
Affiliates and are attributable to the periods of time on and after the
Effective Time, including prepaid utility charges;

 

(l)                                     the Conveyed IP; and

 

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(m)                             all of Contributor’s and its Affiliates’ files,
records and data directly and primarily relating to the items described in the
preceding clauses above, including title records (including title opinions and
curative documents), surveys, maps and drawings, operating data and records,
maintenance records, and correspondence, including any Intellectual Property
(other than Trademarks) held by Contributor therein, except (i) to the extent
the transfer, delivery or copying of such records may be restricted by contract
with a third party or subject to a fee; (ii) all documents and instruments of
Contributor that may be protected by the attorney-client privilege; and (iii)
all accounting and Tax files, books, records, Tax Returns and Tax work papers
related to such items (the foregoing, collectively, the “Records”).

 

Notwithstanding the foregoing, “Assets” shall not include the Excluded Assets.

 

“Asset Taxes” shall mean sales, use, ad valorem, property, excise or similar
Taxes based upon the operation or ownership of the Assets but excluding, for the
avoidance of doubt, (a) Income Taxes and (b) Transfer Taxes.

 

“Assignment Documents” has the meaning set forth in Section 2.3(a)(i).

 

“Bonds” has the meaning set forth in the definition of Excluded Assets.

 

“Business Day” means any day except Saturday, Sunday or any day on which banks
in the United States are required to be or are customarily closed.

 

“Carved-Out Asset” has the meaning set forth in Section 5.4(b).

 

“Claims” has the meaning set forth in the definition of Assets.

 

“Closing” means the consummation of the transactions contemplated by this
Agreement.

 

“Closing Date” means the date on which Closing occurs.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Compressor Stations” has the meaning set forth in the definition of Assets.

 

“Contributor” has the meaning set forth in the introductory paragraph.

 

“Conveyed IP” means (a) all Intellectual Property (other than Trademarks) owned
by Contributor primarily relating to the operation of the Non-Hydrocarbon
Systems and (b) the Intellectual Property described in Exhibit A, including all
rights, claims and causes of action for past, present and future infringement
and misappropriation of the Conveyed IP, including the right to seek injunctive
relief and damages, and to collect and retain same.

 

“Customary Post-Closing Consents” means (a) consents, notices, approvals,
waivers, authorizations and filings from or to (as applicable) Governmental
Authorities that are customarily obtained or made (as applicable) after closing
in connection with transactions similar to the transactions contemplated by this
Agreement and (b) any consents, approvals, waivers and authorizations of
Governmental Authorities or other third parties that cannot be unreasonably
withheld by the relevant Person.

 

“Easements” has the meaning set forth in the definition of Assets.

 

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“Effective Time” means 00:01 a.m. (Central Time) on the first day of the
calendar month in which Closing occurs.

 

“Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. §
7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1471 et
seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil
Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Occupational Safety and Health
Act, 29 U.S.C. § 651 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f
through 300j; and all similar Laws of any Governmental Authority having
jurisdiction over the Assets in question addressing pollution or protection of
human health, safety, natural resources or the environment, Releases or
threatened Releases of, or exposure to, Hazardous Materials, or otherwise
relating to the generation, manufacture, processing, distribution, use,
treatment, storage, handling, transport or disposal of Hazardous Materials and
all amendments to such Laws.

 

“Equipment” has the meaning set forth in the definition of Assets.

 

“Excluded Assets” means all right, title and interest of Contributor and its
Affiliates in and to any assets, properties, agreements and interests not
included in the definition of Assets, including, without limitation:

 

(a)                                 the Upstream Assets;

 

(b)                                 all systems primarily used or intended for
the gathering or transportation of Hydrocarbons produced from the Excluded
Wells;

 

(c)                                  all of Contributor’s (and its Affiliates’)
corporate minute books, financial records and other business records to the
extent such books and records are related to Contributor’s (or any of its
Affiliates’) business generally or are otherwise not directly related to the
Assets;

 

(d)                                 all claims for refunds, credits, loss
carryforwards and similar Tax assets with respect to (i) Asset Taxes allocated
to Contributor pursuant to Section 6.1(b), (ii) Income Taxes of Contributor or
any of its Affiliates or (iii) any Taxes attributable to any of the assets or
properties described in this definition;

 

(e)                                  all personal computers and associated
peripherals and all radio and telephone equipment (and licenses related
thereto);

 

(f)                                   all of Contributor’s (and its Affiliates’)
computer software, patents, trade secrets, copyrights, names, trademarks, logos
and other intellectual property (except the Conveyed IP), and all interests of
the Contributor in and to the License Agreement;

 

(g)                                  all documents and instruments of
Contributor (or any of its Affiliates) that may be protected by an
attorney-client privilege (other than title opinions and reports on status of
title, in each case, with respect to title to any of the Assets);

 

(h)                                 all offices of Contributor and all personal
property located therein;

 

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(i)                                     all of the bonds, letters of credit,
guarantees, deposits and other pre-payments posted by Contributor or any of its
Affiliates with any Governmental Authorities or any other third parties
(“Bonds”);

 

(j)                                    all trade credits, receivables and all
other proceeds, income or revenues attributable to the Assets with respect to
any period of time prior to the Effective Time, or attributable to any of the
assets and properties described in this definition with respect to any period of
time;

 

(k)                                 all accounts (including bank accounts) and
all cash on hand;

 

(l)                                     any policy or agreement of insurance or
indemnity agreement and any proceeds or awards therefrom;

 

(m)                             all assets of Antero Resources Midstream
Management LLC and all assets of any Person that directly or indirectly holds
any interest in Antero Resources Midstream Management LLC; and

 

(n)                                 all assets described on Exhibit B.

 

“Excluded Wells” means the wells specified on Exhibit H.

 

“Gathering Agreement” means a natural gas gathering agreement to be entered into
by Contributor and Antero Midstream at Closing in substantially the form set
forth in Exhibit C.

 

“Governmental Authority” means any federal, state, local, municipal or other
governments; any governmental, quasi-governmental, regulatory or administrative
agency, commission, body or other authority exercising or entitled to exercise
any administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power; and any court or governmental tribunal.

 

“Hazardous Materials” means any substance that, by its nature or its use, is
regulated or as to which liability might arise under any Environmental Law
including any:  (a) chemical, product, material, substance or waste defined as
or included in the definition of “hazardous substance,” “hazardous material,”
“hazardous waste,” “restricted hazardous waste,” “extremely hazardous waste,”
“solid waste,” “toxic waste,” “extremely hazardous substance,” toxic substance,”
“toxic pollutant,” “contaminant,” “pollutant,” or words of similar meaning or
import found in any Environmental Law; (b) Hydrocarbons, petroleum products,
petroleum substances, natural gas, condensate, crude oil or any components,
fractions, or derivatives thereof or oil and gas exploration and production
waste; and (c) asbestos containing materials, polychlorinated biphenyls,
radioactive materials, urea formaldehyde foam insulation, or radon gas.

 

“Hydrocarbons” means oil and gas and other hydrocarbons produced in association
therewith (whether in liquid or gaseous form), or any combination thereof, and
any minerals produced in association therewith.

 

“Income Taxes” means any federal, state, local or foreign Taxes measured by or
imposed on net income, gross revenue or receipts, including franchise or similar
Taxes.

 

“Intellectual Property” means (a) patents and patent applications; (b) trade
secrets and confidential information, (c) copyrights, registered and
unregistered; and (d) trademarks, service marks, trade names, trade dress, and
domain names (“Trademarks”).

 

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“Lands” has the meaning set forth in the definition of Assets.

 

“Laws” means any and all applicable laws, statutes, ordinances, Permits,
decrees, writs, injunctions, orders, codes, judgments, principles of common law,
rules or regulations that are promulgated, issued or enacted by a Governmental
Authority having jurisdiction, and includes Environmental Laws.

 

“Leases” has the meaning set forth in the definition of Assets.

 

“Liabilities” shall mean any and all claims, causes of action, payments,
charges, judgments, assessments, liabilities, obligations, losses, damages,
penalties, fines and other costs and expenses (including reasonable attorneys’
fees and other legal costs and expenses), including any of the foregoing arising
out of or otherwise attributable to personal injury or death, property damage,
environmental damage or remediation, or violation of Environmental Law.

 

“License Agreement” means a license agreement in respect of certain intellectual
property rights of Contributor, to be entered into by Contributor and Antero
Midstream at Closing in substantially the form set forth in Exhibit F.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, defect, restriction or other encumbrance in respect of such
asset.

 

“Material Adverse Effect” means any change, inaccuracy, effect, event, result,
occurrence, condition or fact (for the purposes of this definition, each, an
“event”) (whether foreseeable or not and whether covered by insurance or not)
that has had or would be reasonably likely to have, individually or in the
aggregate with any other event or events, a material adverse effect on the
Assets; provided, however, that a Material Adverse Effect shall not include such
material adverse effects resulting from (a) general changes in Hydrocarbon
prices; (b) general changes in industry, economic, financial or political
conditions or markets; (c) changes in conditions or developments generally
applicable to the oil and gas industry, in any area or areas where the Assets
are located; (d) acts of God, including hurricanes, storms and other natural
disasters; (e) acts or failures to act of Governmental Authorities; or (f) civil
unrest or similar disorder, terrorist acts, any outbreak of hostilities of war.

 

“Midstream Permits” has the meaning set forth in the definition of Assets.

 

“Non-Hydrocarbon Systems” has the meaning set forth in the definition of Assets.

 

“Operating Expenses” means all operating expenses (including costs of insurance
but excluding Asset Taxes) and capital expenditures incurred in the ownership
and operation of the Assets.

 

“Party” and “Parties” have the meanings set forth in the introductory paragraph.

 

“Permit” means any permit, license, certificate, consent, approval, waiver,
exemption, variance, authorization, registration and any similar item required
under any Law or issued by any Governmental Authority.

 

“Permitted Liens” means, with respect to any Asset:

 

(a)                                 any Governmental Authority or other third
party consent, notice, approval, waiver, authorization or filing required in
respect of such Asset in connection with the consummation of the transactions
contemplated hereby, including the

 

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Required Consents in respect of any Carved-Out Asset and the Customary
Post-Closing Consents;

 

(b)                                 the dedications and any other Liens under
the Gathering Agreement, the ROFO Agreement, the Water Services Agreement and
the Shared Use Agreements;

 

(c)                                  rights reserved to or vested in a
Governmental Authority having jurisdiction to control or regulate such Asset in
any manner whatsoever and all Laws of such Governmental Authorities;

 

(d)                                 Liens for Taxes, assessments and similar
charges that are (i) not yet due or (ii) being contested in good faith by
appropriate proceedings;

 

(e)                                  mechanic’s, materialman’s, carrier’s,
repairer’s and other similar Liens arising or incurred in the ordinary course of
business that are not yet due and payable;

 

(f)                                   Easements, Leases and Permits affecting
such Asset, and ponds, lakes, waterways, canals, ditches, reservoirs, equipment,
pipelines, utility lines, railways, streets, roads and structures on, over or
through such Asset, in each case, to the extent the same do not materially
affect or impair the ownership, operation or use of such Asset (either as owned,
operated or used immediately before Closing, or as contemplated to be built out
and owned, operated and used by Antero Midstream following Closing);

 

(g)                                  any undetermined or inchoate liens or
charges constituting or securing the payment of expenses that were incurred
incidental to operation or use of such Asset;

 

(h)                                 the terms and conditions of the instruments
creating the Assets, if applicable; and

 

(i)                                     Liens created by any third party owner
of the Lands.

 

“Person” means an individual, partnership, corporation, limited liability
company, trust, Governmental Authority or other entity.

 

“Personal Property” means the equipment, structures, fixtures, improvements,
equipment, storage tanks, pipelines, manifolds, casing, tubing, pumps, motors,
machinery, compression equipment, flow lines, processing and separation
facilities and other items of every kind and nature located at or on the
Compressor Stations or the Lands or primarily used or held for use in connection
with the Assets at Closing.

 

“ROFO Agreement” means a right of first offer agreement relating to natural gas
processing and certain other services to be entered into by Contributor and
Antero Midstream at Closing in substantially the form set forth in Exhibit D.

 

“Records” has the meaning set forth in the definition of Assets.

 

“Related Contracts” shall mean those gathering, transportation and marketing
agreements, hydrocarbon storage agreements, operating agreements, balancing
agreements, facilities or equipment leases, interconnection agreements, service
and parts agreements and all other contracts to which Contributor or an
Affiliate of Contributor is a party, that relate primarily to the ownership or
operation of

 

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the Assets and that will be binding on Antero Midstream or any of the Assets
after the Closing Date, including the contracts set forth on Exhibit A, but
excluding any contract that is an Excluded Asset.

 

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.

 

“Required Consents” means (a) the consents, notices, approvals, waivers,
authorizations and filings set forth on Exhibit G and (b) any Governmental
Authority or other third party consent, notice, approval, waiver, authorization
or filing that is identified by Antero Midstream before Closing as material to
the consummation of the transactions contemplated hereby.

 

“Retained Liabilities” means (a) any and all Income Taxes imposed on Contributor
or any of its Affiliates; the Asset Taxes allocable to Contributor pursuant to
Section 6.1(b); any Taxes imposed on or with respect to the Excluded Assets; and
any and all other Taxes imposed on or with respect to the Assets for any taxable
period (or portion thereof) ending before the Effective Time; and (b) the
Liabilities described on Exhibit B-2.

 

“Shared Use Agreements” has the meaning set forth in Section 2.3(a)(v).

 

“Straddle Period” means any Tax period beginning before and ending at or after
the Effective Time.

 

“Systems” has the meaning set forth in the definition of Assets.

 

“Tax” and “Taxes” means (a) all taxes, assessments, fees, unclaimed property and
escheat obligations, and other charges of any kind whatsoever imposed by any
Governmental Authority, including any federal, state, local and/or foreign
income tax, surtax, remittance tax, presumptive tax, net worth tax, special
contribution tax, production tax, value added tax, withholding tax, gross
receipts tax, windfall profits tax, profits tax, ad valorem tax, personal
property tax, real property tax, sales tax, goods and services tax, service tax,
transfer tax, use tax, excise tax, premium tax, stamp tax, motor vehicle tax,
entertainment tax, insurance tax, capital stock tax, franchise tax, occupation
tax, payroll tax, employment tax, unemployment tax, disability tax, alternative
or add-on minimum tax and estimated tax, (b) any interest, fine, penalty or
additions to tax imposed by a Governmental Authority in connection with any item
described in clause (a), and (c) any liability in respect of any item described
in clauses (a) or (b) above, that arises by reason of a contract, assumption,
transferee or successor liability, operation of Law (including by reason of
participation in a consolidated, combined or unitary Tax Return) or otherwise.

 

“Tax Return” means any report, return, information statement, election,
document, estimated tax filing, declaration or other filing provided to any
Governmental Authority in respect of Taxes including any attachments thereto and
amendments thereof.

 

“Transfer Taxes” has the meaning set forth in Section 6.1(a).

 

“Upstream Assets” means all assets held by Contributor or an Affiliate of
Contributor in respect of the upstream business of Contributor and its
Affiliates, including all interests of Contributor or its Affiliates:

 

(a)                                 in and to any oil and gas wells and leases,
including all mineral interests, royalty interests, overriding royalty
interests, production payments, other payments out of or measured by the value
of oil and gas production, net profits interests, carried interests, farmout or
farmin rights, options, subleases, and all other rights

 

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and interests that Contributor or its Affiliates have in and to any oil and gas
leases, any lands pooled or unitized therewith and any oil and gas wells;

 

(b)                                 in and to (i) any Hydrocarbons, carbon
dioxide or water or other non-Hydrocarbons in and under, or which may be
produced and saved from or attributable to, the leases or lands referred to in
clause (a), or any interests pooled or unitized therewith; and (ii) any water
the subject of any water rights agreement between Contributor and any third
party;

 

(c)                                  other than any line fill and line pack that
is expressly included in the Assets, all Hydrocarbons in storage or existing in
stock tanks, pipelines and/or plants (including inventory) on the Systems and
all carbon dioxide, water and other non-Hydrocarbons in storage or existing in
stock tanks, pipelines and/or plants (including inventory) on the
Non-Hydrocarbon Systems;

 

(d)                                 with respect to the use and occupancy of the
surface of and the subsurface depths under the lands and leases referred to in
clause (a), and rights of ingress and egress and similar rights and interests
pertaining to, situated on or used in connection with such lands and leases,
except, in the case of surface and access rights, to the extent such surface
rights comprise a part of the Lands;

 

(e)                                  in and to any oil, gas or mineral
unitization, pooling, operating and communitization agreements, joint venture
agreements, farmin and farmout agreements, exploration agreements, exchange
agreements, declarations, orders, rules, regulations or other official acts of
any Governmental Authority and the units created thereby, including all units
voluntarily formed or formed under orders, regulations, rules or other official
acts of any Governmental Authority having jurisdiction;

 

(f)                                   in and to all surface and subsurface
personal property, equipment, machinery, fixtures, movable and immovable
property and improvements on or appurtenant to the leases, lands or wells
described in clause (a), or used or obtained in connection with the exploration,
development or operation of such leases, lands or wells, including any trucks
and cars, drilling/workover rigs and rolling stock and all equipment, pipe and
inventory that is not currently being used or currently designated for use in
connection with the ownership or operation of the Assets (whether located on or
off the Assets); and

 

(g)                                  in and to (i) the Gathering Agreement, the
ROFO Agreement, the Water Services Agreement and the Shared Use Agreements, and
(ii) all agreements with third parties for midstream services, including the
agreements set forth on Exhibit B-3.

 

“Water Services Agreement” means a water services agreement to be entered into
by Contributor and Antero Midstream at Closing in substantially the form set
forth in Exhibit E.

 

ARTICLE II
CONTRIBUTION

 

Section 2.1                                    Contribution.  Subject to the
terms and conditions of this Agreement, Contributor shall contribute, or cause
the transfer of, and Antero Midstream shall accept, all of Contributor’s and its
Affiliates’ right, title and interest in and to the Assets, free and clear of
all Liens other than Permitted

 

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Liens. Notwithstanding anything to the contrary set forth herein, Contributor
shall reserve and retain all of the Excluded Assets and the Assets shall not
include any of the Excluded Assets.

 

Section 2.2                                    Consideration.  The contribution
of the Assets under this Agreement shall be made by way of a capital
contribution from Contributor to Antero Midstream and no payment shall be made
by Antero Midstream to Contributor in consideration of such contribution.

 

Section 2.3                                    Closing.  The Closing shall take
place at the offices of Vinson & Elkins LLP, 1001 Fannin, Suite 2500, Houston,
TX 77002 at 9:00 a.m. (Central Time) on the earlier of (i) the date on which
Antero Midstream elects that Closing shall occur and (ii) the date falling 180
days after the date of this Agreement, and, in each case, if such date is not a
Business Day, the first Business Day thereafter. At the Closing:

 

(a)                                 Antero Midstream shall deliver the following
to Contributor:

 

(i)                                     original executed counterparts of such
assignment agreements, assumption agreements, novation agreements, releases,
deeds and bills of sale (collectively, the “Assignment Documents”) as may be
reasonably required by Antero Midstream in order to effect the contribution of
the Assets as contemplated by this Agreement, in sufficient number as
Contributor and Antero Midstream may each reasonably require to facilitate
appropriate recording; provided that (i) any Assignment Document that comprises
a deed for the transfer of real property shall, unless reasonably requested
otherwise by Antero Midstream, be a special warranty deed and (ii) the
Assignment Documents shall not materially vary the obligations or change the
allocations of liability as between the Parties as set forth in this Agreement;

 

(ii)                                  all other documents reasonably required by
Contributor or Antero Midstream in order to transfer operations on the Assets to
Antero Midstream, to the extent such operations were, immediately prior to
Closing, conducted by Contributor or any of its Affiliates;

 

(iii)                               the consideration set forth in Section 2.2;

 

(iv)                              original executed counterparts of the
Gathering Agreement, the ROFO Agreement, the Water Services Agreement and the
License Agreement;

 

(v)                                 original executed counterparts of such
shared use agreements and other instruments relating to the Contributor and
Antero Midstream’s continued access to, and use of, respectively, the Assets and
the retained assets of Contributor (collectively, the “Shared Use Agreements”),
as may be reasonably required by Antero Midstream in order for Antero Midstream
to develop, construct, own and operate the Assets and the related midstream
business going forward, and for Contributor to continue to own and operate its
retained business; and

 

(vi)                              any other items that are required by this
Agreement to be executed and/or delivered by Antero Midstream on the Closing
Date or are reasonably necessary or desirable to effect the consummation of the
transactions contemplated hereby.

 

(b)                                 Contributor shall deliver the following to
Antero Midstream:

 

(i)                                     original executed copies of such
Assignment Documents as may be reasonably required by Antero Midstream in order
to effect the contribution of the Assets as contemplated by this Agreement, in
sufficient number as Contributor and Antero Midstream may each reasonably
require to facilitate appropriate recording;

 

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(ii)                                  an executed certificate of non-foreign
status described in Treasury Regulation §1.1445-2(b)(2);

 

(iii)                               all other documents reasonably required by
Contributor or Antero Midstream in order to transfer operations on the Assets to
Antero Midstream, to the extent such operations were, immediately prior to
Closing, conducted by Contributor or any of its Affiliate;

 

(iv)                              original executed counterparts of the
Gathering Agreement, the ROFO Agreement, the Water Services Agreement and the
License Agreement;

 

(v)                                 a recordable release of any trust,
mortgages, financing statements, fixture filings or security agreements made by
Contributor or any of its Affiliates affecting any part of the Assets;

 

(vi)                              original executed copies of the Shared Use
Agreements; and

 

(vii)                           any other items that are required by this
Agreement to be executed and/or delivered by Contributor on the Closing Date or
are reasonably necessary or desirable to effect the consummation of the
transactions contemplated hereby.

 

Section 2.4                                    Revenues and Expenses.

 

(a)                                 Except as expressly provided otherwise in
Section 7.1 or otherwise in this Agreement, Contributor or its applicable
Affiliate shall remain entitled to all of the rights of ownership (including the
right to all proceeds) and shall remain responsible for all Operating Expenses,
in each case attributable to the Assets for the period of time prior to the
Effective Time.  Except as expressly provided otherwise in Section 7.1, Antero
Midstream shall be entitled to all of the rights of ownership (including the
right to all proceeds), and shall be responsible for all Operating Expenses, in
each case attributable to the Assets from and after the Effective Time.

 

(b)                                 If any Party receives monies that, in
accordance with the principles set forth in Section 2.4(a), belong to the other
Party, then the receiving Party shall, within 30 days after the end of the month
in which such amounts were received, pay such amounts to the proper Party. If
any Party pays monies for Operating Expenses which are the obligation of the
other Party hereto, then such other Party shall, within 30 days after the end of
the month in which the applicable invoice and proof of payment of such invoice
were received, reimburse the Party that paid such Operating Expenses. If a Party
receives an invoice of an expense or obligation which is owed by the other
Party, such Party receiving the invoice shall promptly forward such invoice to
the Party obligated to pay the same. If an invoice or other evidence of an
obligation is received by a Party, which is partially an obligation of both
Contributor and Antero Midstream, then the Parties shall consult with each
other, and each shall promptly pay its portion of such obligation to the
obligee.

 

(c)                                  Each of Contributor and Antero Midstream
shall be permitted to offset any Operating Expenses owed by such Party to the
other Party pursuant to this Section 2.4 against revenues owing by the second
Party to the first Party pursuant to this Section 2.4, but not otherwise.

 

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ARTICLE III
CONTRIBUTOR’S REPRESENTATIONS AND WARRANTIES

 

Contributor represents and warrants to Antero Midstream the following as of the
date of this Agreement and as of Closing (except to the extent that a specific
date is referred to, in which case Contributor represents and warrants to Antero
Midstream that such statement is correct as of such specific date):

 

Section 3.1                                    Organization and Good Standing. 
Contributor is a corporation, duly organized and validly existing under the Laws
of the State of Delaware. Contributor is duly licensed or qualified to do
business as a foreign corporation, and is in good standing in all jurisdictions
in which such qualification is required by Law, except where the failure to
qualify would not have a Material Adverse Effect.

 

Section 3.2                                    Authority; Authorization of
Agreement.  Contributor has all requisite power and authority to execute and
deliver this Agreement and the documents contemplated hereby to be executed and
delivered by Contributor, to consummate the transactions contemplated by this
Agreement and such documents and to perform all of its obligations herein and
therein.  This Agreement constitutes, and such documents, when executed and
delivered by Contributor, shall constitute, the valid and binding obligation of
Contributor, enforceable against it in accordance with their terms, except as
such enforceability may be limited by bankruptcy, insolvency or other Laws
relating to or affecting the enforcement of creditors’ rights and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity).

 

Section 3.3                                    No Violations.  Except for (x)
any Customary Post-Closing Consents and (y) as at Closing, any Required Consents
in respect of any Carved-Out Assets: (a) there are no consents, notices,
approvals, waivers, authorizations and filings or other prohibitions on
assignment that are applicable to the contribution of the Assets by Contributor
and its Affiliates to Antero Midstream as contemplated by this Agreement; and
(b) Contributor’s execution and delivery of this Agreement and the documents
contemplated hereby to be executed and delivered by Contributor, and the
consummation of the transactions contemplated by this Agreement and such
documents, shall not:

 

(i)                                     conflict with or require the consent,
approval, waiver or authorization of, or the notice or filing to, any Person
under any of the terms, conditions or provisions of the organizational documents
of Contributor;

 

(ii)                                  violate any provision of, or require any
consents, notices, approvals, waivers, authorizations and filings under, any
Laws (excluding Environmental Laws) applicable to Contributor except (in each
case) where such violation or the failure to make or obtain such consents,
notices, approvals, waivers, authorizations and filings would not have a
Material Adverse Effect;

 

(iii)                               conflict with, result in a breach of,
constitute a default under or constitute an event that with notice or lapse of
time, or both, would constitute a default under, accelerate or permit the
acceleration of the performance required by, or require any consents, notices,
approvals, waivers, authorizations and filings under any Related Contract,
except where such conflict, breach or default would not have a Material Adverse
Effect; or

 

(iv)                              result in the creation or imposition of any
Lien upon one or more of the Assets except where such Lien would not have a
Material Adverse Effect.

 

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Section 3.4                                    No Liens.  Except for Permitted
Liens and Liens that will be released at Closing, there are no Liens upon any of
the Assets.

 

ARTICLE IV
ANTERO MIDSTREAM’S REPRESENTATIONS AND WARRANTIES

 

Antero Midstream represents and warrants to Contributor the following as of the
date of this Agreement and as of Closing (except to the extent that a specific
date is referred to, in which case Antero Midstream represents and warrants to
Contributor that such statement is correct as of such specific date):

 

Section 4.1                                    Organization and Good Standing. 
Antero Midstream is a limited liability company duly organized, validly existing
and in good standing under the Laws of the State of Delaware.  Antero Midstream
is duly licensed or qualified to do business as a foreign entity and is in good
standing in all jurisdictions in which it is required by Law except where the
failure to qualify would not have a material adverse effect on the business,
financial condition or results in operations of Antero Midstream or any of its
subsidiaries taken as a whole or have a material adverse effect on Antero
Midstream’s ability to consummate the transactions contemplated by, or to
perform its obligations under, this Agreement.

 

Section 4.2                                    Authority; Authorization of
Agreement.  Antero Midstream has all requisite power and authority to execute
and deliver this Agreement and the documents contemplated hereby to be executed
and delivered by Antero Midstream, to consummate the transactions contemplated
by this Agreement and such documents and to perform all of its obligations
herein and therein.  This Agreement constitutes, and such documents, when
executed and delivered by Antero Midstream, shall constitute, the valid and
binding obligation of Antero Midstream, enforceable against Antero Midstream in
accordance with its and their terms, except as such enforceability may be
limited by bankruptcy, insolvency or other Laws relating to or affecting the
enforcement of creditors’ rights and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).

 

Section 4.3                                    No Violations.  Antero
Midstream’s execution and delivery of this Agreement and the documents
contemplated hereby to be executed and delivered by Antero Midstream, and the
consummation of the transactions contemplated by this Agreement and such
documents do not:

 

(a)                                 conflict with or require the consent,
approval, waiver or authorization of, or the notice or filing to, any Person
under any of the terms, conditions or provisions of the organizational documents
of Antero Midstream;

 

(b)                                 violate any provision of, or require any
consents, notices, approvals, waivers, authorizations and filings under any Laws
(excluding Environmental Laws) applicable to Antero Midstream; or

 

(c)                                  conflict with, result in a breach of,
constitute a default under or constitute an event that, with notice or lapse of
time, or both, would constitute a default under, accelerate or permit the
acceleration of the performance required by, or require any consents, notices,
approvals, waivers, authorizations and filings under:  (i) any material
agreement or any mortgage, indenture, loan, credit agreement or other agreement
evidencing indebtedness for borrowed money to which Antero Midstream is a party
or by which Antero Midstream (or any of its assets) is bound, except (in each
case) where such conflict, breach or default would not materially affect Antero
Midstream’s ability to consummate the transactions contemplated hereby or
thereby or (ii) any order, judgment or decree of any Governmental Authority.

 

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ARTICLE V
COVENANTS

 

Section 5.1                                    Conduct of Business.  From the
date of this Agreement until the Closing, Contributor shall, and shall cause its
Affiliates to:

 

(a)                                 operate its business (solely as it relates
to the Assets) in the ordinary course,  except in respect of (i) operations
necessary to respond to or alleviate the eminent or immediate endangerment of
the health or safety of any individual or the environment or the safety or
operational condition of any of the Assets, (ii) actions and operations
necessary to develop, construct and hookup any midstream assets of Contributor
or its Affiliates that are under development or construction as at the date of
this Agreement, or that become under development or construction between the
date of this Agreement and Closing, or (iii) any actions expressly consented to
in writing by Antero Midstream; and

 

(b)                                 not assign or otherwise dispose of, or agree
to assign or otherwise dispose of, any of the Assets or create any Lien on any
of the Assets other than Permitted Liens.

 

Section 5.2                                    Records.  Contributor shall use
commercially reasonable efforts to make available or deliver to Antero Midstream
all of the Records as soon as practicable after the Closing Date.  Contributor
shall have no obligation to deliver any Records to Antero Midstream that include
information relating to Excluded Assets. Notwithstanding the foregoing or any
other provision in this Agreement to the contrary, from and after the Closing
Date, Contributor may retain a copy of any or all of the Records.

 

Section 5.3                                    Bonds.  Contributor shall not
terminate any of the Bonds relating to the Assets before Closing. Contributor
shall be entitled to terminate any of the Bonds relating to the Assets after
Closing; provided that Contributor shall not terminate (and shall cause its
Affiliates not to terminate) any Bond relating to the Assets unless and until
Antero Midstream has put into place a replacement for such Bond directly with
the relevant Governmental Authority or other third party. Antero Midstream shall
use its commercially reasonable endeavors to put into place replacement Bonds
relating to the Assets as soon as reasonably practicable after Closing. If any
Bond relating to the Assets is capable of transfer, in accordance with its
terms, from Contributor or an Affiliate of Contributor to Antero Midstream,
Antero Midstream may elect that such Bond be transferred to Antero Midstream,
for consideration equal to the amount posted by Contributor or its relevant
Affiliate in respect of such Bond.

 

Section 5.4                                    Required Consents; Carved-Out
Assets.

 

(a)                                 Contributor shall, before Closing, send to
the holder of each Required Consent a notice in compliance with the contractual
provisions applicable to such Required Consent seeking such holder’s consent to
the transactions contemplated hereby.

 

(b)                                 In respect of (x) any Claim, Easement,
Lease, Related Contract or Midstream Permit that is not capable of assignment to
Antero Midstream and hence is not included in the Assets, or (y) any Asset to
which a Required Consent applies and for which such Required Consent is not
obtained before Closing (each such Claim, Easement, Lease, Related Contract,
Midstream Permit or Asset, a “Carved-Out Asset”):

 

(i)                                     such Carved-Out Asset shall not be
contributed to Antero Midstream on Closing;

 

(ii)                                  the Parties shall, at Closing, deliver to
each other such documents and take such actions as Antero Midstream, acting
reasonably, determines necessary or desirable to give to Antero Midstream the
benefit of the Carved-Out Asset and to cause Antero Midstream to be responsible

 

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for all of the liabilities associated therewith (which may include Contributor
holding title to such Carved-Out Asset in trust for Antero Midstream,
Contributor sub-leasing, sub-contracting or licensing such Carved-Out Asset to
Antero Midstream, Antero Midstream assuming the pre-Effective Time Liabilities
of Contributor under the Related Contracts to the extent required for an
assignment of such Related Contracts to be effective, or any other arrangement);

 

(iii)                               from and after Closing, and unless and until
such Carved-Out Asset is contributed pursuant to paragraph (iv) or (v) below or
otherwise by mutual agreement of the Parties:

 

(A)                               Antero Midstream shall perform all obligations
of Contributor under such Carved-Out Asset; and

 

(B)                               if such Carved-Out Asset is a Claim, Easement,
Lease, Related Contract or Midstream Permit, Contributor shall take no action
(and shall make no omission) the taking (or omission, as applicable) of which
would be reasonably likely to (1) comprise or cause a breach, violation or
default of or under such Claim, Easement, Lease, Related Contract or Midstream
Permit or (2) in respect of a Midstream Permit, cause its revocation,
cancellation, suspension or adverse modification;

 

(iv)                              if such Carved-Out Asset requires a Required
Consent, each Party shall use its commercially reasonable endeavors after
Closing to cooperate with the other Party in seeking to obtain such Required
Consent and, in the event that such Required Consent is obtained following the
Closing Date, then, as soon as reasonably practicable (and no later than the
tenth Business Day) after such Required Consent is obtained, Contributor shall
contribute such Carved-Out Asset to Antero Midstream pursuant to an instrument
or instruments in substantially the same form as equivalent instruments for
similar assets executed and delivered at Closing, for no additional
consideration; and

 

(v)                                 each Party shall use its commercially
reasonable endeavors after Closing to cooperate with the other Party in taking
all other actions as may be reasonably required by Antero Midstream to cause
such Carved-Out Asset to become assignable, if possible, and, in the event that
such Carved-Out Asset becomes assignable following the Closing Date, then, as
soon as reasonably practicable (and no later than the tenth Business Day)
thereafter (assuming prior receipt of Required Consents), Contributor shall
contribute such Carved-Out Asset to Antero Midstream pursuant to an instrument
or instruments in substantially the same form as equivalent instruments for
similar assets executed and delivered at Closing, for no additional
consideration.

 

Section 5.5                                    Customary Post-Closing Consents. 
Each Party shall use its commercially reasonable endeavors after Closing to
cooperate with the other Party in seeking to obtain each Customary Post-Closing
Consent to the extent Antero Midstream deems it reasonably necessary to obtain
such Customary Post-Closing Consent.

 

Section 5.6                                    Casualty Loss.  Notwithstanding
the Effective Time concept set forth in this Agreement, if, after the date of
this Agreement but prior to the Closing Date, any portion of the Assets is
damaged or destroyed by fire or other casualty or is taken in condemnation or
under right of eminent domain, then (a) the affected Assets shall be deemed to
be Excluded Assets and shall not be contributed at Closing, and (b) Contributor
shall retain the right to all sums paid or payable to Contributor by third
parties by reason of such event with respect to the affected Assets.

 

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ARTICLE VI
TAX MATTERS

 

Section 6.1                                    Tax Matters.

 

(a)                                 Transfer Taxes.  To the extent that any
transfer, sales, purchase, use, stamp, registration or other similar Taxes
(collectively, “Transfer Taxes”) are payable as a result of the transactions
contemplated by this Agreement, such Transfer Taxes shall be borne and timely
paid by Contributor.  Contributor and Antero Midstream, as appropriate, shall,
at the expense of Contributor, file, to the extent required by applicable Laws,
all necessary Tax Returns and other documentation with respect to such Taxes,
and, if required by applicable Laws, Contributor and Antero Midstream, as
appropriate, will join in the execution of any such Tax Return or other
documentation of the other.

 

(b)                                 Asset Taxes.  Contributor shall be allocated
and bear all Asset Taxes attributable to (A) any Tax period ending prior to the
Effective Time and (B) the portion of any Straddle Period ending immediately
prior to the Effective Time.  Antero Midstream shall bear and be allocated all
Asset Taxes attributable to (A) any Tax period beginning at or after the
Effective Time and (B) the portion of any Straddle Period beginning at the
Effective Time.  For purposes of determining the allocations of Asset Taxes for
Straddle Periods, (i) Asset Taxes that are imposed in connection with any sale
or other transfer or assignment of property (real or personal, tangible or
intangible) shall be allocated between the portion of such Straddle Period
ending immediately prior to the Effective Time and the portion of such Straddle
Period beginning at the Effective Time based on the portion of the Straddle
Period in which the transaction giving rise to such Asset Taxes occurred, and
(ii) Asset Taxes that are ad valorem, property or other Asset Taxes imposed on a
periodic basis pertaining to a Straddle Period shall be allocated between the
portion of such Straddle Period ending immediately prior to the Effective Time
and the portion of such Straddle Period beginning at the Effective Time by
prorating each such Asset Tax based on the number of days in the applicable
Straddle Period that occur before the Effective Time, on the one hand, and the
number of days in such Straddle Period that occur at or after the Effective
Time, on the other hand.

 

(c)                                  Tax Cooperation.  The Parties shall
cooperate fully, as and to the extent reasonably requested by the other Party,
in connection with the filing of Tax Returns and any audit, litigation or other
proceeding with respect to Taxes relating to the Assets.  Such cooperation shall
include the retention and (upon another Party’s request) the provision of
records and information that are relevant to any such Tax Return or audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided under this Agreement. The Parties agree to retain all books
and records with respect to Tax matters pertinent to the Assets relating to any
taxable period beginning before the Effective Time until the expiration of the
statute of limitations of the respective taxable periods and to abide by all
record retention agreements entered into with any Governmental Authority

 

ARTICLE VII
ASSUMPTION; DISCLAIMER

 

Section 7.1                                    Assumption by Antero Midstream. 
Antero Midstream assumes and agrees to fulfill, perform, pay and discharge (or
cause to be fulfilled, performed, paid and discharged) all Liabilities, known or
unknown, with respect to the Assets to the extent arising on or after the
Effective Time; provided that Antero Midstream shall not assume any Liabilities
of Contributor resulting from, relating to or arising out of the Retained
Liabilities or, for the avoidance of doubt, relating to or arising out of the
Excluded Assets. Contributor shall indemnify Antero Midstream in respect of all
Retained Liabilities and all Liabilities relating to or arising out of the
Excluded Assets.

 

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Section 7.2                                    Disclaimer.

 

(a)                                 EXCEPT AS AND TO THE EXTENT EXPRESSLY SET
FORTH IN ARTICLE III AND IN ANY ASSIGNMENT DOCUMENT, (I) CONTRIBUTOR MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY OR IMPLIED AND (II)
CONTRIBUTOR EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY
REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY
OR IN WRITING) TO ANTERO MIDSTREAM OR ITS EMPLOYEES, AGENTS, CONSULTANTS OR
REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT
MAY HAVE BEEN PROVIDED TO ANTERO MIDSTREAM BY ANY OFFICER, DIRECTOR, EMPLOYEE,
AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF CONTRIBUTOR).

 

(b)                                 EXCEPT AS AND TO THE EXTENT EXPRESSLY SET
FORTH IN ARTICLE III AND IN ANY ASSIGNMENT DOCUMENT, CONTRIBUTOR EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO
(I) TITLE TO ANY OF THE ASSETS, (II) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR
FUTURE REVENUES GENERATED BY THE ASSETS, (III)  THE CONDITION, QUALITY,
SUITABILITY OR MARKETABILITY OF THE ASSETS, (IV) THE CONTENT, CHARACTER OR
NATURE OF ANY INFORMATION MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS
PREPARED BY CONTRIBUTOR OR THIRD PARTIES WITH RESPECT TO THE ASSETS, AND (V) ANY
OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE TO ANTERO
MIDSTREAM OR ITS EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
DISCUSSION OR PRESENTATION RELATING THERETO. EXCEPT AS AND TO THE EXTENT
EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE III AND IN ANY ASSIGNMENT DOCUMENT,
CONTRIBUTOR FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY
OR IMPLIED, OF MERCHANTABILITY, FREEDOM FROM LATENT VICES OR DEFECTS, FITNESS
FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY
ASSETS, RIGHTS OF A PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF
CONSIDERATION, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES THAT,
EXCEPT AS AND TO THE EXTENT OTHERWISE PROVIDED IN ARTICLE III OR IN ANY
ASSIGNMENT DOCUMENT, ANTERO MIDSTREAM SHALL BE DEEMED TO BE OBTAINING THE ASSETS
IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS”
WITH ALL FAULTS OR DEFECTS (KNOWN OR UNKNOWN, LATENT, DISCOVERABLE OR
UNDISCOVERABLE), AND THAT ANTERO MIDSTREAM HAS MADE OR CAUSED TO BE MADE SUCH
INSPECTIONS AS ANTERO MIDSTREAM DEEMS APPROPRIATE.

 

(c)                                  Environmental Matters.

 

(i)                                     CONTRIBUTOR HAS NOT MADE ANY
REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO
ENVIRONMENTAL LAWS, ENVIRONMENTAL PERMITS, THE RELEASE OR THREATENED RELEASE OF
HAZARDOUS MATERIALS INTO THE ENVIRONMENT, EXPOSURE TO HAZARDOUS MATERIALS, OR
THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR
ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSETS, AND NOTHING IN THIS AGREEMENT
OR OTHERWISE SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY.

 

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(ii)                                  Notwithstanding Section 7.2(c)(i):

 

(A)                               Contributor shall indemnify and hold harmless
Antero Midstream from and against all Liabilities arising under Environmental
Law to the extent resulting from Contributor’s operation or ownership of the
Assets and occurring before the Effective Time;

 

(B)                               Antero Midstream shall indemnify and hold
harmless Contributor from and against all Liabilities arising under
Environmental Law in respect of the Assets to the extent arising on or after the
Effective Time.

 

(d)                                 THE PARTIES AGREE THAT, TO THE EXTENT
REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION 7.2 ARE “CONSPICUOUS”
DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

 

ARTICLE VIII
MISCELLANEOUS PROVISIONS

 

Section 8.1                                    Notices.  All notices,
communications and deliveries under this Agreement will be made in writing
signed by or on behalf of the Party making the same, will specify the Section of
this Agreement pursuant to which it is given or being made, and will be
delivered personally or by facsimile transmission or sent by registered or
certified mail (return receipt requested) or by nationally recognized overnight
courier (with evidence of delivery and postage and other fees prepaid) as
follows:

 

If to Antero Midstream:

Antero Resources Midstream LLC

 

1625 17th Street

 

Denver, Colorado 80202

 

Attn: Chief Financial Officer

 

Facsimile: (303) 357-7315

 

 

If to Contributor:

Antero Resources Corporation

 

1625 17th Street

 

Denver, Colorado 80202

 

Attn: Chief Financial Officer

 

Facsimile: (303) 357-7315

 

or to such other representative or at such other address or facsimile number of
a Party as such Party may furnish to the other Parties in writing. Any such
notice, communication or delivery will be deemed given or made upon the date of
receipt by the applicable Party.

 

Section 8.2                                    Assignment; Successors in
Interest.  No assignment or transfer by any Party of its rights and obligations
under this Agreement will be made except with the prior written consent of the
other Party. This Agreement will be binding upon and will inure to the benefit
of the Parties and their successors and permitted assigns, and any reference to
a Party will also be a reference to a successor or permitted assign. For the
avoidance of doubt, the conversion of a Party to a different legal form or the
merger of a Party with a newly-formed entity for the principal purpose of
converting such Party to a different legal form shall not be deemed an
assignment of any rights or obligations under this Agreement.

 

Section 8.3                                    Governing Law.  This Agreement
will be governed by and construed and enforced in accordance with the Laws of
the State of Texas, excluding any choice of Law rules which may direct the
application of the Laws of another jurisdiction.

 

18

--------------------------------------------------------------------------------

 

Section 8.4                                    Consent to Jurisdiction, Etc.;
Waiver of Jury Trial.  Each of the Parties hereby irrevocably consents and
agrees that any dispute arising out of or relating to this Agreement or any
related document shall exclusively be brought in the courts of the State of
Texas, in Harris County or the federal courts located in the Southern District
of the State of Texas.  The Parties agree that, after such a dispute is before a
court as specified in this Section 8.4 and during the pendency of such dispute
before such court, all actions with respect to such dispute, including any
counterclaim, cross-claim or interpleader, shall be subject to the exclusive
jurisdiction of such court.  Each of the Parties hereby waives, and agrees not
to assert, as a defense in any legal dispute, that it is not subject thereto or
that such dispute may not be brought or is not maintainable in such court or
that its property is exempt or immune from execution, that the dispute is
brought in an inconvenient forum or that the venue of the dispute is improper. 
Each Party agrees that a final judgment in any dispute described in this
Section 8.4 after the expiration of any period permitted for appeal and subject
to any stay during appeal shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Laws. 
THE PARTIES HEREBY WAIVE IRREVOCABLY ANY AND ALL RIGHTS TO DEMAND A TRIAL BY
JURY IN CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR
ANY DOCUMENT CONTEMPLATED HEREIN OR OTHERWISE RELATED HERETO.

 

Section 8.5                                    Severability.  Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction will, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction will
not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by Law, the Parties waive any provision of Law which
renders any such provision prohibited or unenforceable in any respect.

 

Section 8.6                                    Counterparts.  This Agreement may
be executed simultaneously in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute but one and the
same instrument. Facsimile or scanned and emailed transmission of any signed
original document or retransmission of any signed facsimile or scanned and
emailed transmission will be deemed the same as delivery of an original.

 

Section 8.7                                    No Third-Party Beneficiaries. 
Nothing expressed or implied in this Agreement is intended, or will be
construed, to confer upon or give any Person other than the Parties, and their
successors or permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, or result in such Person being
deemed a third party beneficiary of this Agreement.

 

Section 8.8                                    Amendment; Waiver.

 

(a)                                 Any amendment, extension or waiver of any
provision of this Agreement will be valid only if set forth in an instrument in
writing signed by both Contributor and Antero Midstream.

 

(b)                                 A waiver by a Party of the performance of
any covenant, agreement, obligation, condition, representation or warranty will
not be construed as a waiver of any other covenant, agreement, obligation,
condition, representation or warranty. A waiver by any Party of the performance
of any act will not constitute a waiver of the performance of any other act or
an identical act required to be performed at a later time.

 

Section 8.9                                    Entire Agreement.  This Agreement
and the documents executed pursuant to this Agreement supersede all
negotiations, agreements and understandings between the Parties with respect to
the subject matter of this Agreement and constitute the entire agreement between
the Parties.

 

19

--------------------------------------------------------------------------------

 

Section 8.10                             Further Cooperation.  From and after
the Closing Date, each of the Parties shall deliver to the others such further
information and documents and shall execute and deliver to the others such
further instruments and agreements as the other Party shall reasonably request
to consummate or confirm the transactions provided for in this Agreement, to
accomplish the purpose of this Agreement.

 

Section 8.11                             Transaction Costs.  Except as otherwise
provided herein, each Party will be responsible for its own legal fees and other
expenses incurred in connection with the negotiation, preparation, execution or
performance of this Agreement.

 

Section 8.12                             Construction.

 

(a)                                 This Agreement has been freely and fairly
negotiated between the Parties. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the Parties and no presumption or burden of proof will arise favoring or
disfavoring any Party because of the authorship of any provision of this
Agreement. Any reference to any Law will be deemed also to refer to such Law as
amended, modified, succeeded or supplemented from time to time and in effect at
any given time, and all rules and regulations promulgated thereunder, unless the
context requires otherwise. The words “include,” “includes,” and “including” do
not limit the preceding terms or words and shall be deemed to be followed by
“without limitation.”  Pronouns in masculine, feminine and neuter genders will
be construed to include any other gender, and words in the singular form will be
construed to include the plural and vice versa, unless the context otherwise
requires. Unless the context otherwise requires, the terms “day” and “days” mean
and refer to calendar day(s). The words “this Agreement,” “herein,” “hereof,”
“hereby,” “hereunder,” and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so limited.

 

(b)                                 The titles, captions and table of contents
contained in this Agreement are inserted in this Agreement only as a matter of
convenience and for reference and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision of this Agreement.

 

Signature Page Follows

 

20

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first set forth above.

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

/s/ Alvyn A. Schopp

 

Name:

Alvyn A. Schopp

 

Title:

Chief Administrative Officer and Regional Vice President

 

 

 

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

By:

/s/ Alvyn A. Schopp

 

Name:

Alvyn A. Schopp

 

Title:

Authorized Person

 

Signature Page to Contribution Agreement

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

ASSETS

 

A-1

--------------------------------------------------------------------------------

 

Systems

 

Any low pressure and high pressure gathering systems gathering gas from
Contributor in the following counties and states:

 

Washington, PA;

 

Doddridge, WV;

 

Harrison, WV;

 

Tyler, WV;

 

Ritchie, WV;

 

Noble, OH;

 

Monroe, OH;

 

Guernsey, OH ; and

 

Belmont, OH,

 

excluding facilities owned by Summit, Crestwood, ETC, M3, EQT, and MarkWest.

 

A-2

--------------------------------------------------------------------------------

 

Non-Hydrocarbon Systems

 

1.              All existing or imminent buried water pipelines and associated
appurtenances.

 

2.              All existing or imminent temporary surface water pipeline and
associated appurtenances.

 

3.              All water pipeline and associated appurtenances contained in
inventory and designated for future water pipeline projects.

 

4.              All existing or imminent pump stations, transfer pumps, or
booster pumps that are designated for the transfer of water up to the
Contributor’s receiving tanks/pits.

 

5.              All pump stations, transfer pumps, or booster pumps that are
contained in inventory and designated for the future transfer of water up to the
Contributor’s receiving tanks/pits.

 

6.              All existing or imminent operational equipment, tools, telemetry
devices, vehicles necessary for operation of the line.

 

7.              All existing or imminent surface use agreements for withdrawal
points, access roads, impoundments, pump stations, maintenance shops, laydown or
staging yards and surface feature access pads.

 

8.              Fresh Water Impoundments (“FWIs”) (status as of October 10,
2013):

 

FWIs built and in-service

 

1.              Harshbarger North FWI

 

2.              Harshbarger South FWI

 

3.              Marsden FWI

 

4.              Quinn FWI

 

5.              Bonnell FWI

 

FWIs — constructing

 

1.              Hinter Heirs South FWI

 

2.              Hinter Heirs North FWI

 

3.              Pearl Jean South FWI

 

4.              Pearl Jean North FWI

 

5.              Annie Horizontal FWI

 

6.              Lake FWI

 

7.              Nimorwicz West FWI

 

8.              Nimorwicz East FWI

 

9.              Foreman FWI

 

10.       Bee Lewis FWI

 

A-3

--------------------------------------------------------------------------------

 

Planning/Permitting/waiting on release/waiting on SUA

 

1.              John Richards Centralized Pit (produced water storage)

 

2.              Whitehair FWI

 

3.              Hartley West FWI

 

4.              Melody FWI

 

5.              Spiker FWI

 

6.              Heflin FWI

 

7.              James Webb FWI

 

8.              Lemley FWI

 

A-4

--------------------------------------------------------------------------------

 

Easements

 

Bluestone Easements

 

LINE
NAME

 

ANTERO
LINE
NUMBER

 

GRANTOR

 

GRANTEE

 

AGREEMENT

 

EXECUTED

 

PARCEL
TAX ID

 

RECORDING
DATE

 

BOOK
PAGE
INSTRUMENT

BLUESTONE

 

WV-BLU-001.000

 

RITTER, NEVA (LE)

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

9/21/2008

 

18-280-2

 

11/6/2008

 

1424-724
#200800031429

BLUESTONE

 

WV-BLU-002.000

 

SAMER, MATTHEW T ET UX

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

3/7/2008

 

18-280-1.2

 

4/14/2008

 

1416-691
#200800009060

BLUESTONE

 

WV-BLU-003.000

 

TRAVIS, CHARLES ET UX

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

3/20/2008

 

18-280-1

 

4/14/2008

 

1416-691
#200800009060

BLUESTONE

 

WV-BLU-005.000

 

CORNELL, ANTHONY P ET UX

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

5/28/2008

 

18-281-19

 

1/18/2011

 

1461-1075
#201100001737

BLUESTONE

 

WV-BLU-006.000

 

STOUT, RICHARD T.

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

3/20/2008

 

18-281-22

 

4/14/2008

 

1416-685
#200800009057

BLUESTONE

 

WV-BLU-009.000

 

GRIFFIN, DONNIE F

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

11/25/2008

 

18-281-23

 

12/30/2008

 

1426-348
#200800036292

BLUESTONE

 

WV-BLU-012.000

 

DOLLY, MARY S

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

1/12/2009

 

18-261-13
18-281-10

 

1/29/2009

 

1427-129
#200900002766

BLUESTONE

 

WV-BLU-013.000

 

CITY OF SALEM

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

6/22/2009

 

18-281-13
18-281-14
18-281-15
18-281-17
18-281-30
18-281-52

 

7/10/2009

 

1434-532
#200900022676

BLUESTONE

 

WV-BLU-015.000

 

HICKMAN, IVA S ET AL

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

3/17/2009

 

18-261-5

 

3/23/2009

 

1428-761
#200900009618

BLUESTONE

 

WV-BLU-016.000

 

MATTHEY, WILLIS LEE

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

3/17/2009

 

18-261-4

 

3/23/2009

 

1428-758
200900009616

BLUESTONE

 

WV-BLU-018.000

 

GORBY, BILLY LEE ET UX

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

12/3/2008

 

18-281-32.1

 

12/30/2008

 

1426-363
#200800036297

BLUESTONE

 

WV-BLU-020.000

 

BAILEY, DAVID D

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

10/1/2009

 

18-282-12
18-282-32.2

 

11/20/2009

 

1439-223
#200900038130

BLUESTONE

 

WV-BLU-021.000

 

KINNEY, CLYDE JR

 

BLUESTONE ENERGY PARTNERS

 

PIPELINE RIGHT OF WAY

 

11/25/2008

 

18-282-15

 

12/30/2008

 

1426-357
#200800036295

 

A-5

--------------------------------------------------------------------------------

 

Easements: Land Agreements

 

[attached.]

 

A-6

--------------------------------------------------------------------------------

 

Water Rights

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-ACCESS-2009-11

 

Kimberly A. Male

 

Antero Resources Appalachian Corporation

 

2/7/2009

 

 7-285-51

 

2/18/2009

 

1427/943

 

Harrison County, WV

ANT-ACCESS-2010-1

 

Lorrain P. Laverdierre

 

Antero Resources Appalachian Corporation

 

4/20/2010

 

7-285-3

 

5/6/2010

 

1146/1010

 

Harrison County, WV

ANT-ACCESS-2011-10

 

Vickie Lynn Singleton

 

Antero Resources Appalachian Corporation

 

5/11/2011

 

 14-265-96

 

5/13/2011

 

1469/1195

 

Harrison County, WV

ANT-ACCESS-2011-40

 

Jerry Norman and Michael Norman

 

Antero Resources Appalachian Corporation

 

10/17/2011

 

 1-9-16

 

11/8/2011

 

294/645

 

Doddridge County, WV

ANT-ACCESS-2011-41

 

Milton D Nicholson

 

Antero Resources Appalachian Corporation

 

12/9/2011

 

6-12-30

 

1/30/2012

 

262/636

 

Doddridge County, WV

ANT-ACCESS-2011-9

 

Janet L. Baxter

 

Antero Resources Appalachian Corporation

 

5/11/2011

 

14-265-90,91

 

5/13/2011

 

1469/1191

 

Harrison County, WV

ANT-ACCESS-2012-1

 

David M. Hartley

 

Antero Resources Appalachian Corporation

 

11/14/2012

 

6-12-26

 

12/13/2012

 

404/846

 

Tyler County, WV

ANT-ACCESS-2012-2

 

David and Vivian Burton

 

Antero Resources Appalachian Corporation

 

12/20/2012

 

6-15-12

 

2/25/2013

 

305/381

 

Doddridge County, WV

ANT-ACCESS-2012-39

 

Annabell Riffle and Troy Cunningham

 

Antero Resources Appalachian Corporation

 

6/20/2012

 

1-6-41

 

7/10/2012

 

271/438

 

Doddridge County, WV

ANT-ACCESS-2012-4

 

Robert Lewis

 

Antero Resources Appalachian Corporation

 

6/6/2012

 

20-383-47

 

6/18/2012

 

1493/589

 

Harrison County, WV

ANT-ACCESS-2013-1

 

Brenda and Michael Tuckwiller

 

Antero Resources Appalachian Corporation

 

3/11/2013

 

20-424-16

 

4/19/2013

 

1509/1060

 

Harrison County, WV

ANT-ACCESS-2013-2

 

William M McDonald

 

Antero Resources Appalachian Corporation

 

1/31/2013

 

20-424-2

 

N/A

 

N/A

 

Harrison County, WV

ANT-ACCESS-2013-2

 

James and Ashley Heffinger

 

Antero Resources Appalachian Corporation

 

3/5/2013

 

20-403-13.2

 

3/20/2013

 

1506/1307

 

Harrison County, WV

 

A-7

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-DEED-2012-1

 

Anthony Lake

 

Antero Resources Appalachian Corporation

 

12/18/2013

 

4-12-19

 

12/21/2012

 

304/399

 

Doddridge County, WV

ANT-FWI-2010-1

 

Richard F Rager

 

Antero Resources Appalachian Corporation

 

12/16/2010

 

9-227-36

 

1/4/2011

 

1461/234

 

Harrison County, WV

ANT-FWI-2010-12

 

Kimberly A. Male

 

Antero Resources Appalachian Corporation

 

6/28/2010

 

 7-285-51

 

7/12/2010

 

1450/834

 

Harrison County, WV

ANT-FWI-2010-13

 

Five H Investments Limited Liability Company

 

Antero Resources Appalachian Corporation

 

6/12/2010

 

7-285-32

 

6/30/2010

 

1450/153

 

Harrison County, WV

ANT-FWI-2010-15

 

Randall L. Nutter and Wanda L. Nutter

 

Antero Resources Appalachian Corporation

 

7/21/2010

 

 7-266-51

 

8/13/2010

 

1452/1023

 

Harrison County, WV

ANT-FWI-2010-16

 

Joseph L Dunn

 

Antero Resources Appalachian Corporation

 

7/22/2010

 

PA-West Pike Run Twshp-7000020000001100

 

1/22/2012

 

201218460

 

Washington County, PA

ANT-FWI-2010-17

 

Larry and Martha Posey

 

Antero Resources Appalachian Corporation

 

8/19/2010

 

7-286-16

 

9/30/2010

 

1456/29

 

Harrison County, WV

ANT-FWI-2010-18

 

Lorrain P. Laverdierre

 

Antero Resources Appalachian Corporation

 

4/20/2010

 

7-285-3

 

N/A

 

1446/1014

 

Harrison County, WV

ANT-FWI-2010-2

 

Edmund J Gore

 

Antero Resources Appalachian Corporation

 

4/30/2010

 

7-266-27

 

9/30/2010

 

1456/42

 

Harrison County, WV

ANT-FWI-2010-28

 

Larry L Posey and Martha V. Posey

 

Antero Resources Appalachian Corporation

 

8/19/2010

 

7-286-24.1,25,25.2

 

9/30/2010

 

1456/32

 

Harrison County, WV

ANT-FWI-2010-3

 

Stanley Lawrence and Michael Yates

 

Antero Resources Appalachian Corporation

 

8/8/2010

 

20-324-5

 

9/14/2010

 

1455/132

 

Harrison County, WV

ANT-FWI-2010-32

 

James D. Scarff and Meva J. Scarff

 

Antero Resources Appalachian Corporation

 

6/25/2010

 

 9-266A-24,25

 

7/12/2010

 

1450/837

 

Harrison County, WV

ANT-FWI-2010-4

 

Charles E Yeager

 

Antero Resources Appalachian Corporation

 

8/19/2010

 

20-363-34,37

 

9/14/2010

 

1455/141

 

Harrison County, WV

ANT-FWI-2010-5

 

Patrick H and Frank O Cunningham

 

Antero Resources Appalachian Corporation

 

5/18/2010

 

7-265-2

 

6/11/2010

 

1448/1082

 

Harrison County, WV

 

A-8

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-FWI-2010-6

 

Joshua G. Williams

 

Antero Resources Appalachian Corporation

 

7/12/2010

 

1-305-28

 

8/3/2010

 

1451/1219

 

Harrison County, WV

ANT-FWI-2010-7

 

John R. Jones and Catherine W. Jones

 

Antero Resources Appalachian Corporation

 

7/28/2010

 

 14-265-33, 61

 

8/13/2010

 

1452/1013

 

Harrison County, WV

ANT-FWI-2011-1

 

June S. Hanner

 

Antero Resources Appalachian Corporation

 

12/6/2011

 

20-384-10,11,19,22; 20-404-4,1

 

7/20/2012

 

1495/591

 

Harrison County, WV

ANT-FWI-2011-10

 

Michael and Barbara Davis

 

Antero Resources Appalachian Corporation

 

3/18/2011

 

20-422-4,13

 

3/30/2011

 

1465/928

 

Harrison County, WV

ANT-FWI-2011-11

 

Mable Roberts, Borman Kimball, Marvin Kimball, Charles Kimball, Michael Kimball,
Virginia Griffin, Barbara Lemasters

 

Antero Resources Appalachian Corporation

 

4/12/2011

 

3-2-2,8.1,8.2,16

 

8/1/2011

 

017/133

 

Doddridge County, WV

ANT-FWI-2011-12

 

Forest and Brenda Moore

 

Antero Resources Appalachian Corporation

 

4/1/2011

 

5-20-13

 

4/22/2011

 

381/514

 

Tyler County, WV

ANT-FWI-2011-13

 

James D Grose

 

Antero Resources Appalachian Corporation

 

5/9/2011

 

18-283-11

 

5/24/2011

 

1470/930

 

Harrison County, WV

ANT-FWI-2011-14

 

Robert L Reed; Lynn and Lora Reed, Robert and Gayle Reed, Richard and Betty
Bennett

 

Antero Resources Appalachian Corporation

 

4/14/2011; 4/11/2011

 

20-382-9

 

5/24/2011

 

1470/943

 

Harrison County, WV

ANT-FWI-2011-15

 

Matthew and Lisa D Bowyer

 

Antero Resources Appalachian Corporation

 

5/14/2011

 

20-383-23

 

5/24/2011

 

1470/948

 

Harrison County, WV

 

A-9

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-FWI-2011-2

 

Martha P Leeson

 

Antero Resources Appalachian Corporation

 

7/7/2011

 

14-225-24

 

7/27/2011

 

1473/1326

 

Harrison County, WV

ANT-FWI-2011-26

 

Kenneth Lee Poling

 

Antero Resources Appalachian Corporation

 

6/29/2011

 

20-365-29

 

7/27/2011

 

1453/1331

 

Harrison County, WV

ANT-FWI-2011-3

 

Samuel S.Jackson and Barbara J. Jackson

 

Antero Resources Appalachian Corporation

 

5/9/2011

 

7-286-26

 

5/24/2011

 

1470/933

 

Harrison County, WV

ANT-FWI-2011-31

 

Clarence Pratt and Jaunita Pratt

 

Antero Resources Appalachian Corporation

 

4/1/2011

 

8-8-11

 

4/19/2011

 

288/428

 

Doddridge County, WV

ANT-FWI-2011-35

 

John Somerville

 

Antero Resources Appalachian Corporation

 

2/1/2011

 

20-365-4, 4.1, 4.2

 

2/16/2011

 

1463/682

 

Harrison County, WV

ANT-FWI-2011-4

 

Robert and Patricia Bennett

 

Antero Resources Appalachian Corporation

 

6/8/2011

 

20-383-25

 

7/8/2011

 

1473/578

 

Harrison County, WV

ANT-FWI-2011-42

 

Troy Cunningham

 

Antero Resources Appalachian Corporation

 

10/17/2011

 

 1-6-31

 

11/8/2011

 

294/637

 

Doddridge County, WV

ANT-FWI-2011-5

 

James F Allen IV

 

Antero Resources Appalachian Corporation

 

6/17/2011

 

20-365-12

 

7/8/2011

 

1473/611

 

Harrison County, WV

ANT-FWI-2011-6

 

Kimberly Lindsey, Trustee and Ronald G Bennett

 

Antero Resources Appalachian Corporation

 

12/8/2011

 

20-383-55

 

1/10/2012

 

1481/1309

 

Harrison County, WV

ANT-FWI-2011-7

 

Pelma B Swiger

 

Antero Resources Appalachian Corporation

 

6/11/2011

 

9-185-48

 

7/27/2011

 

1473/1320

 

Harrison County, WV

ANT-FWI-2011-8

 

Ronald G Bennett

 

Antero Resources Appalachian Corporation

 

6/23/2011

 

20-383-56

 

7/12/2011

 

1473/717

 

Harrison County, WV

ANT-FWI-2011-9

 

Albert, Theresa, Everett, and Shirley Myer

 

Antero Resources Appalachian Corporation

 

1/19/2011

 

20-403-22

 

2/9/2011

 

1463/193

 

Harrison County, WV

ANT-FWI-2012-1

 

James, Stanley. Richard and Brian Webb

 

Antero Resources Appalachian Corporation

 

12/5/2012

 

7-4-19.9,
19.8,19.7,18,
16

 

2/25/2013

 

305/359

 

Doddridge County, WV

 

A-10

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-FWI-2012-16

 

Elton D Whitehair and Judith Whitehair

 

Antero Resources Appalachian Corporation

 

8/14/2012

 

 6-12-18

 

8/28/2012

 

275/454

 

Doddridge County, WV

ANT-FWI-2012-17

 

Richard K. Nicholson and Linda J. Nicolson

 

Antero Resources Appalachian Corporation

 

7/13/2012

 

 6-12-33

 

7/20/2012

 

302/87

 

Doddridge County, WV

ANT-FWI-2012-18

 

Rush L. Hickman and Judith A Hickman

 

Antero Resources Appalachian Corporation

 

7/16/2012

 

 6-12-33

 

7/25/2012

 

302/85

 

Doddridge County, WV

ANT-FWI-2012-19

 

George and Barbara Adrian

 

Antero Resources Appalachian Corporation

 

9/16/2012

 

6-3-6

 

10/9/2012

 

303/319

 

Doddridge County, WV

ANT-FWI-2012-2

 

John and Tamela Richards

 

Antero Resources Appalachian Corporation

 

1/12/2012

 

10-8-7

 

4/2/2013

 

319/326

 

Doddridge County, WV

ANT-FWI-2012-20

 

Randall A Molek

 

Antero Resources Appalachian Corporation

 

3/11/2012

 

PA-West Pike Run Twshp-7000010000001600; 3200120000001100

 

N/A

 

N/A

 

Washington County, PA

ANT-FWI-2012-27

 

Carolyn Plauger

 

Antero Resources Appalachian Corporation

 

11/5/2012

 

4-4-6

 

11/30/2012

 

304/142

 

Doddridge County, WV

ANT-FWI-2012-3

 

Dennis Foreman

 

Antero Resources Appalachian Corporation

 

5/3/2012

 

4-7-10

 

5/24/2012

 

301/108

 

Doddridge County, WV

ANT-FWI-2012-4

 

Bruner Land Co

 

Antero Resources Appalachian Corporation

 

7/16/2012

 

4-7-9

 

7/25/2012

 

302/83

 

Doddridge County, WV

ANT-FWI-2012-41

 

Troy Cunningham and Annabell Riffle

 

Antero Resources Appalachian Corporation

 

6/20/2012

 

 1-6-41

 

