STAFF AS IT CURRENTLY
MAINTAINS FOR THE PERFORMANCE OF ITS SERVICES HEREUNDER, AND STALLION SHALL
DEVOTE TO THE PERFORMANCE OF THE SERVICES HEREUNDER THE PERSONNEL CURRENTLY
RENDERING SUCH SERVICES OR OTHER PERSONNEL EXPERIENCED AND QUALIFIED IN SUCH
MATTERS. STALLION MAY HIRE SUCH PERSONNEL AS IT DEEMS NECESSARY TO PERFORM THE
SERVICES.
STALLION WILL AT ALL TIMES ENDEAVOR TO PERFORM SUCH SERVICES IN
ACCORDANCE WITH GOOD PROFESSIONAL INDUSTRY AND BUSINESS STANDARDS, AND IN
RESPECT OF THE OPERATIONAL AND FIELD SERVICES PROVIDED HEREUNDER, TO THE
STANDARD OF A REASONABLY PRUDENT OIL AND GAS OPERATOR IN THE AREA UNDER THE SAME
OR SIMILAR CIRCUMSTANCES, BUT IN NO EVENT SHALL STALLION HAVE ANY LIABILITY TO
ANY LINN PARTY FOR LOSSES SUSTAINED OR LIABILITIES INCURRED IN PERFORMING ANY
SERVICES EXCEPT TO THE EXTENT SUCH LOSSES OR LIABILITIES RESULT FROM GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF STALLION OR ITS AGENTS.
STALLION AND ITS
AFFILIATES SHALL HAVE ACCESS TO AND USE OF THE ASSETS TO PERFORM THE SERVICES TO
BE PROVIDED PURSUANT TO THIS AGREEMENT.
(C)
STALLION SHALL NOT ENTER INTO ANY CONTRACTS RELATING TO THE ASSETS
OR WELLS TO BE DRILLED ON THE ASSETS DURING THE TERM OF THIS AGREEMENT WITHOUT
THE PRIOR WRITTEN AGREEMENT OF LINN.
(D)
APPENDIX C SETS FORTH THE MATERIAL CURRENT CONTRACTS AND AGREEMENTS
WITH THIRD PARTIES PURSUANT TO WHICH SERVICES ARE PROVIDED IN CONNECTION WITH
THE ASSETS ("SERVICE CONTRACTS").
IF AT THE TERMINATION OF THIS AGREEMENT ANY
SERVICE CONTRACT HAS NOT YET EXPIRED, THEN LINN SHALL HAVE THE OPTION TO EITHER:
(I) TAKE ASSIGNMENT OF THE SERVICE CONTRACT FROM STALLION, IF ASSIGNABLE; SUCH
ASSIGNMENT TO BE MADE TO THE LINN PARTY DESIGNATED BY LINN OR (II) INSTRUCT
STALLION TO TERMINATE THE SERVICE CONTRACT AND REIMBURSE STALLION FOR ANY EARLY
TERMINATION FEES OR COSTS ASSOCIATED WITH SUCH EARLY TERMINATION.
2.
COMPENSATION AND REMITTANCE OF NET AVAILABLE CASH
(A)
FOR THE PERFORMANCE OF SERVICES HEREUNDER, STALLION WILL BE ENTITLED
TO THE G&A FEE (AS DEFINED IN THE SCHEDULE ATTACHED AS APPENDIX A HERETO).
(B)
UNTIL TERMINATION OF THIS AGREEMENT, STALLION SHALL CONTINUE TO
RECEIVE AND COLLECT REVENUES FROM THE ASSETS AND/OR ANY WELLS DRILLED ON THE
ASSETS DURING THE TERM OF THIS AGREEMENT FOR THE ACCOUNT OF AND ON BEHALF OF THE
LINN PARTY WHO IS ENTITLED THERETO AND SHALL REMIT SAME AS PROVIDED IN THIS
PARAGRAPH 2 (THE TOTAL AMOUNT OF SUCH REVENUES ARE HEREIN REFERRED TO AS THE
"LINN GROSS REVENUES")
(C)
EACH MONTH DURING THE TERM HEREOF, STALLION SHALL DEDUCT FROM THE
LINN GROSS REVENUES APPLICABLE PRODUCTION, SEVERANCE AND OTHER TAXES AND REMIT,
AS APPLICABLE, THOSE TAXES TO THE EXTENT NOT WITHHELD BY THE PURCHASER OF
PRODUCTION.
THE
2
AMOUNT OF LINN GROSS REVENUES LESS APPLICABLE PRODUCTION, SEVERANCE AND OTHER
TAXES IS HEREIN REFERRED TO AS THE "LINN NET REVENUES".
(D)
EACH MONTH, DURING THE TERM HEREOF, STALLION SHALL DEDUCT FROM THE
LINN NET REVENUES THE FOLLOWING: (I) THE G&A FEE FOR SUCH MONTH, (II) THE AMOUNT
OF OUTSTANDING OPERATING EXPENSES, WORKOVER EXPENSES, CAPITAL EXPENDITURES AND
OTHER COSTS AND