Certain portions of this exhibit (indicated by “[***]”) have been omitted
pursuant to Item
601(b)(10) of Regulation S-K. Such excluded information is not material and
would likely cause
competitive harm to the registrant if publicly disclosed.

Exhibit 10.1

SETTLEMENT AGREEMENT

This Settlement Agreement (this “Agreement”) is made as of June 6, 2020 (the
“Execution Date”), by and among (a) the Debtors, (b) Catarina Midstream,
(c) Carnero G&P, (d) Seco Pipeline, (e) SNMP, (f) Sanchez Midstream Partners GP,
LLC, (g) SP Holdings, LLC and (h) Targa.  Each of the Debtors, Catarina
Midstream, Carnero G&P, Seco Pipeline, SNMP, and Targa may be referred to in
this Agreement individually as a “Party” and collectively as the
“Parties.”  Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in section 1.1 of this Agreement.

RECITALS

WHEREAS, the Debtors, primarily SN Catarina, have rights to explore and produce
oil and gas on certain Eagle Ford Shale properties, which include approximately
106,000 net acres in Dimmit, La Salle, and Webb Counties, Texas and are referred
to as the “Catarina” properties;

WHEREAS, the Debtors are in need of, among other things, “midstream” and
“marketing” services, including gathering, transportation and processing
services, to exploit the foregoing exploration and production rights
economically;

WHEREAS, Catarina Midstream is a party to the Catarina Gathering Agreement
pursuant to which it currently provides certain wellhead gathering,
transportation, processing, and other services to SN Catarina with respect to
the Debtors’ Catarina oil and gas assets;

WHEREAS, by letters dated December 21, 2018 and March 18, 2019, Catarina
Midstream raised gathering and processing fees on volumes produced from wells on
the Eastern Catarina Acreage;

WHEREAS, the Debtors allege that such changes in fees were improper and, as a
result, constituted breaches of the Catarina Gathering Agreement, and Catarina
Midstream disputes all such allegations;

WHEREAS, the Debtors presently have no economically viable alternative for the
gathering of oil and gas from a substantial portion of their wells on the
Catarina Acreage without access to the gathering system owned or operated by
Catarina Midstream;

WHEREAS,  Carnero G&P is a party to certain gas gathering, processing, and
natural gas liquids purchase agreements with certain of the Debtors, including
the Carnero Agreements, with respect to the Debtors’ Catarina gas assets;

WHEREAS, the Debtors filed for relief under chapter 11 of the United States
Bankruptcy Code, 11 U.S.C. §§ 101-1532, on August 11, 2019, and the Bankruptcy
Court confirmed the Plan on April 30, 2020;

 

 

 

 

 

WHEREAS, the Plan contemplates the rejection, assumption, and resolution of
objections to assumption or rejection of agreements following confirmation of
the Plan;

WHEREAS, certain disputes exist between and among the Parties relating to, inter
alia, the treatment under the Plan of their respective claims, causes of action,
defenses, and agreements, including but not limited to the assumption or
rejection of certain agreements;

WHEREAS, resolution of such disputes on the terms set forth in this Agreement is
critical to the successful reorganization of the Debtors’ business and
operations;

WHEREAS, the Debtors have concluded, after considering all the costs, risks, and
potential outcomes of continued litigation among the Parties and/or other
parties, that the benefits provided in this Agreement are in the best interests
of the Debtors and their estates; and

WHEREAS, the Parties have agreed to a global resolution among them in order to
resolve the various claims, defenses, causes of action, and other disputes among
them on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants,
releases, and other agreements contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, on the terms and subject to the conditions of this Agreement, the
Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS AND RULES OF INTERPRETATION

1.1       Definitions.  Except as otherwise expressly set forth herein, the
following terms have the following meanings:

“Affirmative Covenant Agreements” means, collectively, the Midstream Agency
Agreement, the Brasada Processing Agreement, the EFG Processing Agreement, the
ETC Processing Agreement, the Enterprise Purchase Agreement, the Enterprise
Transportation Agreement, and the Other Carnero G&P Rejection Agreements.

“Agency Agreements” means, together, the Marketing Agency Agreement and the
Midstream Agency Agreement.

“Amendment Agreements” means, collectively, the Carnero Agreement Amendment, the
LLC Agreement Amendment, the NGL Sales Agreement Amendment, the New Seco
Pipeline Agreements, and the Catarina Gathering Amendment.

“Anadarko Parties” means any of Anadarko Petroleum Corporation, Anadarko Energy
Services Company, Anadarko E&P Onshore, LLC, Anadarko E&P Company LP, Kerr-McGee
Oil & Gas Onshore LP, Kerr-McGee Oil & Gas Onshore, LLC, Springfield Pipeline,
LLC, WGR Operating, LP, Western Gas Operating, LLC, Western Gas Partners, LP,
Western Midstream Partners, LP, or any of their respective affiliates.

“Approval Date” means the date on which the Bankruptcy Court enters the Approval
Order.

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“Approval Order” means an order of the Bankruptcy Court reasonably acceptable to
the Parties, entered pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, approving this Agreement and authorizing the Parties to perform
hereunder, which order has not been reversed, vacated or stayed.

“Assumption Agreements” means, collectively, the Carnero Agreements and the
Catarina Gathering Agreement, the Mitsui Letter Agreement and the various
Ratification Agreements by and among Carnero G&P, SN Maverick and each of the
Other Comanche Working Interest Holders pursuant to which the Other Comanche
Working Interest Holders ratified the Comanche FGGPA.

“Bankruptcy Cases” means the chapter 11 cases of the Debtors pending before the
Bankruptcy Court, styled In re Sanchez Energy Corporation, et al., Case No.
19-34508 (MI) (Bankr. S.D. Tex.) (Jointly Administered).

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of Texas.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure.

“BP Oil Purchase Agreement” means that certain Agreement, dated as of December
13, 2013, by and between BP Products North America Inc., as Buyer, and Anadarko
E&P Onshore LLC, as Seller, as amended or modified from time to time, including
by that certain First Amendment to Agreement, dated as of February 2015.

“Brasada Processing Agreement” means that certain Gas Processing Agreement,
dated as of February 27, 2012, by and between WGR Operating, LP, as Processor,
and Anadarko E&P Company LP, as Supplier, as amended or modified from time to
time, including by that certain Gas Processing Agreement Amendment No. 1, dated
as of January 3, 2013, that certain Gas Processing Agreement Amendment No. 2,
dated as of March 11, 2014, that certain Gas Processing Agreement Amendment
No. 3, dated as of September 1, 2016, and that certain Gas Processing Agreement
Amendment No. 4, dated as of September 1, 2016.

“Carnero Agreement Amendment” means that certain Second Amendment Agreement,
dated as of the Approval Date and effective as of the Closing Date, by and among
Carnero G&P, SN and SN Catarina, in the form attached hereto as Exhibit C.

 

“Carnero Agreements” means, together, the Carnero Gathering Agreement and the
Carnero Processing Agreement.

 

“Carnero G&P” means Carnero G&P LLC, a joint venture owned 50% by SNMP and 50%
by Targa.

 

“Carnero Gathering Agreement” means that certain Firm Gas Gathering Agreement,
dated as of October 2, 2015, by and among SN, SN Catarina, and Targa (as
predecessor in interest to Carnero G&P), as amended or modified from time to
time and as in effect on the Execution Date, including by that certain Omnibus
Amendment, dated as of June 23, 2016, that certain First Amendment to

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Firm Gas Gathering Agreement, dated as of May 1, 2017, and that certain
Amendment Agreement, dated as of April 1, 2018.

“Carnero Processing Agreement” means that certain Firm Gas Processing Agreement,
dated as of October 2, 2015, by and among SN, SN Catarina, and Targa (as
predecessor in interest to Carnero G&P), as amended or modified from time to
time and as in effect on the Execution Date, including by that certain Omnibus
Amendment, dated as of June 23, 2016, that certain First Amendment to Firm Gas
Gathering Agreement, dated as of May 1, 2017, and that certain Amendment
Agreement, dated as of April 1, 2018.

 

“Catarina Acreage” means the “Dedicated Acreage,” as such term is defined in the
Carnero Agreements.

 

“Catarina Gathering Agreement” means that certain Firm Gathering and Processing
Agreement, dated as of October 14, 2015, by and between SN Catarina, as
Producer, and Catarina Midstream, as Gatherer, as amended by that certain
Amendment No. 1 to Firm Gathering and Processing Agreement, executed on June 30,
2017 but effective as of April 1, 2017, and as in effect on the Execution Date.

 

“Catarina Gathering Amendment” means that certain Amended and Restated Firm
Gathering and Processing Agreement, dated as of the Approval Date and effective
as of the Closing Date, by and between SN Catarina, as Producer, and Catarina
Midstream, as Gatherer, in the form attached hereto as Exhibit F.

 

“Catarina Midstream” means Catarina Midstream LLC, a wholly-owned direct
subsidiary of SNMP.

 

“Closing” means the consummation of the Midstream Transaction as contemplated in
section 2.5, following satisfaction of the Closing Conditions Precedent or
waiver thereof in accordance with section 4.6.

“Closing Conditions Precedent” means, collectively, the conditions precedent set
forth in sections 4.2 through 4.5.

“Closing Date” means the date the Closing occurs in accordance with this
Agreement.

 

“Closing Notice” means a notice of the occurrence of Closing in the form
attached hereto as Exhibit G.

 

“Closing Outside Date” means 5:00 pm Houston, TX time on October 1, 2020.

 

“Comanche Acreage” means the “Dedicated Acreage,” as such term is defined in the
Comanche FGGPA, provided that the Comanche Acreage shall not include acreage (or
associated wells) serviced as of the Execution Date under the Howard Gathering
Agreement, unless and until such amounts become dedicated in accordance with the
Comanche FGGPA and are not subject to a temporary release in accordance with
section 2.1 of the Comanche FGGPA.

 

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“Comanche FGGPA” means that certain Firm Gas Gathering, Processing and Purchase
Agreement, dated as of April 1, 2018, by and between SN Maverick and Carnero
G&P, as amended or modified from time to time and as in effect on the Execution
Date, including by that certain Amendment to Firm Gas Gathering, Processing and
Purchase Agreement dated as of April 1, 2018.

 

“Confirmation Order” means the Order Approving Disclosure Statement and
Confirming Second Amended Joint Chapter 11 Plan of Reorganization of Sanchez
Energy Corporation and its Debtor Affiliates [DKT. #1212], entered by the
Bankruptcy Court in the Bankruptcy Cases on April 30, 2020, as amended or
modified.

 

“Continuing Requirement” means the procedure set forth in Exhibit G of the
Carnero Agreement Amendment.

 

“Debtors” means, collectively, prior to the Effective Date, SN and each of its
direct and indirect subsidiaries that are debtors and debtors-in-possession in
the Bankruptcy Cases, including SN Maverick and SN Catarina, and, after the
Effective Date, such entities as reorganized pursuant to the Plan.

 

“Double Eagle Transportation Agreement” means that certain Throughput and
Deficiency Agreement, dated as of December 13, 2013, by and among Anadarko E&P
Onshore LLC, Double Eagle Pipeline LLC, and Kinder Morgan Crude & Condensate
LLC, as amended or modified from time to time.

 

“Eastern Catarina Acreage” means the section of the Catarina Acreage which does
not form part of the “Dedicated Acreage,” as such term is defined in the
Catarina Gathering Agreement.

“Effective Date” has the meaning ascribed to such term in the Plan.

 

“EFG Processing Agreement” means that certain Gas Services Agreement between
SWEPI LP (predecessor in interest to SN Catarina) and Eagle Ford Gathering LLC,
dated as of November 1, 2011, as amended from time to time, including by that
certain First Amendment to Gas Services Agreement, dated as of August 8, 2014,
that certain Second Amendment to Gas Services Agreement, dated as of
September 29, 2015, and that certain Third Amendment to Gas Services Agreement,
dated as of August 1, 2016.

“EFM Agreements” means, together, the Intrastate EFM Agreement and the
Interstate EFM Agreement.

 

“EFM Assignment Agreement” means that certain Assignment and Consent to
Assignment Agreement, dated as of June 28, 2017, by and among Anadarko Energy
Services Company, as Assignor, SN Maverick, as Assignee, and Eagle Ford
Midstream, LP, as Consenting Party.

 

“Enterprise Purchase Agreement” means that certain Purchase Agreement, dated as
of March 1, 2012, by and between Anadarko Energy Services Company and Enterprise
Products Operating LLC, as amended or modified from time to time.

 

5

 

 

“Enterprise Transportation Agreement” means that certain Transportation Services
Agreement, dated as of March 1, 2012, by and between Enterprise Products
Operating LLC and Anadarko Energy Services Company, as amended or modified from
time to time.

“ETC Processing Agreement” means that certain Gathering and Processing
Agreement, dated as of April 1, 2011, by and between Anadarko E&P Company LP and
ETC Texas Pipeline, Ltd., as amended or modified from time to time.

 

“Final Order” means an order or judgment of a court of competent jurisdiction,
including the Bankruptcy Court, that has been entered on the docket maintained
by the clerk of such court and has not been reversed, vacated, or stayed and as
to which (a) the time to appeal, petition for certiorari, or move for a new
trial, reconsideration, or rehearing has expired and as to which no appeal,
petition for certiorari, remand proceeding, or other proceedings for a new
trial, reconsideration, or rehearing shall then be pending, or (b) if an appeal,
writ of certiorari, new trial, reconsideration, or rehearing thereof has been
sought, (i) such order or judgment shall have been affirmed or reversed in part
or in full, with no further proceedings on remand, by the highest court to which
such order was appealed, certiorari shall have been denied, or a new trial,
reconsideration, or rehearing shall have been denied or resulted in no
modification of such order, and (ii) the time to take any further appeal,
petition for certiorari, or move for a new trial, reconsideration, or rehearing
shall have expired; provided,  however, that the possibility that a motion
pursuant to rule 60 of the Federal Rules of Civil Procedure, or any analogous
rule under the Bankruptcy Rules, may be filed relating to such order shall not
prevent such order from being a Final Order.

 

“Howard Gathering Agreement” means that certain Firm Transportation Agreement,
effective October 1, 2009, by and between Texas Pipeline LLC and Anadarko E&P
Company LP, as amended or modified from time to time, including by that certain
First Amendment to Firm Transportation Agreement, dated as of September 1, 2012,
that certain Second Amendment to Firm Transportation Agreement, dated as of
December 4, 2012, and that certain Third Amendment to Firm Transportation
Agreement, dated as of October 1, 2016.

 

“Interstate EFM Agreement” means that certain Firm NGPA Section 311 Gas
Transportation Agreement, dated as of January 17, 2012, by and between Anadarko
Energy Services Company and Eagle Ford Midstream, LP, as amended or modified
from time to time, including by that certain First Amendment to Firm NGPA
Section 311 Transportation Agreement, dated as of June 27, 2016, and as assigned
to SN Maverick in accordance with the EFM Assignment Agreement.

 

“Intrastate EFM Agreement” means that certain Firm Intrastate Gas Transportation
Agreement, dated as of January 17, 2012, by and between Anadarko Energy Services
Company and Eagle Ford Midstream, LP, as amended or modified from time to time,
including by that certain First Amendment to Firm Intrastate Gas Transportation
Agreement, dated as of June 27, 2016, and as assigned to SN Maverick in
accordance with the EFM Assignment Agreement.

 

“LC Deposit Funds” means the funds, in the amount of $17,078,144.00, held on
deposit by Carnero G&P from the proceeds of the draw of a letter of credit
posted by SN to Carnero G&P in accordance with the Carnero Agreements.

 

6

 

 

“LLC Agreement” means that certain Second Amended and Restated Limited Liability
Company Agreement of Carnero G&P, dated as of April 1, 2018, by and between SNMP
and Targa, as amended or modified from time to time.

“LLC Agreement Amendment” means the amendment to the LLC Agreement, to be dated
as of the Closing Date, in form and substance agreed upon by SNMP and Targa
prior to the Execution Date.

“Marketing Agency Agreement” means that certain Retained Marketing Contracts
Services Agreement, by and between SN Maverick and SN Catarina, collectively, as
Provider, and Anadarko E&P Onshore LLC, Kerr-McGee Oil & Gas Onshore LP, and
Anadarko Energy Services Company, collectively, as Recipient, as amended or
modified from time to time and in effect on the Execution Date, including by
that certain First Amendment to the Retained Marketing Contracts Services
Agreement, dated as of June 28, 2017, and that certain Second Amendment to the
Retained Marketing Contracts Services Agreement, dated as of September 15, 2017.

“Midstream Agency Agreement” means that certain Retained Midstream Contracts
Services Agreement, by and between SN Maverick, as Provider, and Anadarko E&P
Onshore LLC and Kerr-McGee Oil & Gas Onshore LP, together, as Recipient, as
amended or modified from time to time and in effect on the Execution Date.

“Midstream Transaction” means the transactions described in section 2.5, which
shall occur and/or become effective following the date upon which the Closing
Conditions Precedent have been met and the Closing has occurred.

 

“Mitsui Letter Agreement” means that certain Letter Agreement re: Retained
Take-in-Kind Rights of Mitsui E&P Texas LP in Volumes Committed to the Raptor
Gas Processing Facility in La Salle County, Texas, executed as of May 2018, by
and among Mitsui E&P Texas LP, SN Maverick, and Carnero G&P.

 

“New Catarina-Seco Agreement” means that certain Firm Transportation Service
Agreement, dated as of the Approval Date and effective as of the Closing Date,
by and among Seco Pipeline and SN Catarina, in the form attached hereto as
Exhibit D.

 

“New Comanche-Seco Agreement” means that certain Firm Transportation Service
Agreement, dated as of the Approval Date and effective as of the Closing Date,
by and among Seco Pipeline and SN Maverick, in the form attached hereto as
Exhibit E.

 

“New Seco Pipeline Agreements” means, together, the New Catarina-Seco Agreement
and the New Comanche-Seco Agreement.

 

“NGL Sale Agreement” means that certain NGL Sale Agreement (Raptor Plant and
Silver Oak II Plant), dated as of April 1, 2018, by and between Carnero G&P and
Targa Liquids, as amended or modified from time to time.

 

7

 

 

“NGL Sale Agreement Amendment” means an amendment to the NGL Sale Agreement,
dated as of the Approval Date and effective as of the Closing Date, in form and
substance agreed upon by SNMP, Targa, Carnero G&P and Targa Liquids prior to the
Execution Date.

 

“Non-Anadarko Party” means any party to (a) either of the EFM Agreements or
(b) any of the Underlying Agreements, in the case of either (a) or (b) other
than an Anadarko Party.

“Other Carnero G&P Rejection Agreements” means, collectively, the agreements set
forth on Exhibit B attached hereto.

 

“Other Comanche Working Interest Holders” means, collectively, Gavilan
Resources, LLC, Eagle Ford TX LP, Mitsui E&P Texas LP, SN EF UnSub, LP, and
Venado EF L.P., and each of their respective successors and assigns.

 

“Plan” means the Second Amended Joint Chapter 11 Plan of Reorganization of
Sanchez Energy Corporation and its Debtor Affiliates, dated as of April 30, 2020
[DKT. #1205], as amended or modified from time to time.

 

“Raptor Plant” means the Raptor gas processing plant located in La Salle County,
Texas, and operated by Carnero G&P.

 

“Rejection Agreements” means the Agency Agreements, the EFM Agreements, the EFG
Processing Agreement, and the Other Carnero G&P Rejection Agreements, in each
case to the extent such Rejection Agreements may be rejected pursuant to the
Plan and 11 U.S.C. § 365.

 

“Rejection Litigation” means and any claims, objections, causes of action, and
other litigation brought by or on behalf of any Anadarko Party or Non-Anadarko
Party, in each case to the extent asserting that any of the Debtors remain
bound, or will remain bound, by any material covenants or other material
obligations set forth in the Underlying Agreements following the rejection of
the Agency Agreement governing SN Maverick’s and/or SN Catarina’s agency with
respect to the applicable Underlying Agreement.

 

“Second Installment Conditions” means, collectively, (a) the satisfaction or
waiver of the conditions precedent set forth in sections 4.2.2 and 4.2.3 and
(b) entry of one or more orders of the Bankruptcy Court approving the Debtors’
rejection of (or otherwise finding that such agreements do not continue to bind
any of the Debtors in any material respect): (i) the EFG Processing Agreement
and (ii) to the extent applicable, each of the Other Carnero G&P Rejection
Agreements; provided that the effective waiver by a Party of a condition
precedent set forth in sections 4.2.2, 4.2.3, 4.4.2(a), or 4.4.2(b) shall be
deemed a waiver of the requirements set forth in the immediately preceding
clauses (b)(i) or (b)(ii) by the same Party with respect to the same condition
precedent, respectively.

 

“Second Installment Orders” means, collectively, the order or orders of the
Bankruptcy Court, if any, satisfying the conditions set forth in clauses (a) and
(b) of the definition of Second Installment Conditions.

 

8

 

 

“Seco Administrative Expense Claim” means the administrative expense claim
asserted against the Debtors by Seco Pipeline in an amount of not less than
$1,944,800 for unpaid amounts allegedly due under that certain Firm
Transportation Services Agreement, dated as of September 1, 2017, by and between
Seco Pipeline and SN Catarina, which agreement was previously terminated by SN
Catarina.

 

“Seco Pipeline” means Seco Pipeline, LLC, a wholly-owned direct subsidiary of
SNMP.

“SN” means Sanchez Energy Corporation.

 

“SN Catarina” means SN Catarina, LLC.

 

“SN Maverick” means SN EF Maverick, LLC.

 

“SNMP” means Sanchez Midstream Partners, LP.

 

“Targa” means TPL SouthTex Processing Company LP.

 

“Targa Liquids” means Targa Liquids Marketing and Trade LLC, an affiliate of
Targa.

 

“Term Sheet” means the Term Sheet attached hereto as Exhibit A.

 

“Underlying Agreements” means, collectively, the Brasada Processing Agreement,
the ETC Processing Agreement, the Enterprise Transportation Agreement, the
Enterprise Purchase Agreement, the BP Oil Purchase Agreement, and the Double
Eagle Transportation Agreement.

 

1.2       Rules of Interpretation. All references in this Agreement to articles,
sections, subsections, Exhibits (as defined below), and other subdivisions refer
to corresponding articles, sections, subsections, Exhibits, and other
subdivisions of this Agreement unless expressly provided otherwise.  Titles
appearing at the beginning of any articles, sections, subsections, Exhibits, and
subdivisions are for convenience only and will not constitute part of such
articles, sections, subsections, Exhibits, and subdivisions and will be
disregarded in construing the language contained in such articles, sections,
subsections, Exhibits, and subdivisions. 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.  Words in the singular form will be construed to include the plural and
vice versa, unless the context otherwise requires.  References to a written
agreement refer to such agreement as it may be amended, modified, or
supplemented from time to time.  Pronouns in masculine, feminine, and neuter
genders will be construed to include any other gender.  This Agreement will
inure to the benefit of and be binding upon the Parties and their respective
successors and permitted assigns.  Examples will not be construed to limit,
expressly or by implication, the matter they illustrate.  The word “includes”
and its derivatives means “includes, but is not limited to” and corresponding
derivative expressions.  Where a date or time period is specified, it will be
deemed inclusive of the last day in such period or the date specified, as the
case may be.  No consideration will be given to the fact or presumption that one
Party had a greater or lesser hand in drafting this Agreement.  The Recitals are
incorporated into and form part of this Agreement and shall be deemed true and
correct representations of the Parties’ respective positions with respect to the
statements therein.

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1.3       Exhibits.  The following exhibits (collectively “Exhibits,” and each
an “Exhibit”) are attached to, form part of, and are incorporated herein by
reference as though contained in the body of this Agreement:

Exhibit A         Term Sheet

Exhibit B         Other Carnero G&P Rejection Agreements

Exhibit C         Carnero Agreement Amendment

Exhibit D         New Catarina-Seco Agreement

Exhibit E         New Comanche-Seco Agreement

Exhibit F         Catarina Gathering Amendment

Exhibit G         Closing Notice

 

Whenever any term or condition, whether express or implied, of any Exhibit
conflicts with or is at variance with any term or condition of the body of this
Agreement, the terms and conditions of the body of this Agreement will prevail
to the extent of such conflict or variance.

 

ARTICLE 2

AGREEMENTS OF THE PARTIES

2.1       LC Deposit Funds.

2.1.1    Delivery of LC Deposit Funds to SN (up to $14 million).  Upon the
occurrence of both the Approval Date and the execution of the Amendment
Agreements and other agreements as required pursuant to section 2.5.1, Carnero
G&P will return or otherwise cause to be delivered to SN from the LC Deposit
Funds $8 million in cash, by wire transfer of immediately available funds to a
bank account designated in writing by SN.  On the date that is the sixtieth
(60th) day following the satisfaction of the Second Installment Conditions (or,
if such date is not a business day, the next business day), Carnero G&P will
return or otherwise cause to be delivered to SN from the LC Deposit Funds an
additional $6 million in cash (the “Second Installment”), by wire transfer of
immediately available funds to a bank account designated in writing by SN;
provided, however, that, if, as of the date that the Second Installment is
otherwise required to be returned or delivered to SN pursuant to this section
2.1.1, any of the Second Installment Orders has been stayed by an order of a
court of competent jurisdiction, the Second Installment will instead be
delivered to SN within three (3) days following the lifting or termination of
such stay.  The date on which the Second Installment is delivered to SN in
accordance with the prior sentence shall be referred to as the “Second
Installment Date.”  Delivery of the LC Deposit Funds pursuant to this paragraph
will be deemed consistent with the terms of the Carnero Agreements, and Carnero
G&P agrees that, except as expressly permitted by the terms of the Carnero
Agreement Amendment, it will not request the issuance of a new or replacement
letter of credit or other form of credit assurance from the Debtors under the
Carnero Agreements, unless this Agreement has been terminated, the Debtors are
in material breach hereof, and/or the Carnero Agreement Amendment has not been
executed and delivered as contemplated herein or, following the Closing Date, is
no longer in full force and effect as against the Debtors.

2.1.2    Remaining LC Deposit Funds.  On the Second Installment Date, all
remaining LC Deposit Funds not returned to SN in accordance with section 2.1.1
(the “Remaining LC Amounts”) shall be retained by and become the property of
Carnero G&P; provided, however,

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if, after the Second Installment Date, any of the other LC Deposit Funds are
returned to Carnero G&P pursuant to this Agreement, then the Remaining LC
Amounts shall not be retained by and become the property of Carnero G&P and
shall be held solely as credit support in accordance with the Carnero
Agreements, whether before or after it is amended by the Carnero Agreement
Amendment; provided further that if the same LC Deposit Funds that were returned
to Carnero G&P are then subsequently returned by Carnero G&P to the Debtors
under the terms of the Carnero Agreements or Carnero Agreement Amendment, the
Remaining LC Amounts shall again be fully and finally retained by and become the
property of Carnero G&P. Retention of the Remaining LC Amounts by Carnero G&P to
the extent permitted by this section 2.1.2 is consideration for Carnero G&P
entering into this Agreement and is not an offset, credit or reduction against
the Debtors’ other obligations.

2.2       Post-Approval Date Agreements.

2.2.1    Affirmative Covenants.

(a)        The Debtors hereby covenant and agree:

(i)         To elect, and do hereby elect, to place on the Schedule of Rejected
Executory Contracts and Unexpired Leases (as defined in the Plan) the
Affirmative Covenant Agreements and agree that they will not change such
election;

(ii)        Not to request any further extension of the Contract Objection
Deadline (as defined in the Confirmation Order), solely with respect to any of
the Affirmative Covenant Agreements; and

(iii)      To diligently (a) pursue rejection, to the extent permitted under 11
U.S.C. §365, of the Affirmative Covenant Agreements, including (x) fully
prosecuting any appeals related to such rejection, (y) opposing any requested
stays of the orders approving rejection of the Affirmative Covenant Agreements,
and (z) taking appropriate legal actions related to the foregoing.

(b)        If the Debtors fail in any material respect to continue to diligently
pursue rejection and related appeals in accordance with section 2.2.1(a) at any
time prior to final resolution of all such matters, (i) SN shall, promptly upon
demand by Carnero G&P, return to Carnero G&P all amounts of the LC Deposit Funds
actually delivered to SN pursuant to this Agreement, which amounts shall
thereafter be held in accordance with the existing Carnero Agreements, as
applicable, and (ii) for purposes of clarification, if the Continuing
Requirement has become effective in accordance with the terms of this Agreement
and the Carnero Agreement Amendment, in addition to the remedies in the
immediately preceding clause (i), the Continuing Requirement procedure shall
continue to apply.  The remedies set forth in this section 2.2.1 shall be the
sole remedies for the Debtors’ failure to continue to diligently pursue
rejection and related appeals as set forth in section 2.2.1(a)(iii).  Upon the
entry of one or more Final Orders approving the rejection of all of the
Affirmative Covenant Agreements or otherwise finding that the Debtors do not
remain bound by any material obligations set forth in the Affirmative Covenant
Agreements, the Debtors shall be deemed to have complied with the covenants in
this section 2.2.1.

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(c)        From and after the Approval Date, each of the other Parties agrees
and covenants to: (i) cooperate with and undertake commercially reasonable
efforts to assist and support the Debtors in their pursuit and prosecution of
the rejection of the Rejection Agreements and resolution of any claims,
objections, causes of action, and other litigation related thereto;
(ii) cooperate with the Debtors and negotiate in good faith in connection with,
and to exercise commercially reasonable efforts with respect to, the pursuit,
approval of, and implementation of the Midstream Transaction and other covenants
and agreements set forth herein; and (iii) take such action as may be reasonably
necessary or reasonably requested by the Debtors to carry out the purposes and
intent of this Agreement, and shall refrain from taking any action that would
frustrate the purposes and intent of this Agreement.

(d)        Further, from and after the Approval Date, the Debtors will not
remove any executory contracts or unexpired leases from the Schedule of Assumed
Executory Contracts and Unexpired Leases (as defined in the Plan), the removal
of which would reasonably be expected to adversely affect the Debtors’ ability
to perform any material obligation under either this Agreement or the agreements
to be executed by the Parties pursuant to section 2.5.

2.3       Delivery of Gas at Raptor Tailgate.  From and after the Approval Date
and through the Closing, the Debtors will use commercially reasonable efforts to
obtain any and all consents and agreements necessary to permit the Debtors to
deliver their owned and controlled gas and all Other Comanche Working Interest
Holders’ gas, in each case, flowing through the tailgate of the Raptor Plant,
for transportation and redelivery on a month-to-month basis by Seco Pipeline,
and the Debtors shall deliver all such gas that is processed at the Brasada
natural gas processing plant in La Salle County, Texas or to be processed at the
Raptor Plant at the tailgate of the Raptor Plant (or by way of the Raptor
Plant), but specifically excluding gas that is processed at any of the Carnero
G&P processing plants in Bee County, Texas, subject only to the satisfaction of
the applicable current monthly minimum volume commitment obligation under the
current sole existing minimum volume commitment contract for residue gas should
it continue to be in effect; provided that any volumes delivered by or on behalf
of the Debtors or the Other Comanche Working Interest Holders pursuant to this
Section 2.3 prior to the Closing will be transported and redelivered by Seco
Pipeline on economic and other terms no less favorable to the Debtors and the
Other Comanche Working Interest Holders than the terms contained in the New Seco
Pipeline Agreements.  Any volumes in excess of the current minimum volume
commitment contract, should it continue to be in effect, would be subject to
Debtors’ obligations under this Section 2.3.  The Debtors shall not enter into
any new minimum volume commitments, dedications, or other contracts that would
hinder its ability to fulfill Debtors’ obligations under this Section 2.3.

2.4       Contribution of Administrative Expense Claim.  Seco Pipeline agrees
that, as of the Approval Date, any and all recoveries to which it would
otherwise be entitled on account of the Seco Administrative Expense Claim will
be contributed to the Debtors and used to pay, on the Effective Date, other
administrative expense claims of the Debtors’ estates.  For purposes of
clarification, no distribution will be made under the Plan to any holder of the
Seco Administrative Expense Claim.

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2.5       Approval Date and Closing Date Agreements.

2.5.1    Execution of Amendments and Other Agreements.  On the Approval Date,
each of the Parties agrees to take the following actions, as applicable:

(a)        the Debtors will execute and deliver (i) the Carnero Agreement
Amendment, (ii) the Catarina Gathering Amendment, and (iii) the New Seco
Pipeline Agreements;

(b)        Catarina Midstream will execute and deliver the Catarina Gathering
Amendment;

(c)        Carnero G&P will execute and deliver the Carnero Agreement Amendment
and the NGL Sales Agreement Amendment;

(d)        Seco Pipeline will execute and deliver the New Seco Pipeline
Agreements;

(e)        SNMP will (i) execute and deliver the LLC Agreement Amendment and
(ii) take any and all actions necessary to cause (A) Catarina Midstream to
execute and deliver the Catarina Gathering Amendment, (B) Seco Pipeline to
execute and deliver the New Seco Pipeline Agreements, and (C) Carnero G&P to
execute and deliver the Carnero Agreement Amendment and the NGL Sales Agreement
Amendment;

(f)        Targa will (i) execute and deliver the LLC Agreement Amendment and
(ii) take any and all actions necessary to cause (A) Carnero G&P to execute and
deliver the Carnero Agreement Amendment and the NGL Sales Agreement Amendment,
and (B) Targa Liquids to execute and deliver the NGL Sales Agreement Amendment;
and

(g)        Each Party will execute and deliver a customary release to each other
Party of all actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, contracts, damages, judgments, claims, and demands
whatsoever, in law or equity, known or unknown, asserted or unasserted, which
each Party ever had, now has or hereafter can, shall or may have, against any
such other Party for, upon, or by reason of any matter, cause or thing
whatsoever from the beginning of the world through the Closing Date, subject
only to customary carve outs for obligations under this Agreement, the
Assumption Agreements and any other agreements between or among the Parties or
any affiliates of the Parties that have been or will be assumed, pursuant to 11
U.S.C. § 365, under the Plan.  The releases will extend to each Party’s
respective current and former officers, directors, managers, principals,
members, partners, employees, agents, advisory board members, financial
advisors, attorneys, accountants, investment bankers, consultants,
representatives, and other professionals, in each case, solely in their capacity
as such.

(h)        Notwithstanding anything in this Agreement to the contrary, the
execution and delivery prior to the Closing Date of any of the agreements,
amendments, instruments, releases, or other documents required to be executed
pursuant to this section 2.5.1 shall be for convenience only and shall have no
legal force or effect in any respect prior to the Closing, and, if the Closing
does not occur, all such agreements, amendments, instruments,

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releases, or other documents required to be executed pursuant to this section
2.5.1 shall be deemed void ab initio and of no legal force or effect.

2.5.2    Assumption of Agreements.  The Parties agree that, effective as of the
Approval Date, each of the Assumption Agreements will be deemed assumed or
otherwise ratified for all purposes under the Plan (but not amended by the
applicable Amendment Agreements) and that, effective as of the Closing Date,
each of the Assumption Agreements will be deemed assumed or otherwise ratified
for all purposes under the Plan, in each case as amended by the applicable
Amendment Agreements; provided,  however, the terms of the Assumption
Agreements, as amended by the applicable Amendment Agreements, will
automatically be effective as of the Closing without regard for the timing of
compliance with section 2.5.1.  For the avoidance of doubt, the Parties agree
that no payments will be due from any of the Debtors, including in respect of
any Cure Claims (as defined in the Plan) that may be asserted by any Party, in
connection with assumption or ratification of any of the Assumption Agreements
pursuant to this section 2.5.2 or otherwise; provided,  however, that the
Parties agree that all performance and payment obligations, including with
respect to minimum volume commitments, that exist under the Carnero Agreements
and other agreements being assumed by the Debtors in accordance with this
Agreement shall continue in full force and effect subject only to the specific
modifications under this Agreement and the Amendment Agreements.  For the
avoidance of doubt, the Mitsui Letter Agreement will be one of the Assumption
Agreements assumed by the Debtors.