7/10/2012

 

271/435

 

Doddridge County, WV

ANT-FWI-2012-42

 

James T. Barr, Jr. and Bernice J Barr

 

Antero Resources Appalachian Corporation

 

8/6/2012

 

6-12-10

 

8/21/2012

 

302/440

 

Doddridge County, WV

ANT-FWI-2012-43

 

James T. Barr, Jr. and Bernice J Barr

 

Antero Resources Appalachian Corporation

 

9/20/2012

 

6-12-15

 

10/25/2012

 

303/602

 

Doddridge County, WV

ANT-FWI-2012-44

 

Jason and Michelle Harshbarger

 

Antero Resources Appalachian Corporation

 

12/6/2012

 

10/14/2015

 

1/9/2013

 

318/773

 

Ritchie County, WV

 

A-11

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-FWI-2012-45

 

O’Neill Family Trust; Romarllo LLC; Karah and Kelcie Lofitin; Kathleen Hooven;
Timothy R O’Neill; Sharon S O’Neill; Nancy Louise Antill; Mary Frances Harms

 

Antero Resources Appalachian Corporation

 

11/28/2012;
11/27/12;
11/2/12;
11/7/12;
11/5/12;
11/2/12;
11/28/12;
11/6/12

 

20-14-10

 

1/9/2013;
1/9/13;
12/4/12;
12/4/12;
11/26/12;
11/26/12;
1/9/13;
11/26/12

 

318/770;
318/768;
318/479;
318/482;
318/416;
318/418;
318/765;
318/413

 

Ritchie County, WV

ANT-FWI-2012-5

 

Lawrence J and Jacqueline Jones

 

Antero Resources Appalachian Corporation

 

8/16/2012

 

4-6-12.2

 

N/A

 

275/456

 

Doddridge County, WV

ANT-FWI-2012-53

 

David M. Hartley

 

Antero Resources Appalachian Corporation

 

11/14/2012

 

6-12-23,26,27

 

12/13/2012

 

404/844

 

Ritchie County, WV

ANT-FWI-2012-55

 

Mona Morgan

 

Antero Resources Appalachian Corporation

 

11/5/2012

 

4-11-21,26

 

11/30/2012

 

304/144

 

Doddridge County, WV

ANT-FWI-2012-56

 

David and Vivian Burton; Richard and Loreta Delaney

 

Antero Resources Appalachian Corporation

 

12/20/2012

 

6-15-12

 

2/25/2013

 

305/383

 

Doddridge County, WV

ANT-FWI-2012-6

 

Richard and Margerite Clevenger

 

Antero Resources Appalachian Corporation

 

5/3/2012

 

4-7-21

 

N/A

 

301/110

 

Doddridge County, WV

ANT-FWI-2012-8

 

 Giovanna Miracle

 

Antero Resources Appalachian Corporation

 

6/5/2012

 

 1-7-21

 

6/19/2012

 

271/433

 

Doddridge County, WV

ANT-FWI-2013-1

 

Johnnie and Amy Cline

 

Antero Resources Appalachian Corporation

 

6/9/2013

 

6-15-13.3

 

7/23/2013

 

310/559

 

Doddridge County, WV

ANT-FWI-2013-10

 

James E Webb

 

Antero Resources Appalachian Corporation

 

5/8/2013

 

1-15-3

 

6/3/2013

 

309/563

 

Doddridge County, WV

ANT-FWI-2013-11

 

John and Carole Bunten

 

Antero Resources Appalachian Corporation

 

6/6/2013

 

4-10-11

 

 

 

 

 

Doddridge County, WV

 

A-12

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-FWI-2013-12

 

Frank and Charisse Traska

 

Antero Resources Corporation

 

8/6/2013

 

Beaver Twshp-Section 23-01-21433.000

 

 

 

 

 

Noble County, OH

ANT-FWI-2013-13

 

Richard F. McCullough

 

Antero Resources Appalachian Corporation

 

5/22/2013

 

1-6-5

 

7/23/2013

 

310/593

 

Doddridge County, WV

ANT-FWI-2013-14

 

John, Myron, and Cynthia Law

 

Antero Resources Appalachian Corporation

 

4/25/2013

 

Seneca Twshp-Section 15-31-0021235.000

 

6/3/2013

 

225/37

 

Noble County, OH

ANT-FWI-2013-2

 

Lewis, Toby, Paul and Kevin Bee

 

Antero Resources Corporation

 

8/5/2013

 

8-19-6

 

 

 

 

 

Doddridge County, WV

ANT-FWI-2013-22

 

Dean R. Pennington and Martha A. Pennington

 

Antero Resources Appalachian Corporation

 

2/8/2012

 

3-16-21 ; 3-17-28; 3- 20-1 , 51

 

3/18/2013

 

305/553

 

Doddridge County, WV

ANT-FWI-2013-3

 

Key Oil Company, Inc

 

Antero Resources Appalachian Corporation

 

2/19/2013

 

8-19-6

 

3/18/2013

 

305/534

 

Doddridge County, WV

ANT-FWI-2013-4

 

Larry and Carolyn Sams

 

Antero Resources Appalachian Corporation

 

7/16/2013

 

3-4-3,4,5,8

 

 

 

 

 

Doddridge County, WV

ANT-FWI-2013-5

 

James E Webb

 

Antero Resources Appalachian Corporation

 

5/8/2013

 

1-15-3

 

6/3/2013

 

309/363

 

Doddridge County, WV

ANT-FWI-2013-7

 

Teresa Webb and Patricia Davidson

 

Antero Resources Corporation

 

7/2/2013

 

6-20-28

 

7/23/2013

 

310/531

 

Doddridge County, WV

ANT-FWI-2013-8

 

Donna Frumento

 

Antero Resources Appalachian Corporation

 

5/2/2013

 

18-341-2

 

5/30/2013

 

1512/992

 

Harrison County, WV

ANT-FWI-2013-9

 

Tillman Lee Williams

 

Antero Resources Appalachian Corporation

 

4/23/2013

 

18-341-1

 

7/23/2012

 

1515/637

 

Harrison County, WV

ANT-H20EASEMENT-2013-1

 

Frederick, Lonnie and Gregory Doerfler

 

Antero Resources Appalachian Corporation

 

4/30/2013

 

PA-West Pike Run Twshp-7000040000000800

 

N/A

 

N/A

 

Washington, County, WV

ANT-H20FACILITY-2012-1

 

James and Brenda Raines; Clarence Mutschelknaus, Patrick Deem

 

Antero Resources Appalachian Corporation

 

1/23/2012

 

7-267-24.2

 

1/26/2012

 

1482/1123

 

Harrison County, WV

 

A-13

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-H20ROWEASEMENT-2009-13

 

Kimberly A. Male

 

Antero Resources Appalachian Corporation

 

4/8/2009

 

 7-285-49

 

NA

 

NA

 

Harrison County, WV

ANT-H20WITHDRAWL-2010-1

 

Regina Rager, James and Loreli Hart

 

Antero Resources Appalachian Corporation

 

9/27/2010

 

Taylor county 5-2-1.1

 

10/20/2010

 

60/28

 

Taylor County, WV

ANT-H20WITHDRAWL-2011-1

 

The City of Salem

 

Antero Resources Appalachian Corporation

 

11/9/2011

 

18-2708-98

 

11/21/2011

 

1480/28

 

Harrison County, WV

ANT-H20WITHDRAWL-2012-1

 

Andrew and Yolanda Wiliamson

 

Antero Resources Appalachian Corporation

 

8/12/2012

 

10-14-3.2

 

10/29/2012

 

259/225

 

Ritchie County, WV

ANT-H20WITHDRAWL-2012-10

 

Gary and Rella Dawson

 

Antero Resources Appalachian Corporation

 

11/13/2012

 

1-15-1

 

12/13/2012

 

404/842

 

Tyler County, WV

ANT-H20WITHDRAWL-2012-11

 

Lewis F. Grimes

 

Antero Resources Appalachian Corporation

 

11/15/2012

 

Grandview Twshp-Section 18-15-57020.000; Grandview Twshp-Section 24-15-57024.000

 

4/15/2013

 

543/2193

 

Washington County, OH

ANT-H20WITHDRAWL-2012-14

 

Guy and Josephine Brown

 

Antero Resources Appalachian Corporation

 

10/24/2012

 

Jackson Twshp-Section 18-10-015001.000; Jackson Twshp-Section 24-10-016026.000

 

4/4/2013

 

239/437

 

Monroe County, OH

ANT-H20WITHDRAWL-2012-2

 

Clarence Sweeney

 

Antero Resources Appalachian Corporation

 

2/23/2012

 

5-12-33

 

3/8/2012

 

297/303

 

Doddridge County, WV

ANT-H20WITHDRAWL-2012-3

 

Nancy Powers

 

Antero Resources Appalachian Corporation

 

6/18/2012

 

20-324-19

 

7/3/2012

 

1494/645

 

Harrison County, WV

ANT-H20WITHDRAWL-2012-4

 

Nancy Powers

 

Antero Resources Appalachian Corporation

 

9/6/2012

 

20-343-14

 

10/4/2012

 

1499/317

 

Harrison County, WV

 

A-14

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-H20WITHDRAWL-2012-5

 

Kevin J Poth

 

Antero Resources Appalachian Corporation

 

4/12/2012

 

20-364-14

 

4/24/2012

 

1489/930

 

Harrison County, WV

ANT-H20WITHDRAWL-2012-7

 

Larry Alderman

 

Antero Resources Appalachian Corporation

 

7/20/2012

 

 4H-18

 

8/2/2012

 

506/451

 

Upshur County, WV

ANT-H20WITHDRAWL-2012-8

 

Arthur J. Rockwell

 

Antero Resources Appalachian Corporation

 

7/24/2012

 

9-304-15

 

8/2/2012

 

1117/503

 

Marion County, WV

ANT-H20WITHDRAWL-2012-9

 

David and Debra Shrieves (G.A.L)

 

Antero Resources Appalachian Corporation

 

3/21/2012; 3/21/13

 

12-424-17

 

N/A

 

1486/537

 

Harrison County, WV

ANT-H20WITHDRAWL-2013-5

 

Carson and Teresa Spence

 

Antero Resources Appalachian Corporation

 

1/20/2013

 

Section 21-20-0170031.000

 

2/21/2013

 

236/860

 

Monroe County, OH

ANT-H20WITHDRAWL-2013-6

 

City of Pennsboro

 

Antero Resources Appalachian Corporation

 

6/4/2013

 

Pennsboro Water Reservoir (TM/P not listed on agmt)

 

N/A

 

N/A

 

Ritchie County, WV

ANT-H20WITHDRAWL-2013-7

 

Timothy and Julia Hall

 

Antero Resources Appalachian Corporation

 

1/25/2013

 

Section 21-31-00426.000

 

N/A

 

500/554

 

Guernsey County, OH

ANT-H20WITHDRAWL-2013-7

 

The Village of Barnesville

 

Antero Resources Appalachian Corporation

 

5/1/2013

 

Warren Twshp-Section 13-Barnesville Park Lake

 

7/26/2013

 

408/355

 

Belmont County, OH

ANT-H20WITHDRAWL-2013-8

 

The Village of Barnesville

 

Antero Resources Appalachian Corporation

 

5/1/2013

 

Somerset Twshp

 

7/26/2013

 

408/357

 

Belmont County, OH

ANT-PERMH20LINE-2012-1

 

Clara Mae and Peggy Hurst

 

Antero Resources Appalachian Corporation

 

10/1/2012

 

20-403-4

 

N/A

 

N/A

 

Harrison County, WV

ANT-PERMH20LINE-2012-2

 

Everett M and Shirley Myer

 

Antero Resources Appalachian Corporation

 

11/19/2012

 

20-403-22

 

N/A

 

N/A

 

Harrison County, WV

 

A-15

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-PERMH20LINE-2013-1

 

Ronald Mark Hitt

 

Antero Resources Appalachian Corporation

 

1/28/2013

 

20-403-30,31

 

2/21/2013

 

1502/802

 

Harrison County, WV

ANT-PERMH20LINE-2013-2

 

Charles N Tyree

 

Antero Resources Appalachian Corporation

 

2/4/2013

 

20-404-30.1

 

2/21/2013

 

1505/800

 

Harrison County, WV

ANT-PERMH20LINE-2013-3

 

Ronald C Fragmin

 

Antero Resources Appalachian Corporation

 

1/28/2013

 

20-404-39

 

2/21/2013

 

1505/790

 

Harrison County, WV

ANT-PERMH20LINE-2013-4

 

James Ivan McDonald

 

Antero Resources Appalachian Corporation

 

1/28/2013

 

20-424-1; 20-424-14

 

2/21/2013

 

1505/805

 

Harrison County, WV

ANT-PERMH20LINE-2013-5

 

William M McDonald

 

Antero Resources Appalachian Corporation

 

9/30/2012

 

20-424-2

 

11/19/2012

 

1501/526

 

Harrison County, WV

ANT-PERMH20LINE-2013-6

 

Christopher and Kimberly Turner

 

Antero Resources Appalachian Corporation

 

1/28/2013

 

20-403-32

 

2/21/2013

 

1505/797

 

Harrison County, WV

ANT-STORAGEYARD-2013-1

 

James Singer and Dennis F. Gerst

 

Antero Resources Appalachian Corporation

 

4/18/2013

 

Section 6-28-2137.000

 

N/A

 

N/A

 

Noble County, OH

ANT-TANKPAD-2011-1

 

Vivian and David Burton

 

Antero Resources Appalachian Corporation

 

6/23/2011

 

6-15-12

 

8/12/2011

 

017/129

 

Doddridge County, WV

ANT-TANKPAD-2012-1

 

Bernard, Clara Mae, and Peggy Hurst

 

Antero Resources Appalachian Corporation

 

10/17/2012

 

20-403-4

 

11/19/2012

 

1501/530

 

Harrison County, WV

ANT-TANKPAD-2012-2

 

Andrew and Yolanda Williamson

 

Antero Resources Appalachian Corporation

 

8/23/12

 

10-14-3.2

 

10/9/2012

 

258/924

 

Ritchie County, WV

ANT-TANKPAD-2012-29

 

Dennis Powell and Mellie M. Powell

 

Antero Resources Appalachian Corporation

 

8/21/2012

 

3-19-31, 31.1, 31.2,32

 

9/6/2012

 

302/559

 

Doddridge County, WV

ANT-TANKPAD-2012-30

 

Dennis Powell and Mellie M. Powell

 

Antero Resources Appalachian Corporation

 

11/8/2012

 

3-19-31, 31.1, 31.2,32

 

11/30/2012

 

304/140

 

Doddridge County, WV

ANT-TANKPAD-2012-44

 

James and Sharon Devericks

 

Antero Resources Appalachian Corporation

 

10/27/2012

 

6-12-37.5

 

11/8/2012

 

303/715

 

Doddridge County, WV

ANT-TANKPAD-2012-45

 

James T. Barr, Jr. and Bernice J Barr

 

Antero Resources Appalachian Corporation

 

10/23/2012

 

4-12-10,10.1

 

11/8/2012

 

304/3

 

Doddridge County, WV

 

A-16

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-TANKPAD-2012-5

 

John and Sandra Erwin

 

Antero Resources Appalachian Corporation

 

8/30/2012

 

6-19-10

 

10/9/2012

 

303/332

 

Doddridge County, WV

ANT-TANKPAD-2012-6

 

John and Sandra Erwin

 

Antero Resources Appalachian Corporation

 

10/25/2012

 

6-19-1

 

11/8/2012

 

303/719

 

Doddridge County, WV

ANT-TANKPAD-2012-7

 

James and Bernice Barr

 

Antero Resources Appalachian Corporation

 

10/23/2012

 

6-12-10,10.1

 

11/8/2012

 

304/3

 

Doddridge County, WV

ANT-TANKPAD-2012-8

 

George and Susan Gagnon

 

Antero Resources Appalachian Corporation

 

9/10/2012

 

6-3-2

 

10/9/2012

 

303/321

 

Doddridge County, WV

ANT-TANKPAD-2013-1

 

Gabriele Smith aka Gariele Hoover

 

Antero Resources Appalachian Corporation

 

2/25/2013

 

4-15-16,16.1,33

 

3/18/2013

 

305/530

 

Doddridge County, WV

ANT-TANKPAD-2013-14

 

Richard E. Marsden and Wilma J. Marsden

 

Antero Resources Appalachian Corporation

 

4/30/2013

 

4-4-16

 

6/3/2013

 

309-381

 

Doddridge County, WV

ANT-TANKPAD-2013-2

 

Delbert, Donna, and Michael Leatherman and Elizabeth Hayduk

 

Antero Resources Appalachian Corporation

 

1/23/2013

 

3-16-15

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TANKPAD-2013-25

 

Sharon S. O’Neill; Romarlo LLC; Timothy O’Neill; Karah and Kelcie Lofitin;
O’Neill Family Trust; Nancy Antill; Mary Harms; O’Neill Family Trust c/o Daniel
O’Neill; Kathleen Hooven

 

Antero Resources Appalachian Corporation

 

1/19/2013;
1/14/2013;
1/11/13;
1/7/13;
1/9/13 ;
1/11/13;
1/12/13;
1/11/13
1/14/2013

 

10-13-23

 

2/20/2013

 

318/1067;
318/1072;
318/1068;
318/1073;
318/1076;
318/1085;
318/1082;
318/1079;
319/330

 

Ritchie County, WV

 

A-17

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-TANKPAD-2013-3

 

Garry R. Norton

 

Antero Resources Appalachian Corporation

 

2/7/2013

 

6-16-15; 6-19-6

 

3/18/2013

 

305/542

 

Doddridge County, WV

ANT-TANKPAD-2013-4

 

Troy D. Cunningham and Annabelle Rifle

 

Antero Resources Corporation

 

7/5/2013

 

1-6-41

 

7/23/2013

 

310/527

 

Ritchie County, WV

ANT-TANKPAD-2013-43

 

Troy D. Cunningham and Annabelle Rifle

 

Antero Resources Appalachian Corporation

 

7/5/2013

 

 1-6-41

 

7/23/2013

 

310/527

 

Ritchie County, WV

ANT-TANKPAD-2013-6

 

George G Hamilton; Gary L Hamilton

 

Antero Resources Appalachian Corporation

 

6/10/2013

 

6-10-4

 

7/23/2013

 

310/549; 310/553

 

Doddridge County, WV

ANT-TANKPAD-2013-7

 

Ritchie County Cooperative Marketing Association

 

Antero Resources Appalachian Corporation

 

2/8/2013

 

3-34-31

 

4/2/2013

 

319/328

 

Ritchie County, WV

ANT-TANKPAD-2013-8

 

Michael and Judy Arnold

 

Antero Resources Appalachian Corporation

 

2/28/2013

 

Buffalo Twshp-Section 28-05-002125.002

 

7/22/2013

 

227/746

 

Noble County, OH

ANT-TEMPACCESS-2012-1

 

Jordan Swiger

 

Antero Resources Appalachian Corporation

 

8/28/2012

 

6-12-27.1

 

10/9/2012

 

303/330

 

Doddridge County, WV

ANT-TEMPACCESS-2012-2

 

Naomi and Frank Williams

 

Antero Resources Appalachian Corporation

 

8/22/2012

 

6-12-34,36,39

 

9/6/2012

 

302/563

 

Doddridge County, WV

ANT-TEMPACCESS-2012-3

 

Gary and Gayenne Crislip

 

Antero Resources Appalachian Corporation

 

8/22/2012

 

6-12-34,36,39

 

10/9/2012

 

303/340

 

Doddridge County, WV

ANT-TEMPACCESS-2012-4

 

Dorothy Davis

 

Antero Resources Appalachian Corporation

 

8/22/2013

 

6-12-34,36,39

 

11/8/2012

 

304/11

 

Doddridge County, WV

 

A-18

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-TEMPACCESS-2012-5

 

Rexall and Deborah Crislip

 

Antero Resources Appalachian Corporation

 

8/24/2012

 

6-12-34,36,39

 

8/24/2012

 

304/343

 

Doddridge County, WV

ANT-TEMPACCESS-2012-6

 

Thomas Johns and Celia Arbogast

 

Antero Resources Appalachian Corporation

 

11/12/2012

 

6-12-5,5.1,40

 

1/16/2013

 

304/651

 

Doddridge County, WV

ANT-TEMPH20LINE-2011-23

 

Rita A Walker

 

Antero Resources Appalachian Corporation

 

1116/2011

 

 9-266A-2,16

 

11/21/2011

 

1480/22

 

Harrison County, WV

ANT-TEMPH20LINE-2011-24

 

Curt Myers and James E. Raines

 

Antero Resources Appalachian Corporation

 

11/7/2011

 

9-266A-5

 

11/21/2011

 

1480/25

 

Harrison County, WV

ANT-TEMPH20LINE-2011-25

 

Donald L. Phillips and Mary V. Phillips

 

Antero Resources Appalachian Corporation

 

10/28/2011

 

9-266A-6.1

 

11/21/2011

 

1480/32

 

Harrison County, WV

ANT-TEMPH20LINE-2012-1

 

Don and Heidi Huffman

 

Antero Resources Appalachian Corporation

 

7/22/2012

 

18-324-2

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2012-10

 

Robert and Sue Cook

 

Antero Resources Appalachian Corporation

 

8/7/2012

 

5-25-59

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-11

 

Freda M Hutson

 

Antero Resources Appalachian Corporation

 

8/8/2012

 

5-25-37

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-12

 

Randall P Hutson

 

Antero Resources Appalachian Corporation

 

8/8/2012

 

5-25-36

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-13

 

Kevin D Hutson

 

Antero Resources Appalachian Corporation

 

8/7/2012

 

5-25-38

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-14

 

Gregory Myers

 

Antero Resources Appalachian Corporation

 

8/24/2012

 

20-241-1

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2012-15

 

Annie Haymond and Eddie Landrum

 

Antero Resources Appalachian Corporation

 

9/24/2012

 

3-14-5

 

N/A

 

N/A

 

Ritchie County, WV

 

A-19

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-TEMPH20LINE-2012-16

 

Lewis and Norma Davis

 

Antero Resources Appalachian Corporation

 

11/7/2012

 

3-14-12

 

N/A

 

N/A

 

Ritchie County, WV

ANT-TEMPH20LINE-2012-17

 

Mountain Lakes, LLC

 

Antero Resources Appalachian Corporation

 

4/13/2012

 

20-364-2

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2012-2

 

Phyllis Smith

 

Antero Resources Appalachian Corporation

 

8/29/2012

 

20-242-2

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2012-3

 

Tracy and Stephanie Knight

 

Antero Resources Appalachian Corporation

 

10/10/2012

 

10-14-3.3

 

N/A

 

N/A

 

Ritchie County, WV

ANT-TEMPH20LINE-2012-43

 

Dorothy Davis

 

Antero Resources Appalachian Corporation

 

10/23/2012

 

6-12-34,36,39

 

11/8/2012

 

303/725

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-44

 

Rexall Crislip

 

Antero Resources Appalachian Corporation

 

10/24/2012

 

6-12-34,36,39

 

11/8/2012

 

304/1

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-45

 

Frank and Naomi Williams

 

Antero Resources Appalachian Corporation

 

10/23/2012

 

6-12-34,36,39

 

11/8/2012

 

304/5

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-46

 

Gary and Gayenne Crislip

 

Antero Resources Appalachian Corporation

 

10/23/2012

 

6-12-34,36,39

 

11/8/2012

 

304/7

 

Doddridge County, WV

ANT-TEMPH20LINE-2012-47

 

Matthew and Lisa D Bowyer

 

Antero Resources Appalachian Corporation

 

12/17/2012

 

20-383-31,23

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2012-48

 

David and Lisa A Gaines

 

Antero Resources Appalachian Corporation

 

12/2/2013

 

20-403-4.2

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2012-7

 

David and Blanche Stutler

 

Antero Resources Appalachian Corporation

 

12/17/2012

 

20-383-32

 

N/A

 

N/A

 

Harrison County, WV

 

A-20

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-TEMPH20LINE-2012-8

 

James K Lightner

 

Antero Resources Appalachian Corporation

 

12/20/2012

 

20-383-24

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2012-9

 

Dorotha J Post

 

Antero Resources Appalachian Corporation

 

8/13/2012

 

18-242-35

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-1

 

Patrick J Shaver

 

Antero Resources Corporation

 

7/3/2013

 

18-321-31.2

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-10

 

Allen Ash, Jr

 

Antero Resources Appalachian Corporation

 

1/11/2013

 

6-25-6.1

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2013-11

 

Allen and Janet Ash

 

Antero Resources Appalachian Corporation

 

2/26/2013

 

6-20-26

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2013-12

 

Freddie R Daugherty

 

Antero Resources Appalachian Corporation

 

1/22/2013

 

20-383-22

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-14

 

Blackrock Enterprises, LLC

 

Antero Resources Corporation

 

8/10/2013

 

18-302-51

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-15

 

Lyle and Betty R Benedum

 

Antero Resources Corporation

 

8/10/2013

 

18-302-78; 18-322-6, 2

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-16

 

Mark and Sabrina Benedum

 

Antero Resources Corporation

 

8/25/2013

 

18-321-10.1,18 18-302-22

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-17

 

Eric L Cochran

 

Antero Resources Corporation

 

7/17/2013

 

18-302-78; 18-321-10

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-2

 

John and Marianne Clevenger

 

Antero Resources Appalachian Corporation

 

7/16/2013

 

18-321-39

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-3

 

William J Boggs

 

Antero Resources Appalachian Corporation

 

7/9/2013

 

18-281-31

 

N/A

 

N/A

 

Harrison County, WV

 

A-21

--------------------------------------------------------------------------------

 

Antero
File #

 

Grantor(s)

 

Grantee

 

Execution Date

 

District-TM-
PCL

 

Recording Date

 

Book/Page

 

County,
State

ANT-TEMPH20LINE-2013-4

 

Lilburn C Wilburn and Jessie G. Wilburn

 

Antero Resources Appalachian Corporation

 

3/28/2013

 

10-19-30

 

NA

 

NA

 

Ritchie County, WV

ANT-TEMPH20LINE-2013-42

 

Willis Lee Mathey

 

Antero Resources Corporation

 

7/26/2013

 

18-2708-166

 

NA

 

NA

 

Harrison County, WV

ANT-TEMPH20LINE-2013-44

 

David and Barbara K Thompson

 

Antero Resources Appalachian Corporation

 

3/5/2013

 

McClellan District, Doddridge County(NO TM or PCL listed on Agmt)

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2013-5

 

Sleepy Hollow Hunting Club

 

Antero Resources Appalachian Corporation

 

3/4/2013

 

10-19-9,10,12.1, 12.2, 12.3,12.4,12.5,12.6

 

NA

 

NA

 

Ritchie County, WV

ANT-TEMPH20LINE-2013-6

 

Jonathan L. Davis and Louella d. Davis

 

Antero Resources Appalachian Corporation

 

6/12/2013

 

   1-7-1

 

NA

 

NA

 

Doddridge County, WV

ANT-TEMPH20LINE-2013-7

 

Robert and Patricia Bennett

 

Antero Resources Appalachian Corporation

 

2/4/2013

 

20-383-25

 

N/A

 

N/A

 

Harrison County, WV

ANT-TEMPH20LINE-2013-8

 

M & R investments

 

Antero Resources Appalachian Corporation

 

4/1/2013

 

8-13-5

 

N/A

 

N/A

 

Doddridge County, WV

ANT-TEMPH20LINE-2013-9

 

Rendal and Sandy Dotson

 

Antero Resources Appalachian Corporation

 

2/6/2013

 

6-20-9

 

N/A

 

N/A

 

Doddridge County, WV

 

A-22

--------------------------------------------------------------------------------

 

Compressor Stations

 

Compressor Stations and Related Dehydration Facilities

 

Compressor Stations and
Related Dehydration
Facilities

 

State

 

County

 

Land Owner / Lessor

 

Compressor Owner

Salem

 

WV

 

Harrison

 

Antero Resources

 

Crestwood/Enerven

Ike & Mike

 

WV

 

Harrison

 

Antero Resources

 

Crestwood/Enerven

Jarvisville/Sperry

 

WV

 

Harrison

 

Antero Resources

 

Crestwood/Enerven

Tichenal

 

WV

 

Harrison

 

Antero Resources

 

Crestwood/Enerven

Clarksburg

 

WV

 

Harrison

 

Antero Resources

 

EXPL

West Union

 

WV

 

Doddridge

 

Antero Resources

 

Crestwood

Victoria

 

WV

 

Doddridge

 

Antero Resources

 

Crestwood

Pike Fork

 

WV

 

Doddridge

 

Antero Resources

 

EXPL

Midpoint(1)

 

WV

 

Doddridge

 

Summit/MarkWest

 

Summit

White Oak

 

WV

 

Ritchie

 

Antero Resources

 

E2: Operator
AR: Owner

Bluestone

 

WV

 

Doddridge

 

Antero Resources

 

Antero Resources

Upper Hill

 

OH

 

Noble

 

Antero Resources

 

E2

Reusser

 

OH

 

Monroe

 

Antero Resources

 

E2

Batesville

 

OH

 

Noble

 

Antero Resources

 

E2

New Milton

 

WV

 

Doddridge

 

Antero Resources

 

Antero Resources

Sherwood

 

WV

 

Doddridge

 

Antero Resources /MarkWest

 

MarkWest

Doefler
Out of Service

 

PA

 

Washington

 

Antero Resources

 

Exterran

 

--------------------------------------------------------------------------------

(1)  Note: Antero Resources Corporation reserved the right to use the inlet area
as described in conveyance to MarkWest

 

A-23

--------------------------------------------------------------------------------

 

Equipment

 

Receivers, Launchers and Slug Catchers

 

Pad/Line Name

 

State

 

County

 

Pipe Size

 

Compressor

 

No. of
Existing
Facilities

WEST VIRGINIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cunningham Pad

 

WV

 

Harrison

 

8"

 

Ike & Mike

 

2

Williams #10

 

WV

 

Harrison

 

8"

 

Ike & Mike

 

2

Williams #9

 

WV

 

Harrison

 

8"

 

Ike & Mike

 

2

Matthews Pad

 

WV

 

Harrison

 

16"

 

Ike & Mike

 

2

Mattheny

 

WV

 

Harrison

 

8"

 

Ike & Mike

 

2

Moss Pad

 

WV

 

Harrison

 

12"

 

Ike & Mike

 

2

Moss to Ike & Mike

 

WV

 

Harrison

 

16"

 

Ike & Mike

 

2

Tracy

 

WV

 

Harrison

 

12"

 

ClarksBurg

 

2

5H

 

WV

 

Harrison

 

*'

 

ClarksBurg

 

2

Clarksburg Compressor Discharge

 

WV

 

Harrison

 

12"

 

ClarksBurg

 

2

Ross

 

WV

 

Harrison

 

8"

 

ClarksBurg

 

2

Ike & Mike to Jarvisville

 

WV

 

Harrison

 

16"

 

Clarksburg/Jarvisville

 

2

Richman

 

WV

 

Harrison

 

8"

 

Ike & Mike

 

0

Fannigan

 

WV

 

Harrison

 

16"

 

Ike & Mike

 

2

Roscoe (Jones Pad)

 

WV

 

Harrison

 

16"

 

Ike & Mike

 

2

Phillips

 

WV

 

Harrison

 

16"

 

Ike & Mike

 

2

Larry

 

WV

 

Harrison

 

8"

 

Ike & Mike

 

2

Alan Ash

 

WV

 

Harrison

 

16"

 

Ike & Mike

 

2

Betty Williams

 

WV

 

Doddridge

 

16"

 

Pike Fork

 

2

Lowe (Wagner)

 

WV

 

Harrison

 

8"

 

Jarvisville

 

 

Sperry

 

WV

 

Harrison

 

8"

 

Tichenal

 

 

Hurst 21

 

WV

 

Harrison

 

 

 

Jarvisville

 

 

Coffman

 

WV

 

Harrison

 

8"

 

Javisville/Tichenal

 

2

Jarvisville to Tichenal

 

WV

 

Harrison

 

16"

 

Salem

 

2

Matheny

 

WV

 

Harrison

 

12"

 

Salem

 

2

Hill (Poly)

 

WV

 

Harrison

 

10"

 

Salem

 

2

Salem 1

 

WV

 

Harrison

 

12"

 

Salem

 

2

O’Rice Pad

 

WV

 

Harrison

 

12"

 

Salem

 

2

Powell Pad

 

WV

 

Doddridge

 

12"

 

MarkWest Smithburg

 

2

Forrest Pad

 

WV

 

Doddridge

 

16"

 

MarkWest Smithburg

 

2

Erwin Valley

 

WV

 

Doddridge

 

16"

 

Brushy Fork

 

2

Coastal HillTop

 

WV

 

Doddridge

 

12"

 

Brushy Fork

 

2

 

A-24

--------------------------------------------------------------------------------

 

Pad/Line Name

 

State

 

County

 

Pipe Size

 

Compressor

 

No. of
Existing
Facilities

White Oak to MarkWest

 

WV

 

Doddridge

 

20"

 

MarkWest Smithburg

 

2

John Campbell North

 

WV

 

Doddridge

 

16"

 

White Oak

 

2

Moore

 

WV

 

Doddridge

 

 

 

MarkWest Smithburg

 

2

Langford

 

WV

 

Doddridge

 

16"

 

 

 

0

Jonathan Davies

 

WV

 

Doddridge

 

16"

 

West Union

 

2

Eddy

 

WV

 

Doddridge

 

16"

 

West Union

 

2

West Union Compressor

 

WV

 

Doddridge

 

20"

 

West Union

 

2

Vogt

 

WV

 

Doddridge

 

16"

 

West Union

 

2

West Union Compressor Discharge

 

WV

 

Doddridge

 

16"

 

West Union

 

2

Mountain Lakes

 

WV

 

Doddridge

 

16"

 

Jarvisville

 

2

 

 

 

 

 

 

 

 

 

 

 

OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rubel

 

Ohio

 

Monroe

 

16"

 

MarkWest Senecaville

 

2

Seneca (MarkWest)

 

Ohio

 

Noble

 

20"

 

MarkWest Senecaville

 

2

Carpenter

 

Ohio

 

Monroe

 

16" to 20"

 

MarkWest Senecaville

 

4

Wayne Pad

 

Ohio

 

Noble

 

20"

 

MarkWest Senecaville

 

6

Miley

 

Ohio

 

Noble

 

16"

 

MarkWest Senecaville

 

4

Sanford 1-H

 

Ohio

 

Noble

 

8"

 

MarkWest Senecaville

 

2

 

 

 

 

 

 

 

 

 

 

 

PENNSYLVANIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hill 2H & 3H

 

PA

 

Washington

 

12"

 

Doerfler

 

2

 

Additional Facilities

 

1

Hall Master Meter, Doddridge County, West Virginia.

2

All Gathering to Hustead Pad and Mary Post Pad located in Harrison County, West
Virginia.

3

Any required Licenses in connection with the Assets.

4

All pipe, pipe fittings, fixtures, and equipment inventories in connection with
the Assets.

5

Any pipelines or facilities currently in service or under construction in
connection with the Assets.

6

Agreements to purchase pipe equipment, compressors, etc., currently in effect,
in connection with the Assets.

7

Any water pipelines or facilities currently in service or under construction
utilizing a MarkWest Liberty Midstream, Summit MidstreamPartners LP or Crestwood
Marcellus Midstream LLC, Crestwood Appalachia Pipeline LLC right of way
agreement.

8

Any electrical, IT, monitoring, control, communication or utility facilities
associated with gas gathering and water handling.

 

A-25

--------------------------------------------------------------------------------

 

Midstream Permits

 

Permits

 

Permit

 

Requirement

Army Corp of Engineers (“ACOE”)

 

ACOE permits are necessary for any work, including construction and dredging, in
the Nation’s navigable waters. Submitted when there are impacts to any streams
or wetlands. Submitted for both Ohio and West Virginia.

US Fish and Wildlife Service (“USFWS”)

 

Submitted for RTE (rare, threatened, endangered species; e.g., Indiana Bats)
discussion. Submitted for both Ohio and West Virginia.

West Virginia Department of Natural Resources, Wildlife Resources Division

 

Submitted for RTE (rare, threatened, endangered species; i.e., Indiana Bats)
discussion.

West Virginia State Historic Preservation Office (“SHPO”)

 

Consultation with this agency is required when we submit a project to the ACOE.
They look for historic resources (i.e., anything that might have archeological
significance, human remains) within federal nexuses.

From their website:

“When a project requires a government license or permit or makes use of
government money, federal and state laws require that the project be sent to the
SHPO for review. Once submitted, the SHPO staff determines how that project will
affect West Virginia’s historic resources and provides comments to the
government agency.”

West Virginia Department of Environmental Protection (“WVDEP”)

 

WVDEP Storm Water General Construction Permit.

Notice of Intent submittal for projects under 3 acres and a Site Registration
with Stormwater Pollution Prevention Plan (“SWPPP”) for sites larger than 3
acres.

West Virginia Department of Natural Resources Office of Land and Streams

 

Agency must be consulted for any stream activities associated with a project to
identify if any aquatic resources will be impacted during construction. Includes
stream crossings (boring or not), rail crossings, wetlands, mussel streams, etc.

West Virginia Division of Highways

 

Permitting covers construction in/around road crossings (boring a roadway) and
project access roads/entrance locations. Road crossings and entrance permits are
submitted separately.

West Virginia County Floodplain Offices

 

Must get approval for projects within each county floodplain and submit all
projects in or not in floodplain.

Ohio Department of Natural Resources Wildlife Resources Impact Assessment

 

Consultation necessary to search the Ohio Natural Heritage Database and other
relevant databases to determine if the project is located within any officially
designated wilderness areas or wilderness preserves and to ascertain if there
were any threatened or endangered species within the proposed project ROW or on
contiguous properties.

 

Permitting Agencies

 

Agency

 

Requirement

Ohio State Historic Preservation Office

 

Cultural review to identify Phase 1 Surveys or archaeological sites within the
project ROW.

Ohio Environmental Protection Agency (“OEPA”)

 

Anyone who wishes to impact jurisdictional wetlands or streams, regardless of
whether on private or public property, must obtain an individual Section 401
Water Quality Certification (“WQC”) from the state in addition to a ACOE 404
Permit.

Ohio County Floodplain Offices:

 

Consultation required if project is located within a 100-year floodplain.

 

A-26

--------------------------------------------------------------------------------

 

EXHIBIT B1

 

EXCLUDED ASSETS

 

1.              Any firm transportation and firm gas sales contracts or any
other contracts relating to the upstream business of Contributor or its
Affiliates.

 

2.              Excluded Low Pressure and High Pressure Gathering Systems

 

Any Low Pressure and High Pressure Gathering Systems owned by Summit, Crestwood,
ETC, M3, EQT, and MarkWest gathering Contributor gas in the following counties
and states:

 

Washington, PA;

 

Doddridge, WV;

 

Harrison, WV;

 

Tyler, WV;

 

Ritchie, WV;

 

Noble, OH;

 

Monroe, OH;

 

Guernsey, OH; and

 

Belmont, OH.

 

3.              Excluded Water Infrastructure

 

i.

 

All above-ground tanks and other temporary storage facilities on or near
Contributor’s fracturing locations that are designated for use by Contributor
for receiving water from Antero Midstream.

ii.

 

All existing pad associated pits designated for use as storage for onsite
flowback water, or for receiving water from Antero Midstream on fracturing
locations.

iii.

 

All pumps required for the transfer of water from Contributor’s receiving
tanks/pits/temporary storage facilities to the onsite working tanks immediately
associated with fracturing activities.

iv.

 

All water pipeline required for the transfer of water from Contributor’s
receiving tanks/pits/temporary storage facilities to the onsite working tanks
immediately associated with fracturing activities.

 

B-1

--------------------------------------------------------------------------------

 

EXHIBIT B-2

 

RETAINED LIABILITIES

 

Any liabilities associated with Environmental Protection Agency consent decrees.

 

B-2

--------------------------------------------------------------------------------

 

EXHIBIT B-3

 

RETAINED THIRD PARTY MIDSTREAM AGREEMENTS

 

Scadalynx Monitoring Agreement between Contributor and eLynx Technologies, LLC,
expiring December 31, 2013. Notice has been served for renewal effective January
1, 2014 through December 31, 2014.

 

B-3

--------------------------------------------------------------------------------

 

EXHIBIT C

 

FORM OF GATHERING AGREEMENT

 

[attached.]

 

C-1

--------------------------------------------------------------------------------

 

GATHERING AND COMPRESSION AGREEMENT

 

BY AND BETWEEN

 

ANTERO RESOURCES CORPORATION

 

AND

 

ANTERO RESOURCES MIDSTREAM LLC

 

DATED AS OF

 

[                 ]

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

Article 1

DEFINITIONS

1

 

 

 

Article 2

SHIPPER COMMITMENTS

9

 

 

 

Section 2.1

Shipper’s Dedication

9

Section 2.2

Conflicting Dedications

9

Section 2.3

Shipper’s Reservations

9

Section 2.4

Covenant Running with the Land

10

Section 2.5

Additional Oil and Gas Interests or Gathering Facilities

10

Section 2.6

Priority of Dedicated Production

14

 

 

 

Article 3

SERVICES; GATHERING SYSTEM EXPANSION AND CONNECTION OF WELLS

14

 

 

 

Section 3.1

Gatherer Service Commitment

14

Section 3.2

Development Plan; Gathering System Plan; Exchange and Review of Information

14

Section 3.3

Expansion of Gathering System; Connection of Well Pads; Delivery Points

15

Section 3.4

Compression

18

Section 3.5

High Pressure Services

19

Section 3.6

Liquids Gathering

19

Section 3.7

Production Removed for Lease Operations

19

Section 3.8

Right of Way and Access

20

Section 3.9

Cooperation

20

 

 

 

Article 4

TERM

20

 

 

 

Section 4.1

Term

20

 

 

 

Article 5

FEES AND CONSIDERATION

21

 

 

 

Section 5.1

Fees

21

 

 

 

Article 6

ALLOCATIONS

23

 

 

 

Section 6.1

Allocation of Lost and Unaccounted For Gas

23

Section 6.2

Allocation of Fuel

24

Section 6.3

Allocation of Condensate Recovered from the Gathering System

24

Section 6.4

Allocation of Liquid Hydrocarbons

24

 

 

 

Article 7

CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

25

 

 

 

Section 7.1

Operational Control of Gatherer’s Facilities

25

Section 7.2

Maintenance

25

Section 7.3

Firm Capacity Production; Capacity Allocations on the Gathering System

25

Section 7.4

Arrangements After Redelivery

25

Section 7.5

Line Pack

25

 

 

 

Article 8

PRESSURES AT RECEIPT POINTS AND DELIVERY POINTS

26

 

 

 

Section 8.1

Pressures at Receipt Points

26

Section 8.2

Pressures at Delivery Points

26

Section 8.3

Shipper Facilities

26

 

i

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Article 9

NOMINATION AND BALANCING

26

 

 

 

Section 9.1

Gatherer Notifications

26

Section 9.2

Nominations

26

Section 9.3

Balancing

26

 

 

 

Article 10

QUALITY

27

 

 

 

Section 10.1

Receipt Point Gas Quality Specifications

27

Section 10.2

Non-Conforming Gas

27

Section 10.3

Delivery Point Gas Quality Specifications

28

Section 10.4

Liquid Hydrocarbons Quality Requirements

28

Section 10.5

Greenhouse Gas Emissions

28

 

 

 

Article 11

MEASUREMENT EQUIPMENT AND PROCEDURES

28

 

 

 

Section 11.1

Equipment

28

Section 11.2

Gas Measurement Standards

29

Section 11.3

Liquid Hydrocarbons Measurement Standards

29

Section 11.4

Gas Measurement

29

Section 11.5

Notice of Measurement Facilities Inspection and Calibration

31

Section 11.6

Measurement Accuracy Verification

31

Section 11.7

Special Tests

31

Section 11.8

Metered Flow Rates in Error

32

Section 11.9

Record Retention

32

Section 11.10

Access

32

 

 

 

Article 12

NOTICES

33

 

 

 

Section 12.1

Notices

33

 

 

 

Article 13

PAYMENTS

34

 

 

 

Section 13.1

Invoices

34

Section 13.2

Right to Suspend on Failure to Pay

34

Section 13.3

Audit Rights

34

Section 13.4

Payment Disputes

35

Section 13.5

Interest on Late Payments

35

Section 13.6

Credit Assurance

35

Section 13.7

Excused Performance

36

 

 

 

Article 14

FORCE MAJEURE

36

 

 

 

Section 14.1

Suspension of Obligations

36

Section 14.2

Definition of Force Majeure

37

Section 14.3

Settlement of Strikes and Lockouts

37

Section 14.4

Payments for Gas Delivered

37

 

 

 

Article 15

INDEMNIFICATION

37

 

 

 

Section 15.1

Gatherer

37

Section 15.2

Shipper

37

 

 

 

Article 16

CUSTODY AND TITLE

38

 

 

 

Section 16.1

Custody

38

 

ii

--------------------------------------------------------------------------------

 

Section 16.2

Shipper Warranty

38

Section 16.3

Title

38

 

 

 

Article 17

TAXES; ROYALTIES

38

 

 

 

Section 17.1

Taxes

38

Section 17.2

Royalties

39

 

 

 

Article 18

MISCELLANEOUS

39

 

 

 

Section 18.1

Rights

39

Section 18.2

Applicable Laws

39

Section 18.3

Governing Law; Jurisdiction

40

Section 18.4

Successors and Assigns

40

Section 18.5

Severability

41

Section 18.6

Confidentiality

41

Section 18.7

Entire Agreement, Amendments and Waiver

43

Section 18.8

Limitation of Liability

43

Section 18.9

Headings

43

Section 18.10

Rights and Remedies

43

Section 18.11

No Partnership

43

Section 18.12

Rules of Construction

44

Section 18.13

No Third Party Beneficiaries

44

Section 18.14

Further Assurances

44

Section 18.15

Counterpart Execution

44

Section 18.16

Memorandum of Agreement

44

 

 

 

Exhibit A

Excluded Wells

 

Exhibit B

Delivery Points

 

Exhibit C

Gathering System

 

Exhibit D

Initial Development Plan

 

Exhibit E

Conflicting Dedications

 

Exhibit F

Initial Gathering System Plan

 

Exhibit G

Form of Connection Notice

 

Exhibit H

Deemed Connection Notices

 

Exhibit I

Cost of Service Fee

 

Exhibit J

Memorandum of Agreement

 

 

iii

--------------------------------------------------------------------------------

 

GATHERING AND COMPRESSION AGREEMENT

 

This Gathering and Compression Agreement (this “Agreement”), dated as of
[                        ] (the “Effective Date”), is by and between ANTERO
RESOURCES CORPORATION, a Delaware corporation (“Shipper”), and ANTERO RESOURCES
MIDSTREAM LLC, a Delaware limited liability company (“Gatherer”).  Shipper and
Gatherer may be referred to herein individually as a “Party” or collectively as
the “Parties.”

 

RECITALS

 

A.                                    Shipper owns Oil and Gas Interests and
intends to produce Gas and/or Liquid Hydrocarbons from Wells in the Initial
Dedication Area and may from time to time own Oil and Gas Interests and may
produce Gas and Liquid Hydrocarbons from Wells in other areas.

 

B.                                    Gatherer has acquired the Gathering
System, which gathers Gas from certain Wells of Shipper, from Shipper. Gatherer
anticipates the expansion of the Gathering System to connect additional Wells of
Shipper.

 

C.                                    Shipper desires to contract with Gatherer
to provide the Services on the Gathering System with respect to Dedicated
Production, including compressing Dedicated Gas at the System Compression
Stations, and Gatherer desires to provide the Services to Shipper, in each case
in accordance with the terms and conditions of this Agreement.

 

NOW THEREFORE, in consideration of the premises and mutual covenants set forth
in this Agreement, the Parties agree as follows:

 

ARTICLE 1
DEFINITIONS

 

Capitalized terms used, but not otherwise defined, in this Agreement shall have
the respective meanings given to such terms set forth below:

 

Acquired Facilities.  As defined in Section 2.3(c).

 

Adequate Assurance of Performance.  As defined in Section 13.6(a).

 

Affiliate.  Any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
another Person.  Affiliated shall have the correlative meaning.  The term
“control” (including its derivatives and similar terms) shall mean possessing
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership, by contract, or otherwise.  Notwithstanding
the foregoing, any Person shall be deemed to control any specified Person if
such Person owns fifty percent (50%) or more of the voting securities of the
specified Person, or if the specified Person owns fifty percent (50%) or more of
the voting securities of such Person, or if fifty percent (50%) or more of the
voting securities of the specified Person and such Person are under common
control.

 

Agreement.  As defined in the preamble hereof.

 

Barrel.  Forty-two Gallons.

 

1

--------------------------------------------------------------------------------

 

Btu.  The amount of heat required to raise the temperature of one pound of pure
water from 58.5 degrees Fahrenheit to 59.5 degrees Fahrenheit at a constant
pressure of 14.73 psia.

 

Business Day.  Any calendar Day that commercial banks in New York City are open
for business.

 

Completion Deadline.  As defined in Section 3.4(b).

 

Compression Fee.  As defined in Section 5.1(a)(iii).

 

Condensate.  Gas that condenses at the wellhead or in the Gathering System at
ambient temperatures and is recovered from the Gathering System or at the
wellhead as a hydrocarbon liquid.

 

Confidential Information.  As defined in Section 18.6(a).

 

Conflicting Dedication.  Any gathering agreement or other commitment or
arrangement that would require Dedicated Production to be gathered and/or
compressed on any gathering system other than the Gathering System.

 

Connection Notice.  As defined in Section 3.4(b).

 

Contract Year.  Each of (i) the period from the Effective Date to the last Day
of the Month in which the first anniversary of the Effective Date occurs and
(ii) each period of twelve (12) Months thereafter.

 

Cost of Service Fee.  As defined in Section 5.1(e).

 

CPI.  As defined in Section 5.1(b).

 

CS Facility.  As defined in Section 5.1(e).

 

Cubic Foot.  The volume of Gas in one cubic foot of space at a standard pressure
and temperature base of 14.73 psia and 60 degrees Fahrenheit, respectively.

 

Day.  A period commencing at 10:00 a.m., Eastern Standard Time, on a calendar
day and ending at 10:00 a.m., Eastern Standard Time, on the next succeeding
calendar day.  Daily shall have the correlative meaning.

 

Dedicated Gas.  Gas constituting Dedicated Production.

 

Dedicated Production.  All Production that is attributable to any Dedicated
Property (including all Production attributable to third parties that is
produced from a Well located on such Dedicated Property) that Shipper has the
right to control and deliver for gathering and that is produced on or after the
Dedication Effective Date with respect to such Dedicated Property, except for
(i) Production consisting of Liquid Hydrocarbons, except to the extent that
Gatherer is providing Liquid Hydrocarbons gathering pursuant to Section 2.3(c),
and (ii) Gas being produced from the wells identified in Exhibit A.

 

2

--------------------------------------------------------------------------------

 

Dedicated Properties.  All Oil and Gas Interests now owned or hereafter acquired
by Shipper and located wholly or partly within the Dedication Area or pooled,
unitized or communitized with Oil and Gas Interests located wholly or partly
within the Dedication Area; provided that Dedicated Properties shall not include
any Oil and Gas Interests that are unitized or pooled with the properties of
third parties that are not Dedicated Properties if Shipper is not the operator
of such unit.

 

Dedication Area.  The Initial Dedication Area and any other area that becomes
part of the Dedication Area pursuant to Section 20.1.

 

Dedication Effective Date.  With respect to Dedicated Properties owned by
Shipper as of the Effective Date, the Effective Date; and with respect to
Dedicated Properties acquired by Shipper after the Effective Date, the date such
Oil and Gas Interests become Dedicated Properties pursuant to Section 20.1.

 

Delivery Point.  Each point at which point Gatherer will redeliver Production to
Shipper or for its account, which shall be (i) in the case of Gas, the point of
interconnection of the Gathering System with the facilities of a Processing
Plant or Downstream Pipeline, including those points more particularly described
on 0, (ii) in the case of Liquid Hydrocarbons recovered at the wellhead, the
outlet flange of the storage tank into which such Liquid Hydrocarbons are
delivered from the Gathering System, and (iii) in the case of Condensate that is
recovered from Gas gathering facilities at a System Compressor Station, the
outlet flange of the storage tank at such System Compressor Station into which
such Condensate is delivered.

 

Delivery Point Gas.  A quantity of Gas having a Thermal Content equal to the
total Thermal Content of the Dedicated Gas received by Gatherer from Shipper at
the Receipt Points, less (i) the Thermal Content of Gas used for Fuel, (ii) the
Thermal Content of Condensate recovered from the Gathering System, and (iii) the
Thermal Content of Lost and Unaccounted for Gas, in each case, as allocated to
Shipper in accordance with this Agreement.

 

Development Plan.  As defined in Section 3.3(a).

 

Downstream Pipeline.  Any Gas pipeline or any facilities of any end-user or
local distribution company, in each case downstream of the Gathering System,
into which Shipper’s Gas is delivered from the Gathering System or a Processing
Plant.

 

Effective Date.  As defined in the preamble of this Agreement.

 

Emissions Charges.  As defined in Section 10.4.

 

Fair Market Value.  With respect to any asset, the price that would be paid by a
willing buyer of such asset to a willing seller, as determined by an independent
nationally known investment banking firm selected by Gatherer and reasonably
acceptable to Shipper.

 

FERC.  As defined in Section 18.2.

 

Firm Capacity Production.  Production that is accorded the highest priority on
the Gathering System with respect to capacity allocations, interruptions, or
curtailments, specifically

 

3

--------------------------------------------------------------------------------

 

including (i) Dedicated Production and (ii) Production delivered to the
Gathering System from any Person for which Gatherer is contractually obligated
to provide the highest priority. Firm Capacity Production will be the last
Production removed from the relevant part of the Gathering System in the event
of an interruption or curtailment and all Firm Capacity Production, including
Dedicated Production, will be treated equally in the event an allocation is
necessary.

 

Force Majeure.  As defined in Section 14.2.

 

Fuel.  Gas and electric power used in the operation of the Gathering System,
including fuel consumed in System Compressor Stations and dehydration facilities
that are part of the Gathering System.

 

Gallon.  One U.S. gallon, which is equal to 231 cubic inches.

 

Gas.  Any mixture of gaseous hydrocarbons, consisting essentially of methane and
heavier hydrocarbons and inert and noncombustible gases, that is extracted from
beneath the surface of the earth.

 

Gas Quality Specifications.  As defined in Section 10.1.

 

Gatherer.  As defined in the preamble of this Agreement.

 

Gathering Fee.  As defined in Section 5.1(a).

 

Gathering System.  The gathering system described in Exhibit C being acquired by
Gatherer from Shipper as of the date hereof, together with any additional System
Segments constructed after the date hereof, as such gathering system is expanded
after the date hereof, including, in each case, to the extent now in existence
or constructed or installed in the future, Low Pressure Gas gathering pipelines,
Liquid Hydrocarbons gathering pipelines, High Pressure Gas gathering pipelines,
System Compressor Stations, Gas dehydration facilities, Receipt Points, Delivery
Points (including all interconnection facilities), Measurement Facilities,
Condensate handling facilities, pig receiving facilities, slug catchers and
other inlet facilities at Processing Plants, rights of way, fee parcels, surface
rights, and permits, and all appurtenant facilities.

 

Gathering System Plan.  As defined in Section 3.3(b).

 

Gross Heating Value.  The number of Btus produced by the complete combustion in
air, at a constant pressure, of one Cubic Foot of Gas when the products of
combustion are cooled to the initial temperature of the Gas and air and all
water formed by combustion is condensed to the liquid state.

 

Governmental Authority.  Any federal, state, local, municipal, tribal or other
government; any governmental, regulatory or administrative agency, commission,
body or other authority exercising or entitled to exercise any administrative,
executive, judicial, legislative, regulatory or taxing authority or power; and
any court or governmental tribunal, including any tribal authority having or
asserting jurisdiction.

 

4

--------------------------------------------------------------------------------

 

High Pressure.  Pipelines gathering or transporting Gas that has been dehydrated
and compressed to the pressure of the Downstream Pipelines or Processing Plants
at the Delivery Points.

 

High Pressure Gathering Fee.  As defined in Section 5.1(a)(ii).

 

Ideal Gas Laws.  The thermodynamic laws applying to perfect gases.

 

Imbalance.  As defined in Section 9.3.

 

Index Price.  For Gas produced from the Marcellus formation in West Virginia,
the “Midpoint Average” price published in Platt’s Gas Daily Price Guide for
“Columbia Gas/Appalachia”.  For Gas produced from the Utica formation in Ohio,
the “Midpoint Average” price published in Platt’s Gas Daily Price Guide for
“Texas Eastern M-2 Receipts”.  For other Gas production, an index price
determined by Shipper and reasonably acceptable to Gatherer based on where such
Gas production is being sold, or, if no appropriate index is available, a price
based on a netback calculation determined by Shipper and reasonably acceptable
to Gatherer.

 

Initial Dedication Area.  The states of Pennsylvania, West Virginia, and Ohio.

 

Initial Development Plan.  The Development Plan attached hereto as Exhibit D.

 

Interruptible Production.  Production that is accorded the lowest priority on
the Gathering System with respect to capacity allocations, interruptions, or
curtailments.  Interruptible Production will be the first Production removed
from the Gathering System in the event of an interruption or curtailment.

 

Liquids Gathering Fee.  As defined in Section 5.1(a)(iv).

 

Liquid Hydrocarbons.  Oil, Condensate, natural gasoline and all the liquid
hydrocarbon production from wells, or a blend of such, in its natural form, not
having been processed, other than for removal of water at the wellhead.

 

Lost and Unaccounted For Gas.  Gas received into the Gathering System that is
released or lost through piping, equipment, operations, or measurement losses or
inaccuracies or that is vented, flared or lost in connection with the operation
of the Gathering System.

 

Low Pressure.  Pipelines gathering Gas at or near wellhead pressure that has yet
to be compressed (other than by well pad gas lift compression or dedicated well
pad compressors) and dehydrated.

 

Made Available for Delivery.  In connection with deliveries of Dedicated
Production under this Agreement, Dedicated Production that is unable to be
delivered to the applicable point as a result of Gatherer’s failure to perform
its obligations under this Agreement.

 

Maintenance.  As defined in Section 7.3.

 

Mcf.  One thousand (1,000) Cubic Feet.

 

5

--------------------------------------------------------------------------------

 

Measurement Facilities.  Any facility or equipment used to measure the volume of
Gas or Liquid Hydrocarbons, which may include meter tubes, LACT units, isolation
valves, tank strappings, recording devices, communication equipment, buildings
and barriers.

 

Minimum Compression Volume Commitment.  With respect to any Contract Year from
the Contract Year in which the first System Compressor Station is placed in
service through the earlier of the Contract Year in which occurs the tenth
(10th) anniversary of the placement in service of the last System Compressor
Station to be placed in service or the expiration or termination of the term of
this Agreement, a volume of Dedicated Gas, stated in Mcf, equal to the sum of
all such volumes calculated at each System Compressor Station that has been in
service for ten (10) years or less, each of which shall be calculated as
follows: the product of (i) the total design capacity, stated in Mcf per Day, of
the relevant System Compressor Station, multiplied by (ii) subject to the
immediately following sentence, the number of Days in such Contract Year,
multiplied by (iii) 0.70.  For purposes of the foregoing calculation the design
capacity of a particular System Compressor Station shall be included (1) only to
the extent that such capacity has been installed at the direction of the Shipper
in accordance with Section 3.4(a) and does not represent additional capacity
installed at such System Compressor Station by Gatherer as permitted by
Section 3.4(a), (2) for not more than the 10 year period after it is first
placed in service, (3) in the Contract Year in which it is placed in service,
only for the number of Days in such Contract Year after it has been placed in
service, and (4) if arising prior to the expiration or termination of the term
of this Agreement, in the Contract Year in which the 10th anniversary of its
placement in service occurs, only for the number of Days through such
10th anniversary.

 

Minimum High Pressure Volume Commitment.  With respect to any Contract Year from
the Contract Year in which the first System High Pressure Line is placed in
service through the earlier of the Contract Year in which occurs the tenth
(10th) anniversary of the placement in service of the last System High Pressure
Line to be placed in service or the expiration or termination of the term of
this Agreement, a volume of Dedicated Gas, stated in Mcf, equal to the sum of
all such volumes calculated at each System High Pressure Line that has been in
service for ten (10) years or less, each of which shall be calculated as
follows: the product of (i) the total design capacity, stated in Mcf per Day, of
the relevant System High Pressure Line, as reasonably calculated by Gatherer
based on the capacity of the relevant System Compressor Station and the length
and diameter of such System High Pressure Line, multiplied by (ii) subject to
the immediately following sentence, the number of Days in such Contract Year,
multiplied by (iii) 0.75.  For purposes of the foregoing calculation the design
capacity of a particular System High Pressure Line shall be included (1) for not
more than the 10 year period after it is first placed in service, (2) in the
Contract Year in which it is placed in service, only for the number of Days in
such Contract Year after it has been placed in service, and (3) if arising prior
to the expiration or termination of the term of this Agreement, in the Contract
Year in which the 10th anniversary of its placement in service occurs, only for
the number of Days through such 10th anniversary.

 

MMBtu.  One million (1,000,000) Btus.

 

MMcf.  One million (1,000,000) Cubic Feet.

 

6

--------------------------------------------------------------------------------

 

Monitoring Services Provider.  As defined in Section 11.9(a).

 

Month.  A period commencing at 10:00 a.m., Eastern Standard Time, on the first
Day of a calendar month and extending until 10:00 a.m., Eastern Standard Time,
on the first Day of the next succeeding calendar month.  Monthly shall have the
correlative meaning.

 

Oil and Gas Interests.  Oil and gas leasehold interests and oil and gas mineral
fee interests, including working interests, overriding royalty interests, net
profits interests, carried interests, and similar rights and interests.

 

Parties.  As defined in the preamble of this Agreement.

 

Party.  As defined in the preamble of this Agreement.

 

Person.  An individual, a corporation, a partnership, a limited partnership, a
limited liability company, an association, a joint venture, a trust, an
unincorporated organization, or any other entity or organization, including a
Governmental Authority.

 

Planned Well.  As defined in Section 3.3(a).

 

Planned Well Pad.  As defined in Section 3.3(a).

 

Production.  Gas and/or Liquid Hydrocarbons.

 

Processing Plant. Any Gas processing facility downstream of any portion of the
Gathering System to which Shipper has dedicated Gas for processing or at which
Shipper has arranged for Gas to be processed prior to delivery to a Downstream
Pipeline.

 

Proposal Notice.  As defined in Section 2.3(c).

 

psia.  Pounds per square inch, absolute.

 

psig.  Pounds per square inch, gauge.

 

Receipt Point.  The inlet valve at the Measurement Facilities located at or
nearby or assigned to a Well Pad where one or more Wells or, in the case of
Liquid Hydrocarbons, one or more of Producer’s tanks receiving Liquid
Hydrocarbons from such Wells, are connected to the Gathering System.

 

Remote Monitoring Data.  As defined in Section 11.9(a).

 

Request for Proposal.  As defined in Section 2.3(c).

 

Required Compressor Station.  As defined in Section 3.4(a).

 

Required High Pressure Lines.  As defined in Section 3.5.

 

Services.  As defined in Section 3.1.

 

7

--------------------------------------------------------------------------------

 

Shipper.  As defined in the preamble of this Agreement.

 

Shipper’s GHG Emissions.  As defined in Section 10.4.

 

System Compressor Station.  As defined in Section 3.4(a).

 

System Delivery Point.  Each point at which Gatherer redelivers Gas from the
Gathering System to or for the account of shippers, including the Delivery
Points.

 

System High Pressure Line.  As defined in Section 3.5.

 

System Receipt Point.  Each point where Gas first enters the Gathering System,
including the Receipt Points.

 

System Segment.  A physically separate segment of the Gathering System that
connects one or more of Shipper’s Wells to one or more Delivery Points,
including all Low Pressure Gas gathering pipelines, Liquid Hydrocarbons
gathering pipelines, High Pressure Gas gathering pipelines, System Compressor
Stations, Gas dehydration facilities, Receipt Points, Delivery Points,
Measurement Facilities, Condensate handling facilities, rights of way, fee
parcels, surface rights, and permits, and all appurtenant facilities.

 

Target Completion Date.  As defined in Section 3.4(b).

 

Taxes.  All gross production, severance, conservation, ad valorem and similar or
other taxes measured by or based upon production, together with all taxes on the
right or privilege of ownership of Production, or upon the Services, including
gathering, transportation, handling, transmission, compression, processing,
treating, conditioning, distribution, sale, use, receipt, delivery or redelivery
of Production, including, without limitation, gross receipts taxes, and
including all of the foregoing now existing or in the future imposed or
promulgated.

 

Thermal Content.  For Gas, the product of (i) a volume of Gas in Cubic Feet and
(ii) the Gross Heating Value of such Gas, as expressed in MMBtus.  For
Condensate, the product of the measured volume in Gallons multiplied by the
Gross Heating Value per Gallon determined in accordance with the GPA 2145-09
Table of Physical Properties for Hydrocarbons and GPA 8173 Method for Converting
Mass of Natural Gas Liquids and Vapors to Equivalent Liquid Volumes, in each
case as revised from time to time; provided, however, that if sufficient data
has not been obtained to make such calculation, the Thermal Content of
Condensate shall be deemed to be 0.115 MMBtu per Gallon.

 

Third Party Production.  Production produced by Persons other than Shipper and
not considered Dedicated Production hereunder.

 

Well.  A well for the production of hydrocarbons in which Shipper owns an
interest that produces or is intended to produce Dedicated Production or
otherwise is connected or is required to be connected to the Gathering System in
accordance with this Agreement.

 

Well Pad.  The surface installation on which one or more Wells are located.

 

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ARTICLE 2
SHIPPER COMMITMENTS

 

Section 2.1                                   Shipper’s Dedication.  Subject to
Section 2.2 through Section 2.4, (a) Shipper exclusively dedicates and commits
to deliver to Gatherer, as and when produced, all Dedicated Production for
gathering through the Gathering System under this Agreement, including (in the
case of Dedicated Gas) High Pressure gathering and compression in the System
Compressor Stations, and (b) Shipper agrees not to deliver any Dedicated
Production to any other gathering system or compressor station.

 

Section 2.2                                   Conflicting Dedications.  Shipper
shall have the right to comply with each of the Conflicting Dedications set
forth in EXHIBIT B hereto and any other Conflicting Dedication entered into by a
non-Affiliated predecessor-in-interest to Shipper that is applicable as of the
date of acquisition thereof to any Dedicated Property acquired after the
Effective Date (but not any entered into in connection with such acquisition);
provided, however, that Shipper shall have the right to comply with Conflicting
Dedications only until the first Day of the Month following the termination of
such Conflicting Dedication and shall not take any voluntary action (including
the exercise of any right to extend) to extend the term of such Conflicting
Dedication beyond the minimum term provided for in the document evidencing such
Conflicting Dedication.  Shipper represents that, except as set forth in EXHIBIT
B, Dedicated Production is not as of the Effective Date subject to any
Conflicting Dedication.  If Dedicated Production produced from a Well on a Well
Pad is subject to a Conflicting Dedication that Shipper has the right to comply
with under this Section 2.2, Shipper has the right, in complying with such
Conflicting Dedication, to deliver all Dedicated Production from such Well Pad
in accordance with the Conflicting Dedication, even if all Wells on such Well
Pad are not subject to such Conflicting Dedication.