2.6       Other Agreements of All Parties.  Each of the Parties agrees to
cooperate with each other Party and negotiate in good faith in connection with,
and to exercise commercially reasonable efforts with respect to, the pursuit,
approval of, and implementation of the Midstream Transaction and other covenants
and agreements set forth herein, including the negotiation, drafting, execution,
and delivery of the Amendment Agreements.  Furthermore, subject to the terms
hereof, each of the Parties agrees to take such action as may be reasonably
necessary or reasonably requested by the other Parties to carry out the purposes
and intent of this Agreement, and shall refrain from taking any action that
would frustrate the purposes and intent of this Agreement.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

3.1       Representations and Warranties of the Debtors.

3.1.1    Each of the Debtors, severally (and not jointly and severally),
represents and warrants to each of the other Parties hereto that the following
statements are true, correct, and complete as of the Execution Date and as of
the Closing:

(a)        Each of the Debtors is validly existing and in good standing under
the laws of the state of its incorporation or organization, and, subject to
entry of the Approval Order, has all requisite corporate, partnership, limited
liability company, or similar authority to enter into this Agreement and carry
out the Midstream Transaction and other agreements contemplated hereby and to
perform its obligations contemplated hereunder.  Subject to entry of the
Approval Order, the execution and delivery of this Agreement and the performance
of such Debtor’s obligations hereunder have been duly authorized by all
necessary corporate, limited liability company, partnership, or other similar
action on its part.

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(b)        Subject to approval of the Bankruptcy Court, the execution, delivery
and performance by such Debtor of this Agreement does not and will not
(i) violate any material provision of law, rule, or regulation applicable to it
or its charter or bylaws (or other similar governing documents) or (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation to which it is a
party, except any breach that may result from the rejection of the Rejection
Agreements.

(c)        The execution, delivery, and performance by such Debtor of this
Agreement does not and will not require any material registration or filing
with, consent or approval of, or notice to, or other action, with or by, any
federal, state, or governmental authority or regulatory body, except the
Bankruptcy Court.

(d)        This Agreement is the legally valid and binding obligation of such
Debtor, enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to or limiting creditors’ rights
generally or by equitable principles relating to enforceability.

(e)        Other than the Howard Gathering Agreement and the Mitsui Letter
Agreement, there are no other agreements to which any of the Debtors is a party
or by which any of the Debtors is bound that would reasonably be expected,
following the Closing Date, to prevent or materially restrict the Debtors from
delivering gas produced from the Comanche Acreage  to Carnero G&P under the
Comanche FGGPA (and the various Ratification Agreements by and among Carnero
G&P, SN Maverick, and each of the Other Comanche Working Interest Holders
pursuant to which the Other Comanche Working Interest Holders ratified the
Comanche FGGPA).

3.1.2    Each of the Debtors, severally (and not jointly and severally),
represents and warrants to each of the other Parties hereto that, as of the
Approval Date, the Debtors have not taken or failed to take any actions during
the period from the execution of this Agreement through the Approval Date that
would have been violations of section 2.5.2 if the same had been taken (or
failed to be taken) after the Approval Date.

3.2       Representations and Warranties of all Other Parties.

3.2.1    Each of the Parties other than the Debtors, solely with respect to
itself, represents and warrants to each of the other Parties hereto (including
each of the Debtors) that unless otherwise stated below, the following
statements are true, correct, and complete as of the Execution Date and as of
the Closing Date:

(a)        Such Party is validly existing and in good standing under the laws of
the state of its incorporation or organization, and has all requisite corporate,
partnership, limited liability company, or similar authority to enter into this
Agreement and carry out the Midstream Transaction and other agreements
contemplated hereby and to perform its obligations contemplated hereunder.  The
execution and delivery of this Agreement and the performance of such Party’s
obligations hereunder have been duly authorized by all necessary corporate,
limited liability company, partnership, or other similar action on its part.

(b)        The execution, delivery and performance by such Party of this
Agreement will not, as of the Closing Date (i) violate any material provision of
law, rule, or

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regulation applicable to it or its charter or bylaws (or other similar governing
documents), or (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation to which it is a party.

(c)        The execution, delivery, and performance by such Party of this
Agreement does not and will not require any material registration or filing
with, consent or approval of, or notice to, or other action, with or by, any
federal, state, or governmental authority or regulatory body.

(d)        This Agreement is the legally valid and binding obligation of such
Party, enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to or limiting creditors’ rights
generally or by equitable principles relating to enforceability.

3.2.2    Each of SNMP, Targa, and Carnero G&P, severally (and not jointly and
severally), represents and warrants to each of the other Parties hereto that, as
of the Execution Date, the form and substance of each of the LLC Agreement
Amendment and the NGL Sales Agreement Amendment have been agreed upon in all
respects by and among SNMP, Targa, Targa Liquids, and Carnero G&P.

ARTICLE 4

CONDITIONS PRECEDENT

4.1       Condition Precedent to all of the Parties’ Obligations.  The Parties’
performance of their obligations set forth in this Agreement shall be subject to
entry of the Approval Order.

4.2       Conditions Precedent to Midstream Transaction Closing.  The respective
obligations of each of the Parties to effect the Closing are subject to
satisfaction of each of the following conditions precedent:

4.2.1    Each of the representations and warranties of the Parties contained in
Article 3 that are made as of the Closing shall be true, correct, and complete
as of the Closing.

4.2.2    The Bankruptcy Court shall have entered one or more orders approving
the Debtors’ rejection of the following agreements in accordance with the Plan:

(a)        the Marketing Agency Agreement; and

(b)        the Midstream Agency Agreement.

4.2.3    With respect to each of the Brasada Processing Agreement, the ETC
Processing Agreement, the Enterprise Purchase Agreement, or the Enterprise
Transportation Agreement, the Bankruptcy Court shall have entered one or more
orders (none of which shall be subject to a stay imposed by a court of competent
jurisdiction) rejecting the Underlying Agreements or finding that the Underlying
Agreement or Underlying Agreements do not continue to bind any of the Debtors in
any material respect.

4.2.4    The Effective Date shall have occurred.

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4.2.5    The Bankruptcy Court shall have entered the Approval Order.

4.2.6    On the Approval Date, the Parties shall have executed the Amendment
Agreements pursuant to section 2.5.1.

4.3       Conditions Precedent to Debtors’ Obligations to Effect the
Closing.  The Debtors’ obligations to effect the Closing are subject to
satisfaction of each of the following additional conditions precedent:

4.3.1    The Bankruptcy Court shall have entered one or more orders (none of
which shall be subject to a stay imposed by a court of competent jurisdiction)
approving the Debtors’ rejection of the following agreements in accordance with
the Plan:

(a)        the EFG Processing Agreement;

(b)        the Interstate EFM Agreement; and

(c)        the Intrastate EFM Agreement.

4.3.2    If any Rejection Litigation is commenced with respect to either the BP
Oil Purchase Agreement or the Double Eagle Transportation Agreement, the
Bankruptcy Court shall have entered one or more orders (none of which shall be
subject to a stay imposed by a court of competent jurisdiction) finding that the
Underlying Agreement or Underlying Agreements subject to any such claims,
objections, causes of action, or other litigation do not continue to bind any of
the Debtors in any material respect.

4.3.3    Each of the conditions precedent in sections 4.4 and 4.5 shall have
been satisfied or waived pursuant to section 4.6.

4.3.4    The Debtors’ entry into an agreement on terms acceptable to the
Debtors, to accept volumes of gas upon redelivery from Seco Pipeline in
accordance with the New Seco Transportation Agreements.

4.4       Conditions Precedent to Targa’s and Carnero G&P’s Obligations to
Effect the Closing.  The obligations of Targa and Carnero G&P to effect the
Closing are subject to satisfaction of each of the following additional
conditions precedent:

4.4.1    None of the Bankruptcy Court’s orders described in sections 4.2.2 and
4.2.3 shall be subject to a stay imposed by a court of competent jurisdiction.

4.4.2    The Bankruptcy Court shall have entered one or more orders (none of
which shall be subject to a stay imposed by a court of competent jurisdiction)
approving the Debtors’ rejection of the following agreements (or otherwise
finding that the Debtors are bound by any material obligations of), in each
case, in accordance with the Plan:

(a)        the EFG Processing Agreement; and

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(b)        to the extent applicable, any Other Carnero G&P Rejection
Agreements.  For the avoidance of doubt, SN Maverick shall not be required to
reject the Mitsui Letter Agreement, and rejection of the Mitsui Letter Agreement
is not required for the satisfaction of the condition precedent set forth in
this section 4.4.2.

4.5       Conditions Precedent to SNMP’s, Catarina Midstream’s, and Seco
Pipeline’s Obligations to Effect the Closing.  The obligations of SNMP, Catarina
Midstream, and Seco Pipeline to effect the Closing is subject to satisfaction of
each of the following additional conditions precedent:

4.5.1    The Bankruptcy Court shall have entered one or more orders (none of
which shall be subject to a stay imposed by a court of competent jurisdiction)
approving the Debtors’ rejection of (or otherwise finding that the Debtors are
not bound by any material obligations of) the following agreements in accordance
with the Plan:

(a)        the Interstate EFM Agreement; and

(b)        the Intrastate EFM Agreement.

4.5.2    SN shall have confirmed that it has obtained all necessary consents
under existing contractual arrangements and/or has otherwise secured all
necessary contractual agreements from all Other Comanche Working Interest
Holders in order to ensure the delivery for transportation and redelivery by
Seco Pipeline in accordance with the terms of the New Comanche-Seco Agreement.

4.6       Waiver of Conditions Precedent.  A condition precedent in this article
4 may be waived only by a written instrument executed by or on behalf of each of
the Parties.

4.7       Closing Notice.  Promptly following the satisfaction of all Closing
Conditions Precedent and the Closing, the Parties shall execute and file the
Closing Notice with the Bankruptcy Court.

ARTICLE 5

TERMINATION

5.1       Termination by Mutual Consent.  This Agreement may be terminated and
the Closing may be abandoned at any time prior to such Closing:

5.1.1    By mutual written consent of the Parties; or

5.1.2    At any time after the Closing Outside Date, by any Party by written
notice to the other Parties, if (a) an order has not been entered rejecting the
Marketing Agency Agreement and the Midstream Agency Agreement and directly or
indirectly rejecting the Underlying Agreements (or finding that the Debtors are
not bound by the Underlying Agreements) and (b) if the Closing has failed to
occur on or before the Closing Outside Date; in each case, provided that no
Party shall be entitled to terminate pursuant to this section 5.1.2 if such
failure of the Closing to occur by the Closing Outside Date results primarily
from (i) such Party’s breach of or failure to perform any material obligation
under this Agreement, (ii) the failure of a material representation

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or warranty of such Party in this Agreement, or (iii) the failure of a closing
condition to be satisfied by the Closing Outside Date resulting primarily from
actions taken or failed to be taken by such Party; for all purposes of this
section 5.1.2 and section 5.1.3 (and only for purposes of this section 5.1.2 and
section 5.1.3) (a) the Debtors will be considered a single Party, (b) Catarina
Midstream, Seco Pipeline and SNMP will be considered a single Party, and (c)
Targa and Carnero G&P will be considered a single Party; or

5.1.3    At any time after October 15, 2020, by any Party by written notice to
the other Parties, if the Closing has failed to occur on or before such date; in
each case, provided that no Party shall be entitled to terminate pursuant to
this section 5.1.3 if such failure of the Closing to occur by the Closing
Outside Date results primarily from (i) such Party’s breach of or failure to
perform any material obligation under this Agreement, (ii) the failure of a
material representation or warranty of such Party in this Agreement, or (iii)
the failure of a closing condition to be satisfied by the Closing Outside Date
resulting primarily from actions taken or failed to be taken by such Party.

ARTICLE 6

MISCELLANEOUS

6.1       Amendments and Waivers.  This Agreement may be amended only upon
written consent of each Party.  Neither this Agreement nor any provisions hereof
may be changed, waived, discharged, or terminated, nor may any consent to the
departure from the terms hereof be given, orally (even if supported by new
consideration), but only by an instrument in writing signed by each of the
Parties to this Agreement.  Any waiver or consent so given shall be effective
only in the specified instance and for the specific purpose for which given.

6.2       Governing Law; Jurisdiction; Waiver of Jury Trial.

6.2.1    This Agreement shall be construed and enforced in accordance with, and
the rights of the Parties shall be governed by, the laws of the State of Texas,
without giving effect to the conflict of laws principles thereof.  Each of the
Parties irrevocably agrees that any legal action, suit, or proceeding arising
out of or relating to this Agreement brought by any Party or its successors or
assigns shall be brought and determined in the Bankruptcy Court, and each of the
Parties hereby irrevocably submits to the jurisdiction of the Bankruptcy Court
for itself and with respect to its property, generally and unconditionally, with
regard to any such proceeding arising out of or relating to this Agreement or
the Midstream Transaction.  Each of the Parties agrees not to commence any
proceeding relating hereto or to the Midstream Transaction or any of the other
covenants or agreements set forth herein except in the Bankruptcy Court, other
than proceedings in any court of competent jurisdiction to enforce any judgment,
decree, or award rendered by the Bankruptcy Court.  Each of the Parties further
agrees that notice as provided in section 6.10 shall constitute sufficient
service of process, and the Parties further waive any argument that such service
is insufficient.  Each of the Parties hereby irrevocably and unconditionally
waives and agrees not to assert by way of motion or as a defense, counterclaim,
or otherwise, in any legal action, suit, or proceeding arising out of or
relating to this Agreement or the Midstream Transaction, (a) any claim that it
is not personally subject to the jurisdiction of the Bankruptcy Court as
described herein for any reason, (b) that it or its property is exempt or immune
from jurisdiction of the Bankruptcy Court, or from any legal process commenced
in the Bankruptcy

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Court (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
or (c) that (i) a proceeding in the Bankruptcy Court is brought in an
inconvenient forum, (ii) the venue of such proceeding is improper, or (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by the
Bankruptcy Court, and each Party further consents to the entry of a Final Order
by the Bankruptcy Court in the event that the Bankruptcy Court or another court
of competent jurisdiction concludes that the Bankruptcy Court cannot or could
not enter a final order or judgment consistent with Article III of the United
States Constitution absent the consent of some or all of the Parties.

6.2.2    Each Party hereby waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in any legal proceeding directly
or indirectly arising out of or relating to this Agreement or the transactions
contemplated hereby (whether based on contract, tort or any other theory).

6.3       Specific Performance/Remedies.  Except as otherwise provided in
section 2.2.1 with respect to the affirmative covenants (which section contains
the exclusive remedy for breaches of section 2.2.1(a)(iii)), it is understood
and agreed by the Parties that money damages would not be a sufficient remedy
for any breach of this Agreement by any Party and each non-breaching Party shall
be entitled to specific performance and injunctive or other equitable relief
(including attorneys’ fees and costs) as a remedy for any such breach, without
the necessity of proving the inadequacy of money damages as a remedy.  Each
Party hereby waives any requirement for the security or posting of any bond in
connection with such remedies.

6.4       Survival.  Notwithstanding the termination of this Agreement pursuant
to Article 5, (a) sections 2.1, 2.4, 6.2, 6.3, 6.4, 6.6, 6.7, 6.8, 6.10, 6.11,
6.12, and 6.13 and, in the event of a termination in accordance with section
5.1, the remedy described in section 2.2.1(b)(i), shall survive such termination
and shall continue in full force and effect in accordance with the terms hereof
and (b) any liability of a Party for failure to comply with the terms of this
Agreement shall survive such termination.

6.5       Successors and Assigns; Severability. Neither this Agreement nor any
of the rights and obligations hereunder may be assigned or transferred by any
Party (whether by operation of law or otherwise) without the prior written
consent of each other Party.  Any attempted assignment in violation of this
section shall be void.  This Agreement is intended to bind and inure to the
benefit of the Parties and their respective successors, permitted assigns,
heirs, executors, administrators, and representatives.  If any provision of this
Agreement, or the application of any such provision to any person or entity or
circumstance, shall be held invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall attach only to such provision or part
thereof and the remaining part of such provision hereof and this Agreement shall
continue in full force and effect.  Upon any such determination of invalidity,
the Parties shall negotiate in good faith to modify this Agreement so as to
effectuate the original intent of the Parties as closely as possible in a
reasonably acceptable manner in order that the transactions contemplated hereby
are consummated as originally contemplated to the greatest extent possible.

6.6       Several, Not Joint, Obligations.  Except as otherwise expressly stated
in this Agreement, the agreements, representations, and obligations of the
Parties pursuant to this Agreement are, in all respects, several and not joint
or joint and several.

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6.7       Relationship Among Parties.  This Agreement shall be solely for the
benefit of the Parties, and no other person or entity shall be a third-party
beneficiary hereof.

6.8       Prior Negotiations; Entire Agreement.  This Agreement, including all
Exhibits, constitutes the entire agreement and understanding of the Parties and
supersedes all other prior negotiations, agreements, or understandings, in each
case with respect to the subject matter hereof.

6.9       Counterparts.  This Agreement may be executed in several counterparts,
each of which shall be deemed an original, and all of which together shall be
deemed to be one and the same agreement.  Execution copies of this Agreement
delivered by facsimile or PDF shall be deemed originals for the purposes of this
paragraph.

6.10     Notices.  All notices hereunder shall be deemed given if in writing and
delivered if sent by electronic mail, facsimile, courier, or by registered or
certified mail (return receipt requested) to the following addresses and
facsimile numbers:

6.10.1  If to the Debtors, to:

Sanchez Energy Corporation

1000 Main Street

Suite 2800

Houston, Texas 77002

Attention: Gregory Kopel

Email: gkopel@sanchezog.com

 

With a copy (which shall not constitute notice) to:

 

Morrison & Foerster LLP

250 West 55th Street

New York, New York 10019

Facsimile: (212) 468-7900

Attention: Dennis L. Jenkins and James A. Newton

Email: djenkins@mofo.com and jnewton@mofo.com

 

6.10.2  If to Catarina Midstream, to:

Catarina Midstream LLC

c/o/ Sanchez Midstream Partners LP

1360 Post Oak Blvd, Suite 2400

Houston, TX 77056

Attn: Chief Financial Officer

Email: cward@sanchezmidstream.com

 

With a copy (which shall not constitute notice) to:

 

Hunton Andrews Kurth LLP

600 Travis Street, Suite 4200

21

 

 

Houston, Texas 77002

Attention: Tad Davidson and Phil Haines

Email: taddavidson@huntonak.com and phaines@huntonak.com

 

6.10.3  If to Carnero G&P, to:

TPL SouthTex Pipeline Company LP

110 W. 7th Street

Suite 2300

Tulsa, OK  74119

Attention: Pat McDonie

Email: pmcdonie@targaresources.com

 

With a copy (which shall not constitute notice) to:

 

TPL SouthTex Pipeline Company LP

110 W. 7th Street

Suite 2300

Tulsa, OK  74119

Attention: Jerry Shrader

Email: jshrader@targaresources.com

 

6.10.4  If to Seco Pipeline, to:

Seco Pipeline, LLC

c/o Sanchez Midstream Partners LP

1360 Post Oak Blvd, Suite 2400

Houston, TX 77056

Attn: Chief Financial Officer

Email: cward@sanchezmidstream.com

 

With a copy (which shall not constitute notice) to:

 

Hunton Andrews Kurth LLP

600 Travis Street, Suite 4200

Houston, Texas 77002

Attention: Tad Davidson and Phil Haines

Email: taddavidson@huntonak.com and phaines@huntonak.com

 

6.10.5  If to SNMP, to:

Sanchez Midstream Partners LP

1360 Post Oak Blvd, Suite 2400

Houston, TX 77056

Attn: Chief Financial Officer

Email: cward@sanchezmidstream.com

22

 

 

With a copy (which shall not constitute notice) to:

 

Hunton Andrews Kurth LLP

600 Travis Street, Suite 4200

Houston, Texas 77002

Attention: Tad Davidson and Phil Haines

Email: taddavidson@huntonak.com and phaines@huntonak.com

 

6.10.6  If to Targa, to:

TPL SouthTex Pipeline Company LP

110 W. 7th Street

Suite 2300

Tulsa, OK  74119

Attention: Pat McDonie

Email: pmcdonie@targaresources.com

 

With a copy (which shall not constitute notice) to:

 

TPL SouthTex Pipeline Company LP

110 W. 7th Street

Suite 2300

Tulsa, OK  74119

Attention: Jerry Shrader

Email: jshrader@targaresources.com

 

6.11     Settlement Discussions.  This Agreement is part of a proposed
settlement of matters that could otherwise be the subject of litigation among
the Parties.  Pursuant to Rule 408 of the Federal Rules of Evidence, any
applicable state rules of evidence, and any other applicable law, foreign or
domestic, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any proceeding among the Parties other than a
proceeding to enforce its terms.  Notwithstanding anything in this Agreement to
the contrary, nothing in this Agreement shall be deemed an admission that any
agreement, document, contract, instrument, or unexpired lease is or is not an
executory contract or unexpired lease within the meaning of 11 U.S.C. § 365 or
otherwise, nor shall anything in this Agreement be deemed a waiver of any
rights, claims, defenses, or objections with respect to the proper
characterization of any agreement, document, contract, instrument, or unexpired
lease under applicable law or under the Plan.

6.12     Limitation on Liability.  Notwithstanding anything to the contrary
contained in this Agreement, no Party shall be liable to any other Party or its
affiliates, whether in contract, tort (including negligence and strict
liability), or otherwise at law or in equity for any consequential, special, or
punitive damages for any act or failure to act under any provision of this
Agreement, even if advised of the possibility thereof.

6.13     Expenses.  Except as expressly otherwise provided in this Agreement,
whether or not the Closing takes place, all costs and expenses incurred in
connection with this Agreement, the

23

 

 

Midstream Transaction, and the other transactions contemplated hereby shall be
paid by the Party incurring such expense.

[Signature pages follow]

 

 

 

 

24

 

 

SANCHEZ ENERGY CORPORATION

 

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

SN PALMETTO, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SM MARQUIS, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SN COTULLA ASSETS, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SN OPERATING, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SN TMS, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SN CATARINA, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

ROCKIN L RANCH COMPANY, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SN PAYABLES, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SN EF MAVERICK, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SN UR HOLDINGS, LLC

 

 

 

 

 

By:

SANCHEZ ENERGY CORPORATION,

 

 

its sole member

 

 

 

 

By:

/s/ Mohsin Meghji

 

Name:

Mohsin Meghji

 

Title:

Chief Restructuring Officer

 

 

 

 

 

 

SANCHEZ MIDSTREAM PARTNERS GP LLC

 

 

 

 

 

By:

/s/ Gerald F. Willinger

 

Name:

Gerald F. Willinger

 

Title:

Chief Executive Officer

 

 

 

SANCHEZ MIDSTREAM PARTNERS LP

 

 

 

By:

Sanchez Midstream Partners GP LLC,

 

 

its general partner

 

 

 

 

By:

/s/ Gerald F. Willinger

 

Name:

Gerald F. Willinger

 

Title:

Chief Executive Officer

 

 

 

CATARINA MIDSTREAM, LLC

 

 

 

By:

Sanchez Midstream Partners LP,

 

 

its sole member

 

 

 

 

By:

Sanchez Midstream Partners GP LLC,

 

 

its general partner

 

 

 

 

By:

/s/ Gerald F. Willinger

 

Name:

Gerald F. Willinger

 

Title:

Chief Executive Officer

 

 

 

SECO PIPELINE, LLC

 

 

 

By:

Sanchez Midstream Partners LP,

 

 

its sole member

 

 

 

 

By:

Sanchez Midstream Partners GP LLC,

 

 

its general partner

 

 

 

 

By:

/s/ Gerald F. Willinger

 

Name:

Gerald F. Willinger

 

Title:

Chief Executive Officer

 

 

 

 

 

 

SP HOLDINGS, LLC

 

 

 

By:

SP Capital Holdings, LLC,

 

 

its manager

 

 

 

 

By:

/s/ Antonio R. Sanchez, III

 

Name:

Antonio R. Sanchez, III

 

Title:

Manager

 

 

 

 

 

 

CARNERO G&P LLC

 

 

 

 

 

 

By:

/s/ Patrick J. McDonie

 

Name:

Patrick J. McDonie

 

Title:

President

 

 

 

 

 

 

TPL SOUTHTEX PROCESSING COMPANY LP

 

 

 

By:

TPL SouthTex Pipeline Company LLC,

 

 

its general partner

 

 

 

 

By:

/s/ Patrick J. McDonie

 

Name:

Patrick J. McDonie

 

Title:

President – Gathering and Processing

 

 

 

 

 

Exhibit A

 

Term Sheet

 

 

 

Midstream Agreement Summary1

Term Sheet

 

Carnero Agreement Amendment

Carnero G&P

Carnero Agreements G&P Rate

 

      Upon satisfaction or waiver of all Closing Conditions Precedent, $[***] /
Mcf escalated on June 1, 2021 and each year thereafter per existing contract,2
subject to the Continuing Requirement

 

o      Gathering Fee = $[***] / Mcf

o      Processing Fee = $[***] / Mcf

 

Note:  The fees in the agreements are on an MMBtu basis.  The MMBtu to Mcf
conversion factor of [***] MMBtu / Mcf is consistent with the current documents
and current gross heating value of Catarina gas

 

      All minimum volume commitments (“MVCs”) removed after May 2021

      Consistent with existing agreement mechanisms, volumes are firm at the
Silver Oak II Plant through remaining term of MVC, then are priority
interruptible, with Raptor Plant volumes remaining priority interruptible

      Retention and clarification of existing netting mechanism across all
Carnero Agreement fees and payments, per current practice

Carnero G&P

Carnero Agreements T&F Rate

 

      Upon satisfaction or waiver of all Closing Conditions Precedent, $[***] /
Gal, escalated on June 1, 2020 and thereafter per existing contract, subject to
the Continuing Requirement

Carnero G&P

Carnero Agreements Adequate Assurance

      Credit Assurance

o      The amount of Credit Assurance (as described in the Carnero Agreements)
will be SN Catarina’s anticipated obligations for the next 60 days

o      Carnero G&P will not be entitled to demand Credit Assurance until 180
days after the Second Installment Date.  Following such time, Carnero G&P may
demand Credit Assurance only if a Trigger has occurred

o      Triggers: (i) reasonable grounds for insecurity, (ii) SN Catarina is in a
net payable position to Carnero G&P under the Carnero Agreements, as amended, in
an amount greater than $1.0 Million, or (iii) SN Catarina is in Default

o      Credit Assurance, at SN Catarina’s election, can be in the form of a
letter of credit, cash collateral, or prepayments

o      Credit Assurance posting will be within three business days (current
agreement is just regular days) of written notice

Carnero G&P

Carnero Agreements Extension Option

      At expiration, SN Catarina may extend Carnero Agreements, as amended,
every 12 months (by giving at least 180 days’ notice) for up to four additional
12-month terms at the then-current rates (escalated as described above in rows 1
and 2 of this Term Sheet)

      Carnero Agreements, as amended, terminate if not extended at SN
Catarina’s option

 

1         Capitalized terms used but not otherwise defined herein have the
meanings ascribed to such terms in the Settlement Agreement to which this Term
Sheet is annexed.

2         All references to existing contracts, agreements, terms, and practices
refer to such contracts, agreements, terms, or practices existing as of May 22,
2020.

 

 

 

 

 

 

Catarina Gathering Amendment

Catarina Midstream

Catarina Natural Gas Gathering Rate

      Upon satisfaction or waiver of all Closing Conditions Precedent, $[***] /
Mcf for all natural gas gathering, escalated at CPI only, per existing contract

      No MVCs 

Catarina Midstream

Catarina Crude Oil Gathering Rate

      Upon satisfaction or waiver of all Closing Conditions Precedent, $[***] /
Bbl for all crude oil gathering, escalated at CPI only, per existing contract

Catarina Midstream

Catarina Water Gathering Rate

      Upon satisfaction or waiver of all Closing Conditions Precedent, water
rate of $[***] / Bbl 

Catarina Midstream

Extension Option

      At expiration, SN Catarina may extend the Catarina Gathering Amendment,
as amended, every 12 months (by giving at least 180 days’ notice) for up to four
additional 12-month terms at the then-current rates (escalated at CPI only, per
existing contract)

      Catarina Gathering Agreement, as amended, terminates if not extended at
SN Catarina’s option

Catarina Midstream

Acreage Dedication

 

      Eastern Catarina Acreage dedicated through October 2030

      All existing dedications remain

Catarina Midstream

Other

      Catarina Midstream to provide SN Catarina a MFN on the Catarina Acreage
for Natural Gas Gathering Rates, Oil Gathering Rates, and Water Gathering Rates
on any new SN Catarina development after the Effective Date of the Plan

New Seco Pipeline Agreements

Seco Pipeline

Residue Natural Gas Takeaway

 

 

      $[***] / MMBtu via Seco Pipeline, escalated at CPI only

      No MVC; firm capacity set at maximum of Raptor Plant residue natural gas
capacity or 200 MMBtu/d; SN Maverick and SN Catarina to dedicate all owned
residue gas and use commercially reasonable efforts to cause all Raptor Plant
tailgate residue gas to flow through Seco Pipeline

 

 

2

 

Exhibit B

 

Other Carnero G&P Rejection Agreements

 

SN Catarina

 

None.

 

SN Maverick

 

None.

 

 

 

 

Exhibit C

 

Carnero Agreement Amendment

 

 

 

 

2

 

 

SECOND AMENDMENT AGREEMENT

 

This Second Amendment Agreement, (this “Agreement”), dated as of [________],
2020, but effective as of the Effective Time (as defined below) is by and among
CARNERO G&P LLC (“Carnero”), a Delaware limited liability company, SANCHEZ
ENERGY CORPORATION (“Sanchez”), a Delaware corporation, and SN CATARINA, LLC
(“SN Catarina”), a Delaware limited liability company.  Carnero, Sanchez and SN
Catarina are each referred to herein as a “Party” and collectively as the
“Parties”.

 

Recitals

 

A.        The Parties are each party to the following agreements: (i) that
certain Firm Gas Gathering Agreement dated as of October 2, 2015, which was
amended effective June 23, 2016, May 1, 2017, and April 1, 2018 (as amended, the
“Gathering Agreement”) and (ii) that certain Firm Gas Processing Agreement dated
as of October 2, 2015, which was amended effective June 23, 2016, May 1, 2017,
and April 1, 2018 (as amended, the “Processing Agreement”).

B.         On August 11, 2019, Sanchez, SN Catarina, and certain of their
affiliates (collectively, the “Debtors”) filed for protection under Chapter 11
of the United States Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of Texas (the “Bankruptcy Court”).  The Debtors’ chapter
11 cases are styled In re Sanchez Energy Corporation, et al., Case No. 19-34508
(MI) (Bankr. S.D. Tex.) (Jointly Administered).

C.         On April 30, 2020, the Bankruptcy Court entered an Order Approving
Disclosure Statement and Confirming Second Amended Chapter 11 Plan of
Reorganization of Sanchez Energy Corporation and its Affiliated Debtors [Dkt.
No. 1212] (the “Confirmation Order”).

D.        On May 29, 2020, Carnero, on the one hand, and Sanchez and SN
Catarina, as Debtors under the Chapter 11 Plan on the other hand (among other
parties thereto), entered into that certain Settlement Agreement (the
“Settlement Agreement”) in furtherance of the Chapter 11 Plan, with the
Settlement Agreement being approved by the Bankruptcy Court on [________], 2020.

E.         The Parties desire to amend the Gathering Agreement and Processing
Agreement as set forth in this Agreement.

Agreement

 

For and in consideration of the foregoing and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, the
Parties hereby agree as follows:.

 

1.         Amendment of Gathering Agreement.  The Gathering Agreement is hereby
amended as follows:

(a)        The definition of “Insolvency Event” in Section 1.1 of the Gathering
Agreement is amended to add the following sentence at the end thereof:

 

 

 

 

 

“For the avoidance of doubt, as used herein the term “Insolvency Event” shall
not include those cases before the United States Bankruptcy Court for the
Southern District of Texas styled In re Sanchez Energy Corporation, et al., Case
No. 19-34508 (MI) (Bankr. S.D. Tex.) (Jointly Administered).”

(b)        The definition of “Minimum Annual Quantity” in Section 1.1 of the
Gathering Agreement is deleted in its entirety and replaced with the following:

““Minimum Annual Quantity” and “MAQ” mean, for any Contract Year ending on or
before May 31, 2021, a quantity of [***] MMcfd multiplied by the number of Days
in that Contract Year, subject to adjustment in accordance with the terms of
this Agreement.  For the avoidance of doubt, beginning with the Contract Year
commencing on June 1, 2021 and for all subsequent Contract Years, there shall be
no the Minimum Annual Quantity or MAQ.”

(c)        The definitions of “Assurance Formula,” “Issuing Bank,” “MAQ
Election,” “Minimum Annual Quantity Credit,” “Sanchez Credit Agreement,” and
“Third Party Agreements” in Section 1.1 of the Gathering Agreement and all
references to the same in the Gathering Agreement are deleted.

(d)        The following definitions are inserted in Section 1.1 of the
Gathering Agreement in appropriate alphabetic order:

““Renewal Term” has the meaning set forth in Section 9.1.”

““Second Amendment Agreement” means that certain Second Amendment Agreement,
dated as of [________], by and among the Parties hereto.”

(e)        Section 3.1(c) of the Gathering Agreement is deleted in its entirety
and replaced with the following:

“(c)      In accordance with the terms of Section 5.4, Producer will deliver to
Gatherer at the Receipt Points a cumulative minimum volume of Producer’s Gas in
each Contract Year ending on or before May 31, 2021, equal to no less than the
Minimum Annual Quantity.”

 

(f)        Section 3.3 of the Gathering Agreement is deleted in its entirety and
replaced with the following: “[Reserved].”

(g)        Section 5.4(a) of the Gathering Agreement is deleted and replaced
with the following:

“(a)      During each Contract Year ending on or before May 31, 2021, Producer
agrees to tender for delivery the Minimum Annual Quantity.”

(h)        Section 5.4(b) of the Gathering Agreement is deleted and replaced
with the following:

2

 

 

“(b)      Subject to Section 5.4(d), if, at the end of any Contract Year through
and including the Contract Year ending May 31, 2021, the total quantity of
Producer’s Gas delivered by Producer to the Receipt Points (excluding Comanche
Gas as defined in Exhibit G) is less than the Minimum Annual Quantity (such
difference, a “Shortfall”), then Producer shall pay a fee equal to the amount of
the Shortfall, multiplied by the MMBtu Conversion Factor for such Contract Year,
multiplied by the Gathering Fee per MMBtu (the “True-Up Fee”).  Any volumes
delivered by any Person to whom Producer has partially assigned (i) this
Agreement or (ii) any of its rights or obligations under this Agreement will be
considered in determining the Shortfall to the extent (x) Gatherer does not
expend capital to connect such volumes and (y) such volumes are gathered
pursuant to the terms of this Agreement and processed pursuant to the terms of
the applicable Processing Agreement, regardless of whether such Gas is
transported on the Gathering System or processed at the Raptor Plant.”

(i)         Section 5.4(d) of the Gathering Agreement is deleted in its entirety
and replaced with the following:

“(d) All rights and obligations with respect to the Minimum Annual Quantity
(including Producer’s obligation to pay any True-Up Fee in respect of any period
after May 31, 2021, but excluding Producer’s obligation to pay any True-Up Fee
for the period ending May 31, 2021), shall terminate at 11:59 p.m. CST on May
31, 2021.”

(j)         Section 5.4(e) of the Gathering Agreement is deleted in its entirety
and replaced with the following: “[Reserved].”

(k)        The Gathering Agreement is amended to add the following new Section
5.10:

“Section 5.10 Netting.  Gatherer is entitled to net amounts owed by it under the
Processing Agreement or this Agreement against amounts due to it under the
Processing Agreement or this Agreement.”

(l)         Section 9.1 of the Gathering Agreement is deleted in its entirety
and replaced with the following:

“Section 9.1    Term.  The period of time that this Agreement remains in effect
pursuant to this Section 9.1 is referred to as the “Term.” This Agreement will
commence on the Effective Date and remain in full force and effect until the
15th anniversary of April 1, 2018 (the “Primary Term”).  Producer may extend the
Term for up to four twelve-month periods (each, a “Renewal Term”) beyond the
Primary Term by providing at least 180 Days’ prior written notice to Gatherer
prior to the expiration of the Primary Term or the applicable Renewal Term.  If
Producer does not extend the Agreement in accordance with the preceding
sentence, the Agreement will

3

 

 

terminate at the end of the Primary Term or the applicable Renewal Term.  If
Producer elects all four Renewal Terms, then after the expiration of the fourth
Renewal Term, the Agreement will continue year-to-year thereafter, and either
Party may terminate the Agreement at the end of the fourth Renewal Term or other
then-current annual period by providing at least 180 Days’ prior written notice
to the other Party.  Notwithstanding anything to the contrary herein, this
Agreement will terminate automatically upon the termination of the Processing
Agreement.”

(m)       Section 12.3 of the Gathering Agreement is deleted in its entirety and
replaced with the following:

“Section 12.3  Credit Assurance.