 

Section 2.3                                   Shipper’s Reservations.  Shipper
reserves the following rights with respect to Dedicated Production for itself
and for the operator of the relevant Dedicated Properties:  (a) to operate Wells
producing Dedicated Production as a reasonably prudent operator in its sole
discretion, including the right, but never the obligation, to drill new Wells,
to repair and rework old Wells, to renew or extend, in whole or in part, any Oil
and Gas Interest covering any of the Dedicated Properties, and to cease
production from or abandon any Well or surrender any such Oil and Gas Interest,
in whole or in part, when no longer deemed by Shipper to be capable of producing
Production in paying quantities under normal methods of operation; (b) to use
Dedicated Production for operations (including reservoir pressure maintenance
and drilling or fractionation fuel); (c) to deliver or furnish to Shipper’s
lessors and holders of other existing similar burdens on production such
Production as is required to satisfy the terms of the applicable leases or other
applicable instruments; (d) to acquire Wells connected to existing gathering
systems and to continue to deliver to such gathering systems Production produced
from such Wells, provided that, to the extent that Production from such Wells
constitutes Dedicated Production, Shipper delivers a Connection Notice to
Gatherer with respect to any such Well not later than 30 Days after its
acquisition and thereafter delivers Production to such gathering system only
until Gatherer has connected such Well to the Gathering System in accordance
with Section 3.4; (e) to pool, communitize, or unitize Shipper’s Oil and Gas
Interests with respect to Dedicated Production, provided that the share of
Production produced from such pooled, communitized, or unitized Oil and Gas
Interests shall be committed and dedicated to this

 

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Agreement; and (f) to gather Liquid Hydrocarbons produced from the Marcellus
formation in trucks.

 

Section 2.4                                   Covenant Running with the Land. 
The dedication and commitment made by Shipper under this Article 2 is a covenant
running with the land. For the avoidance of doubt and in addition to that which
is provided in Section 18.4, in the event Shipper sells, transfers, conveys,
assigns, grants, or otherwise disposes of any or all of its interest in the
Dedicated Properties, then any such sale, transfer, conveyance, assignment,
grant, or other disposition shall be expressly subject to this Agreement and any
instrument of conveyance shall so state.  Notwithstanding the foregoing, Shipper
shall be permitted to sell, transfer, convey, assign, grant, or otherwise
dispose of Dedicated Properties free of the dedication hereunder (i) in a sale
or other disposition in which a number of net acres of Dedicated Properties
that, when added to the total of net acres of Dedicated Properties theretofore
and, where applicable, simultaneously disposed of free of dedication hereunder
pursuant to this Section 2.4, does not exceed the aggregate number of net acres
of Dedicated Properties acquired by Gatherer after the Effective Date, including
in a transaction in which Dedicated Properties are exchanged for other
properties located in the Dedication Area that would be subject to dedication
hereunder or (ii) in a sale of Wells located on Dedicated Properties that are
pooled or unitized with the properties of third parties that are not Dedicated
Properties if Shipper is not the operator of such unit; provided, however, that
any such sale, transfer, conveyance, assignment, grant or other disposition of
Dedicated Properties shall not include, and there shall be expressly excluded
therefrom, any Well that is or has been connected to the Gathering System
(whether producing, shut-in, temporarily abandoned or which has been spud or as
to which drilling, completion, reworking or other well operations have
commenced) or which is located on a Well Pad for which a Connection Notice has
previously been delivered by Shipper (unless the completion of such Well has
been delayed and Shipper has paid the costs and expenses incurred by Gatherer in
connection therewith in accordance with Section 3.3(d)).  At the request of
Gatherer, the Parties shall execute and record an amendment to the memorandum of
this Agreement previously entered into, as provided in Section 18.16, to reflect
additions to the Dedicated Properties.

 

Section 2.5                                   Additional Oil and Gas Interests
or Gathering Facilities.

 

(a)                                 If Shipper acquires any existing gathering
facilities gathering Gas from any Oil and Gas Interests, it shall, by notice to
Gatherer on or before the 10th Day after such acquisition, which notice shall
include a reasonable description of such gathering facilities and such Oil and
Gas Interests (including an update to the Development Plan reflecting such Oil
and Gas Interests) and the price paid by Shipper for such gathering facilities,
including any liabilities assumed by Shipper, offer to sell to Gatherer such
gathering facilities, including all Low Pressure Gas gathering pipelines, High
Pressure Gas gathering pipelines, compressor stations, Gas dehydration
facilities, receipt points, delivery points, measurement facilities, Condensate
handling facilities, rights of way, fee parcels, surface rights, and permits,
and all appurtenant facilities, as well as any third party shipper contracts for
Gas gathered on such gathering facilities, at the same price at which such
gathering facilities were acquired by Shipper, including the assumption of any
liabilities with respect thereto assumed by Shipper.  Gatherer shall have the
right, to be exercised by notice to Shipper on or before the 60th Day after
Shipper’s notice of its acquisition of such gathering facilities, to acquire
such gathering facilities at such price (including the assumption of such
liabilities).  If Gatherer does not give such notice to Shipper

 

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on or before such 60th Day, Gatherer shall be deemed to have waived its right to
acquire such gathering facilities, except in the case of a third party gathering
offer as provided below, and (i) Shipper shall have the right to own and operate
such facilities to gather the Gas from the Oil and Gas Interests described in
such notice and/or (ii) Shipper shall have the right to solicit proposals from a
third party gatherer to acquire, own, and operate such facilities to gather the
Gas from the Oil and Gas Interests described in such notice on the basis that
Shipper will dedicate to such gatherer all Oil and Gas Interests owned by
Shipper the Gas from which is being gathered by such gathering facilities as
well as the area (including all geological strata and production zones) within
two miles of any such Oil and Gas Interest.  If Shipper obtains any such third
party proposal, it shall, by notice to Gatherer, provide Gatherer with all the
terms and conditions thereof, and Gatherer shall have the right to elect, by
notice to Shipper on or before the 60th Day after its receipt of Shipper’s
notice containing the terms and conditions of such proposal, to acquire such
gathering facilities and provide such services on the same terms and conditions
as those offered by the third party gatherer.  If Gatherer does not so elect on
or before such 60th Day, Gatherer shall be deemed to have waived its right to
acquire such gathering facilities and provide such services, and Shipper shall
have the right to contract with such third party gatherer to acquire such
facilities and to provide such services on such terms and conditions and to
dedicate to such gatherer all Oil and Gas Interests owned by Shipper the Gas
from which is being gathered by such gathering facilities as well as the area
(including all geological strata and production zones) within two miles of any
such Oil and Gas Interest.  If Gatherer elects to acquire such gathering
facilities, the closing of Gatherer’s purchase of such gathering facilities from
Shipper shall take place as soon as reasonably practicable following Gatherer’s
exercise of its right to acquire such gathering facilities.  From and after the
closing of such purchase by Gatherer, all Oil and Gas Interests owned by Shipper
the Gas from which is being gathered by such gathering facilities shall be
Dedicated Properties, the area (including all geological strata and production
zones) within two miles of any such Dedicated Property shall become part of the
Dedication Area, and such gathering facilities shall be deemed to be part of the
Gathering System.  In any transaction in which Shipper so acquires gathering
facilities, Shipper shall use reasonable efforts to cause the transaction
documents for such acquisition to state a separate purchase price (and
separately state any assumed liabilities) for such gathering facilities.  If
notwithstanding such reasonable efforts the transaction documents for such
acquisition do not state a separate purchase price, the purchase price to be
paid by Gatherer to Shipper for such gathering facilities shall be equal to the
Fair Market Value of such gathering facilities, and Gatherer shall assume all
liabilities in respect of such gathering facilities to the extent arising from
the ownership and operation of such gathering facilities and/or any occurrence
from and after the closing of the purchase of such gathering facilities by
Gatherer.

 

(b)                                 If at any time Shipper desires to construct,
own, and operate, or to have constructed and operated, gathering facilities to
gather Gas from Oil and Gas Interests located outside the then-existing
Dedication Area, Shipper shall, by notice to Gatherer specifying (i) the
facilities it desires and the receipt points and delivery points it plans to
connect, (ii) the Oil and Gas Interests acquired by Shipper the Gas from which
will be gathered using such facilities, and (iii) a proposed update to the
Development Plan reflecting the Wells to be drilled on such Oil and Gas
Interests during the period of at least 18 Months after such notice, including
production forecasts for all such Wells, offer to Gatherer the opportunity to
construct, own, and operate such facilities as part of the Gathering System on
the terms set forth in this Agreement.  Gatherer shall have the right, to be
exercised by notice to Shipper on or before the 60th Day after Shipper’s

 

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notice, to elect to construct, own, and operate such facilities.  If Gatherer
exercises such right, from and after the date of Gatherer’s notice of exercise,
all Oil and Gas Interests owned by Shipper described in Gatherer’s notice shall
be Dedicated Properties, the area (including all geological strata and
production zones) within two miles of any such Dedicated Property shall become
part of the Dedication Area, such gathering facilities as they are constructed
shall be deemed to be part of the Gathering System, and the proposed development
plan included in Shipper’s notice shall become part of the Development Plan.  If
Gatherer does not give such notice to Shipper on or before such 60th Day,
Gatherer shall be deemed to have waived its right to construct, own, and operate
the facilities set forth in Shipper’s notice as part of the Gathering System on
the terms set forth in this Agreement, except in the case of a third party
gathering offer as provided below, and (1) Shipper shall have the right to
construct, own, and operate such facilities to gather the Gas from the Oil and
Gas Interests described in such notice or (2) Shipper shall have the right to
solicit proposals from a third party gatherer to construct, own, and operate
such facilities to gather the Gas from the Oil and Gas Interests described in
such notice on the basis that Shipper will dedicate to such gatherer all Oil and
Gas Interests described in such notice as well as the area (including all
geological strata and production zones) within two miles of any such Oil and Gas
Interest.  If Shipper obtains any such third party proposal, it shall, by notice
to Gatherer, provide Gatherer with all the terms and conditions thereof, and
Gatherer shall have the right to elect, by notice to Shipper on or before the
60th Day after its receipt of Shipper’s notice containing the terms and
conditions of such proposal, to construct, own, and operate such facilities to
gather the Gas from the Oil and Gas Interests described in such notice on the
same terms and conditions as those offered by the third party gatherer.  If
Gatherer does not so elect on or before such 60th Day, Gatherer shall be deemed
to have waived its right to provide such services, and Shipper shall have the
right to contract with such third party gatherer to provide such services on
such terms and conditions and to dedicate to such gatherer the Oil and Gas
Interests described in such notice as well as the area (including all geological
strata and production zones) within two miles of any such Oil and Gas Interest.

 

(c)                                  If at any time Shipper desires Services
consisting of gathering Liquid Hydrocarbons from any Oil and Gas Interests of
Shipper the Production from which has not already become Dedicated Production
pursuant to this Section 2.3(c), including any such Services to be provided
through any existing facilities acquired or being acquired by Shipper (“Acquired
Facilities”), Shipper shall, by notice to Gatherer, request from Gatherer a
proposal to provide such Services on the terms set forth in this Agreement (such
notice, a “Request for Proposal”).  Each Request for Proposal shall (i) specify
the Oil and Gas Interests from which such Liquid Hydrocarbons would be gathered,
(ii) specify the proposed Delivery Points to which such Liquid Hydrocarbons
would be delivered, (iii) in the case of Acquired Facilities, provide a
reasonable description of such Acquired Facilities and the price paid or
proposed to be paid by Shipper for the Acquired Facilities, including any
liabilities assumed by Shipper, and details of any third-party contracts for
Liquid Hydrocarbons gathering on such Acquired Facilities, and (iv) a proposed
update to the Development Plan for the Wells to be drilled on such Oil and Gas
Interests from which such Liquid Hydrocarbons would be gathered during the
period of at least 18 Months after the Request for Proposal, including
production forecasts for all such Wells.  Gatherer shall have the right, to be
exercised by notice to Shipper on or before the 60th Day after the Request for
Proposal (such notice, a “Proposal Notice”), make a proposal to provide such
Services for the Liquid Hydrocarbons gathering fees set forth in such Proposal
Notice and otherwise on the terms and conditions set forth in this Agreement. 
Concurrently with

 

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or following its Request for Proposal to Gatherer, Shipper may seek proposals
from third parties to provide such Services on the terms and conditions set
forth in this Agreement.  On or before the 60th Day after a Request for Proposal
with respect to which Gatherer has given a Proposal Notice, Shipper shall inform
Gatherer that (1) it is accepting Gatherer’s Proposal Notice, (2) it is
accepting a proposal from a third party for such Services on the basis that the
gathering fees proposed by such third party for providing such Services on the
terms and conditions set forth in this Agreement were lower than the gathering
fees proposed by Gatherer, or (3) it has elected not to acquire such Services or
to carry out such Services itself and is accordingly withdrawing its Request for
Proposal.  If Gatherer’s proposal is accepted, Gatherer shall, as applicable,
(A)  construct and operate such facilities so as to provide such Services on the
terms and conditions set forth in this Agreement such that it commences the
performance of such Services within 18 Months after the date of Shipper’s
Request for Proposal and/or (B) as soon as reasonably practicable accept the
transfer from Shipper of any Acquired Facilities and commence providing Services
through such Acquired Facilities.  If Gatherer’s proposal is accepted, all
Liquid Hydrocarbons Production from the Oil and Gas Interests referred to in
Shipper’s Request for Proposal or from any other Oil and Gas Interests at any
time owned by Shipper (in each case including all geological strata and
production zones) within two miles of any such Oil and Gas Interests shall
become Dedicated Production, such gathering facilities as they are constructed
and/or such Acquired Facilities, as applicable, shall be deemed to be part of
the Gathering System, and the proposed Development Plan update included in
Shipper’s notice shall become part of the Development Plan.  If a third party
proposal is accepted as provided above or if Gatherer does not deliver a
Proposal Notice, Gatherer shall be deemed to have waived its right under this
Section 2.3(c) to provide the requested Services, and Shipper shall have the
right to contract with such third party to provide such Services to Shipper on
the terms and conditions set forth in this Agreement for the fees set forth in
such third party’s proposal, including if applicable the transfer of any
Acquired Facilities to such third party, and Shipper shall have the right to
dedicate to such third party all Liquid Hydrocarbons Production from the Oil and
Gas Interests referred to in Shipper’s Request for Proposal and from any other
Oil and Gas Interests at any time owned by Shipper (in each case including all
geological strata and production zones) within two miles of any such Oil and Gas
Interest described in such notice as well as the area.  If Shipper does not
enter into an agreement with a third party in accordance with this
Section 2.3(c) on or before the 90th Day after Shipper’s Request for Proposal,
the Services that were the subject of such Request for Proposal shall again
become subject to this Section 2.3(c).  In respect of any Acquired Facilities,
Shipper shall use reasonable efforts to cause the transaction documents for the
acquisition thereof to state a separate purchase price (and separately state any
assumed liabilities) for such Acquired Facilities. If, pursuant to this
Section 2.3(c), Gatherer is to acquire from Shipper any Acquired Facilities,
such acquisition shall be made at the same price at which such Acquired
Facilities were acquired by Shipper, including the assumption of any liabilities
with respect thereto assumed by Shipper. If the transaction documents for
Shipper’s acquisition of such Acquired Facilities did not state a separate
purchase price for such Acquired Facilities, the purchase price to be paid by
Gatherer to Shipper for the Acquired Facilities shall be equal to the Fair
Market Value of the Acquired Facilities, and Gatherer shall assume all
liabilities in respect of the Acquired Facilities to the extent arising from the
ownership and operation of the Acquired Facilities and/or any occurrence from
and after the closing of the purchase of the Acquired Facilities by Gatherer.

 

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Section 2.6                                   Priority of Dedicated Production. 
Dedicated Production tendered under this Agreement shall be Firm Capacity
Production.

 

ARTICLE 3
SERVICES; GATHERING SYSTEM EXPANSION AND CONNECTION OF WELLS

 

Section 3.1                                   Gatherer Service Commitment. 
Subject to and in accordance with the terms and conditions of this Agreement,
Gatherer commits to providing the following services (collectively, the
“Services”) to Shipper:

 

(a)                                 receive, or cause to be received, into the
Gathering System, from or for the account of Shipper, at each Receipt Point, all
Dedicated Production tendered by Shipper;

 

(b)                                 compress and dehydrate Dedicated Gas
received into the Gathering System at the System Compressor Stations;

 

(c)                                  deliver, or cause to be delivered, to or
for the account of Shipper, at the nominated Delivery Point for Gas, Delivery
Point Gas allocated to Shipper; and

 

(d)                                 to the extent that the Gatherer is providing
Liquid Hydrocarbon gathering pursuant to Section 2.3(c), make available for
delivery, to or for the account of Shipper, at each Delivery Point for Liquid
Hydrocarbons, the Liquid Hydrocarbons received into the Gathering System and
gathered to or delivered into storage tanks at such Delivery Point allocated to
Shipper in accordance with Section 6.4.

 

Section 3.2                                   Development Plan; Gathering System
Plan; Exchange and Review of Information.

 

(a)                                 The Initial Development Plan describes the
planned development, drilling, and production activities relating to the
Dedicated Properties through the date that is 18 months after the Effective Date
(such plan, as updated as hereinafter provided, and including any proposed
development plan that becomes part of the Development Plan pursuant to
Section 2.3(b), the “Development Plan”).  Following the Effective Date, Shipper
shall provide Gatherer an updated Development Plan describing the planned
development, drilling, and production activities relating to the Dedicated
Properties for the 18-Month period commencing on the date of such updated
Development Plan on or before the last Day of each Month.  Each Development Plan
will include (i) information as to the Wells that Shipper expects will be
drilled during such period (each such Well reflected in a Development Plan, a
“Planned Well”), information as to each Well Pad expected to be constructed
during such period (each such Well Pad reflected in a Development Plan, a
“Planned Well Pad”) and the approximate locations thereof, the earliest date on
which one or more Wells at each such Well Pad are expected to be completed, and
the Delivery Points at which Gas produced from such Wells is to be redelivered
to Shipper and (ii) good faith and reasonable production forecasts for all Wells
connected as of, and estimated to be connected to the Gathering System during
the 18-Month period following, the date of such Development Plan (to the extent
not previously provided or, if earlier provided, as revised in Shipper’s good
faith estimation).  Shipper shall make its representatives available to discuss
the Development Plan from time to time with Gatherer and its representatives, in
order to facilitate advance planning for expansion or improvement of the
Gathering System and to address other

 

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matters relating to the construction and installation of additions to the
Gathering System.  Shipper may provide updated or amended Development Plans to
Gatherer at any time and shall provide its then-current Development Plan to
Gatherer from time to time on or prior to the fifth (5th) Business Day after
Gatherer’s request therefor.

 

(b)                                 Attached hereto as Exhibit D is a Gathering
System plan describing and/or depicting the Gathering System, including all
pipelines, all Receipt Points and Delivery Points, and all compression and
dehydration facilities and other major physical facilities, together with their
locations, sizes and other physical specifications, operating parameters,
capacities, and other relevant specifications, and together with a schedule for
completing the construction and installation of the planned portions thereof, in
each case as currently in existence, under construction, or planned (such plan,
as updated as hereinafter provided, the “Gathering System Plan”).  Based on the
Development Plans and such other information about the expected development of
the Dedicated Properties as shall be provided to Gatherer by or on behalf of
Shipper, Gatherer shall periodically update the Gathering System Plan.  Without
limiting the generality of the foregoing, Gatherer shall ensure that the
Gathering System Plan reflects each Monthly Development Plan not later than 30
Days after such Development Plan is delivered. Gatherer shall make the Gathering
System Plan available for inspection by Shipper and its representatives from
time to time and shall make representatives of Gatherer available to discuss the
Gathering System Plan from time to time with Shipper and its representatives. 
Gatherer shall provide Shipper updates not less frequently than monthly on the
progress of work on all facilities necessary to connect Planned Wells to the
Gathering System and to connect the Gathering System to the Delivery Points as
set forth in the then-current Gathering System Plan.

 

(c)                                  The Parties recognize that the plans for
the development of the Dedicated Properties set forth in the Development Plans,
as well as all information provided by Shipper to Gatherer regarding its
intentions with respect to the development of the Dedicated Properties, are
subject to change and revision at any time at the discretion of Shipper, and
that such changes may impact the timing, configuration, and scope of the planned
activities of Gatherer.  The exchange of such information and any changes
thereto shall not give rise to any rights or liabilities as between the Parties
except as expressly set forth in this Agreement, and Gatherer shall determine at
its own risk the time at which it begins to work on and incur costs in
connection with particular Gathering System expansion projects, including the
acquisition of rights of way, equipment, and materials.  Without limiting the
generality of the foregoing, Shipper has no obligation to Gatherer under this
Agreement to develop or produce any hydrocarbons from the Dedicated Properties
or to pursue or complete any drilling or development on the Dedicated
Properties, whether or not envisioned in the Development Plan.

 

Section 3.3                                   Expansion of Gathering System;
Connection of Well Pads; Delivery Points.

 

(a)                                 The Gathering System shall be designed,
developed, and constituted for the purpose of providing Services as and when
needed to support the upstream development of the Dedicated Properties, and
Gatherer shall be obligated, at its sole cost and expense, subject to the
provisions of this Agreement, to plan, procure, construct, install, own, and
operate the Gathering System so as to timely connect the Planned Wells to the
Gathering System, connect the Gathering System to Delivery Points on the
Downstream Pipelines or at the Processing Plants

 

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specified by Shipper, and timely commence providing the full scope of Services,
with respect to all Dedicated Production produced from the Planned Wells from
and after their completion, all in accordance with this Section 3.4; provided,
that the foregoing shall not preclude Gatherer from also designing, developing
and constituting the Gathering System to accommodate Third Party Production.

 

(b)                                 In planning the Gathering System, Gatherer
shall use its discretion in determining when to construct and install separate
and segregated facilities in the same geographical area for the purposes of
handling Production with different characteristics (for example, hydrocarbon-dry
versus hydrocarbon-wet Gas); provided, however, that if Shipper requests that
Gatherer construct and install separate facilities, Gatherer shall, subject to
all of the terms and conditions of this Agreement, do so.

 

(c)                                  Gatherer shall be obligated to connect
Wells at a particular Well Pad to the Gathering System only if Gatherer has
received from Shipper a notice in the form of Exhibit F hereto (or in such form
as Shipper and Gatherer shall otherwise agree from time to time) stating that
Shipper intends to drill and complete such Wells at such Well Pad (a “Connection
Notice”) and setting forth the target completion date for drilling and
completion of such Wells (the “Target Completion Date”), and the expected
production from such Well Pad over the next eighteen (18) months.  Following
receipt of a Connection Notice, Gatherer shall cause the necessary facilities to
be constructed to connect the Planned Wells referred to in such Connection
Notice to the Gathering System and to commence the Services with respect to
Dedicated Production produced from such Planned Wells.  Such facilities shall be
available to receive Dedicated Production from Planned Wells on the Planned Well
Pad on which such Planned Wells are to be located as soon as reasonably
practicable following the Connection Notice and in any event on or before the
later to occur of (1) the Target Completion Date with respect to such Planned
Well Pad, (2) the date that is 180 Days after the Connection Notice, and (3) the
date on which the initial Planned Well(s) at such Planned Well Pad has reached
its projected depth and is ready for completion (the later of such dates, with
respect to such Planned Well Pad, the “Completion Deadline”).  Gatherer shall
provide Shipper notice promptly upon Gatherer’s becoming aware of any reason to
believe that it may not be able to connect a Planned Well Pad to the Gathering
System by the Target Completion Date therefor or to otherwise complete all
facilities necessary to provide the full scope of Services with respect to all
Dedicated Production from Wells on such Planned Well Pad by the Target
Completion Date therefor.  If and to the extent Gatherer is delayed in
completing and making available such facilities by a Force Majeure event or any
action of Shipper that is inconsistent with the cooperation requirements of
Section 3.9, then the Completion Deadline for such connection shall be extended
for a period of time equal to that during which Gatherer’s completion and making
available of such facilities was delayed by such events or actions.  If such
facilities are not completed and made available by the Completion Deadline, as
Shipper’s sole and exclusive remedies for such delay,

 

(i)                                     the Dedicated Production from such
Planned Well Pad shall be temporarily released from dedication hereunder until
such time as such Planned Well Pad is connected to the Gathering System and the
Gathering System is ready to receive Dedicated Production produced from such
Planned Well Pad and to commence the Services with respect thereto; and

 

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(ii)                                  Shipper shall have the right to complete
the procurement, construction and/or installation of any rights or facilities
necessary to connect the relevant Planned Well Pad to the Gathering System, to
connect the Gathering System to the relevant Delivery Point, and/or to permit
Dedicated Production from Planned Wells at the Planned Well Pad to be received
into the Gathering System and delivered to the relevant Delivery Point, in which
case Gatherer shall pay to Shipper an amount equal to 115% of all reasonable
costs and expenses incurred by Shipper in so procuring, constructing, and/or
installing such rights and facilities, and Shipper shall convey all such rights
and facilities to Gatherer and such rights and facilities shall thereafter be
part of the Gathering System.

 

The remedies set forth in clauses (i) and (iii) above shall be applicable to
Wells with Completion Deadlines that are 180 Days or more after the Effective
Date.

 

(d)                                 If the actual completion of the initial
Planned Well at a particular Planned Well Pad is delayed more than 30 Days after
the Target Completion Date for such Planned Well Pad and the Gathering System is
connected to such Planned Well Pad and available to commence providing the
Services with respect to all Dedicated Production from such Planned Well prior
to the date such initial Planned Well has reached its projected depth and is
ready for completion, Gatherer shall be entitled to a fee equal to interest per
annum at the Wall Street Journal prime rate on the incremental cost and expense
incurred by Gatherer to procure, construct and install the relevant rights and
facilities to connect to such Planned Well Pad and to cause such facilities to
be available to commence providing Services thereto for the number of Days after
the Target Completion Date until the Day that the first Well at such Planned
Well Pad is completed; provided, however, that if such first Well has not been
completed by the date that is six months after the Target Completion Date for
such Well or, as of an earlier date, Shipper notifies Gatherer that it has
elected not to complete any Planned Wells at such Planned Well Pad, Shipper
shall pay to Gatherer an amount equal to 115% of all reasonable incremental
costs and expenses incurred by Gatherer in procuring, constructing and
installing such rights and facilities to connect the Gathering System to such
Planned Well Pad and to cause such facilities to be available to commence
providing Services thereto, and Gatherer shall assign, transfer, and deliver to
Shipper all rights and facilities (including equipment, materials, work in
progress, and completed construction) the costs and expenses of which have so
been paid by Shipper, to Shipper.  If Shipper so pays Gatherer and later
completes a Well at such Planned Well Pad, or if such facilities are later used
to connect a completed Well at a different Planned Well Pad or for a third
party, Gatherer shall refund to Shipper such amount paid by Shipper, and Shipper
shall retransfer such rights and facilities to Gatherer.

 

(e)                                  A Connection Notice shall be deemed to have
been given for the Planned Wells set forth on Exhibit G hereto, the Target
Completion Date for which shall be as set forth Exhibit G.  Such Connection
Notice shall be deemed to have been given for each such Planned Well 180 Days
prior to such Target Completion Date.

 

(f)                                   Shipper shall have right to specify in the
Development Plan or in a Connection Notice that Dedicated Gas produced from a
particular Well be redelivered to Shipper at a particular Delivery Point,
including a Delivery Point on any Downstream Pipeline.  Gatherer shall be
obligated, at Gatherer’s cost, to provide connections to the Delivery Points set
forth on

 

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0.  If Shipper specifies that Shipper’s Gas is to be delivered to a Delivery
Point not described on 0 that is not at such time connected to the Gathering
System, Gatherer shall, at Shipper’s sole cost, risk, and expense, provide a
connection to such Delivery Point.  All such Delivery Points shall be provided
with all interconnection facilities and other Delivery Point facilities
(including any Measurement Facilities), and with sufficient capacities,
necessary to permit Shipper’s Gas to be redelivered at such Delivery Point in
accordance with this Agreement (with all expansions of capacity at such Delivery
Points, including the Delivery Points described on 0, being at Shipper’s sole,
cost, risk, and expense).  Subject to the foregoing, Gatherer shall connect each
Well to the Gathering System such that Gas from such Well can be redelivered to
the Delivery Point described in the Development Plan.

 

Section 3.4                                   Compression.

 

(a)                                 The Gathering System Plan will describe the
compression facilities that will be required to compress Dedicated Gas upstream
of the Delivery Points or any System High Pressure Line in order for the
Gathering System to be operated at the pressures specified in Section 8.1 and to
permit Dedicated Gas to enter the facilities of the Downstream Pipelines or
Processing Plants, as applicable (“Required Compressor Stations”).  Gatherer
shall install each such Required Compressor Station as directed by Shipper and
shall operate and maintain each Required Compressor Station (each such Required
Compressor Station so installed by Gatherer, a “System Compressor Station”). 
Notwithstanding the foregoing, Gatherer shall not be obligated to install any
Required Compressor Station during the ten year period immediately prior to the
scheduled termination of this Agreement unless Shipper agrees that this
Agreement shall remain in effect beyond the scheduled termination thereof as to
such Required Compressor Station only and the amount determined under
Section 5.1(d)(ii)(A) with respect thereto until the 10th anniversary of the
placement in service of such Required Compressor Station.  To the extent that
Shipper does not direct Gatherer to install any Required Compressor Station as,
when, and where described in the Gathering System Plan and as a consequence the
Gathering System is not capable of operating in accordance with the obligations
of Gatherer with respect to pressures that are set forth in Sections 8.1 and
8.2, Gatherer shall be relieved from such obligations.  For the avoidance of
doubt, Gatherer shall have the right at any time to add additional compressor
stations to the Gathering System, and to add compression capacity at any System
Compressor Station in addition to the capacity that Shipper has directed to be
installed at such System Compressor Station, as it deems necessary or
appropriate to provide the Services and such services as it is providing in
respect of Third Party Production.  Shipper must pay the Compression Fee with
respect to all its Gas that is compressed using such additional compressor
stations or using such additional capacity, but such additional compressor
stations or additional capacity shall not be included for purposes of
calculating the Minimum Compression Volume Commitment, and the Compression Fee
paid by Gatherer for its Gas compressed using such additional compressor
stations or additional capacity shall not count toward the amount determined
under Section 5.1(d)(ii)(A).

 

(b)                                 The Parties acknowledge that inlet
Measurement Facilities and a slug catcher have not been installed at the System
Compressor Station referred to in the Initial Gathering Plan as the Bluestone
Compressor Station.  Shipper agrees that if it sells or otherwise transfers any
Well upstream of the Bluestone Compressor Station such that Gas owned by a third
party is being gathered to the Bluestone Compressor Station, Gatherer will
install such

 

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Measurement Facilities and a slug catcher at the Bluestone Compressor Station,
and Shipper will reimburse Gatherer’s reasonable costs of doing so.

 

Section 3.5                                   High Pressure Services.  The
Gathering System Plan will describe the High Pressure gathering pipelines that
Gatherer determines are necessary or appropriate to connect the Gathering System
to the Gas Delivery Points required by Shipper and to redeliver the volumes of
Dedicated Gas to be redelivered at such Delivery Points in the most efficient
manner (“Required High Pressure Lines”).  Gatherer shall install each such
Required High Pressure Line, together with the associated Required Compressor
Stations, as directed by Shipper and shall operate and maintain each Required
High Pressure Line (each such Required High Pressure Line so installed by
Gatherer, a “System High Pressure Line”).  Notwithstanding the foregoing,
Gatherer shall not be obligated to install any Required High Pressure Line
during the ten year period immediately prior to the scheduled termination of
this Agreement unless Shipper agrees either that this Agreement shall remain in
effect beyond the scheduled termination thereof as to such Required High
Pressure Line only and the amount determined under Section 5.1(d)(i)(A) with
respect thereto until the 10th anniversary of the placement in service of such
Required High Pressure Line.  To the extent that Shipper does not direct
Gatherer to install any Required High Pressure Line as, when, and where
described in the Gathering System Plan and as a consequence the Gathering System
is not capable of operating in accordance with the obligations of Gatherer with
respect to pressures that are set forth in Sections 8.1 and 8.2, Gatherer shall
be relieved from such obligations.  For the avoidance of doubt, Gatherer shall
have the right at any time to add additional High Pressure gathering pipelines
to the Gathering System as it deems necessary or appropriate to provide the
Services and such services as it is providing in respect of Third Party
Production.  Shipper must pay the High Pressure Gathering Fee with respect to
all its Gas that is gathered through such additional High Pressure gathering
pipelines, but such additional High Pressure Gathering Pipelines shall not be
included for purposes of calculating the Minimum High Pressure Volume
Commitment, and the High Pressure Gathering Fee paid by Gatherer for its Gas
gathered through such additional High Pressure gathering pipelines shall not
count toward the amount determined under Section 5.1(d)(i)(A).

 

Section 3.6                                   Liquids Gathering.  If Gatherer
provides Liquid Hydrocarbons gathering pursuant to Section 2.3(c), Shipper is
responsible for the construction, ownership, and operation of (a) all facilities
for the separation and/or collection of Liquid Hydrocarbons at the wellhead and
the Well site storage of such liquids and (b) the pumps located at each Receipt
Point to transfer Liquid Hydrocarbons from such storage into the Gathering
System.  Shipper shall ensure that pumps have sufficient capacity and are
operated in a manner sufficient to cause the Liquid Hydrocarbons received into
the Gathering System to be redelivered into the tanks located at the Liquid
Hydrocarbons Delivery Points.  Shipper shall cause Liquid Hydrocarbons to be
received into the Gathering System at reasonably uniform rates of flow and to
provide Gatherer reasonable notice of material increases or decreases in such
rates of flow.

 

Section 3.7                                   Production Removed for Lease
Operations.  Gatherer shall use commercially reasonable efforts to accommodate,
at the cost and expense of Shipper, any request by Shipper to redeliver to
Shipper any Production that has been received into the Gathering System that
Shipper desires to use in lease operations, including for drilling and
fractionation fuel.  Shipper shall be responsible for the construction,
ownership, and operation of facilities to

 

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transport such Production from the point of redelivery of such production from
the Gathering System to the lease sites where such Production will be used.

 

Section 3.8                                   Right of Way and Access.  Gatherer
is responsible for the acquisition of rights of way, crossing permits, licenses,
use agreements, access agreements, leases, fee parcels, and other rights in land
right necessary to construct, own, and operate the Gathering System, and all
such rights in land shall be solely for use by Gatherer and shall not be shared
with Shipper, except as otherwise agreed by Gatherer; provided that Shipper
hereby grants, without warranty of title, either express or implied, to the
extent that it has the right to do so without the incurrence of material
expense, an easement and right of way upon all lands covered by the Dedicated
Properties, for the purpose of installing, using, maintaining, servicing,
inspecting, repairing, operating, replacing, disconnecting, and removing all or
any portion of the Gathering System, including all pipelines, meters, and other
equipment necessary for the performance of this Agreement; provided, further,
that the exercise of these rights by Gatherer shall not unreasonably interfere
with Shipper’s lease operations or with the rights of owners in fee, and will be
subject to Shipper’s safety and other reasonable access requirements applicable
to Shipper’s personnel.  Shipper shall not have a duty to maintain the
underlying agreements (such as leases, easements, and surface use agreements)
that such grant of easement or right of way to Gatherer is based upon, and such
grants of easement or right of way will terminate if Shipper loses its rights to
the property, regardless of the reason for such loss of rights.  Notwithstanding
the foregoing, (i) Shipper will assist Gatherer to secure replacements for such
terminated grants of easement or right of way, in a manner consistent with the
cooperation requirements of Section 3.9, (ii) to the extent that Shipper agrees
that Gatherer’s Measurement Facilities may be located on Shipper’s Well Pad
sites, Shipper shall be responsible for obtaining any necessary rights to locate
such Measurement Facilities on such Well Pad sites, and (iii) Shipper shall use
reasonable efforts to involve Gatherer in Shipper’s negotiations with the owners
of lands covered by the Dedicated Properties so that Shipper’s surface use
agreements and Gatherer’s rights of way with respect to such lands can be
concurrently negotiated and obtained.

 

Section 3.9                                   Cooperation.  Because of the
interrelated nature of the actions of the Parties required to obtain the
necessary permits and authorizations from the appropriate Governmental
Authorities and the necessary consents, rights of way and other authorizations
from other Persons necessary to drill and complete each Planned Well and
construct the required extensions of the Gathering System to each Planned Well
Pad, the Parties agree to work together in good faith to obtain such permits,
authorizations, consents and rights of way as expeditiously as reasonably
practicable, all as provided herein.  The Parties further agree to cooperate
with each other and to communicate regularly regarding their efforts to obtain
such permits, authorizations, consents and rights of way.

 

ARTICLE 4
TERM

 

Section 4.1                                   Term.  This Agreement shall become
effective on the Effective Date and, unless terminated earlier by mutual
agreement of the Parties, shall continue in effect until the twentieth (20th)
anniversary of the Effective Date and from year to year thereafter (with the
initial term of this Agreement deemed extended for each of any such additional
year) until such time as this Agreement is terminated, effective upon an
anniversary of the Effective Date, by

 

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 notice from either Party to the other Party on or before the one hundred
eightieth (180th) Day prior to such anniversary.

 

ARTICLE 5
FEES AND CONSIDERATION

 

Section 5.1                                   Fees.

 

(a)                                 Subject to the other provisions of this
Agreement, including Section 5.1(c), Shipper shall pay Gatherer each Month in
accordance with the terms of this Agreement, for all Services provided by
Gatherer during such Month, an amount equal to the sum of the following:

 

(i)                                     The product of (A) the aggregate volume
of Gas, stated in Mcf, received by Gatherer from Shipper or for Shipper’s
account at each Receipt Point during such Month multiplied by (B) $0.30
(provided that such fee shall be discounted by fifty percent (50%) for Gas
removed from the Gathering System for use lease operations fuel in accordance
with Section 3.7) (as such fee may be increased or decreased in accordance with
Section 5.1(b), the “Gathering Fee”);

 

(ii)                                  The product of (A) the aggregate volume of
Gas, stated in Mcf, received from Shipper or for Shipper’s account entering any
System High Pressure Line during such Month multiplied by (B) $0.18 (as may be
increased or decreased in accordance with Section 5.1(b), the “High Pressure
Gathering Fee”);

 

(iii)                               The product of (A) the aggregate volume of
Gas, stated in Mcf, received from Shipper or for Shipper’s account and
compressed and dehydrated at each System Compressor Station during such Month
multiplied by (B) $0.18 (as may be increased or decreased in accordance with
Section 5.1(b), the “Compression Fee”); and

 

(iv)                              If Gatherer is providing Liquid Hydrocarbons
gathering Services pursuant to Section 2.3(c) the product of (A) the aggregate
volume of Liquid Hydrocarbons, stated in Barrels, received from Shipper or for
Shipper’s account entering the Gathering System during such Month multiplied by
(B) the fee for such Services stated in Gatherer’s Proposal Notice (as may be
increased or decreased in accordance with Section 5.1(b), the “Liquids Gathering
Fee”).

 

(b)                                 After each of the first five (5) Contract
Years, one hundred percent (100%), and after the sixth (6th) Contract Year and
each Contract Year thereafter, fifty-five percent (55%), of the Gathering Fee,
High Pressure Gathering Fee, Compression Fee, and Liquids Gathering Fee shall be
adjusted up or down on an annual basis in proportion to the percentage change,
from the preceding year, in the All Items Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average, 1982-84 = 100, as published by the
United States Department of Labor, Bureau of Labor Statistics (“CPI”). Such
adjustment shall be made effective upon the first Day of each Contract Year
commencing in the Contract Year beginning in 2014, and shall reflect the
percentage change in the CPI as it existed for June of the preceding Contract
Year from the CPI for the second immediately preceding June; provided, however,
that the Gathering Fee, High Pressure Gathering Fee, Compression Fee, and
Liquids Gathering Fee

 

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shall never be less than the initial fees stated in Section 5.1(a); nor shall
such fees be increased or decreased by more than 3% in any given Contract Year.

 

(c)                                  Subject to the other provisions of this
Agreement, including Section 5.1(c), Shipper shall pay Gatherer the actual cost
of electricity used as Fuel and allocated to Shipper in accordance with
Section 6.2.

 

(d)                                 Notwithstanding the foregoing provisions of
this Section 5.1; regardless of whether Shipper has any Firm Capacity
Production:

 

(i)                                     If, with respect to any Contract Year in
which there is a Minimum High Pressure Volume Commitment, Shipper shall pay to
Gatherer, on or before the 30th Day after receipt of Gatherer’s invoice therefor
(which shall be delivered not more than sixty (60) Days after the end of the
relevant Contract Year), an amount equal to the excess, if any, of:

 

(A)                               the product of the Minimum High Pressure
Volume Commitment for such Contract Year multiplied by the High Pressure
Gathering Fee in effect for such Contract Year, over

 

(B)                               the product of the High Pressure Gathering Fee
in effect for such Contract Year multiplied by the aggregate of the volumes of
Dedicated Production, stated in Mcf, delivered or Made Available for Delivery at
each System High Pressure Line during such Contract Year.

 

(ii)                                  If, with respect to any Contract Year in
which there is a Minimum Compression Volume Commitment, Shipper shall pay to
Gatherer, on or before the 30th Day after receipt of Gatherer’s invoice therefor
(which shall be delivered not more than sixty (60) Days after the end of the
relevant Contract Year), an amount equal to the excess, if any, of:

 

(A)                               the product of the Minimum Compression Volume
Commitment for such Contract Year multiplied by the Compression Fee in effect
for such Contract Year, over

 

(B)                               the product of the Compression Fee in effect
for such Contract Year multiplied by the aggregate of the volumes of Dedicated
Production, stated in Mcf, delivered or Made Available for Delivery at each
System Compressor Station during such Contract Year.

 

(e)                                  All Services for which specific prices are
not set forth in Section 5.1(a), including any required treating of Production
and the handling and treatment of Condensate recovered from the Gathering System
but excluding Liquid Hydrocarbons gathering, shall be priced on a cost of
service basis as set forth in this Section 5.1(e).  In addition, notwithstanding
the foregoing provisions of this Section 5.1 or any other provision to the
contrary in this Agreement, Gatherer shall have the right to elect to be paid
for some or all Services, but excluding Liquid Hydrocarbons gathering, on a cost
of service basis to the extent set forth in this Section 5.1(e).  Gatherer shall
have the right to elect to be paid on a cost of service basis (i) for

 

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any Services other than Services offered in respect of the Wells and Planned
Wells set forth in the Initial Development Plan, all of which Services shall be
performed for the volumetric fees, subject to the minimum volumes, set forth in
Section 5.1(a) and Section 5.1(c), and (ii) any compression services in respect
of the Wells and Planned Wells set forth in the Initial Development Plan if
Gatherer determines in good faith that, if such services were to be performed
for the volumetric fees, and subject to the minimum volumes, set forth in
Section 5.1(a) and Section 5.1(c), it would receive a rate of return on its
capital expenditures for such System Compressor Station of less than 13% over
the period of 84 months after such System Compressor Station is placed into
service.  With respect to such Services, Gatherer may elect, by notice to
Shipper at least three (3) Months prior to the placement in service of the
relevant facilities or parts of the Gathering System, or, in the case of any
gathering facilities by Gatherer acquired pursuant to Section 2.5(a), in the
notice given by Gatherer in accordance with such Section that Gatherer will
acquire such gathering facilities, to be paid on a cost of service basis for the
Services specified in such notice commencing with their placement in service or
with the acquisition of such facilities, as applicable, and continuing for the
remaining term of this Agreement, but only with respect to the facilities so
acquired and/or discrete parts of the Gathering System (each, a “CS Facility”)
that are placed into service after such notice.  The Services specified in such
notice may be of any scope determined by Gatherer in its sole discretion and may
include all eligible Services or any part thereof and may include, by way of
example only, gathering Services with respect to a particular Well or group of
Wells, compression Services and/or High Pressure Services with respect to a
particular System Compressor Station and/or System High Pressure Line, all
Services of a particular type, and any other subset of the Services determined
by Gatherer, in each case subject to the foregoing sentence.  All Services
provided from time to time on a cost of service basis shall be bundled together
for purposes of calculating a single Monthly cost of service fee (the “Cost of
Service Fee”), which shall be calculated with respect to each Contract Year as
set forth in Exhibit H attached hereto.

 

ARTICLE 6
ALLOCATIONS

 

Section 6.1                                   Allocation of Lost and Unaccounted
For Gas.  Lost and Unaccounted For Gas shall be allocated, on a Monthly basis,
among all Receipt Points on each System Segment pro rata based upon the Thermal
Content of all Gas received at all System Receipt Points on such System Segment
during such Month.  Total Lost and Unaccounted For Gas with respect to each
System Segment shall be determined by subtracting from the sum of the total
Thermal Content of Gas received at all System Receipt Points on such System
Segment during such Month the sum of (i) the Thermal Content of Gas actually
delivered to all System Delivery Points on such System Segment during such
Month, (ii) the Thermal Content of Condensate recovered from such System Segment
during such Month (other than Condensate vaporized and reinjected into the Gas
stream), and (iii) the Thermal Content of Gas used for Fuel on such System
Segment, if any, during such Month.  Lost and Unaccounted For Gas shall be
allocated, on a Monthly basis, to each Receipt Point based upon a fraction, the
numerator of which is the total Thermal Content of Gas measured at such Receipt
Point during such Month, and the denominator of which is the total Thermal
Content of Gas measured at all System Receipt Points on the System Segment on
which such Receipt Point is located during such Month.

 

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Section 6.2                                   Allocation of Fuel.  Gatherer
shall allocate Fuel (included Gas used as Fuel and the cost of electricity used
as Fuel), on a Monthly basis, to each Receipt Point upstream of a System
Compressor Station on a pro rata basis, based upon a fraction, the numerator of
which is the total volume of Gas measured at such Receipt Point during such
Month, and the denominator of which is the total volume of Gas measured at all
System Receipt Points upstream of such System Compressor Station during such
Month.  Gas consumed for Fuel shall be determined based actual measurements of
Fuel consumption.

 

Section 6.3                                   Allocation of Condensate Recovered
from the Gathering System.  Gatherer shall allocate the volume of Condensate
collected from any System Segment (or from facilities at compressor stations
downstream of System Delivery Points on such System Segment and allocated to the
Gathering System by the operator of such compressor station) to each System
Receipt Point on such System Segment during the applicable Month based on a
fraction, the numerator of which is the theoretical volume of Condensate
attributable to such System Receipt Point during such Month and the denominator
of which is the total theoretical volume of Condensate for all such System
Receipt Points on such System Segment during such Month.  The theoretical volume
of Condensate at each System Receipt Point shall be determined by multiplying
the total volume of Gas (in Mcf) received at the applicable System Receipt Point
during the applicable Month by the Gallons per Mcf of pentanes and heavier
components in such Gas determined at the relevant System Receipt Point on such
System Segment.

 

Section 6.4                                   Allocation of Liquid Hydrocarbons.

 

(a)                                 Subject to Section 6.4(b), if Gatherer is
providing Liquid Hydrocarbons gathering pursuant to Section 2.3(c), Gatherer
shall allocate the volume of Liquid Hydrocarbons gathered to or delivered into
storage tanks at each Delivery Point to each System Receipt Point upstream of
such Delivery Point during the applicable Month based on a fraction, the
numerator of which is the volume of Liquid Hydrocarbons received at such System
Receipt Point and the numerator of which is the total volumes of Liquid
Hydrocarbons received at all such System Receipt Points during such Month.

 

(b)                                 If Gatherer is providing Liquid Hydrocarbons
gathering pursuant to Section 2.3(c), Gatherer shall not commingle Shipper’s
Liquid Hydrocarbons received at the Receipt Points with Liquid Hydrocarbons
constituting Third Party Production if the resulting commingled stream would
have a market value that is materially less than the market value a stream
composed solely of Shipper’s Liquid Hydrocarbons would have, unless Gatherer has
provided by notice to Shipper a written allocation methodology that ensures that
Shipper is allocated a portion of the commingled stream that would enable it to
realize a market value that reasonably approximates the market value of such
stream composed solely of Shipper’s Liquid Hydrocarbons.  From and after the
delivery of such notice, Gatherer shall have the right to commingle such Liquid
Hydrocarbons and shall apply such allocation methodology to such commingled
stream.

 

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ARTICLE 7
CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

 

Section 7.1                                   Operational Control of Gatherer’s
Facilities.  Gatherer shall design, construct, own, operate, and maintain the
Gathering System at its sole cost and risk.  Gatherer shall be entitled to full
and complete operational control of its facilities and shall be entitled to
schedule deliveries and to operate and reconfigure its facilities in a manner
consistent with its obligations under this Agreement.

 

Section 7.2                                   Maintenance.  Gatherer shall be
entitled, without liability, to interrupt its performance hereunder to perform
necessary or desirable inspections, pigging, maintenance, testing, alterations,
modifications, expansions, connections, repairs or replacements to its
facilities as Gatherer deems necessary (“Maintenance”), with reasonable notice
provided to Shipper, except in cases of emergency where such notice is
impracticable or in cases where the operations of Shipper will not be affected. 
Before the beginning of each calendar year, Gatherer shall provide Shipper in
writing with a projected schedule of the Maintenance to be performed during the
year and the anticipated date of such Maintenance.  On or before the 10th Day
before the end of each Month, Gatherer shall provide Shipper with its projected
maintenance schedule for the following Month.

 

Section 7.3                                   Firm Capacity Production; Capacity
Allocations on the Gathering System.  Subject to the capacity allocations set
forth in this Section 7.4, Gatherer has the right to contract with other Persons
for the delivery of Third Party Production to the Gathering System, including
the delivery of Firm Capacity Production.  If the volume of Gas or Liquid
Hydrocarbons, as applicable, available for delivery into any System Segment
exceeds the capacity of such System Segment at any point relevant to Gatherer’s
service to Shipper hereunder, then Gatherer shall interrupt or curtail receipts
of Production in accordance with the following:

 

(a)                                 First, Gatherer shall curtail all
Interruptible Production prior to curtailing Firm Capacity Production.

 

(b)                                 Second, if additional curtailments are
required beyond Section 7.4(a) above, Gatherer shall curtail Firm Capacity
Production.  In the event Gatherer curtails some, but not all Firm Capacity
Production on a particular Day, Gatherer shall allocate the capacity of the
applicable point on the relevant System Segment available to such shippers of
Firm Capacity Production, including Dedicated Production, on a pro rata basis
based upon Shipper’s and the other shippers’ of Firm Capacity Production average
of the confirmed nominations for the previous fourteen (14) Day period of Firm
Capacity Production prior to the event causing the curtailment.

 

Section 7.4                                   Arrangements After Redelivery.  It
shall be Shipper’s obligation to make any required arrangements with other
parties for delivery of Shipper’s Production to the Receipt Points and Delivery
Point Gas following delivery by Gatherer at the Delivery Points.

 

Section 7.5                                   Line Pack.  To the extent that it
is necessary, in order for Gatherer to commence operations of new segments of
the Gathering System, for Production to be used as line fill, Shipper shall
provide such line fill to Gatherer.

 

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ARTICLE 8
PRESSURES AT RECEIPT POINTS AND DELIVERY POINTS

 

Section 8.1                                   Pressures at Receipt Points. 
Gatherer shall not operate the Gas Gathering System in such a manner as to cause
the average pressure at any Receipt Point in any Month to exceed the lower of
(a) two hundred (200) psig and (b) fifty (50) psig above the average suction
pressure, as measured at the first separator or slug catcher upstream of any
compression suction valve or any other valve that can be partially closed, at
the nearest System Compressor Station downstream of such Receipt Point during
such Month.  Subject to the foregoing, Shipper shall deliver or cause to be
delivered Gas to each Receipt Point at sufficient pressure to enter the
Gathering System against its operating pressure.

 

Section 8.2                                   Pressures at Delivery Points.  All
System Compressor Stations (a) shall be designed for a suction pressure of from
one hundred (100) psig to one hundred forty (140) psig and (b) shall be designed
for and shall be operated at a discharge pressure sufficient to effect delivery
to the relevant Downstream Pipeline or Processing Plant.

 

Section 8.3                                   Shipper Facilities.  Shipper, at
its own expense, shall construct, equip, maintain, and operate all facilities
(including separation, line heaters, and/or compression equipment) necessary to
deliver Dedicated Production to Gatherer at the Receipt Points.  Shipper shall
install and maintain sufficient pressure regulating equipment upstream of the
Receipt Points in order to keep the pressure of the Gas delivered to Gatherer at
the Receipt Points from exceeding the maximum allowable operating pressure at
the applicable Receipt Point.  Gatherer shall design the Gas Gathering System to
ANSI 300 standards or higher such that the maximum allowable operating pressure
at each Receipt Point shall be not less than 740 psig.

 

ARTICLE 9
NOMINATION AND BALANCING

 

Section 9.1                                   Gatherer Notifications.  On or
before the fifth (5th) Day prior to the end of each Month, Gatherer shall
provide written notice to Shipper of Gatherer’s good faith estimate of any
capacity allocations or curtailments for the any System Segment, if any, that,
based on then currently available information, Gatherer anticipates will be
required or necessary during the next Month, including as a result of any
Maintenance.  Gatherer shall use all reasonable efforts to provide 48 hours
advance notice of any actual event requiring allocation or curtailment,
including Maintenance.

 

Section 9.2                                   Nominations.  On or before the
second (2nd) Day prior to the end of each Month, Shipper shall provide to
Gatherer nominations for deliveries of Dedicated Production to the Receipt
Points and the delivery of Delivery Point Gas to the specified Delivery Points
during the next Month.  Shipper shall have the right to change such nominations
at any time subject to the requirements of the Persons receiving Delivery Point
Gas downstream of the Delivery Points and subject to changes in wellhead volumes
being delivered into the system.

 

Section 9.3                                   Balancing.  Gatherer will maintain
records of any Daily and Monthly variances (“Imbalances”) between the volume of
Dedicated Gas received at the Receipt Points and the volumes of Delivery Point
Gas, plus Lost and Unaccounted for Gas, Fuel, and

 

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Condensate allocated to Shipper.  Shipper shall make such changes in its
nominations as Gatherer may from time to time reasonably request to maintain
Daily and Monthly balances or to correct an Imbalance.  Shipper shall reimburse
Gatherer for any cost, penalty, or fee arising from any Imbalance assessed
against Gatherer by any Person receiving Dedicated Production downstream of the
Delivery Points, except to the extent such Imbalance was caused by Gatherer.
Upon the termination of this Agreement or at such other time as the Parties
agree the Parties shall cash out any cumulative Imbalance using the applicable
Index Price for the prior Month.

 

ARTICLE 10
QUALITY

 

Section 10.1                            Receipt Point Gas Quality
Specifications.  Gas delivered by Shipper to the Receipt Points shall meet the
following specifications (collectively, the “Gas Quality Specifications”):

 

(a)                                 The Gas shall not contain any of the
following in excess of: one-quarter (1/4) grain of hydrogen sulfide per hundred
(100) cubic feet; one (1) grain of total sulfur per hundred (100) cubic feet;
two one-hundredths of one percent (0.02%) by volume of oxygen; or two percent
(2%) by volume of nitrogen.

 

(b)                                 The total of all non-hydrocarbon gases shall
not exceed three percent (3%) by volume.

 

(c)                                  The temperature of the Gas at the Receipt
Point shall not be in excess of one hundred twenty (120) degrees Fahrenheit.

 

(d)                                 The Gas shall be free of solids, sand, salt,
dust, gums, crude oil, and hydrocarbons in the liquid phase, and other
objectionable substances which may be injurious to pipelines or which may
interfere with the measurement, transmission or commercial utilization of said
Gas.

 

Except for items (a) through (d) above, such Gas shall meet the most restrictive
quality specifications required from time to time by the Downstream Pipelines
receiving Delivery Point Gas, except for water vapor content, for which there
shall be no specification applicable at the Receipt Points.

 

Section 10.2                            Non-Conforming Gas.   If any Gas
delivered by Shipper fails at any time to conform to the Gas Quality
Specifications, then Gatherer will have the right to immediately discontinue
receipt of such non-conforming Gas so long as such Gas continues to be
non-conforming.  Shipper agrees to undertake commercially reasonable measures to
eliminate the cause of such non-conformance.  If Shipper fails to remedy such
non-conformance, but such Gas conforms to all specifications other than
hydrocarbon dew point and/or Gross Heating Value, then Gatherer agrees to
(i) use commercially reasonable efforts to blend and commingle such Gas with
other Gas in the Gathering System so that it meets the applicable specifications
and (ii) if such Gas cannot be brought into compliance with such blending will
continue to accept and redeliver such Gas to the Delivery Points that will
accept such non-conforming Gas as long as (A) no harm is done to the Gathering
System, (B) no harm is done to other shippers or their Gas, and (C) other
shippers are not prevented from nominating Gas to their preferred Delivery
Point.  In the event that Gatherer takes receipt of non-conforming Gas, Shipper
agrees to be responsible

 

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for, and to defend, indemnify, release, and hold Gatherer and its Affiliates,
directors, officers, employees, agents, consultants, representatives, and
invitees harmless from and against, all claims and losses of whatever kind and
nature resulting from such non-conforming Gas.

 

Section 10.3                            Delivery Point Gas Quality
Specifications.  Gatherer shall redeliver the Delivery Point Gas that it is
required to redeliver to Shipper at the Delivery Points meeting the Gas Quality
Specifications, provided that Shipper delivers Gas to Gatherer at the Receipt
Points which meets the Gas Quality Specifications.

 

Section 10.4                            Liquid Hydrocarbons Quality
Requirements.  Liquid Hydrocarbons delivered by Shipper to the Receipt Points
shall have gravity, viscosity, and other properties such that it is readily
susceptible to gathering and handling through Gatherer’s existing facilities and
such that it will not adversely affect the quality of Liquid Hydrocarbons
received from other shippers or cause any material disadvantage to other
shippers or Gatherer.  If any Liquid Hydrocarbons delivered by Shipper fails at
any time to conform to the foregoing requirements, then Gatherer will have the
right to immediately discontinue receipt of such non-conforming Liquid
Hydrocarbons so long as such Liquid Hydrocarbons continues to be
non-conforming.  Shipper agrees to undertake commercially reasonable measures to
eliminate the cause of such non-conformance.  Gatherer shall ensure that the
Liquid Hydrocarbons of other shippers are also required to meet the foregoing
standards.

 

Section 10.5                            Greenhouse Gas Emissions. 
Notwithstanding anything contained in this Agreement to the contrary, in the
event there is an enactment of, or change in, any law after the Effective Date
of this Agreement which, in Gatherer’s reasonable determination, results in
(a) a Governmental Authority requiring Gatherer to hold or acquire emission
allowances or their equivalent related to the carbon dioxide content or
emissions or the greenhouse gas content or emissions attributable to Shipper’s
Production and/or the gathering, or transportation of such Production
(collectively, “Shipper’s GHG Emissions”) or (b) Gatherer incurring any costs or
expenses attributable to Shipper’s Production, including any costs or expenses
for disposal or treating of carbon dioxide attributable to such Production, or
any other additional economic burden being placed on Gatherer in connection with
or related to Shipper’s GHG Emissions, including any tax, assessment, or other
cost or expense (collectively, “Emissions Charges”), then (i) Shipper will use
reasonable efforts to provide any required emissions allowances or their
equivalent to Gatherer in a timely manner (and shall indemnify and hold harmless
Gatherer from against any Losses, including any expenses incurred by Gatherer in
acquiring such allowances in the marketplace, arising out of Shipper’s failure
to so provide such allowances) and (ii) Shipper shall be fully responsible for
such Emissions Charges and shall reimburse Gatherer for any Emissions Charges
paid by Gatherer within ten (10) Days of receipt of Gatherer’s invoice.

 

ARTICLE 11
MEASUREMENT EQUIPMENT AND PROCEDURES

 

Section 11.1                            Equipment.  Gatherer shall install, own,
operate, and maintain Measurement Facilities to measure Production at all the
System Receipt Points and shall ensure that the relevant Downstream Pipeline or
Processing Plant installs, owns, operates, and maintains Measurement Facilities
at the System Delivery Points (but downstream of any slug catcher) for Gas. 
Measurement Facilities at the Receipt Points shall meet current industry
standards for

 

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custody transfer measurement.  Shipper shall have the right to install check
Measurement Facilities at each Receipt Point, including the right to install
check measurement equipment on Gatherer’s meter tubes and orifice unions.

 

Section 11.2                            Gas Measurement Standards.  The
following standards shall apply to the measurement of Gas hereunder:

 

(a)                                 Where measurement is by orifice meter, all
fundamental constants, observations, records, and procedures involved in the
determination and/or verification of the quantity and other characteristics of
the Gas delivered hereunder shall be in accordance with the standards prescribed
in the latest edition of A.G.A. Report No. 3 (ANSI/API 2530) “Orifice Metering
of Natural Gas” with any revisions, amendments or supplements as may be mutually
acceptable to the Parties.

 

(b)                                 Where measurement is by ultrasonic meter,
all fundamental constants, observations, records, and procedures involved in the
determination and/or verification of the quantity and other characteristics of
the Gas delivered hereunder shall be in accordance with the standards prescribed
in the latest edition of A.G.A. Report No. 9 “Measurement of Gas by Multi Path
Ultrasonic Meters” with any revisions, amendments or supplements as may be
mutually acceptable to the Parties.

 

(c)                                  The changing and integration of the charts
(if utilized for measurement purposes hereunder) and calibrating and adjusting
of meters shall be performed by Gatherer.

 

Section 11.3                            Liquid Hydrocarbons Measurement
Standards.  The following standards shall apply to the measurement of Liquid
Hydrocarbons hereunder:

 

(a)                                 Measurement Devices used in the measurement
of Liquid Hydrocarbons shall be designed, installed, and operated in accordance
with specifications of the American Petroleum Institute Manual of Petroleum
Measurement Standards or other applicable industry standards, as amended from
time to time.

 

(b)                                 The quality and gravity of Liquid
Hydrocarbons shall be determined from laboratory analyses of representative
samples following the calculation procedures in American Petroleum Institute
Manual of Petroleum Measurement Standards or other applicable industry standards

 

Section 11.4                            Gas Measurement.

 

(a)                                 The unit of volume for measurement of Gas
delivered hereunder shall be one Mcf at a base temperature of 60 degrees
Fahrenheit and at an absolute pressure of 14.73 psia and without adjustment for
water vapor content.  It is agreed that for the purposes of measurement and
computations hereunder, (a) the atmospheric pressure shall be based on the
atmospheric pressure determined and used by Downstream Pipelines at the Delivery
Point(s) regardless of the atmospheric pressure at which the Gas is measured and
(b) all measurements and testing performed hereunder shall all be made by
Gatherer in accordance with applicable rules, regulations, and orders.

 

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(b)                                 Gatherer’s Measurement Facilities at the
System Receipt Points shall be spot samplers, continuous samplers, or gas
chromatographs, as Gatherer shall in its discretion determine, subject to the
minimum requirements set forth in the following three sentences.  Gatherer shall
at least take monthly spot samples at all Measurement Facilities located at
System Receipt Points where Gas is received into the Gathering System from a
single Well.  At all Measurement Facilities located at System Receipt Points
where Gas is received into the System from more than one Well, Gatherer shall at
least (i) take monthly spot samples if such Measurement Facilities measure less
than five thousand (5,000) Mcf per Day, (ii) use continuous samplers if such
Measurement Facilities measure from five thousand (5,000) to twenty thousand
(20,000) Mcf per Day, and (iii) use gas chromatographs if such Measurement
Facilities measure more than twenty thousand (20,000) Mcf per Day.  Measurement
at the System Delivery Points shall be done using continuous samplers (for
Measurement Facilities metering less than twenty thousand (20,000) Mcf per Day)
and online gas chromatographs (for Measurement Facilities metering twenty
thousand (20,000) Mcf or more per Day).  Gatherer shall procure or cause to be
procured a sample of Gas at each System Delivery Point and analyze the samples
by chromatographic analysis to determine the component content (mole percent),
specific gravity, and the Thermal Content thereof.  These determinations shall
be made utilizing the following standards: (i) Gas Processors Association
Obtaining Natural Gas Samples for Analysis by Gas, Publication No. 2166 as
amended or supplemented from time to time and (ii) Gas Processors Association
Analysis for Natural Gas and Similar Gaseous Mixtures by Gas Chromatography,
Publication No. 2161 as amended or supplemented from time to time, or (iii) any
other tests that are mutually agreed by Shipper and Gatherer.

 

(c)                                  The specific gravity of Gas shall be
measured by a standard gravity balance in accordance with the provisions of the
Natural Gas Processors Association Publication No. 3130, entitled “Standard
Method for Determining the Specific Gravity of Gas”, or by a gravitometer
employing the “Momentum Method” as described in Chapter VII, “Determination of
Specific Gravity”, of the American Gas Association Gas Measurement Manual, 1963,
in each case, as such may be amended from time to time.  The specific gravity
will be determined and calculated to the nearest one-thousandth (0.001).

 

(d)                                 The temperature of Gas shall be determined
by means of a recording thermometer recording the temperature of such Gas
flowing through each measurement meter.  The average temperature to the nearest
one degree (1º) Fahrenheit, obtained while Gas is being delivered, will be the
applicable flowing Gas temperature for the period under consideration.

 

(e)                                  The deviation of the Gas from Ideal Gas
Laws shall be determined in accordance with the A.G.A. Par Research Project
NX-19 Report “Manual for the Determination of Supercompressibilty Factors for
Natural Gas”, Reprinted 1976, if the composition of the Gas is such to render
this procedure applicable.

 

(f)                                   Physical constants required for making
calculations hereunder shall be taken from the Gas Processors Association Table
of Physical Properties for Hydrocarbons and Other Compounds of Interest to the
Natural Gas Industry, Publication No. 2145 as amended or supplemented from time
to time.  Physical constants for the hexanes and heavier hydrocarbons portion of
hydrocarbon mixtures shall be assumed to be the same as the physical constants
for hexane.

 

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Section 11.5                            Notice of Measurement Facilities
Inspection and Calibration.  Each Party shall give reasonable notice to the
other Party in order that the other Party may, at its option, have
representatives present to observe any reading, inspecting, testing, calibrating
or adjusting of Measurement Facilities used in measuring or checking the
measurement of receipts or deliveries of Production under this Agreement.  The
official electronic data from such Measurement Facilities shall remain the
property of the Measurement Facilities’ owner, but copies of such records shall,
upon written request, be submitted, together with calculations and flow computer
configurations therefrom, to the requesting Party for inspection and
verification.

 

Section 11.6                            Measurement Accuracy Verification.

 

(a)                                 Each Party shall verify the accuracy of all
Measurement Facilities owned by such Party at intervals based upon the following
schedule:

 

(i)                                     semi-annually for Gas Measurement
Facilities metering less than one thousand (1,000) Mcf per Day;

 

(ii)                                  quarterly for Gas Measurement Facilities
metering between one thousand (1,000) and five thousand (5,000) Mcf per Day;

 

(iii)                               monthly for Gas Measurement Facilities
metering more than five thousand (5,000) Mcf per Day; and

 

(iv)                              quarterly for Liquid Hydrocarbons Measurement
Facilities.

Neither Party shall be required to cause adjustment or calibration of such
equipment more frequently than once per Month, unless a special test is
requested pursuant to Section 11.6.

 

(b)                                 If, during any test of the Measuring
Facilities, an adjustment or calibration error is found which results in an
incremental adjustment to the calculated flow rate through each meter run in
excess of one percent (1%) of the adjusted flow rate (whether positive or
negative and using the adjusted flow rate as the percent error equation
denominator), then any previous recordings of such equipment shall be corrected
to zero error for any period during which the error existed (and which is either
known definitely or agreed to by the Parties) and the total flow for the period
redetermined in accordance with the provisions of Section 11.7.  If the period
of error condition cannot be determined or agreed upon between the Parties, such
correction shall be made over a period extending over the last one half of the
time elapsed since the date of the prior test revealing the one percent (1%)
error.