(a) If, at any time at least one hundred eighty (180) days after the Second
Installment Date, (i) Gatherer has reasonable grounds for insecurity regarding
Producer’s performance or payment under this Agreement, (ii) Producer is in a
net payable position to Gatherer (after netting and aggregation of amounts owed
and due to each Party under both this Agreement and the Processing Agreement) in
an amount in excess of $1 million ($1,000,000) dollars or (iii) Producer is in
Default under this Agreement, then Gatherer may require Producer to post, within
three Business Days following written notice from Gatherer, credit assurance in
the form, selected by Producer, of an irrevocable letter of credit, cash
collateral, prepayment, or a combination of the foregoing, in an amount equal to
the Gathering Fees, Other Fuel Fees, and True-Up Fees (if any) that Gatherer
estimates in good faith will be due under this Agreement for the next sixty (60)
Days immediately following delivery of Gatherer’s notice.  Any letter of credit
shall be from a U.S. bank that satisfies the Issuer Rating Requirement.

(b) If all, or any portion, of the Cash Collateral is required to be returned to
Gatherer under the terms of the Settlement Agreement, then the terms of this
Section 12.3, as in effect immediately prior to the Effective Time, shall be
reinstated to the extent necessary to permit Gatherer to hold, retain and use
such Cash Collateral as credit support and/or to offset obligations of Producer,
all in accordance with the terms of this Agreement as they existed prior to the
Effective Time, provided that upon the entry of one or more Final Orders (as
defined in the Settlement Agreement) approving the rejection of all of the
Affirmative Covenant Agreements (as defined in the Settlement Agreement) or
otherwise finding that the Debtors do not remain bound by any material
obligations set forth in the Affirmative Covenant Agreements: (x) Gatherer shall
return to Producer any Cash Collateral previously returned to Gatherer under the
terms of the Settlement Agreement (without duplication of any similar obligation
under the Carnero Processing Agreement and to the extent the same was not
already used to offset obligations of Producer under the terms of this Agreement
or the

4

 

 

Carnero Processing Agreement) and (y) the terms of Section 12.3(a) above (and
not the terms of Section 12.3, as in effect immediately prior to the Effective
Time) shall once again apply for the remaining term of this Agreement.

(c) For purposes of this Agreement, the terms “Cash Collateral”, “Settlement
Agreement” and “Effective Time” have the meanings set forth in the Second
Amendment Agreement.”

(n)       The lead in to Section 17.3 of the Gathering Agreement is deleted in
its entirety and replaced with the following:

“Section 17.3  Confidentiality.  Except as disclosed in connection with the
filing and prosecution by Producer and its affiliates of a motion seeking
approval of their entry into and performance under the Settlement Agreement,
Gatherer and Producer, and their respective employees, agents, officers,
directors, Affiliates and attorneys, will keep confidential the terms of this
Agreement and all information provided hereunder (including any information
provided by Gatherer or Producer in connection with negotiation of the Second
Amendment Agreement).  It is understood and agreed upon that disclosure of the
terms of this Agreement or any information provided hereunder to any Person who
is not a Party to this Agreement could result in damage to non-disclosing Party
for which the disclosing Party may be held liable. However, either Party may
disclose the terms of this Agreement or information provided hereunder, without
prior permission of the other Party, to the following Persons
(“Representatives”) in the following circumstances:”

(o)       Section 14.1(e) of the Gathering Agreement is deleted in its entirety
and replaced with the following:

“(e)      if Producer or any of its Affiliates is in Default under any
Transaction Document.”

(p)        Section 16.1 of the Gathering Agreement is amended by deleting
Producer’s notice information in its entirety and replacing it with the
following:

Producer:                     Sanchez Energy Corporation

SN Catarina, LLC
1000 Main, Suite 2800
Houston, Texas 77002
Attn: Gregory Kopel
E-mail: gkopel@sanchezog.com

5

 

 

with a copy to

 

Morrison & Foerster, LLP

200 Clarendon Street, 20th Floor
Boston, MA 02116

Attn: Dennis Jenkins

Phone: (212) 468-8023

Facsimile: (212) 468-7900

Email: djenkins@mofo.com

(q)        Exhibit B of the Gathering Agreement is deleted in its entirety and
replaced by Annex I attached hereto.

(r)         A new Exhibit G, Fee Adjustment is added to the Gathering Agreement
in the form attached hereto as Annex IV.

(s)        On and after June 1, 2021, each reference in the Gathering Agreement
(as amended by this Agreement) to “Firm” (other than such references in the
Recitals, in Section 3.6, and in the definition of the terms “Carnero Processing
Agreement,” “Comanche Agreement,” “Interruptible,” and “Firm”) when speaking to
the priority or class of service, will be deemed to be replaced with the phrase
“Priority Interruptible.”

2.         Amendment of Processing Agreement.  The Processing Agreement is
hereby amended as follows:

(a)       The definition of “Fractionation Fee” in Section 1.1 of the Processing
Agreement is deleted in its entirety and replaced with the following:

“Fractionation Fee” means a fee for the fractionation of Producer’s Products
determined in accordance with Exhibit F, as in effect immediately prior to the
Effective Time, plus any Taxes (excluding ad valorem taxes with respect to
Processor’s plant and equipment and Taxes imposed on Processor with respect to
its net income).

(b)       The definition of “Insolvency Event” in Section 1.1 of the Processing
Agreement is amended to add the following sentence at the end thereof:

“For the avoidance of doubt, as used herein the term “Insolvency Event” shall
not include those cases before the United States Bankruptcy Court for the
Southern District of Texas styled In re Sanchez Energy Corporation, et al., Case
No. 19-34508 (MI) (Bankr. S.D. Tex.) (Jointly Administered).”

(c)       The definition of “Minimum Annual Quantity” in Section 1.1 of the
Processing Agreement is deleted in its entirety and replaced with the following:

““Minimum Annual Quantity” and “MAQ” mean, subject to adjustment in accordance
with the terms of this Agreement, for any Contract Year ending on or before May
31, 2021, a quantity of [***] MMcfd multiplied

6

 

 

by the number of Days in that Contract Year.  For the avoidance of doubt,
beginning with the Contract Year commencing on June 1, 2021 and for all
subsequent Contract Years, there shall be no the Minimum Annual Quantity or
MAQ.”

 

(d)      The definition of “Product Price” in Section 1.1 of the Processing
Agreement is deleted in its entirety and replaced with the following:

““Product Price” for any Month, means the Mont Belvieu monthly average of the
daily high and low prices (in cents per Gallon) for each Plant Product published
by the Oil Price Information Service (or if such index ceases to be published, a
successor index mutually agreed by the Parties) for such Month using: (i) the
“Non-TET” average for the propane, normal butane, iso-butane, and natural
gasoline products and (ii) the purity ethane price for the ethane component of
Plant Products, less, in each case, T&F Fee.”

 

(e)       The definitions of “Additional Processing Fee,” Additional Processing
True-Up Fee,” “Assurance Formula,” “Issuing Bank,” “Minimum Annual Quantity
Credit,” “Sanchez Credit Agreement,” and “Third Party Agreements” in Section 1.1
of the Processing Agreement and all references to the same in the Processing
Agreement are deleted.

(f)       The following definitions are inserted in Section 1.1 of the
Processing Agreement in appropriate alphabetic order:

““Effective Time” has the meaning ascribed to such term in the Second Amendment
Agreement.”

““Renewal Term” has the meaning set forth in Section 9.1.”

““Second Amendment Agreement” means that certain Second Amendment Agreement,
dated as of [______], by and among the Parties hereto.”

““T&F Fee” means a fee for the transportation and fractionation of Producer’s
Products determined in accordance with Exhibit F, plus Taxes (excluding ad
valorem taxes with respect to Processor’s plant and equipment and Taxes imposed
on Processor with respect to its net income).”

(g)       Section 3.1(b) of the Processing Agreement is deleted in its entirety
and replaced with the following:

“(b)      in accordance with the terms of Section 5.6, deliver to Processor at
the Receipt Point a cumulative minimum volume of Producer’s Gas in each Contract
Year ending on or before May 31, 2021, not less than the Minimum Annual
Quantity;”

 

(h)       Section 3.3 of the Processing Agreement is deleted in its entirety and
replaced with the following: “[Reserved].”

7

 

 

(i)        Section 5.2 of the Processing Agreement is deleted in its entirety
and replaced with the following: “[Reserved].”

(j)        Section 5.6(a) of the Processing Agreement is deleted in its entirety
and replaced with the following:

“(a)      During each Contract Year through and including the Contract Year
ending May 31, 2021, Producer agrees to tender for delivery at the Receipt Point
the Minimum Annual Quantity.  For purposes of calculating the True-Up Fee,
Producer will be deemed to have delivered to Processor the quantities of
Producer’s Gas (excluding Comanche Gas as defined in Exhibit G) delivered by
Producer to Gatherer at the Gathering Receipt Points or directly to the Receipt
Point (in each case to the extent such Gas is processed at the Plant or another
processing facility owned by Processor, any Affiliate of Processor, or Carnero
Processing JV).”

(k)       Section 5.6(b) of the Processing Agreement is deleted in its entirety
and replaced with the following:

“(b)      Subject to Section 5.6(d), if, at the end of any Contract Year through
and including the Contract Year ending May 31, 2021, the total quantity of
Producer’s Gas delivered by Producer to the Receipt Point (excluding Comanche
Gas as defined in Exhibit G) in such Contract Year is less than the Minimum
Annual Quantity (such difference, a “Shortfall”), then Producer shall pay a fee
equal to the amount of the Shortfall, multiplied by the MMBtu Conversion Factor
for such Contract Year, multiplied by the Processing Fee per MMBtu (such amount,
the “MAQ True-Up Fee” or “True-Up Fee”).  Any volumes delivered by any Person to
whom Producer has partially assigned (i) this Agreement or (ii) any of its
rights or obligations under this Agreement will only be considered in
determining the Shortfall if such volumes are processed pursuant to the terms of
this Agreement and gathered pursuant to the terms of the Gathering Agreement.”

(l)        Section 5.6(d) is deleted in its entirety and is replaced with the
following:

“(d)      All rights and obligations with respect to the Minimum Annual Quantity
(including Producer’s obligation to pay any MAQ True-Up Fee or True-Up Fee in
respect of any period after May 31, 2021, but excluding Producer’s obligation to
pay any MAQ True-Up Fee or True-Up Fee for the period ending May 31, 2021),
shall terminate at 11:59 p.m. CST on May 31, 2021.”

(m)      Section 5.6(e) of the Processing Agreement is deleted in its entirety
and replaced with the following: “[Reserved].”

(n)       The Processing Agreement is amended to add the following new Section
5.12:

“Section 5.12  Netting.  Processor is entitled to net amounts owed by it under
the Gathering Agreement or this Agreement against amounts due to it under the
Gathering Agreement or this Agreement.”

8

 

 

(o)       Section 9.1 of the Processing Agreement is deleted in its entirety and
replaced with the following:

“Section 9.1    Term.  The period of time that this Agreement remains in effect
pursuant to this Section 9.1 is referred to as the “Term”. This Agreement will
commence on the Effective Date and remain in full force and effect until the
15th anniversary of April 1, 2018 (the “Primary Term”).  Producer may extend the
Term for up to four twelve-month periods (each, a “Renewal Term”) beyond the
Primary Term by providing at least 180 Days’ prior written notice to Processor
prior to the expiration of the Primary Term or the Applicable Renewal Term.  If
Producer does not extend the Agreement in accordance with the preceding
sentence, the Agreement will terminate at the end of the Primary Term or the
applicable Renewal Term.  If Producer elects all four Renewal Terms, then after
the expiration of the fourth Renewal Term, the Agreement will continue
year-to-year thereafter, and either Party may terminate the Agreement at the end
of the fourth Renewal Term or other then-current annual period by providing at
least 180 Days’ prior written notice to the other Party.  Notwithstanding
anything to the contrary herein, this Agreement will terminate automatically
upon the termination of the Gathering Agreement.”

(p)       Section 12.3 of the Processing Agreement is deleted in its entirety
and replaced with the following:

“Section 12.3  Credit Assurance.

 

(a) If, at any time at least one hundred eighty (180) days after the Second
Installment Date: (i) Processor has reasonable grounds for insecurity regarding
Producer’s performance or payment under this Agreement, (ii) Producer is in a
net payable position to Processor (after netting and aggregation of amounts owed
and due to each Party under both this Agreement and the Gathering Agreement) in
an amount in excess of $1 million ($1,000,000) dollars or (iii) Producer is in
Default under this Agreement, then Processor may require Producer to post,
within three Business Days following written notice from Processor, credit
assurance in the form, selected by Producer, of an irrevocable letter of credit,
cash collateral, prepayment, or a combination of the foregoing, in an amount
equal to the Processing Fees, Treating Fees, Other Fuel Fees, and True-Up Fees
(if any) that Processor estimates in good faith will be due from Producer under
this Agreement for the next sixty (60) Days immediately following delivery of
Processor’s notice.  Any letter of credit shall be from a U.S. bank that
satisfies the Issuer Rating Requirement.

 

(b) If all, or any portion, of the Cash Collateral is required to be returned to
Processor under the terms of the Settlement Agreement, then the terms of this
Section 12.3, as in effect immediately prior to the Effective Time, shall be
reinstated to the extent necessary to permit Processor to hold, retain and use
such Cash Collateral as credit support and/or to offset obligations of

9

 

 

Producer, all in accordance with the terms of this Agreement as they existed
prior to the Effective Time, provided that upon the entry of one or more Final
Orders (as defined in the Settlement Agreement) approving the rejection of all
of the Affirmative Covenant Agreements (as defined in the Settlement Agreement)
or otherwise finding that the Debtors do not remain bound by any material
obligations set forth in the Affirmative Covenant Agreements: (x) Processor
shall return to Producer any Cash Collateral previously returned to Processor
under the terms of the Settlement Agreement (without duplication of any similar
obligation under the Gathering Agreement and to the extent the same was not
already used to offset obligations of Producer under the terms of this Agreement
or the Gathering Agreement) and (y) the terms of Section 12.3(a) above (and not
the terms of Section 12.3, as in effect immediately prior to the Effective Time)
shall once again apply for the remaining term of this Agreement.

(c) For purposes of this Agreement, the terms “Cash Collateral”, “Settlement
Agreement” and “Effective Time” have the meanings set forth in the Second
Amendment Agreement.”

 

(q)       Section 14.1(e) of the Processing Agreement is deleted in its entirety
and replaced with the following:

“(e)      if Producer or any of its Affiliates is in Default under any
Transaction Document.”

(r)       Section 16.1 of the Processing Agreement is amended by deleting
Producer’s notice information in its entirety and replacing it with the
following:

Producer:                     Sanchez Energy Corporation

SN Catarina, LLC
1000 Main, Suite 2800
Houston, Texas 77002
Attn: Gregory Kopel
E-mail: gkopel@sanchezog.com

 

with a copy to

 

Morrison & Foerster, LLP

200 Clarendon Street, 20th Floor
Boston, MA 02116

Attn: Dennis Jenkins

Phone: (212) 468-8023

Facsimile: (212) 468-7900

Email: djenkins@mofo.com

10

 

 

(s)       Section 17.3 of the Processing Agreement is deleted in its entirety
and replaced with the following:

“Section 17.3  Mutual Waiver of Certain Remedies.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE
OTHER PARTY, ANY SUCCESSORS IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE OF THIS
AGREEMENT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE
DAMAGES, OR FOR LOST OR DELAYED PRODUCTION OR LOST BUSINESS OPPORTUNITY, OR FOR
BUSINESS LOSSES OR FOR LOST PROFITS OF THE OTHER PARTY ARISING OUT OF THIS
AGREEMENT OR ANY BREACH HEREOF OTHER THAN SUCH DAMAGES OR LOSSES PAID OR OWED TO
A PERSON NOT A PARTY TO THIS AGREEMENT (OTHER THAN AN AFFILIATE OF A PARTY).
THIS SECTION 17.3 WILL APPLY NOTWITHSTANDING THE SOLE, JOINT OR CONCURRENT
NEGLIGENCE, GROSS NEGLIGENCE OR OTHER FAULT OR RESPONSIBILITY OF THE PARTY WHOSE
LIABILITY IS WAIVED BY THIS PROVISION, OR ANY OTHER EVENT OR CONDITION, WHETHER
ANTICIPATED OR UNANTICIPATED, AND REGARDLESS OF WHETHER PRE-EXISTING PRIOR TO
THE EFFECTIVE DATE.”

(t)       The lead in to Section 17.4 of the Processing Agreement is deleted in
its entirety and replaced with the following:

“Section 17.4   Confidentiality.  Except as disclosed in connection with the
filing and prosecution by Producer and its Affiliates of a motion seeking
approval of their entry into and performance under the Settlement Agreement,
Processor and Producer, and their respective employees, agents, officers,
directors, Affiliates and attorneys, will keep confidential the terms of this
Agreement and all information provided hereunder (including any information
provided by Processor or Producer in connection with negotiation of the Second
Amendment Agreement).  It is understood and agreed upon that disclosure of the
terms of this Agreement or any information provided hereunder to any Person who
is not a Party to this Agreement could result in damage to non-disclosing Party
for which the disclosing Party may be held liable. However, either Party may
disclose the terms of this Agreement or information provided hereunder, without
prior permission of the other Party, to the following Persons
(“Representatives”) in the following circumstances:”

(u)       Exhibit B of the Processing Agreement is deleted in its entirety and
replaced by Annex II attached hereto.

(v)       Exhibit E of the Processing Agreement is deleted in its entirety and
replaced with the following: “[Reserved].”

(w)      Exhibit F of the Processing Agreement is deleted in its entirety and
replaced by Annex III attached hereto.

11

 

 

(x)       A new Exhibit G, Fee Adjustment is added to the Processing Agreement
in the form attached hereto as Annex IV.

(y)       On and after June 1, 2021, each reference in the Processing Agreement
(as amended by this Agreement) to “Firm” (other than such references in the
Recitals, Sections 3.5(a) & 3.6, and the definitions of the terms “Comanche
Agreement,” “Firm,” “Interruptible,” and “Priority Interruptible”) when speaking
to the priority or class of service, will be deemed to be replaced with the
phrase “Priority Interruptible.”

3.         Effectiveness. All matters contemplated in this Agreement will become
effective, for all purposes as of the “Effective Time”, which shall mean the
filing of the Closing Notice on the Closing Date under the Settlement Agreement
and, if the Settlement Agreement is terminated without Closing occurring, this
Agreement shall automatically terminate at the same time and be of no further
force or effect.  For purposes hereof the “Closing”, “Closing Date”, “Closing,”
 “Closing Notice,” and “Second Installment Date” have the meanings set forth in
the Settlement Agreement.

4.         Release of Cash Collateral.  At the time of execution of this
Agreement, Carnero holds an aggregate amount of cash collateral totaling
$17,078,144.00 (the “Cash Collateral”) in respect of drawing on letters of
credit previously posted by Producer under the Gathering Agreement and
Processing Agreement.  Carnero has agreed to release or retain the Cash
Collateral at the times and on the terms set forth in the Settlement Agreement.

5.         Effect on Transaction Documents.  Except as amended herein, the
Gathering Agreement and the Processing Agreement remain in full force and
effect.  The Parties acknowledge and agree that this Agreement shall in no
manner impair or affect the validity or enforceability of the Gathering
Agreement or the Processing Agreement.

6.         Counterparts.  This Agreement may be executed in any number of
counterparts (including by .pdf or other electronic means), each of which shall
be an original but all of which together shall constitute one instrument.  Each
counterpart may consist of a number of copies hereof, each signed by less than
all, but together signed by all, of the Parties.

[Signature Page Follows]

 

 

 

12

 

The Parties have executed this Agreement as of the day and year first above
written.

 

 

CARNERO G&P LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

SANCHEZ ENERGY CORPORATION

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

SN CATARINA, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ANNEX I

 

EXHIBIT B

Attached to and made a part of the Firm Gas Gathering Agreement

among Carnero G&P LLC, Sanchez Energy Corporation

and SN Catarina, LLC

dated October 2, 2015

 

Fees

 

Gathering Fee (based on the aggregate quantity of Producer's Gas, stated in
MMBtu, received by Gatherer at the Receipt Points)

 

$[***] per MMBtu, escalated on June 1, 2021 and each June 1st thereafter in
accordance with Section 5.6.

The Gathering Fee is also subject to adjustment as set forth on Exhibit G to
this Agreement.

 

 

 

ANNEX II

EXHIBIT B

Attached to and made a part of the Firm Gas Processing Agreement

among Carnero G&P LLC, Sanchez Energy Corporation and

SN Catarina, LLC

dated October 2, 2015

 

Fees

 

1.   Processing Fee (based, for any period, on (a) Gathering Receipt Point
Quantity multiplied by (b) a fraction, the numerator of which is Producer’s
aggregate nominations (as adjusted) to Receipt Points (as defined herein) under
the Gathering Agreement and the denominator of which is Producer’s aggregate
nominations (as adjusted) under the Gathering Agreement):

The Processing Fee is $[***] per MMBtu, with a [***]% annual escalation of the
then-current fee occurring on June 1, 2021 and each June 1st thereafter.  The
Processing Fee is also subject to adjustment as set forth on Exhibit G to this
Agreement.

2. [Reserved].

3.  Treating Fee (based, for any period, on (a) CO2 content and Mcf at the
Gathering Receipt Points and (b) (i) Gathering Receipt Point Quantity multiplied
by (ii) a fraction, the numerator of which is Producer’s aggregate nominations
(as adjusted) to Receipt Points (as defined herein) under the Gathering
Agreement and the denominator of which is Producer’s aggregate nominations (as
adjusted) under the Gathering Agreement):

If CO2 content is 2.0% or less, the Treating Fee will be $0.00.

If CO2 content is greater than 2.0%, the Parties will mutually agree on a
Treating Fee.

 

 

ANNEX III

 

EXHIBIT F

Attached to and made a part of the Firm Gas Processing Agreement

among Carnero G&P LLC, Sanchez Energy Corporation and

SN Catarina, LLC

dated October 2, 2015

 

Transportation and Fractionation Fee

 

T&F Fee = $[***] + [1.0 x (CPIU2/CPIU1)] + ([***] x Gas Price) + ([***] x
Electricity Price).  The T&F Fee is subject to adjustment as set forth on
Exhibit G to this Agreement.

Where:

“CPIU2” is the most recently published Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average for All Items, (1982-84=100) as
published by the Bureau of Labor or any successor agency thereto (or any
replacement thereof mutually agreeable to the Parties if it is no longer
published).

“CPIU1” is the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S.
City Average for All Items, (1982-84=100) as published by the Bureau of Labor or
any successor agency thereto (or any replacement thereof mutually agreeable to
the Parties if it is no longer published), for the Month preceding the
In-Service Date.

For purposes of calculating the above fees, the ratio of CPIU2/CPIU1 shall never
be less than 1.0.

 

“Gas Price” will equal to the sum of (i) the Houston Ship Channel-Index (HSC) as
published in the first issue of such Month of S&P Global Platts’ GAS DAILY PRICE
GUIDE (or any replacement thereof mutually agreeable to the Parties if it is no
longer published), expressed in $/MMBtu, plus (ii) a market differential
expressed in $/MMBtu, which is currently $0.[***]/MMBtu.  Producer acknowledges
that the market differential represents the fractionator’s best approximation of
its costs of all natural gas fuel being delivered to the fractionator in
relation to the HSC Index, and that Processor may request to change the market
differential as utilized in determining the T&F Fee as warranted by market
conditions.

 

“Electricity Price” is the average cost of purchased electricity (expressed in
dollars/kWh) at the fractionator for the Month prior to the Month in which
Producer’s Plant Products were delivered to the fractionator.

 

 

 

ANNEX IV

 

EXHIBIT G

 

Attached to and made a part of the Firm Gas Gathering Agreement

among Carnero G&P LLC, Sanchez Energy Corporation and

SN Catarina, LLC

dated October 2, 2015 (the “Gathering Agreement”)

 

and

 

Attached to and made a part of the Firm Gas Processing Agreement

among Carnero G&P LLC, Sanchez Energy Corporation and

SN Catarina, LLC

dated October 2, 2015 (the “Processing Agreement”)

 

Fee Adjustment

 

The Gathering Fee set forth in the Gathering Agreement and the Processing Fee
and the T&F Fee set forth in the Processing Agreement are being discounted as of
the Effective Time for and in consideration of the delivery of additional
volumes to Carnero G&P LLC (“Carnero”) under the Comanche Agreement.  It is
anticipated that, as a result of the rejection in their bankruptcy proceedings
of the “Brasada Processing Agreement,” the “EFG Processing Agreement,” the “ETC
Processing Agreement,” or the “Other Carnero G&P Rejection Agreements” (each as
defined in the Settlement Agreement and as such agreements relate to the
Comanche Agreement, being the “Existing Commitments” for all purposes of this
Exhibit) by Producer1 or its Affiliates, all gas from all acreage that is, as of
the Second Amendment Execution Date (a) dedicated to Carnero or (b) excluded
from the dedication to Carnero because it is subject to Existing Commitments, in
each case of clause (a) and (b), under the Comanche Agreement (including all
ratifications and assumptions thereof as of the Second Amendment Execution Date,
reflecting a 100% working interest) (collectively, the “Comanche Gas”) will be:
(i) released from the Existing Commitments and (ii) delivered to Carnero under
the Comanche Agreement for the remaining term of the Comanche Agreement.

 

After the Effective Time (as defined in the Second Amendment), in the event
that: (a) any Comanche Gas is no longer being delivered under the Comanche
Agreement; or (b) delivery of any amounts of Comanche Gas referenced in clause
(a) of this paragraph is restored, then, and in each such event, the Gathering
Fee, the Processing Fee and the T&F Fee shall automatically be adjusted only on
the following terms and conditions.

 

1.   In the event, for any reason, Comanche Gas is not delivered to Carnero
under the Comanche Agreement for gathering and processing by Carnero, the
Gathering Fee, the Processing Fee and the T&F Fee shall be increased such that
Carnero is kept economically whole based on the following determinations:

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

1         Capitalized terms used but not otherwise defined herein have the
meanings ascribed to such terms in the Processing Agreement or Gathering
Agreement to which this Exhibit is attached.

 

 

a.    Carnero shall in good faith estimate, based on the best information
available, including the most recently received PDP forecasts inclusive of the
volumes of gas which are no longer being delivered to Carnero, the Net Margin
Difference attributable to such undelivered volumes beginning with the first Day
such volumes are not delivered to Carnero during the first calendar quarter such
Gas is not delivered to Carnero (the “Adjustment Quarter”) and continuing for
each remaining calendar quarter for the term of the Comanche Agreement;

 

b.   Producer will provide (or cause its Affiliates to provide) all necessary
information with respect to production of Comanche Gas, including delivery on a
quarterly basis of a PDP reserve and forecasts showing quarterly volumes for the
Comanche Gas for the remainder of the term, and other forecast and operating
information reasonably requested by Carnero to develop its estimated forecasts
of the Net Margin Difference under the Comanche Agreement for the remaining term
thereof;

 

c.    Each quarter, based on Carnero’s forecasted Net Margin Difference, Carnero
will estimate, in good faith, and implement an increased Gathering Fee,
Processing Fee and T&F Fee under the Gathering Agreement or Processing
Agreement, as applicable (which may vary over the remaining term of the Comanche
Agreement based on the forecast for each calendar quarter), as are necessary to
offset any forecasted Net Margin Difference and keep Carnero economically whole,
on a quarterly basis, throughout the term of the Comanche Agreement, with such
fees being increased, beginning on the first day such volumes of Comanche Gas
are not delivered to Carnero during the Adjustment Quarter and continuing in
effect until the fees are again adjusted under the terms of this paragraph (c)
or paragraphs (d) or 2 below.  The proportionate allocation, as between the
Gathering Fee, Processing Fee and T&F Fee shall be based on the relative
proportion each such fee bears to the sum of all such fees on the date such
adjustment is being made and in no event will any of the adjusted fees exceed
the Original Fees, as they would have been in effect on the date the adjusted
fees are applied.

 

For purposes of this Exhibit G:

 

(i)      “Comanche Agreement” means the Comanche Agreement, as in effect on the
Second Amendment Execution Date, together with all ratifications and assumptions
thereof.

(ii)     “Gross Margin” for any period, shall mean the then-current fees under
the Comanche Agreement during such period,  with respect to each quarter during
the relevant period, multiplied by the volume (on an MMBtu or per gallon basis,
as applicable), projected by Carnero in good faith for such period, both before
and after the decrease in volumes of Comanche Gas referenced herein and based on
the best information available, as described in paragraphs 1(a) and 1(b) above
(the difference in such volume forecasts, being the “Forecasted Volume
Difference”).

 

 

(iii)    “Net Margin Difference” for any period, means the reduction in the
Gross Margin attributed to the Forecasted Volume Difference for such period less
the Variable Costs associated with the Forecasted Volume Difference.

(iv)    “Original Fees” shall mean the Gathering Fee, the Processing Fee and,
with respect to the T&F Fee, the Transportation Fee and Fractionation Fee, as in
effect immediately prior to the Effective Time and, in each case, subject to
escalation both prior to and after the Effective Time without giving effect to
the Second Amendment.

(v)     “Second Amendment” shall mean the Second Amendment Agreement to the
Gathering Agreement and the Processing Agreement, executed on the Second
Amendment Execution Date.

(vi)    “Second Amendment Execution Date” shall mean [______].

(vii)   “Settlement Agreement” has the meaning ascribed to such term in the
Second Amendment.

(viii)  “Variable Costs” means, with respect to any period, the variable
operating costs for gathering, processing, transportation, and fractionation
services that would have been incurred by Carnero with respect to the Forecasted
Volume Difference during such period if the Forecasted Volume Difference had
actually been delivered to Carnero under the Comanche Agreement, which Carnero
will estimate in good faith, taking into account reasonable comments from
Producer designees.

d.   If, in the event any working interest owner delivering Comanche Gas (other
than Producer or its Affiliates) is subject to a bankruptcy court order in its
bankruptcy (each a “Limited Exception”) and, as a result thereof, any Comanche
Gas ceases being or is otherwise not delivered under the Comanche Agreement, in
lieu of the methodology reflected in paragraph (c) above, Producer and Carnero
shall share in the Net Margin Difference, as forecast for each calendar quarter
for the remaining term of the Comanche Agreement, attributable to the resulting
loss of volumes from the Limited Exception in the following fashion:

 

(i)         Carnero’s Net Margin Difference forecasts, with and without the
impact (and resulting loss of volumes) of the Limited Exception, shall be
compared to determine on a percentage basis, the Net Margin Difference that
Carnero will experience for each calendar quarter for the remaining term of the
Comanche Agreement;

 

(ii)       The most recent adjusted Gathering Fee, Processing Fee and T&F Fee
(collectively, the “SN Fees”), as in effect on the occurrence of the Limited
Exception shall be forecast and compared, on a quarterly basis throughout the
remaining term of the Comanche Agreement, against the Original Fees that

 

 

would have been in effect during each such calendar quarter for the remaining
term of the Comanche Agreement.  The difference between “Original Fees” and the
“SN Fees” for each calendar quarter shall be the “Rate Discount” for each such
calendar quarter.

 

(iii)      Following the determination made under clause (ii) above, the Rate
Discount for each calendar quarter shall be reduced by the percentage determined
under clause (i) above (after adjustment, the “Adjusted Rate Discount”) and the
Gathering Fee, the Processing Fee and the T&F Fee shall be increased
proportionately such that the Rate Discount equals the Adjusted Rate Discount,
for the remaining term of the Comanche Agreement (subject to subsequent
adjustment under paragraph (c), this paragraph (d) or paragraph 2); provided,
however, that the Gathering Fee, Processing Fee and T&F Fee may not be increased
above the amount of the Original Fee as would have been in effect at such time.

 

(iv)       For avoidance of doubt the terms of paragraphs (a) and (b) shall
apply with respect to forecasts and determinations made with respect to a
Limited Exception.

 

e.    The following De Minimis Exclusions shall not be considered for purposes
of making adjustments as described in paragraphs (c) and (d):  (i) temporary
loss of gas delivery for 30 days or less, (ii) loss of gas due to mechanical
loss of wells or well productivity and (iii) any temporary disruption in
delivery to Carnero of 30 days or less caused by interruptions in service  by
other service providers upstream of Carnero; provided, however, that loss of
acreage dedication whether such acreage was dedicated by Producer’s Affiliates
or any other working interest owner (or Gas volumes related thereto) will not be
excluded from such determinations, to the extent Comanche Gas is actually not
delivered.

 

2.   In the event Comanche Gas resulting in an adjustment under paragraph 1(c)
or 1(d) is later restored for any reason, including but not limited to drilling,
a comparable adjustment to the Gathering Fee, Processing Fee, and T&F Fee shall
be made to that in paragraph 1(c) or 1(d), as applicable, but in favor of
Producer; provided, for avoidance of doubt, that the Gathering Fee, Processing
Fee and T&F Fee may not be decreased below the amount of the then-current SN
Fees as escalated.

 

3.   The Parties agree to negotiate amendments to each of the Gathering
Agreement and Processing Agreement, in good faith, and to document each
adjustment to the fees contemplated in this Exhibit G.

 

4.   For purposes of clarification, (a) nothing in this Agreement, this Exhibit,
or the Settlement Agreement is a guaranty of delivery of any specific volume of
Comanche Gas and (b) notwithstanding anything in this Agreement, this Exhibit,
or the Settlement Agreement to the contrary, the upward adjustments set forth in
this Exhibit to the Gathering Fee, Processing Fee and T&F Fee under the
Gathering Agreement or Processing Agreement, as

 

 

applicable, shall be made only upon a decrease in the working interests of
Comanche Gas being delivered to Carnero under the Comanche Agreement or loss of
dedication under the Comanche Agreement or any ratifications and assumptions
thereof; provided that any decrease in the volume of Comanche Gas being
delivered to Carnero as a result of a loss of acreage dedication or loss of a
working interest dedication from a working interest owner delivering Comanche
Gas (other than Producer or its Affiliates) due to a bankruptcy court ruling in
such working interest owner’s bankruptcy proceeding shall result in an
adjustment in accordance with paragraph 1(d) above.

 

 

Exhibit D

 

New Catarina-Seco Agreement

 

 

 

FIRM TRANSPORTATION SERVICE AGREEMENT

THIS FIRM TRANSPORTATION SERVICE AGREEMENT (this “Agreement”) is dated the
Approval Date but effective as of the Closing Date (the “Effective Date”) by and
between SECO PIPELINE, LLC, a Delaware limited liability company
(“Transporter”), and SN CATARINA, LLC, a Delaware limited liability company
(“Shipper”). Transporter and Shipper may be referred to in this Agreement
individually as a “Party” and collectively as the “Parties.”  Capitalized terms
used in the Agreement but not defined herein shall have the meanings given to
them in Exhibit A.

 

WHEREAS, Transporter has pipeline facilities located wholly within the State of
Texas, and is willing to receive and transport certain quantities of natural gas
on a Firm basis and/or Interruptible basis, as applicable, on Transporter’s Seco
Pipeline system located in LaSalle and Webb Counties, Texas, as further
described on Exhibit B (“Transporter’s System”); and

 

WHEREAS, Transporter and Shipper desire to enter into an agreement providing for
the transportation by Transporter of certain quantities of processed natural gas
from Receipt Point(s) located in Texas to Delivery Point(s) located in Texas;
and

 

WHEREAS, Transporter is agreeable to receiving, transporting and delivering such
processed natural gas delivered by Shipper in accordance with the terms and
conditions hereinafter set forth; and

 

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
Parties hereto mutually covenant and agree as follows:

 

ARTICLE I

SHIPPER’S GAS

1.1       Shipper’s Gas.

(a)        Subject to the terms and conditions of this Agreement, Shipper hereby
commits and dedicates to Transporter for transportation on Transporter’s System
all volumes of Residue Gas owned or Controlled by Shipper or its Affiliates
(other than SN EF Maverick, LLC) that are produced from natural gas delivered to
Shipper under the Catarina Gathering Agreement at the tailgate of the Raptor
Plant and specifically excluding gas that is processed at any of the Carnero
G&P, LLC processing plants in Bee County, Texas (the “Dedicated Gas”).  Shipper
shall deliver, or cause to be delivered, all Dedicated Gas to Transporter at the
Receipt Point(s). Shipper commits and dedicates to Transporter all of Shipper’s
and its Affiliates’ (other than SN EF Maverick, LLC’s) right, title, and
interests in and to the Dedicated Acreage, to support Shipper’s performance of
its obligations provided for in this Section 1.1(a).