 

(c)                                  If, during any test of any Measurement
Facilities, an adjustment or calibration error is found which results in an
incremental adjustment to the calculated hourly flow rate which does not exceed
one percent (1%) of the adjusted flow rate, all prior recordings and electronic
flow computer data shall be considered to be accurate for quantity determination
purpose.

 

Section 11.7                            Special Tests.  In the event a Party
desires a special test (a test not scheduled by a Party under the provisions of
Section 11.5) of any Measurement Facilities, seventy-two (72) hours advance
notice shall be given to the other Party and both Parties shall

 

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cooperate to secure a prompt test of the accuracy of such equipment.  If the
Measurement Facilities tested are found to be within the range of accuracy set
forth in Section 11.5(b), then the Party that requested the test shall pay the
costs of such special test including any labor and transportation costs
pertaining thereto.  If the Measurement Facilities tested are found to be
outside the range of accuracy set forth in Section 11.5(b), then the Party that
owns such Measurement Facilities shall pay such costs and perform the
corrections according to Section 11.7.

 

Section 11.8                            Metered Flow Rates in Error.  If, for
any reason, any Measurement Facilities are (i) out of adjustment, (ii) out of
service, or (iii) out of repair and the total calculated flow rate through each
meter run is found to be in error by an amount of the magnitude described in
Section 11.5, the total quantity of Production delivered shall be determined in
accordance with the first of the following methods which is feasible:

 

(a)                                 By using the registration of any mutually
agreeable check metering facility, if installed and accurately registering
(subject to testing as provided for in Section 11.5);

 

(b)                                 Where multiple meter runs exist in series,
by calculation using the registration of such meter run equipment; provided that
they are measuring Production from upstream and downstream headers in common
with the faulty metering equipment, are not controlled by separate regulators,
and are accurately registering;

 

(c)                                  By correcting the error by re-reading of
the official charts, or by straightforward application of a correcting factor to
the quantities recorded for the period (if the net percentage of error is
ascertainable by calibration, tests or mathematical calculation); or

 

(d)                                 By estimating the quantity, based upon
deliveries made during periods of similar conditions when the meter was
registering accurately.

 

Section 11.9                            Record Retention.  The Party owning the
Measurement Facilities shall retain and preserve all test data, charts, and
similar records for any calendar year for a period of at least twenty-four (24)
Months following the end of such calendar year unless applicable law or
regulation requires a longer time period or the Party has received written
notification of a dispute involving such records, in which case records shall be
retained until the related issue is resolved.

 

Section 11.10                     Access.

 

(a)                                 Gatherer shall contract with eLynx
Technologies or a provider of comparable services reasonably satisfactory to
Shipper (the “Monitoring Services Provider”) for remote monitoring of Gas
Measurement Facilities, including monitoring of measurement data on an hourly
(or more frequent) basis for flow rate, meter pressures, meter temperature,
orifice diameter, Gross Heating Value, and composition for importation into
PRAMS Plus production software or comparable production software (“Remote
Monitoring Data”).

 

(b)                                 Gatherer shall (i) provide the Monitoring
Services Provider access to all of Gatherer’s radio and telephone infrastructure
to access and gather all Remote Monitoring Data and (ii) cause the Monitoring
Services Provider to allow Shipper to view and access all Remote

 

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Monitoring Data on the Monitoring Service Provider’s system, including the
ability to poll for Remote Monitoring Data through the Monitoring Services
Provider’s system.

 

(c)                                  Gatherer shall provide Shipper 120 Days’
notice of any termination by Gatherer of its contract with any Monitoring
Services Provider.

 

ARTICLE 12
NOTICES

 

Section 12.1                            Notices.  Unless otherwise provided
herein, any notice, request, invoice, statement, or demand which either Party
desires to serve upon the other regarding this Agreement shall be made in
writing and shall be considered as delivered (i) when hand delivered, or
(ii) when delivery is confirmed by pre-paid delivery service (such as FedEx,
UPS, DHL or a similar delivery service), or (iii) if mailed by United States
certified mail, postage prepaid, three (3) Business Days after mailing, or
(iv) if sent by facsimile transmission, when receipt is confirmed by the
equipment of the transmitting Party, or (v) when sent via email; provided, if
sent by email after normal business hours or if receipt of a facsimile
transmission is confirmed after normal business hours, receipt shall be deemed
to be the next Business Day.  Notwithstanding the foregoing, if a Party desires
to serve upon the other a notice of default under this Agreement, or if Shipper
desires to serve upon Gatherer a Connection Notice, the delivery of such notice
shall be considered effective under this 0 only if delivered by any method set
forth in items (i) through (iv) above.  Any notice shall be given to the other
Party at the following address, or to such other address as either Party shall
designate by written notice to the other:

 

Shipper:

ANTERO RESOURCES CORPORATION

 

1625 17th Street

 

Denver, Colorado 80202

 

 

 

Attn: Chief Financial Officer

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

With copy to:

For gas control, nominations & balancing:

 

Manager of Gas Marketing

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

 

For accounting, financial, and legal:

 

Controller

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

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Gatherer:

ANTERO RESOURCES MIDSTREAM LLC

 

1625 17th Street

 

Denver, Colorado 80202

 

 

 

Attn: Chief Financial Officer

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

 

For gas control, nominations & balancing:

 

Manager of Gas Marketing

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

 

For accounting, financial, and legal:

 

Controller

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

ARTICLE 13
PAYMENTS

 

Section 13.1                            Invoices.  Not later than the tenth
(10th) Day following the end of each Month, Gatherer shall provide Shipper with
a detailed statement setting forth the volume and Thermal Content of Gas and, if
applicable, the volume of Liquid Hydrocarbons received by Gatherer at the
Receipt Points in such Month, the volume and Thermal Content of Delivery Point
Gas allocated to Shipper and, if applicable, the volume of Liquid Hydrocarbons
redelivered to Shipper in such Month, the quantity of Gas and the cost of
electricity used as Fuel allocated to Shipper in such Month, the volume and
Thermal Content of Lost and Unaccounted For Gas for such Month, and the
Gathering Fee, the High Pressure Gathering Fee, the Compression Fee, the Liquids
Gathering Fee, and the Cost of Service Fee with respect to such Month, together
with measurement summaries and the amount of any Imbalances and all relevant
supporting documentation, to the extent available on such tenth (10th) Day (with
Gatherer being obligated to deliver any such supporting documentation that is
not available on such tenth (10th) Day as soon as it becomes available). 
Shipper shall make payment to Gatherer by the last Business Day of the Month in
which such invoice is received.  Such payment shall be made by wire transfer
pursuant to wire transfer instructions delivered by Gatherer to Shipper in
writing from time to time.  If any overcharge or undercharge in any form
whatsoever shall at any time be found and the invoice therefor has been paid,
Gatherer shall refund any amount of overcharge, and Shipper shall pay any amount
of undercharge, within thirty (30) Days after final determination thereof,
provided, however, that no retroactive adjustment will be made beyond a period
of twenty-four (24) Months from the date of a statement hereunder.

 

Section 13.2                            Right to Suspend on Failure to Pay.  If
any undisputed amount due hereunder remains unpaid for sixty (60) Days after the
due date, Gatherer shall have the right to suspend or discontinue Services
hereunder until any such past due amount is paid.

 

Section 13.3                            Audit Rights.  Either Party, on not less
than thirty (30) Days prior written notice to the other Party, shall have the
right at its expense, at reasonable times during normal

 

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business hours, but in no event more than twice in any period of twelve (12)
consecutive Months, to audit the books and records of the other Party to the
extent necessary to verify the accuracy of any statement, allocation,
measurement, computation, charge, payment made under, or obligation or right
pursuant to this Agreement.  The scope of any audit shall be limited to
transactions affecting Dedicated Production and Delivery Point Gas hereunder and
shall be limited to the twenty-four (24) Month period immediately prior to the
Month in which the notice requesting an audit was given.  All statements,
allocations, measurements, computations, charges, or payments made in any period
prior to the twenty-four (24) Month period immediately prior to the Month in
which the audit is requested shall be conclusively deemed true and correct and
shall be final for all purposes.

 

Section 13.4                            Payment Disputes.  In the event of any
dispute with respect to any payment hereunder, Shipper shall make timely payment
of all undisputed amounts, and Gatherer and Shipper will use good faith efforts
to resolve the disputed amounts within sixty (60) Days following the original
due date.  Any amounts subsequently resolved shall be due and payable within ten
(10) Days of such resolution.

 

Section 13.5                            Interest on Late Payments.  In the event
that Shipper shall fail to make timely payment of any sums, except those
contested in good faith or those in a good faith dispute, when due under this
Agreement, interest will accrue at an annual rate equal to ten percent (10%)
from the date payment is due until the date payment is made.

 

Section 13.6                            Credit Assurance.  Gatherer shall apply
consistent evaluation practices to all similarly situated shippers to determine
the new Shipper’s financial ability to perform its payment obligations under
this Agreement.

 

(a)                                 If Gatherer has reasonable grounds for
insecurity regarding the performance of any obligation by Shipper under this
Agreement (whether or not then due), Gatherer may demand Adequate Assurance of
Performance from Shipper, which Adequate Assurance of Performance shall be
provided to Gatherer within five (5) Days after written request.  If Shipper
fails to provide such Adequate Assurance of Performance within such time, then
Gatherer may suspend its performance under this Agreement until such Adequate
Assurance of Performance is provided.  However, any action by Gatherer shall not
relieve Shipper of its payment obligations.  The exercise by Gatherer of any
right under this Section 13.6 shall be without prejudice to any claims for
damages or any other right under this Agreement.  As used herein, “Adequate
Assurance of Performance” means any of the following, in Gatherer’s reasonable
discretion:

 

(i)                                     an irrevocable standby letter of credit
in an amount not to exceed an amount that is equal to sixty (60) Days of
Shipper’s payment obligations hereunder from a financial institution rated at
least A- by S&P or at least A3 by Moody’s in a form and substance satisfactory
to Gatherer;

 

(ii)                                  cash collateral in an amount not to exceed
an amount that is equal to sixty (60) Days of Shipper’s payment obligations
hereunder to be deposited in an escrow account as designated by Gatherer;
Gatherer is hereby granted a security interest

 

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in and right of set-off against all cash collateral, which is or may hereafter
be delivered or otherwise transferred to such escrow account in connection with
this Agreement; or

 

(iii)                               a guaranty in an amount not to exceed an
amount that is equal to sixty (60) Days of Shipper’s payment obligations
hereunder reasonably acceptable to Gatherer.

 

(b)                                 The term of any security provided under this
Section 13.6 shall be as reasonably determined by Gatherer, but it shall never
exceed sixty (60) Days, after which the security shall terminate (or in the case
of cash collateral, be immediately returned by Gatherer to Shipper without
further action by either Party).  Nothing shall prohibit Gatherer, however, from
requesting additional Adequate Assurance of Performance following the end of any
such term, so long as the conditions triggering such a request under this
Section 13.6 exist.

 

(c)                                  Should Shipper fail to provide Adequate
Assurance of Performance within five (5) Days after receipt of written demand
for such assurance (which shall include reasonable particulars for the demand
and documentation supporting the calculation of such amount demanded), then
Gatherer shall have the right (notwithstanding any other provision of this
Agreement) to suspend performance under this Agreement until such time as
Shipper furnishes Adequate Assurance of Performance.

 

Section 13.7                            Excused Performance.  Gatherer will not
be required to perform or continue to perform services hereunder, and Shipper
shall not be obligated to deliver Dedicated Production to the Gathering System
(or make any payments required under Section 5.1(d)(i) and Section 5.1(d)(ii))
in the event:

 

(a)                                 the other Party has voluntarily filed for
bankruptcy protection under any chapter of the United States Bankruptcy Code;

 

(b)                                 the other Party is the subject of an
involuntary petition of bankruptcy under any chapter of the United States
Bankruptcy Code, and such involuntary petition has not been settled or otherwise
dismissed within ninety (90) Days of such filing; or

 

(c)                                  the other Party otherwise becomes
insolvent, whether by an inability to meet its debts as they come due in the
ordinary course of business or because its liabilities exceed its assets on a
balance sheet test; and/or however such insolvency may otherwise be evidenced.

 

ARTICLE 14
FORCE MAJEURE

 

Section 14.1                            Suspension of Obligations.  In the event
a Party is rendered unable, wholly or in part, by Force Majeure to carry out its
obligations under this Agreement, other than the obligation to make payments
then or thereafter due hereunder, and such Party promptly gives notice and
reasonably full particulars of such Force Majeure in writing to the other Party
promptly after the occurrence of the cause relied on, then the obligations of
the Party giving such notice, so far as and to the extent that they are affected
by such Force Majeure, shall be suspended during the continuance of any
inability so caused, but for no longer period, and such

 

36

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cause shall so far as reasonably possible be remedied with all reasonable
dispatch by the Party claiming Force Majeure.

 

Section 14.2                            Definition of Force Majeure.  The term
“Force Majeure” as used in this Agreement shall mean any cause or causes not
reasonably within the control of the Party claiming suspension and which, by the
exercise of reasonable diligence, such Party is unable to prevent or overcome,
including acts of God, strikes, lockouts or other industrial disturbances, acts
of the public enemy, acts of terror, sabotage, wars, blockades, military action,
insurrections, riots, epidemics, landslides, subsidence, lightning, earthquakes,
fires, storms or storm warnings, crevasses, floods, washouts, civil
disturbances, explosions, breakage or accident to wells, machinery, equipment or
lines of pipe, the necessity for testing or making repairs or alterations to
wells, machinery, equipment or lines of pipe, freezing of wells, equipment or
lines of pipe, inability of any Party hereto to obtain, after the exercise of
reasonable diligence, necessary materials, supplies, or government
authorizations, any action or restraint by any Governmental Authority (so long
as the Party claiming suspension has not applied for or assisted in the
application for, and has opposed where and to the extent reasonable, such action
or restraint, and as long as such action or restraint is not the result of a
failure by the claiming Party to comply with applicable laws, rules,
regulations, or orders), and, in the case of Gatherer as the claiming party, any
breach of any representation or warranty of Shipper or any failure by Shipper to
perform any obligation of Shipper under that certain Contribution Agreement
dated [                     ], 2013, by and between Shipper and Gatherer.

 

Section 14.3                            Settlement of Strikes and Lockouts.  It
is understood and agreed that the settlement of strikes or lockouts shall be
entirely within the discretion of the Party having the difficulty, and that the
above requirement that any Force Majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes or lockouts by acceding to
the demands of the opposing party when such course is inadvisable in the sole
discretion of the Party having the difficulty.

 

Section 14.4                            Payments for Gas Delivered. 
Notwithstanding the foregoing, it is specifically understood and agreed by the
Parties that an event of Force Majeure will in no way affect or terminate
Shipper’s obligation to make payment for quantities of Gas delivered prior to
such event of Force Majeure.

 

ARTICLE 15
INDEMNIFICATION

 

Section 15.1                            Gatherer.  Subject to the terms of this
Agreement, including Section 18.8, Gatherer shall release, indemnify, defend,
and hold harmless Shipper and its Affiliates, directors, officers, employees,
agents, consultants, representatives, and invitees from and against all claims
and losses arising out of or relating to (i) the operations of Gatherer and
(ii) any breach of this agreement by Gatherer.

 

Section 15.2                            Shipper.  Subject to the terms of this
Agreement, including Section 18.8, Shipper shall release, indemnify, defend, and
hold harmless Gatherer and its Affiliates, directors, officers, employees,
agents, consultants, representatives, and invitees from and against all claims

 

37

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and losses arising out of or relating to (i) the operations of Shipper and
(ii) any breach of this agreement by Shipper.

 

ARTICLE 16
CUSTODY AND TITLE

 

Section 16.1                            Custody.  As among the Parties, Shipper
shall be in custody, control and possession of (i) Shipper’s Production
hereunder until such Production is delivered to the Receipt Points and (ii) the
Delivery Point Gas and Liquid Hydrocarbons after they are delivered to Shipper
at the Delivery Points, including any portion of any Delivery Point Gas which
accumulates as liquids.  As among the Parties, Gatherer shall be in custody,
control and possession of all Production in the Gathering System at all other
times, including any portion thereof which accumulates as liquids. The Party
having custody and control of Production under the terms of this Agreement shall
be responsible for, and shall defend, indemnify, release and hold the other
Party and its Affiliates, directors, officers, employees, agents, consultants,
representatives, and invitees harmless from and against, all claims and losses
of whatever kind and nature for anything that may happen or arise with respect
to such Production when such Production is in its custody and control, including
losses resulting from any negligent acts or omissions of any indemnified party,
but excluding any losses to the extent caused by or arising out of the
negligence, gross negligence, or willful misconduct of the indemnified party.

 

Section 16.2                            Shipper Warranty.  Shipper represents
and warrants that it owns, or has the right to deliver to the Gathering System,
all Production delivered under this Agreement, free and clear of all liens,
encumbrances and adverse claims.  If the title to Production delivered by
Shipper hereunder is disputed or is involved in any legal action, Gatherer shall
have the right to cease receiving such Production, to the extent of the interest
disputed or involved in legal action, during the pendency of the action or until
title is freed from the dispute, or until Shipper furnishes, or causes to be
furnished, indemnification to save Gatherer harmless from all claims arising out
of the dispute or action, with surety acceptable to Gatherer.  Shipper hereby
indemnifies Gatherer against and holds Gatherer harmless from any and all claims
and losses arising out of or related to any breach of the foregoing
representation and warranty..

 

Section 16.3                            Title.  Title to all Production
delivered under this Agreement, including all constituents thereof, shall remain
with and in Shipper or its customers at all times; provided, however, title to
Production used as Fuel and Lost and Unaccounted For Gas shall pass from Shipper
or its customer to Gatherer immediately downstream of the Receipt Point. Title
to Condensate that is recovered from Shipper’s Gas in the Gathering System shall
remain with Shipper.  Title to water (i) that is removed from Shipper’s Gas in
Gatherer’s dehydration facilities shall pass to Gatherer immediately downstream
of the point of recovery, and (ii) that condenses from Shipper’s Gas in the
Gathering System shall pass to Gatherer immediately downstream of the Receipt
Point.

 

ARTICLE 17
TAXES; ROYALTIES

 

Section 17.1                            Taxes.  Shipper shall pay or cause to be
paid and agrees to hold Gatherer harmless as to the payment of all excise, gross
production, severance, sales, occupation and all

 

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other Taxes, charges or impositions of every kind and character required by
statute or by order of Governmental Authorities and levied against or with
respect to Shipper’s Production, Delivery Point Gas or the Services provided
under this Agreement.  Gatherer shall not become liable for such Taxes, unless
designated to remit those Taxes on behalf of Shipper by any duly constituted
jurisdictional agency having authority to impose such obligations on Gatherer,
in which event the amount of such Taxes remitted on Shipper’s behalf shall be
(i) reimbursed by Shipper upon receipt of invoice, with corresponding
documentation from Gatherer setting forth such payments, or (ii) deducted from
amounts otherwise due Gatherer under this Agreement.  Gatherer shall pay or
cause to be paid all Taxes, charges and assessments of every kind and character
required by statute or by order of Governmental Authorities with respect to the
Gathering System.  Except as provided in Exhibit H attached hereto, neither
Party shall be responsible nor liable for any Taxes or other statutory charges
levied or assessed against the facilities of the other Party, including ad
valorem tax (however assessed), used for the purpose of carrying out the
provisions of this Agreement or against the net worth or capital stock of such
Party.

 

Section 17.2                            Royalties.  As between the Parties,
Shipper shall have the sole and exclusive obligation and liability for the
payment of all Persons due any proceeds derived from Shipper’s Production or
Delivery Point Gas (including all constituents and products thereof) delivered
under this Agreement, including royalties, overriding royalties, and similar
interests, in accordance with the provisions of the leases or agreements
creating those rights to proceeds.  In no event will Gatherer have any
obligation to those Persons due any of those proceeds of production attributable
to any such Gas (including all constituents and products thereof) delivered
under this Agreement.  Although Shipper shall retain title to Production as
provided in this Section 16.3, Gatherer shall have the right to commingle
Production delivered by Shipper with Third Party Production.

 

ARTICLE 18
MISCELLANEOUS

 

Section 18.1                            Rights.  The failure of either Party to
exercise any right granted hereunder shall not impair nor be deemed a waiver of
that Party’s privilege of exercising that right at any subsequent time or times.

 

Section 18.2                            Applicable Laws.  This Agreement is
subject to all valid present and future laws, regulations, rules and orders of
Governmental Authorities now or hereafter having jurisdiction over the Parties,
this Agreement, or the services performed or the facilities utilized under this
Agreement.  The Parties hereby agree that, in the event that (i) Gatherer’s
facilities, or any part thereof, become subject to regulation by the Federal
Energy Regulatory Commission, or any successor agency thereto (“FERC”), or any
other Governmental Authority of the rates, terms and conditions for service,
(ii) Gatherer becomes obligated by FERC or any other Governmental Authority to
provide Services or any portion thereof on an open access, nondiscriminatory
basis as a result of Gatherer’s execution, performance or continued performance
of this Agreement or (iii) FERC or any other Governmental Authority seeks to
modify any rates under, or terms or conditions of, this Agreement, then:

 

(a)                                 to the maximum extent permitted by law, it
is the intent of the Parties that the rates and terms and conditions established
by the FERC Governmental Authority having

 

39

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jurisdiction shall not alter the rates or terms and conditions set forth in this
Agreement, and the Parties agree to vigorously defend and support in good faith
the enforceability of the rates and terms and conditions of this Agreement;

 

(b)                                 in the event that FERC or the Governmental
Authority having jurisdiction modifies the rates or terms and conditions set
forth in this Agreement, the Parties hereby agree to negotiate in good faith to
enter into such amendments to this Agreement and/or a separate arrangement in
order to give effect, to the greatest extent possible, to the rates and other
terms and conditions set forth herein; and

 

(c)                                  in the event that the Parties are not
successful in accomplishing the objectives set forth in (a) or (b) above such
that the Parties are in substantially the same economic position as they were
prior to any such regulation, then either Party may terminate this Agreement
upon the delivery of written notice of termination to the other Party.

 

Section 18.3                            Governing Law; Jurisdiction.

 

(a)                                 This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Colorado
without regard to choice of law principles.

 

(b)                                 The Parties agree that the appropriate,
exclusive and convenient forum for any disputes between the Parties arising out
of this Agreement or the transactions contemplated hereby shall be in any state
or federal court in City and County of Denver, Colorado, and each of the Parties
irrevocably submits to the jurisdiction of such courts solely in respect of any
proceeding arising out of or related to this Agreement.  The Parties further
agree that the Parties shall not bring suit with respect to any disputes arising
out of this Agreement or the transactions contemplated hereby in any court or
jurisdiction other than the above specified courts.

 

Section 18.4                            Successors and Assigns.

 

(a)                                 This Agreement shall extend to and inure to
the benefit of and be binding upon the Parties and their respective successors
and permitted assigns.  Except as set forth in Section 18.4(b) and
Section 18.4(c), neither Party shall have the right to assign its respective
rights and obligations in whole or in part under this Agreement without the
prior written consent of the other Party (which such consent shall not be
unreasonably withheld, conditioned or delayed), and any assignment or attempted
assignment made otherwise than in accordance with this Section 18.4 shall be
null and void ab initio.

 

(b)                                 Notwithstanding the foregoing clause (a),
Gatherer may perform all services under this Agreement itself using its own
gathering, compression, and other facilities and/or perform any or all such
services through third parties, in which case references herein to the Gathering
System shall be deemed to be references to such facilities of the relevant third
party.

 

(c)                                  Notwithstanding the foregoing clause (a):

 

(i)                                     Gatherer shall have the right to assign
its rights under this Agreement, in whole or in part, as applicable, without the
consent of Shipper if such

 

40

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assignment is made to any Person to which the Gathering System or any part
thereof has been or will be transferred that assumes in writing all of
Gatherer’s obligations hereunder (if applicable, to the extent that part of the
Gathering System being transferred to such Person) and is (A) an Affiliate of
Gatherer or (B) a Person to which the Gathering System has been or will be
transferred who (1) hires (or retains, as applicable) operating personnel who
are then operating the Gathering System (or has similarly experienced operating
personnel itself), (2) has operated for at least two (2) years prior to such
assignment systems similar to the Gathering System, or (3) contracts for the
operation of the Gathering System with another Person that satisfies either of
the foregoing conditions (1) or (2) in this clause (B), provided in the case of
an assignment pursuant to this clause (B), the assignee has creditworthiness as
reasonably determined by Shipper that is equal to the higher of Gatherer’s
creditworthiness as of the Effective Date and Gatherer’s creditworthiness as of
the date of the assignment.

 

(ii)                                  Gatherer shall have the right to grant a
security interest in this Agreement to a lender or other debt provider (or
trustee or agent on behalf of such lender) of Gatherer.

 

(iii)                               Shipper shall have the right to assign its
rights under this Agreement, in whole or in part, as applicable, without the
consent of Gatherer, to any Person to which it sells, assigns, or otherwise
transfers all or any portion of the Dedicated Properties and who (A) who assumes
in writing all of Shipper’s obligations hereunder (if applicable, to the extent
of the Dedicated Properties being transferred to such Person) and (B) whose
credit rating is equal to or greater than the greater of Producer’s credit
rating as of the Effective Date and Producer’s credit rating as of the date of
the assignment.

 

(d)                                 Upon an assignment by Gatherer in accordance
with Section 17.4(e)(i)(B) Gatherer shall be released from its obligations under
this Agreement to the extent of such assignment.  Upon an assignment by Shipper
in accordance with Section 18.4(c)(ii), Shipper shall be released from its
obligations under this Agreement to the extent of such assignment.

 

Section 18.5                            Severability.  If any provision of this
Agreement is determined to be void or unenforceable, in whole or in part, then
(i) such provision shall be deemed inoperative to the extent it is deemed void
or unenforceable, (ii) the Parties agree to enter into such amendments to this
Agreement in order to give effect, to the greatest extent legally possible, to
the provision that is determined to be void or unenforceable and (iii) the other
provisions of this Agreement in all other respects shall remain in full force
and effect and binding and enforceable to the maximum extent permitted by law;
provided, however, that in the event that a material term under this Agreement
is so modified, the Parties will, timely and in good faith, negotiate to revise
and amend this Agreement in a manner which preserves, as closely as possible,
each Party’s business and economic objectives as expressed by the Agreement
prior to such modification.

 

Section 18.6                            Confidentiality.

 

(a)                                 Confidentiality.  Except as otherwise
provided in this Section 18.6, each Party agrees that it shall maintain all
terms and conditions of this Agreement, and all information disclosed to it by
the other Party or obtained by it in the performance of this Agreement and

 

41

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relating to the other Party’s business (including Development Plans, Gathering
System Plans, and all data relating to the production of Shipper, including well
data, production volumes, volumes gathered, transported, or compressed, and gas
quality) (collectively, “Confidential Information”) in strictest confidence, and
that it shall not cause or permit disclosure of this Agreement or its existence
or any provisions contained herein without the express written consent of the
other Party.

 

(b)                                 Permitted Disclosures.  Notwithstanding
Section 18.6(a) disclosures of any Confidential Information may be made by
either Party (i) to the extent necessary for such Party to enforce its rights
hereunder against the other Party; (ii) to the extent to which a Party is
required to disclose all or part of this Agreement by a statute or by the order
or rule of a Governmental Authority exercising jurisdiction over the subject
matter hereof, by order, by regulations, or by other compulsory process
(including deposition, subpoena, interrogatory, or request for production of
documents); (iii) to the extent required by the applicable regulations of a
securities or commodities exchange; (iv) to a third person in connection with a
proposed sale or other transfer of a Party’s interest in this Agreement,
provided such third person agrees in writing to be bound by the terms of this
Section 18.6; (v) to its own directors, officers, employees, agents and
representatives; (vi) to an Affiliate; (vii) to financial advisors, attorneys,
and banks, provided that such Persons are subject to a confidentiality
undertaking consistent with this Section 18.6(b), or (viii) except for
information disclosed pursuant to Article 3 of this Agreement, to a royalty,
overriding royalty, net profits or similar owner burdening Dedicated Production,
provided such royalty, overriding royalty, net profits or similar owner, agrees
in writing to be bound by the terms of this Section 18.6.

 

(c)                                  Notification.  If either Party is or
becomes aware of a fact, obligation, or circumstance that has resulted or may
result in a disclosure of any of the terms and conditions of this Agreement
authorized by Section 17.6(b)(ii) or (iii), it shall so notify in writing the
other Party promptly and shall provide documentation or an explanation of such
disclosure as soon as it is available.

 

(d)                                 Party Responsibility.  Each Party shall be
deemed solely responsible and liable for the actions of its directors, officers,
employees, agents, representatives and Affiliates for maintaining the
confidentiality commitments of this Section 18.6.

 

(e)                                  Public Announcements.  The Parties agree
that prior to making any public announcement or statement with respect to this
Agreement or the transaction represented herein permitted under this
Section 18.6, the Party desiring to make such public announcement or statement
shall provide the other Party with a copy of the proposed announcement or
statement prior to the intended release date of such announcement.  The other
Party shall thereafter consult with the Party desiring to make the release, and
the Parties shall exercise their reasonable best efforts to (i) agree upon the
text of a joint public announcement or statement to be made by both such Parties
or (ii) in the case of a statement to be made solely by one Party, obtain
approval of the other Party to the text of a public announcement or statement. 
Nothing contained in this Section 18.6 shall be construed to require either
Party to obtain approval of the other Party to disclose information with respect
to this Agreement or the transaction represented herein to any Governmental
Authority to the extent required by applicable law or necessary to comply with

 

42

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disclosure requirements of the Securities and Exchange Commission, New York
Stock Exchange, or any other regulated stock exchange.

 

(f)                                   Survival.  The provisions of this
Section 18.6 shall survive any expiration or termination of this Agreement;
provided that other than with respect to information disclosed pursuant to
Article 3, as to which such provisions shall survive indefinitely, such
provisions shall survive only a period of one (1) year.

 

Section 18.7                            Entire Agreement, Amendments and
Waiver.  This Agreement, including all exhibits hereto, integrates the entire
understanding between the Parties with respect to the subject matter covered and
supersedes all prior understandings, drafts, discussions, or statements, whether
oral or in writing, expressed or implied, dealing with the same subject matter. 
This Agreement may not be amended or modified in any manner except by a written
document signed by the Parties that expressly amends this Agreement.  No waiver
by either Party of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless expressly
provided.  No waiver shall be effective unless made in writing and signed by the
Party to be charged with such waiver.

 

Section 18.8                            Limitation of Liability. 
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS
AGREEMENT OR THE BREACH THEREOF OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER
TORT, NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT, WARRANTY, INDEMNITY OR
OTHERWISE, INCLUDING LOSS OF USE, INCREASED COST OF OPERATIONS, LOSS OF PROFIT
OR REVENUE, OR BUSINESS INTERRUPTIONS; PROVIDED, HOWEVER, THAT THE FOREGOING
LIMITATION SHALL NOT APPLY TO ANY DAMAGE CLAIM ASSERTED BY OR AWARDED TO A THIRD
PARTY FOR WHICH A PARTY WOULD OTHERWISE BE LIABLE UNDER ANY INDEMNIFICATION
PROVISION SET FORTH HEREIN.

 

Section 18.9                            Headings.  The headings and captions in
this Agreement have been inserted for convenience of reference only and shall
not define or limit any of the terms and provisions hereof.

 

Section 18.10                     Rights and Remedies.  Except as otherwise
provided in this Agreement, each Party reserves to itself all rights,
counterclaims, other remedies and defenses that such Party is or may be entitled
to arising from or out of this Agreement or as otherwise provided by law.

 

Section 18.11                     No Partnership.  Nothing contained in this
Agreement shall be construed to create an association, trust, partnership, or
joint venture or impose a trust, fiduciary or partnership duty, obligation or
liability on or with regard to either Party.

 

43

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Section 18.12                     Rules of Construction.  In construing this
Agreement, the following principles shall be followed:

 

(a)                                 no consideration shall be given to the fact
or presumption that one Party had a greater or lesser hand in drafting this
Agreement;

 

(b)                                 examples shall not be construed to limit,
expressly or by implication, the matter they illustrate;

 

(c)                                  the word “includes” and its syntactical
variants mean “includes, but is not limited to,” “includes without limitation”
and corresponding syntactical variant expressions;

 

(d)                                 the plural shall be deemed to include the
singular and vice versa, as applicable; and

 

(e)                                  references to Section shall be references
to Sections of this Agreement.

 

Section 18.13                     No Third Party Beneficiaries.  This Agreement
is for the sole benefit of the Parties and their respective successors and
permitted assigns, and shall not inure to the benefit of any other Person
whomsoever or whatsoever, it being the intention of the Parties that no third
Person shall be deemed a third party beneficiary of this Agreement.

 

Section 18.14                     Further Assurances.  Each Party shall take
such acts and execute and deliver such documents as may be reasonably required
to effectuate the purposes of this Agreement.

 

Section 18.15                     Counterpart Execution.  This Agreement may be
executed in any number of counterparts, each of which shall be considered an
original, and all of which shall be considered one and the same instrument.

 

Section 18.16                     Memorandum of Agreement.  Contemporaneously
with the execution of this Agreement, the Parties shall execute, acknowledge,
deliver and record a “short form” memorandum of this Agreement in the form of
EXHIBIT C attached hereto (as modified, including by the addition of any
required property descriptions, required by local law and practice to put such
Memorandum of record and put third parties on notice of this Agreement), which
shall be placed of record in each state and county in which the
currently-existing Dedicated Properties are located.  Further such memoranda
shall be executed and delivered by Shipper as Gatherer from time to time
requests to evidence the dedication of additional areas or Oil and Gas Interests
under this Agreement.

 

44

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
set forth above.

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Gathering and Compression Agreement

Signature Page

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

EXCLUDED WELLS

 

All gathering to Bluestone and ExCo vertical wells and all gathering to Davis
Well and McKinley 1 & 2 H Wells.

 

Exhibit A - Page 1

--------------------------------------------------------------------------------

 

EXHIBIT B

 

PLANNED GAS DELIVERY POINTS

 

Low Pressure Delivery Points

 

West Virginia

 

1.              Antero Mountain Compressor Station (2)

 

2.              Antero Pennington Compressor Station (3)

 

3.              Antero Middlebourne Compressor Station(4)

 

4.              Antero North Canton Compressor Station(5)

 

5.              Antero White Oak Compressor Station

 

6.              Crestwood Appalachia Pipeline LLC (Crestwood) West Union
Compressor Station(6)

 

7.              Crestwood Victoria Compressor Station(7)

 

Ohio

 

1.              Antero Crum Compressor Station(8)

 

2.              Antero Upper Miley Compressor Station(9)

 

3.              E2 Appalachian Compression, LLC, (E2) Upper Hill Compressor
Station(10)

 

4.              E2 Batesville Compressor Station(11)

 

5.              E2 Reusser Compressor Station(12)

 

High Pressure Delivery Points

 

West Virginia

 

Receipt Points

 

Delivery Points

Antero Mountain Compressor Station

 

MarkWest Sherwood Plant

Antero Pennington Compressor Station

 

Summit Midstream Partners, LP (Summit)Pike Fork lateral

Antero Middlebourne Compressor Station

 

Magnum Hunter

 

--------------------------------------------------------------------------------

(2)  Planned

(3)  Under construction

(4)  Planned

(5)  Planned

(6)  Under construction

(7)  Under construction

(8)  Planned

(9)  Planned

(10)  Under construction

(11)  Under construction

(12)  Under construction

 

Exhibit B - Page 1

--------------------------------------------------------------------------------

 

Antero North Canton Compressor Station

 

Summit Pike Fork lateral

Antero White Oak Compressor Station

 

MarkWest Sherwood Plant

Crestwood West Union Compressor Station

 

MarkWest Sherwood Plant

Crestwood Victoria Compressor Station

 

Summit Pike Fork lateral

Antero high pressure gathering

 

MarkWest Liberty Midstream & Resources, LLC, Sherwood Gas Processing Plant

EXLP Operating LLC Pike Fork Compressor

 

Columbia Gas Transmission

 

Ohio

 

Receipt Points

 

Delivery Points

Antero high pressure gathering

 

MarkWest Utica EMG, LLC, Seneca Gas Processing Plant

Antero Sanford well gathering line

 

Dominion East Ohio

Antero Crum Compressor Station

 

MarkWest Seneca Plant

Antero Upper Miley Compressor Station

 

MarkWest Seneca Plant

E2 Appalachian Compression, LLC, (E2) Upper Hill Compressor Station

 

MarkWest Seneca Plant

E2 Batesville Compressor Station

 

MarkWest Seneca Plant

E2 Reusser Compressor Station

 

MarkWest Seneca Plant

 

Exhibit B - Page 2

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EXHIBIT C

 

GATHERING SYSTEM

 

Any Low Pressure and High Pressure Gathering Systems gathering Gas from Shipper
in the following counties and states:

 

Washington, PA;

 

Doddridge, WV;

 

Harrison, WV;

 

Tyler, WV;

 

Ritchie, WV;

 

Noble, OH;

 

Monroe, OH;

 

Guernsey, OH; and

 

Belmont, OH,

 

excluding facilities owned by Summit, Crestwood, ETC, M3, EQT, and MarkWest.

 

Exhibit C - Page 1

--------------------------------------------------------------------------------

 

EXHIBIT D

 

INITIAL DEVELOPMENT PLAN

 

[to be attached]

 

Exhibit D - Page 1

--------------------------------------------------------------------------------

 

EXHIBIT E

 

CONFLICTING DEDICATIONS

 

1.                                      Second Amended and Restated Gas
Gathering Agreement between Shipper and M3 Appalachia Gathering, LLC, dated
July 1, 2013

 

2.                                      Gathering and Compression Agreement
between Shipper and Crestwood Marcellus Midstream LLC dated effective as of
January 1, 2012.

 

3.                                      Gas Gathering Agreement between Shipper
and ETC Northeast Pipeline, LLC, dated January 1, 2010, as amended through the
Effective Date.

 

EXHIBIT E- Page 1

--------------------------------------------------------------------------------

 

EXHIBIT F

 

INITIAL GATHERING SYSTEM PLAN

 

[to be attached]

 

Exhibit F- Page 1

--------------------------------------------------------------------------------

 

EXHIBIT G

 

FORM OF CONNECTION NOTICE

 

Antero Resources Midstream LLC
1625 17th Street
Denver, Colorado 80202

 

Re:                             Gathering and Compression Agreement dated
[                     ], 2013, between Antero Resources Corporation and Antero
Resources Midstream LLC (the “Gathering Agreement”)

 

Ladies and Gentlemen:

 

This is a Connection Notice for purposes of the Gathering Agreement. 
Capitalized terms used but not defined in this Connection Notice have the
meanings given such terms in the Gathering Agreement.

 

Gatherer is hereby notified that Shipper is planning to drill and complete the
Planned Wells at the Planned Well Pads by the Target Completion Dates, in each
case as set forth below:

 

Planned Well

 

Planned Well Pad

 

Target Completion Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Very truly yours,

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Exhibit G- Page 1

--------------------------------------------------------------------------------

 

EXHIBIT H

 

DEEMED CONNECTION NOTICES

 

Well

 

Target Completion Date

[          ]

 

[          ]

 

Exhibit H- Page 1

--------------------------------------------------------------------------------

 

EXHIBIT I

 

COST OF SERVICE FEE

 

The Monthly Cost of Service Fee shall be calculated separately for each CS
Facility for each Contract Year or, in the case of a CS Facility that is placed
into service or acquired during a Contract Year, for the period from the first
Day of the Month following the Month in which such CS Facility is placed into
service or acquired through the end of such Contract Year, and for each Contract
Year thereafter.  The Cost of Service Fees for all CS Facilities for each Month
shall be summed to result in the total Cost of Service Fee payable for such
Month.  The Monthly Cost of Service Fee for each Contract Year (or portion
thereof, if applicable) for each CS Facility is determined as follows:

 

Monthly Capex Fee + Monthly O&M Fee = Monthly Cost of Service Fee.

 

The “Monthly Capex Fee” for each CS Facility is an amount equal to the product
of (i) the amount that, if paid to Gatherer with respect to each Month remaining
in the Recovery Term for such CS Facility, when taken together with all Prior
Capex Fees paid to Gatherer for such CS Facility, would result in Gatherer
recovering all of Gatherer’s capital expenditures for such CS Facility
(including the cost of acquisition of such CS Facility from Producer, if
applicable) over a period of 84 Months commencing with the placement in service
or acquisition of such CS Facility (the “Recovery Term”), with a return on
capital invested of 13% per annum. “Prior Capex Fees” means, with respect to any
Contract Year and any CS Facility, the aggregate of the Monthly Capex Fees with
respect to such CS Facility paid in all prior Contract Years.  For purposes of
determining the Monthly Capex Fee for any CS Facility, if such CS Facility is
specified or sized to gather, compress, or otherwise handle volumes of
Production in excess of those volumes of Dedicated Production projected in the
Development Plan to be put through such CS Facility, only such portion of such
capital expenditures that would be required to build facilities specified and
sized to gather, compress, or otherwise the volumes of Dedicated Production
projected in the Development Plan to be put through such CS Facility shall be
considered.

 

The “Monthly O&M Fee” for any Contract Year (or portion thereof, if applicable)
is an amount equal to:

 

(i)                                     the sum of:

 

(a)                                 the operations and maintenance costs and
expenses, including the costs and expenses of repairs and replacements in kind,
that Gatherer estimates it will incur with respect to the CS Facility during
such Contract Year (or such portion thereof, if applicable); plus

 

(b)                                 the O&M True Up Amount, if any,

 

(ii)                                  divided by 12 (or by the number of Months
in such portion of such Contract Year, if applicable).

 

Exhibit I- Page 1

--------------------------------------------------------------------------------

 

The “O&M True Up Amount” means, with respect to any Contract Year (or portion
thereof, if applicable) and any CS Facility,

 

(i)                                     the positive or negative difference
resulting from the following calculation:

 

(a)                                 the actual operations and maintenance costs
and expenses, including the costs and expenses of repairs and replacements in
kind,  incurred by Gatherer in the immediately prior Contract Year with respect
to such CS Facility;

 

Minus

 

(b)                                 the sum of the aggregate Monthly O&M Fees
paid to Gatherer with respect to such CS Facility with respect to the
immediately prior Contract Year,

 

(ii)                                  plus 13% per annum.

 

The Monthly O&M Fee includes Gatherer’s allocation to the CS Facility of
Gatherer’s overhead and general and administrative expenses together with Taxes
payable by Gatherer with respect to the CS Facility or the Services performed in
connection with the CS Facility (but excluding in any event Gatherer’s income
taxes), to the extent not otherwise paid or reimbursed by Shipper pursuant to
this Agreement.  For purposes of determining the Monthly O&M Fee for any CS
Facility, if such CS Facility also used to gather, compress, or otherwise handle
Third Party Production, only the portion of such operating expenses that are
fairly allocable to gathering Dedicated Production shall be considered.

 

Exhibit I- Page 2

--------------------------------------------------------------------------------

 

EXHIBIT J

 

MEMORANDUM OF AGREEMENT

 

THIS MEMORANDUM OF GATHERING AGREEMENT (this “Memorandum”) is entered into
effective [                   ], 2013 (the “Effective Date”), by and between
ANTERO RESOURCES CORPORATION (“Shipper”), with an address of 1625 17th Street,
Denver, Colorado 80202, and ANTERO RESOURCES MIDSTREAM LLC, with an address of
1625 17th Street, Denver, Colorado 80202 (“Gatherer”).

 

WHEREAS, Shipper and Gatherer entered into that certain Gathering and
Compression Agreement effective [                   ] 2013 (the “Agreement”),
pursuant to which Gatherer will provide certain gathering and other services as
therein set forth;

 

WHEREAS, any capitalized term used, but not defined, in this Memorandum shall
have the meaning ascribed to such term in the Agreement; and

 

WHEREAS, the Parties desire to file this Memorandum of record in the real
property records of [counties/states], to give notice of the existence of the
Agreement and certain provisions contained therein;

 

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

1.                                      Notice.  Notice is hereby given of the
existence of the Agreement and all of its terms, covenants and conditions to the
same extent as if the Agreement was fully set forth herein.  Certain provisions
of the Agreement are summarized in Sections 2 through 3 below.

 

2.                                      Dedication.  Subject to the exceptions,
exclusions, and reservations set forth in the Agreement and the other terms and
conditions of the Agreement,  Shipper has exclusively dedicated and committed to
deliver to Gatherer, as and when produced, all Production produced on or after
the date of the Agreement that is attributable to the Oil and Gas Interests now
owned or hereafter acquired by Shipper and located wholly or partly within the
states of Pennsylvania, West Virginia, and Ohio, and certain other areas, or on
lands pooled, unitized or communitized wholly or partly within any portion of
the Dedication Area (the “Dedicated Properties”), together with all Gas
attributable to third parties that is produced from a Well located on the
Dedicated Properties, which Gas Shipper has the right to control and deliver for
gathering (“Dedicated Production”), for gathering through the Gathering System
under the Agreement, and Shipper agrees not to deliver any Dedicated Production
to any other gathering system (the foregoing dedication and commitment being
herein referred to as the “Dedication”).

 

3.                                      Covenant Running with the Land.  So long
as the Agreement is in effect, Dedication shall be a covenant running with the
land and, subject to the exceptions and reservations set forth in the
Agreement,  in the event Shipper sells, transfers, conveys, assigns, grants, or
otherwise disposes of any or all of its interest in the Dedicated Properties,
then any such sale, transfer, conveyance, assignment, grant, or other
disposition shall be expressly subject to this Agreement and any instrument of
conveyance shall so state, and in the event Gatherer sells, transfers, conveys,
assigns, grants, or otherwise disposes of any or all of its interest in the
Gathering System, then any such sale, transfer, conveyance, assignment, grant,
or other disposition shall be expressly subject to this Agreement and any
instrument of conveyance shall so state.

 

4.                                      No Amendment to Agreement.  This
Memorandum is executed and recorded solely for the purpose of giving notice and
shall not amend nor modify the Agreement in any way.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Memorandum has been signed by or on behalf of each of
the Parties as of the Day first above written.

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Exhibit J- Page 2

--------------------------------------------------------------------------------

 

ACKNOWLEDGEMENTS

 

STATE OF COLORADO

§

 

§

CITY AND COUNTY OF DENVER

§

 

 

The foregoing instrument was acknowledged before me on the            Day of
              , 2013, by [                       ], [                       ] of
Antero Resources Midstream LLC, a Delaware limited liability company, on behalf
of said entity.

 

 

 

 

 

Notary Public in and for

 

 

 

 

 

 

Printed or Typed Name of Notary

 

 

STATE OF COLORADO

§

 

§

CITY AND COUNTY OF DENVER

§

 

 

The foregoing instrument was acknowledged before me on the            Day of
              , 2013, by [                       ], [                       ] of
Antero Resources Corporation, a Delaware corporation, on behalf of said entity.

 

 

 

 

 

Notary Public in and for

 

 

 

 

 

 

Printed or Typed Name of Notary

 

Exhibit J- Page 3

--------------------------------------------------------------------------------

 

EXHIBIT D

 

FORM OF ROFO AGREEMENT

 

[attached.]

 

D-1

--------------------------------------------------------------------------------

 

RIGHT OF FIRST OFFER AGREEMENT

 

BY AND BETWEEN

 

ANTERO RESOURCES CORPORATION

 

AND

 

ANTERO RESOURCES MIDSTREAM LLC

 

DATED AS OF

 

[                 ]

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

Article 1  DEFINITIONS

1

 

 

 

Article 2  Dedication

3

 

 

 

Section 2.1

Dedication

3

Section 2.2

Conflicting Dedications

3

Section 2.3

Reservations

4

Section 2.4

Covenant Running with the Land

4

 

 

 

Article 3  Right of First Offer

5

 

 

 

Section 3.1

Bid Request

5

Section 3.2

Bid; Bid Award

6

Section 3.3

Accepted Bid

7

Section 3.4

Accepted Third Party Bid

8

Section 3.5

Midstream Rights Unaffected

8

 

 

 

Article 4  TERM

9

 

 

 

Section 4.1

Term

9

 

 

Article 5  NOTICES

9

 

 

Section 5.1

Notices

9

 

 

 

Article 6  MISCELLANEOUS

10

 

 

 

Section 6.1

Rights

10

Section 6.2

Applicable Laws

10

Section 6.3

Governing Law; Jurisdiction

10

Section 6.4

Successors and Assigns

10

Section 6.5

Severability

11

Section 6.6

Confidentiality

11

Section 6.7

Entire Agreement, Amendments and Waiver

13

Section 6.8

Limitation of Liability

13

Section 6.9

Headings

13

Section 6.10

Rights and Remedies

13

Section 6.11

No Partnership

13

Section 6.12

Rules of Construction

13

Section 6.13

No Third Party Beneficiaries

14

Section 6.14

Further Assurances

14

Section 6.15

Counterpart Execution

14

Section 6.16

Memorandum of Agreement

14

 

Exhibit A

Conflicting Dedications

 

Exhibit B

Memorandum of Agreement

 

Exhibit C

Form of Gas Processing Agreement

 

 

D-i

--------------------------------------------------------------------------------

 

RIGHT OF FIRST OFFER AGREEMENT

 

This Right of First Offer Agreement (this “Agreement”), dated as of 
[                  ] (the “Effective Date”), is by and between ANTERO RESOURCES
CORPORATION, a Delaware corporation (“Producer”), and ANTERO RESOURCES MIDSTREAM
LLC, a Delaware limited liability company (“Midstream”).  Producer and Midstream
may be referred to herein individually as a “Party” or collectively as the
“Parties.”

 

RECITALS

 

A.                                    Producer owns Oil and Gas Interests and
intends to produce Gas (and/or liquid hydrocarbons) from wells on such Oil and
Gas Interests.

 

B.                                    Producer and Midstream desire that
Midstream should have certain rights to provide Services in respect of Producer
Gas as set forth in this Agreement.

 

NOW THEREFORE, in consideration of the premises and mutual covenants set forth
in this Agreement, the Parties agree as follows:

 

ARTICLE 1DEFINITIONS

 

Capitalized terms used in this Agreement shall have the respective meanings
given to such terms set forth below.

 

Accepted Midstream Bid.  As defined in Section 3.2(c).

 

Accepted Third Party Bid.  As defined in Section 3.2(c).

 

Acquired Facility. As defined in Section 3.1(a).

 

Affiliate.  Any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
another Person.  Affiliated shall have the correlative meaning.  The term
“control” (including its derivatives and similar terms) shall mean possessing
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership, by contract, or otherwise.  Notwithstanding
the foregoing, any Person shall be deemed to control any specified Person if
such Person owns fifty percent (50%) or more of the voting securities of the
specified Person, or if the specified Person owns fifty percent (50%) or more of
the voting securities of such Person, or if fifty percent (50%) or more of the
voting securities of the specified Person and such Person are under common
control.

 

Agreement.  As defined in the preamble hereof.

 

Bid. As defined in Section 3.2(a).

 

Bid Request.  As defined in Section 3.1(a).

 

Confidential Information. As defined in Section 6.6(a).

 

Conflicting Dedication.  Any processing agreement or other commitment or
arrangement that would require Services to be provided with respect to Producer
Gas by any Person other than Midstream.

 

D-1

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Cubic Foot.  The volume of Gas in one cubic foot of space at a standard pressure
and temperature base of 14.73 pounds per square inch absolute and 60 degrees
Fahrenheit, respectively.

 

Day.  A period commencing at 10:00 a.m., Eastern Standard Time, on a calendar
day and ending at 10:00 a.m., Eastern Standard Time, on the next succeeding
calendar day.

 

Dedication Area.  As defined in Section 3.1(a)(vi).

 

Delivery Fee. As defined in Section 3.2(a)(iv).

 

Effective Date.  As defined in the preamble of this Agreement.

 

Fair Market Value.  With respect to any asset, the price that would be paid by a
willing buyer of such asset to a willing seller, as determined by an independent
nationally known investment banking firm selected by Midstream and reasonably
acceptable to Producer.

 

Fee.  Any of the Processing Fee, Fractionation Fee, Marketing Fee or Delivery
Fee, as the context may require.

 

Firm Capacity.  The volume of Producer’s Gas that is to be entitled to Services
that are accorded the highest priority with respect to capacity allocations,
interruptions, or curtailments.

 

Fractionated Products.  Finished liquid products fractionated from an
undifferentiated stream of Plant Products, including ethane, propane, isobutane,
normal butane and natural gasoline.

 

Fractionation Fee. As defined in Section 3.2(a)(iv).

 

Gas.  Any mixture of gaseous hydrocarbons, consisting essentially of methane and
heavier hydrocarbons and inert and noncombustible gases, that is extracted from
beneath the surface of the earth.

 

Governmental Authority.  Any federal, state, local, municipal, tribal or other
government; any governmental, regulatory or administrative agency, commission,
body or other authority exercising or entitled to exercise any administrative,
executive, judicial, legislative, regulatory or taxing authority or power; and
any court or governmental tribunal, including any tribal authority having or
asserting jurisdiction.

 

Marketing Fee. As defined in Section 3.2(a)(iv).

 

Mcf.  One thousand (1,000) Cubic Feet.

 

MMcf.  One million (1,000,000) Cubic Feet.

 

Midstream.  As defined in the preamble of this Agreement.

 

Month.  A period commencing at 10:00 a.m., Eastern Standard Time, on the first
Day of a calendar month and extending until 10:00 a.m., Eastern Standard Time,
on the first Day of the next succeeding calendar month.

 

New Services. As defined in Section 3.1(a).

 

D-2

--------------------------------------------------------------------------------

 

Oil and Gas Interests.  Oil and gas leasehold interests and oil and gas mineral
fee interests, including working interests, overriding royalty interests, net
profits interests, carried interests, and similar rights and interests.

 

Parties.  As defined in the preamble of this Agreement.

 

Party.  As defined in the preamble of this Agreement.

 

Person.  An individual, a corporation, a partnership, a limited partnership, a
limited liability company, an association, a joint venture, a trust, an
unincorporated organization, or any other entity or organization, including a
Governmental Authority.

 

Plant Products.  Propane, ethane, iso-butane, normal butane, iso-pentane, normal
pentane, hexanes plus, any other liquid hydrocarbon product except for a
liquefied methane product, or any mixtures thereof, and any incidental methane
and incidental ethane included in any such plant products, which are separated,
extracted, recovered or condensed, and saved, from Producer Gas.

 

Processing Agreement.  A gas processing and fractionation agreement in
substantially the form set forth in Exhibit C to this Agreement, completed as
set forth in Section 3.3(a)(i)(A) or Section 3.4(a).

 

Processing Fee. As defined in Section 3.2(a)(iii).

 

Processing Services.  The processing of Producer Gas for the removal of Plant
Products and the delivery of the resulting residue Gas and Plant Products to or
for the account of Producer.

 

Producer.  As defined in the preamble of this Agreement.

 

Producer Gas.  All Gas that Producer has the right to control and deliver for
processing.

 

Services.  (i) The Processing Services; (ii) the fractionation of Plant
Products; (iii) the transportation of Plant Products and/or the exchange of
Plant Products for Fractionated Products; and (iv) the marketing and delivery of
Fractionated Products.

 

Services Agreement.  Any Processing Agreement or any other agreement entered
into in accordance with this Agreement for the provision of any Services.

 

Third Party Bid. As defined in Section 3.1(c).

 

Third Party Bidder. As defined in Section 3.1(c).

 

Withdrawn Bid Request.  As defined in Section 3.2(c).

 

ARTICLE 2DEDICATION

 

Section 2.1                                   Dedication.  Subject to
Section 2.2 through Section 2.4, Producer covenants and commits not to obtain
any Services in respect of Producer Gas from any third party.

 

Section 2.2                                   Conflicting Dedications.  Producer
shall have the right to comply with each of the Conflicting Dedications set
forth in Exhibit A and any other Conflicting Dedication (a) entered into by a
non-Affiliated predecessor-in-interest to Producer that is applicable as of the

 

D-3

--------------------------------------------------------------------------------

 

date of acquisition thereof to any Oil and Gas Interests acquired by Producer or
its Affiliates after the Effective Date (but not any entered into in connection
with such acquisition) or (b) entered into pursuant to a Third Party Bid in
accordance with Section 3.4; provided, however, that Producer shall have the
right to comply with Conflicting Dedications only until the first Day of the
Month following the termination of such Conflicting Dedication and shall not
take any voluntary action (including the exercise of any right to extend) to
extend the term of such Conflicting Dedication beyond the minimum term provided
for in the document evidencing such Conflicting Dedication.  Producer represents
that, except as set forth in Exhibit A, Producer Gas is not as of the Effective
Date subject to any Conflicting Dedication. If Producer Gas produced from a well
on a well pad is subject to a Conflicting Dedication that Producer has the right
to comply with under this Section 2.2, Producer has the right, in complying with
such Conflicting Dedication, to deliver all Producer Gas from such well pad in
accordance with the Conflicting Dedication, even if all wells on such well pad
are not subject to such Conflicting Dedication.

 

Section 2.3                                   Reservations.  Producer reserves
the following rights with respect to Producer Gas for itself and for the
operator of the properties covered by Producer’s Oil and Gas Interests:  (a) to
operate wells producing Producer Gas as a reasonably prudent operator in its
sole discretion, including the right, but never the obligation, to drill new
wells, to repair and rework old wells, to renew or extend, in whole or in part,
any Oil and Gas Interest, and to cease production from or abandon any well or
surrender any such Oil and Gas Interest, in whole or in part, when no longer
deemed by Producer to be capable of producing Gas in paying quantities under
normal methods of operation; (b) to use Producer Gas for operations (including
reservoir pressure maintenance and drilling or fractionation fuel); (c) to
deliver or furnish to Producer’s lessors and holders of other existing similar
burdens on production such Gas and other production as is required to satisfy
the terms of the applicable leases or other applicable instruments; and (d) to
pool, communitize, or unitize Producer’s Oil and Gas Interests with respect to
Producer Gas, provided that Producer’s share of Gas produced from such pooled,
communitized, or unitized Oil and Gas Interests shall be committed and dedicated
to this Agreement.

 

Section 2.4                                   Covenant Running with the Land. 
The covenant and commitment made by Producer under this Article 2 is a covenant
running with the land. For the avoidance of doubt, in the event Producer sells,
transfers, conveys, assigns, grants, or otherwise disposes of any or all of its
interest in any property covered by any Oil and Gas Interest, then any such
sale, transfer, conveyance, assignment, grant, or other disposition shall be
expressly subject to this Agreement and any instrument of conveyance shall so
state.  Notwithstanding the foregoing, Producer shall be permitted to sell,
transfer, convey, assign, grant, or otherwise dispose of any property free of
the covenant and commitment made under this Article 2 in a sale or other
disposition involving a number of net acres covered by any Oil and Gas Interest
that, when added to the total of net acres covered by any Oil and Gas Interest
theretofore and, where applicable, simultaneously disposed of free of dedication
hereunder pursuant to this Section 2.4, does not exceed the aggregate number of
net acres covered by any Oil and Gas Interest acquired by Producer after the
Effective Date.  At the request of Midstream, the Parties shall execute and
record an amendment to the memorandum of this Agreement previously entered into,
as provided in Section 6.16, to reflect any such addition to or release of
acreage.

 

D-4

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ARTICLE 3RIGHT OF FIRST OFFER

 

Section 3.1                                   Bid Request.

 

(a)                     Subject to Section 2.2 through Section 2.3, if Producer
requires any Services in respect of any Producer Gas that are not the subject of
a Services Agreement then in effect and are not otherwise already being provided
by Midstream (“New Services”), including any such New Services to be provided
through any existing facility acquired or proposed to be acquired by Producer
(an “Acquired Facility”), Producer shall promptly (and, in the case of the
acquisition of any Acquired Facility, on or before the 10th Day after the
acquisition of such Acquired Facility) provide notice to Midstream of such
desired New Services, which notice (the “Bid Request”) shall include, to the
extent applicable:

 

(i)                                     confirmation that the New Services
include all Services with respect to Producer Gas produced from the Dedication
Area described in the Bid Request, or a description of any Conflicting
Dedication and the Services being excluded from the Bid Request as a result of
such Conflicting Dedication;

 

(ii)                                  a description of the initial required
delivery points to which Producer’s residue Gas is to be redelivered to Producer
(including any existing delivery points to which residue Gas is to be delivered
from the Acquired Facility);

 

(iii)                               Producer’s required Firm Capacity in MMcf
per Day;

 

(iv)                              in the case of an Acquired Facility, a
reasonable description of the Acquired Facility and the price paid or proposed
to be paid by Producer for the Acquired Facility, including any liabilities
assumed by Producer, and details of any third party contracts for processing at
the Acquired Facility;

 

(v)                                 a description of any new facilities Producer
desires, including the capacity thereof;

 

(vi)                              a description of the area that will constitute
the “Dedication Area” for purposes of any Processing Agreement or other Services
Agreement entered into pursuant to such Bid Request with respect to the New
Services (the “Dedication Area”);

 

(vii)                           the Oil and Gas Interests located in the
Dedication Area with respect to which the New Services are required, including a
description of any existing wells and a proposed development plan for the wells
to be drilled on such Oil and Gas Interests during the period of at least 18
Months after such notice, including production forecasts for all such wells; and

 

(viii)                        if the New Services do not include Processing
Services, a form of Services Agreement covering the New Services.

 

(b)                     Notwithstanding Section 3.1(a), if from time to time any
Processing Agreement is in effect, Producer shall not be required to issue a Bid
Request in connection

 

D-5

--------------------------------------------------------------------------------

 

with any desired expansion of the Processing Plant (as defined in such
Processing Agreement) to provide Increased Capacity (as defined in such
Processing Agreement).

 

(c)                      Concurrently with or following its delivery of a Bid
Request to Midstream, Producer may seek bids from third parties (each, a “Third
Party Bidder”, and each bid received from a Third Party Bidder a “Third Party
Bid”) to provide the New Services set forth in the Bid Request on the same terms
and conditions as are set forth in the Bid Request (which, if the New Services
include Processing Services, shall be substantially the terms and conditions set
forth in the Processing Agreement or, if the New Services do not include
Processing Services, shall be substantially the terms and conditions set forth
in the form of Services Agreement delivered by Producer with the relevant Bid
Request). Any such Third Party Bid shall only be considered if it is received by
Producer on or before the 30th Day after Midstream’s receipt of the Bid Request,
and only if such Third Party Bid (i) includes itemized fees for each of the New
Services that are the subject of the Bid Request, as well as details of all
other proposed charges and costs applicable to such Third Party Bid, and
(ii) does not propose any changes to the Processing Agreement or proposed form
of Services Agreement (as applicable).

 

Section 3.2                                   Bid; Bid Award.

 

(a)                     If Midstream desires to provide any or all of the New
Services set forth in a Bid Request, Midstream shall deliver a notice on or
before the 30th Day after such Bid Request, which notice (the “Bid”) shall
include, in each case on the basis that such New Services shall be provided on
substantially the terms and conditions set forth in the Processing Agreement or,
if the New Services do not include Processing Services, the form of Services
Agreement included in the Bid Request:

 

(i)                                     confirmation as to whether Midstream
desires to provide the New Services, including to acquire the Acquired Facility
from Producer, or construct and operate the required new facilities, as
applicable;

 

(ii)                                  in each case, the scope of the New
Services Midstream would be willing to provide (upon completion of the
acquisition of the Acquired Facility or construction of the new facilities, if
applicable);

 

(iii)                               if the Services Midstream would be willing
to provide include Processing Services, Midstream’s proposed processing fee per
Mcf (the “Processing Fee”); and

 

(iv)                              if the Services Midstream would be willing to
provide include fractionation services, Midstream’s proposed (A) fractionation
fee per gallon of Plant Products to be exchanged for Fractionated Products (the
“Fractionation Fee”), (B) delivery fee per gallon of Plant Products (the
“Delivery Fee”), and (C) marketing fee per gallon of Plant Products (the
“Marketing Fee”).

 

(b)                                 Producer shall provide copies of all Third
Party Bids to Midstream within 5 Days of receipt. On or before the 45th Day
after Midstream’s receipt of the Bid

 

D-6

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Request, Midstream may submit to Producer a revised Bid in respect of all or any
portion of the original Bid.

 

(c)                                  On or before the 60th Day after a Bid
Request, Producer shall inform Midstream, with respect to each of the New
Services requested in the Bid Request, that (i) it is accepting Midstream’s Bid
for such Service (such Bid, as it relates to Services for which such Bid was
accepted, an “Accepted Midstream Bid”), (ii) it is accepting a Third Party Bid
for such Service on the basis that the Fee proposed in such Third Party Bid for
such Service was lower than the Fee proposed in Midstream’s Bid for such Service
or on the basis that Midstream did not deliver a Bid or propose a Fee for such
Service (such Third Party Bid, as it relates to Services for which such Third
Party Bid was accepted, an “Accepted Third Party Bid”), or (iii) it has elected
not to acquire such Service and not to carry out such Service itself and is
accordingly withdrawing the Bid Request with respect to such Services (such Bid
Request, as it relates to Services with respect to which it is being withdrawn,
a “Withdrawn Bid Request”).  For purposes of the foregoing, each New Service
covered by each Bid and also covered by a Third Party Bid shall be evaluated
separately, and awarded separately, based on the Fee for such Service stated in
such Bid and such Third Party Bid.

 

Section 3.3                                   Accepted Bid.

 

(a)                                 Upon a Bid becoming an Accepted Midstream
Bid:

 

(i)                                     if the Services to which the Accepted
Midstream Bid relates include Processing Services:

 

(A)                               the Parties shall promptly execute and deliver
to each other a Processing Agreement in respect of such Services, completed
based upon the Accepted Bid, with such changes or modifications as shall be
agreed by the Parties, and:

 

(1)                                 depending upon the Services the subject of
the Accepted Bid: the Processing Fees (as defined in the Processing Agreement)
shall be the Processing Fees are set forth in the Accepted Bid (if applicable),
the Fractionation Fees (as defined in the Processing Agreement) shall be the
Fractionation Fees set forth in the Accepted Bid (if applicable), the Delivery
Fees (as defined in the Processing Agreement) shall be the Delivery Fees set
forth in the Accepted Bid (if applicable) and the Marketing Fees (as defined in
the Processing Agreement) shall be the Marketing Fees set forth in the Accepted
Bid (if applicable);

 

(2)                                 the Dedication Area described in the Bid
Request shall be the Dedication Area for purposes of the Processing Agreement;

 

(3)                                 in the case of a Bid Request relating to an
Acquired Facility, the Processing Agreement shall be revised to the extent
reasonably necessary to take account of the Services being provided at an
existing processing facility rather than a newly-built facility;

 

D-7

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(B)                               in the case of a Bid Request relating to an
Acquired Facility, Producer shall as soon as reasonably practicable transfer to
Midstream the Acquired Facility and all appurtenant equipment and facilities, as
well as any third party contracts for Services at such Acquired Facility;

 

(ii)                                  if the Services to which the Accepted
Midstream Bid relates do not include Processing Services, the Parties shall
promptly negotiate, execute and deliver to each other a Services Agreement in
respect of such Services in the form provided by Producer in the Bid Request,
completed based on the Accepted Midstream Bid, with such changes or
modifications as shall be agreed by the Parties or, if no such form was required
to be provided in the Bid Request, such form as shall be agreed by the Parties.

 

(b)                     In respect of any Acquired Facility, Producer shall use
reasonable efforts to cause the transaction documents for the acquisition
thereof to state a separate purchase price (and separately state any assumed
liabilities) for such Acquired Facility. If, pursuant to Section 3.3(a),
Midstream is to acquire from Producer an Acquired Facility, such acquisition
shall be made at the same price at which the Acquired Facility was acquired by
Producer, including the assumption of any liabilities with respect thereto
assumed by Producer. If the transaction documents for Producer’s acquisition of
the Acquired Facility did not state a separate purchase price for the Acquired
Facility, the purchase price to be paid by Midstream to Producer for the
Acquired Facility shall be equal to the Fair Market Value of the Acquired
Facility, and Midstream shall assume all liabilities in respect of the Acquired
Facility to the extent arising from the ownership and operation of the Acquired
Facility and/or any occurrence from and after the closing of the purchase of the
Acquired Facility by Midstream.