(b)        In addition to the Dedicated Gas, Shipper hereby agrees to use
commercially reasonable efforts to deliver or cause to be delivered, hereunder
to Transporter for transportation on Transporter’s System under this Agreement,
all volumes of Residue Gas that are owned or Controlled by Shipper or its
Affiliates (other than SN EF Maverick, LLC) that are not Dedicated

 

 

 

 

Gas but are received by Shipper or its Affiliates (other than SN EF Maverick,
LLC) at the tailgate of the Raptor Plant  (the “Additional Gas”, and together
with the Dedicated Gas, “Shipper’s Gas”).

1.2       Receipt.

(a)        Subject to the terms and conditions of this Agreement, Transporter
agrees to accept and receive, up to one hundred percent (100%) of the quantity
of Shipper’s Gas tendered by Shipper or its designee each Day during the Term of
this Agreement at the Receipt Point(s), not to exceed the greater of (i) the
maximum Residue Gas capacity at the Raptor Plant or (ii) two hundred (200) MMBtu
per Day (such greater amount, the “Maximum Daily Quantity”), and to transport
for Shipper such quantity of Shipper’s Gas on Transporter’s System on a Firm
basis.

(b)        Transporter agrees to use commercially reasonable efforts to, accept
and receive, Shipper’s Gas tendered by Shipper or its designee in excess of the
Maximum Daily Quantity, each Day during the Term of this Agreement at the
Receipt Point(s), and to transport for Shipper such quantity of Shipper’s Gas on
Transporter’s System on an Interruptible basis.

(c)        Transporter’s acceptance and receipt of Shipper’s Gas is expressly
subject to the operational considerations and capacity constraints as set forth
in Article VIII of this Agreement, and such Gas meeting the quality
specifications as set forth in Article IV of Exhibit A.

1.3       Delivery.

(a)        During the Term of this Agreement, Transporter shall deliver and
Shipper shall accept or cause to be accepted at the Delivery Point(s), a
quantity of natural gas equivalent, on a MMBtu basis, to the sum of the
quantities of Shipper’s Gas accepted and received by Transporter at the Receipt
Point(s) for transportation hereunder in accordance with Section 1.1,  less
Shipper’s pro-rata share of actual fuel, including actual fuel equivalents, and
losses incurred on Transporter’s System (“Shipper’s FL&U”). Shipper’s FL&U shall
not exceed one percent (1%) of the volume of Residue Gas received by Transporter
at the Receipt Point(s) each Month.

(b)        Notwithstanding anything to the contrary in this Agreement,
Transporter has the right to commingle Shipper’s Residue Gas with other Gas or
Residue Gas in Transporter’s System and to deliver Residue Gas at the Delivery
Point(s) that is of the same or similar quality as that received at the Receipt
Point(s), and the right to cease taking deliveries of Residue Gas so long as
Transporter, in its sole opinion, determines that due to operations of Shipper,
its agents, representatives, or contractors, a dangerous or unsafe condition
exists. Upon Transporter’s giving notice of any such cessation and continuing
until such condition is remedied to Transporter’s satisfaction, Transporter
shall not be obligated to accept delivery of Shipper’s Gas.

1.4       Covenant Running with the Land; Assignment of Interests.  So long as
this Agreement is in effect, the dedication and commitment with respect to the
Dedicated Gas made by Shipper under this Agreement, along with the provisions of
Section 1.1(a), is a covenant running with the land. This Agreement, along with
all renewals, extensions, amendments, and supplements, and all rights, title and
interests contained herein, shall be binding upon and inure to the benefit of
the Parties, and their successors and permitted assigns. Any assignment, sale,
transfer or conveyance by Shipper or its Affiliates (other than SN EF Maverick,
LLC) of any interests in the Dedicated Acreage shall be subject to the
dedication under this Agreement and Shipper shall

2

 

require that the assignee of any such interests agree in writing to expressly
ratify this Agreement and assume and discharge the duties and obligations of
Shipper under this Agreement with respect to such interests acquired from and
assigned by Shipper or its Affiliates (other than SN EF Maverick, LLC); and such
assigned interests shall be Dedicated Acreage. Any Person which shall succeed by
purchase, merger or consolidation with Shipper or Transporter and their
respective successors in interest shall be subject to the obligations of its
predecessor under this Agreement.

1.5       Memorandum of Agreement.  Contemporaneously with the execution of this
Agreement and from time to time during the Term, the Parties will execute,
acknowledge, deliver and record a “short form” memorandum of this Agreement
substantially in the form of Exhibit D (“Memorandum of Agreement”) identifying
the Dedicated Acreage, which Shipper will file of record in the real property
records of each county that contains Dedicated Acreage. Notwithstanding the
foregoing, Transporter shall also have the right to file and record such
memorandum of this Agreement and any necessary supporting documents or
instruments in the real property records of each county that contains Dedicated
Acreage.

ARTICLE II

TRANSPORTATION SERVICES

2.1       Receipt Point(s).  The receipt point(s) at which Shipper shall tender
Residue Gas to Transporter for transportation is described in Exhibit B to this
Agreement (the “Receipt Point(s)”). The delivery pressure and other pertinent
factors applicable to the Receipt Point(s) are set forth in Exhibit B.

2.2       Delivery Point(s).  The delivery point(s) at which Transporter shall
deliver hereunder is described in Exhibit B (the “Delivery Point(s)”). The
delivery pressure and other pertinent factors applicable to the Delivery
Point(s) are set forth in Exhibit B.

2.3       Title.  Except as expressly provided for in this Agreement, title to
Shipper’s Gas delivered to Transporter under this Agreement will remain with
Shipper or Shipper’s customers at all times.

2.4       Substances Recovered in Pipeline.  All substances, whether or not of
commercial value, including all liquid hydrocarbons of whatever nature, except
substances expressly reserved for Shipper, that Transporter recovers in the
course of transporting the quantities of Shipper’s Gas tendered hereunder will
be Transporter’s sole property and Transporter will not be obligated to account
to Shipper for any value, whether or not realized by Transporter, that may
attach, or be said to attach, to such substances.

2.5       Residue Gas.  All references to Gas with respect to Transporter’s
obligation to receive, transport, and/or deliver Gas hereunder shall be read as
references to Residue Gas.

3

 

ARTICLE III

FEE(S)

3.1       Fee(s).  Upon the commencement of service hereunder, Shipper shall pay
Transporter, for the transportation services rendered hereunder from the Receipt
Point(s) to the Delivery Point(s), the fee(s) set forth in Exhibit B.

3.2       Annual Rate Escalation.  Effective on each anniversary of the
Effective Date through the Term of this Agreement, the Transportation Fee set
forth in Exhibit B and all other fees for services by Transporter in accordance
with this Agreement shall be adjusted by the product of the rate then in effect
multiplied by the percentage increase (if any) between the Consumer Price Index
(All Urban Consumers (CPI-U); U.S. City Average; All items, 1982-1984 reference
base), issued by the United States Department of Labor, Bureau of Labor
Statistics (“BLS”) (the “CPI”) for January of the current year and the CPI for
January of the immediately preceding year; provided that in no event shall the
fees hereunder be increased by more than 3% from the fees in effect for the
immediately preceding year, or decreased.  If the 1982-1984 reference base is no
longer used as the standard reference base by BLS, then the standard reference
base shall be that established from time to time by BLS as the replacement for
the CPI.

ARTICLE IV

REGULATORY REQUIREMENTS

4.1       Regulatory Requirements.  The transportation arrangements provided for
in this Agreement are subject to Texas Railroad Commission regulations, as
amended from time to time.

ARTICLE V

TERM; TERMINATION

5.1       Term.  This Agreement will become effective as of the Effective Date,
and will remain in full force and effect until March 31, 2033 (such period,
“Primary Term”). Unless otherwise terminated as provided in Section 5.2 of this
Agreement or Section 9.2 of Exhibit A, upon the expiration of the Primary Term,
this Agreement shall renew automatically for additional terms of one (1) year
each thereafter (each, a “Renewal Term”) on the existing terms (including the
then-existing rates), unless either Party elects to terminate this Agreement by
written notice to the other Party no later than the date which is one hundred
eighty (180) Days prior to the expiration of the Primary Term or any Renewal
Term, as applicable.  The period of time that this Agreement remains in effect
pursuant to this Section 5.1 is referred to as the “Term”.

5.2       Early Terminations.

(a)        If a Party is in Default, the non-defaulting Party may, in addition
and without prejudice to any other remedies such non-defaulting Party may have
under this Agreement or at law or in equity, suspend all performance under this
Agreement or terminate this Agreement, in each case upon ten (10) Days’ prior
written notice.

(b)        The following shall constitute events of “Default” under this
Agreement:

4

 

(i)         if a Party fails to pay any amount due to the other Party when the
same is due, and such Party’s account remains delinquent beyond a twenty (20)
Day period after written notice of failure to pay has been delivered to such
Party, exclusive of any amounts subject to a good faith dispute pursuant to
Section 5.3 of Exhibit A;

(ii)        if a Party experiences an Insolvency Event; or

(iii)       if such Party is in material breach of this Agreement (other than
for failure to pay amounts due, which is addressed in clause (i) above), and
that breach is not cured within forty-five (45) Days after receipt by such Party
of written notice from the other Party asserting such breach.

5.3       Effect of Termination.  Termination of this Agreement will not (i)
relieve either Party of its respective obligation to correct any volume
imbalances hereunder occurring prior to the termination, or (ii) relieve either
Party of the obligation, if any, to pay monies due prior to or as of the
termination of this Agreement to the other Party.

ARTICLE VI

NOTICES

6.1       Notices.  Any formal notice, request or demand that either Party gives
to the other respecting this Agreement must be in writing and must be mailed by
registered or certified mail or delivered in hand to the following address of
the other Party or to such other address as a Party shall designate by formal
written notice.

 

If to Shipper:

SN Catarina, LLC

Attn: General Counsel

1000 Main Street, Suite 2800

Houston, Texas 77002

Phone: [__________]

Facsimile: [__________]

If to Transporter:

Seco Pipeline, LLC [Attn: __________]

[To be added]

[]

Houston, Texas [-]

Phone: [__________]

Facsimile: [__________]

 

6.2       Routine and Operating Communications.  Routine communications should
be provided by electronic means, whether via email or facsimile. Operating
communications by telephone, facsimile or other mutually agreeable means will be
considered as duly delivered with subsequent written confirmation.

ARTICLE VII

NOMINATIONS

7.1       Nominations.  Shipper shall submit to Transporter nominations for
transportation service hereunder at least five (5) days prior to the beginning
of each Month. Nominations shall detail the specific Receipt Point(s) and
Delivery Point(s) for that volume. Shipper may submit any daily changes to such
nomination by 10:00 a.m. Central Time on the Day immediately before the Day on
which Shipper’s Gas is desired to flow from time to time.

5

 

7.2       Imbalances.  Shipper is responsible for Monthly nominations into
pipelines downstream of the Delivery Point(s); and for reconciliation of daily
and Monthly gas imbalances with such downstream pipelines. Shipper shall use
reasonable efforts to minimize these imbalances and agrees to make nomination
adjustments to both achieve a minimal imbalance at the end of each Month and
resolve any existing imbalances in the following Month or as soon as
practicable.

7.3       Nomination Changes.  Transporter or Shipper shall notify the other
Party (except if due to an event of Force Majeure) by written notice (which can
be by fax or email) and make allowable intra-day changes consistent with
industry standards.

ARTICLE VIII

OTHER OPERATING PROVISIONS

8.1       Disruptions to Firm Services.  Shipper’s Gas entitled to Firm services
under this Agreement may be, from time to time, interrupted, curtailed, or
disrupted (herein, a “Disruption”) to the extent reasonably necessary (as
determined by Transporter acting in its reasonable discretion) for any of the
following reasons: (i) safe operation of the Transporter’s System, (ii) an
ongoing event of Force Majeure affecting Transporter, (iii) subject to the
Transporter’s compliance with the other terms and conditions of this Agreement,
the inability of a Receipt Point to receive Shipper’s Gas, and (iv) upon
reasonable advance notice of at least thirty (30) days’ to Shipper for scheduled
maintenance, expansions or modifications of Transporter’s System from time to
time, provided that with respect to item (iv) Transporter will reasonably
cooperate with Shipper to minimize adverse effects due to such work.  In the
event of a Disruption, Transporter will give Shipper prompt notice with
reasonable detail of the reason for the Disruption and a good faith estimate of
the duration and extent of such Disruption.  In such event Transporter shall not
be in breach or default of its obligations under this Agreement and shall have
no liability to Shipper in connection with or resulting from any such
curtailment.  When Transporter reestablishes the Firm service as to such volumes
of Shipper’s Gas interrupted or curtailed by a Disruption, Transporter shall
give Shipper notice thereof and Shipper shall resume deliveries to Shipper of
the affected volumes. For the avoidance of doubt, services provided by
Transporter hereunder on an Interruptible basis may be interrupted, curtailed,
disrupted or discontinued at any time at the sole discretion of Transporter, for
no reason or any reason, including, without limitation, any Disruption set forth
in this Section 8.1.

When Transporter reestablishes the Firm service as to such volumes of Shipper’s
Gas interrupted or curtailed by a Disruption, Transporter shall give Shipper
notice thereof and Shipper shall resume deliveries to Shipper of the affected
volumes. For the avoidance of doubt, services provided by Transporter hereunder
on an Interruptible basis may be interrupted, curtailed, disrupted or
discontinued at any time at the sole discretion of Transporter, for no reason or
any reason, including, without limitation, any Disruption set forth in this
Section 8.1.

 

(a)        Temporary Disruption.  To the extent Transporter does not accept any
portion of Shipper’s Gas, such rejected Gas (the “Subject Gas”) shall be
immediately temporarily released from the dedication hereunder and Shipper may
enter into short term interruptible arrangements with third parties for the
transportation of such Subject Gas (“Temporary Arrangements”); provided that
Shipper must again deliver such Subject Gas to Transporter at the Receipt Points
on the first (1st) Day

6

 

of the Month immediately following after Shipper receives notice from
Transporter that Transporter is able to accept the Subject Gas.  Any of
Shipper’s Gas temporarily released from this Agreement shall not be Dedicated
Gas hereunder; provided, however, that such Residue Gas shall become Dedicated
Gas again at the conclusion of a temporary disruption.  In such event
Transporter shall not be in breach or default of its obligations under this
Agreement and shall have no liability to Shipper in connection with or resulting
from such Temporary Disruption.

(b)        Permanent Disruption.  If, for any reason, excluding an event of
Force Majeure, Transporter does not accept any portion of Shipper’s Gas up to
the Maximum Daily Quantity (such portion not accepted, the “Disruption Volumes”)
for more than one hundred fifty (150) Days out of any two hundred ten (210) Day
period (“Permanent Disruption”), then the Disruption Volumes shall be
permanently released from the dedication hereunder. Shipper, in its sole
discretion, may enter into any alternative arrangements for the transportation
of the Disruption Volumes.  For the avoidance of doubt, this Section 8.1(b)
shall not apply to any failure of Transporter to accept any portion of Shipper’s
Gas due to any action or inaction of Shipper.

8.2       Capacity Curtailment.

(a)        Notwithstanding anything to the contrary in this Agreement,
Transporter’s acceptance and receipt of Shipper’s Gas that is nominated and
tendered by Shipper in accordance with this Agreement is subject to the physical
capacity constraints on Transporter’s System. If, on any Day, Transporter
determines that the physical capacity of Transporter’s System, or any portion
thereof, is insufficient to serve all requests from its customers (including
Shipper) for any reason, including without limitation any Disruptions, then
Transporter has the right to schedule transportation in accordance with this
Section 8.2 until all available capacity is allocated.

(b)        Capacity on the Transporter’s System shall be curtailed and allocated
among applicable customers in accordance with the following:

(i)         First, Transporter shall curtail all Gas received on an
Interruptible basis (including all of Shipper’s Gas exceeding the Maximum Daily
Quantity) prior to curtailing Gas received on a Firm basis.  If Transporter
curtails Gas received on an Interruptible basis, Transporter shall allocate the
capacity of Transporter’s System available to Interruptible customers among such
Interruptible customers, on a pro rata basis, based upon each such customer’s
request of capacity to the total capacity of Transporter’s System available to
Interruptible customers.

 

(ii)        Second, if additional curtailments are required beyond clause
8.2(b)(i) above, Transporter shall curtail Gas received on a Firm basis
(including Shipper’s Gas up to the Maximum Daily Quantity).  If Transporter
curtails Gas received on a Firm basis (including Shipper’s Gas up to the Maximum
Daily Quantity), Transporter shall allocate the capacity of Transporter’s System
available to customers with Firm reserved capacity (including Shipper) on a pro
rata basis based upon each such customer’s ratio of its reserved capacity to the
total reserved

7

 

capacity on Transporter’s System.  For the purposes of this Agreement,
Customer’s reserved capacity shall be the Maximum Daily Quantity.

 

ARTICLE IX

MISCELLANEOUS

9.1       Governing Law.  This Agreement will be interpreted, construed, and
governed by the laws of the State of Texas, without reference to conflicts of
law principles thereof that might apply the laws of another jurisdiction.

9.2       Dispute Resolution.

(a)        The Parties desire to resolve any disputes related to this Agreement
that may arise by mutual agreement, if possible.  All disputes arising out of or
relating to this Agreement that are not resolved by mutual agreement of the
Parties shall be resolved using the provisions of this Section 9.2.

(b)        If a dispute or disputes arise out of or relating to this Agreement,
a Party shall give notice of the dispute(s) to the other Party, and each Party
will appoint an employee to negotiate with the other Party concerning the
dispute(s).  If the dispute(s) have not been resolved by negotiation within
thirty (30) Days of the initial dispute notice, the dispute(s) shall be
exclusively and finally resolved by binding arbitration in Houston, Texas in
accordance with the then current Rules for Non-Administered Arbitration of the
International Institute for Conflict Prevention and Resolution (“Rules”) and
this Section 9.2.

(c)        The arbitration shall be governed by the Rules, to the exclusion of
any provision of state law inconsistent with them.  The arbitration shall be
initiated by a Party seeking arbitration by notice transmitted to the other
Party or Parties to be involved.

(d)        The Parties shall select one disinterested arbitrator with at least
10 years’ experience in the midstream oil and gas industry and ten (10) years’
experience with oil and gas law, and not previously employed by either Party or
its Affiliates, and, if possible, shall be selected by agreement between the
Parties.  If the Parties cannot select an arbitrator by agreement within fifteen
(15) Days of the date of the notice of arbitration, a qualified arbitrator will
be selected in accordance with the Rules.

(e)        If the dispute(s) involves an amount greater than $150,000, the
dispute(s) will be decided by a panel of three arbitrators with the above
qualifications, one selected by each Party, and the third selected by the
Party-appointed arbitrators, or in the absence of their agreement, pursuant to
the Rules.

(f)        The arbitrator(s) shall resolve the disputes and render a final award
in accordance with the substantive law of the State of Texas.

(g)        If arbitration is necessary to resolve a dispute, the arbitral
tribunal is authorized to award costs and reasonable attorneys’ fees or allocate
them between the Parties, and the costs of the arbitration proceedings,
including reasonable attorneys’ fees, shall be borne in the manner determined by
the arbitral tribunal.

8

 

(h)        The decision of the arbitrator(s) shall be final and binding on both
Parties and shall set forth the reasons for the award in writing, and judgment
on the arbitration award may be entered in any court having jurisdiction.

9.3       Entire Agreement.  The Exhibits attached hereto are hereby
incorporated by reference as part of this Agreement. This Agreement (including
the Exhibits referenced in and attached to this Agreement) and the Memorandum of
Agreement contain the entire agreement of Parties with respect to the matters
addressed herein and therein, and supersede all prior negotiations,
representations, understandings, agreements, contracts (whether oral or written)
by and between Transporter and Shipper with respect to the subject matter
herein. This Agreement and the Memorandum of Agreement will be amended only by
an instrument in writing signed by both Parties.  The Parties acknowledge that
this Agreement and the Memorandum of Agreement will be deemed and considered for
all purposes as prepared through the joint efforts of the Parties and will not
be construed against a Party as a result of the preparation, submittal,
negotiation or drafting thereof.  Exhibit A and the General Terms and Conditions
are hereby incorporate by reference as part of this Agreement.

9.4       Mutual Waiver of Certain Remedies.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, OTHER THAN REASONABLE ATTORNEYS’ FEES AND COURT
COSTS, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY, ANY
SUCCESSORS IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE OF THIS AGREEMENT FOR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES, OR FOR LOST
OR DELAYED PRODUCTION OR LOST BUSINESS OPPORTUNITY, OR FOR BUSINESS LOSSES OR
FOR ECONOMIC LOSSES OF THE OTHER PARTY ARISING OUT OF THIS AGREEMENT OR ANY
BREACH HEREOF.  THIS SECTION 9.4 WILL APPLY NOTWITHSTANDING THE SOLE, JOINT OR
CONCURRENT NEGLIGENCE, OR OTHER FAULT OR RESPONSIBILITY OF THE PARTY WHOSE
LIABILITY IS WAIVED BY THIS PROVISION, OR ANY OTHER EVENT OR CONDITION, WHETHER
ANTICIPATED OR UNANTICIPATED, AND REGARDLESS OF WHETHER PRE-EXISTING PRIOR TO
THE DATE OF THIS AGREEMENT.

 [Signature Page Follows.]

 

9

 

The Parties have executed this Agreement as of the Effective Date.

 

 

 

 

 

 

SHIPPER:

   

TRANSPORTER:

SN CATARINA, LLC

 

SECO PIPELINE, LLC

 

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

10

 

EXHIBIT A

GENERAL TERMS AND CONDITIONS

ARTICLE I

DEFINITIONS

Except in those certain instances where the context states another meaning, the
following terms when used in the Agreement and all Exhibits thereto have the
meaning stated:

 

1.1       “Additional Gas”  shall have the meaning set forth in Section 1.1(b)
of the Agreement.

1.2       “Affiliate”  shall mean when used with respect to any Person, any
other Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person.  As
used herein, “control” means possessing, directly or indirectly, the power to
direct or cause the direction of the management and policies of any such
relevant Person by ownership of voting interest, by contract or otherwise;
provided, however, that solely having the power to act as the operator of a
Person’s day-to-day commercial operations, without otherwise having the direct
or indirect power to direct or cause the direction of the management and
policies of such Person, shall not satisfy the foregoing definition of
“control”. Notwithstanding anything to the contrary herein, in no event shall
Transporter or any of its subsidiaries be deemed to be an Affiliate of Shipper
or any of its subsidiaries.

1.3       “Approval Date”  means the date on which the Bankruptcy Court enters
the Approval Order.

1.4       “Approval Order”  means an order of the Bankruptcy Court reasonably
acceptable to the parties to the Settlement Agreement, entered pursuant to Rule
9019 of the Federal Rules of Bankruptcy Procedure, approving the Settlement
Agreement, which order has not been reversed, vacated or stayed.

1.5       “Assumed Obligations”  shall have the meaning set forth in Section
10.2 of this Exhibit A.

1.6       “Bankruptcy Cases”  means the chapter 11 cases of the Debtors pending
before the Bankruptcy Court, styled In re Sanchez Energy Corporation, et al.,
Case No. 19-34508 (MI) (Bankr. S.D. Tex.) (Jointly Administered).

1.7       “Bankruptcy Court” means the United States Bankruptcy Court for the
Southern District of Texas.

1.8       “BLS”  shall have the meaning set forth in Section 3.2 of the
Agreement.

1.9       “Btu”  shall mean British thermal unit.

1.10     “Catarina Gathering Agreement”  shall mean that certain Firm Gathering
and Processing Agreement, dated effective as of October 14, 2015, by and between
Shipper and Catarina Midstream, LLC, a Delaware limited liability company, as
amended by that certain

Exhibit A-1

 

Amendment No. 1 to the Firm Gathering and Processing Agreement, executed on June
30, 2017, as further amended by that certain Amendment No. 2 to the Firm
Gathering and Processing Agreement, executed on [ ], 2020, and as the same may
be further amended from time to time.

1.11     “Closing Date”  means the date the Closing Notice is executed and filed
with the Bankruptcy Court.

1.12     “Closing Notice”  means a notice of the occurrence of Closing (as
defined in the Settlement Agreement and attached thereto as Exhibit G).

1.13     “Control”  (including its derivatives and similar terms) means (a) with
respect to any Person, possessing, directly or indirectly, the power to direct
or cause the direction of the management and policies of any such relevant
Person by ownership of voting interest, by contract or otherwise; provided,
however, that solely having the power to act as the operator of a Person’s
day-to-day commercial operations, without otherwise having the direct or
indirect power to direct or cause the direction of the management and policies
of such Person, shall not satisfy the foregoing definition of “Control” and (b)
with respect to any Gas, such Gas with respect to which Shipper has the
contractual right or obligation (pursuant to a marketing, gathering,
transportation, processing, agency, operating, unit or similar agreement) to
market, gather, transport or process such Gas and Shipper elects or is obligated
to market, gather, transport or process such Gas.

1.14     “CPI”  shall have the meaning set forth in Section 3.2 of the
Agreement.

1.15     “Day”  shall mean the period of twenty-four (24) consecutive hours
beginning at 9:00 a.m. Central Time on any calendar day and ending at 9:00 a.m.
Central Time on the calendar day immediately following.

1.16     “Debtors”  means, collectively, prior to the Effective Date, Sanchez
Energy Corporation and each of its direct and indirect subsidiaries that are
debtors and debtors-in-possession in the Bankruptcy Cases, including SN EF
Maverick, LLC and SN Catarina, LLC, and, after the Effective Date, such entities
as reorganized pursuant to the Plan.

1.17     “Dedicated Acreage”  shall mean the Dedicated Instruments and the
Dedicated Reserves.

1.18     “Dedicated Gas”  shall have the meaning set forth in Section 1.1(a) of
the Agreement.

1.19     “Dedicated Instruments”  shall have the meaning set forth in Exhibit C.

1.20     “Dedicated Reserves”  shall mean the interest of Shipper in all Gas
reserves in and under, and all Gas owned or Controlled by Shipper and produced
or delivered from (i) lands within the area described on Exhibit C – Part 1 of
the Catarina Gathering Agreement, and (ii) the Dedicated Instruments, whether
now owned or hereafter acquired, and any and all additional right, title,
interest, or claim of every kind and character of Shipper in (x) land within the
area described on Exhibit C – Part 1 of the Catarina Gathering Agreement or (y)
the Dedicated Instruments, and Gas production therefrom, and all interests in
any wells, whether now existing or drilled hereafter,

Exhibit A-2

 

on, or completed on, lands covered by a Dedicated Instrument or within the area
described on Exhibit C – Part 1 of the Catarina Gathering Agreement.

1.21     “Default”  shall have the meaning set forth in Section 5.2(b) of the
Agreement.

1.22     “Disruption” or “Disruptions”  shall have the meaning set forth in
Section 8.1 of the Agreement.

1.23     “Firm”  shall mean service on Transporter’s System that may not be
curtailed, interrupted or discontinued, subject, however, to the Disruptions set
forth in Article VIII of the Agreement.

1.24     “Gas”  shall mean natural gas produced from gas wells and gas produced
in association with oil (casinghead gas).

1.25     “Governmental Authority”  shall mean any legislature, court, tribunal,
arbitrator or arbitral body, authority, agency, commission, division, board,
bureau, branch, official or other instrumentality of the U.S., or any domestic
state, county, city, tribal or other political subdivision, governmental
department or similar governing entity, and including any governmental,
quasi-governmental or non-governmental body exercising similar powers of
authority.

1.26     “Heating Value”  shall mean the gross number of British thermal units
(Btu’s) which would be contained in the volume of one (1) cubic foot of gas at a
temperature of sixty degrees (60°) Fahrenheit, when saturated with water vapor
and under a pressure of fourteen and seventy-three hundredths (14.73) pounds per
square inch absolute and adjusted to reflect the actual water vapor content of
the gas delivered; however, if the water vapor content is seven (7) pounds per
million cubic feet or less, the gas shall be deemed dry.

1.27     “Insolvency Event”  shall mean, with respect to any Person, such Person
(i) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits
in writing its inability generally to pay its debts as they become due; (iii)
makes a general assignment, arrangement or composition with or for the benefit
of its creditors; (iv) institutes or has instituted against it, a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights,
or a petition is presented for its winding-up or liquidation by it or a
regulator, supervisor or similar official, in each case which is not dismissed,
discharged, stayed or restrained in each case within fifteen (15) Days of the
institution or presentation thereof; (v) has a resolution passed for its
winding-up, dissolution or liquidation (other than pursuant to a consolidation,
amalgamation or merger); (vi) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or substantially all its assets;
(vii) has a secured party take possession of all or substantially all its assets
or has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within fifteen (15) days
thereafter; (viii) causes or is subject to any event with respect to it that,
under applicable law, has an analogous effect to any of the events specified in
clauses (i)

Exhibit A-3

 

to (vii) above (inclusive); or (ix) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts.

1.28     “Interruptible”  shall mean service on Transporter’s System that may be
curtailed, interrupted or discontinued at any time, at the sole discretion of
Transporter, for any reason or no reason, without liability, obligation or
penalty of any kind.

1.29     Maximum Daily Quantity”  shall have the meaning set forth in Section
1.2(a) of the Agreement.

1.30     “Mcf”  shall mean One thousand (1,000) cubic feet.

1.31     “Memorandum of Agreement”  shall have the meaning set forth in Section
1.5 of the Agreement.

1.32     “MMBtu”  shall mean one million (1,000,000) Btu.

1.33     “Month”  shall mean the period beginning at 9:00 a.m. Central Time on
the first day of a calendar month and ending at 9:00 a.m. Central Time on the
first day of the calendar month immediately following, except that the first
month shall begin on the date of initial deliveries of natural gas hereunder and
shall end at 9:00 a.m. Central Time on the first day of the calendar month
immediately following.

1.34     “Permanent Disruption” shall have the meaning set forth in Section
8.1(b).

1.35     “Person”  shall include any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, or Governmental Authority.

1.36     “Plan”  means the Second Amended Joint Chapter 11 Plan of
Reorganization of Sanchez Energy Corporation and its Debtor Affiliates, dated as
of April 30, 2020 [DKT. #1205], as amended or modified from time to time.

1.37     “Primary Term”  shall have the meaning set forth in Section 5.1 of the
Agreement.

1.38     “psia”  shall mean pounds per square inch absolute.

1.39     “psig”  shall mean pounds per square inch gauge.

1.40     “Raptor Plant”  shall mean that certain Raptor gas processing plant
owned by Carnero G&P LLC in LaSalle County, Texas.

1.41     “Renewal Term”  shall have the meaning set forth in Section 5.1 of the
Agreement.

1.42     “Residue Gas” shall mean the gaseous portion of Gas that remains after
the extraction and/or removal therefrom of liquefiable hydrocarbons or other
constituents, shrinkage, fuel gas used to operate the processing facilities, and
flare, vented and/or or lost and unaccounted for gas that may be incurred in the
operation of the processing facilities.

Exhibit A-4

 

1.43     “Rules”  shall have the meaning set forth in Section 9.2(b) of the
Agreement.

1.44     “Settlement Agreement”  means that certain Settlement Agreement, dated
as of May [•], 2020, by and among the Debtors, Catarina Midstream LLC, Carnero
G&P LLC, Seco Pipeline, LLC, Sanchez Midstream Partners, LP and TPL SouthTex
Processing Company LP.

1.45     “Shipper’s FL&U”  shall have the meaning set forth in Section 1.3(a) of
the Agreement.

1.46     “Shipper’s Gas”  shall have the meaning set forth in Section 1.1 of the
Agreement.

1.47     “Subject Gas”  shall have the meaning set forth in Section 8.1(a) of
the Agreement.

1.48     “Temporary Arrangements” shall have the meaning set forth in Section
8.1(a).

1.49     “Term”  shall have the meaning set forth in Section 5.1 of the
Agreement.

ARTICLE II

MEASUREMENT AND TESTS

The measurement and tests for quality of Gas delivered hereunder will be
governed by the following:

 

2.1       The volume will be measured by meters installed, maintained and
operated by or on behalf of Transporter. Computations shall be made in
accordance with industry practice.

2.2       For the purpose of measurement, and meter calibration, the atmospheric
(Barometric) pressure will be in accordance with AGA Report No. 3/API 14.3, as
it is now and from time to time may be revised.

2.3       The unit of volume for purposes of measurement will be one (1) cubic
foot of gas at a temperature base of sixty degrees (60°) Fahrenheit and at a
pressure base of fourteen and seventy-three hundredths (14.73) psia.

2.4       The temperature will be adjusted to standard conditions by a
compensation device included with the meter. Corrections will be made in
accordance with industry practice.

2.5       Specific gravity will be determined with accuracy to the nearest
one-thousandth by taking samples of the Gas at the Receipt Point(s) at such
times as may be determined to be necessary in practice by the use of an
instrument commonly used and accepted in the industry.

2.6       Tests for carbon dioxide, sulfur, and hydrogen sulfide content of the
Gas delivered hereunder will be made by approved standard methods from time to
time as requested by either Party, but not more often than once each Month.

2.7       All measuring equipment, housing devices, and materials shall be of
standard manufacture and will, with all related equipment, appliances and
buildings, be installed, maintained, and furnished by Transporter or its
designee at Transporter’s expense. Shipper may

Exhibit A-5

 

install and operate check­measuring equipment, which will not interfere with the
use of Transporter’s equipment. All testing equipment shall be of standard
manufacture and will be maintained, operated and furnished by Transporter or its
designee at Transporter’s expense.

2.8       The accuracy of Transporter’s measuring and testing equipment will be
verified by Transporter at necessary intervals, to ensure accurate measurement.
Tests for quality of the Gas may be made at the time of equipment testing, or at
other times, as deemed necessary by Transporter. Notice of the time and nature
of each test shall be provided to Shipper sufficiently in advance to permit
Shipper to have a representative present. Measuring and testing equipment will
be tested by reasonable means and methods in the presence of representatives of
both Shipper and Transporter, if present. If Shipper fails to have a
representative present after proper notice, the results of such tests will be
provided to Shipper and will nevertheless be considered accurate until the next
test. All tests will be made at Transporter’s expense, except that Shipper will
bear the expense of tests made at its request, if the inaccuracy found is one
percent (1%) or less.

2.9       If at any time any of the measuring or testing equipment is found to
be out of service, or registering inaccurately in any percentage, it will be
adjusted at once to read accurately within the limits prescribed by the
manufacturer. If any measuring equipment shall be found to be inaccurate by an
amount exceeding one percent (1%) at a reading corresponding to the average
hourly rate of flow for the period since the last preceding test, the previous
reading of such equipment will be disregarded for any period definitely known or
agreed upon or if not so known or agreed upon for a period of sixteen (16) Days
or one-half (1/2) of the elapsed time since the last test, whichever is shorter.
The volume of Gas delivered during such period will be estimated by:

(a)        using the data recorded by any check-measuring equipment if installed
and accurately registering; or

(b)        if the check measuring equipment is not installed or registering
accurately by correcting the error if the percentage of error is ascertainable
by calibration test or mathematical calculation; or

(c)        if neither such method is feasible, by estimating the quantity, or
quality, delivered based upon deliveries under similar conditions during a
period when the equipment was registering accurately; and

provided,  that, no corrections will be made for recorded inaccuracies of two
percent (2%) or less.

 

2.10     Shipper and Transporter will have the right to inspect equipment
installed or furnished by the other, and the charts and other measurement or
testing data of the other, at all times during business hours, but the reading,
calibration and adjustment of such equipment and changing of charts will be done
only by the Party owning such equipment. Each Party will preserve all original
test data, charts and other similar records in such Party’s possession for a
period of at least two (2) years.

Exhibit A-6

 

ARTICLE III

DELIVERY PRESSURE AND COMPRESSION

3.1       All Gas delivered by or for the account of Shipper to Transporter
hereunder must be delivered at pressures as may be needed to enter Transporter’s
System against the working pressures maintained therein from time to time, but
not to exceed the pressure required to sustain the redelivery pressure specified
in Section 3.2 below or the maximum pressure set forth on Exhibit B of the
Agreement.

3.2       All Gas delivered by Transporter to Shipper or Shipper’s designee
hereunder must be delivered at pressures sufficient to enter Shipper’s or
Shipper’s designee’s facilities against a working pressure maintained therein
from time to time.

3.3       Notwithstanding the other provisions of the Agreement, neither
Transporter nor Shipper shall be required to provide compression to effectuate
the delivery or redelivery of gas pursuant in this Agreement.

ARTICLE IV

QUALITY

4.1       All Gas delivered to Transporter at the Receipt Point under this
Agreement will comply with the following specifications:

(a)        Water Vapor: The Gas will not have a water vapor content in excess of
seven (7) pounds per Mcf of Gas.

(b)        Hydrogen Sulfide: Subject to provisions of Section 4.1(h) hereof, the
Gas will not contain more than one-quarter (1/4) grain of hydrogen sulfide per
one hundred (100) cubic feet of Gas, as determined by quantitative tests.

(c)        Total Sulfur: Subject to provisions of Section 4.1(h) hereof, the Gas
will not contain more than five (5) grains of total sulfur per one hundred (100)
cubic feet of Gas, as determined by quantitative tests.

(d)        Temperature: The Gas will not have a temperature less than forty (40)
degrees Fahrenheit or more than one hundred twenty (120) degrees Fahrenheit.

(e)        Carbon Dioxide: Subject to provisions of Section 4.1(h) hereof, the
Gas will not contain more than two percent (2%) by volume of carbon dioxide.

(f)        Oxygen: Subject to provisions of Section 4.1(h) hereof, the Gas will
not contain more than ten (10) parts per million of oxygen by volume.

(g)        Nitrogen: Subject to provisions of Section 4.1(h) hereof, the Gas
will not contain more than two percent (2%) by volume of nitrogen.

(h)        Non-hydrocarbons: Notwithstanding the foregoing provisions of this
Section 4.1 to the contrary, the Gas will not contain more than three percent
(3%) by volume of

Exhibit A-7

 

total non­hydrocarbons, which will include, but not be limited to, water
hydrogen sulfide, sulfur, carbon dioxide, oxygen and nitrogen.

(i)         Objectionable Liquids and Solids and Dilution: The Gas will be free
of objectionable liquids and solids, will not contain any hydrocarbons which
might condense to free liquids in the pipeline under normal pipeline conditions
and will be commercially free from dust, gums, gum-forming constituents, and
other liquids or solid matter which might become separated from the Gas in the
course of transportation through pipelines.

(j)         Gross Heating Value: The gas will contain a Gross Heating Value of
at least nine hundred fifty (950) Btu per cubic foot, but not greater than one
thousand and fifty (1050) Btu per cubic foot. The Gross Heating Value will be
the number of Btus produced by the complete combustion of a cubic foot of Gas
(excluding hydrogen sulfide) at a temperature base of sixty degrees (60°)
Fahrenheit and a pressure base of fourteen and seventy-three hundredths (14.73)
psia. Heating values shall be expressed in Btu per cubic foot and may be
determined by calorimeter, calculation from compositional analysis or other
acceptable industry practices and shall reflect the actual condition of the Gas
on delivery as adjusted for pressure, water content, and compressibility unless
otherwise prescribed by statute. For the purposes of making Btu calculations,
the gas shall be considered saturated at the delivery conditions of pressure and
temperature.

4.2       Provided that all Gas delivered by Shipper to Transporter at a Receipt
Point meets all quality specifications as provided above, the Gas delivered by
Transporter at the Delivery Point will meet the same quality specifications. If
the quality specifications of the receiving pipeline at the Delivery Point are
modified to include additional specifications or become more stringent than
those in place as of the Effective Date, the quality specifications above will
automatically be amended to include the additional or more stringent quality
specifications, and Transporter will not be required to accept at the Receipt
Point or deliver at the Delivery Point any Gas tendered by Shipper for
transportation under this Agreement until Shipper conforms the Gas to such
specifications. Upon mutual agreement, Transporter may conform Gas to meet the
more stringent specifications of the receiving pipeline and charge a mutually
agreeable fee for doing so.

4.3       If the Gas delivered at any Receipt Point fails to meet any of the
quality specifications stated above, then Transporter will notify Shipper, and
Shipper will make a diligent effort to correct the situation. Transporter will
have the right to refuse to accept such Gas for so long as Shipper is unable to
deliver Gas conforming to such specifications.

ARTICLE V

PAYMENTS

5.1       After delivery of Gas has commenced, Transporter shall, on or before
the 25th day of each Month, render to Shipper a statement showing the quantity
of Gas delivered by Transporter to Shipper at the Delivery Point(s) and the
amount owed Transporter for such deliveries during the Month preceding such
notice. Shipper shall pay Transporter the amount so billed after the delivery of
the statement by Transporter on or before the later of (i) the last day of the
Month the statement

Exhibit A-8

 

was received by Shipper, or (ii) ten (10) days after the statement was received
by Shipper. All amounts due Transporter from Shipper, including penalties, are
payable at the address of Transporter shown in Article VI of the Agreement.

5.2       If Shipper fails to pay any amount due Transporter when the same is
due, interest thereon will accrue from, but excluding, the due date to, and
including, the date payment thereof is actually made at the lesser of: (i) the
maximum legal rate of interest permitted by applicable law, or (ii) the Prime
Rate, plus 2%, computed on an annualized basis and compounded monthly. For
purposes of this Section 5.2, the term “Prime Rate” means the prime rate as
published in the Wall Street Journal, or any successor thereto, on the first
date of publication for the calendar month in which payment is due. Transporter
will render a late payment charge invoice and Shipper will make payment therefor
within ten Days of the date of such invoice.

5.3       If any invoice is disputed by Shipper, Shipper will pay the undisputed
amounts and will, within ten days from the date of Transporter’s invoice, give
Transporter written notification setting forth the disputed amount and the basis
therefor. Shipper and Transporter will use reasonable diligence to resolve
disputed amounts within thirty (30) days following written notification. If the
undisputed amount is not paid when due, the undisputed amount will be subject to
late payment charges as described above. Any disputed amount that later is
determined to be due to Transporter will be subject to late payment charges from
the original due date.

5.4       Each Party has the right at any and all reasonable times to examine
the books and records of the other, to the extent necessary to verify the
accuracy of any statement, charge, computation or demand made under this
Agreement.

ARTICLE VI

TAXES

6.1       Transporter shall pay or cause to be paid the taxes lawfully levied on
Transporter, or otherwise to be borne contractually by Transporter and
applicable to the Gas delivered hereunder prior to its delivery to Shipper or
Shipper’s designee at the Delivery Point(s). Shipper shall pay all taxes
lawfully levied on Shipper applicable to such Gas after delivery to Shipper or
Shipper’s designee or otherwise to be borne contractually by Shipper under the
terms of the Agreement.

ARTICLE VII

WARRANTY OF TITLE

7.1       Shipper warrants title to all Gas delivered by it, that it has the
right to same, and that such Gas is free from liens and adverse claims of every
kind. Shipper shall pay or cause to be paid all sums due on the gathering or
handling of the Gas delivered by Transporter. Shipper shall indemnify and save
Transporter harmless from and against all taxes, payments, liens or other
charges applicable to said Gas arising prior to its delivery to Transporter or
Transporter’s designee.

Exhibit A-9

 

ARTICLE VIII

FORCE MAJEURE

8.1       Except for Shipper’s obligations to make payments hereunder, neither
Party will be liable for any failure to perform the terms of the Agreement when
such failure is due to Force Majeure. The term “Force Majeure” as employed in
this Agreement shall mean acts of God, strikes, lockouts, or industrial disputes
or disturbances, civil disturbances, arrests and restraint from rulers or
people, interruptions or terminations by or as a result of government or court
action or orders, or present and future valid orders of any regulatory body
having jurisdiction, acts of the public enemy, wars, riots, blockades,
insurrections, inability to secure or delay in securing labor or materials by
reason of allocations promulgated by authorized governmental agencies,
epidemics, landslides, lightning, earthquakes, fire, storm, floods, washouts,
explosions, breakage or freezing of pipelines (so long as such breakage is not
directly caused by Transporter), inability to obtain easement or rights-of-way,
allocation or curtailment by third parties of downstream capacity, constraints
on or physical disruptions to transportation downstream of and directly
connected to Shipper’s or Transporter’s facilities used herein, refusal or other
failure to accept Gas by Persons downstream of Transporter’s facilities that are
directly connected to Transporter’s System or to any Delivery Point, the making
of repairs or alterations to lines of pipe or plants, partial or entire failure
of gas supply, failure or inability or any other cause, whether of the kind
herein enumerated or otherwise not reasonably within the control of the Party
claiming Force Majeure. The Force Majeure will, so far as possible, be remedied
with all reasonable dispatch. The settlement of strikes or lockouts or
industrial disputes or disturbances will be entirely within the discretion of
the Party having the difficulty, and the above requirement that any Force
Majeure will be remedied with all reasonable dispatch will not require the
settlement of strikes, lockouts, or industrial disputes or disturbances by
acceding to the demands of any opposing Party therein when such course is
inadvisable in the discretion of the Party having the difficulty. A decision to
close a facility due to business or economic conditions will not fall within the
meaning of “force majeure.”

8.2       If a Party claims Force Majeure that affects one or more Delivery
Point(s), nothing herein will require the Party claiming Force Majeure to make
deliveries or to take Gas at an alternative Delivery Point(s), not designated in
Exhibit B of the Agreement.

ARTICLE IX

GOVERNMENTAL RULES, REGULATIONS AND AUTHORIZATION

9.1       This Agreement will be subject to all valid applicable state, local
and federal laws, orders, directives, rules and regulations of any governmental
body, agency or official having jurisdiction over this Agreement and the
transportation of Gas hereunder.

9.2       If at any time during the Term of the Agreement, any Governmental
Authority having jurisdiction over this Agreement and the transportation of Gas
hereunder takes any action as to Transporter or Shipper or any third party
transporter whereby the sale, transportation other handling (including
compression or treating), delivery, receipt and use of Gas as contemplated
hereunder is proscribed or subjected to terms, conditions, regulations,
restraints, or price or rate controls, ceilings or limits that in the sole
judgment of Transporter or Shipper are unduly or overly burdensome to that
Party, such Party may at any time thereafter terminate this Agreement, upon

Exhibit A-10

 

thirty (30) days written notice without further liability hereunder, except as
to obligations (including but not limited to payment obligations) incurred prior
to the time of such termination.

9.3       Shipper and Transporter agree to file or have filed in a timely manner
all applications, affidavits, statements and notices required for sale,
transportation and delivery of the Gas hereunder.

ARTICLE X

ASSIGNMENT

10.1     The Agreement (including this Exhibit A and other Exhibits attached
thereto), including, without limitation, any and all renewals, extensions,
amendments and/or supplements hereto, will run with the land and will be binding
upon and inure to the benefit of the successors and assigns of the Parties,
provided that neither Party may assign or otherwise convey all or any portion of
its right, title, or interest under this Agreement without obtaining the prior
written consent of the other Party, which consent will not be unreasonably
withheld, conditioned, or delayed, and any attempts to assign without such
consent will be void ab initio.  Notwithstanding the foregoing, (i) either Party
may assign this Agreement to an Affiliate of such Party without the consent of
the other Party, and (ii) either Party may pledge this Agreement to secure any
credit facility or indebtedness of such Party or its Affiliates without the
consent of the other Party.

10.2     Subject to Section 1.4 of the Agreement, if any transfer of the
Agreement occurs, (i) the transferee (other than any grantee under any lien,
pledge, encumbrance or security interest) shall assume in writing the
obligations and liabilities of the transferor under this Agreement, and (ii) no
transfer or succession to the interest of Shipper hereunder, wholly or
partially, shall affect or bind Transporter until the first of the month
following the date Transporter has received a copy of the recorded transfer
document or other proof satisfactory to Transporter that the claimant is legally
entitled to such interest.

ARTICLE XI

AGENCY DESIGNATION

11.1     Shipper may designate an agent, which may be Transporter, to nominate
and schedule transportation service on Shipper’s behalf. Shipper shall notify
Transporter in writing of the designated agent, if any.

11.2     Transporter is authorized to rely on nominations and scheduling
information provided by Shipper’s agent. By designating an agent, Shipper agrees
to indemnify and save Transporter harmless from all suits, actions, debts,
accounts, damages, costs, losses and expenses arising in any way from Shipper’s
agent’s actions on behalf of Shipper, Shipper’s agent’s failure to act on behalf
of Shipper, or Transporter’s reliance upon the information provided to
Transporter by Shipper’s agent; provided, however that such indemnification will
not excuse Transporter from liability for actions taken when Transporter is
acting as agent.

Exhibit A-11

 

ARTICLE XII

MISCELLANEOUS

12.1     No waiver by either Transporter or Shipper of any default of the other
under this Agreement will operate as a waiver of any future default, whether of
like or different character or nature.

12.2     This Agreement may be amended only by a written instrument executed by
the Parties hereto and expressly stating that it is an amendment to this
Agreement.

12.3     The headings used throughout this Agreement are inserted for reference
purposes only, and are not to be construed or taken into account in interpreting
the terms and provisions of any Article, nor to be deemed in any way to qualify,
modify or explain the effects of any such term or provision.

 

 

 

Exhibit A-12

 

EXHIBIT B

TRANSPORTER’S SYSTEM

 

Transporter’s System: [to come]1

 

Receipt Point(s): The tailgate of the Raptor Plant in LaSalle County, Texas.

 

Delivery Point(s): The interconnection between Transporter’s System and Texas
Pipeline

Webb County Lean System, LLC’s Kudu Plant in Webb County, Texas.

 

Transportation Fee:

     For Firm services: $[***] per MMBtu, as may be escalated annually under
Section 3.2 of the Agreement.

     For Interruptible services: $[***] per MMBtu, as may be escalated annually
under Section 3.2 of the Agreement.

Maximum Pressure (psig): Actual operating pressure, not to exceed 1,200 psig.

 

 

 

 

 

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

1         NTD: Insert a detailed description or map here.

 

 

 

Exhibit B-1

 

EXHIBIT C

Dedication

 

Dedicated Instruments:  [to come – intended to be the same as those contained in
the updated Catarina Gathering Agreement]

 

 

 

 

Exhibit C-1

 

EXHIBIT D

Memorandum of Agreement

 

[NTD: to come.]

 

 

 

 

Exhibit D-1

 

Exhibit E

 

New Comanche-Seco Agreement

 

 

 

FIRM TRANSPORTATION SERVICE AGREEMENT

THIS FIRM TRANSPORTATION SERVICE AGREEMENT (this “Agreement”) is dated the
Approval Date but effective as of the Closing Date (the “Effective Date”) by and
between SECO PIPELINE, LLC, a Delaware limited liability company
(“Transporter”), and SN EF MAVERICK, LLC, a Delaware limited liability company
(“Shipper”). Transporter and Shipper may be referred to in this Agreement
individually as a “Party” and collectively as the “Parties.”  Capitalized terms
used in the Agreement but not defined herein shall have the meanings given to
them in Exhibit A.

 

WHEREAS, Transporter has pipeline facilities located wholly within the State of
Texas, and is willing to receive and transport certain quantities of natural gas
on a Firm basis and/or Interruptible basis, as applicable, on Transporter’s Seco
Pipeline system located in LaSalle and Webb Counties, Texas, as further
described on Exhibit B (“Transporter’s System”); and

 

WHEREAS, Transporter and Shipper desire to enter into an agreement providing for
the transportation by Transporter of certain quantities of processed natural gas
from Receipt Point(s) located in Texas to Delivery Point(s) located in Texas;
and

 

WHEREAS, Transporter is agreeable to receiving, transporting and delivering such
processed natural gas delivered by Shipper in accordance with the terms and
conditions hereinafter set forth; and

 

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
Parties hereto mutually covenant and agree as follows:

 

ARTICLE I

SHIPPER’S GAS

1.1       Shipper’s Gas.

(a)        Subject to the terms and conditions of this Agreement, Shipper hereby
commits and dedicates to Transporter for transportation on Transporter’s System
all volumes of Residue Gas owned or Controlled by Shipper or its Affiliates
(other than SN Catarina, LLC) that are produced from natural gas delivered to
Shipper under the Comanche Gathering Agreement at the tailgate of the Raptor
Plant (the “Dedicated Gas”).  Shipper shall deliver, or cause to be delivered,
all Dedicated Gas to Transporter at the Receipt Point(s). Shipper commits and
dedicates to Transporter all of Shipper’s and its Affiliates (other than SN
Catarina, LLC) right, title, and interests in and to the Dedicated Reserves, to
support Shipper’s performance of its obligations provided for in this
Section 1.1(a).

(b)        In addition to the Dedicated Gas, Shipper hereby agrees to use
commercially reasonable efforts to deliver or cause to be delivered, hereunder
to Transporter for transportation on Transporter’s System under this Agreement,
all volumes of Residue Gas that are owned or Controlled by Shipper or its
Affiliates (other than SN Catarina, LLC)  that are not Dedicated Gas but are
received by Shipper or its Affiliates (other than SN Catarina, LLC) at the
tailgate of the Raptor Plant (the “Additional Gas”, and together with the
Dedicated Gas, “Shipper’s Gas”).

 

 

 

 

1.2       Receipt.

(a)        Subject to the terms and conditions of this Agreement, Transporter
agrees to accept and receive, up to one hundred percent (100%) of the quantity
of Shipper’s Gas tendered by Shipper or its designee each Day during the Term of
this Agreement at the Receipt Point(s), not to exceed the greater of (i) the
maximum Residue Gas capacity at the Raptor Plant or (ii) two hundred (200) MMBtu
per Day (such greater amount, the “Maximum Daily Quantity”), and to transport
for Shipper such quantity of Shipper’s Gas on Transporter’s System on a Firm
basis.

(b)        Transporter agrees to use commercially reasonable efforts to, accept
and receive, Shipper’s Gas tendered by Shipper or its designee in excess of the
Maximum Daily Quantity, each Day during the Term of this Agreement at the
Receipt Point(s), and to transport for Shipper such quantity of Shipper’s Gas on
Transporter’s System on an Interruptible basis.

(c)        Transporter’s acceptance and receipt of Shipper’s Gas is expressly
subject to the operational considerations and capacity constraints as set forth
in Article VIII of this Agreement, and such Gas meeting the quality
specifications as set forth in Article IV of Exhibit A.

1.3       Delivery.

(a)        During the Term of this Agreement, Transporter shall deliver and
Shipper shall accept or cause to be accepted at the Delivery Point(s), a
quantity of natural gas equivalent, on a MMBtu basis, to the sum of the
quantities of Shipper’s Gas accepted and received by Transporter at the Receipt
Point(s) for transportation hereunder in accordance with Section 1.1,  less
Shipper’s pro-rata share of actual fuel, including actual fuel equivalents, and
losses incurred on Transporter’s System (“Shipper’s FL&U”). Shipper’s FL&U shall
not exceed one percent (1%) of the volume of Residue Gas received by Transporter
at the Receipt Point(s) each Month.

(b)        Notwithstanding anything to the contrary in this Agreement,
Transporter has the right to commingle Shipper’s Residue Gas with other Gas or
Residue Gas in Transporter’s System and to deliver Residue Gas at the Delivery
Point(s) that is of the same or similar quality as that received at the Receipt
Point(s), and the right to cease taking deliveries of Residue Gas so long as
Transporter, in its sole opinion, determines that due to operations of Shipper,
its agents, representatives, or contractors, a dangerous or unsafe condition
exists. Upon Transporter’s giving notice of any such cessation and continuing
until such condition is remedied to Transporter’s satisfaction, Transporter
shall not be obligated to accept delivery of Shipper’s Gas.

1.4       Covenant Running with the Land; Assignment of Interests.  So long as
this Agreement is in effect, the dedication and commitment with respect to the
Dedicated Gas made by Shipper under this Agreement, along with the provisions of
Section 1.1(a), is a covenant running with the land. This Agreement, along with
all renewals, extensions, amendments, and supplements, and all rights, title and
interests contained herein, shall be binding upon and inure to the benefit of
the Parties, and their successors and permitted assigns. Any assignment, sale,
transfer or conveyance by Shipper or its Affiliates (other than SN Catarina,
LLC) of any interests in the Dedicated Reserves shall be subject to the
dedication under this Agreement and Shipper shall require that the assignee of
any such interests agree in writing to expressly ratify this Agreement and
assume and discharge the duties and obligations of Shipper or its Affiliates
(other than SN

2

 

Catarina, LLC) under this Agreement with respect to such interests acquired from
and assigned by Shipper; and such assigned interests shall be Dedicated
Reserves. Any Person which shall succeed by purchase, merger or consolidation
with Shipper or Transporter and their respective successors in interest shall be
subject to the obligations of its predecessor under this Agreement.

1.5       Memorandum of Agreement.  Contemporaneously with the execution of this
Agreement and from time to time during the Term, the Parties will execute,
acknowledge, deliver and record a “short form” memorandum of this Agreement
substantially in the form of Exhibit C (“Memorandum of Agreement”) identifying
the Dedicated Reserves, which Shipper will file of record in the real property
records of each county that contains Dedicated Reserves. Notwithstanding the
foregoing, Transporter shall also have the right to file and record such
memorandum of this Agreement and any necessary supporting documents or
instruments in the real property records of each county that contains Dedicated
Reserves.

ARTICLE II

TRANSPORTATION SERVICES

2.1       Receipt Point(s).  The receipt point(s) at which Shipper shall tender
Residue Gas to Transporter for transportation is described in Exhibit B to this
Agreement (the “Receipt Point(s)”). The delivery pressure and other pertinent
factors applicable to the Receipt Point(s) are set forth in Exhibit B.

2.2       Delivery Point(s).  The delivery point(s) at which Transporter shall
deliver hereunder is described in Exhibit B (the “Delivery Point(s)”). The
delivery pressure and other pertinent factors applicable to the Delivery
Point(s) are set forth in Exhibit B.

2.3       Title.  Except as expressly provided for in this Agreement, title to
Shipper’s Gas delivered to Transporter under this Agreement will remain with
Shipper or Shipper’s customers at all times.

2.4       Substances Recovered in Pipeline.  All substances, whether or not of
commercial value, including all liquid hydrocarbons of whatever nature, except
substances expressly reserved for Shipper, that Transporter recovers in the
course of transporting the quantities of Shipper’s Gas tendered hereunder will
be Transporter’s sole property and Transporter will not be obligated to account
to Shipper for any value, whether or not realized by Transporter, that may
attach, or be said to attach, to such substances.

2.5       Residue Gas.  All references to Gas with respect to Transporter’s
obligation to receive, transport, and/or deliver Gas hereunder shall be read as
references to Residue Gas.

3

 

ARTICLE III

FEE(S)

3.1       Fee(s).  Upon the commencement of service hereunder, Shipper shall pay
Transporter, for the transportation services rendered hereunder from the Receipt
Point(s) to the Delivery Point(s), the fee(s) set forth in Exhibit B.

3.2       Annual Rate Escalation.  Effective on each anniversary of the
Effective Date through the Term of this Agreement, the Transportation Fee set
forth in Exhibit B and all other fees for services by Transporter in accordance
with this Agreement shall be adjusted by the product of the rate then in effect
multiplied by the percentage increase (if any) between the Consumer Price Index
(All Urban Consumers (CPI-U); U.S. City Average; All items, 1982-1984 reference
base), issued by the United States Department of Labor, Bureau of Labor
Statistics (“BLS”) (the “CPI”) for January of the current year and the CPI for
January of the immediately preceding year; provided that in no event shall the
fees hereunder be increased by more than 3% from the fees in effect for the
immediately preceding year, or decreased.  If the 1982-1984 reference base is no
longer used as the standard reference base by BLS, then the standard reference
base shall be that established from time to time by BLS as the replacement for
the CPI.

ARTICLE IV

REGULATORY REQUIREMENTS

4.1       Regulatory Requirements.  The transportation arrangements provided for
in this Agreement are subject to Texas Railroad Commission regulations, as
amended from time to time.

ARTICLE V

TERM; TERMINATION

5.1       Term.  This Agreement will become effective as of the Effective Date,
and will remain in full force and effect until March 31, 2033 (such period,
“Primary Term”). Unless otherwise terminated as provided in Section 5.2 of this
Agreement or Section 9.2 of Exhibit A, upon the expiration of the Primary Term,
this Agreement shall renew automatically for additional terms of one (1) year
each thereafter (each, a “Renewal Term”) on the existing terms (including the
then-existing rates), unless either Party elects to terminate this Agreement by
written notice to the other Party no later than the date which is ninety (90)
Days prior to the expiration of the Primary Term or any Renewal Term, as
applicable.  The period of time that this Agreement remains in effect pursuant
to this Section 5.1 is referred to as the “Term”.

5.2       Early Terminations.

(a)        If a Party is in Default, the non-defaulting Party may, in addition
and without prejudice to any other remedies such non-defaulting Party may have
under this Agreement or at law or in equity, suspend all performance under this
Agreement or terminate this Agreement, in each case upon ten (10) Days’ prior
written notice.

(b)        The following shall constitute events of “Default” under this
Agreement:

4

 

(i)         if a Party fails to pay any amount due to the other Party when the
same is due, and such Party’s account remains delinquent beyond a twenty (20)
Day period after written notice of failure to pay has been delivered to such
Party, exclusive of any amounts subject to a good faith dispute pursuant to
Section 5.3 of Exhibit A;

(ii)        if a Party experiences an Insolvency Event; or

(iii)       if such Party is in material breach of this Agreement (other than
for failure to pay amounts due, which is addressed in clause (i) above), and
that breach is not cured within forty-five (45) Days after receipt by such Party
of written notice from the other Party asserting such breach.

5.3       Effect of Termination.  Termination of this Agreement will not (i)
relieve either Party of its respective obligation to correct any volume
imbalances hereunder occurring prior to the termination, or (ii) relieve either
Party of the obligation, if any, to pay monies due prior to or as of the
termination of this Agreement to the other Party.

ARTICLE VI

NOTICES

6.1       Notices.  Any formal notice, request or demand that either Party gives
to the other respecting this Agreement must be in writing and must be mailed by
registered or certified mail or delivered in hand to the following address of
the other Party or to such other address as a Party shall designate by formal
written notice.

 

If to Shipper:

SN EF Maverick, LLC

Attn: General Counsel

1000 Main Street, Suite 2800

Houston, Texas 77002

Phone: [__________]

Facsimile: [__________]

If to Transporter:

Seco Pipeline, LLC [Attn: __________]

[To be added]

[]

Houston, Texas [-]

Phone: [__________]

Facsimile: [__________]

 

 

6.2       Routine and Operating Communications.  Routine communications should
be provided by electronic means, whether via email or facsimile. Operating
communications by telephone, facsimile or other mutually agreeable means will be
considered as duly delivered with subsequent written confirmation.

ARTICLE VII

NOMINATIONS

7.1       Nominations.  Shipper shall submit to Transporter nominations for
transportation service hereunder at least five (5) days prior to the beginning
of each Month. Nominations shall detail the specific Receipt Point(s) and
Delivery Point(s) for that volume. Shipper may submit any daily changes to such
nomination by 10:00 a.m. Central Time on the Day immediately before the Day on
which Shipper’s Gas is desired to flow from time to time.

5

 

7.2       Imbalances.  Shipper is responsible for Monthly nominations into
pipelines downstream of the Delivery Point(s); and for reconciliation of daily
and Monthly gas imbalances with such downstream pipelines. Shipper shall use
reasonable efforts to minimize these imbalances and agrees to make nomination
adjustments to both achieve a minimal imbalance at the end of each Month and
resolve any existing imbalances in the following Month or as soon as
practicable.

7.3       Nomination Changes.  Transporter or Shipper shall notify the other
Party (except if due to an event of Force Majeure) by written notice (which can
be by fax or email) and make allowable intra-day changes consistent with
industry standards.

ARTICLE VIII

OTHER OPERATING PROVISIONS

8.1       Disruptions to Firm Services.  Shipper’s Gas entitled to Firm services
under this Agreement may be, from time to time, interrupted, curtailed, or
disrupted (herein, a “Disruption”) to the extent reasonably necessary (as
determined by Transporter acting in its reasonable discretion) for any of the
following reasons: (i) safe operation of the Transporter’s System, (ii) an
ongoing event of Force Majeure affecting Transporter, (iii) subject to the
Transporter’s compliance with the other terms and conditions of this Agreement,
the inability of a Receipt Point to receive Shipper’s Gas, and (iv) upon
reasonable advance notice of at least thirty (30) days’ to Shipper for scheduled
maintenance, expansions or modifications of Transporter’s System from time to
time, provided that with respect to item (iv) Transporter will reasonably
cooperate with Shipper to minimize adverse effects due to such work.  In the
event of a Disruption, Transporter will give Shipper prompt notice with
reasonable detail of the reason for the Disruption and a good faith estimate of
the duration and extent of such Disruption.  In such event Transporter shall not
be in breach or default of its obligations under this Agreement and shall have
no liability to Shipper in connection with or resulting from any such
curtailment.  When Transporter reestablishes the Firm service as to such volumes
of Shipper’s Gas interrupted or curtailed by a Disruption, Transporter shall
give Shipper notice thereof and Shipper shall resume deliveries to Shipper of
the affected volumes. For the avoidance of doubt, services provided by
Transporter hereunder on an Interruptible basis may be interrupted, curtailed,
disrupted or discontinued at any time at the sole discretion of Transporter, for
no reason or any reason, including, without limitation, any Disruption set forth
in this Section 8.1.

When Transporter reestablishes the Firm service as to such volumes of Shipper’s
Gas interrupted or curtailed by a Disruption, Transporter shall give Shipper
notice thereof and Shipper shall resume deliveries to Shipper of the affected
volumes. For the avoidance of doubt, services provided by Transporter hereunder
on an Interruptible basis may be interrupted, curtailed, disrupted or
discontinued at any time at the sole discretion of Transporter, for no reason or
any reason, including, without limitation, any Disruption set forth in this
Section 8.1.

 

(a)        Temporary Disruption.  To the extent Transporter does not accept any
portion of Shipper’s Gas, such rejected Gas (the “Subject Gas”) shall be
immediately temporarily released from the dedication hereunder and Shipper may
enter into short term interruptible arrangements with third parties for the
transportation of such Subject Gas (“Temporary Arrangements”); provided that
Shipper must again deliver such Subject Gas to Transporter at the Receipt Points
on the first (1st) Day

6

 

of the Month immediately following after Shipper receives notice from
Transporter that Transporter is able to accept the Subject Gas.  Any of
Shipper’s Gas temporarily released from this Agreement shall not be Dedicated
Gas hereunder; provided, however, that such Residue Gas shall become Dedicated
Gas again at the conclusion of a temporary disruption.  In such event
Transporter shall not be in breach or default of its obligations under this
Agreement and shall have no liability to Shipper in connection with or resulting
from such Temporary Disruption.

(b)        Permanent Disruption.  If, for any reason, excluding an event of
Force Majeure, Transporter does not accept any portion of Shipper’s Gas up to
the Maximum Daily Quantity (such portion not accepted, the “Disruption Volumes”)
for more than one hundred fifty (150) Days out of any two hundred ten (210) Day
period (“Permanent Disruption”), then the Disruption Volumes shall be
permanently released from the dedication hereunder. Shipper, in its sole
discretion, may enter into any alternative arrangements for the transportation
of the Disruption Volumes.  For the avoidance of doubt, this Section 8.1(b)
shall not apply to any failure of Transporter to accept any portion of Shipper’s
Gas due to any action or inaction of Shipper.

8.2       Capacity Curtailment.

(a)        Notwithstanding anything to the contrary in this Agreement,
Transporter’s acceptance and receipt of Shipper’s Gas that is nominated and
tendered by Shipper in accordance with this Agreement is subject to the physical
capacity constraints on Transporter’s System. If, on any Day, Transporter
determines that the physical capacity of Transporter’s System, or any portion
thereof, is insufficient to serve all requests from its customers (including
Shipper) for any reason, including without limitation any Disruptions, then
Transporter has the right to schedule transportation in accordance with this
Section 8.2 until all available capacity is allocated.

(b)        Capacity on the Transporter’s System shall be curtailed and allocated
among applicable customers in accordance with the following:

(i)         First, Transporter shall curtail all Gas received on an
Interruptible basis (including all of Shipper’s Gas exceeding the Maximum Daily
Quantity) prior to curtailing Gas received on a Firm basis.  If Transporter
curtails Gas received on an Interruptible basis, Transporter shall allocate the
capacity of Transporter’s System available to Interruptible customers among such
Interruptible customers, on a pro rata basis, based upon each such customer’s
request of capacity to the total capacity of Transporter’s System available to
Interruptible customers.

(ii)        Second, if additional curtailments are required beyond clause
8.2(b)(i) above, Transporter shall curtail Gas received on a Firm basis
(including Shipper’s Gas up to the Maximum Daily Quantity).  If Transporter
curtails Gas received on a Firm basis (including Shipper’s Gas up to the Maximum
Daily Quantity), Transporter shall allocate the capacity of Transporter’s System
available to customers with Firm reserved capacity (including Shipper) on a pro
rata basis based upon each such customer’s ratio of its reserved capacity to the
total reserved capacity on Transporter’s System.  For the purposes of this
Agreement, Customer’s

7

 

reserved capacity shall be the Maximum Daily Quantity.

 

ARTICLE IX

MISCELLANEOUS

9.1       Governing Law.  This Agreement will be interpreted, construed, and
governed by the laws of the State of Texas, without reference to conflicts of
law principles thereof that might apply the laws of another jurisdiction.

9.2       Dispute Resolution.

(a)        The Parties desire to resolve any disputes related to this Agreement
that may arise by mutual agreement, if possible.  All disputes arising out of or
relating to this Agreement that are not resolved by mutual agreement of the
Parties shall be resolved using the provisions of this Section 9.2.

(b)        If a dispute or disputes arise out of or relating to this Agreement,
a Party shall give notice of the dispute(s) to the other Party, and each Party
will appoint an employee to negotiate with the other Party concerning the
dispute(s).  If the dispute(s) have not been resolved by negotiation within
thirty (30) Days of the initial dispute notice, the dispute(s) shall be
exclusively and finally resolved by binding arbitration in Houston, Texas in
accordance with the then current Rules for Non-Administered Arbitration of the
International Institute for Conflict Prevention and Resolution (“Rules”) and
this Section 9.2.

(c)        The arbitration shall be governed by the Rules, to the exclusion of
any provision of state law inconsistent with them.  The arbitration shall be
initiated by a Party seeking arbitration by notice transmitted to the other
Party or Parties to be involved.

(d)        The Parties shall select one disinterested arbitrator with at least
10 years’ experience in the midstream oil and gas industry and ten (10) years’
experience with oil and gas law, and not previously employed by either Party or
its Affiliates, and, if possible, shall be selected by agreement between the
Parties.  If the Parties cannot select an arbitrator by agreement within fifteen
(15) Days of the date of the notice of arbitration, a qualified arbitrator will
be selected in accordance with the Rules.

(e)        If the dispute(s) involves an amount greater than $150,000, the
dispute(s) will be decided by a panel of three arbitrators with the above
qualifications, one selected by each Party, and the third selected by the
Party-appointed arbitrators, or in the absence of their agreement, pursuant to
the Rules.

(f)        The arbitrator(s) shall resolve the disputes and render a final award
in accordance with the substantive law of the State of Texas.

(g)        If arbitration is necessary to resolve a dispute, the arbitral
tribunal is authorized to award costs and reasonable attorneys’ fees or allocate
them between the Parties, and the costs of the arbitration proceedings,
including reasonable attorneys’ fees, shall be borne in the manner determined by
the arbitral tribunal.

8

 

(h)        The decision of the arbitrator(s) shall be final and binding on both
Parties and shall set forth the reasons for the award in writing, and judgment
on the arbitration award may be entered in any court having jurisdiction.

9.3       Entire Agreement.  The Exhibits attached hereto are hereby
incorporated by reference as part of this Agreement. This Agreement (including
the Exhibits referenced in and attached to this Agreement) and the Memorandum of
Agreement contain the entire agreement of Parties with respect to the matters
addressed herein and therein, and supersede all prior negotiations,
representations, understandings, agreements, contracts (whether oral or written)
by and between Transporter and Shipper with respect to the subject matter
herein. This Agreement and the Memorandum of Agreement will be amended only by
an instrument in writing signed by both Parties.  The Parties acknowledge that
this Agreement and the Memorandum of Agreement will be deemed and considered for
all purposes as prepared through the joint efforts of the Parties and will not
be construed against a Party as a result of the preparation, submittal,
negotiation or drafting thereof.  Exhibit A and the General Terms and Conditions
are hereby incorporate by reference as part of this Agreement.