 

Section 3.4                                   Accepted Third Party Bid.  With
respect to any Services requested in a Bid Request as to which a Third Party Bid
is accepted as provided in Section 3.2(c) above, Producer shall be entitled, for
a period of 90 days after such Third Party Bid is accepted, (a) to enter into a
Processing Agreement or a Services Agreement in the form provided by Producer in
the Bid Request (or, if no such form was required to be provided in the Bid
Request, such form as shall be agreed by Producer and the Third Party Bidder),
in either case completed based on the Accepted Third Party Bid, for Fees that
are no more than the Fees proposed in such Accepted Third Party Bid, in which
case such Processing Agreement or Services Agreement shall constitute a
Conflicting Dedication, and (b) if such Bid Request related to an Acquired
Facility, transfer to the Third Party Bidder the Acquired Facility and all
appurtenant equipment and facilities, as well as any third party contracts for
Services at such Acquired, on the same basis as the Acquired Facility would have
been required to be transferred to Midstream pursuant to Section 3.3(b).

 

Section 3.5                                   Midstream Rights Unaffected.

 

(a)                                 Any Services covered by any Bid Request
(i) with respect to which a Third Party Bid is accepted but with respect to
which Producer does not enter into a Processing Agreement or other Services
Agreement in accordance with Section 3.4 within the 90-Day period provided for
in such section or (ii) that is a Withdrawn Bid Request shall continue to be
subject to this Agreement, and, if Producer thereafter desires such Services, it
shall comply with the provisions of this Agreement with respect thereto.

 

D-8

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(b)                                 If Midstream does not provide a Bid in
response to a Bid Request, or provides a Bid (or revised Bid) that does not
become an Accepted Bid, the rights of Midstream under this Agreement shall be
unaffected, and Producer shall remain obligated to provide a Bid Request in
accordance with Section 3.1 if at any time Producer requires any New Services,
until termination or expiry of this Agreement in accordance with its terms.

 

ARTICLE 4TERM

 

Section 4.1                                   Term.  This Agreement shall become
effective on the Effective Date and, unless terminated earlier by mutual
agreement of the Parties, shall continue in effect until the twentieth (20th)
anniversary of the Effective Date.

 

ARTICLE 5NOTICES

 

Section 5.1                                   Notices.  Unless otherwise
provided herein, any notice, request, invoice, statement, or demand which either
Party desires to serve upon the other regarding this Agreement shall be made in
writing and shall be considered as delivered (i) when hand delivered, or
(ii) when delivery is confirmed by pre-paid delivery service (such as FedEx,
UPS, DHL or a similar delivery service), or (iii) if mailed by United States
certified mail, postage prepaid, three (3) Business Days after mailing, or
(iv) if sent by facsimile transmission, when receipt is confirmed by the
equipment of the transmitting Party, or (v) when sent via email; provided, if
sent by email after normal business hours or if receipt of a facsimile
transmission is confirmed after normal business hours, receipt shall be deemed
to be the next Business Day.  Notwithstanding the foregoing, if a Party desires
to serve upon the other a notice of default under this Agreement, the delivery
of such notice shall be considered effective under this Section 5.1 only if
delivered by any method set forth in items (i) through (iv) above.  Any notice
shall be given to the other Party at the following address, or to such other
address as either Party shall designate by written notice to the other:

 

Producer:

ANTERO RESOURCES CORPORATION

 

1625 17th Street

 

Denver, Colorado 80202

 

 

 

Attn: Chief Financial Officer

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

With copy to:

For gas control, nominations & balancing:

 

Manager of Gas Marketing

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

 

For accounting, financial, and legal:

 

Controller

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

D-9

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Midstream:

ANTERO RESOURCES MIDSTREAM LLC

 

1625 17th Street

 

Denver, Colorado 80202

 

 

 

Attn: Chief Financial Officer

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

With copy to:

For gas control, nominations & balancing:

 

Manager of Gas Marketing

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

 

 

For accounting, financial, and legal:

 

Controller

 

Phone: (303) 357-7310

 

Fax Number: (303) 357-7315

 

ARTICLE 6MISCELLANEOUS

 

Section 6.1                                   Rights.  The failure of either
Party to exercise any right granted hereunder shall not impair nor be deemed a
waiver of that Party’s privilege of exercising that right at any subsequent time
or times.

 

Section 6.2                                   Applicable Laws.  This Agreement
is subject to all valid present and future laws, regulations, rules and orders
of Governmental Authorities now or hereafter having jurisdiction over the
Parties, this Agreement, or the services performed or the facilities utilized
under this Agreement.

 

Section 6.3                                   Governing Law; Jurisdiction.

 

(a)                     This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Colorado without regard to
choice of law principles.

 

(b)                     The Parties agree that the appropriate, exclusive and
convenient forum for any disputes between the Parties arising out of this
Agreement or the transactions contemplated hereby shall be in any state or
federal court in City and County of Denver, Colorado, and each of the Parties
irrevocably submits to the jurisdiction of such courts solely in respect of any
proceeding arising out of or related to this Agreement.  The Parties further
agree that the Parties shall not bring suit with respect to any disputes arising
out of this Agreement or the transactions contemplated hereby in any court or
jurisdiction other than the above specified courts.

 

Section 6.4                                   Successors and Assigns.

 

(a)                     This Agreement shall extend to and inure to the benefit
of and be binding upon the Parties and their respective successors and permitted
assigns.  To the extent any Affiliate of Producer acquires any Oil and Gas
Interests of Producer, Producer shall cause such

 

D-10

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Affiliate to comply with the obligations of Producer under this Agreement in the
event such Affiliate requires Services relating to such Oil and Gas Properties. 
Except as set forth in Section 6.4(b) and Section 6.4(c), neither Party shall
have the right to assign its respective rights and obligations in whole or in
part under this Agreement without the prior written consent of the other Party
(which such consent shall not be unreasonably withheld, conditioned or delayed),
and any assignment or attempted assignment made otherwise than in accordance
with this Section 6.4 shall be null and void ab initio.

 

(b)                     Notwithstanding the foregoing clause (a), Midstream may
elect that, rather than Midstream itself, any subsidiary of Midstream may enter
into any Processing Agreement or Services Agreement pursuant to this Agreement.

 

(c)                      Notwithstanding the foregoing clause (a):

 

(i)                                     Midstream shall have the right to assign
its rights under this Agreement, in whole or in part, as applicable, without the
consent of Producer to any Person to which all or substantially all of the
midstream business of Midstream has been or will be transferred.

 

(ii)                                  Midstream shall have the right to grant a
security interest in this Agreement to a lender or other debt provider (or
trustee or agent on behalf of such lender) of Midstream.

 

(d)                     Upon an assignment by Midstream in accordance with
Section 6.4(c)(i) Midstream shall be released from its obligations under this
Agreement to the extent of such assignment.

 

Section 6.5                                   Severability.  If any provision of
this Agreement is determined to be void or unenforceable, in whole or in part,
then (i) such provision shall be deemed inoperative to the extent it is deemed
void or unenforceable, (ii) the Parties agree to enter into such amendments to
this Agreement in order to give effect, to the greatest extent legally possible,
to the provision that is determined to be void or unenforceable and (iii) the
other provisions of this Agreement in all other respects shall remain in full
force and effect and binding and enforceable to the maximum extent permitted by
law; provided, however, that in the event that a material term under this
Agreement is so modified, the Parties will, timely and in good faith, negotiate
to revise and amend this Agreement in a manner which preserves, as closely as
possible, each Party’s business and economic objectives as expressed by the
Agreement prior to such modification.

 

Section 6.6                                   Confidentiality.

 

(a)                     Confidentiality.  Except as otherwise provided in this
Section 6.6, each Party agrees that it shall maintain all terms and conditions
of this Agreement, and all information disclosed to it by the other Party or
obtained by it in the performance of this Agreement and relating to the other
Party’s business (including all data relating to the production of Producer,
including well data, production volumes, volumes gathered, transported, or
compressed, and gas quality) (collectively, “Confidential Information”) in
strictest confidence, and that it shall not cause or permit disclosure of this
Agreement or its

 

D-11

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existence or any provisions contained herein without the express written consent
of the other Party.

 

(b)                     Permitted Disclosures.  Notwithstanding Section 6.6(a),
disclosures of any Confidential Information may be made by either Party (i) to
the extent necessary for such Party to enforce its rights hereunder against the
other Party; (ii) to the extent to which a Party is required to disclose all or
part of this Agreement by a statute or by the order or rule of a Governmental
Authority exercising jurisdiction over the subject matter hereof, by order, by
regulations, or by other compulsory process (including deposition, subpoena,
interrogatory, or request for production of documents); (iii) to the extent
required by the applicable regulations of a securities or commodities exchange;
(iv) to a third person in connection with a proposed sale or other transfer of a
Party’s interest in this Agreement, provided such third person agrees in writing
to be bound by the terms of this Section 6.6; (v) to its own directors,
officers, employees, agents and representatives; (vi) to an Affiliate; (vii) to
financial advisors, attorneys, and banks, provided that such Persons are subject
to a confidentiality undertaking consistent with this Section 6.6(b), or
(viii) to a royalty, overriding royalty, net profits or similar owner burdening
Producer Gas, provided such royalty, overriding royalty, net profits or similar
owner, agrees in writing to be bound by the terms of this Section 6.6.

 

(c)                      Notification.  If either Party is or becomes aware of a
fact, obligation, or circumstance that has resulted or may result in a
disclosure of any of the terms and conditions of this Agreement authorized by
Section 6.6(b)(ii) or (iii), it shall so notify in writing the other Party
promptly and shall provide documentation or an explanation of such disclosure as
soon as it is available.

 

(d)                     Party Responsibility.  Each Party shall be deemed solely
responsible and liable for the actions of its directors, officers, employees,
agents, representatives and Affiliates for maintaining the confidentiality
commitments of this Section 6.6.

 

(e)                      Public Announcements.  The Parties agree that prior to
making any public announcement or statement with respect to this Agreement or
the transaction represented herein permitted under this Section 6.6, the Party
desiring to make such public announcement or statement shall provide the other
Party with a copy of the proposed announcement or statement prior to the
intended release date of such announcement.  The other Party shall thereafter
consult with the Party desiring to make the release, and the Parties shall
exercise their reasonable best efforts to (i) agree upon the text of a joint
public announcement or statement to be made by both such Parties or (ii) in the
case of a statement to be made solely by one Party, obtain approval of the other
Party to the text of a public announcement or statement.  Nothing contained in
this Section 6.6 shall be construed to require either Party to obtain approval
of the other Party to disclose information with respect to this Agreement or the
transaction represented herein to any Governmental Authority to the extent
required by applicable law or necessary to comply with disclosure requirements
of the Securities and Exchange Commission, New York Stock Exchange, or any other
regulated stock exchange.

 

(f)                       Survival.  The provisions of this Section 6.6 shall
survive any expiration or termination of this Agreement for a period of one
(1) year.

 

D-12

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Section 6.7                                   Entire Agreement, Amendments and
Waiver.  This Agreement, including all exhibits hereto, integrates the entire
understanding between the Parties with respect to the subject matter covered and
supersedes all prior understandings, drafts, discussions, or statements, whether
oral or in writing, expressed or implied, dealing with the same subject matter. 
This Agreement may not be amended or modified in any manner except by a written
document signed by the Parties that expressly amends this Agreement.  No waiver
by either Party of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless expressly
provided.  No waiver shall be effective unless made in writing and signed by the
Party to be charged with such waiver.

 

Section 6.8                                   Limitation of Liability. 
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS
AGREEMENT OR THE BREACH THEREOF OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER
TORT, NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT, WARRANTY, INDEMNITY OR
OTHERWISE, INCLUDING LOSS OF USE, INCREASED COST OF OPERATIONS, LOSS OF PROFIT
OR REVENUE, OR BUSINESS INTERRUPTIONS; PROVIDED, HOWEVER, THAT THE FOREGOING
LIMITATION SHALL NOT APPLY TO ANY DAMAGE CLAIM ASSERTED BY OR AWARDED TO A THIRD
PARTY FOR WHICH A PARTY WOULD OTHERWISE BE LIABLE UNDER ANY INDEMNIFICATION
PROVISION SET FORTH HEREIN.

 

Section 6.9                                   Headings.  The headings and
captions in this Agreement have been inserted for convenience of reference only
and shall not define or limit any of the terms and provisions hereof.

 

Section 6.10                            Rights and Remedies.  Except as
otherwise provided in this Agreement, each Party reserves to itself all rights,
counterclaims, other remedies and defenses that such Party is or may be entitled
to arising from or out of this Agreement or as otherwise provided by law.

 

Section 6.11                            No Partnership.  Nothing contained in
this Agreement shall be construed to create an association, trust, partnership,
or joint venture or impose a trust, fiduciary or partnership duty, obligation or
liability on or with regard to either Party.

 

Section 6.12                            Rules of Construction.  In construing
this Agreement, the following principles shall be followed:

 

(a)                     no consideration shall be given to the fact or
presumption that one Party had a greater or lesser hand in drafting this
Agreement;

 

(b)                     examples shall not be construed to limit, expressly or
by implication, the matter they illustrate;

 

(c)                      the word “includes” and its syntactical variants mean
“includes, but is not limited to,” “includes without limitation” and
corresponding syntactical variant expressions;

 

D-13

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(d)                     the plural shall be deemed to include the singular and
vice versa, as applicable; and

 

(e)                      references to Section shall be references to Sections
of this Agreement.

 

Section 6.13                            No Third Party Beneficiaries.  This
Agreement is for the sole benefit of the Parties and their respective successors
and permitted assigns, and shall not inure to the benefit of any other Person
whomsoever or whatsoever, it being the intention of the Parties that no third
Person shall be deemed a third party beneficiary of this Agreement.

 

Section 6.14                            Further Assurances.  Each Party shall
take such acts and execute and deliver such documents as may be reasonably
required to effectuate the purposes of this Agreement.

 

Section 6.15                            Counterpart Execution.  This Agreement
may be executed in any number of counterparts, each of which shall be considered
an original, and all of which shall be considered one and the same instrument.

 

Section 6.16                            Memorandum of Agreement. 
Contemporaneously with the execution of this Agreement, the Parties shall
execute, acknowledge, deliver and record a “short form” memorandum of this
Agreement in a form substantially similar to Exhibit B, which shall be placed of
record in each state and county in which the properties covered by Producer’s
Oil and Gas Interests are located, and further memoranda in substantially
similar form shall be recorded in additional counties as may be required upon
any future acquisition by Producer of Oil and Gas Interests.

 

D-14

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
set forth above.

 

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

 

By:

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Right of First Offer Agreement

Signature Page

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Conflicting Dedications

 

1.                                      Gas Processing Agreement between
Producer and MarkWest Liberty Midstream & Resources LLC dated March 31, 2011, as
amended through the Effective Date

 

2.                                      Natural Gas Liquids Exchange Agreement
(Sherwood) between Producer and MarkWest Liberty Midstream & Resources dated
March 31, 2011, as amended through the Effective Date

 

3.                                      Gas Processing Agreement between
Producer and MarkWest Utica EMG, LLC, dated October 30, 2012, as amended through
the Effective Date

 

4.                                      Natural Gas Liquids Exchange and
Marketing Agreement (Seneca) between Producer and MarkWest Utica EMG, LLC, dated
October 30, 2012, as amended through the Effective Date

 

Gas Processing (Right of First Offer) Agreement

Signature Page

 

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EXHIBIT B

 

MEMORANDUM OF AGREEMENT

 

THIS MEMORANDUM OF GAS PROCESSING (RIGHT OF FIRST OFFER) AGREEMENT (this
“Memorandum”) is entered into effective [                       ], 2013 (the
“Effective Date”), by and between ANTERO RESOURCES CORPORATION (“Producer”),
with an address of 1625 17th Street, Denver, Colorado 80202, and ANTERO
RESOURCES MIDSTREAM LLC (“Midstream”), with an address of 1625 17th Street,
Denver, Colorado 80202.

 

WHEREAS, Producer and Midstream entered into that certain Gas Processing (Right
of First Offer) Agreement effective [                       ] 2013 (the
“Agreement”), pursuant to which Midstream has a right of first offer in respect
of the provision of certain gas processing and other services as therein set
forth;

 

WHEREAS, any capitalized term used, but not defined, in this Memorandum shall
have the meaning ascribed to such term in the Agreement; and

 

WHEREAS, the Parties desire to file this Memorandum of record in the real
property records of [counties/states], to give notice of the existence of the
Agreement and certain provisions contained therein;

 

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

1.                                      Notice.  Notice is hereby given of the
existence of the Agreement and all of its terms, covenants and conditions to the
same extent as if the Agreement was fully set forth herein.  Certain provisions
of the Agreement are summarized in Sections 2 through 3 below.

 

2.                                      Dedication.  Subject to the exceptions,
exclusions, and reservations set forth in the Agreement and the other terms and
conditions of the Agreement, Producer has covenanted that, other than as
permitted by the Agreement, it will not obtain from any third party any
processing, fractionation, delivery or marketing services in respect of any Gas
that is attributable to any Oil and Gas Interests of Producer or to any property
pooled, unitized or communitized with the property covered by such Oil and Gas
Interests (the “Oil and Gas Interests”), together with all Gas attributable to
third parties that is produced from a well located on the property covered by
the Oil and Gas Interests, which Gas Producer has the right to control and
deliver for processing (“Producer Gas”), other than as permitted by the
Agreement (the foregoing dedication and commitment being herein referred to as
the “Dedication”).

 

3.                                      Covenant Running with the Land.  So long
as the Agreement is in effect, the Dedication shall be a covenant running with
the land and, subject to the exceptions and reservations set forth in the
Agreement, in the event Producer sells, transfers, conveys, assigns, grants, or
otherwise disposes of any or all of its interest in the Oil and Gas Interests,
then any such sale, transfer, conveyance, assignment, grant, or other
disposition shall be expressly subject to this Agreement and any instrument of
conveyance shall so state.

 

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4.                                      No Amendment to Agreement.  This
Memorandum is executed and recorded solely for the purpose of giving notice and
shall not amend nor modify the Agreement in any way.

 

IN WITNESS WHEREOF, this Memorandum has been signed by or on behalf of each of
the Parties as of the Day first above written.

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

Acknowledgements

 

STATE OF COLORADO

§

 

§

CITY AND COUNTY OF DENVER

§

 

 

The foregoing instrument was acknowledged before me on the         Day of
               , 2013, by [                            ],
[                       ] of Antero Resources Midstream LLC, a Delaware limited
liability company, on behalf of said entity.

 

 

 

 

Notary Public in and for

 

 

 

 

 

 

 

 

 

Printed or Typed Name of Notary

 

STATE OF COLORADO

§

 

§

CITY AND COUNTY OF DENVER

§

 

The foregoing instrument was acknowledged before me on the             Day
of          , 2013, by [                              ],
[                       ] of Antero Resources Corporation, a Delaware
corporation, on behalf of said entity.

 

 

 

 

Notary Public in and for

 

 

 

 

 

 

 

 

 

Printed or Typed Name of Notary

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

FORM OF GAS PROCESSING AGREEMENT

 

GAS PROCESSING AGREEMENT

 

BY AND BETWEEN

 

ANTERO RESOURCES CORPORATION

 

AND

 

ANTERO RESOURCES MIDSTREAM LLC

 

DATED AS OF

 

[                        ]

 

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TABLE OF CONTENTS

 

Article 1 DEFINITIONS

1

 

 

Article 2 Producer COMMITMENTS

7

 

 

Section 2.1

Producer’s Dedication

7

Section 2.2

Conflicting Dedications

7

Section 2.3

Producer’s Reservations

8

Section 2.4

Covenant Running with the Land

8

Section 2.5

Firm Capacity

8

 

 

 

Article 3 SERVICES

9

 

 

Section 3.1

Processor Service Commitment

9

Section 3.2

Processing Plant

9

Section 3.3

Expansion of Processing Plant

10

Section 3.4

Ethane Nomination

11

Section 3.5

[Exchange and Marketing of Fractionated Plant Products.]

11

 

 

 

Article 4 TERM

12

 

 

Section 4.1

Term

12

 

 

 

Article 5 FEES AND CONSIDERATION

12

 

 

Section 5.1

Fees

12

 

 

 

Article 6 ALLOCATIONS

14

 

 

Section 6.1

Allocation of Lost and Unaccounted For Gas

14

Section 6.2

Allocation of Fuel

14

Section 6.3

Allocation of Bypass Gas

15

Section 6.4

Allocation of Plant Products

15

Section 6.5

Allocation of Residue Gas

16

Section 6.6

[Gathering System Measurement Information]

16

 

 

 

Article 7 CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

16

 

 

Section 7.1

Processing Rights

16

Section 7.2

Operational Control of Processor’s Facilities

17

Section 7.3

Maintenance

17

Section 7.4

Firm Capacity; Capacity Allocations at the Processing Plant

17

Section 7.5

Arrangements After Redelivery

17

Section 7.6

Bypass Gas

17

 

 

 

Article 8 PRESSURES AT RECEIPT POINTS AND DELIVERY POINTS

18

 

 

Section 8.1

Pressure at Receipt Points

18

Section 8.2

Pressure at Delivery Points

18

 

 

 

Article 9 NOMINATION AND BALANCING

18

 

 

Section 9.1

Processor Notifications

18

Section 9.2

Nominations

18

Section 9.3

Balancing

19

 

i

--------------------------------------------------------------------------------

 

Article 10 QUALITY

19

 

 

Section 10.1

Receipt Point Gas Quality Specifications

19

Section 10.2

Non-Conforming Gas

20

Section 10.3

Producer Residue Gas Quality Specifications

20

Section 10.4

Greenhouse Gas Emissions

20

 

 

 

Article 11 MEASUREMENT EQUIPMENT AND PROCEDURES

20

 

 

Section 11.1

Equipment

20

Section 11.2

Gas Measurement Standards

21

Section 11.3

Gas Measurement

21

Section 11.4

Notice of Measurement Facilities Inspection and Calibration

22

Section 11.5

Measurement Accuracy Verification

22

Section 11.6

Special Tests

23

Section 11.7

Metered Flow Rates in Error

23

Section 11.8

Record Retention

24

Section 11.9

Access

24

 

 

 

Article 12 NOTICES

24

 

 

Section 12.1

Notices

24

 

 

 

Article 13 PAYMENTS

25

 

 

Section 13.1

Invoices

25

Section 13.2

Right to Suspend on Failure to Pay

26

Section 13.3

Audit Rights

26

Section 13.4

Payment Disputes

27

Section 13.5

Interest on Late Payments

27

Section 13.6

Credit Assurance

27

Section 13.7

Excused Performance

28

 

 

 

Article 14 FORCE MAJEURE

28

 

 

Section 14.1

Suspension of Obligations

28

Section 14.2

Definition of Force Majeure

28

Section 14.3

Settlement of Strikes and Lockouts

29

Section 14.4

Payments for Gas Delivered

29

 

 

 

Article 15 INDEMNIFICATION

29

 

 

Section 15.1

Processor

29

Section 15.2

Producer

29

 

 

 

Article 16 CUSTODY AND TITLE

30

 

 

Section 16.1

Custody

30

Section 16.2

Producer Warranty

30

Section 16.3

Title

30

 

 

 

Article 17 TAXES; ROYALTIES

31

 

 

Section 17.1

Taxes

31

Section 17.2

Royalties

31

 

ii

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Article 18 MISCELLANEOUS

31

 

 

Section 18.1

Rights

31

Section 18.2

Applicable Laws

31

Section 18.3

Governing Law; Jurisdiction

31

Section 18.4

Successors and Assigns

32

Section 18.5

Severability

33

Section 18.6

Confidentiality

33

Section 18.7

Entire Agreement, Amendments and Waiver

34

Section 18.8

Limitation of Liability

34

Section 18.9

Headings

35

Section 18.10

Rights and Remedies

35

Section 18.11

No Partnership

35

Section 18.12

Rules of Construction

35

Section 18.13

No Third Party Beneficiaries

35

Section 18.14

Further Assurances

35

Section 18.15

Counterpart Execution

36

Section 18.16

Memorandum of Agreement

36

 

Exhibit A

Delivery Points

Exhibit B

Conflicting Dedications

Exhibit C

Memorandum of Agreement

Exhibit D

Excluded Wells

Exhibit E

Dedication Area

 

iii

--------------------------------------------------------------------------------

 

GAS PROCESSING AGREEMENT

 

This Gas Processing Agreement (this “Agreement”), dated as of
[                    ] (the “Effective Date”), is by and between ANTERO
RESOURCES CORPORATION, a Delaware corporation (“Producer”), and ANTERO RESOURCES
MIDSTREAM LLC, a Delaware limited liability company (“Processor”).  Producer and
Processor may be referred to herein individually as a “Party” or collectively as
the “Parties.”

 

RECITALS

 

A.                                    Producer owns the Dedicated Properties and
intends to produce Gas (and/or liquid hydrocarbons) from wells thereon.

 

B.                                    [On [                    ], 2013, Producer
and Processor entered into an agreement for, among other things, the gathering
and compression of Dedicated Gas (the “Gathering Agreement”), pursuant to which
Processor agrees to redeliver Dedicated Gas to the delivery points set forth in
the Gathering Agreement, which include the Receipt Points hereunder.](13)

 

C.                                    Producer desires to contract with
Processor to provide the Services with respect to Dedicated Gas, and Processor
desires to provide the Services to Producer with respect to Dedicated Gas, in
each case in accordance with the terms and conditions of this Agreement.

 

NOW THEREFORE, in consideration of the premises and mutual covenants set forth
in this Agreement, the Parties agree as follows:

 

ARTICLE 1
DEFINITIONS

 

Capitalized terms used, but not otherwise defined, in this Agreement shall have
the respective meanings given to such terms set forth below:

 

Adequate Assurance of Performance.  As defined in Section 13.6(a).

 

Additional Processing Facilities.  As defined in Section 3.3.

 

Affiliate.  Any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
another Person.  Affiliated shall have the correlative meaning.  The term
“control” (including its derivatives and similar terms) shall mean possessing
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership, by contract, or otherwise.  Notwithstanding
the foregoing, any Person shall be deemed to control any specified Person if
such Person owns fifty percent (50%) or more of the voting securities of the
specified Person, or if the specified Person owns fifty percent (50%) or more of
the voting securities of such Person, or if fifty percent (50%) or more of the
voting securities of the specified Person and such Person are under common
control.

 

Agreement.  As defined in the preamble hereof.

 

--------------------------------------------------------------------------------

(13)  References to the Gathering Agreement will not be needed for any
Processing Agreement that relates to Oil and Gas Interests not connected to the
gathering system. References have been square bracketed for ease of
identification in the event they are to be deleted.

 

1

--------------------------------------------------------------------------------

 

Btu.  The amount of heat required to raise the temperature of one pound of pure
water from 58.5 degrees Fahrenheit to 59.5 degrees Fahrenheit at a constant
pressure of 14.73 psia.

 

Business Day.  Any calendar Day that commercial banks in New York City are open
for business.

 

Bypass Gas.  Gas delivered by Producer or by a third party to the Plant Receipt
Points that is bypassed around the Processing Plant and is therefore not
processed.

 

Bypass Point.  A point at the Processing Plant where Gas is redirected to bypass
the Processing Plant.

 

Confidential Information.  As defined in Section 18.6(a).

 

Conflicting Dedication.  Any processing agreement or other commitment or
arrangement that would require Dedicated Gas to be processed other than at the
Processing Plant [and/or would require the resulting Plant Products to be
fractionated other than under this Agreement](14).

 

Contract Year.  Each of (i) the period from the Processing Effective Date to the
last Day of the Month in which the first anniversary of the Processing Effective
Date occurs and (ii) each period of twelve (12) Months thereafter.

 

CPI.  As defined in Section 5.1(b).

 

Cubic Foot.  The volume of Gas in one cubic foot of space at a standard pressure
and temperature base of 14.73 psia and 60 degrees Fahrenheit, respectively.

 

Day.  A period commencing at 10:00 a.m., Eastern Standard Time, on a calendar
day and ending at 10:00 a.m., Eastern Standard Time, on the next succeeding
calendar day. Daily shall have the correlative meaning.

 

Dedicated Gas.  All Gas that is attributable to any Dedicated Property
(including all Gas attributable to third parties that is produced from a well
located on such Dedicated Property) that Producer has the right to control and
deliver for processing and that is produced on or after the Processing Effective
Date with respect to such Dedicated Property, except for Gas being produced from
the wells identified in Exhibit D.

 

Dedicated Properties.  All Oil and Gas Interests now owned or hereafter acquired
by Producer and located wholly or partly within the Dedication Area or pooled,
unitized or communitized with Oil and Gas Interests located wholly or partly
within the Dedication Area, provided that Dedicated Properties shall not include
any Oil and Gas Interests that are unitized or pooled with the properties of
third parties that are not Dedicated Properties if Producer is not the operator
of such unit.

 

Dedication Area.  The Dedication Area set forth in Exhibit E.

 

[Delivery Fee.  As defined in Section 5.1(a)(iii).]

 

Delivery Point.  Each point identified in Exhibit A at which Residue Gas
allocated to Producer is delivered to a Downstream Pipeline by Processor, and
any additional delivery points that, from time to

 

--------------------------------------------------------------------------------

(14)  To be deleted if fractionation services are not to be provided under this
Agreement.

 

2

--------------------------------------------------------------------------------

 

time after the Effective Date, are added at the request of Producer (at
Producer’s expense) to permit delivery to Downstream Pipelines.

 

Design Recoveries.  As defined in Section 3.2(a).

 

Downstream Pipeline.  Any Gas pipeline or any facilities of any end-user or
local distribution company, in each case downstream of the Processing Plant,
into which Residue Gas allocated to Producer is delivered.

 

Effective Date.  As defined in the preamble of this Agreement.

 

Emissions Charges.  As defined in Section 10.4.

 

Ethane Nomination. As defined in Section 3.4(a).

 

Ethane Recovery Mode.  The operation of the Processing Plant in such a way as to
maximize the recovery and delivery of ethane from Producer Gas.

 

Ethane Rejection Mode. The operation of the Processing Plant in such a way as to
minimize the recovery and delivery of ethane from Producer Gas, subject to the
minimum ethane recovery rate required to meet the then-applicable Residue Gas
specifications of the Downstream Pipelines.

 

Fees.  Together, the Processing Fee, [the Delivery Fee], [the Fractionation Fee]
and [the Marketing Fee].

 

Firm Capacity.  The volume of Producer’s Gas delivered to the Receipt Points
that is entitled to Firm Service, as designated in Section 2.5, together with
any Increased Capacity that is added to the Firm Capacity in accordance with
Section 3.3.

 

Firm Service.  Services that are accorded the highest priority in the Processing
Plant with respect to capacity allocations, interruptions, or curtailments,
specifically including (i) the Services provided to Producer hereunder with
respect to Producer’s Firm Capacity and (ii) services to any Person for which
Processor is contractually obligated to give the highest priority.

 

Force Majeure.  As defined in Section 14.2.

 

[Fractionated Products.  Finished liquid products fractionated from the
undifferentiated stream of Plant Products extracted in the Processing Plant,
including ethane, propane, isobutane, normal butane and natural gasoline.]

 

[Fractionation Fee.  As defined in Section 5.1(a)(ii).]

 

Fuel.  Gas and electric power used in the operation of the Processing Plant.

 

Gallon.  One U.S. gallon, which is equal to 231 cubic inches.

 

Gas.  Any mixture of gaseous hydrocarbons, consisting essentially of methane and
heavier hydrocarbons and inert and noncombustible gases, that is extracted from
beneath the surface of the earth.

 

Gas Quality Specifications.  As defined in Section 10.1.

 

[Gathering Agreement.  As defined in the recitals.]

 

3

--------------------------------------------------------------------------------

 

[Gathering Receipt Point.  Each “Receipt Point” as defined in the Gathering
Agreement.]

 

Gross Heating Value.  The number of Btus produced by the complete combustion in
air, at a constant pressure, of one Cubic Foot of Gas when the products of
combustion are cooled to the initial temperature of the Gas and air and all
water formed by combustion is condensed to the liquid state.

 

Governmental Authority.  Any federal, state, local, municipal, tribal or other
government; any governmental, regulatory or administrative agency, commission,
body or other authority exercising or entitled to exercise any administrative,
executive, judicial, legislative, regulatory or taxing authority or power; and
any court or governmental tribunal, including any tribal authority having or
asserting jurisdiction.

 

Imbalance.  As defined in Section 9.3.

 

Increased Capacity.  As defined in Section 3.3.

 

Index Price.  For Gas produced from the Marcellus formation in West Virginia,
the “Midpoint Average” price published in Platt’s Gas Daily Price Guide for
“Columbia Gas/Appalachia”.  For Gas produced from the Utica formation in Ohio,
the “Midpoint Average” price published in Platt’s Gas Daily Price Guide for
“Texas Eastern M-2 Receipts”.  For other Gas production, an index price
determined by Producer and reasonably acceptable to Processor based on where
such Gas production is being sold, or, if no appropriate index is available, a
price based on a netback calculation determined by Producer and reasonably
acceptable to Processor.

 

Interruptible Gas.  Gas that is accorded the lowest priority in the Processing
Plant with respect to capacity allocations, interruptions, or curtailments.  In
accordance with Section 7.4, Interruptible Gas will be the first Gas removed
from the Processing Plant in the event of an interruption or curtailment.

 

Interruptible Gas Plant Receipt Points.  As defined in Section 6.3(a).

 

Lost and Unaccounted For Gas.  Gas received into the Processing Plant that is
released or lost through piping, equipment, operations, or measurement losses or
inaccuracies or that is vented, flared or lost in connection with the operation
of the Processing Plant.

 

Made Available for Delivery.  In connection with deliveries of Dedicated Gas
under this Agreement, Dedicated Gas that meets the Gas Quality Specifications
and is unable to be delivered to the applicable point as a result of Processor’s
failure to perform its obligations under this Agreement [or the Gathering
Agreement].

 

Maintenance.  As defined in Section 7.3.

 

[Marketing Fee.  As defined in Section 5.1(a)(iv).]

 

Mcf.  One thousand (1,000) Cubic Feet.

 

Measurement Facilities.  Any facility or equipment used to measure the volume of
Gas, which may include meter tubes, recording devices, communication equipment,
buildings and barriers.

 

Minimum Processing Volume Commitment.  With respect to each of the first ten
Contract Years, a volume of Dedicated Gas per Day, stated in MMcf, equal to 75%
of the nameplate processing capacity of the Processing Plant from time to time
(without taking into account any limitations to such processing

 

4

--------------------------------------------------------------------------------

 

capacity as a result of Maintenance or Force Majeure). If there is any Increased
Capacity pursuant to Section 3.3, the Minimum Processing Volume Commitment will
be increased by a volume of Dedicated Gas per Day, stated in MMcf, equal to 75%
of such Increased Capacity with respect to the period from the date the
Additional Processing Facilities are first placed in service by Processor
through the end of the Contract Year in which such Additional Processing
Facilities were placed in service and with respect to each of the ten following
Contract Years.

 

MMBtu.  One million (1,000,000) Btus.

 

MMcf.  One million (1,000,000) Cubic Feet.

 

Monitoring Services Provider.  As defined in Section 11.9(a).

 

Month.  A period commencing at 10:00 a.m., Eastern Standard Time, on the first
Day of a calendar month and extending until 10:00 a.m., Eastern Standard Time,
on the first Day of the next succeeding calendar month.  Monthly shall have the
correlative meaning.

 

[Net Sales Price.  A price per gallon of each individual Fractionated Product
exchanged for Plant Products allocated to Producer in accordance with this
Agreement, which shall be the weighted average net price per gallon received by
Processor for the total volume of each individual Fractionated Product sold to
third parties who are not Affiliates of Processor during the relevant Month at
the Fractionation Plant.  To determine the Net Sales Price, Processor shall
deduct from the actual gross sales prices of such Fractionated Products the
out-of-pocket costs and expenses related to the Services provided under this
Agreement in respect of the fractionation, transportation and sale of such
Fractionated Products, including fuel, tank car rentals, Taxes (excluding income
taxes), offsite storage, and other costs and expenses, in each case, paid to any
Person on arm’s length terms (or, in the case of Taxes, to a taxing authority
pursuant to applicable law), to determine a net price (FOB the Processing Plant
or netted back to the Processing Plant, as applicable) for such sale.]

 

Nomination.  As defined in Section 9.2.

 

Oil and Gas Interests.  Oil and gas leasehold interests and oil and gas mineral
fee interests, including working interests, overriding royalty interests, net
profits interests, carried interests, and similar rights and interests.

 

Parties.  As defined in the preamble of this Agreement.

 

Party.  As defined in the preamble of this Agreement.

 

Person.  An individual, a corporation, a partnership, a limited partnership, a
limited liability company, an association, a joint venture, a trust, an
unincorporated organization, or any other entity or organization, including a
Governmental Authority.

 

Plant Delivery Point.  Each point at which Processor redelivers Residue Gas from
the Processing Plant to or for the account of customers, including the Delivery
Points.

 

Plant Products.  Propane, ethane, iso-butane, normal butane, iso-pentane, normal
pentane, hexanes plus, any other liquid hydrocarbon product except for a
liquefied methane product, or any mixtures thereof, and any incidental methane
and incidental ethane included in any Plant Products, which are separated,
extracted, recovered or condensed, and saved, from Gas processed in the
Processing Plant.

 

5

--------------------------------------------------------------------------------

 

Plant Products Delivery Point.  [The point at or downstream of the Processing
Plant at which Plant Products are delivered to Producer] OR [The point
downstream of any de-ethanizer or fractionation plant at which Fractionated
Products are redelivered to Processor immediately prior to such Fractionated
Products being delivered to the purchaser thereof](15).

 

Plant Receipt Point.  Each point where Gas first enters the Processing Plant,
including the Receipt Points.

 

Plant Site.  As defined in Section 3.2(c).

 

Processing Effective Date.  The date on which the Processing Plant has been
constructed and made operational and is capable of operating at the design
capacity and Design Recoveries specified in Section 3.2(a).

 

Processing Fee.  As defined in Section 5.1(a)(i).

 

Processing Plant. The Gas processing facilities to be installed and constructed
by Processor at the Plant Site, including, to the extent installed, cryogenic,
refrigeration and chilling equipment, absorption vessels, product separation and
fractionation vessels, product storage vessels, associated condensing, heating,
compressing, pumping, conveying, dehydration and other equipment,
instrumentation, and recompression and refrigeration compression facilities, and
all related structures; the Residue Gas pipelines to the Plant Delivery Points
and the associated interconnections; and all easements, rights-of-way, and other
property rights on which any of the foregoing facilities are located; in each
case wherever located.

 

Processor.  As defined in the preamble of this Agreement.

 

Producer.  As defined in the preamble of this Agreement.

 

Producer Gas.  Dedicated Gas delivered to the Receipt Points pursuant to this
Agreement.

 

Producer Plant Products.  That portion of the Plant Products allocated to the
Producer in accordance with Section 6.4.

 

Producer Residue Gas.  Residue Gas allocated to Producer under this Agreement.

 

Producer’s GHG Emissions.  As defined in Section 10.4.

 

psia.  Pounds per square inch, absolute.

 

psig.  Pounds per square inch, gauge.

 

Receipt Point.  The inlet flange of Processor’s facilities at each point at the
Processing Plant where Producer[, Processor (in its capacity as Gatherer under
the Gathering Agreement)] or a third party gathering Producer’s Gas delivers
Producer’s Gas to the Processing Plant.

 

Remote Monitoring Data.  As defined in Section 11.9(a).

 

Required Processing Effective Date.  As defined in Section 3.2(d).

 

--------------------------------------------------------------------------------

(15)  The appropriate definition will depend upon whether or not fractionation
services are to be provided under this Agreement.

 

6

--------------------------------------------------------------------------------

 

Residue Gas.  That portion of the Gas delivered to the Plant Receipt Points that
remains after processing at the Processing Plant (if processed) and after Fuel
and Lost and Unaccounted For Gas, including Bypass Gas.

 

Services.  As defined in Section 3.1.

 

Shortfall Period.  As defined in Section 2.5.

 

Taxes.  All gross production, severance, conservation, ad valorem and similar or
other taxes measured by or based upon production, together with all taxes on the
right or privilege of ownership of Gas, or upon the Services, including
gathering, transportation, handling, transmission, compression, processing,
treating, conditioning, distribution, sale, use, receipt, delivery or redelivery
of Gas, Residue Gas or Plant Products, including, without limitation, gross
receipts taxes, and including all of the foregoing now existing or in the future
imposed or promulgated.

 

Theoretical Gallons.  The number of Gallons of Plant Products in Gas at any
particular point determined by Processor using generally-accepted industry
standards utilizing chromatograph analysis taken on Gas samples from the
relevant point.

 

Thermal Content.  For Gas, the product of (i) a volume of Gas in Cubic Feet and
(ii) the Gross Heating Value of such Gas, as expressed in MMBtus.  For [any
Plant Product] OR [Plant Products], the product of (i) a volume of [such Plant
Product] OR [the Plant Products] in Gallons and (ii) the Gross Heating Value per
Gallon determined in accordance with the GPA 2145-09 Table of Physical
Properties for Hydrocarbons and GPA 8173 Method for Converting Mass of Natural
Gas Liquids and Vapors to Equivalent Liquid Volumes, in each case as revised
from time to time.

 

Third Party Gas.  Gas produced by Persons other than Producer and not considered
Dedicated Gas hereunder.

 

Water Services Agreement.  That certain water services agreement dated
[                ] made by and between Producer and Processor.

 

ARTICLE 2
PRODUCER COMMITMENTS

 

Section 2.1                                   Producer’s Dedication.  Subject to
Section 2.2 through Section 2.4, (a) Producer exclusively dedicates and commits
to deliver to Processor, as and when produced, all Dedicated Gas, up to the
amount of Producer’s then-current Firm Capacity, for processing under this
Agreement[, including the fractionation and marketing of the Plant Products
extracted from such Dedicated Gas,] and (b) Producer agrees not to deliver any
Dedicated Gas to any processing plant other than the Processing Plant.

 

Section 2.2                                   Conflicting Dedications.  Producer
shall have the right to comply with each of the Conflicting Dedications set
forth in Exhibit B hereto and any other Conflicting Dedication entered into by a
non-Affiliated predecessor in interest to Producer that is applicable as of the
date of acquisition thereof to any Dedicated Property acquired after the
Effective Date (but not any entered into in connection with such acquisition);
provided, however, that Producer shall have the right to comply with Conflicting
Dedications only until the first Day of the Month following the termination of
such Conflicting Dedication and shall not take any voluntary action (including
the exercise of any right to extend) to extend the term of such Conflicting
Dedication

 

7

--------------------------------------------------------------------------------

 

beyond the minimum term provided for in the document evidencing such Conflicting
Dedication.  Producer represents that, except as set forth in Exhibit B,
Dedicated Gas is not as of the Effective Date subject to any Conflicting
Dedication. If Dedicated Gas produced from a well on a well pad is subject to a
Conflicting Dedication that Producer has the right to comply with under this
Section 2.2, Producer has the right, in complying with such Conflicting
Dedication, to deliver all Dedicated Gas from such well pad in accordance with
the Conflicting Dedication, even if all wells on such well pad are not subject
to such Conflicting Dedication.

 

Section 2.3                                   Producer’s Reservations.  Producer
reserves the following rights with respect to Dedicated Gas for itself and for
the operator of the relevant Dedicated Properties:  (a) to operate wells
producing Dedicated Gas as a reasonably prudent operator in its sole discretion,
including the right, but never the obligation, to drill new wells, to repair and
rework old wells, to renew or extend, in whole or in part, any Oil and Gas
Interest covering any of the Dedicated Properties, and to cease production from
or abandon any well or surrender any such Oil and Gas Interest, in whole or in
part, when no longer deemed by Producer to be capable of producing Gas in paying
quantities under normal methods of operation; (b) to use Dedicated Gas for
operations (including reservoir pressure maintenance and drilling or
fractionation fuel); (c) to deliver or furnish to Producer’s lessors and holders
of other existing similar burdens on production such Gas and other production as
is required to satisfy the terms of the applicable leases or other applicable
instruments; and (d) to pool, communitize, or unitize Producer’s Oil and Gas
Interests with respect to Dedicated Gas, provided that the Producer’s share of
Gas produced from such pooled, communitized, or unitized Oil and Gas Interests
shall be committed and dedicated to this Agreement.

 

Section 2.4                                   Covenant Running with the Land. 
The dedication and commitment made by Producer under this Article 2 is a
covenant running with the land. For the avoidance of doubt and in addition to
that which is provided in Section 18.4, in the event Producer sells, transfers,
conveys, assigns, grants, or otherwise disposes of any or all of its interest in
the Dedicated Properties, then any such sale, transfer, conveyance, assignment,
grant, or other disposition shall be expressly subject to this Agreement and any
instrument of conveyance shall so state.  Notwithstanding the foregoing,
Producer shall be permitted to sell, transfer, convey, assign, grant, or
otherwise dispose of Dedicated Properties free of the dedication hereunder in a
sale or other disposition in which a number of net acres of Dedicated Properties
that, when added to the total of net acres of Dedicated Properties theretofore
and, where applicable, simultaneously disposed of free of dedication hereunder
pursuant to this Section 2.4, does not exceed the aggregate number of net acres
of Dedicated Properties acquired by Producer after the Effective Date, including
in a transaction in which Dedicated Properties are exchanged for other
properties located in the Dedication Area that would be subject to dedication
hereunder. At the request of Processor, the Parties shall execute and record an
amendment to the memorandum of this Agreement previously entered into, as
provided in Section 18.16, to reflect additions to the Dedicated Properties.

 

Section 2.5                                   Firm Capacity.  As of the
Processing Effective Date, Producer shall have Firm Capacity of [            ]
MMcf per Day.  If, during any period of six (6) consecutive Months at any time
after the Processing Effective Date, Producer fails to deliver to the Receipt
Points, on average during such six (6) Month period (the “Shortfall Period”), a
volume of Producer Gas per Day equal to at least [75]% of Producer’s
then-effective Firm Capacity, then Producer’s Firm

 

8

--------------------------------------------------------------------------------

 

Capacity shall be reduced by the amount by which Producer’s Firm Capacity
exceeds the volume per Day, on average in the relevant Shortfall Period, of
Producer Gas delivered to the Receipt Points.  Such reduction shall remain
effective for the remainder of the term of this Agreement, subject to any
subsequent reductions pursuant to this Section 2.6. [Notwithstanding the
foregoing provisions of this Section 2.5, the Firm Capacity of Producer shall
not be reduced pursuant to this Section 2.5 to the extent that such reduction
would cause the Firm Capacity of Producer to fall below (i) [125]% of the
Minimum Processing Volume Commitment applicable from time to time, if any or
(ii) if no Minimum Processing Volume Commitment is applicable at the relevant
time, [110]% of average Daily deliveries of Producer Gas delivered hereunder
during the applicable Shortfall Period.]

 

ARTICLE 3
SERVICES

 

Section 3.1                                   Processor Service Commitment. 
Subject to and in accordance with the terms and conditions of this Agreement,
Processor commits to providing the following services (collectively, the
“Services”) to Producer, commencing on the Processing Effective Date:

 

(a)                                 receive, or cause to be received, from or
for the account of Producer, at the Receipt Points, all Dedicated Gas tendered
by Producer;

 

(b)                                 either process such Dedicated Gas at the
Processing Plant or, as permitted by Section 7.6 or Section 10.2, bypass such
Dedicated Gas around the Processing Plant and, in either case, redeliver Residue
Gas to Producer, or for Producer’s account, at the Delivery Points nominated by
Producer in accordance with Section 9.2;

 

(c)                                  [deliver to Producer the Plant Products at
the Plant Products Delivery Point] OR [exchange the unfractionated Plant
Products available at the tailgate of the Processing Plant for Fractionated
Products allocated to Producer at the Plant Products Delivery Point in
accordance with Section 3.5; and](16)

 

(d)                                 [market such Fractionated Products for the
account of Producer, deliver Fractionated Products exchanged in accordance with
paragraph (c) above to the purchaser thereof at the Plant Products Delivery
Point, and pay Producer the net sales proceeds of such Fractionated Products, in
each case in accordance with Section 3.5].

 

Section 3.2                                   Processing Plant.  Processor
hereby agrees as follows with respect to the Processing Plant.

 

(a)                                 Processor shall design, engineer, procure,
construct and install the Processing Plant, or shall procure the same, and shall
use commercially reasonable efforts to construct and install the Processing
Plant as soon as is practicable under the circumstances that, from time to time,
may exist.  After the Processing Effective Date, the Processing Plant will have
processing capacity of at least [          ] MMcf per day with design recoveries
(“Design Recoveries”) as follows:

 

--------------------------------------------------------------------------------

(16)  The appropriate description will depend upon whether or not fractionation
services are to be provided under this Agreement.

 

9

--------------------------------------------------------------------------------

 

Design Plant Recovery

 

When Operating in
Ethane Rejection Mode

 

When Operating in
Ethane Recovery Mode

Helium

 

0.0%

 

 

0.0%

 

CO2 - Carbon Dioxide

 

0.0%

 

 

0.0%

 

N2    - Nitrogen

 

0.0%

 

 

0.0%

 

H2S  - Hydrogen Sulfide

 

0.0%

 

 

0.0%

 

C1    - Methane

 

0.0%

 

 

0.0%

 

C2    - Ethane

 

2.0%

 

 

85.0%

 

C3    - Propane

 

90.0%

 

 

98.0%

 

IC4   - Isobutane

 

98.0%

 

 

99.5%

 

NC4  - Normal Butane

 

99.5%

 

 

99.8%

 

C5+  - Natural Gasoline

 

99.9%

 

 

99.9%

 

 

(b)                                 The Processing Plant shall include the
installation, at Processor’s cost, of a residue gas pipeline for redelivery of
the Residue Gas to the Delivery Points set forth on Exhibit A attached hereto.

 

(c)                                  The Processing Plant will be constructed at
a site to be determined by Processor that is reasonably acceptable to Producer
(the “Plant Site”).  The Plant Site may be acquired in fee or under a site lease
or other form of interest as is reasonably acceptable to Processor.  The Plant
Site will reserve in favor of Producer, for the use of Producer and its
contractors [(including the Gatherer under the Gathering Agreement)] and their
respective successors and assigns, appropriate fee parcels, easements or other
surface and underground rights sufficient for Producer and such contractors to
construct, locate, and operate the inlet facilities required for the delivery of
Producer’s Gas to the Processing Plant at the Receipt Points, including, but not
limited to, inlet slug catchers, pig receivers, and compression facilities.

 

(d)                                 If the Processing Effective Date has not
occurred by the end of twenty-one (21) months after the Effective Date (the
“Required Processing Effective Date”), and such delay is not due to Force
Majeure, then after the Processing Effective Date occurs, Processor will not
charge Producer any of the Fees for a number of Days equal to the number of Days
following the Required Processing Effective Date until the Processing Effective
Date, but only with respect to those volumes of Producer’s Gas up to its Firm
Capacity that were not processed at the Processing Plant as Interruptible Gas
during such delay period.  The remedy described above shall be Producer’s sole
and exclusive remedy for any such delay.

 

Section 3.3                                   Expansion of Processing Plant.  If
Producer determines at any time or from time to time that it requires capacity
at the Processing Plant in excess of its then-existing Firm Capacity (“Increased
Capacity”), Producer will provide written notice to Processor of its Increased
Capacity requirements at least eighteen (18) months in advance.  Producer shall
reasonably demonstrate to Processor Producer’s drilling plans to support the
amount of Increased Capacity.  If Processor desires to provide such Increased
Capacity on the terms and conditions set forth in this Agreement, Processor will
notify Producer that it will so provide such Increased Capacity on or before the
60th Day after Producer’s notice of such Increased Capacity, and Processor will
design the expanded or new processing facilities at the Processing Plant
(“Additional Processing Facilities”) to meet Producer’s Increased Capacity
requirements.  Following the completion of the Additional Processing Facilities,
Producer will have Firm Capacity in respect of the Increased Capacity in such
Additional Processing Facilities so

 

10

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requested by Producer pursuant to this Section 3.3.  If Processor does not
notify Producer, on or before the 60th Day after Producer’s notice to Processor
of Producer’s Increased Capacity requirements, that Processor will provide such
Increased Capacity on the terms and conditions set forth in this Agreement,
Dedicated Gas up to a Daily volume equal to such Increased Capacity shall be
released from Producer’s commitments under Article 2, and Producer shall be free
to commit and deliver such volume of Dedicated Gas to a third party for
processing, fractionation, and marketing. If the Additional Processing
Facilities are not completed by the end of eighteen (18) months after the notice
provided by Producer of its Increased Capacity Requirements, and such delay is
not due to Force Majeure, then after the Additional Processing Facilities are
completed, Processor will not charge Producer any of the Fees for a number of
Days equal to the number of Days of such delay, but only with respect to those
volumes of Producer’s Gas up to its Firm Capacity that were not processed at the
Processing Plant as Interruptible Gas during such delay period.  The remedy
described above shall be Producer’s sole and exclusive remedy for any such
delay.

 

Section 3.4                                   Ethane Nomination.  From the
Processing Effective Date:

 

(a)                                 At least one (1) Business Day prior to the
date on which any ethane pipeline or other receiving transporter or purchaser
requires monthly nominations to be submitted in respect of a Month, Producer
shall provide written notice to Processor (each, an “Ethane Nomination”), which
shall either (x) direct Processor to operate the Processing Plant in Ethane
Recovery Mode during such Month or (y) direct Processor to operate the
Processing Plant in Ethane Rejection Mode during such Month.

 

(b)                                 If Producer fails to deliver an Ethane
Nomination within the time required, Producer shall be deemed to have delivered
an Ethane Nomination directing Processor to operate the Processing Plant in
Ethane Rejection Mode.

 

(c)                                  Despite an Ethane Nomination directing
Processor to operate the Processing Plant in Ethane Recovery Mode, Processor may
instead continue to operate the Processing Plant in Ethane Rejection Mode and
deliver to Producer the volume of ethane that would have been allocable to
Producer had the Processing Plant been operated in Ethane Recovery Mode.  Such
ethane shall be delivered by Processor from other sources or supplies of ethane
in lieu of recovering the ethane from Producer’s Gas.  In the case where an
Ethane Nomination requires Ethane Recovery Mode and Processor continues to
operate in Ethane Rejection Mode, during such period Producer shall be allocated
Plant Products (other than ethane) on the basis of the Design Recoveries for
operating in Ethane Recovery Mode, and the allocation of Residue Gas to Producer
shall be determined taking into account the Thermal Content resulting from the
application of such Design Recoveries.

 

Section 3.5                                   [Exchange and Marketing of
Fractionated Plant Products.]

 

(a)                                 [Subject to and in accordance with the terms
and conditions of this Agreement, commencing on the Processing Effective Date,
Processor (i) shall exchange all Plant Products allocated to Producer in
accordance with Article 6 for Fractionated Products based on the volume and
composition of Plant Products allocated to Producer in accordance with
Article 6, (ii) shall market, as Producer’s agent, such Fractionated Products in
accordance with the terms

 

11

--------------------------------------------------------------------------------

 

of this Section 3.5, and (iii) shall pay Producer, in respect of each Month, one
hundred percent (100%) of the Net Sales Price for such Fractionated Products
multiplied by the number of Gallons of Fractionated Products sold during such
Month.  Producer hereby designates Processor as its agent for the purpose of
marketing, selling and transporting for sale the Fractionated Products.

 

(b)                                 If for any reason at any time Processor is
unable to fully exchange Fractionated Products for all the Plant Products
allocated to Producer in accordance with Article 6, then any products delivered
at the Plant Products Delivery Point that do not constitute Fractionated
Products will be marketed and sold in accordance with this Agreement and
consistent with the provisions governing the marketing and sale of Fractionated
Products; provided that, Processor shall use commercially reasonable efforts,
taking into account the additional costs of storing, transporting and/or
fractionating such other products and the then-current differential between
market prices of the individual components thereof and the sale of such products
as a mixed stream of natural gas liquids, to utilize substitute means of
fractionating the Plant Products allocated to Producer for the ultimate sale of
components thereof or store any such other products exchanged therefor until
fractionation is possible.]

 

ARTICLE 4
TERM

 

Section 4.1                                   Term.  This Agreement shall become
effective on the Effective Date and, unless terminated earlier by mutual
agreement of the Parties, shall continue in effect until the twentieth (20th)
anniversary of the Effective Date and from year to year thereafter (with the
initial term of this Agreement deemed extended for each of any such additional
year) until such time as this Agreement is terminated, effective upon an
anniversary of the Effective Date, by notice from either Party to the other
Party on or before the one hundred eightieth (180th) Day prior to such
anniversary.

 

ARTICLE 5
FEES AND CONSIDERATION

 

Section 5.1                                   Fees.

 

(a)                                 Subject to the other provisions of this
Agreement, including Section 5.1(d), and commencing on the Processing Effective
Date, Producer shall pay Processor in respect of each Month (or partial Month)
from and after the Processing Effective Date in accordance with the terms of
this Agreement, for all Services provided by Processor under this Agreement
during such period, an amount equal to the sum of the following:

 

(i)                                     The product of (A) the aggregate volume
of Gas, stated in Mcf, received by Processor from Producer or for Producer’s
account at each Receipt Point during such period (excluding Bypass Gas)
multiplied by (B) $[         ] (as may be increased or decreased in accordance
with Section 5.1(b), the “Processing Fee”);

 

(ii)                                  [The product of (A) the aggregate volume
of Producer Plant Products, stated in Gallons, allocated to Producer under this
Agreement with respect to

 

12

--------------------------------------------------------------------------------

 

such period multiplied by (B) $[         ] (as may be increased or decreased in
accordance with Section 5.1(b), the “Fractionation Fee”);]

 

(iii)                               [The product of (A) the aggregate volume of
Producer Plant Products, stated in Gallons, allocated to Producer under this
Agreement with respect to such period multiplied by (B) $[         ] (as may be
increased or decreased in accordance with Section 5.1(b), the “Delivery Fee”);
and]

 

(iv)                              [The product of (A) the aggregate volume of
Producer Plant Products, stated in Gallons, sold by Processor on behalf of
Producer under this Agreement during such period multiplied by (B) $[         ]
(as may be increased or decreased in accordance with Section 5.1(b), the
“Marketing Fee”)].

 

(b)                                 After each of the first five (5) Contract
Years, one hundred percent (100%), and after the sixth (6th) Contract Year and
each Contract Year thereafter, fifty-five percent (55%), of each of the Fees
shall be adjusted up or down on an annual basis in proportion to the percentage
change, from the preceding year, in the All Items Consumer Price Index for All
Urban Consumers (CPI-U) for the U.S. City Average, 1982-84 = 100, as published
by the United States Department of Labor, Bureau of Labor Statistics (“CPI”).
Such adjustment shall be made effective upon the first Day of the relevant
Contract Year, and shall reflect the percentage change in the CPI as it existed
for June of the preceding Contract Year from the CPI for the second immediately
preceding June; provided, however, that the Fees shall never be less than the
initial fees stated in Section 5.1(a); nor shall any Fees be increased or
decreased by more than 3% in any given Contract Year.

 

(c)                                  Subject to the other provisions of this
Agreement, including Section 5.1(d), Producer shall pay Processor the actual
cost of electricity used as Fuel and allocated to Producer in accordance with
Section 6.2.

 

(d)                                 Notwithstanding the foregoing provisions of
this Section 5.1, regardless of whether Producer utilize any portion of its Firm
Capacity, with respect to any Contract Year in which there is a Minimum
Processing Volume Commitment, Producer shall pay to Processor, on or before the
30th Day after receipt of Processor’s invoice therefor (which shall be delivered
not more than sixty (60) Days after the end of the relevant Contract Year), an
amount equal to the excess, if any, of:

 

(i)                                     the sum of (A) the Minimum Processing
Volume Commitment for such Contract Year multiplied by the Processing Fee for
such Contract Year[, plus (B) the sum of the Fractionation Fee, the Delivery
Fee, and the Marketing Fee that Processor would earn on the volumes of Plant
Products extracted from the Minimum Processing Volume Commitment for such
Contract Year, based on the Design Recoveries] over

 

(ii)                                  the sum of (X) the aggregate amount of
Fees paid with respect such Contract Year and (Y) the sum of (1) the product of
the Processing Fee in effect for such Contract Year multiplied by the aggregate
of the volumes of Dedicated Gas, stated in Mcf, Made Available for Delivery by
Producer at each Receipt Point during such Contract Year[, plus (2) the
Fractionation Fee, the Delivery Fee, and the Marketing Fee

 

13

--------------------------------------------------------------------------------

 

that Processor would have earned on the volumes of Plant Products extracted from
the volumes of Dedicated Gas so Made Available for Delivery, based on Design
Recoveries].

 

ARTICLE 6
ALLOCATIONS

 

The allocations set forth in this Article 6 shall be made by Processor on a
Monthly basis.

 

Section 6.1                                   Allocation of Lost and Unaccounted
For Gas.

 

(a)                                 Total Lost and Unaccounted For Gas with
respect to the Processing Plant in respect of each Month shall be determined by
subtracting from the total Thermal Content of Gas received at all Plant Receipt
Points during such Month the sum of (i) the Thermal Content of Residue Gas
actually delivered to all Plant Delivery Points during such Month, (ii) the
Thermal Content of Plant Products actually delivered to the Plant Products
Delivery Point during such Month, and (iii) the Thermal Content of Gas used for
Fuel at the Processing Plant, if any, during such Month.

 

(b)                                 Thermal Content of Lost and Unaccounted For
Gas shall be allocated to each Plant Receipt Point on a pro rata basis, based
upon a fraction, the numerator of which is the total Thermal Content of Gas
measured at such Plant Receipt Point during the relevant Month (less all Bypass
Gas attributable to such Plant Receipt Point), and the denominator of which is
the total Thermal Content of Gas measured at all Plant Receipt Points (less the
total of all Bypass Gas) during such Month.

 

(c)                                  [Thermal Content of Lost and Unaccounted
For Gas that has been allocated to a Receipt Point in accordance with paragraph
(b) above shall be allocated to each Gathering Receipt Point on a pro rata
basis, based on a fraction, the numerator of which is the total Thermal Content
of Gas measured at such Gathering Receipt Point during the relevant Month, and
the denominator of which is the total Thermal Content of Gas measured at all
Gathering Receipt Points during such Month.]

 

Section 6.2                                   Allocation of Fuel.

 

(a)                                 Total Fuel shall be determined based on
actual measurements of Fuel consumption.

 

(b)                                 Fuel (including Gas used as Fuel and the
cost of electricity used as Fuel) shall be allocated to each Plant Receipt Point
on a pro rata basis, based upon a fraction, the numerator of which is the total
volume of Gas (in Mcf) measured at such Plant Receipt Point during the relevant
Month (less all Bypass Gas attributable to such Plant Receipt Point), and the
denominator of which is the total volume of Gas (in Mcf) measured at all Plant
Receipt Points (less the total of all Bypass Gas) during such Month.

 

(c)                                  [Fuel that has been allocated to a Receipt
Point in accordance with paragraph (b) above shall be allocated to each
Gathering Receipt Point on a pro rata basis, based on a fraction, the numerator
of which is the total volume of Gas (in Mcf) measured at such

 

14

--------------------------------------------------------------------------------

 

Gathering Receipt Point during the relevant Month, and the denominator of which
is the total volume of Gas (in Mcf) measured at all Gathering Receipt Points
during such Month.]

 

Section 6.3                                   Allocation of Bypass Gas.  Thermal
Content of Bypass Gas bypassed at any Bypass Point during a Month shall be
allocated to each Plant Receipt Point upstream of the relevant Bypass Point as
follows:

 

(a)                                 First, by allocation on a pro rata basis
among all Plant Receipt Points (upstream of the relevant Bypass Point) at which
Interruptible Gas was delivered (together, the “Interruptible Gas Plant Receipt
Points”) during the relevant Month (based on a fraction, the numerator of which
is the Thermal Content of Gas received at the relevant Interruptible Gas Plant
Receipt Point during the relevant Month, and the denominator of which is the
Thermal Content of all Gas delivered at all Interruptible Gas Plant Receipt
Points during such Month), to a maximum amount (in Thermal Content) for each
such Interruptible Gas Receipt Point equal to the Thermal Content of the total
Interruptible Gas received at such Interruptible Gas Plant Receipt Point during
such Month.

 

(b)                                 Secondly, to the extent of any remaining
Bypass Gas after the allocation set forth in paragraph (a) above, on a pro rata
basis among all Plant Receipt Points (upstream of the relevant Bypass Point) at
which any Gas was delivered during the relevant Month (based on a fraction, the
numerator of which is the Thermal Content of Gas received at the relevant Plant
Receipt Point during the relevant Month, and the denominator of which is the
Thermal Content of all Gas delivered at all Plant Receipt Points upstream of the
relevant Bypass Point during such Month), to a maximum amount (in Thermal
Content) for each such Plant Receipt Point equal to the total Thermal Content of
all Gas entitled to Firm Service that was received at such Plant Receipt Point
during such Month.

 

(c)                                  [Thermal Content of Bypass Gas that has
been allocated to a Receipt Point in accordance with paragraphs (a) and
(b) above shall be allocated to each Gathering Receipt Point on a pro rata
basis, based on a fraction, the numerator of which is the Thermal Content of Gas
measured at such Gathering Receipt Point during the relevant Month, and the
denominator of which is the total Thermal Content of Gas measured at all
Gathering Receipt Points during such Month.]

 

Section 6.4                                   Allocation of Plant Products.

 

(a)                                 The volume (in Gallons) of [each Plant
Product] OR [the Plant Products](17) at the Plant Products Delivery Point shall
be allocated to each Plant Receipt Point on a pro rata basis, based on a
fraction, the numerator of which is the Theoretical Gallons of the [relevant
Plant Product] OR [Plant Products] contained in the Gas received at such Plant
Receipt Point during the relevant Month (such Gas measurement being calculated
minus any Bypass Gas, Fuel and Lost and Unaccounted For Gas allocated to such
Plant Receipt Point in accordance with this Agreement), and the denominator of
which is the Theoretical Gallons of the [relevant Plant Product] OR [Plant
Products] contained in the Gas received at all Plant Receipt Points during

 

--------------------------------------------------------------------------------

(17)  The appropriate wording will depend on whether Processor is to provide
fractionation services under this Agreement.

 

15

--------------------------------------------------------------------------------

 

such Month (such Gas measurement being calculated minus any Bypass Gas, Fuel and
Lost and Unaccounted For Gas allocated to such Plant Receipt Point in accordance
with this Agreement).

 

(b)                                 [The volume (in Gallons) of [each Plant
Product] OR [the Plant Products] that has been allocated to a Receipt Point in
accordance with paragraph (a) above shall be allocated to each Gathering Receipt
Point on a pro rata basis, based on a fraction, the numerator of which is the
Theoretical Gallons of the [relevant Plant Product] OR [Plant Products]
contained in the Gas measured at such Gathering Receipt Point during the
relevant Month (less the volume of fuel and lost and unaccounted for Gas
allocated to such Gathering Receipt Point in accordance with the Gathering
Agreement in respect of such Month), and the denominator of which is the
Theoretical Gallons of the [relevant Plant Product] OR [Plant Products]
contained in the Gas measured at all Gathering Receipt Points during the
relevant Month (less the volume of all fuel and lost and unaccounted for Gas
allocated to all Gathering Receipt Points in accordance with the Gathering
Agreement).]