9.4       Mutual Waiver of Certain Remedies.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, OTHER THAN REASONABLE ATTORNEYS’ FEES AND COURT
COSTS, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY, ANY
SUCCESSORS IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE OF THIS AGREEMENT FOR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES, OR FOR LOST
OR DELAYED PRODUCTION OR LOST BUSINESS OPPORTUNITY, OR FOR BUSINESS LOSSES OR
FOR ECONOMIC LOSSES OF THE OTHER PARTY ARISING OUT OF THIS AGREEMENT OR ANY
BREACH HEREOF.  THIS SECTION 9.4 WILL APPLY NOTWITHSTANDING THE SOLE, JOINT OR
CONCURRENT NEGLIGENCE, OR OTHER FAULT OR RESPONSIBILITY OF THE PARTY WHOSE
LIABILITY IS WAIVED BY THIS PROVISION, OR ANY OTHER EVENT OR CONDITION, WHETHER
ANTICIPATED OR UNANTICIPATED, AND REGARDLESS OF WHETHER PRE-EXISTING PRIOR TO
THE DATE OF THIS AGREEMENT.

9.5       Shippers’ Representative.

(a)        To the extent that Shipper is appointed as the representative of a
Comanche Shipper pursuant to a Ratification Agreement, Transporter agrees that
Shipper is such  Comanche Shipper’s  representative (collectively, the
“Shippers’ Representative”) with respect to all matters arising under this
Agreement.

(i)         Transporter may act, and shall be fully protected in acting, in
reliance upon any and all acts and things done and performed by or agreements
made with respect to all matters dealt with herein by Shippers’ Representative
on behalf of each Person included within the definition of Shipper or Comanche
Shipper as fully and with the same effect as though each such Person had done,
performed, made or executed the same.  Shipper hereby indemnifies Transporter
against and holds Transporter harmless from any and all damages arising out of
or in any way related to Transporter’s reliance

9

 

upon the foregoing sentence.

(ii)        Shipper may change Shippers’ Representative designated above, or
designate a new Shippers’ Representative from time to time by delivery of
written notice of change and designation to Transporter

(iii)       Shippers’ Representative so designated shall have and may exercise
all power and authority therein granted with like effect as though originally
named as the Shippers’ Representative.

(b)        Notwithstanding the terms of Section 9.5(a) above, the obligations of
each Comanche Shipper shall be several and not joint to the extent of the
Shipper’s Share, as set forth in the Ratification Agreement.

(c)        Transporter agrees that, without prejudice to any other rights it may
have in respect of any Default by Shipper, Transporter will not suspend
performance under, take any enforcement action or exercise any remedy in respect
of, or otherwise terminate, this Agreement due to any default by Shipper that is
capable of being cured by the Comanche Shippers without first notifying each
Comanche Shipper in writing of the nature and details of such default with
reasonable specificity and providing each Comanche Shipper thirty (30) days (or
in the case of a payment default, fifteen (15) days) following such Comanche
Shipper’s receipt of such notice to cure such default to the extent arising out
of or attributable to its Shipper’s Share (as defined in the applicable
Ratification Agreement) of such responsibilities and obligations.  If a Comanche
Shipper cures the default within such thirty (30) day (or in the case of a
payment default, fifteen (15) day) period in accordance with the terms of this
Agreement, then as to such Comanche Shipper, the default will be deemed cured in
accordance with this Agreement and Shipper and Transporter will not have any
further right against such Comanche Shipper (to the extent arising due to the
cured default) to suspend performance under, take any enforcement action or
exercise any remedy in respect of, or otherwise terminate, this Agreement with
respect to such Comanche Shipper.  For clarity, Transporter may provide the
notice required by this paragraph to the Comanche Shippers concurrently with or
after notices provided to Shipper under Section 6.1.

[Signature Page Follows.]

 

10

 

The Parties have executed this Agreement as of the Effective Date.

 

 

 

 

 

 

SHIPPER:

   

TRANSPORTER:

SN EF MAVERICK, LLC

 

SECO PIPELINE, LLC

 

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

 

11

 

EXHIBIT A

GENERAL TERMS AND CONDITIONS

ARTICLE I

DEFINITIONS

Except in those certain instances where the context states another meaning, the
following terms when used in the Agreement and all Exhibits thereto have the
meaning stated:

 

1.1       “Additional Gas” shall have the meaning set forth in Section 1.1(b) of
the Agreement.

1.2       “Affiliate” shall mean when used with respect to any Person, any other
Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person.  As
used herein, “control” means possessing, directly or indirectly, the power to
direct or cause the direction of the management and policies of any such
relevant Person by ownership of voting interest, by contract or otherwise;
provided, however, that solely having the power to act as the operator of a
Person’s day-to-day commercial operations, without otherwise having the direct
or indirect power to direct or cause the direction of the management and
policies of such Person, shall not satisfy the foregoing definition of
“control”. Notwithstanding anything to the contrary herein, in no event shall
Transporter or any of its subsidiaries be deemed to be an Affiliate of Shipper
or any of its subsidiaries.

1.3       “Approval Date” means the date on which the Bankruptcy Court enters
the Approval Order.

1.4       “Approval Order” means an order of the Bankruptcy Court reasonably
acceptable to the parties to the Settlement Agreement, entered pursuant to Rule
9019 of the Federal Rules of Bankruptcy Procedure, approving the Settlement
Agreement, which order has not been reversed, vacated or stayed.

1.5       “Assumed Obligations” shall have the meaning set forth in Section 10.2
of this Exhibit A.

1.6       “Bankruptcy Cases” means the chapter 11 cases of the Debtors pending
before the Bankruptcy Court, styled In re Sanchez Energy Corporation, et al.,
Case No. 19-34508 (MI) (Bankr. S.D. Tex.) (Jointly Administered).

1.7       “Bankruptcy Court” means the United States Bankruptcy Court for the
Southern District of Texas.

1.8       “BLS” shall have the meaning set forth in Section 3.2 of the
Agreement.

1.9       “Btu” shall mean British thermal unit.

1.10     “Closing Date” means the date the Closing Notice is executed and filed
with the Bankruptcy Court.

Exhibit A-1

 

1.11     “Closing Notice” means a notice of the occurrence of Closing (as
defined in the Settlement Agreement and attached thereto as Exhibit G).

1.12     “Comanche Gathering Agreement” shall mean that certain Firm Gas
Gathering, Processing and Purchase Agreement, dated effective as of April 1,
2018, by and between Shipper and Carnero G&P LLC, a Delaware limited liability
company, as amended by that certain Amendment to certain Firm Gas Gathering,
Processing and Purchase Agreement, dated effective as of April 1 2018, and as
the same may be further amended from time to time.

1.13     “Comanche Shippers” means (i) Producer and (ii) each of SN EF UnSub,
LP, Eagle Ford TX LP, Venado EF L.P., Gavilan Resources, LLC, Mitsui E&P Texas
LP and their respective Affiliates, successors and assigns that delivers Gas to
Transporter from the Dedicated Reserves under one or more Ratification
Agreements.

1.14     “Control” (including its derivatives and similar terms) means (a) with
respect to any Person, possessing, directly or indirectly, the power to direct
or cause the direction of the management and policies of any such relevant
Person by ownership of voting interest, by contract or otherwise; provided,
however, that solely having the power to act as the operator of a Person’s
day-to-day commercial operations, without otherwise having the direct or
indirect power to direct or cause the direction of the management and policies
of such Person, shall not satisfy the foregoing definition of “Control” and (b)
with respect to any Gas, such Gas with respect to which Shipper has the
contractual right or obligation (pursuant to a marketing, gathering,
transportation, processing, agency, operating, unit or similar agreement) to
market, gather, transport or process such Gas and Shipper elects or is obligated
to market, gather, transport or process such Gas.

1.15     “CPI” shall have the meaning set forth in Section 3.2 of the Agreement.

1.16     “Day” shall mean the period of twenty-four (24) consecutive hours
beginning at 9:00 a.m. Central Time on any calendar day and ending at 9:00 a.m.
Central Time on the calendar day immediately following.

1.17     “Debtors” means, collectively, prior to the Effective Date, Sanchez
Energy Corporation and each of its direct and indirect subsidiaries that are
debtors and debtors-in-possession in the Bankruptcy Cases, including SN EF
Maverick, LLC and SN Catarina, LLC, and, after the Effective Date, such entities
as reorganized pursuant to the Plan.

1.18     “Dedicated Gas” shall have the meaning set forth in Section 1.1(a) of
the Agreement.

1.19     “Dedicated Reserves” shall mean the interest of Shipper in all Gas
reserves in and under, and all Gas owned or Controlled by Shipper or which
Shipper produced or delivered from lands within the area described on Exhibit D
of the Comanche Gathering Agreement, whether now owned or hereafter acquired,
and any and all additional right, title, interest, or claim of every kind and
character of Shipper or its Affiliates in land within the area described on
Exhibit D of the Comanche Gathering Agreement, and Gas production therefrom, and
all interests in any wells, whether now existing or drilled hereafter, on, or
completed on, lands within the area described on Exhibit D of the Comanche
Gathering Agreement.

Exhibit A-2

 

1.20     “Default” shall have the meaning set forth in Section 5.2(b) of the
Agreement.

1.21     “Disruption” or “Disruptions” shall have the meaning set forth in
Section 8.1 of the Agreement.

1.22     “Firm” shall mean service on Transporter’s System that may not be
curtailed, interrupted or discontinued, subject, however, to the Disruptions set
forth in Article VIII of the Agreement.

1.23     “Gas” shall mean natural gas produced from gas wells and gas produced
in association with oil (casinghead gas).

1.24     “Governmental Authority” shall mean any legislature, court, tribunal,
arbitrator or arbitral body, authority, agency, commission, division, board,
bureau, branch, official or other instrumentality of the U.S., or any domestic
state, county, city, tribal or other political subdivision, governmental
department or similar governing entity, and including any governmental,
quasi-governmental or non-governmental body exercising similar powers of
authority.

1.25     “Heating Value” shall mean the gross number of British thermal units
(Btu’s) which would be contained in the volume of one (1) cubic foot of gas at a
temperature of sixty degrees (60°) Fahrenheit, when saturated with water vapor
and under a pressure of fourteen and seventy-three hundredths (14.73) pounds per
square inch absolute and adjusted to reflect the actual water vapor content of
the gas delivered; however, if the water vapor content is seven (7) pounds per
million cubic feet or less, the gas shall be deemed dry.

1.26     “Insolvency Event” shall mean, with respect to any Person, such Person
(i) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits
in writing its inability generally to pay its debts as they become due; (iii)
makes a general assignment, arrangement or composition with or for the benefit
of its creditors; (iv) institutes or has instituted against it, a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights,
or a petition is presented for its winding-up or liquidation by it or a
regulator, supervisor or similar official, in each case which is not dismissed,
discharged, stayed or restrained in each case within fifteen (15) Days of the
institution or presentation thereof; (v) has a resolution passed for its
winding-up, dissolution or liquidation (other than pursuant to a consolidation,
amalgamation or merger); (vi) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or substantially all its assets;
(vii) has a secured party take possession of all or substantially all its assets
or has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within fifteen (15) days
thereafter; (viii) causes or is subject to any event with respect to it that,
under applicable law, has an analogous effect to any of the events specified in
clauses (i) to (vii) above (inclusive); or (ix) takes any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the
foregoing acts.

Exhibit A-3

 

1.27     “Interruptible” shall mean service on Transporter’s System that may be
curtailed, interrupted or discontinued at any time, at the sole discretion of
Transporter, for any reason or no reason, without liability, obligation or
penalty of any kind.

1.28     Maximum Daily Quantity” shall have the meaning set forth in Section
1.2(a) of the Agreement.

1.29     “Mcf” shall mean One thousand (1,000) cubic feet.

1.30     “Memorandum of Agreement” shall have the meaning set forth in Section
1.5 of the Agreement.

1.31     “MMBtu” shall mean one million (1,000,000) Btu.

1.32     “Month” shall mean the period beginning at 9:00 a.m. Central Time on
the first day of a calendar month and ending at 9:00 a.m. Central Time on the
first day of the calendar month immediately following, except that the first
month shall begin on the date of initial deliveries of natural gas hereunder and
shall end at 9:00 a.m. Central Time on the first day of the calendar month
immediately following.

1.33     “Permanent Disruption” shall have the meaning set forth in Section
8.1(b).

1.34     “Person” shall include any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, or Governmental Authority.

1.35     “Plan” means the Second Amended Joint Chapter 11 Plan of Reorganization
of Sanchez Energy Corporation and its Debtor Affiliates, dated as of April 30,
2020 [DKT. #1205], as amended or modified from time to time.

1.36     “Primary Term” shall have the meaning set forth in Section 5.1 of the
Agreement.

1.37     “psia” shall mean pounds per square inch absolute.

1.38     “psig” shall mean pounds per square inch gauge.

1.39     “Raptor Plant” shall mean that certain Raptor gas processing plant
owned by Carnero G&P LLC in LaSalle County, Texas.

1.40     “Ratification Agreement” shall mean an agreement executed by a Comanche
Shipper ratifying or otherwise committing such Comanche Shipper to the
performance of this Agreement, and on terms mutually agreeable to Transporter
and the applicable Comanche Shipper.

1.41     “Renewal Term” shall have the meaning set forth in Section 5.1 of the
Agreement.

1.42     “Residue Gas” shall mean the gaseous portion of Gas that remains after
the extraction and/or removal therefrom of liquefiable hydrocarbons or other
constituents, shrinkage,

Exhibit A-4

 

fuel gas used to operate the processing facilities, and flare, vented and/or or
lost and unaccounted for gas that may be incurred in the operation of the
processing facilities.

1.43     “Rules” shall have the meaning set forth in Section 9.2(b) of the
Agreement.

1.44     “Settlement Agreement” means that certain Settlement Agreement, dated
as of May [•], 2020, by and among the Debtors, Catarina Midstream LLC, Carnero
G&P LLC, Seco Pipeline, LLC, Sanchez Midstream Partners, LP and TPL SouthTex
Processing Company LP.

1.45     “Shipper’s FL&U” shall have the meaning set forth in Section 1.3(a) of
the Agreement.

1.46     “Shipper’s Gas” shall have the meaning set forth in Section 1.1 of the
Agreement.

1.47     “Subject Gas” shall have the meaning set forth in Section 8.1(a) of the
Agreement.

1.48     “Temporary Arrangements” shall have the meaning set forth in Section
8.1(a).

1.49     “Term” shall have the meaning set forth in Section 5.1 of the
Agreement.

ARTICLE II

MEASUREMENT AND TESTS

The measurement and tests for quality of Gas delivered hereunder will be
governed by the following:

 

2.1       The volume will be measured by meters installed, maintained and
operated by or on behalf of Transporter. Computations shall be made in
accordance with industry practice.

2.2       For the purpose of measurement, and meter calibration, the atmospheric
(Barometric) pressure will be in accordance with AGA Report No. 3/API 14.3, as
it is now and from time to time may be revised.

2.3       The unit of volume for purposes of measurement will be one (1) cubic
foot of gas at a temperature base of sixty degrees (60°) Fahrenheit and at a
pressure base of fourteen and seventy-three hundredths (14.73) psia.

2.4       The temperature will be adjusted to standard conditions by a
compensation device included with the meter. Corrections will be made in
accordance with industry practice.

2.5       Specific gravity will be determined with accuracy to the nearest
one-thousandth by taking samples of the Gas at the Receipt Point(s) at such
times as may be determined to be necessary in practice by the use of an
instrument commonly used and accepted in the industry.

2.6       Tests for carbon dioxide, sulfur, and hydrogen sulfide content of the
Gas delivered hereunder will be made by approved standard methods from time to
time as requested by either Party, but not more often than once each Month.

Exhibit A-5

 

2.7       All measuring equipment, housing devices, and materials shall be of
standard manufacture and will, with all related equipment, appliances and
buildings, be installed, maintained, and furnished by Transporter or its
designee at Transporter’s expense. Shipper may install and operate
check­measuring equipment, which will not interfere with the use of
Transporter’s equipment. All testing equipment shall be of standard manufacture
and will be maintained, operated and furnished by Transporter or its designee at
Transporter’s expense.

2.8       The accuracy of Transporter’s measuring and testing equipment will be
verified by Transporter at necessary intervals, to ensure accurate measurement.
Tests for quality of the Gas may be made at the time of equipment testing, or at
other times, as deemed necessary by Transporter. Notice of the time and nature
of each test shall be provided to Shipper sufficiently in advance to permit
Shipper to have a representative present. Measuring and testing equipment will
be tested by reasonable means and methods in the presence of representatives of
both Shipper and Transporter, if present. If Shipper fails to have a
representative present after proper notice, the results of such tests will be
provided to Shipper and will nevertheless be considered accurate until the next
test. All tests will be made at Transporter’s expense, except that Shipper will
bear the expense of tests made at its request, if the inaccuracy found is one
percent (1%) or less.

2.9       If at any time any of the measuring or testing equipment is found to
be out of service, or registering inaccurately in any percentage, it will be
adjusted at once to read accurately within the limits prescribed by the
manufacturer. If any measuring equipment shall be found to be inaccurate by an
amount exceeding one percent (1%) at a reading corresponding to the average
hourly rate of flow for the period since the last preceding test, the previous
reading of such equipment will be disregarded for any period definitely known or
agreed upon or if not so known or agreed upon for a period of sixteen (16) Days
or one-half (1/2) of the elapsed time since the last test, whichever is shorter.
The volume of Gas delivered during such period will be estimated by:

(a)        using the data recorded by any check-measuring equipment if installed
and accurately registering; or

(b)        if the check measuring equipment is not installed or registering
accurately by correcting the error if the percentage of error is ascertainable
by calibration test or mathematical calculation; or

(c)        if neither such method is feasible, by estimating the quantity, or
quality, delivered based upon deliveries under similar conditions during a
period when the equipment was registering accurately; and

provided,  that, no corrections will be made for recorded inaccuracies of two
percent (2%) or less.

 

2.10     Shipper and Transporter will have the right to inspect equipment
installed or furnished by the other, and the charts and other measurement or
testing data of the other, at all times during business hours, but the reading,
calibration and adjustment of such equipment and changing of charts will be done
only by the Party owning such equipment. Each Party will preserve all original
test data, charts and other similar records in such Party’s possession for a
period of at least two (2) years.

Exhibit A-6

 

ARTICLE III

DELIVERY PRESSURE AND COMPRESSION

3.1       All Gas delivered by or for the account of Shipper to Transporter
hereunder must be delivered at pressures as may be needed to enter Transporter’s
System against the working pressures maintained therein from time to time, but
not to exceed the pressure required to sustain the redelivery pressure specified
in Section 3.2 below or the maximum pressure set forth on Exhibit B of the
Agreement.

3.2       All Gas delivered by Transporter to Shipper or Shipper’s designee
hereunder must be delivered at pressures sufficient to enter Shipper’s or
Shipper’s designee’s facilities against a working pressure maintained therein
from time to time.

3.3       Notwithstanding the other provisions of the Agreement, neither
Transporter nor Shipper shall be required to provide compression to effectuate
the delivery or redelivery of gas pursuant in this Agreement.

ARTICLE IV

QUALITY

4.1       All Gas delivered to Transporter at the Receipt Point under this
Agreement will comply with the following specifications:

(a)        Water Vapor: The Gas will not have a water vapor content in excess of
seven (7) pounds per Mcf of Gas.

(b)        Hydrogen Sulfide: Subject to provisions of Section 4.1(h) hereof, the
Gas will not contain more than one-quarter (1/4) grain of hydrogen sulfide per
one hundred (100) cubic feet of Gas, as determined by quantitative tests.

(c)        Total Sulfur: Subject to provisions of Section 4.1(h) hereof, the Gas
will not contain more than five (5) grains of total sulfur per one hundred (100)
cubic feet of Gas, as determined by quantitative tests.

(d)        Temperature: The Gas will not have a temperature less than forty (40)
degrees Fahrenheit or more than one hundred twenty (120) degrees Fahrenheit.

(e)        Carbon Dioxide: Subject to provisions of Section 4.1(h) hereof, the
Gas will not contain more than two percent (2%) by volume of carbon dioxide.

(f)        Oxygen: Subject to provisions of Section 4.1(h) hereof, the Gas will
not contain more than ten (10) parts per million of oxygen by volume.

(g)        Nitrogen: Subject to provisions of Section 4.1(h) hereof, the Gas
will not contain more than two percent (2%) by volume of nitrogen.

(h)        Non-hydrocarbons: Notwithstanding the foregoing provisions of this
Section 4.1 to the contrary, the Gas will not contain more than three percent
(3%) by volume of

Exhibit A-7

 

total non­hydrocarbons, which will include, but not be limited to, water
hydrogen sulfide, sulfur, carbon dioxide, oxygen and nitrogen.

(i)         Objectionable Liquids and Solids and Dilution: The Gas will be free
of objectionable liquids and solids, will not contain any hydrocarbons which
might condense to free liquids in the pipeline under normal pipeline conditions
and will be commercially free from dust, gums, gum-forming constituents, and
other liquids or solid matter which might become separated from the Gas in the
course of transportation through pipelines.

(j)         Gross Heating Value: The gas will contain a Gross Heating Value of
at least nine hundred fifty (950) Btu per cubic foot, but not greater than one
thousand and fifty (1050) Btu per cubic foot. The Gross Heating Value will be
the number of Btus produced by the complete combustion of a cubic foot of Gas
(excluding hydrogen sulfide) at a temperature base of sixty degrees (60°)
Fahrenheit and a pressure base of fourteen and seventy-three hundredths (14.73)
psia. Heating values shall be expressed in Btu per cubic foot and may be
determined by calorimeter, calculation from compositional analysis or other
acceptable industry practices and shall reflect the actual condition of the Gas
on delivery as adjusted for pressure, water content, and compressibility unless
otherwise prescribed by statute. For the purposes of making Btu calculations,
the gas shall be considered saturated at the delivery conditions of pressure and
temperature.

4.2       Provided that all Gas delivered by Shipper to Transporter at a Receipt
Point meets all quality specifications as provided above, the Gas delivered by
Transporter at the Delivery Point will meet the same quality specifications. If
the quality specifications of the receiving pipeline at the Delivery Point are
modified to include additional specifications or become more stringent than
those in place as of the Effective Date, the quality specifications above will
automatically be amended to include the additional or more stringent quality
specifications, and Transporter will not be required to accept at the Receipt
Point or deliver at the Delivery Point any Gas tendered by Shipper for
transportation under this Agreement until Shipper conforms the Gas to such
specifications. Upon mutual agreement, Transporter may conform Gas to meet the
more stringent specifications of the receiving pipeline and charge a mutually
agreeable fee for doing so.

4.3       If the Gas delivered at any Receipt Point fails to meet any of the
quality specifications stated above, then Transporter will notify Shipper, and
Shipper will make a diligent effort to correct the situation. Transporter will
have the right to refuse to accept such Gas for so long as Shipper is unable to
deliver Gas conforming to such specifications.

ARTICLE V

PAYMENTS

5.1       After delivery of Gas has commenced, Transporter shall, on or before
the 25th day of each Month, render to Shipper a statement showing the quantity
of Gas delivered by Transporter to Shipper at the Delivery Point(s) and the
amount owed Transporter for such deliveries during the Month preceding such
notice. Shipper shall pay Transporter the amount so billed after the delivery of
the statement by Transporter on or before the later of (i) the last day of the
Month the statement

Exhibit A-8

 

was received by Shipper, or (ii) ten (10) days after the statement was received
by Shipper. All amounts due Transporter from Shipper, including penalties, are
payable at the address of Transporter shown in Article VI of the Agreement.

5.2       If Shipper fails to pay any amount due Transporter when the same is
due, interest thereon will accrue from, but excluding, the due date to, and
including, the date payment thereof is actually made at the lesser of: (i) the
maximum legal rate of interest permitted by applicable law, or (ii) the Prime
Rate, plus 2%, computed on an annualized basis and compounded monthly. For
purposes of this Section 5.2, the term “Prime Rate” means the prime rate as
published in the Wall Street Journal, or any successor thereto, on the first
date of publication for the calendar month in which payment is due. Transporter
will render a late payment charge invoice and Shipper will make payment therefor
within ten Days of the date of such invoice.

5.3       If any invoice is disputed by Shipper, Shipper will pay the undisputed
amounts and will, within ten days from the date of Transporter’s invoice, give
Transporter written notification setting forth the disputed amount and the basis
therefor. Shipper and Transporter will use reasonable diligence to resolve
disputed amounts within thirty (30) days following written notification. If the
undisputed amount is not paid when due, the undisputed amount will be subject to
late payment charges as described above. Any disputed amount that later is
determined to be due to Transporter will be subject to late payment charges from
the original due date.

5.4       Each Party has the right at any and all reasonable times to examine
the books and records of the other, to the extent necessary to verify the
accuracy of any statement, charge, computation or demand made under this
Agreement.

ARTICLE VI

TAXES

6.1       Transporter shall pay or cause to be paid the taxes lawfully levied on
Transporter, or otherwise to be borne contractually by Transporter and
applicable to the Gas delivered hereunder prior to its delivery to Shipper or
Shipper’s designee at the Delivery Point(s). Shipper shall pay all taxes
lawfully levied on Shipper applicable to such Gas after delivery to Shipper or
Shipper’s designee or otherwise to be borne contractually by Shipper under the
terms of the Agreement.

ARTICLE VII

WARRANTY OF TITLE

7.1       Shipper warrants title to all Gas delivered by it, that it has the
right to same, and that such Gas is free from liens and adverse claims of every
kind. Shipper shall pay or cause to be paid all sums due on the gathering or
handling of the Gas delivered by Transporter. Shipper shall indemnify and save
Transporter harmless from and against all taxes, payments, liens or other
charges applicable to said Gas arising prior to its delivery to Transporter or
Transporter’s designee.

Exhibit A-9

 

ARTICLE VIII

FORCE MAJEURE

8.1       Except for Shipper’s obligations to make payments hereunder, neither
Party will be liable for any failure to perform the terms of the Agreement when
such failure is due to Force Majeure. The term “Force Majeure” as employed in
this Agreement shall mean acts of God, strikes, lockouts, or industrial disputes
or disturbances, civil disturbances, arrests and restraint from rulers or
people, interruptions or terminations by or as a result of government or court
action or orders, or present and future valid orders of any regulatory body
having jurisdiction, acts of the public enemy, wars, riots, blockades,
insurrections, inability to secure or delay in securing labor or materials by
reason of allocations promulgated by authorized governmental agencies,
epidemics, landslides, lightning, earthquakes, fire, storm, floods, washouts,
explosions, breakage or freezing of pipelines (so long as such breakage is not
directly caused by Transporter), inability to obtain easement or rights-of-way,
allocation or curtailment by third parties of downstream capacity, constraints
on or physical disruptions to transportation downstream of and directly
connected to Shipper’s or Transporter’s facilities used herein, refusal or other
failure to accept Gas by Persons downstream of Transporter’s facilities that are
directly connected to Transporter’s System or to any Delivery Point, the making
of repairs or alterations to lines of pipe or plants, partial or entire failure
of gas supply, failure or inability or any other cause, whether of the kind
herein enumerated or otherwise not reasonably within the control of the Party
claiming Force Majeure. The Force Majeure will, so far as possible, be remedied
with all reasonable dispatch. The settlement of strikes or lockouts or
industrial disputes or disturbances will be entirely within the discretion of
the Party having the difficulty, and the above requirement that any Force
Majeure will be remedied with all reasonable dispatch will not require the
settlement of strikes, lockouts, or industrial disputes or disturbances by
acceding to the demands of any opposing Party therein when such course is
inadvisable in the discretion of the Party having the difficulty. A decision to
close a facility due to business or economic conditions will not fall within the
meaning of “force majeure.”

8.2       If a Party claims Force Majeure that affects one or more Delivery
Point(s), nothing herein will require the Party claiming Force Majeure to make
deliveries or to take Gas at an alternative Delivery Point(s), not designated in
Exhibit B of the Agreement.

ARTICLE IX

GOVERNMENTAL RULES, REGULATIONS AND AUTHORIZATION

9.1       This Agreement will be subject to all valid applicable state, local
and federal laws, orders, directives, rules and regulations of any governmental
body, agency or official having jurisdiction over this Agreement and the
transportation of Gas hereunder.

9.2       If at any time during the Term of the Agreement, any Governmental
Authority having jurisdiction over this Agreement and the transportation of Gas
hereunder takes any action as to Transporter or Shipper or any third party
transporter whereby the sale, transportation other handling (including
compression or treating), delivery, receipt and use of Gas as contemplated
hereunder is proscribed or subjected to terms, conditions, regulations,
restraints, or price or rate controls, ceilings or limits that in the sole
judgment of Transporter or Shipper are unduly or overly burdensome to that
Party, such Party may at any time thereafter terminate this Agreement, upon

Exhibit A-10

 

thirty (30) days written notice without further liability hereunder, except as
to obligations (including but not limited to payment obligations) incurred prior
to the time of such termination.

9.3       Shipper and Transporter agree to file or have filed in a timely manner
all applications, affidavits, statements and notices required for sale,
transportation and delivery of the Gas hereunder.

ARTICLE X

ASSIGNMENT

10.1     The Agreement (including this Exhibit A and other Exhibits attached
thereto), including, without limitation, any and all renewals, extensions,
amendments and/or supplements hereto, will run with the land and will be binding
upon and inure to the benefit of the successors and assigns of the Parties,
provided that neither Party may assign or otherwise convey all or any portion of
its right, title, or interest under this Agreement without obtaining the prior
written consent of the other Party, which consent will not be unreasonably
withheld, conditioned, or delayed, and any attempts to assign without such
consent will be void ab initio.  Notwithstanding the foregoing, (i) either Party
may assign this Agreement to an Affiliate of such Party without the consent of
the other Party, and (ii) either Party may pledge this Agreement to secure any
credit facility or indebtedness of such Party or its Affiliates without the
consent of the other Party.

10.2     Subject to Section 1.4 of the Agreement, if any transfer of the
Agreement occurs, (i) the transferee (other than any grantee under any lien,
pledge, encumbrance or security interest) shall assume in writing the
obligations and liabilities of the transferor under this Agreement, and (ii) no
transfer or succession to the interest of Shipper hereunder, wholly or
partially, shall affect or bind Transporter until the first of the month
following the date Transporter has received a copy of the recorded transfer
document or other proof satisfactory to Transporter that the claimant is legally
entitled to such interest.

ARTICLE XI

AGENCY DESIGNATION

11.1     Shipper may designate an agent, which may be Transporter, to nominate
and schedule transportation service on Shipper’s behalf. Shipper shall notify
Transporter in writing of the designated agent, if any.

11.2     Transporter is authorized to rely on nominations and scheduling
information provided by Shipper’s agent. By designating an agent, Shipper agrees
to indemnify and save Transporter harmless from all suits, actions, debts,
accounts, damages, costs, losses and expenses arising in any way from Shipper’s
agent’s actions on behalf of Shipper, Shipper’s agent’s failure to act on behalf
of Shipper, or Transporter’s reliance upon the information provided to
Transporter by Shipper’s agent; provided, however that such indemnification will
not excuse Transporter from liability for actions taken when Transporter is
acting as agent.

Exhibit A-11

 

ARTICLE XII

MISCELLANEOUS

12.1     No waiver by either Transporter or Shipper of any default of the other
under this Agreement will operate as a waiver of any future default, whether of
like or different character or nature.

12.2     This Agreement may be amended only by a written instrument executed by
the Parties hereto and expressly stating that it is an amendment to this
Agreement.

12.3     The headings used throughout this Agreement are inserted for reference
purposes only, and are not to be construed or taken into account in interpreting
the terms and provisions of any Article, nor to be deemed in any way to qualify,
modify or explain the effects of any such term or provision.

 

 

 

 

Exhibit A-12

 

EXHIBIT B

TRANSPORTER’S SYSTEM

 

Transporter’s System: [to come]1

 

Receipt Point(s): The tailgate of the Raptor Plant in LaSalle County, Texas.

 

Delivery Point(s): The interconnection between Transporter’s System and Texas
Pipeline

Webb County Lean System, LLC’s Kudu Plant in Webb County, Texas.

 

Transportation Fee:

     For Firm services: $[***] per MMBtu, as may be escalated annually under
Section 3.2 of the Agreement.

     For Interruptible services: $[***] per MMBtu, as may be escalated annually
under Section 3.2 of the Agreement.

Maximum Pressure (psig): Actual operating pressure, not to exceed 1,200psig.

 

 

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

1         NTD: Insert a detailed description or map here.

 

 

 

Exhibit B-1

 

EXHIBIT C

 

 

 

Exhibit C-1

 

Memorandum of Agreement

 

[NTD: to come.]

 

 

 

Exhibit D-1

 

Exhibit F

 

Catarina Gathering Amendment

 

 

 

AMENDMENT NO. 2 TO FIRM GATHERING AND PROCESSING AGREEMENT

This AMENDMENT NO. 2 TO FIRM GATHERING AND PROCESSING AGREEMENT (this “Second
Amendment”), executed on the Approval Date but deemed effective as of the
Closing Date (“Amendment Effective Time”), is by and between SN Catarina, LLC, a
Delaware limited liability company (“Producer”) and Catarina Midstream, LLC, a
Delaware limited liability company (“Gatherer”).  Producer and Gatherer may be
referred to in this Second Amendment individually as a “Party” and collectively
as the “Parties.”

 

RECITALS

WHEREAS, Producer and Gatherer entered into that certain Firm Gathering and
Processing Agreement, dated as of October 14, 2015 (the “Original Gathering
Agreement”), as amended by that certain Amendment No. 1 to Firm Gathering and
Processing Agreement, dated as of June 30, 2017 (the “First Amendment”, and
together with the Original Gathering Agreement, the First Amendment and this
Second Amendment, collectively, the “Gathering Agreement”), pursuant to which
Gatherer provides certain gathering, transportation, and processing services to
Producer;

 

WHEREAS, on August 11, 2019, Sanchez Energy Corporation (“Sanchez”) and certain
of its subsidiaries, including Producer, filed for protection under Chapter 11
of the United States Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of Texas (the “Bankruptcy Court”);

 

WHEREAS, on April 6, 2020, Sanchez and certain of its subsidiaries, including
Producer, filed that certain Joint Chapter 11 Plan of Reorganization of Sanchez
Energy Corporation and its Debtor Affiliates with the Bankruptcy Court at Docket
No. 1109, as amended by that certain Amended Joint Chapter 11 Plan of
Reorganization of Sanchez Energy Corporation and its Debtor Affiliates filed
with the Bankruptcy Court at Docket No. 1149 on April 26, 2020, as further
amended by that certain Second Amended Joint Chapter 11 Plan of Reorganization
of Sanchez Energy Corporation and its Debtor Affiliates, filed with the
Bankruptcy Court at Docket No. 1198 on April 30, 2020 (as amended from time to
time, the “Chapter 11 Plan”); and

 

WHEREAS, in connection with the effectiveness of the Chapter 11 Plan, the
Parties desire to amend the Gathering Agreement to institute a new Gathering &
Processing Fee, to remove Producer’s minimum volume commitments and related
deficiency fee obligations, and to revise the definition of Dedicated Acreage,
together with such other amendments, as more fully set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
for other valuable consideration, the Parties hereby agree as follows:

 

Section 1.1      Definitions.  Capitalized terms used throughout this Second
Amendment and not defined herein have the meanings ascribed to them in the
Gathering Agreement.

Section 1.2      Amendments.

 

 

 

 

 

 (a)        All references to the “Agreement” in the Gathering Agreement shall
be deemed to include the terms and conditions of the First Amendment and this
Second Amendment, as applicable.

(b)        Exhibit A to the Gathering Agreement is hereby deleted in its
entirety and replaced with Exhibit A attached hereto.

(c)        Exhibit B to the Gathering Agreement is hereby deleted in its
entirety and replaced with Exhibit B attached hereto.

(d)        Exhibit C to the Gathering Agreement is hereby deleted in its
entirety and replaced with Exhibit C attached hereto.

(e)        Exhibit D to the Gathering Agreement is hereby deleted in its
entirety and replaced with Exhibit D attached hereto.

(f)        Exhibit E to the Gathering Agreement is hereby deleted in its
entirety and replaced with Exhibit E attached hereto.

(g)        Exhibit F to the Gathering Agreement is hereby deleted in its
entirety and replaced with Exhibit F attached hereto. The title of Exhibit F is
hereby amended to “Pipelines” in all instances throughout the Gathering
Agreement.

(h)        The following definitions are added to Section 1.1 of the Gathering
Agreement in the appropriate alphabetic order:

“Approval Date” means the date on which the Bankruptcy Court enters the Approval
Order.

 

“Approval Order” means an order of the Bankruptcy Court reasonably acceptable to
the parties to the Settlement Agreement, entered pursuant to Rule 9019 of the
Federal Rules of Bankruptcy Procedure, approving the Settlement Agreement, which
order has not been reversed, vacated or stayed.