 

Section 6.5                                   Allocation of Residue Gas.

 

(a)                                 Thermal Content of Residue Gas available for
redelivery at the Delivery Points shall be allocated to each Plant Receipt Point
on a pro rata basis, based on a fraction, the numerator of which is the Thermal
Content of the Gas received at such Plant Receipt Point during the relevant
Month (less the Thermal Content of the Bypass Gas, Plant Products, Fuel and Lost
and Unaccounted For Gas allocated to such Plant Receipt Point in accordance with
this Agreement), and the denominator of which is the Thermal Content of all Gas
delivered at all Plant Receipt Points during such Month (less the Thermal
Content of all Bypass Gas, Plant Products, Fuel and Lost and Unaccounted For Gas
in respect of such Month).

 

(b)                                 [Thermal Content of Residue Gas that has
been allocated to a Receipt Point in accordance with paragraph (a) above shall
be allocated to each Gathering Receipt Point on a pro rata basis, based on a
fraction, the numerator of which is the Thermal Content of Gas measured at such
Gathering Receipt Point during the relevant Month (less the Thermal Content of
fuel and lost and unaccounted for Gas allocated to such Gathering Receipt Point
in accordance with the Gathering Agreement in respect of such Month), and the
denominator of which is the total Thermal Content of Gas measured at all
Gathering Receipt Points during such Month (less the Thermal Content of all fuel
and lost and unaccounted for Gas allocated to all Gathering Receipt Points in
accordance with the Gathering Agreement).]

 

Section 6.6                                   [Gathering System Measurement
Information].  [Producer shall direct the gatherer under the Gathering Agreement
to provide to Processor such measurement and allocation information as Processor
may request to permit Processor to allocate Lost and Unaccounted For Gas, Fuel,
Residue Gas, Bypass Gas and Plant Products to the Gathering Receipt Points in
accordance with this Section 6.6.]

 

ARTICLE 7
CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

 

Section 7.1                                   Processing Rights.  Producer shall
cause the Producer Gas delivered to the Processing Plant not to have been,
before delivery, processed for the extraction of Plant Products

 

16

--------------------------------------------------------------------------------

 

and other valuable components.  Nothing in this Section 7.1 shall limit the
right of Producer or any other Person to dehydrate Gas or to treat Gas for the
removal of carbon dioxide or hydrogen sulfide.

 

Section 7.2                                   Operational Control of Processor’s
Facilities.  Processor shall design, construct, own, operate, and maintain the
Processing Plant at its sole cost and risk.  Processor shall be entitled to full
and complete operational control of its facilities and shall be entitled to
schedule deliveries and to operate and reconfigure its facilities in a manner
consistent with its obligations under this Agreement.

 

Section 7.3                                   Maintenance.  Processor shall be
entitled, without liability, to interrupt its performance hereunder to perform
necessary or desirable inspections, pigging, maintenance, testing, alterations,
modifications, expansions, connections, repairs or replacements to its
facilities as Processor deems necessary (“Maintenance”), with reasonable notice
provided to Producer, except in cases of emergency where such notice is
impracticable or in cases where the operations of Producer will not be
affected.  Before the beginning of each calendar year, Processor shall provide
Producer in writing with a projected schedule of the Maintenance to be performed
during the year and the anticipated date of such Maintenance.  On or before the
10th Day before the end of each Month, Processor shall provide Producer with its
projected maintenance schedule for the following Month.

 

Section 7.4                                   Firm Capacity; Capacity
Allocations at the Processing Plant.  Subject to the capacity allocations set
forth in this Section 7.4, Processor has the right to contract with other
Persons for the processing of Third Party Gas at the Processing Plant, including
by providing such Persons with Firm Service[, so long as the aggregate amount of
Producer’s Firm Capacity and all Third Party Gas entitled to Firm Service does
not, together, exceed the total processing capacity of the Processing Plant]. 
If the processing capacity at the Processing Plant is limited at any particular
time, including for reasons of Maintenance or Force Majeure, then Processor
shall interrupt or curtail receipts of Gas in accordance with the following:

 

(a)                                 First, Processor shall curtail all
Interruptible Gas prior to curtailing Gas that is entitled to Firm Service.

 

(b)                                 Second, if additional curtailments are
required beyond Section 7.4(a) above, Processor shall curtail Gas that is
entitled to Firm Service.  In the event Processor curtails some, but not all
such Gas on a particular Day, Processor shall allocate the capacity of the
Processing Plant on a pro rata basis based upon the average of the Producer’s
and the other Firm Service producers’ confirmed nominations for the previous
fourteen (14) Day period (in respect of their Firm Service entitlements) prior
to the event causing the curtailment.

 

Section 7.5                                   Arrangements After Redelivery.  It
shall be Producer’s obligation to make any required arrangements with other
parties for delivery of Producer’s Gas to the Receipt Points and removal of
Residue Gas following delivery by Processor at the Delivery Points.

 

Section 7.6                                   Bypass Gas.  Subject always to
Section 7.4, during any period when (i) all or any portion of the Processing
Plant is shut down because of mechanical failure, Maintenance, operating
conditions outside of the design parameters of the Processing Plant, or Force
Majeure,

 

17

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(ii) Producer’s Gas Made Available for Delivery, together with Third Party Gas
delivered to the Processing Plant, exceeds the capacity of the Processing Plant,
or (iii) Processor determines reasonably and in good faith that the operation of
all or any portion of the Processing Plant will cause injury or harm to Persons
or property or to the integrity of the Processing Plant, Processor may, if the
relevant Downstream Pipelines are willing to take unprocessed Gas, elect to
bypass Producer’s Gas around the Processing Plant, in which case such Producer’s
Gas shall be Bypass Gas in respect of which Processor’s obligations under
Section 10.3 will not apply.

 

ARTICLE 8
PRESSURES AT RECEIPT POINTS AND DELIVERY POINTS

 

Section 8.1                                   Pressure at Receipt Points. 
Producer shall deliver or shall cause to be delivered Producer’s Gas hereunder
at a pressure sufficient to enter the Processing Plant at the Receipt Points at
a pressure not less than 950 psig.  In the event that Producer’s Gas is
delivered at the Receipt Points at a pressure less than 950 psig, Processor will
operate the Processing Plant and process Producer’s Gas in each case to the
extent commercially practicable and reasonable under the circumstances and
taking into account the impact that such lower pressure may have on the
operation of the Processing Plant, and Producer agrees to be responsible for,
and to defend, indemnify, release, and hold Processor and its Affiliates,
directors, officers, employees, agents, consultants, representatives, and
invitees harmless from and against, all claims and losses of whatever kind and
nature resulting from such low pressure Gas.

 

Section 8.2                                   Pressure at Delivery Points. 
Processor shall redeliver Producer’s Residue Gas within the pressure parameters
required by the Downstream Pipelines; provided, however, Processor shall have no
obligation to compress Residue Gas to a pressure exceeding 1,200 psig.

 

ARTICLE 9
NOMINATION AND BALANCING

 

Section 9.1                                   Processor Notifications.  On or
before the fifth (5th) Day prior to the end of each Month, Processor shall
provide written notice to Producer of Processor’s good faith estimate of any
capacity allocations or curtailments for the Processing Plant, if any, that,
based on then currently available information, Processor anticipates will be
required or necessary during the next Month, including as a result of any
Maintenance.  Processor shall use all reasonable efforts to provide 48 hours’
advance notice of any actual event requiring allocation or curtailment,
including Maintenance.

 

Section 9.2                                   Nominations.  Scheduling of
receipts and deliveries of gas between the Receipt Point and Delivery Points
shall be in accordance with Processor’s reasonable nomination and scheduling
procedures and the nomination and scheduling procedures and imbalance tolerance
levels of the downstream transporters.  No later than two (2) Business Days
prior to the end of each Month, Producer shall notify Processor of the quantity
of gas in MMBtu Producer expects to make available and deliver at the Receipt
Points and receive at the Delivery Points each Day of the following Month,
including identification of each such Receipt Point and Delivery Point and the
volumes of delivery at each Receipt Point and Delivery Point identified (the
“Nomination”).  No later than five (5) Business Days prior to the end of each
Month, Processor shall notify Producer of the estimated Fuel expected to be used
at the Processing Plant

 

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for the following Month, expressed as a percentage of the MMBtus delivered at
the Receipt Points (using the allocation methodology set forth in Section 6.2),
after taking into consideration the anticipated operational efficiencies and
operational mode of the Processing Plant.  Should Producer desire to change the
Nomination during a Month, such change to the Nomination shall be in accordance
with the nomination procedures of the Downstream Pipelines.  Residue Gas shall
be delivered by Processor in accordance with confirmation by the Downstream
Pipelines of the Nomination and/or changes to the Nomination.

 

Section 9.3                                   Balancing.  Processor will
maintain records of any Daily and Monthly variances (“Imbalances”) between the
volume of Dedicated Gas received at the Receipt Points and the volumes of
Producer Residue Gas (after Lost and Unaccounted for Gas, Fuel and Plant
Products allocated to Producer).  Producer shall make such changes in its
Nominations as Processor may from time to time reasonably request to maintain
Daily and Monthly balances or to correct an Imbalance.  Producer shall reimburse
Processor for any cost, penalty, or fee arising from any Imbalance assessed
against Processor by any Person receiving Producer Residue Gas downstream of the
Delivery Points or Producer Plant Products downstream of the Plant Products
Delivery Point, except to the extent such Imbalance was caused by Processor.
Upon the termination of this Agreement or at such other time as the Parties
agree the Parties shall cash out any cumulative Imbalance using the applicable
Index Price for the prior Month.

 

ARTICLE 10
QUALITY

 

Section 10.1                            Receipt Point Gas Quality
Specifications.  Gas delivered by Producer to the Receipt Points shall meet the
following specifications (collectively, the “Gas Quality Specifications”):

 

(a)                                 The Gas shall not contain any of the
following in excess of: one-quarter (1/4) grain of hydrogen sulfide per hundred
(100) Cubic Feet; one (1) grain of total sulfur per hundred (100) Cubic Feet;
two one-hundredths of one percent (0.02%) by volume of oxygen; or two percent
(2%) by volume of nitrogen.

 

(b)                                 The total of all non-hydrocarbon gases shall
not exceed three percent (3%) by volume.

 

(c)                                  The temperature of the Gas at the Receipt
Point shall not be in excess of one hundred twenty (120) degrees Fahrenheit.

 

(d)                                 The Gas shall be free of solids, sand, salt,
dust, gums, crude oil, and hydrocarbons in the liquid phase, and other
objectionable substances which may be injurious to pipelines or which may
interfere with the measurement, transmission or commercial utilization of said
Gas.

 

Except for items (a) through (d) above, such Gas shall be of such quality as
would, after processing (assuming the proper performance by Processor of its
obligations under this Agreement) meet the most restrictive quality
specifications required from time to time by the Downstream Pipelines, including
as to water vapor content.

 

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Section 10.2                            Non-Conforming Gas.   If any Gas
delivered by Producer fails at any time to conform to the Gas Quality
Specifications, then Processor will have the right to immediately discontinue
receipt of such non-conforming Gas so long as such Gas continues to be
non-conforming.  Producer agrees to undertake commercially reasonable measures
to eliminate the cause of such non-conformance.  If Producer fails to remedy
such non-conformance, but such Gas conforms to all specifications other than
hydrocarbon dew point and/or Gross Heating Value, then Processor agrees to
(i) use commercially reasonable efforts to blend and commingle such Gas with
other Gas in the Processing Plant so that it meets the applicable specifications
and (ii) if such Gas cannot be brought into compliance with such blending, will
continue to accept such Gas, such Gas will be Bypass Gas, and Processor shall
redeliver such Bypass Gas to those Delivery Points at which the Downstream
Pipelines will accept such non-conforming Gas as long as (A) no harm is done to
the Processing Plant, (B) no harm is done to other customers of Processor or
their Gas, and (C) other customers of Processor are not prevented from
nominating Gas to their preferred Plant Delivery Point.  In the event that
Processor takes receipt of non-conforming Gas, Producer agrees to be responsible
for, and to defend, indemnify, release, and hold Processor and its Affiliates,
directors, officers, employees, agents, consultants, representatives, and
invitees harmless from and against, all claims and losses of whatever kind and
nature resulting from such non-conforming Gas.

 

Section 10.3                            Producer Residue Gas Quality
Specifications.  Processor shall redeliver the Producer Residue Gas at the
Delivery Points meeting the Gas Quality Specifications[, provided that Producer
complies with its obligations in the proviso to Section 10.3 of the Gathering
Agreement].

 

Section 10.4                            Greenhouse Gas Emissions. 
Notwithstanding anything contained in this Agreement to the contrary, in the
event there is an enactment of, or change in, any law after the Effective Date
of this Agreement which, in Processor’s reasonable determination, results in
(a) a Governmental Authority requiring Processor to hold or acquire emission
allowances or their equivalent related to the carbon dioxide content or
emissions or the greenhouse gas content or emissions attributable to Producer’s
Gas and/or the gathering, or transportation of such Gas (collectively,
“Producer’s GHG Emissions”) or (b) Processor incurring any costs or expenses
attributable to Producer’s Gas, including any costs or expenses for disposal or
treating of carbon dioxide attributable to such Gas, or any other additional
economic burden being placed on Processor in connection with or related to
Producer’s GHG Emissions, including any tax, assessment, or other cost or
expense (collectively, “Emissions Charges”), then (i) Producer will use
reasonable efforts to provide any required emissions allowances or their
equivalent to Processor in a timely manner (and shall indemnify and hold
harmless Processor from against any Losses, including any expenses incurred by
Processor in acquiring such allowances in the marketplace, arising out of
Producer’s failure to so provide such allowances) and (ii) Producer shall be
fully responsible for such Emissions Charges and shall reimburse Processor for
any Emissions Charges paid by Processor within ten (10) Days of receipt of
Processor’s invoice.

 

ARTICLE 11
MEASUREMENT EQUIPMENT AND PROCEDURES

 

Section 11.1                            Equipment.  Processor shall install,
own, operate, and maintain Measurement Facilities to measure Gas at all Plant
Receipt Points downstream of any slug

 

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catcher and, provided Producer bears the cost of the same, shall ensure that
each Downstream Pipeline installs, owns, operates, and maintains Measurement
Facilities at the Plant Delivery Points.  Measurement Facilities at the Plant
Receipt Points shall meet current industry standards for custody transfer
measurement.  Producer shall have the right to install check Measurement
Facilities at each Receipt Point, including the right to install check
measurement equipment on Processor’s meter tubes and orifice unions.

 

Section 11.2                            Gas Measurement Standards.  The
following standards shall apply to the measurement of Gas hereunder:

 

(a)                                 Where measurement is by orifice meter, all
fundamental constants, observations, records, and procedures involved in the
determination and/or verification of the quantity and other characteristics of
the Gas delivered hereunder shall be in accordance with the standards prescribed
in the latest edition of A.G.A. Report No. 3 (ANSI/API 2530) “Orifice Metering
of Natural Gas” with any revisions, amendments or supplements as may be mutually
acceptable to the Parties.

 

(b)                                 Where measurement is by ultrasonic meter,
all fundamental constants, observations, records, and procedures involved in the
determination and/or verification of the quantity and other characteristics of
the Gas delivered hereunder shall be in accordance with the standards prescribed
in the latest edition of A.G.A. Report No. 9 “Measurement of Gas by Multi Path
Ultrasonic Meters” with any revisions, amendments or supplements as may be
mutually acceptable to the Parties.

 

(c)                                  The changing and integration of the charts
(if utilized for measurement purposes hereunder) and calibrating and adjusting
of meters shall be performed by Processor.

 

Section 11.3                            Gas Measurement.

 

(a)                                 The unit of volume for measurement of Gas
delivered hereunder shall be one Mcf at a base temperature of 60 degrees
Fahrenheit and at an absolute pressure of 14.73 psia and without adjustment for
water vapor content.  It is agreed that for the purposes of measurement and
computations hereunder, (a) the atmospheric pressure shall be based on the
atmospheric pressure determined and used by Downstream Pipelines at the Delivery
Points regardless of the atmospheric pressure at which the Gas is measured and
(b) all measurements and testing performed hereunder shall all be made by
Processor in accordance with applicable rules, regulations, and orders.

 

(b)                                 Processor’s Measurement Facilities at the
Plant Receipt Points shall be continuous samplers or gas chromatographs, as
Processor shall in its discretion determine, subject to the minimum requirements
set forth in the following sentence.  Measurement at the Plant Receipt Points
shall be done using continuous samplers (for Measurement Facilities metering
less than twenty thousand (20,000) Mcf per Day) and online gas chromatographs
(for Measurement Facilities metering twenty thousand (20,000) Mcf or more per
Day).  Measurement at the Plant Delivery Points shall be done using continuous
samplers (for Measurement Facilities metering less than twenty thousand (20,000)
Mcf per Day) and online gas chromatographs (for Measurement Facilities metering
twenty thousand (20,000) Mcf or more per Day).  Processor

 

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shall procure or cause to be procured a sample of Gas at each Plant Delivery
Point and analyze the samples by chromatographic analysis to determine the
component content (mole percent), specific gravity, and the Thermal Content
thereof.  These determinations shall be made utilizing the following standards:
(i) Gas Processors Association Obtaining Natural Gas Samples for Analysis by
Gas, Publication No. 2166 as amended or supplemented from time to time and
(ii) Gas Processors Association Analysis for Natural Gas and Similar Gaseous
Mixtures by Gas Chromatography, Publication No. 2161 as amended or supplemented
from time to time, or (iii) any other tests that are mutually agreed by Producer
and Processor.

 

(c)                                  The specific gravity of Gas shall be
measured by a standard gravity balance in accordance with the provisions of the
Natural Gas Processors Association Publication No. 3130, entitled “Standard
Method for Determining the Specific Gravity of Gas”, or by a gravitometer
employing the “Momentum Method” as described in Chapter VII, “Determination of
Specific Gravity”, of the American Gas Association Gas Measurement Manual, 1963,
in each case, as such may be amended from time to time.  The specific gravity
will be determined and calculated to the nearest one-thousandth (0.001).

 

(d)                                 The temperature of Gas shall be determined
by means of a recording thermometer recording the temperature of such Gas
flowing through each measurement meter.  The average temperature to the nearest
one degree (1º) Fahrenheit, obtained while Gas is being delivered, will be the
applicable flowing Gas temperature for the period under consideration.

 

(e)                                  The deviation of the Gas from the
thermodynamic laws applying to perfect gases shall be determined in accordance
with the A.G.A. Par Research Project NX-19 Report “Manual for the Determination
of Supercompressibilty Factors for Natural Gas”, Reprinted 1976, if the
composition of the Gas is such to render this procedure applicable.

 

(f)                                   Physical constants required for making
calculations hereunder shall be taken from the Gas Processors Association Table
of Physical Properties for Hydrocarbons and Other Compounds of Interest to the
Natural Gas Industry, Publication No. 2145 as amended or supplemented from time
to time.  Physical constants for the hexanes and heavier hydrocarbons portion of
hydrocarbon mixtures shall be assumed to be the same as the physical constants
for hexane.

 

Section 11.4                            Notice of Measurement Facilities
Inspection and Calibration.  Each Party shall give reasonable notice to the
other Party in order that the other Party may, at its option, have
representatives present to observe any reading, inspecting, testing, calibrating
or adjusting of Measurement Facilities used in measuring or checking the
measurement of receipts or deliveries of Gas under this Agreement.  The official
electronic data from such Measurement Facilities shall remain the property of
the Measurement Facilities’ owner, but copies of such records shall, upon
written request, be submitted, together with calculations and flow computer
configurations therefrom, to the requesting Party for inspection and
verification.

 

Section 11.5                            Measurement Accuracy Verification.

 

(a)                                 Each Party shall verify the accuracy of all
Measurement Facilities owned by such Party at intervals based upon the following
schedule:

 

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(i)                                     semi-annually for Gas Measurement
Facilities metering less than one thousand (1,000) Mcf per Day;

 

(ii)                                  quarterly for Gas Measurement Facilities
metering between one thousand (1,000) and five thousand (5,000) Mcf per Day; and

 

(iii)                               monthly for Gas Measurement Facilities
metering more than five thousand (5,000) Mcf per Day.

 

Neither Party shall be required to cause adjustment or calibration of such
equipment more frequently than once per Month, unless a special test is
requested pursuant to Section 11.6.

 

(b)                                 If, during any test of the Measuring
Facilities, an adjustment or calibration error is found which results in an
incremental adjustment to the calculated flow rate through each meter run in
excess of one percent (1%) of the adjusted flow rate (whether positive or
negative and using the adjusted flow rate as the percent error equation
denominator), then any previous recordings of such equipment shall be corrected
to zero error for any period during which the error existed (and which is either
known definitely or agreed to by the Parties) and the total flow for the period
redetermined in accordance with the provisions of Section 11.7.  If the period
of error condition cannot be determined or agreed upon between the Parties, such
correction shall be made over a period extending over the last one half of the
time elapsed since the date of the prior test revealing the one percent (1%)
error.

 

(c)                                  If, during any test of any Measurement
Facilities, an adjustment or calibration error is found which results in an
incremental adjustment to the calculated hourly flow rate which does not exceed
one percent (1%) of the adjusted flow rate, all prior recordings and electronic
flow computer data shall be considered to be accurate for quantity determination
purpose.

 

Section 11.6                            Special Tests.  In the event a Party
desires a special test (a test not scheduled by a Party under the provisions of
Section 11.5) of any Measurement Facilities, seventy-two (72) hours advance
notice shall be given to the other Party and both Parties shall cooperate to
secure a prompt test of the accuracy of such equipment.  If the Measurement
Facilities tested are found to be within the range of accuracy set forth in
Section 11.5(b), then the Party that requested the test shall pay the costs of
such special test including any labor and transportation costs pertaining
thereto.  If the Measurement Facilities tested are found to be outside the range
of accuracy set forth in Section 11.5(b), then the Party that owns such
Measurement Facilities shall pay such costs and perform the corrections
according to Section 11.7.

 

Section 11.7                            Metered Flow Rates in Error.  If, for
any reason, any Measurement Facilities are (i) out of adjustment, (ii) out of
service, or (iii) out of repair and the total calculated flow rate through each
meter run is found to be in error by an amount of the magnitude described in
Section 11.5, the total quantity of Gas delivered shall be determined in
accordance with the first of the following methods which is feasible:

 

(a)                                 using the registration of any mutually
agreeable check metering facility, if installed and accurately registering
(subject to testing as provided for in Section 11.5);

 

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(b)                                 Where multiple meter runs exist in series,
by calculation using the registration of such meter run equipment; provided that
they are measuring Gas from upstream and downstream headers in common with the
faulty metering equipment, are not controlled by separate regulators, and are
accurately registering;

 

(c)                                  By correcting the error by re-reading of
the official charts, or by straightforward application of a correcting factor to
the quantities recorded for the period (if the net percentage of error is
ascertainable by calibration, tests or mathematical calculation); or

 

(d)                                 By estimating the quantity, based upon
deliveries made during periods of similar conditions when the meter was
registering accurately.

 

Section 11.8                            Record Retention.  The Party owning the
Measurement Facilities shall retain and preserve all test data, charts, and
similar records for any calendar year for a period of at least twenty-four (24)
Months following the end of such calendar year unless applicable law or
regulation requires a longer time period or the Party has received written
notification of a dispute involving such records, in which case records shall be
retained until the related issue is resolved.

 

Section 11.9                            Access.

 

(a)                                 Processor shall contract with eLynx
Technologies or a provider of comparable services reasonably satisfactory to
Producer (the “Monitoring Services Provider”) for remote monitoring of Gas
Measurement Facilities, including monitoring of measurement data on an hourly
(or more frequent) basis for flow rate, meter pressures, meter temperature,
orifice diameter, Gross Heating Value, and composition for importation into
PRAMS Plus production software or comparable production software (“Remote
Monitoring Data”).

 

(b)                                 Processor shall (i) provide the Monitoring
Services Provider access to all of Processor’s radio and telephone
infrastructure to access and gather all Remote Monitoring Data and (ii) cause
the Monitoring Services Provider to allow Producer to view and access all Remote
Monitoring Data on the Monitoring Service Provider’s system, including the
ability to poll for Remote Monitoring Data through the Monitoring Services
Provider’s system.

 

(c)                                  Processor shall provide Producer 120 Days’
notice of any termination by Processor of its contract with any Monitoring
Services Provider.

 

ARTICLE 12
NOTICES

 

Section 12.1                            Notices.  Unless otherwise provided
herein, any notice, request, invoice, statement, or demand which either Party
desires to serve upon the other regarding this Agreement shall be made in
writing and shall be considered as delivered (i) when hand delivered, or
(ii) when delivery is confirmed by pre-paid delivery service (such as FedEx,
UPS, DHL or a similar delivery service), or (iii) if mailed by United States
certified mail, postage prepaid, three (3) Business Days after mailing, or
(iv) if sent by facsimile transmission, when receipt is confirmed by the
equipment of the transmitting Party, or (v) when sent via email; provided, if
sent by email after normal business hours or if receipt of a facsimile
transmission is confirmed after normal business hours, receipt shall be deemed
to be the next Business Day.

 

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Notwithstanding the foregoing, if a Party desires to serve upon the other a
notice of default under this Agreement, the delivery of such notice shall be
considered effective under this Section 12.1 only if delivered by any method set
forth in items (i) through (iv) above.  Any notice shall be given to the other
Party at the following address, or to such other address as either Party shall
designate by written notice to the other:

 

Producer:                                                                                           
ANTERO RESOURCES CORPORATION
1625 17th Street
Denver, Colorado 80202

 

Attn: Chief Financial Officer
Phone: (303) 357-7310
Fax Number: (303) 357-7315

 

With copy
to:                                                                     For gas
control, nominations & balancing:
Manager of Gas Marketing
Phone: (303) 357-7310
Fax Number: (303) 357-7315

 

For accounting, financial, and legal:
Controller
Phone: (303) 357-7310
Fax Number: (303) 357-7315

 

Processor:                                                                                        
ANTERO RESOURCES MIDSTREAM LLC
1625 17th Street
Denver, Colorado 80202

 

Attn: Chief Financial Officer
Phone: (303) 357-7310
Fax Number: (303) 357-7315

 

With copy
to:                                                                      For gas
control, nominations & balancing:
Manager of Gas Marketing
Phone: (303) 357-7310
Fax Number: (303) 357-7315

 

For accounting, financial, and legal:
Controller
Phone: (303) 357-7310
Fax Number: (303) 357-7315

 

ARTICLE 13
PAYMENTS

 

Section 13.1                            Invoices.  Not later than the tenth
(10th) Day following the end of each Month, Processor shall provide Producer
with a detailed statement setting forth:

 

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(a)                                 the volume and Thermal Content of Gas
received by Processor at the Plant Receipt Points in such Month, the volume and
Thermal Content of Residue Gas delivered at the Plant Delivery Points in such
Month, the quantity of Gas and the cost of electricity used as Fuel in such
Month, the volume and Thermal Content of Lost and Unaccounted For Gas for such
Month, and the volume and Thermal Content of Plant Products delivered to the
Plant Products Delivery Point in such Month;

 

(b)                                 the volume and Thermal Content of Producer
Gas received by Processor at the Receipt Points in such Month, the volume and
Thermal Content of Producer Residue Gas delivered to the Delivery Points in such
Month, the quantity of Gas and the cost of electricity used as Fuel and
allocated to Producer in such Month, the volume and Thermal Content of Lost and
Unaccounted For Gas for such Month allocated to Producer in accordance with this
Agreement, and the volume and Thermal Content of Producer Plant Products
delivered to the Plant Products Delivery Point in such Month;

 

(c)                                  the Processing Fee, [the Fractionation
Fee], [the Delivery Fee] and [the Marketing Fee] with respect to such Month; and

 

(d)                                 relevant measurement summaries and the
amount of any Imbalances and all relevant supporting documentation, to the
extent available on such tenth (10th) Day (with Processor being obligated to
deliver any such supporting documentation that is not available on such tenth
(10th) Day as soon as it becomes available).

 

Producer shall make payment to Processor by the last Business Day of the Month
in which such invoice is received.  Such payment shall be made by wire transfer
pursuant to wire transfer instructions delivered by Processor to Producer in
writing from time to time.  If any overcharge or undercharge in any form
whatsoever shall at any time be found and the invoice therefor has been paid,
Processor shall refund any amount of overcharge, and Producer shall pay any
amount of undercharge, within thirty (30) Days after final determination
thereof, provided, however, that no retroactive adjustment will be made beyond a
period of twenty-four (24) Months from the date of a statement hereunder.

 

[Processor shall be entitled to set off any Net Sales Price owed by Processor to
Producer from time to time under Section 3.5(a) against any amount owing by
Producer to Processor under this Agreement, the Gathering Agreement and/or the
Water Services Agreement from time to time, such that only the net amount shall
be payable.]

 

Section 13.2                            Right to Suspend on Failure to Pay.  If
any undisputed amount due hereunder remains unpaid for sixty (60) Days after the
due date, Processor shall have the right to suspend or discontinue Services
hereunder until any such past due amount is paid.

 

Section 13.3                            Audit Rights.  Either Party, on not less
than thirty (30) Days prior written notice to the other Party, shall have the
right at its expense, at reasonable times during normal business hours, but in
no event more than twice in any period of twelve (12) consecutive Months, to
audit the books and records of the other Party to the extent necessary to verify
the accuracy of any statement, allocation, measurement, computation, charge,
payment made under, or obligation or right pursuant to this Agreement.  The
scope of any audit shall be limited to transactions affecting Dedicated Gas
hereunder and shall be limited to the twenty-four (24) Month period

 

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immediately prior to the Month in which the notice requesting an audit was
given.  All statements, allocations, measurements, computations, charges, or
payments made in any period prior to the twenty-four (24) Month period
immediately prior to the Month in which the audit is requested shall be
conclusively deemed true and correct and shall be final for all purposes.

 

Section 13.4                            Payment Disputes.  In the event of any
dispute with respect to any payment hereunder, Producer shall make timely
payment of all undisputed amounts, and Processor and Producer will use good
faith efforts to resolve the disputed amounts within sixty (60) Days following
the original due date.  Any amounts subsequently resolved shall be due and
payable within ten (10) Days of such resolution.

 

Section 13.5                            Interest on Late Payments.  In the event
that Producer shall fail to make timely payment of any sums, except those
contested in good faith or those in a good faith dispute, when due under this
Agreement, interest will accrue at an annual rate equal to ten percent (10%)
from the date payment is due until the date payment is made.

 

Section 13.6                            Credit Assurance.  Processor shall apply
consistent evaluation practices to all similarly situated producers to determine
Producer’s financial ability to perform its payment obligations under this
Agreement.

 

(a)                                 If Processor has reasonable grounds for
insecurity regarding the performance of any obligation by Producer under this
Agreement (whether or not then due), Processor may demand Adequate Assurance of
Performance from Producer, which Adequate Assurance of Performance shall be
provided to Processor within five (5) Days after written request.  If Producer
fails to provide such Adequate Assurance of Performance within such time, then
Processor may suspend its performance under this Agreement until such Adequate
Assurance of Performance is provided.  However, any action by Processor shall
not relieve Producer of its payment obligations.  The exercise by Processor of
any right under this Section 13.6 shall be without prejudice to any claims for
damages or any other right under this Agreement.  As used herein, “Adequate
Assurance of Performance” means any of the following, in Processor’s reasonable
discretion:

 

(i)                                     an irrevocable standby letter of credit
in an amount not to exceed an amount that is equal to sixty (60) Days of
Producer’s payment obligations hereunder from a financial institution rated at
least A- by S&P or at least A3 by Moody’s in a form and substance satisfactory
to Processor;

 

(ii)                                  cash collateral in an amount not to exceed
an amount that is equal to sixty (60) Days of Producer’s payment obligations
hereunder to be deposited in an escrow account as designated by Processor;
Processor is hereby granted a security interest in and right of set-off against
all cash collateral, which is or may hereafter be delivered or otherwise
transferred to such escrow account in connection with this Agreement; or

 

(iii)                               a guaranty in an amount not to exceed an
amount that is equal to sixty (60) Days of Producer’s payment obligations
hereunder reasonably acceptable to Processor.

 

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(b)                                 The term of any security provided under this
Section 13.6 shall be as reasonably determined by Processor, but it shall never
exceed sixty (60) Days, after which the security shall terminate (or in the case
of cash collateral, be immediately returned by Processor to Producer without
further action by either Party).  Nothing shall prohibit Processor, however,
from requesting additional Adequate Assurance of Performance following the end
of any such term, so long as the conditions triggering such a request under this
Section 13.6 exist.

 

(c)                                  Should Producer fail to provide Adequate
Assurance of Performance within five (5) Days after receipt of written demand
for such assurance (which shall include reasonable particulars for the demand
and documentation supporting the calculation of such amount demanded), then
Processor shall have the right (notwithstanding any other provision of this
Agreement) to suspend performance under this Agreement until such time as
Producer furnishes Adequate Assurance of Performance.

 

Section 13.7                            Excused Performance.  Processor will not
be required to perform or continue to perform the Services hereunder, and
Producer shall not be obligated to deliver Dedicated Gas to the Processing Plant
(or make any payments required under Section 5.1(d)) in the event:

 

(a)                                 the other Party has voluntarily filed for
bankruptcy protection under any chapter of the United States Bankruptcy Code;

 

(b)                                 the other Party is the subject of an
involuntary petition of bankruptcy under any chapter of the United States
Bankruptcy Code, and such involuntary petition has not been settled or otherwise
dismissed within ninety (90) Days of such filing; or

 

(c)                                  the other Party otherwise becomes
insolvent, whether by an inability to meet its debts as they come due in the
ordinary course of business or because its liabilities exceed its assets on a
balance sheet test; and/or however such insolvency may otherwise be evidenced.

 

ARTICLE 14
FORCE MAJEURE

 

Section 14.1                            Suspension of Obligations.  In the event
a Party is rendered unable, wholly or in part, by Force Majeure to carry out its
obligations under this Agreement, other than the obligation to make payments
then or thereafter due hereunder, and such Party promptly gives notice and
reasonably full particulars of such Force Majeure in writing to the other Party
promptly after the occurrence of the cause relied on, then the obligations of
the Party giving such notice, so far as and to the extent that they are affected
by such Force Majeure, shall be suspended during the continuance of any
inability so caused, but for no longer period, and such cause shall so far as
reasonably possible be remedied with all reasonable dispatch by the Party
claiming Force Majeure.

 

Section 14.2                            Definition of Force Majeure.  The term
“Force Majeure” as used in this Agreement shall mean any cause or causes not
reasonably within the control of the Party claiming suspension and which, by the
exercise of reasonable diligence, such Party is unable to prevent or overcome,
including acts of God, strikes, lockouts or other industrial disturbances,

 

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acts of the public enemy, acts of terror, sabotage, wars, blockades, military
action, insurrections, riots, epidemics, landslides, subsidence, lightning,
earthquakes, fires, storms or storm warnings, crevasses, floods, washouts, civil
disturbances, explosions, breakage or accident to wells, machinery, equipment or
lines of pipe, the necessity for testing or making repairs or alterations to
wells, machinery, equipment or lines of pipe, freezing of wells, equipment or
lines of pipe, inability of any Party hereto to obtain, after the exercise of
reasonable diligence, necessary materials, supplies, or government
authorizations, any action or restraint by any Governmental Authority (so long
as the Party claiming suspension has not applied for or assisted in the
application for, and has opposed where and to the extent reasonable, such action
or restraint, and as long as such action or restraint is not the result of a
failure by the claiming Party to comply with applicable laws, rules,
regulations, or orders), [and, in the case of either party as the claiming
party, any failure by the other party to perform any obligation on such other
party under the Gathering Agreement,] and, in the case of Processor as the
claiming party, any breach of any representation or warranty of Producer or any
failure by Producer to perform any obligation of Producer under that certain
Contribution Agreement dated [                   ], 2013, by and between
Producer and Processor.

 

Section 14.3                            Settlement of Strikes and Lockouts.  It
is understood and agreed that the settlement of strikes or lockouts shall be
entirely within the discretion of the Party having the difficulty, and that the
above requirement that any Force Majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes or lockouts by acceding to
the demands of the opposing party when such course is inadvisable in the sole
discretion of the Party having the difficulty.

 

Section 14.4                            Payments for Gas Delivered. 
Notwithstanding the foregoing, it is specifically understood and agreed by the
Parties that an event of Force Majeure will in no way affect or terminate
Producer’s obligation to make payment for quantities of Producer Residue Gas and
Producer Plant Products delivered prior to such event of Force Majeure.

 

ARTICLE 15
INDEMNIFICATION

 

Section 15.1                            Processor.  Subject to the terms of this
Agreement, including Section 18.8, Processor shall release, indemnify, defend,
and hold harmless Producer and its Affiliates, directors, officers, employees,
agents, consultants, representatives, and invitees from and against all claims
and losses arising out of or relating to (i) the operations of Processor and
(ii) any breach of this agreement by Processor.

 

Section 15.2                            Producer.  Subject to the terms of this
Agreement, including Section 18.8, Producer shall release, indemnify, defend,
and hold harmless Processor and its Affiliates, directors, officers, employees,
agents, consultants, representatives, and invitees from and against all claims
and losses arising out of or relating to (i) the operations of Producer and
(ii) any breach of this agreement by Producer.

 

29

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ARTICLE 16
CUSTODY AND TITLE

 

Section 16.1                            Custody.  As between the Parties,
Producer shall be in custody, control and possession of (i) Producer Gas until
such Gas is delivered to the Receipt Points, (ii) Producer Residue Gas after it
is delivered to Producer at the Delivery Points, and (iii) Producer Plant
Products after they are delivered to Producer at the Plant Products Delivery
Point.  As among the Parties, Processor shall be in custody, control and
possession of all Gas, Residue Gas and Plant Products in the Processing Plant at
all other times. The Party having custody and control of Gas, Residue Gas and
Plant Products under the terms of this Agreement shall be responsible for, and
shall defend, indemnify, release and hold the other Party and its Affiliates,
directors, officers, employees, agents, consultants, representatives, and
invitees harmless from and against, all claims and losses of whatever kind and
nature for anything that may happen or arise with respect to such Gas, Residue
Gas or Plant Products when such Gas, Residue Gas or Plant Products are in its
custody and control, including losses resulting from any negligent acts or
omissions of any indemnified party, but excluding any losses to the extent
caused by or arising out of the negligence, gross negligence, or willful
misconduct of the indemnified party.

 

Section 16.2                            Producer Warranty.  Producer represents
and warrants that it owns, or has the right to deliver to the Processor in
accordance with this Agreement, all Producer Gas delivered under this Agreement,
free and clear of all liens, encumbrances and adverse claims.  If the title to
Gas delivered by Producer hereunder is disputed or is involved in any legal
action, Processor shall have the right to withhold payment (with interest at the
prime rate as published in the Wall Street Journal, under “Money Rates”), or
cease receiving such Gas, to the extent of the interest disputed or involved in
legal action, during the pendency of the action or until title is freed from the
dispute, or until Producer furnishes, or causes to be furnished, indemnification
to save Processor harmless from all claims arising out of the dispute or action,
with surety acceptable to Processor.  Producer hereby indemnifies Processor
against and holds Processor harmless from any and all claims and losses arising
out of or related to any breach of the foregoing representation and warranty.

 

Section 16.3                            Title.  Other than as set forth in this
Section 16.3, title to all Producer Gas delivered under this Agreement,
including all constituents thereof, shall remain with and in Producer or its
customers at all times; provided, however, title to Fuel and Lost and
Unaccounted For Gas shall pass from Producer or its customer to Processor
immediately downstream of the Receipt Points.  Title to Producer Plant Products
shall pass from Producer to Processor[, and title to Fractionated Products
exchanged for Producer Plant Products in accordance with Section 3.5 shall pass
from Processor to Producer, in each case] at the Plant Products Delivery Point.
[Title to the Fractionated Products shall remain with Producer until completion
of the sale to the relevant customer of Producer.] Although Producer shall
retain title to Producer Gas as provided in this Section 16.3, Producer Gas
shall constitute part of the supply of Gas from all sources to the Processing
Plant and, as such, Processor shall have the right to commingle Producer Gas
with Third Party Gas. Producer recognizes that no segregated facilities are
provided by Processor hereunder.

 

30

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ARTICLE 17
TAXES; ROYALTIES

 

Section 17.1                            Taxes.  Producer shall pay or cause to
be paid and agrees to hold Processor harmless as to the payment of all excise,
gross production, severance, sales, occupation and all other Taxes, charges or
impositions of every kind and character required by statute or by order of
Governmental Authorities and levied against or with respect to Producer Gas,
Producer Residue Gas, Producer Plant Products or the Services provided under
this Agreement.  Processor shall not become liable for such Taxes, unless
designated to remit those Taxes on behalf of Producer by any duly constituted
jurisdictional agency having authority to impose such obligations on Processor,
in which event the amount of such Taxes remitted on Producer’s behalf shall be
(i) reimbursed by Producer upon receipt of invoice, with corresponding
documentation from Processor setting forth such payments, or (ii) deducted from
amounts otherwise due Processor under this Agreement.  Processor shall pay or
cause to be paid all Taxes, charges and assessments of every kind and character
required by statute or by order of Governmental Authorities with respect to the
Processing Plant.  Neither Party shall be responsible nor liable for any Taxes
or other statutory charges levied or assessed against the facilities of the
other Party, including ad valorem tax (however assessed), used for the purpose
of carrying out the provisions of this Agreement or against the net worth or
capital stock of such Party.

 

Section 17.2                            Royalties.  As between the Parties,
Producer shall have the sole and exclusive obligation and liability for the
payment of all Persons due any proceeds derived from Producer Gas, Producer
Residue Gas or Producer Plant Products delivered under this Agreement, including
royalties, overriding royalties, and similar interests, in accordance with the
provisions of the leases or agreements creating those rights to proceeds.  In no
event will Processor have any obligation to those Persons due any of those
proceeds of production attributable to any such Producer Gas, Producer Residue
Gas or Producer Plant Products delivered under this Agreement.

 

ARTICLE 18
MISCELLANEOUS

 

Section 18.1                            Rights.  The failure of either Party to
exercise any right granted hereunder shall not impair nor be deemed a waiver of
that Party’s privilege of exercising that right at any subsequent time or times.

 

Section 18.2                            Applicable Laws.  This Agreement is
subject to all valid present and future laws, regulations, rules and orders of
Governmental Authorities now or hereafter having jurisdiction over the Parties,
this Agreement, or the services performed or the facilities utilized under this
Agreement.

 

Section 18.3                            Governing Law; Jurisdiction.

 

(a)                                 This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Colorado
without regard to choice of law principles.

 

(b)                                 The Parties agree that the appropriate,
exclusive and convenient forum for any disputes between the Parties arising out
of this Agreement or the transactions contemplated

 

31

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hereby shall be in any state or federal court in City and County of Denver,
Colorado, and each of the Parties irrevocably submits to the jurisdiction of
such courts solely in respect of any proceeding arising out of or related to
this Agreement.  The Parties further agree that the Parties shall not bring suit
with respect to any disputes arising out of this Agreement or the transactions
contemplated hereby in any court or jurisdiction other than the above specified
courts.

 

Section 18.4                            Successors and Assigns.

 

(a)                                 This Agreement shall extend to and inure to
the benefit of and be binding upon the Parties and their respective successors
and permitted assigns.  Except as set forth in Section 18.4(b) and
Section 18.4(c), neither Party shall have the right to assign its respective
rights and obligations in whole or in part under this Agreement without the
prior written consent of the other Party (which such consent shall not be
unreasonably withheld, conditioned or delayed), and any assignment or attempted
assignment made otherwise than in accordance with this Section 18.4 shall be
null and void ab initio.

 

(b)                                 Notwithstanding the foregoing clause (a),
Processor may perform all services under this Agreement itself using its own
gathering, compression, and other facilities and/or perform any or all such
services through third parties, in which case references herein to the
Processing Plant shall be deemed to be references to such facilities of the
relevant third party.

 

(c)                                  Notwithstanding the foregoing clause (a):

 

(i)                                     Processor shall have the right to assign
its rights under this Agreement, in whole or in part, as applicable, without the
consent of Producer if such assignment is made to any Person to which the
Processing Plant or any part thereof has been or will be transferred that
assumes in writing all of Processor’s obligations hereunder (if applicable, to
the extent that part of the Processing Plant being transferred to such Person)
and is (A) an Affiliate of Processor or (B) a Person to which the Processing
Plant has been or will be transferred who (1) hires (or retains, as applicable)
operating personnel who are then operating the Processing Plant (or has
similarly experienced operating personnel itself), (2) has operated for at least
two (2) years prior to such assignment facilities similar to the Processing
Plant, or (3) contracts for the operation of the Processing Plant with another
Person that satisfies either of the foregoing conditions (1) or (2) in this
clause (B), provided in the case of an assignment pursuant to this clause (B),
the assignee has creditworthiness as reasonably determined by Producer that is
equal to the higher of Processor’s creditworthiness as of the Effective Date and
Processor’s creditworthiness as of the date of the assignment.

 

(ii)                                  Processor shall have the right to grant a
security interest in this Agreement to a lender or other debt provider (or
trustee or agent on behalf of such lender) of Processor.

 

(iii)                               Producer shall have the right to assign its
rights under this Agreement, in whole or in part, as applicable, without the
consent of Processor, to any Person to which it sells, assigns, or otherwise
transfers all or any portion of the Dedicated Properties and (A) who assumes in
writing all of Producer’s obligations hereunder (if

 

32

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applicable, to the extent of the Dedicated Properties being transferred to such
Person) and (B) whose credit rating is equal to or greater than the greater of
Producer’s credit rating as of the Effective Date and Producer’s credit rating
as of the date of the assignment.

 

(d)                                 Upon an assignment by Processor in
accordance with Section 18.4(c)(i)(B) Processor shall be released from its
obligations under this Agreement to the extent of such assignment.  Upon an
assignment by Producer in accordance with Section 18.4(c)(ii), Producer shall be
released from its obligations under this Agreement to the extent of such
assignment.

 

Section 18.5                            Severability.  If any provision of this
Agreement is determined to be void or unenforceable, in whole or in part, then
(i) such provision shall be deemed inoperative to the extent it is deemed void
or unenforceable, (ii) the Parties agree to enter into such amendments to this
Agreement in order to give effect, to the greatest extent legally possible, to
the provision that is determined to be void or unenforceable and (iii) the other
provisions of this Agreement in all other respects shall remain in full force
and effect and binding and enforceable to the maximum extent permitted by law;
provided, however, that in the event that a material term under this Agreement
is so modified, the Parties will, timely and in good faith, negotiate to revise
and amend this Agreement in a manner which preserves, as closely as possible,
each Party’s business and economic objectives as expressed by the Agreement
prior to such modification.

 

Section 18.6                            Confidentiality.

 

(a)                                 Confidentiality.  Except as otherwise
provided in this Section 18.6, each Party agrees that it shall maintain all
terms and conditions of this Agreement, and all information disclosed to it by
the other Party or obtained by it in the performance of this Agreement and
relating to the other Party’s business (including all data relating to the
production of Producer, including well data, production volumes, volumes
gathered, transported, or compressed, and gas quality) (collectively,
“Confidential Information”) in strictest confidence, and that it shall not cause
or permit disclosure of this Agreement or its existence or any provisions
contained herein without the express written consent of the other Party.

 

(b)                                 Permitted Disclosures.  Notwithstanding
Section 18.6(a), disclosures of any Confidential Information may be made by
either Party (i) to the extent necessary for such Party to enforce its rights
hereunder against the other Party; (ii) to the extent to which a Party is
required to disclose all or part of this Agreement by a statute or by the order
or rule of a Governmental Authority exercising jurisdiction over the subject
matter hereof, by order, by regulations, or by other compulsory process
(including deposition, subpoena, interrogatory, or request for production of
documents); (iii) to the extent required by the applicable regulations of a
securities or commodities exchange; (iv) to a third person in connection with a
proposed sale or other transfer of a Party’s interest in this Agreement,
provided such third person agrees in writing to be bound by the terms of this
Section 18.6; (v) to its own directors, officers, employees, agents and
representatives; (vi) to an Affiliate; (vii) to financial advisors, attorneys,
and banks, provided that such Persons are subject to a confidentiality
undertaking consistent with this Section 18.6(b), or (viii) except for
information disclosed pursuant to Article 3 of this Agreement, to a royalty,
overriding royalty, net profits or similar owner burdening Dedicated Gas,
provided such royalty, overriding royalty, net profits or similar owner, agrees
in writing to be bound by the terms of this Section 18.6.

 

33

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(c)                                  Notification.  If either Party is or
becomes aware of a fact, obligation, or circumstance that has resulted or may
result in a disclosure of any of the terms and conditions of this Agreement
authorized by Section 18.6(b)(ii) or (iii), it shall so notify in writing the
other Party promptly and shall provide documentation or an explanation of such
disclosure as soon as it is available.

 

(d)                                 Party Responsibility.  Each Party shall be
deemed solely responsible and liable for the actions of its directors, officers,
employees, agents, representatives and Affiliates for maintaining the
confidentiality commitments of this Section 18.6.

 

(e)                                  Public Announcements.  The Parties agree
that prior to making any public announcement or statement with respect to this
Agreement or the transaction represented herein permitted under this
Section 18.6, the Party desiring to make such public announcement or statement
shall provide the other Party with a copy of the proposed announcement or
statement prior to the intended release date of such announcement.  The other
Party shall thereafter consult with the Party desiring to make the release, and
the Parties shall exercise their reasonable best efforts to (i) agree upon the
text of a joint public announcement or statement to be made by both such Parties
or (ii) in the case of a statement to be made solely by one Party, obtain
approval of the other Party to the text of a public announcement or statement. 
Nothing contained in this Section 18.6 shall be construed to require either
Party to obtain approval of the other Party to disclose information with respect
to this Agreement or the transaction represented herein to any Governmental
Authority to the extent required by applicable law or necessary to comply with
disclosure requirements of the Securities and Exchange Commission, New York
Stock Exchange, or any other regulated stock exchange.

 

(f)                                   Survival.  The provisions of this
Section 18.6 shall survive any expiration or termination of this Agreement;
provided that other than with respect to information disclosed pursuant to
Article 3, as to which such provisions shall survive indefinitely, such
provisions shall survive only a period of one (1) year.

 

Section 18.7                            Entire Agreement, Amendments and
Waiver.  This Agreement, including all exhibits hereto, integrates the entire
understanding between the Parties with respect to the subject matter covered and
supersedes all prior understandings, drafts, discussions, or statements, whether
oral or in writing, expressed or implied, dealing with the same subject matter. 
This Agreement may not be amended or modified in any manner except by a written
document signed by the Parties that expressly amends this Agreement.  No waiver
by either Party of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless expressly
provided.  No waiver shall be effective unless made in writing and signed by the
Party to be charged with such waiver.

 

Section 18.8                            Limitation of Liability.
 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS
AGREEMENT OR THE BREACH THEREOF OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER
TORT, NEGLIGENCE, STRICT

 

34

--------------------------------------------------------------------------------

 

LIABILITY, BREACH OF CONTRACT, WARRANTY, INDEMNITY OR OTHERWISE, INCLUDING LOSS
OF USE, INCREASED COST OF OPERATIONS, LOSS OF PROFIT OR REVENUE, OR BUSINESS
INTERRUPTIONS; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION SHALL NOT APPLY
TO ANY DAMAGE CLAIM ASSERTED BY OR AWARDED TO A THIRD PARTY FOR WHICH A PARTY
WOULD OTHERWISE BE LIABLE UNDER ANY INDEMNIFICATION PROVISION SET FORTH HEREIN.

 

Section 18.9                            Headings.  The headings and captions in
this Agreement have been inserted for convenience of reference only and shall
not define or limit any of the terms and provisions hereof.

 

Section 18.10                     Rights and Remedies.  Except as otherwise
provided in this Agreement, each Party reserves to itself all rights,
counterclaims, other remedies and defenses that such Party is or may be entitled
to arising from or out of this Agreement or as otherwise provided by law.

 

Section 18.11                     No Partnership.  Nothing contained in this
Agreement shall be construed to create an association, trust, partnership, or
joint venture or impose a trust, fiduciary or partnership duty, obligation or
liability on or with regard to either Party.

 

Section 18.12                     Rules of Construction.  In construing this
Agreement, the following principles shall be followed:

 

(a)                                 no consideration shall be given to the fact
or presumption that one Party had a greater or lesser hand in drafting this
Agreement;

 

(b)                                 examples shall not be construed to limit,
expressly or by implication, the matter they illustrate;

 

(c)                                  the word “includes” and its syntactical
variants mean “includes, but is not limited to,” “includes without limitation”
and corresponding syntactical variant expressions;

 

(d)                                 the plural shall be deemed to include the
singular and vice versa, as applicable; and

 

(e)                                  references to Section shall be references
to Sections of this Agreement.

 

Section 18.13                     No Third Party Beneficiaries.  This Agreement
is for the sole benefit of the Parties and their respective successors and
permitted assigns, and shall not inure to the benefit of any other Person
whomsoever or whatsoever, it being the intention of the Parties that no third
Person shall be deemed a third party beneficiary of this Agreement.

 

Section 18.14                     Further Assurances.  Each Party shall take
such acts and execute and deliver such documents as may be reasonably required
to effectuate the purposes of this Agreement.

 

35

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Section 18.15                     Counterpart Execution.  This Agreement may be
executed in any number of counterparts, each of which shall be considered an
original, and all of which shall be considered one and the same instrument.

 

Section 18.16                     Memorandum of Agreement.  Contemporaneously
with the execution of this Agreement, the Parties shall execute, acknowledge,
deliver and record a “short form” memorandum of this Agreement in the form of
Exhibit C attached hereto (as modified, including by the addition of any
required property descriptions, required by local law and practice to put such
Memorandum of record and put third parties on notice of this Agreement), which
shall be placed of record in each state and county in which the Dedicated
Properties are located.

 

36

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
set forth above.

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

1

--------------------------------------------------------------------------------

 

EXHIBIT A

 

DELIVERY POINTS

 

[to be attached]

 

EXHIBIT A - Page 1

--------------------------------------------------------------------------------

 

EXHIBIT B

 

CONFLICTING DEDICATIONS

 

[                                          ]

 

EXHIBIT B - Page 1

--------------------------------------------------------------------------------

 

EXHIBIT C

 

MEMORANDUM OF AGREEMENT

 

THIS MEMORANDUM OF PROCESSING AGREEMENT (this “Memorandum”) is entered into
effective [                 ], 2013 (the “Effective Date”), by and between
ANTERO RESOURCES CORPORATION (“Producer”), with an address of 1625 17th Street,
Denver, Colorado 80202, and ANTERO RESOURCES MIDSTREAM LLC (“Processor”), with
an address of 1625 17th Street, Denver, Colorado 80202.

 

WHEREAS, Producer and Processor entered into that certain Gas Processing
Agreement effective [                 ] 2013 (the “Agreement”), pursuant to
which Processor will provide certain gas processing and other services as
therein set forth;

 

WHEREAS, any capitalized term used, but not defined, in this Memorandum shall
have the meaning ascribed to such term in the Agreement; and

 

WHEREAS, the Parties desire to file this Memorandum of record in the real
property records of [counties/states], to give notice of the existence of the
Agreement and certain provisions contained therein;

 

NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

1.             Notice.  Notice is hereby given of the existence of the Agreement
and all of its terms, covenants and conditions to the same extent as if the
Agreement was fully set forth herein.  Certain provisions of the Agreement are
summarized in Sections 2 through 3 below.

 

2.             Dedication.  Subject to the exceptions, exclusions, and
reservations set forth in the Agreement and the other terms and conditions of
the Agreement, (a) Producer has exclusively dedicated and committed to deliver
to Processor, as and when produced, all Gas produced on or after the date of the
Agreement that is attributable to the Oil and Gas Interests set forth in the
Schedule hereto, or pooled, unitized or communitized therewith (the “Dedicated
Properties”), together with all Gas attributable to third parties that is
produced from a well located on the Dedicated Properties, which Gas Producer has
the right to control and deliver for processing (“Dedicated Gas”), for
processing at the Processing Plant under the Agreement, and (b) Producer agrees
not to deliver any Dedicated Gas to any other processing facility (the foregoing
dedication and commitment being herein referred to as the “Dedication”).

 

3.             Covenant Running with the Land.  So long as the Agreement is in
effect, the Dedication shall be a covenant running with the land and, subject to
the exceptions and reservations set forth in the Agreement, (a) in the event
Producer sells, transfers, conveys, assigns, grants, or otherwise disposes of
any or all of its interest in the Dedicated Properties, then any such sale,
transfer, conveyance, assignment, grant, or other disposition shall be expressly
subject to this Agreement and any instrument of conveyance shall so state, and
(b) in the event Processor sells, transfers, conveys, assigns, grants, or
otherwise disposes of any or all of its interest in the Processing Plant, then
any such sale, transfer, conveyance, assignment, grant, or other disposition
shall be expressly subject to this Agreement and any instrument of conveyance
shall so state.

 

--------------------------------------------------------------------------------

 

4.             No Amendment to Agreement.  This Memorandum is executed and
recorded solely for the purpose of giving notice and shall not amend nor modify
the Agreement in any way.

 

IN WITNESS WHEREOF, this Memorandum has been signed by or on behalf of each of
the Parties as of the Day first above written.

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

Schedule — Oil and Gas Interests

 

[                             ]

 

--------------------------------------------------------------------------------

 

Acknowledgements

 

STATE OF COLORADO

§

 

§

CITY AND COUNTY OF DENVER

§

 

The foregoing instrument was acknowledged before me on the             Day of
              , 2013, by [                      ], [                      ] of
Antero Resources Midstream LLC, a Delaware limited liability company, on behalf
of said entity.

 

 

 

 

Notary Public in and for

 

 

 

 

 

 

 

 

Printed or Typed Name of Notary

 

 

STATE OF COLORADO

§

 

§

CITY AND COUNTY OF DENVER

§

 

The foregoing instrument was acknowledged before me on the             Day of
             , 2013, by [                      ], [                      ] of
Antero Resources Corporation, a Delaware corporation, on behalf of said entity.

 

 

 

 

Notary Public in and for

 

 

 

 

 

 

 

 

Printed or Typed Name of Notary

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

EXCLUDED WELLS

 

--------------------------------------------------------------------------------

 

EXHIBIT E

 

DEDICATION AREA

 

--------------------------------------------------------------------------------

 

EXHIBIT E

 

FORM OF WATER SERVICES AGREEMENT

 

[attached]

 

--------------------------------------------------------------------------------

 

WATER SERVICES AGREEMENT

 

BY AND BETWEEN

 

ANTERO RESOURCES CORPORATION

 

AND

 

ANTERO RESOURCES MIDSTREAM LLC

 

DATED AS OF

 

[                          ]

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

ARTICLE 1

DEFINITIONS

1

 

 

 

ARTICLE 2

PRODUCER COMMITMENTS

5

Section 2.1

Producer Commitments

5

Section 2.2

Covenant Running with the Land

6

Section 2.3

Additional Oil and Gas Interests or Water Facilities

6

Section 2.4

Priority of Services

9

 

 

 

ARTICLE 3

SERVICES; WATER FACILITIES EXPANSION AND CONNECTION OF DELIVERY POINTS

9

Section 3.1

Midstream Service Commitment

9

Section 3.2

Water Availability and Quantity

9

Section 3.3

Development Plan; Water Facilities Plan; Exchange and Review of Information

9

Section 3.4

Expansion of Water Facilities; Connection of Delivery Points

11

Section 3.5

Take Points

13

Section 3.6

Retention Facilities

13

Section 3.7

Pumping Facilities

13

Section 3.8

Right of Way and Access

14

Section 3.9

Cooperation

14

 

 

 

ARTICLE 4

TERM

15

Section 4.1

Term

15

 

 

 

ARTICLE 5

FEES AND CONSIDERATION

15

Section 5.1

Fees

15

 

 

 

ARTICLE 6

CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

16

Section 6.1

Operational Control of Midstream’s Facilities

16

Section 6.2

Maintenance

16

Section 6.3

Third Party Services; Capacity Allocations on the Water Facilities

16

 

 

 

ARTICLE 7

DELIVERY RATES

17

Section 7.1

Delivery Rates

17

Section 7.2

Producer Facilities

17

 

 

 

ARTICLE 8

NOMINATION

17

Section 8.1

Maximum Take Point Volumes

17

Section 8.2

Take Point Nominations

18

Section 8.3

Delivery Point Nominations

18

 

 

 

ARTICLE 9

WATER QUALITY

18

Section 9.1

Take Point Water Standards

18

Section 9.2

Non-Conforming Take Point Water

18

Section 9.3

Delivery Point Water Quality Standards

18

Section 9.4

Retention Facility Contamination

18

 

 

 

ARTICLE 10

MEASUREMENT EQUIPMENT AND PROCEDURES

19

Section 10.1

Equipment

19

 

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Section 10.2

Units of Measurement. The unit of volume for measurement of Water made available
hereunder shall be one Barrel

19

Section 10.3

Notice of Measurement Facilities Inspection and Calibration

19

Section 10.4

Measurement Accuracy Verification

19

Section 10.5

Special Tests

20

Section 10.6

Metered Flow Rates in Error

20

Section 10.7

Record Retention

20

 

 

 

ARTICLE 11

NOTICES

21

Section 11.1

Notices

21

 

 

 

ARTICLE 12

PAYMENTS

22

Section 12.1

Invoices

22

Section 12.2

Right to Suspend on Failure to Pay

22

Section 12.3

Audit Rights

22

Section 12.4

Payment Disputes

22

Section 12.5

Interest on Late Payments

23

Section 12.6

Credit Assurance

23

Section 12.7

Excused Performance

24

 

 

 

ARTICLE 13

FORCE MAJEURE

24

Section 13.1

Suspension of Obligations

24

Section 13.2

Definition of Force Majeure

24

Section 13.3

Settlement of Strikes and Lockouts

25

Section 13.4

Payments for Water Made Available

25

 

 

 

ARTICLE 14

INDEMNIFICATION

25

Section 14.1

Midstream

25

Section 14.2

Producer

25

 

 

 

ARTICLE 15

CUSTODY AND TITLE

25

Section 15.1

Custody

25

 

 

 

ARTICLE 16

Payments for Water; taxes

26

Section 16.1

Payments for Water; Taxes

26

 

 

 

ARTICLE 17

MISCELLANEOUS

26

Section 17.1

Rights

26

Section 17.2

Applicable Laws

26

Section 17.3

Governing Law; Jurisdiction

26

Section 17.4

Successors and Assigns

27

Section 17.5

Severability

28

Section 17.6

Confidentiality

28

Section 17.7

Entire Agreement, Amendments and Waiver

29

Section 17.8

Limitation of Liability

30

Section 17.9

Headings

30

Section 17.10

Rights and Remedies

30

Section 17.11

No Partnership

30

Section 17.12

Rules of Construction

30

Section 17.13

No Third Party Beneficiaries

31

Section 17.14

Further Assurances

31

 

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Section 17.15

Counterpart Execution

31

 

Exhibit A

Initial Service Area

Exhibit B

Initial Water Facilities

Exhibit C

Take Points

Exhibit D

Initial Development Plan

Exhibit E

Initial Water Facilities Plan

Exhibit F

Form of Connection Notice

Exhibit G

Deemed Connection Notices

Exhibit H

Cost of Service Fee

 

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WATER SERVICES AGREEMENT

 

This Water Services Agreement (this “Agreement”), dated as of
[                       ] (the “Effective Date”), is by and between ANTERO
RESOURCES CORPORATION, a Delaware corporation (“Producer”), and ANTERO RESOURCES
MIDSTREAM LLC, a Delaware limited liability company (“Midstream”).  Producer and
Midstream may be referred to herein individually as a “Party” or collectively as
the “Parties.”

 

RECITALS

 

A.                                    Producer owns Oil and Gas Interests and
intends to drill and complete Wells for the production of Hydrocarbons in the
Initial Service Area and may from time to time own Oil and Gas Interests and may
drill and complete Wells for the production of Hydrocarbons in other areas.

 

B.                                    Producer requires supplies of Water in its
areas of operation for hydraulic fracturing operations and other purposes and
has the right to take Water from various rivers and other Water sources to use
for such purposes in its operations in the Initial Service Area and may from
time to time have rights to take Water from other sources for such operations
and operations in other areas.

 

C.                                    Midstream has acquired the Water
Facilities, which Producer has been using to take Water from its Water sources
and to make available such Water in its areas of operation in the Initial
Service Area, including certain related assets, from Producer.  Midstream
anticipates the expansion of the Water Facilities to make available Water to
additional locations in the Initial Service Area and other areas.

 

D.                                    Producer desires to contract with
Midstream to provide the Services utilizing the Water Facilities in the Service
Area, and Midstream desires to provide the Services to Producer, in each case in
accordance with the terms and conditions of this Agreement.

 

NOW THEREFORE, in consideration of the premises and mutual covenants set forth
in this Agreement, the Parties agree as follows:

 

ARTICLE 1
DEFINITIONS

 

Capitalized terms used, but not otherwise defined, in this Agreement shall have
the respective meanings given to such terms set forth below:

 

Adequate Assurance of Performance.  As defined in Section 13.6(a).

 

Affiliate.  Any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
another Person.  Affiliated shall have the correlative meaning.  The term
“control” (including its derivatives and similar terms) shall mean possessing
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership, by contract, or otherwise.  Notwithstanding
the foregoing, any Person shall be deemed to control any specified Person if
such Person owns fifty percent (50%) or more of the voting securities of the
specified Person, or if the specified Person owns fifty percent (50%) or more of
the voting securities of such Person, or if fifty percent (50%) or more of the
voting securities of the specified Person and such Person are under common
control.

 

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Agreement.  As defined in the preamble hereof.

 

Applicable Law.  Any applicable law, statute, regulation, rule, code,
administrative order or enforcement action (whether national, local, municipal,
territorial, provincial, or federal) of any Governmental Authority to the extent
they apply to the Services or the Parties.

 

Barrel.  Forty-two Gallons.

 

Business Day.  Any calendar Day that commercial banks in New York City are open
for business.

 

Completion Deadline.  As defined in Section 3.4(b).

 

Connection Notice.  As defined in Section 3.4(b).

 

Confidential Information.  As defined in Section 18.6(a).

 

Contract Year.  Each of (i) the period from the Effective Date to the last Day
of the Month in which the first anniversary of the Effective Date occurs and
(ii) each period of twelve (12) Months thereafter.

 

Cost of Service Fee.  As defined in Section 5.1(c).

 

CPI.  As defined in Section 5.1(b).

 

CS Facility.  As defined in Section 5.1(c).

 

Day.  A period commencing at 10:00 a.m., Eastern Standard Time, on a calendar
day and ending at 10:00 a.m., Eastern Standard Time, on the next succeeding
calendar day.  Daily shall have the correlative meaning.

 

Delivery Point.  The inlet flange of Producer’s Water tank or other Producer
storage facility located at or in the vicinity of a Well Pad.

 

Delivery Point Fee.  As defined in Section 5.1(a)(i).

 

Development Plan.  As defined in Section 3.3(a).

 

Effective Date.  As defined in the preamble of this Agreement.

 

Fair Market Value.  With respect to any asset, the price that would be paid by a
willing buyer of such asset to a willing seller, as determined by an independent
nationally known investment banking firm selected by Midstream and reasonably
acceptable to Producer.

 

Firm Service.  Services that are accorded the highest priority on the Water
Facilities with respect to capacity allocations, interruptions, or curtailments,
specifically including the Services provided to Producer hereunder.  Firm
Services will be the last curtailed on the relevant part of the Water Facilities
in the event of an interruption or curtailment, and all Firm Services will be
treated equally in the event an allocation is necessary.

 

2

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Force Majeure.  As defined in Section 14.2.

 

Gallon.  One U.S. gallon, which is equal to 231 cubic inches.

 

Gas.  Any mixture of gaseous hydrocarbons, consisting essentially of methane and
heavier hydrocarbons and inert and noncombustible gases, that is extracted from
beneath the surface of the earth.

 

Governmental Approval.  Any permit, license, consent, clearance, certificate,
approval, authorization or similar document or authority which any Applicable
Law or Governmental Authority requires either Party to hold or obtain in order
for the Services to be performed, including any that are required to take Water
from the Take Points.

 

Governmental Authority.  Any federal, state, local, municipal, tribal or other
government; any governmental, regulatory or administrative agency, commission,
body or other authority exercising or entitled to exercise any administrative,
executive, judicial, legislative, regulatory or taxing authority or power; and
any court or governmental tribunal, including any tribal authority having or
asserting jurisdiction.

 

Hydrocarbons.  Gas and/or Liquid Hydrocarbons.

 

Initial Development Plan.  The Development Plan attached hereto as Exhibit D.

 

Initial Service Area.  The area described in Exhibit A hereto.

 

Interruptible Service.  Service that is accorded the lowest priority on the
Water Facilities with respect to capacity allocations, interruptions, or
curtailments.  Interruptible Service will be the first curtailed on the Water
Facilities in the event of an interruption or curtailment.

 

Liquid Hydrocarbons.  Oil, condensate, natural gasoline and all the liquid
hydrocarbon production from wells, or a blend of such.

 

Maintenance.  As defined in Section 7.3.

 

Maximum BPM Rate.  Thirty-five (35) Barrels per minute.

 

Measurement Facilities.  Any facility or equipment used to measure the volume of
Water, which may include meter tubes, isolation valves, tank strappings,
recording devices, communication equipment, buildings and barriers.

 

Midstream.  As defined in the preamble of this Agreement.

 

Month.  A period commencing at 10:00 a.m., Eastern Standard Time, on the first
Day of a calendar month and extending until 10:00 a.m., Eastern Standard Time,
on the first Day of the next succeeding calendar month.  Monthly shall have the
correlative meaning.

 

3

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Oil and Gas Interests.  Oil and gas leasehold interests and oil and gas mineral
fee interests, including working interests, overriding royalty interests, net
profits interests, carried interests, and similar rights and interests.

 

Parties.  As defined in the preamble of this Agreement.

 

Party.  As defined in the preamble of this Agreement.

 

Person.  An individual, a corporation, a partnership, a limited partnership, a
limited liability company, an association, a joint venture, a trust, an
unincorporated organization, or any other entity or organization, including a
Governmental Authority.

 

Planned Well.  As defined in Section 3.3(a).

 

Planned Well Pad.  As defined in Section 3.3(a).

 

Producer.  As defined in the preamble of this Agreement.

 

Required Pumping Station.  As defined in Section 3.7.

 

Required Retention Facility.  As defined in Section 3.6.

 

Retention Facility.  Each retention area or other similar facility used to
temporarily store Water prior to its being made available at a Delivery Point.

 

Retention Facility Fee.  As defined in Section 5.1(a)(ii).

 

Service Area.  The Initial Service Area and any other area that becomes part of
the Service Area pursuant to Section 20.1.

 

Service Area Properties.  All Oil and Gas Interests now owned or hereafter
acquired by Producer and located wholly or partly within the Service Area or
pooled, unitized or communitized with Oil and Gas Interests located wholly or
partly within the Service Area; provided that Service Area Properties shall not
include any Oil and Gas Interests that are unitized or pooled with the
properties of third parties that are not Service Area Properties if Producer is
not the operator of such unit.

 

Services.  As defined in Section 3.1.

 

System Pumping Station.  As defined in Section 3.7.

 

System Retention Facility.  As defined in Section 3.6.

 

System Segment.  A physically separate segment of the Water Facilities that
connects one or more Take Points to one or more System Retention Facilities,
together with any underground Water lines downstream of such System Retention
Facilities and any rights of way downstream of such System Retention Facilities
for surface Water lines, including all underground Water pipelines, System
Retention Facilities, System Pumping Stations, Take Point Facilities,

 

4

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Measurement Facilities, rights of way, fee parcels, surface rights, and permits,
and all appurtenant facilities.

 

System Delivery Point.  Each point on any System Segment when Water is made
available to customers, including the Delivery Points.

 

System Take Point.  Each take point on any System Segment, including the Take
Points.

 

Take Point.  Those points specified in Exhibit C hereto, together with such
additional points as are specified by Producer in accordance with Section 3.5
from which, in accordance with agreements with the holders of water rights
and/or Applicable Laws and required Governmental Approvals, Producer has
procured the right for Midstream to take Water to make available to Producer for
use in accordance with this Agreement.

 

Take Point Facilities.  All facilities located at any Take Point that are
necessary for Midstream to take Water from the Water source at such Take Point.

 

Target Commencement Date.  As defined in Section 3.4(b).

 

Water.  Raw fresh water.  For the avoidance of doubt, “Water” does not include
recycled flowback water or produced water.

 

Water Facilities.  The Water facilities described in Exhibit B being acquired by
Midstream from Producer as of the date hereof, together with any additional
System Segments constructed after the date hereof, as such Water facilities are
expanded after the date hereof, including, in each case, to the extent now in
existence or constructed or installed in the future, all underground Water
pipelines, System Retention Facilities, System Pumping Stations, Take Point
Facilities, Measurement Facilities, rights of way (whether for underground or
surface use), fee parcels, surface rights, and permits, and all appurtenant
facilities.

 

Water Facilities Plan.  As defined in Section 3.3(b).

 

Water Quality Standards.  As defined in Section 9.1.

 

Well.  A well for the production of Hydrocarbons in which Producer owns an
interest that is located on the Service Area Properties or for which Water is
required to be made available from the Water Facilities in accordance with this
Agreement.

 

Well Pad.  The surface installation on which one or more Wells are located.

 

ARTICLE 2
PRODUCER COMMITMENTS

 

Section 2.1                                   Producer Commitments.  Subject to
the terms and conditions of this Agreement, Producer covenants and commits to
exclusively use Water made available at the Delivery Points or otherwise made
available by Midstream to Producer under this Agreement for use in its hydraulic
fracturing operations for all Wells operated by Producer in the Service Area.

 

5

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Section 2.2                                   Covenant Running with the Land. 
The covenant and commitment made by Producer under this Article 2 is a covenant
running with the land. For the avoidance of doubt and in addition to that which
is provided in Section 18.4, in the event Producer sells, transfers, conveys,
assigns, grants, or otherwise disposes of any or all of its interest in any of
its Service Area Properties, then any such sale, transfer, conveyance,
assignment, grant, or other disposition shall be expressly subject to this
Agreement and any instrument of conveyance shall so state.  Notwithstanding the
foregoing, Producer shall be permitted to sell, transfer, convey, assign, grant,
or otherwise dispose of Service Area Properties free of the covenant and
commitment made under this Article 2 in a sale or other disposition in which a
number of net acres of Service Area Properties that, when added to the total of
net acres of Service Area Properties theretofore and, where applicable,
simultaneously disposed of free of the commitment made by Producer under this
Article 2, does not exceed the aggregate number of net acres of Service Area
Properties acquired by Producer after the Effective Date, including in a
transaction in which Service Area Properties are exchanged for other properties
located in the Service Area that would be subject to commitment made by Producer
under this Article 2.

 

Section 2.3                                   Additional Oil and Gas Interests
or Water Facilities.

 

(a)                                 If at any time Producer acquires any
existing Water facilities through which Water is made available to any Oil and
Gas Interests, it shall, by notice to Midstream on or before the 10th day after
such acquisition, which notice shall include a reasonable description of such
Water facilities and such Oil and Gas Interests (including an update to the
Development Plan reflecting such Oil and Gas Interests in which Producer owns or
is acquiring an interest) and the price paid by Producer for such Water
facilities, including any liabilities assumed by Producer, offer to sell to
Midstream such Water facilities, including all underground Water pipelines,
retention facilities, pumping stations, take point facilities, delivery points,
measurement facilities, rights of way (whether for underground or surface use),
fee parcels, surface rights, and permits, and all appurtenant facilities, as
well as any third party contracts for Water services utilizing such pipeline
facilities, at the same price at which such Water facilities were acquired by
Producer, including the assumption of any liabilities with respect thereto
assumed by Producer.  Midstream shall have the right, to be exercised by notice
to Producer on or before the 60th Day after Producer’s notice of its acquisition
of such Water facilities, to acquire such Water facilities at such price
(including the assumption of such liabilities).  If Midstream does not give such
notice to Producer on or before such 30th Day, Midstream shall be deemed to have
waived its right to acquire such Water facilities, except in the case of a third
party services offer as provided below, and (i) Producer shall have the right to
own and operate such facilities to make available Water to the Oil and Gas
Interests described in such notice in which Producer owns an interest and all
other Oil and Gas Interests within the area within three miles of any such Oil
and Gas Interest and/or (ii) Producer shall have the right to solicit proposals
from a third party service provider to acquire, own, and operate such facilities
to make available Water to the Oil and Gas Interests described in such notice in
which Producer owns an interest and all Oil and Gas Properties in which Producer
owns an interest within the area within three miles of any such Oil and Gas
Property.   If Producer obtains any such third party proposal, it shall, by
notice to Midstream, provide Midstream with all the terms and conditions
thereof, and Midstream shall have the right to elect, by notice to Producer on
or before the 60th Day after its receipt of Producer’s notice containing the
terms and conditions of such proposal, to acquire such Water facilities and
provide such services on the same terms and conditions as those offered

 

6

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by the third party service provider.  If Midstream does not so elect on or
before such 60th Day, Midstream shall be deemed to have waived its right to
acquire such gathering facilities and provide such services, and Producer shall
have the right to contract with such third party service provider to acquire
such facilities and to provide such services on such terms and conditions to the
Oil and Gas Interests described in such notice in which Producer owns an
interest and all other Oil and Gas Interests within the area within three miles
of any such Oil and Gas Interest.   If Midstream elects to acquire such Water
facilities, the closing of Midstream’s purchase of such Water facilities from
Producer shall take place as soon as reasonably practicable following
Midstream’s exercise of its right to acquire such Water facilities.  From and
after the closing of such purchase by Midstream, all Oil and Gas Properties
owned by Producer the Water for which is being made available utilizing such
water facilities as well as Oil and Gas Properties owned by Producer within the
area within three miles of any such Oil and Gas Property shall become Service
Area Properties, and such area, to the extent not in or part of the
then-existing Service Area, shall become part of the Service Area, such Water
facilities shall be deemed to be one or more System Segments and part of the
Water Facilities, and the proposed Development Plan update included in
Producer’s notice shall become part of the Development Plant.  In any
transaction in which Producer so acquires Water facilities, Producer shall use
reasonable efforts to cause the transaction documents for such acquisition to
state a separate purchase price (and separately state any assumed liabilities)
for such Water facilities.  If notwithstanding such reasonable efforts the
transaction documents for such acquisition do not state a separate purchase
price, the purchase price to be paid by Midstream to Producer for such Water
facilities shall be equal to the Fair Market Value of such Water facilities, and
Midstream shall assume all liabilities in respect of such Water facilities to
the extent arising from the ownership and operation of such Water facilities
and/or any occurrence from and after the closing of the purchase of such Water
facilities by Midstream.

 

(b)                                 If at any time Producer desires to
construct, own, and operate, or to have constructed and operated, Water
facilities to make available Water to any Oil and Gas Interests in which
Producer owns an interest outside the then-existing Service Area, Producer
shall, by notice to Midstream specifying (i) the facilities it desires and the
take points and delivery points it plans to connect, (ii) the Oil and Gas
Interests owned by Producer to which Water is to be made available utilizing
such facilities (including an update to the Development Plan reflecting such Oil
and Gas Interests), and (iii) a proposed development plan for the Wells to be
drilled on such Oil and Gas Interests during the period of at least 18 Months
after such notice, offer to Midstream the opportunity to construct, own, and
operate such facilities as part of the Water Facilities on the terms set forth
in this Agreement.  Midstream shall have the right, to be exercised by notice to
Producer on or before the 60th Day after Producer’s notice, to elect to
construct, own, and operate such facilities.  If Midstream exercises such right,
from and after the date of Midstream’s notice of exercise, the area within three
miles of the Oil and Gas Properties described in such notice, to the extent not
in or part of the then-existing Service Area, shall become part of the Service
Area, such Water facilities as they are constructed shall be deemed to be part
of the Water Facilities, and the proposed Development Plan update included in
Producer’s notice shall become part of the Development Plan.  If Midstream does
not give such notice to Producer on or before such 60th Day, Midstream shall be
deemed to have waived its right to construct, own, and operate the facilities
set forth in Producer’s notice as part of the Water Facilities on the terms set
forth in this Agreement, except in the case of a third party services offer as
provided below,  and (1) Producer shall have the right to construct, own, and

 

7

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operate such facilities to make available Water to the Oil and Gas Interests
described in such notice or (2) Producer shall have the right to solicit
proposals from a third party service provider to construct, own, and operate
such facilities to make available Water to the Oil and Gas Interests described
in such notice and to make available Water to all Oil and Gas Properties owned
by Producer within the area within three miles of any such Oil and Gas
Property.  If Producer obtains any such third party proposal, it shall, by
notice to Midstream, provide Midstream with all the terms and conditions
thereof, and Midstream shall have the right to elect, by notice to Producer on
or before the 60th Day after its receipt of Producer’s notice containing the
terms and conditions of such proposal, to construct, own, and operate such water
facilities to make available Water to the Oil and Gas Interests described in
such notice on the same terms and conditions as those offered by the third party
service provider.  If Midstream does not so elect on or before such 60th Day,
Midstream shall be deemed to have waived its right to provide such services, and
Producer shall have the right to contract with such third party service to make
available Water to the Oil and Gas Interests described in such notice and to
make available Water to all Oil and Gas Properties owned by Producer within the
area within three miles of any such Oil and Gas Property.

 

(c)                                  Midstream shall have the right at any time
after the Effective Date to notify Producer that Midstream desires to increase
the scope of this Agreement to include the treatment, handling, and/or disposal
of flowback water, produced water, and/or drilling fluids and/or other fluid
waste handling services (“Water Treatment Services”).  Midstream shall have the
right to give one or more such notices, each covering one or more such types of
services.  On or before the 30th Day after any such notice, Producer shall by
notice to Midstream request from Midstream a proposal to provide the type or
types of Water Treatment Services specified in the Midstream notice to the
extent that Producer is then utilizing Water Treatment Services of such type
(such notice, a “Request for Proposal”), and thereafter Producer shall provide a
further Request for Proposal each time that it desires any such Water Treatment
Services in addition to those covered in a prior Request for Proposal for such
type of Water Treatment Services.  Each Request for Proposal shall specify the
Water Treatment Services that Producer desires, the proposed terms and
conditions on which such Water Treatment Services would be provided, and the Oil
and Gas Interests with respect to which it desires such Water Treatment
Services.  Midstream shall have the right, to be exercised by notice to Producer
on or before the 60th Day after the Request for Proposal (such notice, a
“Proposal Notice”), to make a proposal to provide such Water Treatment
Services.  Concurrently with or following its Request for Proposal to Midstream,
Producer may seek proposals from third parties to provide such Water Treatment
Services on the same terms and conditions.  Producer shall not accept any such
proposal from any third party for such Water Treatment Services unless (i) such
third party’s offer is received on or before the 60th day after the Request for
Proposal, is on the same terms and conditions as the Request for Proposal, and
offers fees for such Water Treatment Services that are better for Producer than
those offered by Midstream in its Proposal Notice, (ii) Producer, by notice to
Midstream, provides a copy of such third party proposal to Midstream, and
(iii) Midstream does not, by notice to Producer on or before the 30th Day after
notice of such third party offer is received from Producer, offer to provide
such Water Treatment Services for fees at least equal to those proposed by the
third party. If Midstream’s proposal is accepted or if Midstream matches a third
party offer, Midstream and Producer shall document their agreement for Midstream
to provide such services on the terms and conditions in the Request for Proposal
and the Proposal Notice.

 

8

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Section 2.4                                   Priority of Services.  All
Services provided under this Agreement shall be Firm Services.

 

ARTICLE 3
SERVICES; WATER FACILITIES EXPANSION AND CONNECTION OF DELIVERY POINTS

 

Section 3.1                                   Midstream Service Commitment. 
Subject to and in accordance with the terms and conditions of this Agreement,
Midstream commits to providing the following services (collectively, the
“Services”) to Producer:

 

(a)                                 take, or cause to be taken, at each Take
Point on each Day, Water in a quantity at least equal to the lesser of (i) the
maximum capacity of the Take Point Facilities as they then exist at such Take
Point on such Day, (ii) the maximum volume of Water that may be taken at such
Take Point in accordance with Producer’s rights to take Water at such Take
Point, including Applicable Laws and/or any relevant Governmental Approval, and
(iii) such volume of Water as shall be nominated by Producer in accordance with
this Agreement;

 

(b)                                 make available or cause to be made
available, by underground or surface water lines and through the use of System
Retention Facilities if applicable, such Water at the Delivery Points nominated
by Producer in accordance with this Agreement in the quantities specified by
Producer, up to the Maximum BPM Rate; and

 

(c)                                  permit Producer to remove such Water from
the System Retention Facilities by truck for use in its hydraulic fracturing
operations (and for no other use).

 

Section 3.2                                   Water Availability and Quantity. 
The obligation of Midstream to perform the Services is subject to the conditions
that (a) Producer has obtained all necessary rights, including all Governmental
Approvals (but excluding any leases, easements, or other real property rights
necessary for the location of Take Point Facilities, which, subject to the other
provisions of this Agreement, shall be the obligation of Midstream), to take
Water from the Take Points in sufficient volumes to make available Water at the
Delivery Points in the volumes specified in Section 3.1(b) and (b) the quality
of the Water available to be taken at such Take Points is at all times in
compliance with the Water Quality Standards.  Midstream shall be relieved of its
obligations to provide the Services to the extent that it is prevented from
doing so because either of such conditions is not satisfied at any time.

 

Section 3.3                                   Development Plan; Water Facilities
Plan; Exchange and Review of Information.

 

(a)                                 The Initial Development Plan describes
Producer’s planned development and drilling activities relating to the Service
Area Properties through the date that is 18 months after the Effective Date
(such plan, as updated as hereinafter provided, and including any proposed
development plan that becomes part of the Development Plan pursuant to
Section 2.3, the “Development Plan”).  Following the Effective Date, Producer
shall provide Midstream an updated Development Plan describing the planned
development and drilling activities relating to the Service Area Properties for
the 18-Month period commencing on the date of such updated Development Plan on
or before the last Day of each Month.  Each Development Plan will

 

9

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include (i) information as to the Wells that Producer expects will be drilled
during such period (each such Well reflected in a Development Plan, a “Planned
Well”), information as to each Well Pad expected to be constructed during such
period (each such Well Pad reflected in a Development Plan, a “Planned Well
Pad”) and the approximate locations thereof, and the earliest date on which one
or more Planned Wells at each such Planned Well Pad are expected to be completed
and (ii) good faith and reasonable forecasts of the periods of time during which
Water will be required at each Well Pad for the purpose of hydraulic fracturing
operations for all Planned Wells on such Well Pad and the volumes of Water that
will be required for such Planned Wells during the 18-Month period following the
date of such Development Plan (to the extent not previously provided or, if
earlier provided, as revised in Producer’s good faith estimation).  Producer
shall make its representatives available to discuss the Development Plan from
time to time with Midstream and its representatives, in order to facilitate
advance planning for expansion or improvement of the Water Facilities and to
address other matters relating to the construction and installation of additions
to the Water Facilities.  Producer may provide updated or amended Development
Plans to Midstream at any time and shall provide its then-current Development
Plan to Midstream from time to time on or prior to the fifth (5th) Business Day
after Midstream’s request therefor.

 

(b)                                 Attached hereto as Exhibit E is a Water
Facilities plan describing and/or depicting the Water Facilities, including all
Take Points, pipelines, Retention Facilities, Delivery Points, rights of way for
surface Water lines, and all Pumping Stations and other major physical
facilities, together with their locations, sizes and other physical
specifications, operating parameters, capacities, and other relevant
specifications, and together with a schedule for completing the construction and
installation of the planned portions thereof, in each case as currently in
existence, under construction, or planned (such plan, as updated as hereinafter
provided, the “Water Facilities Plan”).  Based on the Development Plans and such
other information about the expected development of the Service Area Properties
as shall be provided to Midstream by or on behalf of Producer, Midstream shall
periodically update the Water Facilities Plan.  Without limiting the generality
of the foregoing, Midstream shall ensure that the Water Facilities Plan reflects
each Monthly Development Plan not later than 30 Days after such Development Plan
is delivered. Midstream shall make the Water Facilities Plan available for
inspection by Producer and its representatives from time to time and shall make
representatives of Midstream available to discuss the Water Facilities Plan from
time to time with Producer and its representatives.  Midstream shall provide
Producer updates not less frequently than Monthly on the progress of work on all
facilities necessary to connect the Water Facilities to Delivery Points at the
Planned Well Pads as set forth in the then-current Water Facilities Plan.

 

(c)                                  The Parties recognize that the plans for
the development of the Service Area Properties set forth in the Development
Plans, as well as all information provided by Producer to Midstream regarding
its intentions with respect to the development of the Service Area Properties,
are subject to change and revision at any time at the discretion of Producer,
and that such changes may impact the timing, configuration, and scope of the
planned activities of Midstream.  The exchange of such information and any
changes thereto shall not give rise to any rights or liabilities as between the
Parties except as expressly set forth in this Agreement, and Midstream shall
determine at its own risk the time at which it begins to work on and incur costs
in connection with particular Water Facilities expansion projects, including the
acquisition of rights of way, equipment, and materials.  Without limiting the
generality of the foregoing,

 

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Producer has no obligation to Midstream under this Agreement to develop or
produce any Hydrocarbons from the Service Area Properties or to pursue or
complete any drilling or development on the Service Area Properties, whether or
not envisioned in the Development Plan.

 

Section 3.4                                   Expansion of Water Facilities;
Connection of Delivery Points.

 

(a)                                 The Water Facilities shall be designed,
developed, and constituted for the purpose of providing Services as and when
needed to provide Water to the Service Area Properties, and Midstream shall be
obligated, at its sole cost and expense, subject to the provisions of this
Agreement, to plan, procure, construct, install, own, and operate the Water
Facilities so as to timely connect the Water Facilities to the Delivery Points
at all Planned Well Pads and timely commence providing the full scope of
Services with respect to all the Planned Wells in accordance with this
Section 3.4; provided, that the foregoing shall not preclude Midstream from also
designing, developing and constituting the Water Facilities to services to third
parties.

 

(b)                                 Midstream shall be obligated to connect the
Water Facilities to Delivery Points at a particular Well Pad only if Midstream
has received from Producer a notice in the form of Exhibit F hereto (or in such
form as Producer and Midstream shall otherwise agree from time to time) stating
that Producer intends to drill, complete, and carry out hydraulic fracturing
operations on such Wells at such Well Pad (a “Connection Notice”) and setting
forth the target date for the commencement of hydraulic fracturing operations
(the “Target Commencement Date”) at such Well Pad and the volumes of Water to be
made available at the Delivery Points starting on such Target Commencement
Date.  Following receipt of a Connection Notice, Midstream shall cause the
necessary facilities to be constructed to connect the Water Facilities to the
Delivery Points at the Well Pads referred to in such Connection Notice and to
commence the Services with respect to such Delivery Points.  Such facilities
shall be able to make Water available to the Delivery Point at the Planned Well
Pad as soon as reasonably practicable following the Connection Notice and in any
event on or before the later to occur of (1) the Target Commencement Date with
respect to such Planned Well Pad, (2) the date that is 180 Days after the
Connection Notice, (3) for any Well Pad located in the Initial Service Area but
in any area outside the area described in Exhibit A as the “core area”, the date
specified for such area in Exhibit A, (4) for any Well Pad located outside the
Initial Service Area, the date that is 18 months after the area in which such
Well  Pad is located became part of the Service Area, and (5) the date on which
the initial Planned Well(s) at such Planned Well Pad has reached its projected
depth and is ready for completion and hydraulic fracturing operations (the later
of such dates, with respect to such Planned Well Pad, the “Completion
Deadline”).  Midstream shall provide Producer notice promptly upon Midstream’s
becoming aware of any reason to believe that it may not be able to connect a
Planned Well Pad to the Water Facilities by the Target Commencement Date
therefor or to otherwise complete all facilities necessary to provide the full
scope of Services with respect to the Delivery Points at such Planned Well Pad
by the Target Commencement Date therefor.  If and to the extent Midstream is
delayed in completing and making available such facilities by a Force Majeure
event or any action of Producer that is inconsistent with the cooperation
requirements of Section 3.9, then the Completion Deadline for such connection
shall be extended for a period of time equal to that during which Midstream’s
completion and making available of such facilities was delayed by such events or
actions.  If

 

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such facilities are not completed and made available by the Completion Deadline,
as Producer’s sole and exclusive remedies for such delay,

 

(i)                                     if Midstream notifies Producer that the
required volumes of Water are available at a System Retention Facility, Producer
shall have the right to pick up such volumes of Water at such System Retention
Facility and truck it to the Delivery Point at the Well Pad, in which case the
Producer’s actual cost of trucking such Water to  such Delivery Point shall be
deducted from the Delivery Point Fee or the Cost of Service Fee, as applicable;
or

 

(ii)                                  if the required volumes of Water are not
available at a System Retention Facility as provided in clause (i) above,
Producer shall have the right to obtain Water from sources other than Midstream
for hydraulic fracturing operations at such Well Pad and truck such Water to
such Well Pad until such time as the Delivery Point at such Well Pad is
connected to the Water Facilities and the Water Facilities are ready to make
available Water at such Delivery Point and to commence the Services with respect
thereto, in which case Producer shall be entitled to recover from Midstream the
excess, if any, of its costs of obtaining such Water and trucking such Water to
such Well Pad over the Delivery Point Fee or the Cost of Service Fee, as
applicable, that it would have been obligated to pay Midstream for the same
volumes of Water; or

 

(iii)                               Producer shall have the right to complete
the procurement, construction and/or installation of any rights or facilities
necessary to connect the Delivery Point at the relevant Planned Well Pad to the
Water Facilities and to permit Water to be made available at such Delivery
Point, in which case Midstream shall pay to Producer an amount equal to 115% of
all reasonable costs and expenses incurred by Producer in so procuring,
constructing, and/or installing such rights and facilities, and Producer shall
convey all such rights and facilities to Midstream and such rights and
facilities shall thereafter be part of the Water Facilities.

 

The remedies set forth in clauses (i), (ii) and (iii) above shall be applicable
to Wells with Completion Deadlines that are 180 Days or more after the Effective
Date.  Once a Well Pad is connected to the Water Facilities, Midstream shall
maintain such connection until such time as Producer has advised Midstream that
all hydraulic fracturing operations have been completed on all Planned Wells at
such Well Pad; provided that Midstream shall have the right to remove and re-lay
temporary surface water lines from time to time as long as no delay or
disruption in Producer’s hydraulic fracturing operations results therefrom.

 

(c)                                  If the actual commencement of hydraulic
fracturing operations at a particular Well Pad is delayed more than 30 Days
after the Target Commencement Date for such Well Pad and the Water Facilities
are connected to the Delivery Point at such Well Pad and available to commence
providing the Services with respect to the Planned Wells on such Well Pad prior
to the date such initial Planned Well is ready for hydraulic fracturing,
Midstream shall be entitled to a fee equal to interest per annum at the Wall
Street Journal prime rate on the incremental cost and expense incurred by
Midstream to procure, construct and install the relevant rights and facilities
to connect to such Well Pad and to cause such facilities to be available to
commence providing Services thereto for the number of Days after the Target
Commencement Date until the Day that hydraulic fracturing of the first Well at
such Well Pad has commenced;

 

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provided, however, that if hydraulic fracturing of such Well has not commenced
by the date that is six months after the Target Commencement Date for such Well
or, as of an earlier date, Producer notifies Midstream that it has elected not
to fracture any Planned Wells at such Planned Well Pad, Producer shall pay to
Midstream an amount equal to 115% of all reasonable incremental costs and
expenses incurred by Midstream in procuring, constructing and installing such
rights and facilities to connect the Water Facilities to such Planned Well Pad
and to cause such facilities to be available to commence providing Services
thereto, and Midstream shall assign, transfer, and deliver to Producer all
rights and facilities (including equipment, materials, work in progress, and
completed construction) the costs and expenses of which have so been paid by
Producer, to Producer.  If Producer so pays Midstream and later completes a Well
at such Well Pad which it desires to hydraulically fracture, or if such
facilities are later used to connect and hydraulically fracture a Well at a
different Planned Well Pad or for a third party, Midstream shall refund to
Producer such amount paid by Producer, and Producer shall retransfer such rights
and facilities to Midstream.

 

(d)                                 A Connection Notice shall be deemed to have
been given for the Planned Wells set forth on Exhibit G hereto, the Target
Commencement Date for which shall be as set forth Exhibit G.  Such Connection
Notice shall be deemed to have been given for each such Planned Well 180 Days
prior to such Target Commencement Date.

 

Section 3.5                                   Take Points.  Midstream shall be
obligated, at Midstream’s cost, to provide Take Point Facilities with respect to
the Take Points set forth on Exhibit C.  All such Take Points shall be provided
with all Take Point Facilities (including any Measurement Facilities) necessary
to take volumes of Water set forth for each such Take Point on Exhibit C (with
all expansions of capacity at such Take Point Facilities, being at Producer’s
sole, cost, risk, and expense).  Producer shall have right from time to time to
specify in the Development Plan or in a Connection Notice that an additional
Take Point shall be added and that Water from such Take Point shall be made
available to Delivery Points connected to a particular System Segment.  If
Producer so specifies, Midstream shall, at Producer’s sole cost, risk, and
expense, provide Take Point Facilities for such Take Point and a connection
between such Take Point Facilities and such System Segment.

 

Section 3.6                                   Retention Facilities.  The Water
Facilities Plan will describe the Retention Facilities that will be required to
permit Midstream to provide the Services in accordance with this Agreement
(each, a “Required Retention Facility”).  Midstream shall install such Required
Retention Facilities and shall operate and maintain such Required Retention
Facilities (each such Required Retention Facility so installed by Midstream, a
“System Retention Facility”).  For the avoidance of doubt, Midstream shall have
the right at any time to add additional retention facilities to the Water
Facilities as it deems necessary or appropriate to provide the Services and such
services as it is providing to third parties.

 

Section 3.7                                   Pumping Facilities.  The Water
Facilities Plan will describe the pumping facilities that will be required in
order for Water to be made available at the Delivery Points at the delivery
rates specified in Section 3.1(b) (each a”Required Pumping Station”).  Midstream
shall install each such Required Pumping Station and shall operate and maintain
each Required Pumping Station (each such Required Pumping Station so installed
by Midstream, a “System Pumping Station”).  For the avoidance of doubt,
Midstream shall have the right at any time to

 

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add additional pumping facilities to the Water Facilities as it deems necessary
or appropriate to provide the Services and such services as it is providing to
third parties.

 

Section 3.8                                   Right of Way and Access. 
Midstream is responsible for the acquisition of rights of way, crossing permits,
licenses, use agreements, access agreements, leases, fee parcels, and other
rights in land right necessary to construct, own, and operate the Water
Facilities, and all such rights in land shall be solely for use by Midstream and
shall not be shared with Producer, except as otherwise agreed by Midstream;
provided that Producer hereby grants, without warranty of title, either express
or implied, to the extent that it has the right to do so without the incurrence
of material expense, an easement and right of way upon all lands covered by the
Service Area Properties, for the purpose of installing, using, maintaining,
servicing, inspecting, repairing, operating, replacing, disconnecting, and
removing all or any portion of the Water Facilities, including all pipelines,
meters, and other equipment necessary for the performance of this Agreement;
provided, further, that the exercise of these rights by Midstream shall not
unreasonably interfere with Producer’s lease operations or with the rights of
owners in fee, and will be subject to Producer’s safety and other reasonable
access requirements applicable to Producer’s personnel.  Producer shall not have
a duty to maintain the underlying agreements (such as leases, easements, and
surface use agreements) that such grant of easement or right of way to Midstream
is based upon, and such grants of easement or right of way will terminate if
Producer loses its rights to the property, regardless of the reason for such
loss of rights.  Notwithstanding the foregoing, (i) Producer will assist
Midstream to secure replacements for such terminated grants of easement or right
of way, in a manner consistent with the cooperation requirements of Section 3.9,
(ii) to the extent that Producer agrees that Midstream’s Measurement Facilities
may be located on Producer’s Well Pad sites, Producer shall be responsible for
obtaining any necessary rights to locate such Measurement Facilities on such
Well Pad sites, and (iii) Producer shall use reasonable efforts to involve
Midstream in Producer’s negotiations with the owners of lands covered by the
Service Area Properties so that Producer’s surface use agreements and
Midstream’s rights of way with respect to such lands can be concurrently
negotiated and obtained. Without limiting the generality of the foregoing,
Producer agrees to make space available at each Delivery Point sufficient for
Midstream to install and construct pig receiving and other facilities necessary
for Midstream to pig the Water Facilities to each Delivery Point.

 

Section 3.9                                   Cooperation.  Because of the
interrelated nature of the actions of the Parties required to obtain the
necessary permits and authorizations from the appropriate Governmental
Authorities and the necessary consents, rights of way and other authorizations
from other Persons necessary to drill and complete each Planned Well and
construct the required extensions of the Water Facilities to each Planned Well
Pad, the Parties agree to work together in good faith to obtain such permits,
authorizations, consents and rights of way as expeditiously as reasonably
practicable, all as provided herein.  The Parties further agree to cooperate
with each other and to communicate regularly regarding their efforts to obtain
such permits, authorizations, consents and rights of way.

 

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ARTICLE 4
TERM

 

Section 4.1                                   Term.  This Agreement shall become
effective on the Effective Date and, unless terminated earlier by mutual
agreement of the Parties, shall continue in effect until the twentieth (20th)
anniversary of the Effective Date and from year to year thereafter (with the
initial term of this Agreement deemed extended for each of any such additional
year) until such time as this Agreement is terminated, effective upon an
anniversary of the Effective Date, by notice from either Party to the other
Party on or before the one hundred eightieth (180th) Day prior to such
anniversary.

 

ARTICLE 5
FEES AND CONSIDERATION

 

Section 5.1                                   Fees.

 

(a)                                 Subject to the other provisions of this
Agreement, including Section 5.1(c), Producer shall pay Midstream each Month in
accordance with the terms of this Agreement, for all Services provided by
Midstream during such Month, an amount equal to the sum of the following:

 

(i)                                     The product of (A) the aggregate volume
of Water, stated in Barrels, made available by Midstream to the Delivery Points
during such Month multiplied by (B) $3.50 (as may be increased or decreased in
accordance with Section 5.1(b), the “Delivery Point Fee”); and

 

(ii)                                  The product of (A) the aggregate volume of
Water, stated in Barrels, picked up by Producer at the System Retention
Facilities as contemplated by Section 3.1(c) during such Month multiplied by
(B) $3.00 (as may be increased or decreased in accordance with Section 5.1(b),
the “Retention Facility Fee”).

 

(b)                                 After each of the first five (5) Contract
Years, one hundred percent (100%), and after the sixth (6th) Contract Year and
each Contract Year thereafter, fifty-five percent (55%) of the Delivery Point
Fee and the Retention Facility Fee shall be adjusted up or down on an annual
basis in proportion to the percentage change, from the preceding year, in the
All Items Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City
Average, 1982-84 = 100, as published by the United States Department of Labor,
Bureau of Labor Statistics (“CPI”). Such adjustment shall be made effective upon
the first Day of each Contract Year commencing in the Contract Year beginning in
2014, and shall reflect the percentage change in the CPI as it existed for
June of the preceding Contract Year from the CPI for the second immediately
preceding June; provided, however, that the Delivery Point Fee and the Retention
Facility Fee shall never be less than the initial fees stated in Section 5.1(a);
nor shall such fees be increased or decreased by more than 3% in any given
Contract Year.

 

(c)                                  Notwithstanding the foregoing provisions of
this Section 5.1 or any other provision to the contrary in this Agreement,
Midstream shall have the right to elect to be paid for some or all Services on a
cost of service basis to the extent set forth in this Section 5.1(c).  Midstream
shall have the right to elect to be paid on a cost of service basis for any
Services other

 

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than Services offered in respect of the Delivery Points at the Planned Well Pads
set forth in the Initial Service Area, all of which Services shall be performed
for the volumetric fees set forth in Section 5.1(a) and Section 5.1(b).  With
respect to any other Services, Midstream may elect, by notice to Producer at
least three (3) Months prior to the commencement of any Contract Year or, in the
case of any water facilities acquired by Midstream pursuant to Section 2.3(a),
in the notice given by Midstream  in accordance with such Section that Midstream
will acquire such water facilities, to be paid on a cost of service basis for
the Services specified in such notice commencing at the beginning of such
Contract Year or with the acquisition of such facilities, as applicable, and
continuing for the remaining term of this Agreement, but only with respect to
the facilities so acquired or discrete parts of the Water Facilities (each, a
“CS Facility”) that are placed into service or acquired during such Contract
Year or a later Contract Year, as applicable.  The Services specified in such
notice may be of any scope determined by Midstream in its sole discretion and
may include all eligible Services or any part thereof and may include, by way of
example only, making Water available at a particular Delivery Point or group of
Delivery Points, providing additional System Retention Facilities or System
Pumping Facilities, connecting additional Take Points, and any other subset of
the Services determined by Midstream, in each case subject to the foregoing
sentence.  All Services provided from time to time on a cost of service basis
shall be bundled together for purposes of calculating a single Monthly cost of
service fee (the “Cost of Service Fee”), which shall be calculated with respect
to each Contract Year as set forth in Exhibit H attached hereto.

 

ARTICLE 6
CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES

 

Section 6.1                                   Operational Control of Midstream’s
Facilities.  Subject to the terms and conditions of this Agreement, Midstream
shall design, construct, own, operate, and maintain the Water Facilities at its
sole cost and risk.  Midstream shall be entitled to full and complete
operational control of its facilities and shall be entitled to operate and
reconfigure its facilities in a manner consistent with its obligations under
this Agreement.

 

Section 6.2                                   Maintenance.  Midstream shall be
entitled, without liability, to interrupt its performance hereunder to perform
necessary or desirable inspections, maintenance, testing, alterations,
modifications, expansions, connections, repairs or replacements to its
facilities as Midstream deems necessary (“Maintenance”), with reasonable notice
provided to Producer, except in cases of emergency where such notice is
impracticable or in cases where the operations of Producer will not be
affected.  Before the beginning of each calendar year, Midstream shall provide
Producer in writing with a projected schedule of the Maintenance to be performed
during the year and the anticipated date of such Maintenance.  On or before the
10th Day before the end of each Month, Midstream shall provide Producer with its
projected maintenance schedule for the following Month.

 

Section 6.3                                   Third Party Services; Capacity
Allocations on the Water Facilities.

 

(a)                                 Subject to this Section 7.4 and the other
provisions of this Agreement, Midstream has the right to contract with other
Persons to perform services utilizing the Water Facilities on an Interruptible
Service basis.

 

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(b)                                 If on any Day the total volumes of Water
that Midstream has agreed to take from all System Take Points on a particular
System Segment, including the volumes Midstream is obligated to take pursuant to
Section 3.1(a), for any reason (including Maintenance, Force Majeure, or any
foreseen or unforeseen reduction in capacity) exceed the capacity of such System
Segment, including any System Retention Facilities located on such System
Segment, Midstream shall reduce the volumes taken from all the System Take
Points pursuant to its agreements with third parties prior to any reduction in
the amounts taken at the Take Points pursuant to this Agreement.

 

(c)                                  To the extent that the volumes of Water
that Midstream has agreed to make available at the System Delivery Points on a
particular System Segment, including the volumes that Midstream is obligated to
make available at the Delivery Points pursuant to Section 3.1(b), for any reason
(including Maintenance, Force Majeure, or any foreseen or unforeseen reduction
in capacity) exceed the capacity of such System Segment to make available Water
at the System Delivery Points, then Midstream shall interrupt or curtail volumes
of Water made available to System Delivery Points other than the Delivery Points
prior to any reduction in the amounts made available at the Delivery Points.

 

(d)                                 Except as otherwise provided in this
Section 6.3, Midstream shall be free to use any Water present in the Water
Facilities to satisfy its obligations to Producer and any third party and shall
not be obligated to ensure that Water taken from any Take Point is utilized only
to perform Services for Producer; provided, however, that Midstream shall comply
with any restrictions on the use of any Water taken from any Take Point and made
available to any third party, and ensure that such third party also so complies,
to the extent that Producer has informed Midstream of such restrictions.

 

ARTICLE 7
DELIVERY RATES

 

Section 7.1                                   Delivery Rates.  Subject to the
other provisions of this Agreement, Midstream shall construct and operate the
Water Facilities in a manner so as to permit Water to be made available at the
Delivery Points at delivery rates equal to or greater than the Maximum BPM Rate.

 

Section 7.2                                   Producer Facilities.  Producer, at
its own expense, shall construct, equip, maintain, and operate all facilities
necessary to receive Water into the tanks or other storage facilities located at
the Delivery Points at delivery rates at least equal to the Maximum BPM Rate. 
Producer shall be responsible at its own expense for disposing of any Water
delivered to Producer to hereunder in the volumes and flow rates provided for
hereunder but that Producer is unable to use or store.

 

ARTICLE 8
NOMINATION

 

Section 8.1                                   Maximum Take Point Volumes. 
Producer has informed Midstream of the maximum volume of Water that can be
taken, if any, in accordance with Producer’s rights to take such Water,
including any Applicable Law or Governmental Approval, at each of the currently

 

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existing Take Points. Producer shall inform Midstream of the maximum volume of
Water that can be taken, if any in accordance with Producer’s rights to take
such Water, including any Applicable Law or Governmental Approval, at each new
Take Point established in accordance with Section 3.5.  Producer shall notify
Midstream of any change to such maximum volumes immediately after Producer
becomes aware of any such change.

 

Section 8.2                                   Take Point Nominations.  If
Producer desires that Midstream take volumes of Water from any Take Point on any
Day that are less than the greater of (a) the maximum capacity of the Take Point
Facilities as they then exist at such Take Point on such Day and (b) the maximum
volume of Water that may be taken on such Day at such Take Point in accordance
with Producer’s rights to take Water at such Take Point, including Applicable
Law and/or any relevant Governmental Approval, Producer may from time to time
nominate Take Point volumes for such Take Point as it desires to be taken at
each such Take Point, on not less than 5 Business Days’ notice to Midstream.

 

Section 8.3                                   Delivery Point Nominations.  If
Producer desires that Midstream make available at any Delivery Point volumes of
Water less than the volumes stated in the Connection Notice with respect to such
Delivery Point, Producer may from time to time nominate Delivery Point volumes
for such Delivery Point, on not less than 5 Business Days’ notice to Midstream.

 

ARTICLE 9
WATER QUALITY

 

Section 9.1                                   Take Point Water Standards.  Water
at each Take Point shall be free from any contamination or any substances that
would result in such Water being unsuitable for use in hydraulic fracturing
operations in accordance with all then-applicable general industry practices,
Applicable Laws, and Governmental Approvals, or that would result in any damage
to the Water Facilities (the standards set forth in this Section 9.1 being
called the “Water Quality Standards”).

 

Section 9.2                                   Non-Conforming Take Point Water.  
If the Water quality at any Take Point does not conform to the Water Quality
Standards, then Midstream will have the right to immediately discontinue taking
Water at such Take Point as long as the Water at such Take Point continues to be
non-conforming.  In the event that Midstream takes receipt of non-conforming
Water at any Take Point, Producer agrees to be responsible for, and to defend,
indemnify, release, and hold Midstream and its Affiliates, directors, officers,
employees, agents, consultants, representatives, and invitees harmless from and
against, all claims and losses of whatever kind and nature resulting from such
non-conforming Water.

 

Section 9.3                                   Delivery Point Water Quality
Standards.  Midstream shall make available Water at each Delivery Point that
meets the Water Quality Standards, provided that Water at the Take Points meets
the Water Quality Standards, and subject to the provisions of Section 9.4.

 

Section 9.4                                   Retention Facility Contamination. 
Midstream shall use reasonable efforts to ensure that Water that is held in the
System Retention Facilities is not subject to any contamination or pollution
that would result in the Water held in the System Retention Facilities not
meeting the Water Quality Standards.  Except to the extent that Midstream has
failed to

 

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perform its obligations set forth in the immediately preceding sentence,
Producer agrees to be responsible for, and to defend, indemnify, release, and
hold Midstream and its Affiliates, directors, officers, employees, agents,
consultants, representatives, and invitees harmless from and against, all claims
and losses of whatever kind and nature resulting from the quality of the Water
in the System Retention Facilities, including any remediation obligation under
any Applicable Laws relating to the environment.

 

ARTICLE 10
MEASUREMENT EQUIPMENT AND PROCEDURES

 

Section 10.1                            Equipment.  Midstream shall install,
own, operate, and maintain Measurement Facilities (a) to measure the volumes of
Water taken at each Take Point on each Day and (b) to measure the volumes of
Water made available at each Delivery Point on each Day.  Producer shall have
the right to install check Measurement Facilities at each Take Point and each
Receipt Point, including the right to install check measurement equipment on
Midstream’s meter tubes and orifice unions.  The changing and integration of the
charts (if utilized for measurement purposes hereunder) and calibrating and
adjusting of meters shall be performed by Midstream.

 

Section 10.2                            Units of Measurement. The unit of volume
for measurement of Water made available hereunder shall be one Barrel.  Delivery
rates shall be stated in Barrels per minute.

 

Section 10.3                            Notice of Measurement Facilities
Inspection and Calibration.  Each Party shall give reasonable notice to the
other Party in order that the other Party may, at its option, have
representatives present to observe any reading, inspecting, testing, calibrating
or adjusting of Measurement Facilities used in measuring or checking the
measurement of volumes of Water under this Agreement.  The official electronic
data from such Measurement Facilities shall remain the property of the
Measurement Facilities’ owner, but copies of such records shall, upon written
request, be submitted, together with calculations and flow computer
configurations therefrom, to the requesting Party for inspection and
verification.

 

Section 10.4                            Measurement Accuracy Verification.

 

(a)                                 Each Party shall verify the accuracy of all
Measurement Facilities owned by such Party no less frequently than quarterly. 
Neither Party shall be required to cause adjustment or calibration of such
equipment more frequently than once per Month, unless a special test is
requested pursuant to Section 11.6.

 

(b)                                 If, during any test of the Measuring
Facilities, an adjustment or calibration error is found which results in an
incremental adjustment to the calculated flow rate through each meter run in
excess of two percent (2%) of the adjusted flow rate (whether positive or
negative and using the adjusted flow rate as the percent error equation
denominator), then any previous recordings of such equipment shall be corrected
to zero error for any period during which the error existed (and which is either
known definitely or agreed to by the Parties) and the total flow for the period
redetermined in accordance with the provisions of Section 11.7.  If the period
of error condition cannot be determined or agreed upon between the Parties, such
correction shall

 

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be made over a period extending over the last one half of the time elapsed since
the date of the prior test revealing the two percent (2%) error.

 

(c)                                  If, during any test of any Measurement
Facilities, an adjustment or calibration error is found which results in an
incremental adjustment to the calculated hourly flow rate which does not exceed
two percent (2%) of the adjusted flow rate, all prior recordings and electronic
flow computer data shall be considered to be accurate for volume determination
purpose.

 

Section 10.5                            Special Tests.  In the event a Party
desires a special test (a test not scheduled by a Party under the provisions of
Section 11.5) of any Measurement Facilities, seventy-two (72) hours advance
notice shall be given to the other Party and both Parties shall cooperate to
secure a prompt test of the accuracy of such equipment.  If the Measurement
Facilities tested are found to be within the range of accuracy set forth in
Section 11.5(b), then the Party that requested the test shall pay the costs of
such special test including any labor and transportation costs pertaining
thereto.  If the Measurement Facilities tested are found to be outside the range
of accuracy set forth in Section 11.5(b), then the Party that owns such
Measurement Facilities shall pay such costs and perform the corrections
according to Section 11.7.

 

Section 10.6                            Metered Flow Rates in Error.  If, for
any reason, any Measurement Facilities are (i) out of adjustment, (ii) out of
service, or (iii) out of repair and the total calculated flow rate through each
meter run is found to be in error by an amount of the magnitude described in
Section 11.5, the total volumes of Water made available shall be determined in
accordance with the first of the following methods which is feasible:

 

(a)                                 By using the registration of any mutually
agreeable check metering facility, if installed and accurately registering
(subject to testing as provided for in Section 11.5);

 

(b)                                 Where multiple meter runs exist in series,
by calculation using the registration of such meter run equipment; provided that
they are measuring Production from upstream and downstream headers in common
with the faulty metering equipment, are not controlled by separate regulators,
and are accurately registering;

 

(c)                                  By correcting the error by re-reading of
the official data, or by straightforward application of a correcting factor to
the volumes recorded for the period (if the net percentage of error is
ascertainable by calibration, tests or mathematical calculation); or

 

(d)                                 By estimating the volumes, based upon
volumes made available during periods of similar conditions when the meter was
registering accurately.

 

Section 10.7                            Record Retention.  The Party owning the
Measurement Facilities shall retain and preserve all test data, flow metering
data, and similar records for any calendar year for a period of at least
twenty-four (24) Months following the end of such calendar year unless
Applicable Law requires a longer time period or the Party has received written
notification of a dispute involving such records, in which case records shall be
retained until the related issue is resolved.

 

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ARTICLE 11
NOTICES

 

Section 11.1                            Notices.  Unless otherwise provided
herein, any notice, request, invoice, statement, or demand which either Party
desires to serve upon the other regarding this Agreement shall be made in
writing and shall be considered as delivered (i) when hand delivered, or
(ii) when delivery is confirmed by pre-paid delivery service (such as FedEx,
UPS, DHL or a similar delivery service), or (iii) if mailed by United States
certified mail, postage prepaid, three (3) Business Days after mailing, or
(iv) if sent by facsimile transmission, when receipt is confirmed by the
equipment of the transmitting Party, or (v) when sent via email; provided, if
sent by email after normal business hours or if receipt of a facsimile
transmission is confirmed after normal business hours, receipt shall be deemed
to be the next Business Day.  Notwithstanding the foregoing, if a Party desires
to serve upon the other a notice of default under this Agreement, or if Producer
desires to serve upon Midstream a Connection Notice, the delivery of such notice
shall be considered effective under this 0 only if delivered by any method set
forth in items (i) through (iv) above.  Any notice shall be given to the other
Party at the following address, or to such other address as either Party shall
designate by written notice to the other:

 

Producer:

 

ANTERO RESOURCES CORPORATION

 

 

1625 17th Street

 

 

Denver, Colorado 80202

 

 

 

 

 

Attn: Chief Financial Officer

 

 

Phone: (303) 357-7310

 

 

Fax Number: (303) 357-7315

 

 

 

With copy to:

 

For water control, nominations & balancing:

 

 

Completion Supervisor

 

 

Phone: (303) 357-7310

 

 

Fax Number: (303) 357-7315

 

 

 

 

 

 

 

 

For accounting, financial, and legal:

 

 

Controller

 

 

Phone: (303) 357-7310

 

 

Fax Number: (303) 357-7315

 

 

 

Midstream:

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

1625 17th Street

 

 

Denver, Colorado 80202

 

 

 

 

 

Attn: Chief Financial Officer

 

 

Phone: (303) 357-7310

 

 

Fax Number: (303) 357-7315

 

 

 

 

 

For water control, nominations & balancing:

 

 

Scheduling Coordinator

 

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Phone: (303) 357-7310

 

 

Fax Number: (303) 357-7315

 

 

 

 

 

For accounting, financial, and legal:

 

 

Controller

 

 

Phone: (303) 357-7310

 

 

Fax Number: (303) 357-7315

 

ARTICLE 12
PAYMENTS

 

Section 12.1                            Invoices.  Not later than the tenth
(10th) Day following the end of each Month, Midstream shall provide Producer
with a detailed statement setting forth the volumes of Water made available
during such Month at the Delivery Points and the volumes of Water taken by
Producer from the System Retention Facilities during such Month and the Delivery
Point Fee, the Retention Facility Fee, and, if applicable, the Cost of Service
Fee with respect to such Month, together with measurement summaries and all
relevant supporting documentation, to the extent available on such tenth (10th)
Day (with Midstream being obligated to deliver any such supporting documentation
that is not available on such tenth (10th) Day as soon as it becomes
available).  Producer shall make payment to Midstream by the last Business Day
of the Month in which such invoice is received.  Such payment shall be made by
wire transfer pursuant to wire transfer instructions delivered by Midstream to
Producer in writing from time to time.  If any overcharge or undercharge in any
form whatsoever shall at any time be found and the invoice therefor has been
paid, Midstream shall refund any amount of overcharge, and Producer shall pay
any amount of undercharge, within thirty (30) Days after final determination
thereof, provided, however, that no retroactive adjustment will be made beyond a
period of twenty-four (24) Months from the date of a statement hereunder.

 

Section 12.2                            Right to Suspend on Failure to Pay.  If
any undisputed amount due hereunder remains unpaid for sixty (60) Days after the
due date, Midstream shall have the right to suspend or discontinue Services
hereunder until any such past due amount is paid.

 

Section 12.3                            Audit Rights.  Either Party, on not less
than thirty (30) Days prior written notice to the other Party, shall have the
right at its expense, at reasonable times during normal business hours, but in
no event more than twice in any period of twelve (12) consecutive Months, to
audit the books and records of the other Party to the extent necessary to verify
the accuracy of any statement, allocation, measurement, computation, charge,
payment made under, or obligation or right pursuant to this Agreement.  The
scope of any audit shall be limited to transactions affecting Water volumes
hereunder or the Cost of Service Fee and shall be limited to the twenty-four
(24) Month period immediately prior to the Month in which the notice requesting
an audit was given.  All statements, allocations, measurements, computations,
charges, or payments made in any period prior to the twenty-four (24) Month
period immediately prior to the Month in which the audit is requested shall be
conclusively deemed true and correct and shall be final for all purposes.

 

Section 12.4                            Payment Disputes.  In the event of any
dispute with respect to any payment hereunder, Producer shall make timely
payment of all undisputed amounts, and Midstream and Producer will use good
faith efforts to resolve the disputed amounts within sixty

 

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(60) Days following the original due date.  Any amounts subsequently resolved
shall be due and payable within ten (10) Days of such resolution.

 

Section 12.5                            Interest on Late Payments.  In the event
that Producer shall fail to make timely payment of any sums, except those
contested in good faith or those in a good faith dispute, when due under this
Agreement, interest will accrue at an annual rate equal to ten percent (10%)
from the date payment is due until the date payment is made.

 

Section 12.6                            Credit Assurance.  Midstream shall apply
consistent evaluation practices to all similarly situated customers to determine
the new Producer’s financial ability to perform its payment obligations under
this Agreement.

 

(a)                                 If Midstream has reasonable grounds for
insecurity regarding the performance of any obligation by Producer under this
Agreement (whether or not then due), Midstream may demand Adequate Assurance of
Performance from Producer, which Adequate Assurance of Performance shall be
provided to Midstream within five (5) Days after written request.  If Producer
fails to provide such Adequate Assurance of Performance within such time, then
Midstream may suspend its performance under this Agreement until such Adequate
Assurance of Performance is provided.  However, any action by Midstream shall
not relieve Producer of its payment obligations.  The exercise by Midstream of
any right under this Section 13.6 shall be without prejudice to any claims for
damages or any other right under this Agreement.  As used herein, “Adequate
Assurance of Performance” means any of the following, in Midstream’s reasonable
discretion:

 

(i)                                     an irrevocable standby letter of credit
in an amount not to exceed an amount that is equal to sixty (60) Days of
Producer’s payment obligations hereunder from a financial institution rated at
least A- by S&P or at least A3 by Moody’s in a form and substance satisfactory
to Midstream;

 

(ii)                                  cash collateral in an amount not to exceed
an amount that is equal to sixty (60) Days of Producer’s payment obligations
hereunder to be deposited in an escrow account as designated by Midstream;
Midstream is hereby granted a security interest in and right of set-off against
all cash collateral, which is or may hereafter be delivered or otherwise
transferred to such escrow account in connection with this Agreement; or

 

(iii)                               a guaranty in an amount not to exceed an
amount that is equal to sixty (60) Days of Producer’s payment obligations
hereunder reasonably acceptable to Midstream.

 

(b)                                 The term of any security provided under this
Section 13.6 shall be as reasonably determined by Midstream, but it shall never
exceed sixty (60) Days, after which the security shall terminate (or in the case
of cash collateral, be immediately returned by Midstream to Producer without
further action by either Party).  Nothing shall prohibit Midstream, however,
from requesting additional Adequate Assurance of Performance following the end
of any such term, so long as the conditions triggering such a request under this
Section 13.6 exist.

 

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(c)                                  Should Producer fail to provide Adequate
Assurance of Performance within five (5) Days after receipt of written demand
for such assurance (which shall include reasonable particulars for the demand
and documentation supporting the calculation of such amount demanded), then
Midstream shall have the right (notwithstanding any other provision of this
Agreement) to suspend performance under this Agreement until such time as
Producer furnishes Adequate Assurance of Performance.

 

Section 12.7                            Excused Performance.  Midstream will not
be required to perform or continue to perform Services, and Producer shall not
be obligated to obtain Water under this Agreement, in the event:

 

(a)                                 the other Party has voluntarily filed for
bankruptcy protection under any chapter of the United States Bankruptcy Code;

 

(b)                                 the other Party is the subject of an
involuntary petition of bankruptcy under any chapter of the United States
Bankruptcy Code, and such involuntary petition has not been settled or otherwise
dismissed within ninety (90) Days of such filing; or

 

(c)                                  the other Party otherwise becomes
insolvent, whether by an inability to meet its debts as they come due in the
ordinary course of business or because its liabilities exceed its assets on a
balance sheet test; and/or however such insolvency may otherwise be evidenced.

 

ARTICLE 13
FORCE MAJEURE

 

Section 13.1                            Suspension of Obligations.  In the event
a Party is rendered unable, wholly or in part, by Force Majeure to carry out its
obligations under this Agreement, other than the obligation to make payments
then or thereafter due hereunder, and such Party promptly gives notice and
reasonably full particulars of such Force Majeure in writing to the other Party
promptly after the occurrence of the cause relied on, then the obligations of
the Party giving such notice, so far as and to the extent that they are affected
by such Force Majeure, shall be suspended during the continuance of any
inability so caused, but for no longer period, and such cause shall so far as
reasonably possible be remedied with all reasonable dispatch by the Party
claiming Force Majeure.

 

Section 13.2                            Definition of Force Majeure.  The term
“Force Majeure” as used in this Agreement shall mean any cause or causes not
reasonably within the control of the Party claiming suspension and which, by the
exercise of reasonable diligence, such Party is unable to prevent or overcome,
including acts of God, strikes, lockouts or other industrial disturbances, acts
of the public enemy, acts of terror, sabotage, wars, blockades, military action,
insurrections, riots, epidemics, landslides, subsidence, lightning, earthquakes,
fires, storms or storm warnings, crevasses, floods, washouts, civil
disturbances, explosions, breakage or accident to wells, machinery, equipment or
lines of pipe, the necessity for testing or making repairs or alterations to
wells, machinery, equipment or lines of pipe, freezing of wells, equipment or
lines of pipe, inability of any Party hereto to obtain, after the exercise of
reasonable diligence, necessary materials, supplies, or government
authorizations, any action or restraint by any Governmental

 

24

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Authority (so long as the Party claiming suspension has not applied for or
assisted in the application for, and has opposed where and to the extent
reasonable, such action or restraint, and as long as such action or restraint is
not the result of a failure by the claiming Party to comply with any Applicable
Law), and any breach of any representation or warranty of Producer or any
failure by Producer to perform any obligation of Producer under that certain
[Contribution Agreement] dated [                          ], 2013, by and
between Producer and Midstream.

 

Section 13.3                            Settlement of Strikes and Lockouts.  It
is understood and agreed that the settlement of strikes or lockouts shall be
entirely within the discretion of the Party having the difficulty, and that the
above requirement that any Force Majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes or lockouts by acceding to
the demands of the opposing party when such course is inadvisable in the sole
discretion of the Party having the difficulty.

 

Section 13.4                            Payments for Water Made Available. 
Notwithstanding the foregoing, it is specifically understood and agreed by the
Parties that an event of Force Majeure will in no way affect or terminate
Producer’s obligation to make payment for volumes of Water made available prior
to such event of Force Majeure.

 

ARTICLE 14
INDEMNIFICATION

 

Section 14.1                            Midstream.  Subject to the terms of this
Agreement, including Section 18.8, Midstream shall release, indemnify, defend,
and hold harmless Producer and its Affiliates, directors, officers, employees,
agents, consultants, representatives, and invitees from and against all claims
and losses arising out of or relating to (i) the operations of Midstream and
(ii) any breach of this agreement by Midstream.

 

Section 14.2                            Producer.  Subject to the terms of this
Agreement, including Section 18.8, Producer shall release, indemnify, defend,
and hold harmless Midstream and its Affiliates, directors, officers, employees,
agents, consultants, representatives, and invitees from and against all claims
and losses arising out of or relating to (i) the operations of Producer and
(ii) any breach of this agreement by Producer.

 

ARTICLE 15
CUSTODY AND TITLE

 

Section 15.1                            Custody.  As among the Parties, Producer
shall be in custody, control and possession of (i) Water until such Water is
taken into the Water Facilities at the Take Points and (ii) Water after such
Water is made available at the Delivery Points or until such Water is picked up
by Producer at a System Facility.  As among the Parties, Midstream shall be in
custody, control and possession of all Water in the Water Facilities at all
other times. Except as otherwise provided in this Agreement, the Party having
custody and control of Water under the terms of this Agreement shall be
responsible for, and shall defend, indemnify, release and hold the other Party
and its Affiliates, directors, officers, employees, agents, consultants,
representatives, and invitees harmless from and against, all claims and losses
of whatever kind and nature for anything that may happen or arise with respect
to such Water when such Water is in its custody

 

25

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and control, including losses resulting from any negligent acts or omissions of
any indemnified party, but excluding any losses to the extent caused by or
arising out of the negligence, gross negligence, or willful misconduct of the
indemnified party.

 

ARTICLE 16
PAYMENTS FOR WATER; TAXES

 

Section 16.1                            Payments for Water; Taxes.  To the
extent that any Person is entitled to any payment in respect of Water taken from
any Take Point, including any taxes, Producer shall pay or cause to be paid and
agrees to hold Midstream harmless as to the payment of all such payments or
taxes.  Midstream shall not become liable for such payments or taxes, unless
designated to remit those taxes on behalf of Producer by any duly constituted
Governmental Authority having authority to impose such obligations on Midstream,
in which event the amount of such taxes remitted on Producer’s behalf shall be
reimbursed by Producer upon receipt of invoice, with corresponding documentation
from Midstream setting forth such payments.  Midstream shall pay or cause to be
paid all taxes, charges and assessments of every kind and character required by
statute or by order of Governmental Authorities with respect to the Water
Facilities.  Except as provided in Exhibit H attached hereto, neither Party
shall be responsible nor liable for any taxes or other statutory charges levied
or assessed against the facilities of the other Party, including ad valorem tax
(however assessed), used for the purpose of carrying out the provisions of this
Agreement or against the net worth or capital stock of such Party. 
Notwithstanding the foregoing, to the extent that such payments or taxes relate
to Water that is made available to a third party pursuant to Section 6.3(d),
Midstream shall look only to such third  party, and not to Producer, for payment
or reimbursement of such payments and taxes to the extent relating to the Water
made available to such third party, and shall use reasonable efforts to ensure
that Water not subject to such payments and taxes is made available to Producer
in preference to third parties.

 

ARTICLE 17
MISCELLANEOUS

 

Section 17.1                            Rights.  The failure of either Party to
exercise any right granted hereunder shall not impair nor be deemed a waiver of
that Party’s privilege of exercising that right at any subsequent time or times.

 

Section 17.2                            Applicable Laws.  This Agreement is
subject to all valid present and future laws, regulations, rules and orders of
Governmental Authorities now or hereafter having jurisdiction over the Parties,
this Agreement, or the services performed or the facilities utilized under this
Agreement.  To the extent that the performance of the Services by Midstream
shall at any point in time become prohibited or restricted by Applicable Laws or
the provisions of any Governmental Approval, Midstream shall be relieved from
its obligations to perform such Services.

 

Section 17.3                            Governing Law; Jurisdiction.

 

(a)                                 This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Colorado
without regard to choice of law principles.

 

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(b)                                 The Parties agree that the appropriate,
exclusive and convenient forum for any disputes between the Parties arising out
of this Agreement or the transactions contemplated hereby shall be in any state
or federal court in City and County of Denver, Colorado, and each of the Parties
irrevocably submits to the jurisdiction of such courts solely in respect of any
proceeding arising out of or related to this Agreement.  The Parties further
agree that the Parties shall not bring suit with respect to any disputes arising
out of this Agreement or the transactions contemplated hereby in any court or
jurisdiction other than the above specified courts.

 

Section 17.4                            Successors and Assigns.

 

(a)                                 This Agreement shall extend to and inure to
the benefit of and be binding upon the Parties and their respective successors
and permitted assigns.

 

(b)                                 To the extent any Affiliate of Producer
acquires any Oil and Gas Interests or any water facilities, Producer shall cause
such Affiliate to comply with the obligations of Producer under Article 2 of
this Agreement with respect to its Oil and Gas Interests and to enter into an
agreement with Midstream substantially the same as this Agreement.

 

(c)                                  Except as set forth in Section 18.4(b) and
Section 18.4(c), neither Party shall have the right to assign its respective
rights and obligations in whole or in part under this Agreement without the
prior written consent of the other Party (which such consent shall not be
unreasonably withheld, conditioned or delayed), and any assignment or attempted
assignment made otherwise than in accordance with this Section 18.4 shall be
null and void ab initio.

 

(d)                                 Notwithstanding the foregoing clause (c),
Midstream may perform all services under this Agreement itself using its own
water facilities and/or perform any or all such services through third parties,
in which case references herein to the Water Facilities shall be deemed to be
references to such facilities of the relevant third party.

 

(e)                                  Notwithstanding the foregoing clause (c):

 

(i)                                     Midstream shall have the right to assign
its rights under this Agreement, in whole or in part, as applicable, without the
consent of Producer if such assignment is made to any Person to which the Water
Facilities or any part thereof has been or will be transferred that assumes in
writing all of Midstream’s obligations hereunder (if applicable, to the extent
that part of the Water Facilities being transferred to such Person) and is
(A) an Affiliate of Midstream or (B) a Person to which the Water Facilities has
been or will be transferred who (1) hires (or retains, as applicable) operating
personnel who are then operating the Water Facilities (or has similarly
experienced operating personnel itself), (2) has operated for at least two
(2) years prior to such assignment systems similar to the Water Facilities, or
(3) contracts for the operation of the Water Facilities with another Person that
satisfies either of the foregoing conditions (1) or (2) in this clause (B),
provided in the case of an assignment pursuant to this clause (B), the assignee
has creditworthiness as reasonably determined by Producer that is equal to the
higher of Midstream’s creditworthiness as of the Effective Date and Midstream’s
creditworthiness as of the date of the assignment.

 

27

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(ii)                                  Midstream shall have the right to grant a
security interest in this Agreement to a lender or other debt provider (or
trustee or agent on behalf of such lender) of Midstream.