 

“Bankruptcy Cases” means the chapter 11 cases of the Debtors pending before the
Bankruptcy Court, styled In re Sanchez Energy Corporation, et al., Case No.
19-34508 (MI) (Bankr. S.D. Tex.) (Jointly Administered).

 

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of Texas.

 

“Chapter 11 Plan” has the meaning set forth in the recitals.

 

“Closing Date” means the date the Closing Notice is executed and filed with the
Bankruptcy Court.

 

“Closing Notice” means a notice of the occurrence of Closing (as defined in the
Settlement Agreement and attached thereto as Exhibit G).

2

 

“Debtors” means, collectively, prior to the Effective Date, Sanchez Energy
Corporation and each of its direct and indirect subsidiaries that are debtors
and debtors-in-possession in the Bankruptcy Cases, including SN EF Maverick, LLC
and SN Catarina, LLC, and, after the Effective Date, such entities as
reorganized pursuant to the Chapter 11 Plan.

 

“First Amendment” means that certain Amendment No. 1 to Firm Gathering and
Processing Agreement, dated as of June 30, 2017 with a deemed effective time of
12:01 a.m. on April 1, 2017, between Producer and Gatherer.

 

“Pipelines” has the meaning set forth in Section 18(a).

 

“Second Amendment” means that certain Amendment No. 2 to Firm Gathering and
Processing Agreement, dated as the Approval Date but effective as of the Closing
Date, between Producer and Gatherer.

 

“Settlement Agreement” means that certain Settlement Agreement, dated as of June
[•], 2020, by and among the Debtors, Catarina Midstream LLC, Carnero G&P LLC,
Seco Pipeline, LLC, Sanchez Midstream Partners, LP and TPL SouthTex Processing
Company LP.

 

“Termination Notice” has the meaning set forth in Section 9.1(a).

 

“Transferee” means a Person who receives all or part of the Pipelines through a
Transfer pursuant to Section 18.

 

(i)         The following definitions are deleted from Section 1.1 of the
Gathering Agreement:

 “Contract Quarter”; “Commitment Term”; “Election Notice”; “Excess Gas Volume”;
“Excess Oil Volume”; “Gas Deficiency Volume”; “Gas Commitment Term”; “Minimum
Quarterly Quantity of Gas”; “Minimum Quarterly Quantity of Oil”; “Oil Deficiency
Volume”; “Oil Commitment Term”; “Quarterly Deficiency Payments”; “Quarterly Gas
Deficiency Payment”; “Quarterly Oil Deficiency Payment”; and “Third Party
Agreement”.

 

(j)         The following definitions from Section 1.1 of the Gathering
Agreement are deleted in their entirety and replaced with the following:

“Cash Value” means the market value (expressed in U.S. dollars) of the Pipelines
subject to the proposed Transfer, based on the amount that a willing buyer would
pay a willing seller in an arm’s length transaction.

 

“Control” (including its derivatives and similar terms) means (a) with respect
to any Person, possessing, directly or indirectly, the power to direct or cause
the direction of the management and policies of any such relevant Person by
ownership of voting interest, by contract or otherwise; provided, however, that

3

 

solely having the power to act as the operator of a Person’s day-to-day
commercial operations, without otherwise having the direct or indirect power to
direct or cause the direction of the management and policies of such Person,
shall not satisfy the foregoing definition of “Control” and (b) with respect to
any Products or water, such Products or water with respect to which Producer has
the contractual right or obligation (pursuant to a marketing, gathering,
transportation, processing, agency, operating, unit or similar agreement) to
market, gather, transport or process such Products or water and Producer elects
or is obligated to market, gather, transport or process such Products or water.

 

“Dedicated Leases” means Producer’s mineral leases located within the area
described on Exhibit C – Part 1, now existing or hereafter acquired, as such
mineral leases may be in effect during the Term, including those mineral leases
set forth on Exhibit C - Part 3 attached hereto and made a part hereof.

 

“Right of First Refusal” has the meaning set forth in Section 18(a).

 

“Transfer” has the meaning set forth in Section 18(a).

 

(k)        Section 2.2 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Subject to the terms of the Dedicated Instruments, Producer exclusively
dedicates and commits the Dedicated Acreage to this Agreement and to deliver to
Gatherer under this Agreement, as and when produced, (a) all of the Dedicated
Products and water owned by Producer and (b) all of the third party Gas, Oil and
water under the Control of Producer, in each case produced during the Term from
the Dedicated Acreage. The Gathering and Processing Fee provided for herein, and
the dedication contemplated hereby, shall apply to (a) all of the Dedicated
Products and water owned by Producer and (b) all of the third party Gas, Oil and
water under the Control of Producer, in each case produced during the Term from
the area described on Exhibit C – Part 1, including, for the avoidance of doubt,
all of the foregoing produced from wells or leases within the area described on
Exhibit C – Part 1 acquired or developed on or after the Closing Date.

 

(l)         Section 2.5 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 2.5 Memorandum. In connection with the execution of the Second Amendment
and from time to time during the Term, the Parties will execute, acknowledge,
deliver and record a “short form” memorandum of this Agreement substantially in
the form of Exhibit E identifying the Dedicated Acreage and identifying the
lands, leases and wells within the Dedicated Acreage in which Producer and its
Affiliates own interests, which Producer will file of record in the real
property records of each county that contains Dedicated Acreage. Notwithstanding
the foregoing, Gatherer shall also have the right to file and record such
memorandum of this Agreement and any necessary supporting documents or

4

 

instruments in the real property records of each county that contains Dedicated
Acreage.

 

(m)       Section 3.1(b) of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

(b)        Reserved;

 

(n)        Section 3.3 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 3.3      Reserved.

 

(o)        Section 3.5 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 3.5  Gathering System Interruptions.  Producer’s Products entitled to
Firm service may be, from time to time, interrupted, curtailed, or disrupted
(herein, a “Disruption”) to the extent reasonably necessary (as determined by
Gatherer acting in its reasonable discretion) for any of the following reasons:
(i) safe operation of the Gathering System, (ii) an ongoing event of Force
Majeure affecting Gatherer, (iii) subject to the Gatherer’s compliance with the
other terms and conditions of this Agreement, the inability of a Delivery Point
to receive Producer’s Products, and (iv) upon reasonable advance notice to
Producer, maintenance, expansions or modifications of the Gathering System from
time to time, provided that with respect to this item Gatherer will reasonably
cooperate with Producer to minimize adverse effects due to such work.  In the
event of a Disruption, Gatherer will give Producer prompt notice with reasonable
detail of the reason for the Disruption and a good faith estimate of the
duration and extent of such Disruption.  In such event Gatherer shall not be in
breach or default of its obligations under this Agreement and shall have no
liability to Producer in connection with or resulting from any such curtailment;
provided, however, that Gatherer shall, at Producer’s request, release from
dedication under this Agreement all of Producer’s volumes interrupted or
curtailed as the result of such Disruption.  When Gatherer reestablishes
Producer’s Firm service as to such volumes interrupted or curtailed by a
Disruption, Gatherer shall give Producer notice of such fact and Producer shall
recommence deliveries to Gatherer of the volumes that would have otherwise been
released from dedication as a result of such Disruption on the first Day of the
Month following the receipt of such notice and all such volumes shall again be
subject to this Agreement.

 

(p)        The title to Article 5 of the Gathering Agreement is hereby deleted
in its entirety and replaced with the following:

ARTICLE 5

FEES, BILLING, AND PAYMENT

 

5

 

(q)        Section 5.2 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 5.2    Reserved.

 

(r)         Section 5.3(a)(vi) of the Gathering Agreement is hereby deleted in
its entirety and replaced with the following:

(vi)       Reserved.

 

(s)        Section 5.3(b) of the Gathering Agreement is hereby amended by
deleting “including any amounts for prior period adjustments, late payments and
the Quarterly Deficiency Payments, if any” and replaced with “including any
amounts for prior period adjustments and late payments”.

(t)         Section 5.4 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 5.4  Annual Rate Adjustment.  Effective on each anniversary of the
Effective Date through the Term of this Agreement, the Gathering and Processing
Fee (other than related to water) shall be adjusted by the product of the fees
then in effect multiplied by the percentage increase (if any) between the
Consumer Price Index (All Urban Consumers (CPI-U); U.S. City Average; All items,
1982-1984 reference base), issued by the United States Department of Labor,
Bureau of Labor Statistics (“BLS”) (the “CPI”) for January of the current year
and the CPI for January of the immediately preceding year; provided that in no
event shall the fees hereunder be increased by more than 3% from the fees in
effect for the immediately preceding year, or decreased.  If the 1982-1984
reference base is no longer used as the standard reference base by BLS, then the
standard reference base shall be that established from time to time by BLS as
the replacement for the CPI. For the avoidance of doubt and notwithstanding
anything to the contrary, the Gathering and Processing Fee (including related to
water) shall not be adjusted other than as specifically set forth in this
Section 5.4.

 

(u)        Section 9.1(a) of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

This Agreement will commence on the Effective Date and remain in full force and
effect until the 15th anniversary of the Effective Date (the “Primary
Term”).  Unless terminated by Producer as provided below in this Section 9.1(a),
upon the expiration of the Primary Term, this Agreement shall renew
automatically for additional terms of twelve (12) months each thereafter (each,
a “Renewal Term”) on the existing terms (including the then-existing rates) for
up to four (4) total Renewal Terms.  No later than the date which is one hundred
eighty (180) Days prior to the expiration of the Primary Term or Renewal Term
(as applicable), Producer may elect in writing (a “Termination Notice”) to
terminate this Agreement.  Upon Producer’s delivery to Gatherer of the
Termination Notice, the

6

 

Parties agree to negotiate in good faith an extension of this Agreement on the
same terms and conditions except with a Gathering and Processing Fee which is at
the then prevailing market rate for comparable gathering systems in the South
Texas producing region.  The period of time that this Agreement remains in
effect pursuant to this Section 9.1 is referred to as the “Term”.

 

(v)        Sections 9.1(b)-(f) of the Gathering Agreement are hereby deleted in
their entirety.

(w)       Section 10.2(a) of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Producer’s Oil received and delivered at each Receipt Point will meet the
following quality specifications:

 

Constituent or Property

Limit

Sediment (excluding water)

Not more than 4.0% by volume

Temperature

Not more than 135°F

Hydrogen Sulfide

Not more than 100 ppm

Viscosity

Not to exceed 1.5 centistokes at 135°F

Total Sulphur

Not more than 0.3% by weight

Organic Chlorides

Not more than 1.5 ppm

Olefins

Not more than 0.5%

Mercaptans

Not more than 0.025% by weight

 

(x)        Section 11.3 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 11.3  Performance Excused; Mitigation Duty.  In the event a Party is
rendered unable, wholly or in part, by an event of Force Majeure, to carry out
its obligations under this Agreement, such Party shall be excused from
performance under this Agreement and shall not be liable for any failure to
perform (except as set forth in the last sentence of this Section 11.3) during a
Force Majeure event, and neither Gatherer nor Producer will be liable in damages
to the other for any act, omission, or circumstances occasioned by or in
consequence of such Force Majeure event (except as set forth in the last
sentence of this Section 11.3), in each case, to the extent affected by such
Force Majeure event.  Except as provided herein, the Party experiencing a Force
Majeure event shall use commercially reasonable efforts to mitigate the effects
of any Force Majeure event and to remedy any inability to perform its
obligations hereunder due to such events as promptly as reasonably
practicable.  It is understood and agreed that the settlement of strikes or
lockouts shall be entirely with the discretion of the Party affected thereby,
and that the above requirement that any Force Majeure shall be mitigated using
commercially reasonable efforts 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 affected
thereby.  Notwithstanding anything to the contrary in this Section 11.3, no
Party shall be

7

 

excused from any indemnity obligation or any payment obligation for amounts due
or becoming due under this Agreement by reason of this Section 11.3.

 

(y)        Section 11.5 of the Gathering Agreement is hereby deleted in its
entirety.

(z)        Section 16.1 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 16.1  Notices.  Any notice, request, demand, statement, bill, payment or
other communication provided for in this Agreement or any notice which any Party
may desire to give to the other, will be in writing and will be considered as
duly delivered if delivered by mail, email, commercial courier, facsimile or
personally, to the address or facsimile numbers of the applicable Parties, and
to the attention of their respective contact persons, as follows:

 

Gatherer:         Catarina Midstream, LLC

c/o Sanchez Midstream Partners LP

1360 Post Oak Blvd, Suite 2400

Houston, TX 77056

Attn: Chief Financial Officer

Email: cward@sanchezmidstream.com

 

with a copy (which shall not constitute notice) to:

 

Hunton Andrews Kurth LLP

600 Travis St, Suite 4200

Houston, Texas 77002

Attention:  Philip Haines

Email: phaines@huntonak.com

 

Producer:         SN Catarina, LLC

c/o Sanchez Energy Corporation

1000 Main, Suite 3000

Houston, Texas 77002

Attn: General Counsel

Fax: (713) 756-2784

Email: gkopel@sanchezog.com

 

with a copy (which shall not constitute notice) to:

 

Morrison & Foerster LLP

250 West 55th Street

New York, New York 10019

Facsimile: (212) 468-7900

Attention: Dennis L. Jenkins and James A. Newton

Email: djenkins@mofo.com and jnewton@mofo.com

 

8

 

Notwithstanding the foregoing of this Section 16.1, statements, bills and
invoices may be delivered via email or other electronic means as may be agreed
to between the Parties and nominations and changes thereto may be delivered
pursuant to Section 6.1.  Either Party may at any time and from time to time by
written notice to the other Party designate different persons or addresses for
notice.

 

Notices will be deemed received: (a) if sent by first class mail, three (3)
Business Days after the postmark date when properly addressed and deposited in
the United States mail, first class postage prepaid; (b) if sent by email, upon
transmission so long as the sender does not receive an automatic system
notification that such email was not deliverable; (c) if sent by facsimile, upon
the sending Party’s receipt of its facsimile machine’s confirmation of
successful transmission, provided that if the Day on which such facsimile is
sent is not a Business Day or is after 5:00 p.m. on a Business Day in the
receiving Party’s jurisdiction, then such facsimile will be deemed to have been
delivered on the next Business Day; (d) if sent by commercial courier, upon the
date of actual delivery as evidenced by the recipient’s written acknowledgment
of receipt; and (e) if delivered personally, upon the date of actual delivery.

 

(aa)      Section 17.6 of the Gathering Agreement is hereby deleted in its
entirety and replaced with the following:

Section 17.6    Consent to Disconnection.  If this Agreement terminates for any
reason whatsoever, Producer hereby consents and agrees that Gatherer shall be
entitled to disconnect, at its sole cost and expense, any wells, leases,
pipeline connections or other facilities utilized by Producer that deliver
Producer’s Products at the Receipt Points under this Agreement after ten (10)
Days prior written notice.  “Disconnect” for the purposes of this Section 17.6
means to remove metering facilities, pipelines and any other interconnection
facilities through which Producer’s Products was delivered under this Agreement
that are either owned by Gatherer, or owned by the pipeline with which Gatherer
contracted for the gathering or transportation services at the Delivery
Point(s).  This consent and agreement by Producer in this paragraph applies to
both Gatherer and Gatherer’s Affiliates, without distinction, and is intended in
all respects to satisfy the laws, rules or regulations of any applicable
jurisdiction.

 

(bb)      The reference to Section 9.1(b)-(f) in Section 17.9 of the Gathering
Agreement is hereby deleted in its entirety.

 

(cc)      A new Section 18 is added to the Gathering Agreement as follows:

Section 18       Right of First Refusal.

 

(a)        If at any time Producer desires to directly Transfer all or any
portion of the pipelines located in Dimmit, La Salle and Webb Counties, Texas as
described in more detail in Exhibit F (the “Pipelines”) to a ready, willing and
able unaffiliated

9

 

Transferee in a bona fide, arms-length transaction (a “Transfer”), Gatherer
shall have a right of first refusal to purchase the Pipelines from Producer (the
“Right of First Refusal”); provided that, for purposes of this Section 18, a
Transfer (i) shall not include a sale of all or substantially all of the assets
or equity of any of Producer, its Affiliates or Sanchez Energy Corporation, a
package sale, or a merger, reorganization, consolidation or other similar
transaction involving either Producer, its Affiliates or Sanchez Energy
Corporation, including in connection with any bankruptcy proceeding , and
(ii) shall include any proposed lease of all or any portion of the Pipelines.
For the avoidance of doubt, if Producer elects to sell a portion of the assets
constituting the Pipelines in a Transfer, but not all of the Pipelines, the
Right of First Refusal shall apply only to the portion of the Pipelines which
Producer elects to sell.

(b)        Producer shall disclose relevant final terms and conditions of a
Transfer of the Pipelines in a notice to Gatherer, which notice shall include a
description of the transaction in which Producer proposed to Transfer the
Pipeline(s), including the Cash Value if the Transfer is not a Cash Transfer.
Gatherer shall have the right to acquire the Pipelines subject to such proposed
Transfer from Producer on the same such terms and conditions as were negotiated
with the proposed Transferee, if, within 15 days after Producer's notice,
Gatherer delivers to Producer a counter-notification that it accepts such terms
and conditions (subject to the other provisions of this Section 18, where
applicable). If Gatherer does not deliver such counter-notification within such
15 day period, such Transfer to the proposed Transferee may, subject to the
other provisions of this Agreement, including the restrictions set forth in
Section 2.6 and Article 13, proceed without further notice under terms and
conditions no more favorable to the Transferee than those set forth in the
notice to Gatherer; provided that such Transfer shall be concluded within 180
days from the date of the original notice to Gatherer. If such Transfer fails to
be concluded within such 180 day period and the parties thereto desire
thereafter to proceed with such proposed Transfer or the terms and conditions of
such Transfer change to be more favorable to the Transferee than those contained
in the applicable notice to Gatherer, in each case, Producer shall be required
to re-offer the assets subject to the Transfer to Gatherer in accordance with
the terms and conditions of this Section 18.

(c)        In the event of a Transfer that is not a Cash Transfer, Producer
shall include in its notice to Gatherer a statement of the proposed Cash Value
of the Pipelines involved in the Transfer as provided by the proposed
Transferee, and Gatherer shall have a right to acquire such Pipelines on the
same final terms and conditions as were negotiated with the proposed Transferee
except that it shall pay the Cash Value in immediately available funds at the
closing of the Transfer in lieu of the consideration payable in the third party
offer, and the terms and conditions of the applicable instruments shall be
modified as necessary to reflect the acquisition of the applicable Pipelines
(and no other properties) for cash.

(d)        For purposes of Section 18(c), the Cash Value included by Producer in
its notice to Gatherer shall be conclusively deemed correct unless Gatherer
gives

10

 

notice to Producer within 15 days after receipt of Gatherer's notice stating
that it does not agree with the statement of the Cash Value, stating the Cash
Value it believes is correct, and providing any supporting information that it
believes is helpful. In such event, the Parties shall have 15 days from the date
Producer receives notice from Gatherer in which to attempt to negotiate in good
faith an agreement on the applicable Cash Value; provided that, after such 15
day period of good faith negotiation, to the extent that the Cash Value cannot
be mutually agreed upon, the provisions of this Section 18 shall not apply to
such proposed Transfer so long as the Transfer concludes within such 180 day
period from the date of the notice.

Section 1.3     Ratification. Except as expressly amended, modified and
supplemented hereby, the provisions of the Gathering Agreement are hereby
ratified and confirmed in all respects and shall remain in full force and
effect.  All references to the Gathering Agreement shall hereafter be deemed to
refer to the Gathering Agreement as amended, including by this Second Amendment.

Section 1.4      Integrated Transaction.  Gatherer and Producer intend and agree
that the Gathering Agreement and this Second Amendment (including all Exhibits
hereto), and the recorded memorandum required hereby constitute and are a single
integrated transaction and such documents contain the entire agreement between
the Parties with respect to the subject matter of this single, indivisible
contract as of the Amendment Effective Time.

Section 1.5      Governing Law.  This Second Amendment shall be governed and
construed in accordance with the laws of the State of Texas, without reference
to conflicts of laws principles that might apply the laws of another
jurisdiction.

 

[Signature page follows.]

 

 

 

11

 

IN WITNESS WHEREOF, this Second Amendment has been duly executed and delivered
by each of the Parties on the date first above written, but effective for all
purposes as of the Amendment Effective Time.

 

 

GATHERER:

 

 

 

CATARINA MIDSTREAM LLC

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

PRODUCER:

 

 

 

SN CATARINA, LLC

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

[Signature Page to Amendment No. 2 to Firm Gathering and Processing Agreement]

 

 

12

 

EXHIBIT A

Receipt Points; Delivery Point(s)

Receipt Points (AND CGPs)

 

 

Meter Number(s)

Receipt Point

Maximum Receipt Capacity

API

Flange of:

 

 

Well Name

Pad

 

42127337520100

PILONCILLO A 01H

A01

Design capacity limit

42127370580000

PILONCILLO A 01HX

A01

Design capacity limit

42127370590000

PILONCILLO A 01HY

A01

Design capacity limit

42127370600000

PILONCILLO A 01HZ

A01

Design capacity limit

42127337660100

PILONCILLO A 02H

A02

Design capacity limit

42127370550000

PILONCILLO A 02HY

A02

Design capacity limit

42127370560000

PILONCILLO A 02HZ

A02

Design capacity limit

42127338430200

PILONCILLO A 03H

A03/04

Design capacity limit

42127338440000

PILONCILLO A 04H

A03/04

Design capacity limit

42127339600000

PILONCILLO A 05H

A05

Design capacity limit

42127341090000

PILONCILLO A 06HA

A06

Design capacity limit

42127341080000

PILONCILLO A 06HB

A06

Design capacity limit

42127341100000

PILONCILLO A 06HC

A06

Design capacity limit

42127341110000

PILONCILLO A 06HD

A06

Design capacity limit

42127342970000

PILONCILLO A 07HA

A07

Design capacity limit

42127342990000

PILONCILLO A 07HB

A07

Design capacity limit

42127343000000

PILONCILLO A 07HC

A07

Design capacity limit

42127343020000

PILONCILLO A 07HD

A07

Design capacity limit

42127343820000

PILONCILLO A 07HE

A07

Design capacity limit

42127365400000

PILONCILLO A 07HG

A07

Design capacity limit

42127365410000

PILONCILLO A 07HH

A07

Design capacity limit

42127365420000

PILONCILLO A 07HI

A07

Design capacity limit

42127367930000

PILONCILLO A 07HY

A07

Design capacity limit

42127367940000

PILONCILLO A 07HZ

A07

Design capacity limit

42127343010000

PILONCILLO A 08HA

A08

Design capacity limit

42127343030000

PILONCILLO A 08HB

A08

Design capacity limit

42127343040000

PILONCILLO A 08HC

A08

Design capacity limit

42127343050100

PILONCILLO A 08HD

A08

Design capacity limit

42127369940000

PILONCILLO A 08HE

A08

Design capacity limit

42127369950000

PILONCILLO A 08HF

A08

Design capacity limit

42127370000000

PILONCILLO A 08HG

A08

Design capacity limit

42127343060000

PILONCILLO A 08HL

A08

Design capacity limit

42127345030000

PILONCILLO A 09HW

A09

Design capacity limit

42127345140000

PILONCILLO A 09HX

A09

Design capacity limit

 

 

13

 

 

42127345040000

PILONCILLO A 09HY

A09

Design capacity limit

42127345050000

PILONCILLO A 09HZ

A09

Design capacity limit

42127346800000

PILONCILLO A 10HA

A10

Design capacity limit

42127346780000

PILONCILLO A 10HB

A10

Design capacity limit

42127346790000

PILONCILLO A 10HC

A10

Design capacity limit

42127346810000

PILONCILLO A 10HD

A10

Design capacity limit

42127369270000

PILONCILLO A 10HE

A10

Design capacity limit

42127369280000

PILONCILLO A 10HF

A10

Design capacity limit

42127347290000

PILONCILLO A 11HA

A11

Design capacity limit

42127347040000

PILONCILLO A 11HB

A11

Design capacity limit

42127347030000

PILONCILLO A 11HC

A11

Design capacity limit

42127347080000

PILONCILLO A 11HD

A11

Design capacity limit

42127347240000

PILONCILLO A 11HE

A11

Design capacity limit

42127347230000

PILONCILLO A 11HF

A11

Design capacity limit

42127350240000

PILONCILLO A 12HA

A12

Design capacity limit

42127350210000

PILONCILLO A 12HB

A12

Design capacity limit

42127350230000

PILONCILLO A 12HC

A12

Design capacity limit

42127370780000

PILONCILLO A 12HD

A12

Design capacity limit

42127370790000

PILONCILLO A 12HE

A12

Design capacity limit

42127370860000

PILONCILLO A 12HU

A12

Design capacity limit

42127370870000

PILONCILLO A 12HV

A12

Design capacity limit

42127370880000

PILONCILLO A 12HW

A12

Design capacity limit

42127350250000

PILONCILLO A 12HX

A12

Design capacity limit

42127350260000

PILONCILLO A 12HY

A12

Design capacity limit

42127350290000

PILONCILLO A 12HZ

A12

Design capacity limit

42127347310000

PILONCILLO A 13HV

A13

Design capacity limit

42127347330000

PILONCILLO A 13HW

A13

Design capacity limit

42127347320000

PILONCILLO A 13HX

A13

Design capacity limit

42127347370000

PILONCILLO A 13HY

A13

Design capacity limit

42127347400000

PILONCILLO A 13HZ

A13

Design capacity limit

42127350890000

PILONCILLO A 14HA

A14

Design capacity limit

42127350730000

PILONCILLO A 14HB

A14

Design capacity limit

42127350740000

PILONCILLO A 14HC

A14

Design capacity limit

42127350820000

PILONCILLO A 14HD

A14

Design capacity limit

42127350850000

PILONCILLO A 14HE

A14

Design capacity limit

42127378400000

PILONCILLO A 14HX

A14

Design capacity limit

42127378420000

PILONCILLO A 14HY

A14

Design capacity limit

42127378410000

PILONCILLO A 14HZ

A14

Design capacity limit

42127347650000

PILONCILLO A 15HL

A15

Design capacity limit

42127347660000

PILONCILLO A 15HM

A15

Design capacity limit

42127347670000

PILONCILLO A 15HW

A15

Design capacity limit

 

14

 

 

42127347680000

PILONCILLO A 15HX

A15

Design capacity limit

42127347690000

PILONCILLO A 15HY

A15

Design capacity limit

42127347700000

PILONCILLO A 15HZ

A15

Design capacity limit

42127369290000

PILONCILLO A 16HU

A16

Design capacity limit

42127369300000

PILONCILLO A 16HV

A16

Design capacity limit

42127369310000

PILONCILLO A 16HW

A16

Design capacity limit

42127369320000

PILONCILLO A 16HX

A16

Design capacity limit

42127369330000

PILONCILLO A 16HY

A16

Design capacity limit

42127369340000

PILONCILLO A 16HZ

A16

Design capacity limit

42127372740000

PILONCILLO A 18U

A18

Design capacity limit

42127372750000

PILONCILLO A 18V

A18

Design capacity limit

42127372760000

PILONCILLO A 18W

A18

Design capacity limit

42127372780000

PILONCILLO A 18X

A18

Design capacity limit

42127372790000

PILONCILLO A 18Y

A18

Design capacity limit

42127372800000

PILONCILLO A 18Z

A18

Design capacity limit

42127369390100

PILONCILLO A 23HA

A23

Design capacity limit

42127369400000

PILONCILLO A 23HB

A23

Design capacity limit

42127373330000

PILONCILLO A 23HC

A23

Design capacity limit

42127373340000

PILONCILLO A 23HD

A23

Design capacity limit

42127373350000

PILONCILLO A 23HE

A23

Design capacity limit

42127373360000

PILONCILLO A 23HF

A23

Design capacity limit

42127373370000

PILONCILLO A 23HG

A23

Design capacity limit

42127373380000

PILONCILLO A 23HH

A23

Design capacity limit

42127369410000

PILONCILLO A 23HX

A23

Design capacity limit

42127354470000

PILONCILLO A 23HY

A23

Design capacity limit

42127354480000

PILONCILLO A 23HZ

A23

Design capacity limit

42127354670000

PILONCILLO A 24HY

A24

Design capacity limit

42127354690000

PILONCILLO A 24HZ

A24

Design capacity limit

42127377560000

PILONCILLO A 25HA

A25

Design capacity limit

42127377570000

PILONCILLO A 25HB

A25

Design capacity limit

42127377580000

PILONCILLO A 25HC

A25

Design capacity limit

42127377590000

PILONCILLO A 25HD

A25

Design capacity limit

42127377600000

PILONCILLO A 25HE

A25

Design capacity limit

42127372630000

PILONCILLO A 25HX

A25

Design capacity limit

42127372640000

PILONCILLO A 25HY

A25

Design capacity limit

42127372650000

PILONCILLO A 25HZ

A25

Design capacity limit

42127373390000

PILONCILLO A 28HA

A28

Design capacity limit

42127373400000

PILONCILLO A 28HB

A28

Design capacity limit

42127373410000

PILONCILLO A 28HC

A28

Design capacity limit

42127373420000

PILONCILLO A 28HD

A28

Design capacity limit

42127373430000

PILONCILLO A 28HE

A28

Design capacity limit

42127372820000

PILONCILLO A 31HA

A31

Design capacity limit

 

15

 

 

42127372830000

PILONCILLO A 31HB

A31

Design capacity limit

42127372840000

PILONCILLO A 31HC

A31

Design capacity limit

42127372850000

PILONCILLO A 31HD

A31

Design capacity limit

42127372860000

PILONCILLO A 31HE

A31

Design capacity limit

42127375540000

PILONCILLO A 41HW

A41

Design capacity limit

42127375550000

PILONCILLO A 41HX

A41

Design capacity limit

42127375560000

PILONCILLO A 41HY

A41

Design capacity limit

42127375570000

PILONCILLO A 41HZ

A41

Design capacity limit

42127379250000

PILONCILLO A 42HA

A42

Design capacity limit

42127379260000

PILONCILLO A 42HB

A42

Design capacity limit

42127379270000

PILONCILLO A 42HC

A42

Design capacity limit

42127379280000

PILONCILLO A 42HD

A42

Design capacity limit

42127379050000

PILONCILLO A 43HW

A43

Design capacity limit

42127379060000

PILONCILLO A 43HX

A43

Design capacity limit

42127379070000

PILONCILLO A 43HY

A43

Design capacity limit

42127379080000

PILONCILLO A 43HZ

A43

Design capacity limit

42127373170000

Piloncillo B 01 HB

B01

Design capacity limit

42127373180000

Piloncillo B 01 HC

B01

Design capacity limit

42127373190000

Piloncillo B 01 HY

B01

Design capacity limit

42127373200000

Piloncillo B 01 HZ

B01

Design capacity limit

42127338420000

PILONCILLO B 01H

B01

Design capacity limit

42127377360000

PILONCILLO B 03HA

B03

Design capacity limit

42127377370000

PILONCILLO B 03HB

B03

Design capacity limit

42127377380000

PILONCILLO B 03HC

B03

Design capacity limit

42127377290000

PILONCILLO B 04HA

B04

Design capacity limit

42127377300000

PILONCILLO B 04HB

B04

Design capacity limit

42127377310000

PILONCILLO B 04HC

B04

Design capacity limit

42127376810000

Piloncillo B 06HX

B06

Design capacity limit

42127376820000

Piloncillo B 06HY

B06

Design capacity limit

42127376830000

Piloncillo B 06HZ

B06

Design capacity limit

42127376840000

Piloncillo B 07HX

B07

Design capacity limit

42127376850000

Piloncillo B 07HY

B07

Design capacity limit

42127376860000

Piloncillo B 07HZ

B07

Design capacity limit

42127377400000

PILONCILLO B 09HX

B09

Design capacity limit

42127377410000

PILONCILLO B 09HY

B09

Design capacity limit

42127377420000

PILONCILLO B 09HZ

B09

Design capacity limit

42127338410100

PILONCILLO C 01H

C01H

Design capacity limit

42127343600100

PILONCILLO C 01V

C01V

Design capacity limit

42127351160000

PILONCILLO C 02H

C02

Design capacity limit

42127351210000

PILONCILLO C 03H

C03

Design capacity limit

42127339420100

PILONCILLO C 04HA

C04

Design capacity limit

42127365090000

PILONCILLO C 04HY

C04

Design capacity limit

 

16

 

 

42127365110000

PILONCILLO C 04HZ

C04

Design capacity limit

42127366300000

PILONCILLO C 05HD

C05

Design capacity limit

42127365650000

PILONCILLO C 05HE

C05

Design capacity limit

42127351470000

PILONCILLO C 06HA

C06

Design capacity limit

42127351490000

PILONCILLO C 06HZ

C06

Design capacity limit

42479410610100

PILONCILLO D 01H

D01

Design capacity limit

42479412340000

PILONCILLO D 03H

D03

Design capacity limit

42479432870000

PILONCILLO D 03HB

D03

Design capacity limit

42479432880000

PILONCILLO D 03HC

D03

Design capacity limit

42479420380000

PILONCILLO D 03HM

D03

Design capacity limit

42479412160100

PILONCILLO D 04H

D04

Design capacity limit

42479415960000

PILONCILLO D 04HA

D04

Design capacity limit

42479415970000

PILONCILLO D 04HB

D04

Design capacity limit

42479415980000

PILONCILLO D 04HC

D04

Design capacity limit

42479415990000

PILONCILLO D 04HD

D04

Design capacity limit

42479416000000

PILONCILLO D 04HE

D04

Design capacity limit

42479412810000

PILONCILLO D 05HA

D05

Design capacity limit

42479412820000

PILONCILLO D 05HB

D05

Design capacity limit

42479412860000

PILONCILLO D 05HY

D05

Design capacity limit

42479412850000

PILONCILLO D 05HZ

D05

Design capacity limit

42479412510000

PILONCILLO D 06HA

D06

Design capacity limit

42479413750000

PILONCILLO D 06HB

D06

Design capacity limit

42479413510000

PILONCILLO D 07HA

D07

Design capacity limit

42479413410000

PILONCILLO D 07HB

D07

Design capacity limit

42479413520000

PILONCILLO D 07HL

D07

Design capacity limit

42479413530000

PILONCILLO D 07HM

D07

Design capacity limit

42479413420000

PILONCILLO D 08HA

D08

Design capacity limit

42479413430000

PILONCILLO D 08HB

D08

Design capacity limit

42479413440000

PILONCILLO D 08HC

D08

Design capacity limit

42479432850000

PILONCILLO D 08HD

D08

Design capacity limit

42479432890000

PILONCILLO D 08HE

D08

Design capacity limit

42479432900000

PILONCILLO D 08HF

D08

Design capacity limit

42479413460000

PILONCILLO D 08HL

D08

Design capacity limit

42479432910000

PILONCILLO D 08HY

D08

Design capacity limit

42479432920000

PILONCILLO D 08HZ

D08

Design capacity limit

42479414120000

PILONCILLO D 09HA

D09

Design capacity limit

42479414130000

PILONCILLO D 09HB

D09

Design capacity limit

42479414140000

PILONCILLO D 09HC

D09

Design capacity limit

42479414190000

PILONCILLO D 09HD

D09

Design capacity limit

42479430560000

PILONCILLO D 09HE

D09

Design capacity limit

42479430570000

PILONCILLO D 09HF

D09

Design capacity limit

42479430580000

PILONCILLO D 09HG

D09

Design capacity limit

 

17

 

 