 

(iii)                               Producer shall have the right to assign its
rights under this Agreement, in whole or in part, as applicable, without the
consent of Midstream, to any Person to which it sells, assigns, or otherwise
transfers all or any portion of the Service Area Properties and who (A) who
assumes in writing all of Producer’s obligations hereunder (if applicable, to
the extent of the Service Area Properties being transferred to such Person) and
(B) whose credit rating is equal to or greater than the greater of Producer’s
credit rating as of the Effective Date and Producer’s credit rating as of the
date of the assignment.

 

(f)                                   Upon an assignment by Midstream in
accordance with Section 17.4(e)(i)(B) Midstream shall be released from its
obligations under this Agreement to the extent of such assignment.  Upon an
assignment by Producer in accordance with Section 18.4(c)(ii), Producer shall be
released from its obligations under this Agreement to the extent of such
assignment.

 

Section 17.5                            Severability.  If any provision of this
Agreement is determined to be void or unenforceable, in whole or in part, then
(i) such provision shall be deemed inoperative to the extent it is deemed void
or unenforceable, (ii) the Parties agree to enter into such amendments to this
Agreement in order to give effect, to the greatest extent legally possible, to
the provision that is determined to be void or unenforceable and (iii) the other
provisions of this Agreement in all other respects shall remain in full force
and effect and binding and enforceable to the maximum extent permitted by
Applicable Law; provided, however, that in the event that a material term under
this Agreement is so modified, the Parties will, timely and in good faith,
negotiate to revise and amend this Agreement in a manner which preserves, as
closely as possible, each Party’s business and economic objectives as expressed
by the Agreement prior to such modification.

 

Section 17.6                            Confidentiality.

 

(a)                                 Confidentiality.  Except as otherwise
provided in this Section 18.6, each Party agrees that it shall maintain all
terms and conditions of this Agreement, and all information disclosed to it by
the other Party or obtained by it in the performance of this Agreement and
relating to the other Party’s business (including Development Plans, Water
Facilities Plans, and all data relating to the production of Producer)
(collectively, “Confidential Information”) in strictest confidence, and that it
shall not cause or permit disclosure of this Agreement or its existence or any
provisions contained herein without the express written consent of the other
Party.

 

(b)                                 Permitted Disclosures.  Notwithstanding
Section 18.6(a) disclosures of any Confidential Information may be made by
either Party (i) to the extent necessary for such Party to enforce its rights
hereunder against the other Party; (ii) to the extent to which a Party is
required to disclose all or part of this Agreement by a statute or by the order
or rule of a Governmental Authority exercising jurisdiction over the subject
matter hereof, by order, by

 

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regulations, or by other compulsory process (including deposition, subpoena,
interrogatory, or request for production of documents); (iii) to the extent
required by the applicable regulations of a securities or commodities exchange;
(iv) to a third person in connection with a proposed sale or other transfer of a
Party’s interest in this Agreement, provided such third person agrees in writing
to be bound by the terms of this Section 18.6; (v) to its own directors,
officers, employees, agents and representatives; (vi) to an Affiliate; (vii) to
financial advisors, attorneys, and banks, provided that such Persons are subject
to a confidentiality undertaking consistent with this Section 18.6(b), or
(viii) except for information disclosed pursuant to Article 3 of this Agreement,
to a royalty, overriding royalty, net profits or similar owner burdening
production from the Service Area Properties, provided such royalty, overriding
royalty, net profits or similar owner, agrees in writing to be bound by the
terms of this Section 18.6.

 

(c)                                  Notification.  If either Party is or
becomes aware of a fact, obligation, or circumstance that has resulted or may
result in a disclosure of any of the terms and conditions of this Agreement
authorized by Section 17.6(b)(ii) or (iii), it shall so notify in writing the
other Party promptly and shall provide documentation or an explanation of such
disclosure as soon as it is available.

 

(d)                                 Party Responsibility.  Each Party shall be
deemed solely responsible and liable for the actions of its directors, officers,
employees, agents, representatives and Affiliates for maintaining the
confidentiality commitments of this Section 18.6.

 

(e)                                  Public Announcements.  The Parties agree
that prior to making any public announcement or statement with respect to this
Agreement or the transaction represented herein permitted under this
Section 18.6, the Party desiring to make such public announcement or statement
shall provide the other Party with a copy of the proposed announcement or
statement prior to the intended release date of such announcement.  The other
Party shall thereafter consult with the Party desiring to make the release, and
the Parties shall exercise their reasonable best efforts to (i) agree upon the
text of a joint public announcement or statement to be made by both such Parties
or (ii) in the case of a statement to be made solely by one Party, obtain
approval of the other Party to the text of a public announcement or statement. 
Nothing contained in this Section 18.6 shall be construed to require either
Party to obtain approval of the other Party to disclose information with respect
to this Agreement or the transaction represented herein to any Governmental
Authority to the extent required by Applicable Law or necessary to comply with
disclosure requirements of the Securities and Exchange Commission, New York
Stock Exchange, or any other regulated stock exchange.

 

(f)                                   Survival.  The provisions of this
Section 18.6 shall survive any expiration or termination of this Agreement;
provided that other than with respect to information disclosed pursuant to
Article 3, as to which such provisions shall survive indefinitely, such
provisions shall survive only a period of one (1) year.

 

Section 17.7                            Entire Agreement, Amendments and
Waiver.  This Agreement, including all exhibits hereto, integrates the entire
understanding between the Parties with respect to the subject matter covered and
supersedes all prior understandings, drafts, discussions, or statements, whether
oral or in writing, expressed or implied, dealing with the same subject matter. 
This Agreement may not be amended or modified in any manner except by a written
document signed

 

29

--------------------------------------------------------------------------------

 

by the Parties that expressly amends this Agreement.  No waiver by either Party
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless expressly provided.  No waiver
shall be effective unless made in writing and signed by the Party to be charged
with such waiver.

 

Section 17.8                            Limitation of Liability. 
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL
BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS
AGREEMENT OR THE BREACH THEREOF OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER
TORT, NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT, WARRANTY, INDEMNITY OR
OTHERWISE, INCLUDING LOSS OF USE, INCREASED COST OF OPERATIONS, LOSS OF PROFIT
OR REVENUE, OR BUSINESS INTERRUPTIONS; PROVIDED, HOWEVER, THAT THE FOREGOING
LIMITATION SHALL NOT APPLY TO ANY DAMAGE CLAIM ASSERTED BY OR AWARDED TO A THIRD
PARTY FOR WHICH A PARTY WOULD OTHERWISE BE LIABLE UNDER ANY INDEMNIFICATION
PROVISION SET FORTH HEREIN.

 

Section 17.9                            Headings.  The headings and captions in
this Agreement have been inserted for convenience of reference only and shall
not define or limit any of the terms and provisions hereof.

 

Section 17.10                     Rights and Remedies.  Except as otherwise
provided in this Agreement, each Party reserves to itself all rights,
counterclaims, other remedies and defenses that such Party is or may be entitled
to arising from or out of this Agreement or as otherwise provided by Applicable
Law.

 

Section 17.11                     No Partnership.  Nothing contained in this
Agreement shall be construed to create an association, trust, partnership, or
joint venture or impose a trust, fiduciary or partnership duty, obligation or
liability on or with regard to either Party.

 

Section 17.12                     Rules of Construction.  In construing this
Agreement, the following principles shall be followed:

 

(a)                                 no consideration shall be given to the fact
or presumption that one Party had a greater or lesser hand in drafting this
Agreement;

 

(b)                                 examples shall not be construed to limit,
expressly or by implication, the matter they illustrate;

 

(c)                                  the word “includes” and its syntactical
variants mean “includes, but is not limited to,” “includes without limitation”
and corresponding syntactical variant expressions;

 

(d)                                 the plural shall be deemed to include the
singular and vice versa, as applicable; and

 

30

--------------------------------------------------------------------------------

 

(e)           references to Section shall be references to Sections of this
Agreement.

 

Section 17.13       No Third Party Beneficiaries.  This Agreement is for the
sole benefit of the Parties and their respective successors and permitted
assigns, and shall not inure to the benefit of any other Person whomsoever or
whatsoever, it being the intention of the Parties that no third Person shall be
deemed a third party beneficiary of this Agreement.

 

Section 17.14       Further Assurances.  Each Party shall take such acts and
execute and deliver such documents as may be reasonably required to effectuate
the purposes of this Agreement.

 

Section 17.15       Counterpart Execution.  This Agreement may be executed in
any number of counterparts, each of which shall be considered an original, and
all of which shall be considered one and the same instrument.

 

31

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
set forth above.

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Water Services Agreement

Signature Page

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

INITIAL SERVICE AREA

 

[g223321ku49i001.jpg]

 

Exhibit A - Page 1

--------------------------------------------------------------------------------

 

[g223321ku49i002.jpg]

 

Exhibit A - Page 2

--------------------------------------------------------------------------------

 

EXHIBIT B

 

INITIAL WATER FACILITIES

 

1.              All existing or imminent buried Water pipelines and associated
appurtenances.

 

2.              All existing or imminent temporary surface Water pipeline and
associated appurtenances.

 

3.              All Water pipeline and associated appurtenances contained in
inventory and designated for future Water pipeline projects.

 

4.              All existing or imminent pump stations, transfer pumps, or
booster pumps that are designated for the transfer of Water up to the Producer’s
receiving tanks/pits.

 

5.              All pump stations, transfer pumps, or booster pumps that are
contained in inventory and designated for the future transfer of Water up to the
Producer’s receiving tanks/pits.

 

6.              All existing or imminent operational equipment, tools, telemetry
devices, vehicles necessary for operation of the line.

 

7.              All existing or imminent surface use agreements for withdrawal
points, access roads, impoundments, pump stations, maintenance shops, laydown or
staging yards and surface feature access pads.

 

8.              Fresh Water Impoundments (“FWIs”) (status as of October 10,
2013):

 

FWIs built and in-service:

 

1.              Harshbarger North FWI

 

2.              Harshbarger South FWI

 

3.              Marsden FWI

 

4.              Quinn FWI

 

5.              Bonnell FWI

 

FWIs – constructing:

 

1.              Hinter Heirs South FWI

 

2.              Hinter Heirs North FWI

 

3.              Pearl Jean South FWI

 

4.              Pearl Jean North FWI

 

5.              Annie Horizontal FWI

 

Exhibit B - Page 1

--------------------------------------------------------------------------------

 

6.              Lake FWI

 

7.              Nimorwicz West FWI

 

8.              Nimorwicz East FWI

 

9.              Foreman FWI

 

10.       Bee Lewis FWI

 

Planning/Permitting/waiting on release/waiting on SUA:

 

1.              John Richards Centralized Pit (produced water storage)

 

2.              Whitehair FWI

 

3.              Hartley West FWI

 

4.              Melody FWI

 

5.              Spiker FWI

 

6.              Heflin FWI

 

7.              James Webb FWI

 

8.              Lemley FWI

 

Exhibit B - Page 2

--------------------------------------------------------------------------------

 

EXHIBIT C

 

TAKE POINTS

 

Fresh Water Impoundments (status as of October 10, 2013)

 

FWIs built and in-service

 

1.             Harshbarger North FWI

 

2.             Harshbarger South FWI

 

3.             Marsden FWI

 

4.             Quinn FWI

 

5.             Bonnell FWI

 

FWIs – constructing

 

1.             Hinter Heirs South FWI

 

2.             Hinter Heirs North FWI

 

3.             Pearl Jean South FWI

 

4.             Pearl Jean North FWI

 

5.             Annie Horizontal FWI

 

6.             Lake FWI

 

7.             Nimorwicz West FWI

 

8.             Nimorwicz East FWI

 

9.             Foreman FWI

 

10.          Bee Lewis FWI

 

Planning/Permitting/waiting on release/waiting on SUA

 

1.             John Richards Centralized Pit (produced water storage)

 

2.             Whitehair FWI

 

3.             Hartley West FWI

 

4.             Melody FWI

 

5.             Spiker FWI

 

6.             Heflin FWI

 

7.             James Webb FWI

 

8.             Lemley FWI

 

Exhibit C - Page 1

--------------------------------------------------------------------------------

 

West Virginia

 

1.             Ohio River at Ben’s Run Withdrawal Site (Tyler County), reference
NOAA Website – Willow Island Lock and Dam

 

Min Gauge Reading:  6,468 cfs

 

Maintain local pass-by of 6,468 cfs

 

Max. pump rate:  7.48 cfs (3,360 gpm)

 

2.             West Fork River at JCP Withdrawal Site (Harrison County),
reference USGS Station Number 03061000

 

Min Gauge Reading:  175.00 cfs

 

Maintain local pass-by of 146.25 cfs

 

Max. pump rate: 4.46 cfs (2,000 gpm)

 

3.             West Fork River at McDonald Withdrawal Site (Harrison County),
reference USGS Station Number 03061000

 

Min Gauge Reading:  175.00 cfs

 

Maintain local pass-by of 106.30 cfs

 

Max. pump rate: 6.68 cfs (3,000 gpm)

 

4.             West Fork River at GAL Withdrawal Site (Harrison County),
reference USGS Station Number 03061000

 

Min Gauge Reading:  175.00 cfs

 

Maintain local pass-by of 105.39 cfs

 

Max. pump rate: 4.46 cfs (2,000 gpm)

 

5.             Middle Island Creek at Dawson Withdrawal Site (Tyler County),
reference USGS Station Number 03114500

 

Min Gauge Reading:  76.03 cfs

 

Maintain local pass-by of 28.83 cfs

 

Max. pump rate: 6.68 cfs (3,000 gpm)

 

6.             Middle Island Creek at Mees Withdrawal Site (Pleasants County),
reference USGS Station Number 03114500

 

Min Gauge Reading:  52.59 cfs

 

Maintain local pass-by of 47.63 cfs

 

Max. pump rate: 7.48 cfs (3,360 gpm)

 

Exhibit C - Page 2

--------------------------------------------------------------------------------

 

7.             McElroy Creek at Forest Withdrawal (Tyler County), reference USGS
Station Number 03114500

 

Min Gauge Reading:  74.77 cfs

 

Maintain local pass-by of 13.10 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

8.             McElroy Creek at Sweeney Withdrawal (Doddridge County), reference
USGS Station Number 03114500

 

Min Gauge Reading:  69.73 cfs

 

Maintain local pass-by of 6.66 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

9.             Meathouse Fork at Gagnon Withdrawal Site (Doddridge County),
reference USGS Station Number 03114500

 

Min Gauge Reading:  71.96 cfs

 

Maintain local pass-by of 13.10 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

10.          Meathouse Fork at Whitehair Withdrawal Site (Doddridge County),
reference USGS Station Number 03114500

 

Min Gauge Reading:  69.73 cfs

 

Maintain local pass-by of 7.28 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

11.          Tom’s Fork at Erwin Withdrawal (Doddridge County), reference USGS
Station Number 03114500

 

Min Gauge Reading:  69.73 cfs

 

Maintain local pass-by of 0.59 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

12.          Arnold Creek at Davis Withdrawal Site (Doddridge County), reference
USGS Station Number 03114500

 

Min Gauge Reading:  69.73 cfs

 

Maintain local pass-by of 3.08 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

Exhibit C - Page 3

--------------------------------------------------------------------------------

 

13.          Buckeye Creek at Powell Withdrawal Site (Doddridge County),
reference USGS Station Number 03114500

 

Min Gauge Reading:  69.73 cfs

 

Maintain local pass-by of 4.59 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

14.          South Fork of Hughes River at Knight Withdrawal Site (Ritchie
County), reference USGS Station Number 03155220

 

Min Gauge Reading:  39.80 cfs

 

Maintain local pass-by of 1.95 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

15.          North Fork of Hughes River at Davis Withdrawal Site (Ritchie
County), reference USGS Station Number 03155220

 

Min Gauge Reading:  35.23 cfs

 

Maintain local pass-by of 2.19 cfs

 

Max. pump rate: 2.23 cfs (1,000 gpm)

 

Exhibit C - Page 4

--------------------------------------------------------------------------------

 

Ohio

 

High Priority

 

Location

 

Latitude

 

Longitude

 

Status

 

Desktop
Evaluation

 

Field
Recon

 

Site Access

 

Delineation

 

SUA

 

Stream
Gaging
Events

 

Rating
Curve/Pump
Sheet

 

Registration

 

Floodplain

 

ODOT

 

Construction
Release

 

ODNR
Registration
Number

 

Parcel ID

 

Property Owner

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Buffalo Creek 4

 

39.811790

 

-81.467680

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

Pending

 

4

 

Complete

 

2.00

 

Pending

 

Pending

 

Pending

 

02487

 

467877787

 

James E & Rosemary L Johnson

 

Issue with pricing, currenlty considering Buffalo Creek Arnold location

Buffalo Creek-Arnold

 

39.863557

 

-81.526403

 

Registered

 

Complete

 

Complete

 

Obtained

 

Pending

 

Pending

 

12

 

Pending

 

2.00

 

Pending

 

Pending

 

Pending

 

02628

 

05-21125.002

 

Michael R & Judy M Arnold

 

Registration and design complete. Stream gaging will continue to be performed in
support of a current or upcoming frac and to maintain an understanding of the
regional flow and seasonal variations.

East Fork Duck Creek-6

 

39.645811

 

-81.309128

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

14

 

Complete

 

2.00

 

Completed

 

Pending

 

Pending

 

02543

 

467869656

 

Christopher A & Paula D Vetter

 

Waiting on Rettew Survey which is a field markout i.e. stakes in ground. Stream
gaging will continue to be performed in support of a current or upcoming frac
and to maintain an understanding of the regional flow and seasonal variations.

Jordan Jones 1

 

39.763746

 

-81.200327

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

NA

 

N/A

 

0.500

 

NA

 

NA

 

Approved

 

02458

 

408880971

 

Gary A & Nancy S Or Survivor Rubel

 

Rettew - What is appropriate drawdown, pulled at times 500,000 GPD on last frac,
Rettew recommends drawdown of no more than 1/2 vol.

Kerry Brown Withdrawal

 

39.58746

 

-80.97836

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

NA

 

N/A

 

2.000

 

NA

 

NA

 

Approved

 

02449

 

408891558

 

Guy L & Josephine G Or Survivor Brown

 

Is built, no plans to use, when Grimes built will cancell registration and SUA

Lewis Grimes Rock Quarry

 

39.505552

 

-81.087615

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

NA

 

N/A

 

2.000

 

Pending

 

NA

 

Approved

 

02450

 

150057020000

 

John Grimes

 

Authorized to do construction. Design complete.

Opossum Run

 

39.869684

 

-81.420662

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

15

 

Complete

 

1.200

 

NA

 

NA

 

Approved

 

02452

 

467879431

 

Wayne F & Martha J Miley

 

Will be utilized during storm events in the summer months. Stream gaging will
continue to be performed in support of a current or upcoming frac and to
maintain an understanding of the regional flow and seasonal variations.

Rubel 4

 

39.780167

 

-81.196681

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

Pending

 

NA

 

N/A

 

0.250

 

NA

 

NA

 

TBD

 

02451

 

408891675

 

Gary A & Nancy S Or Survivor Rubel

 

Rubel reviewing agreement, has not been used, is truck loadout

Rubel Pad Ground Water Withdrawal

 

39.833172

 

-81.302765

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

NA

 

N/A

 

0.750

 

NA

 

NA

 

NA

 

02550

 

408880908

 

Gary A & Nancy S Or Survivor Rubel

 

Used to fill Rubel FWI, can pipe from Carpenter to Rubel FWI only. Sampled on
9/19. Expecting results the week of 9/30. Per ODNR, Rettew will unregister
source at the end of the year.

Seneca Fork Wills Creek - 2

 

39.931389

 

-81.457222

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

13

 

Complete

 

2.00

 

Completed

 

NA

 

Approved

 

02481

 

31-00426

 

Julia J Postlethwait

 

Broken weld down on bridge, county to fix bridge, will be shut down, using staff
gage at bridge.

Skin Creek-1 (Rubel)

 

39.83223

 

-81.30409

 

Registered

 

Complete

 

Complete

 

Complete

 

Complete

 

In place

 

18

 

Complete

 

1.00

 

NA

 

NA

 

NA

 

02555

 

408880908

 

Gary A & Nancy S Or Survivor Rubel

 

Next to Rubel pad, used to fill Rubel FWI. Staff gage decommissioned on 9/25.
Per ODNR, Rettew will unregister source at the end of the year.

Slope Creek Reservoir (Barnesville #3)

 

39.907492

 

-81.165197

 

Registered

 

Complete

 

Complete

 

Obtained

 

Pending

 

Pending

 

NA

 

NA

 

2.00

 

NA

 

Pending

 

Pending

 

02629

 

37-60021.000

 

The Village of Barnesville

 

Registration and design complete.

South Fork (Carpenter)

 

39.813710

 

-81.307880

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

19

 

Complete

 

2.00

 

2/20/2013

 

2/20/2013

 

2/22/2013

 

02488

 

408885365

 

Wallace R & Judy A Or Survivor Carpenter

 

Across road from Carpenter pad - direct fill to Carpenter FWI. Stream gaging
will continue to be performed in support of a current or upcoming frac and to
maintain an understanding of the regional flow and seasonal variations.

West Fork Duck Creek - Buckey

 

39.794094

 

-81.562736

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

14

 

Complete

 

2.00

 

Submitted

 

NA

 

Pending

 

02482

 

467875881

 

Michael R & Linda Buckey

 

Not in floodplain, in use as truck loadout. Stream gaging will continue to be
performed in support of a current or upcoming frac and to maintain an
understanding of the regional flow and seasonal variations.

Beaver Creek-4

 

39.908867

 

-81.316445

 

Registered

 

Complete

 

Complete

 

Obtained

 

Complete

 

In place

 

4

 

Pending

 

2.00

 

Completed

 

Complete

 

Complete

 

02673

 

467876191

 

Shawn Q Carpenter

 

Week of 9/9: Install staff gage, gage stream, preliminary design completed and
registered. Support for Roe/Ervin well pads. Updated Roe to Ervin Design to
Antero on 9/27. ODOT and Floodplain Permits issued on 9/27. Stream gaging will
continue to be performed in support of a current or upcoming frac and to
maintain an understanding of the regional flow and seasonal variations.

 

Exhibit C - Page 1

--------------------------------------------------------------------------------

 

Low Priority

 

Location

 

Latitude

 

Longitude

 

Status

 

Desktop
Evaluation

 

Field
Recon

 

Site
Access

 

Delineation

 

SUA

 

Stream
Gaging
Events

 

Rating
Curve/Pump
Sheet

 

Registration

 

Floodplain

 

ODOT

 

Construction
Release

 

ODNR
Registration
Number

 

Parcel ID

 

Property Owner

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beaver Creek-2

 

39.906603

 

-81.320415

 

On Hold

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEED UPDATE FROM UTICA TEAM Potential feed to Ervin impoundment (across the
road).

Beaver Creek-3

 

39.901428

 

-81.319465

 

On Hold

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEED UPDATE FROM UTICA TEAM Favorable due to deep pools in stream and road
access. On hold, consult Aaron on Beaver Creek-2 potential.

Boggs Fork-2

 

40.177966

 

-81.189805

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To support Piedmont Lake area well pads.

Bushy Fork

 

40.10065

 

-81.430289

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Possible Ervin Source useful for rig program in Barnsville area

Clear Fork

 

40.156895

 

-81.448634

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Possible Ervin Source useful for rig program in Barnsville area

Khune Pond

 

39.670273

 

-81.477492

 

On Hold

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bath Survey complete-25 foot depth throughout pond, 15 feet off shoreline. Do
not register per Aaron.

Middle Fork at Hideaway

 

39.636361

 

-81.363163

 

On Hold

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RETTEW — identify specific locations based on field recon; Antero - Landowner
authorization/SUA, delineation, and water testing; RETTEW — Stream gaging (3-5
events) and registration . Relocated withdraw point to the south

Ohio River-10

 

39.79044

 

-80.84325

 

On Hold

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline Sources from Ohio river to Carpenter FWI

Ohio River-2 (Route 7 & 556)

 

39.772631

 

-80.866189

 

On Hold

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline Sources from Ohio river to Carpenter FWI

Ohio River-9 (Route 7 & 78)

 

39.76465

 

-80.87155

 

On Hold

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline Sources from Ohio river to Carpenter FWI-Primary Option

Piedmont Lake-1

 

40.162223

 

-81.185484

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

545059592

 

Muskingham Watershed Conservancy Dist V

 

To support Piedmont Lake area well pads.

Salt Fork Lake

 

40.087931

 

-81.511942

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Possible Ervin Source, useful for rig program in Barnsville area, N of I-70

Salt Fork-1

 

40.075707

 

-81.432662

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Possible Ervin Source, useful for rig program in Barnsville area, N of I-70

Seneca Fork Wills Creek - 4

 

39.864005

 

-81.321436

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DISCUSS AT UTICA MEETING, ISSUE IS LAKE PROXIMITY, ADF = 524,000 BBLPD. Site
visit needed. To utilize with South Fork-2 at single loadout.

Skull Fork-1

 

40.197821

 

-81.270588

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To support Piedmont Lake area well pads.

South Fork-2

 

39.852887

 

-81.328698

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DISCUSS AT UTICA MEETING, ISSUE IS LAKE PROXIMITY, ADF = 509,000 BBLPD. Site
visit needed. To utilize with Seneca Fork Wills Creek-4 at single loadout.

 

Exhibit C - Page 2

--------------------------------------------------------------------------------

 

Location

 

Latitude

 

Longitude

 

Status

 

Desktop
Evaluation

 

Field
Recon

 

Site
Access

 

Delineation

 

SUA

 

Stream
Gaging
Events

 

Rating
Curve/Pump
Sheet

 

Registration

 

Floodplain

 

ODOT

 

Construction
Release

 

ODNR
Registration
Number

 

Parcel ID

 

Property Owner

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spencer Creek

 

40.055672

 

-81.153597

 

On Hold

 

Complete

 

Drive-by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADF = 370,000 BBLPD, useful for rig program in Barnsville area

Stillwater Creek-1

 

40.195978

 

-81.221571

 

On Hold

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To support Piedmont Lake area well pads.

B & O Pond

 

39.961278

 

-81.280618

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small source, could be utilized for 1-2 fracs in the summer. Site visit needed.

Beaver Creek

 

39.91102

 

-81.30281

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unfavorable due to golf course

Buffalo Creek

 

39.86396

 

-81.533559

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BC 3 & 4 are preferred locations

Buffalo Creek 2

 

39.836750

 

-81.504740

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BC 3 & 4 are preferred locations

Buffalo Creek 3 - Rt 146 and Cooper Road

 

39.849444

 

-81.518889

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

Complete

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replaced by Buffalo Ck Arnold,

Buffalo Creek 5 (Rt 146 West of Sarisville)

 

39.816643

 

-81.481521

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BC 3 & 4 are preferred locations

Buffalo Creek-6

 

39.820696

 

-81.482134

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replaced by Buffalo Ck Arnold,

Buffalo Wills Pond

 

39.906094

 

-81.564696

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18.5 acres, possible EQT TLO being constructed here. Antero needs to contact
land owner.

Christman Pond

 

39.78345

 

-81.29697

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LO wants to preserve ponds-other options on property are inadequate

City of Byesville

 

—

 

—

 

Do Not Pursue

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Prefer not to use it, will not be used to support Wayne and Schroider fracs

City of Caldwell

 

—

 

—

 

Do Not Pursue

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Prefer not to use it, will not be used to support Wayne and Schroider fracs

Clear Fork Little Muskingum River

 

39.713908

 

-81.262185

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not an adequate site. Need to explore other options near by.

Clear Fork Little Muskingum River & Indian Run

 

39.630435

 

-81.225289

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Move withdraw point on northern side of Route 537.

Cline Pond

 

39.886836

 

-81.319883

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Possible Storage,

Consol/CNX Site 27 - Courtney Run

 

39.660778

 

-80.991919

 

Do Not Pursue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West of play

Consol/CNX Site 35 - Kirk Anderson #2

 

40.146111

 

-81.163056

 

Do Not Pursue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West of play

Consol/CNX Site 36 – Muskingum

 

39.675000

 

-81.716111

 

Do Not Pursue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West of play

Cranenest Fork (Route 26 & 800)

 

39.729032

 

-81.119076

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RETTEW — Identify preferred locations for withdrawals; Antero - Landowner
authorization/SUA prior to delineation, gaging and registration

Cumb. LS Pond 1

 

39.876624

 

-81.680747

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Access issues with AEP/Anadarko agreement

 

Exhibit C - Page 3

--------------------------------------------------------------------------------

 

Location

 

Latitude

 

Longitude

 

Status

 

Desktop
Evaluation

 

Field
Recon

 

Site
Access

 

Delineation

 

SUA

 

Stream
Gaging
Events

 

Rating
Curve/Pump
Sheet

 

Registration

 

Floodplain

 

ODOT

 

Construction
Release

 

ODNR
Registration
Number

 

Parcel ID

 

Property Owner

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumb. LS Pond 10

 

39.879877

 

-81.698185

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Access issues with AEP/Anadarko agreement

Cumb. LS Pond 13

 

39.882213

 

-81.684024

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Access issues with AEP/Anadarko agreement

Cumb. LS Pond 2

 

39.875199

 

-81.686866

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Access issues with AEP/Anadarko agreement

Cumberland LS - Pond 3

 

39.870122

 

-81.690489

 

Do Not Pursue

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Active mining activities

Cumberland LS - Pond 4

 

39.873211

 

-81.696256

 

Do Not Pursue

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Active mining activities

Cumberland LS - Pond 5

 

39.871748

 

-81.697748

 

Do Not Pursue

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Active mining activities

Dale Witt

 

—

 

—

 

Do Not Pursue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private Pond - Low Priority

East Fork Duck Creek-5

 

39.666507

 

-81.322882

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Have -6 don’t need -5, .

EastFork Duck Creek (Route 145 & 260)

 

39.649479

 

-81.309876

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RETTEW — Identify preferred locations for withdrawals; Antero - Landowner
authorization/SUA prior to delineation, gaging and registration. Relocate to the
north.

George Thompson Pond

 

39.983725

 

-81.485307

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

Complete

 

 

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Draft Registration to Antero 12/21/12/Sold to Robert Le; under negotiation,
wants $10/1,000

Glady’s Run

 

39.847649

 

-81.341997

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADF = 118,000 BBLPD,

Jordan Jones 2

 

39.767084

 

-81.170135

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Release Mr Rubel from agreement, no plans to use

Khune Pond Stream

 

39.670185

 

-81.475175

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Desktop eval needed

Leatherwood Creek 1

 

40.005172

 

-81.514869

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overuse by other operators and not close to our play

Leatherwood Creek 2

 

39.996017

 

-81.49897

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overuse by other operators and not close to our play

Leatherwood Creek 3

 

39.989915

 

-81.495938

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prefer George Thompson Pond

Leatherwood Creek-4

 

39.968927

 

-81.316331

 

Do Not Pursue

 

Complete

 

Drive-by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overuse by other operators and not close to our play

Leatherwood Creek-5

 

39.66916667

 

-81.48277778

 

Do Not Pursue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overuse by other operators and not close to our play

Matt Blakely Proposed Pond 1

 

39.88783

 

-81.41319

 

Do Not Pursue

 

Complete

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Proposed Pond Inferred dammed drainage.

Matt Blakely Proposed Pond 2

 

39.88451

 

-81.43235

 

Do Not Pursue

 

Complete

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Proposed Pond Inferred dammed drainage.

 

Exhibit C - Page 4

--------------------------------------------------------------------------------

 

Location

 

Latitude

 

Longitude

 

Status

 

Desktop
Evaluation

 

Field
Recon

 

Site
Access

 

Delineation

 

SUA

 

Stream
Gaging
Events

 

Rating
Curve/Pump
Sheet

 

Registration

 

Floodplain

 

ODOT

 

Construction
Release

 

ODNR
Registration
Number

 

Parcel ID

 

Property Owner

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Muskingum River (near Devola)

 

39.483785

 

-81.50023

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USACOE Section 10 and other requirements/permission - may require relocation
Superior Quality designations

OH River Quarry

 

39.352236

 

-81.347350

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39 acres, 300,857 bbls per 1 ft drop, potential Ohio River wateline option,
avoid Wayne NForest

Ohio Power Company Pond Mm-34 & Dyes Creek

 

39.721529

 

-81.670133

 

Do Not Pursue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AEP ReCreation Land - Mining Recleamation permitting may be required - follow up
wht AEP/OEPA

Ohio Power Company Ponds off of Horse Run Rd

 

39.733678

 

-81.732044

 

Do Not Pursue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AEP ReCreation Land - Mining Recleamation permitting may be required - follow up
wht AEP/OEPA

Robert Lee Pond

 

40.001036

 

-81.513246

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Draft Registration to Antero 12/21/12 - Landowner Concerns

Robert Miley Existing Pond

 

39.86236

 

-81.44882

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

Complete

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Dammed drainage Insufficient capacity

Robert Miley Proposed Pond

 

39.859450

 

-81.445050

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

Complete

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Unpermitted wetland disturbances

Robin’s Ridge Golf Course N Pond

 

39.94073

 

-81.43744

 

Do Not Pursue

 

Complete

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Insufficient Capacity Restricted access

Robin’s Ridge Golf Course S Pond

 

39.93815

 

-81.44001

 

Do Not Pursue

 

Complete

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Insufficient CapacityRestricted access

Ron Tank Lake

 

39.86629

 

-81.29784

 

Do Not Pursue

 

Complete

 

—

 

—

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Dammed intermittent stream

Rubel 2 Ponds

 

—

 

—

 

Do Not Pursue

 

—

 

Complete

 

Obtained

 

—

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Release Rubel from water use agreement, See 11/1/12 email and aerial photo and
notes from onsite, water is pumped from Rubel 5 to Rubel 2 and some question as
to whether Rubel Pond water in general is considerd part of Sennicaville lake.

Salt Fork-2

 

40.025064

 

-81.329914

 

Do Not Pursue

 

Complete

 

Drive-by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aaron to drive-by 1/31; distance does not favor new source in light of existing
sources

Seneca Fork Wills Creek - 1

 

39.912590

 

-81.517250

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Better Location at Seneca Fork Wills Creek - 2

Seneca Fork Wills Creek-3

 

39.86667

 

-81.331110

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location is within 1/2 mile buffer, confiremed by Aaron G

South Fork Captina Creek (Route 26 & Brushy Creek Rd)

 

39.905629

 

-81.079544

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East of Barnsville, RETTEW — Identify preferred locations for withdrawals;
Antero - Landowner authorization/SUA prior to delineation, gaging and
registration

South Fork/Skin Creek (Rubel Stream Withdrawal)

 

39.831059

 

-81.309809

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

Complete

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Draft Registration to Antero 12/21/12 - Landowner Concerns

Strip Mine Ponds

 

40.005217

 

-81.267625

 

Do Not Pursue

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On Hold due to access issues, steep slopes, and neighbor concerns

Sunfish Creek -1

 

39.780589

 

-81.059558

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit C - Page 5

--------------------------------------------------------------------------------

 

Location

 

Latitude

 

Longitude

 

Status

 

Desktop
Evaluation

 

Field
Recon

 

Site
Access

 

Delineation

 

SUA

 

Stream
Gaging
Events

 

Rating
Curve/Pump
Sheet

 

Registration

 

Floodplain

 

ODOT

 

Construction
Release

 

ODNR
Registration
Number

 

Parcel ID

 

Property Owner

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sunfish Creek -2

 

39.784778

 

-81.119770

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

 

 

 

 

Pending

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tim Hall (Pond)

 

39.880300

 

-81.383580

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

Complete

 

—

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Pond was constructed within jurisdictional stream channel without confirmation
of State/Federal permits prior to construction. Per J Alberts/D Bulian - Do not
pursue as a source.

West Fork Duck Creek - Caldwell

 

39.75132

 

-81.52768

 

Do Not Pursue

 

Complete

 

Complete

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Need to assess ownership

West Fork Duck Creek-3

 

39.668264

 

-81.485053

 

Do Not Pursue

 

Complete

 

Complete

 

Obtained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coordination w/ County Engineer and ODOT-I77 and Rt 821, desktop eval needed,
would make a good truck loadout, down by Khun Pond near interstate Exit 16

 

Exhibit C - Page 6

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EXHIBIT D

 

INITIAL DEVELOPMENT PLAN

 

[to be attached]

 

Exhibit D - Page 1

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EXHIBIT E

 

INITIAL WATER FACILITIES PLAN

 

[to be attached]

 

Exhibit E - Page 1

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EXHIBIT F

 

FORM OF CONNECTION NOTICE

 

Antero Resources Midstream LLC
1625 17th Street
Denver, Colorado 80202

 

Re:                             Water  Services Agreement dated
[                 ], 2013, between Antero Resources Corporation and Antero
Resources Midstream LLC (the “Water Services Agreement”)

 

Ladies and Gentlemen:

 

This is a Connection Notice for purposes of the Water Services Agreement. 
Capitalized terms used but not defined in this Connection Notice have the
meanings given such terms in the Water Services Agreement.

 

Midstream is hereby notified that Producer is planning to drill, complete, and
hydraulically fracture the Planned Wells at the Planned Well Pads by the Target
Commencement Dates, in each case as set forth below and will require the volumes
of Water stated below to be made available at the Delivery Points located at
such Planned Well Pads for the number of days after the Target Commencement Date
as set forth below:

 

Planned Well

 

Planned Well Pad

 

Target Commencement
Date

 

Volumes
(GPD x
Number of Days)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Very truly yours,

 

 

 

ANTERO RESOURCES CORPORATION

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Exhibit F - Page 1

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EXHIBIT G

 

DEEMED CONNECTION NOTICES

 

Well

 

Target Commencement Date

[          ]

 

[         ]

 

Exhibit G - Page 1

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EXHIBIT H

 

COST OF SERVICE FEE

 

The Monthly Cost of Service Fee for each Contract Year shall be calculated
separately for each CS Facility.  The Cost of Service Fees for each CS Facility
are then summed to result in the total Cost of Service Fee payable for each
Month in the Contract Year.  The Monthly Cost of Service Fee for each Contract
Year for each CS Facility is determined as follows:

 

Monthly Capex Fee + Monthly O&M Fee = Monthly Cost of Service Fee.

 

The “Monthly Capex Fee” for each CS Facility is an amount equal to the product
of (i) the amount that, if paid to Midstream with respect to each Month
remaining in the Recovery Term for such CS Facility, when taken together with
all Prior Capex Fees paid to Midstream for such CS Facility, would result in
Midstream recovering Producer’s share of all capital expenditures for such CS
Facility over a period of 84 Months commencing with the placement in service of
such CS Facility (the “Recovery Term”), with a return on capital invested of 13%
per annum. “Prior Capex Fees” means, with respect to any Contract Year and any
CS Facility, the aggregate of the Monthly Capex Fees with respect to such CS
Facility paid in all prior Contract Years.  For purposes of determining the
Monthly Capex Fee for any Contract Year, “Producer’s share” of the relevant
capital expenditures is Producer’s Throughput Percentage for the Recovery Term,
determined using actual throughput where historical throughput volumes are
available and estimated throughput volumes for future periods.

 

The “Monthly O&M Fee” for any Contract Year is an amount equal to:

 

(i)                                     the sum of:

 

(a)                                 (1) the operations and maintenance costs and
expenses, including the costs and expenses of repairs and replacements in kind,
that Midstream estimates it will incur with respect to the CS Facility during
the Contract Year multiplied by (2) Midstream’s estimate of Producer’s
Throughput Percentage for such Contract Year; plus

 

(b)                                 the O&M True Up Amount, if any,

 

(ii)                                  divided by 12.

 

The “O&M True Up Amount” means, with respect to any Contract Year and any CS
Facility,

 

(i)                                     the positive or negative difference
resulting from the following calculation:

 

(a)                                 the product of (x) the actual operations and
maintenance costs and expenses, including the costs and expenses of repairs and
replacements in kind, incurred by Midstream in the immediately prior Contract
Year with respect to such CS Facility multiplied by (y) Producer’s actual
Throughput Percentage for such Contract year;

 

H-1

--------------------------------------------------------------------------------

 

Minus

 

(b)                                 the sum of the aggregate Monthly O&M Fees
paid to Midstream with respect to such CS Facility with respect to the
immediately prior Contract Year,

 

(ii)                                  plus 13% per annum.

 

The Monthly O&M Fee includes Midstream’s reasonable allocation to the CS
Facility of Midstream’s overhead and general and administrative expenses
together with taxes payable by Midstream with respect to the CS Facility or the
Services performed in connection with the CS Facility (but excluding in any
event Midstream’s income taxes), to the extent not otherwise paid or reimbursed
by Producer pursuant to this Agreement.

 

The “Throughput Percentage” for any CS Facility for any period is a fraction the
numerator of which is the total volumes of Water put through such CS Facility
under this Agreement during such period and the denominator is the total volumes
of Water put through such CS Facility (including third party volumes) during
such period.

 

H-2

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EXHIBIT F

 

FORM OF LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT, including all Exhibits hereto (this “Agreement”), is
entered into and effective the          day of
                                      , 20         (the “Effective Date”), by
and between Antero Resources Corporation, a Delaware corporation (“Licensor”),
and Antero Resources Midstream LLC, a Delaware limited liability company
(“Licensee”). Licensor and Licensee are sometimes hereinafter referred to
individually as a “Party” and collectively as the “Parties.”

 

WHEREAS, Licensor and Licensee have entered into that certain Contribution
Agreement dated October         , 2013 (the “Contribution Agreement”);

 

WHEREAS, Licensor has certain rights in and to the names and marks listed on
Exhibit A hereto (such marks, singularly and collectively, are referred to as
the “Marks”); and

 

WHEREAS, Licensee wishes to engage in the business of the gathering or
transportation of hydrocarbons and the undertaking of other midstream activities
(the “Business”) using the Assets transferred in the Contribution Agreement and
desires to obtain a nonexclusive license to use the Marks in connection with the
Business (the “Licensed Uses”), and Licensor is willing to permit such use by
Licensee subject to the terms of this Agreement;

 

WHEREAS, Licensor also has certain ownership rights in and to certain
unregistered intellectual property (other than trademarks, service marks and
other source identifiers) that Licensor has used in the Business (collectively
the “Licensed Intellectual Property”);

 

NOW, THEREFORE, in consideration of the mutual agreements and promises expressed
in this Agreement, and other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties have
agreed as follows:

 

1.                                      License Grant.  Subject to the terms and
conditions of this Agreement, Licensor grants Licensee, who hereby accepts: 
(a) a nonexclusive and nontransferable right and license to use the Marks solely
in connection with the Licensed Uses and solely in the United States of America;
and (b) a nonexclusive and nontransferable right and license to use, copy,
prepare derivative works, and modify the Licensed Intellectual Property for
internal use in connection with the Business conducted by Licensee.  Except for
such license, all other rights are hereby reserved to Licensor.  Licensee shall
not sell, lease, transfer, or otherwise distribute any items bearing or provide
any services in connection with the Marks except Licensed Uses.  Nothing herein
shall provide Licensee with any right to, and Licensee shall not at any time,
register in Licensee’s name any domain name containing any of the Marks or any
portion or derivative thereof or any term confusingly similar thereto.

 

2.                                      Use of the Marks.  All uses of and
references to the Marks by Licensee shall conform with such instructions
therefor as Licensor from time to time may provide Licensee.  As soon as
reasonably practicable after any request therefor made by Licensor, Licensee
shall place the following notice (or such other notice as Licensor may
reasonably request) in a prominent place on each of the Licensed Uses and, if
the Licensed Uses include services, on each copy of any promotional or
advertising materials or media which contain, embody, or mention the Marks:

 

F-1

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Ô/®                      ANTERO RESOURCES CORPORATION

 

As to those Marks which have been registered in the U.S.A., Licensee shall use
the “®” symbol.  Otherwise, Licensee shall use the symbol “Ô”.

 

3.                                      Ownership.  The Marks and the Licensed
Intellectual Property, and all rights relating thereto, shall remain the sole
and exclusive property of Licensor.  All uses of the Marks, and all promotional,
advertising, and packaging materials used in connection with the Licensed Uses,
by Licensee, its subsidiaries, affiliates, officers, agents, servants,
employees, and representatives shall be in accordance with the standards of
quality as shall be set by Licensor from time to time and all such uses shall
inure solely to the benefit of Licensor.  Nothing in this Agreement or otherwise
shall give Licensee or others any right, title, or interest whatsoever in and to
the Marks and the Licensed Intellectual Property other than the rights expressly
granted hereunder.  Licensee agrees that it shall not attack or dispute
Licensor’s title or rights in and to the Marks and the Licensed Intellectual
Property or the validity thereof.  Licensee shall not register the Marks in its
own name, except solely for the registration and ownership of the name “ANTERO
RESOURCES MIDSTREAM LLC,” which, in the event of the expiration or termination
of this Agreement, shall be deemed automatically transferred to and owned by
Licensor.

 

4.                                      Use by Others.  Licensor, and its other
licensees, shall have the right to use the Marks simultaneously with the use of
the Marks by Licensee.  Licensor does not warrant or represent that Licensee
will have the sole and exclusive right to use the Marks.  Licensor is not
obliged to indemnify or reimburse Licensee for any expenses by Licensee in
connection with Licensee’s use of the Marks.

 

5.                                      Modifications.  Licensee recognizes and
agrees that from time to time, Licensor may change or modify the Marks. 
Licensee agrees that it shall accept and promptly use such changes and
modifications as if they were a part of this Agreement at the time of the
execution hereof, and to make any and all expenditures that such changes or
modifications may require.  Licensee shall not modify or alter the Marks and
shall not use the Marks in connection or combination with any other trademark or
service mark without the prior written approval of Licensor.  Licensee may not
use the Marks on any new products, goods, promotional materials, or any other
items without first submitting two (2) actual specimens of same to Licensor and
obtaining Licensor’s prior written consent to such proposed usage, which consent
shall be deemed given unless Licensor notifies Licensee otherwise within five
business days of Licensee’s submission of such specimens.  Licensee shall not
use, form or participate in the formation or operation of any firm or company
which incorporates or embodies any of the Marks or Licensor’s name, and Licensee
shall not allow others to use the Marks or Licensor’s name.

 

6.                                      Quality Control.  The quality of the
Licensed Uses, as well as the quality of all promotional and advertising
materials using the Marks, shall meet or exceed the quality of the corresponding
goods, services, and promotional and advertising materials of Licensor prior to
the Effective Date.  Licensee shall cooperate with Licensor in facilitating
Licensor’s control of the nature and quality of the Licensed Uses, and all
promotional, advertising, and packaging materials therefor, and to permit the
reasonable inspection of Licensee’s operations, and to supply Licensor with
specimens of use of the Marks promptly upon Licensor’s request therefor. 
Licensee shall sell only those Licensed Uses which have been previously
authorized by Licensor and which meet or exceed Licensor’s quality standards.

 

7.                                      Protection of the Marks.  Licensee shall
cooperate with Licensor in connection with efforts to protect the Marks. 
Licensee shall promptly comply with Licensor’s reasonable requests for
information, specimens of usage, and the like, and shall promptly execute such
lawful instruments as Licensor may reasonably request.  In the event of any
actual or suspected infringement or piracy of any aspect of the Marks, Licensee
shall immediately report the same to Licensor in writing.  Licensor shall have
the sole and exclusive right to institute any claim, demand, or cause of action
with respect to any such suspected or actual infringement or piracy.  Licensor
shall have no obligation or duty, however, to institute any such claim, demand,
or cause of action.  Licensee shall furnish Licensor full cooperation in

 

F-2

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connection with any such claim, demand, or cause of action.  If requested by
Licensor to do so, Licensee shall join as a party to or shall file in its own
name such claim to, demand, or cause of action and, in such situations, shall be
entitled to recover any damages suffered by Licensee as a result of such
infringement or piracy.

 

8.                                      Confidentiality.

 

(a)                                 Licensee shall maintain the Licensor’s
Confidential Information in confidence and not disclose the same to any third
party nor use the same, except as authorized by Licensor in writing or as
expressly permitted in this Section 8.  Licensee further agrees to take the same
care with the Licensor’s Confidential Information as it does with its own, but
in no event less than a reasonable degree of care.  Excepted from these
obligations of confidence and non-use is that information which:  (i)  is
available, or becomes available, to the general public without fault of the
Licensee; (ii)  was in the possession of Licensee on a non-confidential basis
prior to receipt of the same from Licensor; (iii) is obtained by Licensee
without an obligation of confidence from a third party who is rightfully in
possession of such information and, to Licensee’s knowledge, is under no
obligation of confidentiality to Licensor; or (iv) is independently developed by
Licensee without reference to or use of Licensor’s Confidential Information. 
For the purpose of this Section 8(a), a specific item of Confidential
Information shall not be deemed to be within the foregoing exceptions merely
because it is embraced by, or underlies, more general information in the public
domain or in the possession of the receiving Party.

 

(b)                                 Notwithstanding Section 8(a), if the
Licensee becomes legally compelled to disclose, or is required to disclose by
the listing standards of the New York Stock Exchange, any of the Licensor’s
Confidential Information, Licensee shall promptly advise Licensor of such
requirement to disclose Confidential Information, in order that, where possible,
Licensor may seek a protective order or such other remedy as the Licensor may
consider appropriate in the circumstances.  Licensee shall disclose only that
portion of Licensor’s Confidential Information that it is required to disclose.

 

(c)                                  Licensee will limit access to the
Confidential Information of Licensor to those of its employees and contractors
that have a need to know such information in order for Licensee to exercise or
perform its rights and obligations under this Agreement (the “Licensee
Personnel”).  The Licensee Personnel who have access to any Confidential
Information of Licensor will be made aware of the confidentiality provision of
this Agreement, and will be required to abide by the terms thereof.  Any third
party contractors that are given access to Confidential Information of a
disclosing Party pursuant to the terms hereof shall be required to sign a
written agreement pursuant to which such Licensee Personnel agree to be bound by
the provisions of this Agreement, which written agreement will expressly state
that it is enforceable against such Licensee Personnel by Licensor.

 

9.                                      Independent Contractor Relationship. 
Licensee certifies that it is an independent contractor and not the agent or
legal representative of Licensor and that any representation made or agreement
executed by Licensee shall be Licensee’s sole responsibility.  Licensee shall
conduct its business for the promotion and provision of services and uses within
the Licensed Uses as a principal solely for its own account and at its own
expense and risk.  Licensee shall be solely responsible for all commitments
incurred or assumed by it during the term of this Agreement or thereafter, and
Licensor shall not be held responsible in any manner therefor, irrespective of
any suggestion or recommendation with respect thereto by Licensor or its
employees or representatives.  Licensee represents that it will not act or
represent itself directly or by implication as an agent for Licensor and will
not attempt to create any obligation, or make any representation, on behalf of
or in the name of Licensor.  Licensee further shall not have authority to and
shall not appoint any licensee, associate licensee or sublicensee of the Marks
without the prior written approval of an authorized officer of Licensor.  All
financial and other obligations associated with Licensee’s business are and will
remain the sole responsibility of Licensee.  Because

 

F-3

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Licensor and Licensee are independent contractors, nothing contained in this
Agreement shall be construed to (i) give either party the power to direct or
control the activities of the other; (ii) constitute the parties as principal
and agent, partners, joint venturers, or co-owners or otherwise as participants
in a joint undertaking; or (iii) allow Licensee to create or assume any
obligation on behalf of Licensor for any purpose whatsoever.  THIS IS NOT A
FRANCHISE (OR BUSINESS OPPORTUNITY) RELATIONSHIP.

 

10.                               Protection of Goodwill.  Licensee at all times
shall use its best efforts to act and operate in a manner consistent with good
business ethics, and in a manner that will reflect favorably on the Licensed
Uses and on the goodwill and reputation of Licensor and the Marks.  Licensee’s
best efforts shall include at a bare minimum, but are not limited to, the prompt
performance of all of its obligations under this Agreement.  Licensee at all
times shall refrain from engaging in any illegal, unethical, unfair or deceptive
practices, whether with respect to the Licensed Uses or otherwise.  Licensor may
immediately terminate this Agreement if Licensee does anything which in
Licensor’s opinion may tarnish or diminish the goodwill associated with the
Marks and/or the goodwill or reputation of Licensor.

 

11.                               Taxes.  Licensee shall pay all license fees,
sales, use, occupation, personal property, transportation and excise taxes and
any other fees, assessments or taxes which may be assessed or levied by any
national, state or local government and any departments and subdivisions
thereof, on or against any of the Licensed Uses or in connection with this
Agreement and/or Licensee’s business.

 

12.                               Disclaimers; Limits of Liability.  LICENSOR
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND EXPRESSLY EXCLUDES AND DISCLAIMS
ALL WARRANTIES, EXPRESS OR IMPLIED, THAT MIGHT OTHERWISE ARISE INCLUDING THE
IMPLIED WARRANTIES OF (1) MERCHANTABILITY; AND (2) FITNESS FOR A PARTICULAR
PURPOSE; AND (3) THAT THE LICENSED USES AND/OR LICENSEE’S USE OF THE MARKS ARE
FREE FROM INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS, OR PROPRIETARY RIGHTS
OF THIRD PARTIES.   NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE TO LICENSEE
AS TO ITS EARNINGS, SUCCESS, REVENUES, PROFITS OR LOSSES PURSUANT TO THIS
AGREEMENT AND LICENSOR HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO ANY EARNINGS, SUCCESS, REVENUES, PROFIT,
LOSS, OR FAILURE OF LICENSEE HEREUNDER.  LICENSOR’S ENTIRE LIABILITY AND
LICENSEE’S SOLE AND EXCLUSIVE REMEDY FOR DAMAGES FROM ANY CAUSE WHATSOEVER,
WHETHER SOUNDING IN CONTRACT, TORT, UNDER STATUTE, OR OTHERWISE (INCLUDING
WITHOUT LIMITATION ANY NONPERFORMANCE OR MISREPRESENTATION) SHALL BE LIMITED TO
THE AGGREGATE SUM OF U.S. $10,000.  IN NO EVENT WILL LICENSOR BE LIABLE FOR
(i) ANY DAMAGES CAUSED, IN WHOLE OR PART, BY LICENSEE, OR FOR (ii) ANY LOST
REVENUES, LOST PROFITS, LOST SAVINGS OR OTHER INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES INCURRED BY ANY PERSON EVEN IF LICENSOR HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES OR CLAIMS.

 

13.                               Term and Termination.  Unless previously
terminated as provided for herein, this Agreement shall remain in full force and
effect until 20 years from the Effective Date.  Licensor may terminate this
Agreement upon three (3) months written notice to Licensee, with the license to
terminate at the end of such three (3) months, and either party may terminate
this Agreement in the event of a material breach by the other upon fifteen (15)
days prior written notice thereof to the other, with the license to terminate at
the end of such fifteen (15) days.

 

14.                               Post-Terminations Rights/Duties.  Upon
termination of this Agreement, Licensee shall promptly cease all use of the
Marks and shall not thereafter adopt or use in any manner any name, trademark,
service mark, logo, device, or the like which is or may be confusingly similar
to the Marks.

 

F-4

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Licensor shall have no responsibility to reimburse Licensee for any costs or
expenses in connection with relabeling or removing the Marks in use by Licensee
or with respect to any Licensed Uses remaining in Licensee’s inventory at the
date this Agreement is terminated and shall have no liability to Licensee for
such inventory.  Upon the termination hereof, Licensee shall destroy or sell to
Licensor at Licensor’s option all materials in Licensee’s possession, custody,
or control which bear the Marks.  Neither Licensor nor Licensee shall by reason
of the termination or nonrenewal of this Agreement be liable to the other for
compensation, reimbursement or damages on account of the loss of prospective
profits, or anticipated sales or on account of expenditures, investments,
leases, property improvements or commitments.  Upon termination of this
Agreement, Licensee shall thereafter refrain from operating or doing business
under any name or in any manner that might tend to give the general public the
impression that the license granted pursuant to this Agreement is still in force
or that Licensee is in any way connected or affiliated with or sponsored by
Licensor.  In addition, upon written request by Licensor, all of Licensor’s
Confidential Information in whatever form shall be returned to Licensor upon
termination of this Agreement, without Licensee retaining copies thereof except
that one copy of all such Confidential Information may be retained by Licensee’s
legal department solely to the extent that Licensee is required to keep a copy
of such Confidential Information pursuant to applicable law.  The provisions of
Sections 3, 10, 11, 13, 14, 15, and 19 shall survive the termination or
expiration of this Agreement.

 

15.                               Indemnity.  Licensee shall be solely
responsible for and shall defend, indemnify, and hold Licensor harmless from and
against any and all claims or causes of action whatsoever, and any and all
liabilities and every loss, cost, and expense, including the cost of
investigating the claim and reasonable attorneys’ fees incurred by Licensor,
brought by Licensee’s employees, agents, subcontractors, sublicensees, and
representatives, or any other third party, caused by, arising out of, or
relating to the exercise or practice of the rights granted hereunder by Licensor
to Licensee.  This contractual obligation of indemnification shall extend to and
cover the manufacture, use, sale, lease, rental or other providing or marketing
of any Licensed Uses and any other goods or services in connection with which
Licensee has used the Marks.  This contractual obligation of indemnification
shall extend in favor of the officers, employees, agents, and representatives of
Licensor.  This contractual obligation of indemnification shall include claims,
demands, or causes of action on account of any death or bodily injury to person
or injury to property or economic loss.  THIS CONTRACTUAL OBLIGATION OF
INDEMNIFICATION SHALL INCLUDE CLAIMS, DEMANDS, OR CAUSES OF ACTION ALLEGING SOLE
OR CONCURRENT NEGLIGENCE OR OTHER FAULT ON THE PART OF LICENSOR.

 

16.                               Amendment; Waiver; Modification.  No
amendment, modification or waiver of any provision of this Agreement and no
consent to any departure therefrom, shall be effective unless in writing and
signed by duly authorized representatives of each party.  No notice to or demand
on Licensee shall entitle it to any other or further notice or demand in similar
or other circumstances.  No failure or delay on the part of Licensor in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder.

 

17.                               Assignment.  This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Licensee shall not grant any sublicenses or
assign, delegate or otherwise transfer its rights or obligations hereunder or
any interest herein (including any assignment or transfer occurring by operation
of law) without the prior written consent of Licensor.  Licensor may freely
assign or transfer any or all of its rights, obligations, or interest herein.

 

18.                               Compliance with Laws.  Licensee shall, at all
times hereunder, comply with any and all applicable laws, including without
limitation all applicable export and import laws and regulations.  Licensee
shall not export any Licensed Uses outside the United States without first
obtaining or procuring

 

F-5

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any necessary governmental license or approval and the prior written approval of
an authorized officer of Licensor as to any such specific area or country.

 

19.                               Notices.  All notices, communications and
deliveries under this Agreement will be made in writing signed by or on behalf
of the Party making the same, will specify the Section of this Agreement
pursuant to which it is given or being made, and will be delivered personally or
by facsimile transmission or sent by registered or certified mail (return
receipt requested) or by nationally recognized overnight courier (with evidence
of delivery and postage and other fees prepaid) as follows:

 

If to
Licensee:                                                                                                                 
Antero Resources Midstream LLC
1625 17th Street
Denver, Colorado 80202
Attn: Chief Financial Officer
Facsimile: (303) 357-7315

 

If to
Licensor:                                                                                                                  
Antero Resources Corporation
1625 17th Street
Denver, Colorado 80202
Attn: Chief Financial Officer
Facsimile: (303) 357-7315

 

or to such other representative or at such other address or facsimile number of
a Party as such Party may furnish to the other Parties in writing. Any such
notice, communication or delivery will be deemed given or made upon the date of
receipt by the applicable Party.

 

20.                               Choice of Law.  This Agreement will be
governed by and construed and enforced in accordance with the Laws of the State
of Texas, excluding any choice of Law rules which may direct the application of
the Laws of another jurisdiction.

 

21.                               Consent to Jurisdiction, Etc.; Waiver of Jury
Trial.  Each of the Parties hereby irrevocably consents and agrees that any
dispute arising out of or relating to this Agreement or any related document
shall exclusively be brought in the courts of the State of Texas, in Harris
County or the federal courts located in the Southern District of the State of
Texas.  The Parties agree that, after such a dispute is before a court as
specified in this Section 8.4 and during the pendency of such dispute before
such court, all actions with respect to such dispute, including any
counterclaim, cross-claim or interpleader, shall be subject to the exclusive
jurisdiction of such court.  Each of the Parties hereby waives, and agrees not
to assert, as a defense in any legal dispute, that it is not subject thereto or
that such dispute may not be brought or is not maintainable in such court or
that its property is exempt or immune from execution, that the dispute is
brought in an inconvenient forum or that the venue of the dispute is improper. 
Each Party agrees that a final judgment in any dispute described in this
Section 8.4 after the expiration of any period permitted for appeal and subject
to any stay during appeal shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Laws. 
THE PARTIES HEREBY WAIVE IRREVOCABLY ANY AND ALL RIGHTS TO DEMAND A TRIAL BY
JURY IN CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR
ANY DOCUMENT CONTEMPLATED HEREIN OR OTHERWISE RELATED HERETO.

 

22.                               Reformation; Severability.  Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction will, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction will
not invalidate or render unenforceable such

 

F-6

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provision in any other jurisdiction. To the extent permitted by law, the Parties
waive any provision of law which renders any such provision prohibited or
unenforceable in any respect.

 

23.                               Force Majeure.  Licensor shall not be
responsible for any delay or failure in performance hereunder due to fire,
flood, or other natural catastrophe, Act of God, governmental action, war or
civil disturbance, strike, manufacturer’s or supplier’s nondelivery or any other
cause beyond Licensor’s reasonable control, whether similar or dissimilar to any
of the foregoing.

 

24.                               Sole and Entire Agreement.  Each of the
parties hereto agrees that there are no other agreements, understandings, or
representations, oral or written, other than as set forth herein, that this
Agreement supersedes and replaces any and all prior and contemporaneous
agreements, understandings, representations, statements, or other
communications, relating to the subject matter hereof, and that each Party is
not relying on any prior understanding or representation, oral or written, that
is not included or reflected in this Agreement.  The parties hereto further
agree that this Agreement constitutes the sole and entire agreement between the
parties relating to the subject matter hereof.

 

25.                               No Third-Party Beneficiaries.  Nothing
expressed or implied in this Agreement is intended, or will be construed, to
confer upon or give any Person other than the Parties, and their successors or
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, or result in such Person being deemed a third party
beneficiary of this Agreement.

 

26.                               Counterparts.  This Agreement may be executed
in any number of copies, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.  The organization of this Agreement is for
convenience of reference and shall not constitute a part of the Agreement for
any other purpose.

 

IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized
representatives of the parties to be effective the day and year first above
written.

 

 

Licensor:

 

Licensee:

 

 

 

ANTERO RESOURCES CORPORATION

 

ANTERO RESOURCES MIDSTREAM LLC

 

 

 

 

 

 

By:

 

 

By

 

 

F-7

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EXHIBIT A TO LICENSE AGREEMENT

 

The “Marks” consist of the following:

 

1.                                      The following registration:

 

Mark

 

U.S. Registration/Application No.

 

 

 

 

 

ANTERO RESOURCES

 

3,081,917

 

 

2.                                      Common law rights in and to “ANTERO
RESOURCES,” “ANTERO RESOURCES CORPORATION” and the following logo:

 

GRAPHIC [g223321ku67i001.jpg]

 

F-8

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EXHIBIT G

 

REQUIRED CONSENTS

 

ANTERO
LINE

 

GRANTOR

 

GRANTEE

 

EXECUTED

 

PARCEL
TAX
ID

 

RECORDING
DATE

 

BOOK PAGE
INSTRUMENT

 

CONSENT TO
ASSIGN

WV-B18-007.000

 

HOLLAND, MARY, EST

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

4/24/2012

 

8-23-2

 

08/19/2013

 

311/201
#181740

 

ASSIGNMENT WITH LANDOWNER NOTICE AND APPROVAL REQUIRED. NO ASSIGNMENT WILL BE
EFFECTIVE WITHOUT WRITTEN CONSENT FROM THE LANDOWNER, WHICH CONSENT WILL NOT BE
UNREASONABLY WITHHELD.

WV-CN-003.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

4/25/2012

 

5-17-39
5-17-03
5-17-11
5-17-12.1 5-17-14

 

5/16/2012

 

396/29
#59818

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

WV-CS-003.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

3/23/2012

 

3-2-4.2

 

4/12/2012

 

299/75
#161840

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

WV-CO-001.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

7/18/2012

 

5-17-3

 

9/5/2013

 

425/167
#77237

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

ANTERO LINE COASTAL 1 & 2

 

 

 

 

 

 

 

 

 

 

WV-CO-001.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

7/18/2012

 

5-17-3

 

9/5/2013

 

425/167
#77237

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

 

G-1

--------------------------------------------------------------------------------

 

ANTERO LINE COASTAL HILLTOP

 

 

 

 

 

 

 

 

 

 

WV-CHT-001.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

7/2/2012

 

6-12-17

 

10/5/2012

 

303/302
#167312

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

ANTERO LINE NEW MILTON LATERAL

 

 

 

 

 

 

 

 

 

 

WV-NM-001.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

6/21/2013

 

6-8-35
6-12-1

 

 

 

 

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

ANTERO LINE TOM’S FORK

 

 

 

 

 

 

 

 

 

 

WV-TF-008.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

3/27/2013

 

6-8-35

 

 

 

 

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

ANTERO LINE CANTON NORTH AND WATER LINE

 

 

 

 

 

 

 

 

WV-CN-003.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

4/25/2012

 

5-17-39
5-17-03
5-17-11
5-17-12.1 5-17-14

 

5/16/2012

 

396/29
#59818

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

ANTERO LINE VOGT

 

 

 

 

 

 

 

 

 

 

WV-VT-004.000

 

COASTAL FOREST RESOURCE COMPANY

 

ANTERO APPALACHIAN RESOURCES CORPORATION

 

1/7/2013

 

1-6-37.1

 

 

 

 

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

WV-CHT-001.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

7/2/2012

 

6-12-17

 

10/5/2012

 

303/302
#167312

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

 

G-2

--------------------------------------------------------------------------------

 

ANTERO LINE WHITEHAIR

 

 

 

 

 

 

 

 

 

 

WV-CS-003.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

3/23/2012

 

3-2-4.2

 

4/12/2012

 

299/75
#161840

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

ANTERO LINE WHITEHAIR

 

 

 

 

 

 

 

 

 

 

WV-WH-002.000

 

COASTAL FOREST RESOURCES COMPANY

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

7/2/2012

 

6-12-17

 

10/5/2012

 

303/302
#167312

 

GRANTOR’S PRIOR WRITTEN CONSENT REQUIRED

ANTERO LINE OHIO PIPEYARD

 

 

 

 

 

 

 

 

 

 

OH-PIPEYARD-001.000

 

KIRK K. MILLER PROPERTIES LLC

 

ANTERO RESOURCES APPALACHIAN CORPORATION

 

10/01/2012

 

23-85347.001, 23-85343.002, 23-85343.001, 23-85345.001, 23-79320.001,
23-79308.001

 

 

 

 

 

LESSEE SHALL NOT ASSIGN ITS INTEREST IN THIS LEASE OR SUBLEASE THE PREMISES
WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.

ANTERO LINE OHIO -

 

 

 

 

 

 

 

 

 

 

 

 

OH-BV-002.000

 

Wyscarver, James C & Amy D

 

ANTERO RESOURCES CORPORATION

 

08/02/2013

 

01-21323

 

 

 

 

 

Should Grantee assign the Agreement to a third party, Grantee must (1) advise
the Grantors of said assignment in writing; (2) advise third party of this
Addendum and (3) delivery of copy of the Addendum to aid third party prior to
assignment.

 

G-3

--------------------------------------------------------------------------------

 

EXHIBIT H

 

EXCLUDED WELLS

 

All gathering to Bluestone and ExCo vertical wells and all gathering to Davis
Well and McKinley 1 & 2 H wells.

 

H-1

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