42479430590000

PILONCILLO D 09HH

D09

Design capacity limit

42479414520000

PILONCILLO D 10HA

D10

Design capacity limit

42479414530000

PILONCILLO D 10HB

D10

Design capacity limit

42479414540000

PILONCILLO D 10HC

D10

Design capacity limit

42479414610000

PILONCILLO D 10HL

D10

Design capacity limit

42479415100000

PILONCILLO D 11HA

D11

Design capacity limit

42479415080000

PILONCILLO D 11HB

D11

Design capacity limit

42479415090200

PILONCILLO D 11HC

D11

Design capacity limit

42479415110000

PILONCILLO D 11HD

D11

Design capacity limit

42479416180000

PILONCILLO D 12HA

D12

Design capacity limit

42479416130000

PILONCILLO D 12HB

D12

Design capacity limit

42479416170000

PILONCILLO D 12HC

D12

Design capacity limit

42479416140000

PILONCILLO D 12HD

D12

Design capacity limit

42479416820000

PILONCILLO D 13HA

D13

Design capacity limit

42479416870000

PILONCILLO D 13HB

D13

Design capacity limit

42479416880000

PILONCILLO D 13HC

D13

Design capacity limit

42479433140000

PILONCILLO D 13HD

D13

Design capacity limit

42479433150000

PILONCILLO D 13HE

D13

Design capacity limit

42479416720000

PILONCILLO D 14HA

D14

Design capacity limit

42479416730000

PILONCILLO D 14HB

D14

Design capacity limit

42479416740000

PILONCILLO D 14HW

D14

Design capacity limit

42479416750000

PILONCILLO D 14HX

D14

Design capacity limit

42479416760000

PILONCILLO D 14HY

D14

Design capacity limit

42479416660000

PILONCILLO D 14HZ

D14

Design capacity limit

42479416980000

PILONCILLO D 15HA

D15

Design capacity limit

42479416990000

PILONCILLO D 15HB

D15

Design capacity limit

42479417000000

PILONCILLO D 15HC

D15

Design capacity limit

42479417010000

PILONCILLO D 15HD

D15

Design capacity limit

42479417320000

PILONCILLO D 16HA

D16

Design capacity limit

42479417330000

PILONCILLO D 16HB

D16

Design capacity limit

42479432030000

PILONCILLO D 16HC

D16

Design capacity limit

42479433550000

PILONCILLO D 16HE

D16

Design capacity limit

42479432050000

PILONCILLO D 16HY

D16

Design capacity limit

42479432060000

PILONCILLO D 16HZ

D16

Design capacity limit

42479418120000

PILONCILLO D 17HA

D17

Design capacity limit

42479418140000

PILONCILLO D 17HB

D17

Design capacity limit

42479418130000

PILONCILLO D 17HC

D17

Design capacity limit

42479418150000

PILONCILLO D 17HD

D17

Design capacity limit

42479418170000

PILONCILLO D 17HE

D17

Design capacity limit

42479418180000

PILONCILLO D 17HF

D17

Design capacity limit

42479421360000

PILONCILLO D 17HW

D17

Design capacity limit

42479421370000

PILONCILLO D 17HX

D17

Design capacity limit

 

18

 

 

42479421320000

PILONCILLO D 17HY

D17

Design capacity limit

42479421380000

PILONCILLO D 17HZ

D17

Design capacity limit

42479420330000

PILONCILLO D 18HA

D18

Design capacity limit

42479420280000

PILONCILLO D 18HB

D18

Design capacity limit

42479420370000

PILONCILLO D 18HC

D18

Design capacity limit

42479420290000

PILONCILLO D 18HD

D18

Design capacity limit

42479420300000

PILONCILLO D 18HE

D18

Design capacity limit

42479420320000

PILONCILLO D 18HF

D18

Design capacity limit

42479429610000

PILONCILLO D 18HG

D18

Design capacity limit

42479429620000

PILONCILLO D 18HH

D18

Design capacity limit

42479429650000

PILONCILLO D 18HI

D18

Design capacity limit

42479429630000

PILONCILLO D 18HJ

D18

Design capacity limit

42479429660000

PILONCILLO D 18HK

D18

Design capacity limit

42479420980000

PILONCILLO D 19HA

D19

Design capacity limit

42479421000000

PILONCILLO D 19HB

D19

Design capacity limit

42479421010000

PILONCILLO D 19HC

D19

Design capacity limit

42479421020000

PILONCILLO D 19HD

D19

Design capacity limit

42479421030000

PILONCILLO D 19HE

D19

Design capacity limit

42479431040000

PILONCILLO D 19HG

D19

Design capacity limit

42479431060000

PILONCILLO D 19HH

D19

Design capacity limit

42479431070000

PILONCILLO D 19HI

D19

Design capacity limit

42479431750000

PILONCILLO D 19HZ

D19

Design capacity limit

42479422070000

PILONCILLO D 20HA

D20

Design capacity limit

42479422080000

PILONCILLO D 20HB

D20

Design capacity limit

42479422100000

PILONCILLO D 20HD

D20

Design capacity limit

42479422110000

PILONCILLO D 20HE

D20

Design capacity limit

42479422120000

PILONCILLO D 20HV

D20

Design capacity limit

42479422130000

PILONCILLO D 20HW

D20

Design capacity limit

42479422060000

PILONCILLO D 20HX

D20

Design capacity limit

42479422140000

PILONCILLO D 20HY

D20

Design capacity limit

42479422150000

PILONCILLO D 20HZ

D20

Design capacity limit

42479416780100

PILONCILLO D 21HA

D21

Design capacity limit

42479416790000

PILONCILLO D 21HB

D21

Design capacity limit

42479416800000

PILONCILLO D 21HC

D21

Design capacity limit

42479416810000

PILONCILLO D 21HD

D21

Design capacity limit

42479422260000

PILONCILLO D 22HA

D22

Design capacity limit

42479422340000

PILONCILLO D 22HB

D22

Design capacity limit

42479422270000

PILONCILLO D 22HC

D22

Design capacity limit

42479422280000

PILONCILLO D 22HD

D22

Design capacity limit

42479422290000

PILONCILLO D 22HE

D22

Design capacity limit

42479422300000

PILONCILLO D 22HF

D22

Design capacity limit

42479422310000

PILONCILLO D 22HX

D22

Design capacity limit

 

19

 

 

42479422320000

PILONCILLO D 22HY

D22

Design capacity limit

42479422330000

PILONCILLO D 22HZ

D22

Design capacity limit

42479417830000

PILONCILLO D 23HA

D23

Design capacity limit

42479417840000

PILONCILLO D 23HB

D23

Design capacity limit

42479417850000

PILONCILLO D 23HC

D23

Design capacity limit

42479417860000

PILONCILLO D 23HD

D23

Design capacity limit

42479417870000

PILONCILLO D 23HE

D23

Design capacity limit

42479417880000

PILONCILLO D 23HF

D23

Design capacity limit

42479417780000

PILONCILLO D 24HA

D24

Design capacity limit

42479417790000

PILONCILLO D 24HB

D24

Design capacity limit

42479417930000

PILONCILLO D 24HC

D24

Design capacity limit

42479417800000

PILONCILLO D 24HD

D24

Design capacity limit

42479417810000

PILONCILLO D 24HE

D24

Design capacity limit

42479417820000

PILONCILLO D 24HZ

D24

Design capacity limit

42479423870000

PILONCILLO D 25HA

D25

Design capacity limit

42479423990000

PILONCILLO D 25HB

D25

Design capacity limit

42479423970000

PILONCILLO D 25HC

D25

Design capacity limit

42479423880000

PILONCILLO D 25HD

D25

Design capacity limit

42479423980000

PILONCILLO D 25HE

D25

Design capacity limit

42479423890000

PILONCILLO D 25HF

D25

Design capacity limit

42479422870000

PILONCILLO D 26HA

D26

Design capacity limit

42479422880000

PILONCILLO D 26HB

D26

Design capacity limit

42479422890100

PILONCILLO D 26HC

D26

Design capacity limit

42479422900000

PILONCILLO D 26HD

D26

Design capacity limit

42479429790000

PILONCILLO D 26HN

D26

Design capacity limit

42479429760000

PILONCILLO D 26HO

D26

Design capacity limit

42479429800000

PILONCILLO D 26HP

D26

Design capacity limit

42479423030000

PILONCILLO D 26HT

D26

Design capacity limit

42479423090000

PILONCILLO D 26HU

D26

Design capacity limit

42479423040000

PILONCILLO D 26HV

D26

Design capacity limit

42479423050000

PILONCILLO D 26HW

D26

Design capacity limit

42479423060000

PILONCILLO D 26HX

D26

Design capacity limit

42479423070000

PILONCILLO D 26HY

D26

Design capacity limit

42479423080000

PILONCILLO D 26HZ

D26

Design capacity limit

42479411430100

PILONCILLO E 01HA

E01

Design capacity limit

42479415700100

PILONCILLO E 01HB

E01

Design capacity limit

42479412970100

PILONCILLO E 02HA

E02

Design capacity limit

42479435580000

PILONCILLO E 02HB

E02

Design capacity limit

42479435590000

PILONCILLO E 02HC

E02

Design capacity limit

42479435600000

PILONCILLO E 02HD

E02

Design capacity limit

42479435610000

PILONCILLO E 02HE

E02

Design capacity limit

42479412760000

PILONCILLO E 03H

E03

Design capacity limit

 

20

 

 

42479416030000

PILONCILLO E 03HA

E03

Design capacity limit

42479416040000

PILONCILLO E 03HB

E03

Design capacity limit

42479416050000

PILONCILLO E 03HC

E03

Design capacity limit

42479416060000

PILONCILLO E 03HD

E03

Design capacity limit

42479412700000

PILONCILLO E 04H

E03

Design capacity limit

42479415690000

PILONCILLO E 05HA

E05

Design capacity limit

42479415680000

PILONCILLO E 05HB

E05

Design capacity limit

42479415670000

PILONCILLO E 05HC

E05

Design capacity limit

42479415660000

PILONCILLO E 05HD

E05

Design capacity limit

42479415650000

PILONCILLO E 05HE

E05

Design capacity limit

42479415720000

PILONCILLO E 05HL

E05

Design capacity limit

42479417340000

PILONCILLO E 06HA

E06

Design capacity limit

42479417350000

PILONCILLO E 06HB

E06

Design capacity limit

42479417360000

PILONCILLO E 06HC

E06

Design capacity limit

42479417370000

PILONCILLO E 06HD

E06

Design capacity limit

42479417380000

PILONCILLO E 06HE

E06

Design capacity limit

42479432010000

PILONCILLO E 06HF

E06

Design capacity limit

42479432020000

PILONCILLO E 06HG

E06

Design capacity limit

42479417410000

PILONCILLO E 06HL

E06

Design capacity limit

42479432410100

PILONCILLO E 07HA

E07

Design capacity limit

42479432420000

PILONCILLO E 07HB

E07

Design capacity limit

42479434410000

PILONCILLO E 07HC

E07

Design capacity limit

42479434400000

PILONCILLO E 07HD

E07

Design capacity limit

42479439040000

PILONCILLO E 10HA

E10

Design capacity limit

42479439050000

PILONCILLO E 10HB

E10

Design capacity limit

42479439060000

PILONCILLO E 10HC

E10

Design capacity limit

42479439070000

PILONCILLO E 10HD

E10

Design capacity limit

42479439330000

PILONCILLO E 10HX

E10

Design capacity limit

42479439080000

PILONCILLO E 10HY

E10

Design capacity limit

42479439090000

PILONCILLO E 10HZ

E10

Design capacity limit

42479436480000

PILONCILLO E 14HA

E14

Design capacity limit

42479436490000

PILONCILLO E 14HB

E14

Design capacity limit

42479436500000

PILONCILLO E 14HC

E14

Design capacity limit

42479436510000

PILONCILLO E 14HD

E14

Design capacity limit

42479436530000

PILONCILLO E 14HF

E14

Design capacity limit

42479436540000

PILONCILLO E 14HG

E14

Design capacity limit

42479433220000

PILONCILLO E 15HA

E15

Design capacity limit

42479433230000

PILONCILLO E 15HB

E15

Design capacity limit

42479433240000

PILONCILLO E 15HC

E15

Design capacity limit

42479433250000

PILONCILLO E 15HT

E15

Design capacity limit

42479433260000

PILONCILLO E 15HU

E15

Design capacity limit

42479421700000

PILONCILLO E 15HV

E15

Design capacity limit

42479421710000

PILONCILLO E 15HW

E15

Design capacity limit

 

21

 

22

 

 

42479421720000

PILONCILLO E 15HX

E15

Design capacity limit

42479421730000

PILONCILLO E 15HY

E15

Design capacity limit

42479421740000

PILONCILLO E 15HZ

E15

Design capacity limit

42479436560000

PILONCILLO E 20HA

E20

Design capacity limit

42479436570000

PILONCILLO E 20HB

E20

Design capacity limit

42479436580000

PILONCILLO E 20HC

E20

Design capacity limit

42479436590000

PILONCILLO E 20HD

E20

Design capacity limit

42479436600000

PILONCILLO E 20HE

E20

Design capacity limit

42479436610000

PILONCILLO E 20HF

E20

Design capacity limit

42479436620000

PILONCILLO E 20HG

E20

Design capacity limit

42479434520000

PILONCILLO E 21HA

E21

Design capacity limit

42479434530000

PILONCILLO E 21HB

E21

Design capacity limit

42479434540000

PILONCILLO E 21HC

E21

Design capacity limit

42479434550000

PILONCILLO E 21HD

E21

Design capacity limit

42479434560000

PILONCILLO E 21HE

E21

Design capacity limit

42479434440000

PILONCILLO E 22HA

E22

Design capacity limit

42479434450000

PILONCILLO E 22HB

E22

Design capacity limit

42479434460000

PILONCILLO E 22HC

E22

Design capacity limit

42479434470000

PILONCILLO E 22HD

E22

Design capacity limit

42479439370000

PILONCILLO E 28HB

E28

Design capacity limit

42479439380000

PILONCILLO E 28HC

E28

Design capacity limit

42479439390000

PILONCILLO E 28HD

E28

Design capacity limit

42479439400000

PILONCILLO E 28HE

E28

Design capacity limit

42127379700000

PILONCILLO E 30HW

E30

Design capacity limit

42127379710000

PILONCILLO E 30HX

E30

Design capacity limit

42127379720000

PILONCILLO E 30HY

E30

Design capacity limit

42127379730000

PILONCILLO E 30HZ

E30

Design capacity limit

42479440240000

PILONCILLO E 31HA

E31

Design capacity limit

42479440250000

PILONCILLO E 31HB

E31

Design capacity limit

42479440260000

PILONCILLO E 31HC

E31

Design capacity limit

42479440270000

PILONCILLO E 31HD

E31

Design capacity limit

42479438530000

PILONCILLO E 31HW

E31

Design capacity limit

42479438540000

PILONCILLO E 31HX

E31

Design capacity limit

42479438550000

PILONCILLO E 31HY

E31

Design capacity limit

42479438560000

PILONCILLO E 31HZ

E31

Design capacity limit

42479437440000

PILONCILLO E 32HA

E32

Design capacity limit

42479437460000

PILONCILLO E 32HC

E32

Design capacity limit

42479437470000

PILONCILLO E 32HD

E32

Design capacity limit

42479437510000

PILONCILLO E 32HE

E32

Design capacity limit

42479438680000

PILONCILLO E 32HW

E32

Design capacity limit

42479438690000

PILONCILLO E 32HX

E32

Design capacity limit

42479438700000

PILONCILLO E 32HY

E32

Design capacity limit

42479438710000

PILONCILLO E 32HZ

E32

Design capacity limit

 

23

 

24

 

 

42479434930000

PILONCILLO E 33HA

E33

Design capacity limit

42479435000000

PILONCILLO E 33HB

E33

Design capacity limit

42479435010000

PILONCILLO E 33HY

E33

Design capacity limit

42479435020000

PILONCILLO E 33HZ

E33

Design capacity limit

42479439740000

PILONCILLO E 34HA

E34

Design capacity limit

42479439750000

PILONCILLO E 34HB

E34

Design capacity limit

42479439760000

PILONCILLO E 34HC

E34

Design capacity limit

42479439770000

PILONCILLO E 34HD

E34

Design capacity limit

42479435690000

PILONCILLO E 34HV

E34

Design capacity limit

42479435710000

PILONCILLO E 34HW

E34

Design capacity limit

42479435700000

PILONCILLO E 34HX

E34

Design capacity limit

42479435760000

PILONCILLO E 34HY

E34

Design capacity limit

42479435770000

PILONCILLO E 34HZ

E34

Design capacity limit

42479440460000

PILONCILLO E 35HA

E35

Design capacity limit

42479440470000

PILONCILLO E 35HB

E35

Design capacity limit

42479435630000

PILONCILLO E 35HV

E35

Design capacity limit

42479435640000

PILONCILLO E 35HW

E35

Design capacity limit

42479435650000

PILONCILLO E 35HX

E35

Design capacity limit

42479435660000

PILONCILLO E 35HY

E35

Design capacity limit

42479435670000

PILONCILLO E 35HZ

E35

Design capacity limit

42479440390000

PILONCILLO E 36HA

E36

Design capacity limit

42479440400000

PILONCILLO E 36HB

E36

Design capacity limit

42479440410000

PILONCILLO E 36HC

E36

Design capacity limit

42479435720000

PILONCILLO E 36HW

E36

Design capacity limit

42479435730000

PILONCILLO E 36HX

E36

Design capacity limit

42479435740000

PILONCILLO E 36HY

E36

Design capacity limit

42479435750000

PILONCILLO E 36HZ

E36

Design capacity limit

42127374180000

PILONCILLO E 44HA

E44

Design capacity limit

42127374190000

PILONCILLO E 44HB

E44

Design capacity limit

42127374990000

PILONCILLO E 44HC

E44

Design capacity limit

42127375010000

PILONCILLO E 44HX

E44

Design capacity limit

42127339960100

PILONCILLO F 01HA

F01

Design capacity limit

42127365150000

PILONCILLO F 01HD

F01

Design capacity limit

42127365130000

PILONCILLO F 01HZ

F01

Design capacity limit

42479416240000

PILONCILLO F 02HA

F02

Design capacity limit

42479416250000

PILONCILLO F 02HB

F02

Design capacity limit

42479416260000

PILONCILLO F 02HC

F02

Design capacity limit

42479416270000

PILONCILLO F 02HD

F02

Design capacity limit

42479416280000

PILONCILLO F 02HL

F02

Design capacity limit

42479414480000

PILONCILLO F 03HA

F03

Design capacity limit

42479414510100

PILONCILLO F 03HB

F03

Design capacity limit

42479415760000

PILONCILLO F 03HC

F03

Design capacity limit

42479414490000

PILONCILLO F 03HL

F03

Design capacity limit

 

25

 

26

 

 

42479414500000

PILONCILLO F 03HZ

F03

Design capacity limit

42479434730000

PILONCILLO F 05HA

F05

Design capacity limit

42479434740000

PILONCILLO F 05HB

F05

Design capacity limit

42479434750000

PILONCILLO F 05HY

F05

Design capacity limit

42479434760000

PILONCILLO F 05HZ

F05

Design capacity limit

42479433860000

PILONCILLO SWD D 1D

PILONCILLO SWD D 1D

Design capacity limit

 

 

Eastern Catarina Receipt Points

For purposes of this section of Exhibit A, Receipt Points are the flanges
closest to the point where flow from a given line commingles with flow from
another pipeline or header. Such flanges are described below. For clarity, these
Receipt Points are downstream of the related isolation valve, if present.

 

Receipt Point

Latitude/ Longitude

Flange of:

 

 

F5/300 to manifold D

 

Latitude 28.183265,
Longitude -99.618337

 

 

F5/100 to manifold D

Latitude 28.183265,
Longitude -99.618337

 

 

E3/E4/100 to manifold D

Latitude 28.183265,
Longitude -99.618337

 

 

E1/400 to D1-400

Latitude 28.172093, Longitude -99.604984

 

 

C1/C4-400 to Transfer 200/300 lines near North Appraisal

Latitude    28.259518,

Longitude   -99.616122

 

 

B1/100 to manifold A

Latitude  28.266375, Longitude  -99.617618

 

 

B1/300 to manifold A

Latitude  28.266375, Longitude  -99.617618

 

 

27

 

Delivery Points

 

Meter Number(s)

Delivery Point

Maximum Delivery Capacity

 

Inlet of:

 

0969045-10

SOUTH-CPF-D1

Design capacity limit

0984505-10

SHELL TO DOS HERMANAS IC

Design capacity limit

0984505-20

SHELL TO DOS HERMANAS

Design capacity limit

EF1-11721

SWEPI NORTH #1

Design capacity limit

EF1-11722

SWEPI MIDDLE #2

Design capacity limit

EF1-11723

SWEPI SOUTH #3

Design capacity limit

1-8028

Shell A Inlet to LX 16”

Design capacity limit

1-8029

1-8039

4043651

4043652

Shell B Inlet to LX 16”

South Appraisal to T2

Carnero  A

Carnero D - Harrison

Design capacity limit

Design capacity limit

Design capacity limit

Design capacity limit

Shell 1A

SW Segue A

Design capacity limit

Shell 1D

SWD

SW Segue D

CPF-D

Design capacity limit

Design capacity limit

 

 

 

28

 

EXHIBIT B

 

Fees

 

Gathering and Processing Fee (based on the aggregate quantity of Producer’s
Products, stated in Unit of Volume delivered to Gatherer at all Receipt Points):

 

$[***] per Mcf for Gas, as may be adjusted in accordance with Section 5.4.

 

$[***] per Barrel for Oil and Producer’s Condensate, as may be adjusted in
accordance with Section 5.4.

 

$[***] per Barrel for water.

 

 

 

 

 

EXHIBIT C

 

Part 1 – Dedicated Acreage

 

Picture 2 [tmb-20200606xex10d1g001.jpg]

 

Exhibit C

 

EXHIBIT C

 

Part 2 – Dedicated Deeds

 

Mineral Deed from Dan J. Harrison, III, as Grantor, to P Ranch Working Interest,
LLC, as Grantee, dated May 12, 2010, covering 42,262.28 acres of land, more or
less, situated in Dimmit, Webb and La Salle Counties, Texas, a Memorandum of
which is recorded in Volume 386, Page 797 of the Deed Records of Dimmit County,
Texas, in Volume 2946, Page 165 of the Deed Records of Webb County, Texas, and
in Volume 505, Page 435 of the Deed Records of La Salle County, Texas, as
amended, restated, supplemented, assigned or otherwise modified from time
to time.

 

Mineral Deed from BFH Mining, Ltd., as Grantor, to P Ranch Working Interest,
LLC, as Grantee, dated May 12, 2010, covering 42,262.28 acres of land, more or
less, situated in Dimmit, Webb and La Salle Counties, Texas, a Memorandum of
which is recorded in Volume 386, Page 526 of the Deed Records of Dimmit County,
Texas, in Volume 2943, Page 303 of the Deed Records of Webb County, Texas, and
in Volume 505, Page 170 of the Deed Records of La Salle County, Texas, as
amended, restated, supplemented, assigned or otherwise modified from time
to time.

 

Exhibit C

 

EXHIBIT C

 

Part 3 – Dedicated Leases

 

Oil and Gas Lease by and between Harrison Interests, Ltd. and P Ranch Working
Interest, LLC dated May 12, 2010, a memorandum of which is recorded in Volume
386, Page 510 of the Official Records of Dimmit County, Texas, in Volume 2943,
Page 294 of the Official Records of Webb County, Texas, and in Volume 505, Page
161 of the Deed Records of La Salle County, Texas, as amended, restated,
supplemented, assigned or otherwise modified from time to time.

 

Oil, Gas and Mineral Lease by and between the Risken Family Trust, Susan L.
Westergren, Trustee, and SWEPI LP dated March 20, 2013, Texas, recorded in
Volume 466, Page 396, Official Records of Dimmit County, Texas, as amended,
restated, supplemented, assigned or otherwise modified from time to time.

 

 

Exhibit C

 

EXHIBIT D

 

Gathering System

 

[Attached]

 

Exhibit D

 

Picture 7 [tmb-20200606xex10d1g002.jpg]

 

 

Exhibit D

 

Picture 8 [tmb-20200606xex10d1g003.jpg]

 

 

 

32

 

Picture 10 [tmb-20200606xex10d1g004.jpg]

 

Exhibit D

 

Picture 11 [tmb-20200606xex10d1g005.jpg]

 

 

 

Picture 12 [tmb-20200606xex10d1g006.jpg]

 

 

 

Picture 13 [tmb-20200606xex10d1g007.jpg]

 

 

 

Picture 14 [tmb-20200606xex10d1g008.jpg]

 

 

 

Picture 15 [tmb-20200606xex10d1g009.jpg]

 

 

 

Picture 16 [tmb-20200606xex10d1g010.jpg]

 

 

 

Picture 17 [tmb-20200606xex10d1g011.jpg]

 

 

 

 

 

EXHIBIT E

 

 

AMENDED AND RESTATED MEMORANDUM OF FIRM GATHERING AND PROCESSING AGREEMENT

 

THE STATE OF TEXAS

§

 

§

COUNTIES OF DIMMIT,

§

WEBB AND LA SALLE

§

 

THIS AMENDED AND RESTATED MEMORANDUM OF FIRM GATHERING AND PROCESSING AGREEMENT
(this “Memorandum”) is made and entered into effective as of [_______], 2020
(the “Amendment Date”)1,  by and between SN Catarina, LLC, a Delaware limited
liability company (“Producer”), and Catarina Midstream, LLC, a Delaware limited
liability company (“Gatherer”). Producer and Gatherer may be referred to in this
Memorandum individually as a “Party” and collectively as the “Parties.”

WHEREAS, the Parties have executed that (i) certain Firm Gathering and
Processing Agreement dated effective as of October 14, 2015 (the “Original
Gathering Agreement”), (ii) that certain Amendment No. 1 to Firm Gathering and
Processing Agreement, dated as of June 30, 2017 with a deemed effective time of
12:01 a.m. on April 1, 2017 (the “First Amendment”), and (iii) that certain
Amendment No. 2 to Firm Gathering and Processing Agreement, executed on
[_______], 20202 but deemed effective as of the Amendment Date (the “Second
Amendment”, and together with the Original Gathering Agreement and the First
Amendment, the “Gathering Agreement”);

WHEREAS, the Parties previously executed and recorded in the Counties of Dimmit,
Webb and La Salle in the State of Texas that certain Memorandum of Firm Gas
Gathering and Processing Agreement, dated as of [________], 2015, in connection
with the execution of the Original Gathering Agreement (the “Original
Memorandum”); and

WHEREAS, in accordance with the Second Amendment, the Parties desire to amend
and restate the Original Memorandum for the purpose of imparting notice to all
persons of Producer’s dedication and commitment of its interests in oil and gas
leases, wells and/or oil and gas interests within the Dedicated Acreage
(including the Dedicated Instruments) and Producer’s production from or
attributable to such interests to the Gathering Agreement.

NOW, THEREFORE, the Parties agree as follows:

1.         The Gathering Agreement is incorporated by reference in its entirety
in this Memorandum. All capitalized terms used but not defined in this
Memorandum and defined in the

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

1         NTD: Insert the actual “Closing Date” here.

2         NTD: Insert the actual “Approval Date” here.

Exhibit E – Page 1

 

 

Gathering Agreement shall have the meaning ascribed to them in the Gathering
Agreement. As used in this Memorandum, the following capitalized terms shall
have the meanings set forth below:

“Dedicated Acreage”  means Producer’s acreage as described on Exhibit A - Part
1, attached hereto and made a part hereof, including, for the avoidance of
doubt, the Dedicated Instruments.

“Dedicated Instruments” means the Dedicated Deeds and the Dedicated Leases.

“Dedicated Deeds” means Producer’s mineral deeds, including those mineral deeds
set forth on Exhibit A - Part 2 attached hereto and made a part hereof, to the
extent that such mineral deeds cover the Dedicated Acreage.

“Dedicated Leases” means Producer’s mineral leases located within the area
described on Exhibit A – Part 1, now existing or hereafter acquired, as such
mineral leases may be in effect during the Term, including those mineral leases
set forth on Exhibit A - Part 3 attached hereto and made a part hereof.

“Dedicated Products” means, subject to Section 3.1 of the Gathering Agreement,
Producer’s Products that are produced from any well(s) located on the Dedicated
Acreage.

“Producer’s Products” or “Products” means all Oil, Gas and other hydrocarbons
that are: (i) owned or Controlled by Producer or its Affiliates and produced and
saved from the Dedicated Acreage in accordance with the terms of the Gathering
Agreement or (ii) owned or Controlled by Producer or its Affiliates and produced
and saved from outside the Dedicated Acreage and delivered at the Receipt Points
in accordance with the terms of the Gathering Agreement.

2.         The Parties have entered into the Gathering Agreement to provide for,
among other things, (a) the commitment and dedication by Producer of (1) the
Dedicated Acreage (including the Dedicated Instruments), (2) all of the
Dedicated Products and water owned by Producer and (3) all of the third party
Gas, Oil and water under the Control of Producer, in each case with respect to
clauses (2) and (3) produced during the Term from the Dedicated Acreage; and (b)
the grant by Producer to Gatherer or its designee, pursuant and subject to the
terms and conditions of the Dedicated Leases, and otherwise insofar as Producer
has the legal right to do so without the incurrence of additional expense, the
non-exclusive right of ingress and egress over, across and under all lands and
leaseholds or premises of Producer, for the construction, maintenance and
operation of pipelines and other facilities necessary or convenient for the
gathering, compression, separation, processing and redelivery of Producer
Products under the Gathering Agreement.  Upon the termination of the Gathering
Agreement, Producer and Gatherer shall file of record a release and termination
of the Gathering Agreement and this Memorandum as to the commitment and
dedication described herein.

3.         The Gathering Agreement, including the dedication and commitment
covenant made by Producer under the Gathering Agreement, runs with the land and
will be binding upon and inure to the benefit of the successors and assigns of
the Parties, subject to the terms of the Gathering Agreement.  Any transfer by
Producer of any of Producer’s interests in the Dedicated Acreage shall comply
with Article 13 of the Gathering Agreement, which, among other matters, requires
that, except in certain circumstances, the transfer be expressly subject to the
Gathering

Exhibit E – Page 2

 

 

Agreement. Article 13 of the Gathering Agreement requires that, among other
matters and except in certain circumstances, neither Party may assign or
otherwise convey all or any portion of its right, title, or interest under the
Gathering Agreement without obtaining the prior written consent of the other
Party, which consent will not be unreasonably withheld, conditioned, or delayed,
and any attempts to assign without such consent will be void.

4.         Should any person or firm desire additional information, said person
or firm should contact:

 

 

 

Gatherer:

Producer:

Catarina Midstream, LLC

SN Catarina, LLC

c/o Sanchez Midstream Partners LP

c/o Sanchez Energy Corporation

1360 Post Oak Blvd, Suite 2400

1000 Main, Suite 3000

Houston, TX 77056

Houston, Texas 77002

Attn: Chief Financial Officer

Attn: General Counsel

Email: cward@sanchezmidstream.com

Fax: (713) 756-2784

 

Email: gkopel@sanchezog.com

 

and, subject to an appropriate confidentiality agreement, any person may receive
a copy of the Gathering Agreement upon written request to such person at such
address.

5.         The Gathering Agreement became effective on October 14, 2015 and will
remain in full force and effect until the 15th anniversary thereof (the “Primary
Term”). Upon the expiration of the Primary Term, the Gathering Agreement will
renew automatically for up to four (4) additional terms of twelve (12) months
each, unless the Gathering Agreement is terminated by Producer upon at least one
hundred eighty (180) Days’ written notice to Gatherer prior to the end of the
Primary Term or any subsequent anniversary thereof.  Upon termination of the
Gathering Agreement, Producer and Gatherer shall file of record a release and
termination of the Gathering Agreement and this Memorandum as to the commitment
and dedication described herein.

6.         This Memorandum is executed and recorded solely for the purpose of
giving notice and shall not amend or modify the Gathering Agreement in any way.
This Memorandum shall be binding upon and shall inure to the benefit of the
Parties hereto, and to their respective heirs, devises, legal representatives,
successors and permitted assigns.

[Signature page follows]

Exhibit E – Page 3

 

 

IN WITNESS WHEREOF, the Parties have executed this Memorandum to be effective as
of Amendment Date.

PRODUCER:

SN CATARINA, LLC

By:                                                                   
Name:
Title:

STATE OF TEXAS
COUNTY OF HARRIS, TO-WIT:

I, the undersigned, a notary public of the said county, do hereby certify that
on this [__] day of [____________], 2020, before me personally appeared
[____________], who acknowledged himself to be the [____________] of SN
Catarina, LLC, and that he as such officer, being so authorized to do so,
executed the foregoing instrument for the purposes therein contained, by signing
the name of the company by himself as said officer.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                                       
Notary Public

My commission
expires:                                                                     
(Notarial Seal)

Exhibit E – Page 4

 

 

GATHERER:

CATARINA MIDSTREAM, LLC

By:                                                            

Name:

Title:

STATE OF TEXAS
COUNTY OF HARRIS, TO-WIT:

I, the undersigned, a notary public of the said county, do hereby certify that
on this [__] day of [____________], 2020, before me personally appeared
[____________], who acknowledged himself to be the [____________] of Catarina
Midstream, LLC, and that he as such officer, being  so authorized to do so,
executed the foregoing instrument for the purposes therein contained, by signing
the name of the company by himself as said officer.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                                                                        
Notary Public

My commission
expires:                                                                     
(Notarial Seal)

Exhibit E – Page 5

 

 

EXHIBIT A

DEDICATED ACREAGE

PART 1 - DEDICATED ACREAGE

[Attached]

 

PART 2 - DEDICATED DEEDS

[Attached]

 

PART 3 - DEDICATED LEASES

[Attached]

 

Exhibit A

 

 

 

Exhibit E – Page 6

 

 

EXHIBIT F

 

Pipelines

 

[Attached.]

 

 

 

 

Exhibit F

 

 

Picture 3 [tmb-20200606xex10d1g012.jpg]

 

 

 

 

Exhibit G

 

Closing Notice

 

 

 

 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

                                                                                                           

§

In
re:                                                                                                 §          Chapter
11

§

SANCHEZ ENERGY CORPORATION, et
al.,1                                           §          Case No. 19-34508
(MI)

§

Debtors.                                 §          (Jointly Administered)
§

§          Re: ECF No. ____

                                                                                                           

 

CLOSING NOTICE

PLEASE TAKE NOTICE that on ___________, 2020, , this Court entered the Order (A)
Approving a Settlement with Certain Midstream Counterparties and (B) Authorizing
the Assumption of Certain Related Contracts, as Amended [Docket No. ___], among
other things, authorizing the Debtors to enter into and perform under the
Settlement Agreement, dated __________, 2020 (the “Settlement Agreement”)2, by
and between the Debtors, Catarina Midstream, LLC, Carnero G&P LLC, Seco
Pipeline, LLC, Sanchez Midstream Partners, LP, Sanchez Midstream Partners GP,
LLC, SP Holdings, LLC, and TPL SouthTex Processing Company LP (collectively, the
“Parties”).

PLEASE TAKE FURTHER NOTICE that on __________, 2020, the undersigned Parties
acknowledge that all Closing Conditions Precedent set forth in the Settlement
Agreement were satisfied and the Closing occurred

[Remainder of Page Intentionally Left Blank]

 

1                    The Debtors in these chapter 11 cases, along with the last
four digits of each Debtor’s federal tax identification number, are: Sanchez
Energy Corporation (0102); SN Palmetto, LLC (3696); SN Marquis, LLC (0102); SN
Cotulla Assets, LLC (0102); SN Operating, LLC (2143); SN TMS, LLC (0102); SN
Catarina, LLC (0102); Rockin L Ranch Company, LLC (0102); SN EF Maverick, LLC
(0102); SN Payables, LLC (0102); and SN UR Holdings, LLC (0102). The location of
the Debtors’ service address is 1000 Main Street, Suite 2800, Houston, Texas
77002.

2         Capitalized terms used herein and not otherwise defined have the
meanings set forth in the Settlement Agreement.

 

 

Exhibit E – Page 1

 

 

 

 

________________________________

Dennis L Jenkins (admitted pro hac vice)

New York Bar No. 5542428

James A. Newton (admitted pro hac vice)

New York Bar No. _________

Morrison & Forester LLP

250 West 55th Street

New York, New York 10019

Telephone: (212) 468-8000

Facsimile:  (212) 468-7900

djenkins@mofo.com

jnewton@mofo.com

 

Counsel to the Reorganized Debtors

 

 

 

_________________________________

Timothy A. (“Tad”) Davidson II

Texas Bar No. 24012503
Joseph P. Rovira

Texas Bar No. 24066008

HUNTON ANDREWS KURTH LLP

600 Travis, Suite 4200

Houston, Texas 77002

Telephone: (713) 220-4200

Facsimile:  (713) 220-4285
taddavidson@huntonak.com
josephrovira@HuntonAK.com

 

Counsel to Catarina Midstream LLC, Seco Pipeline, LLC and Sanchez Midstream
Partners, LP

__________________________________

Joshua W. Wolfshohl

Texas Bar No. 24038592

1000 Main Street, 36th Floor

Houston, Texas 77002

Telephone: (713) 226-6000

Facsimile: (713) 226-6248

jwolfshohl@porterhedges.com

 

Counsel to Carnero G&P LLC, and TPL SouthTex Processing Company LP

 

 

 

 

 

Picture 5 [tmb-20200606xex10d1g013.jpg]

 

 

 

 

Picture 6 [tmb-20200606xex10d1g014.jpg]

 

 

 

 

Picture 9 [tmb-20200606xex10d1g015.jpg]

 

 

 

 

Picture 18 [tmb-20200606xex10d1g016.jpg]