instruction:
In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write the index where the answer starts. If multiple answers seem to exist, write the index of the answer that is the most plausible. If multiple indices must be used to answer the question, the output should be a common separated list of indices.
question:
CONFIDENTIAL PORTIONS OMITTED

                                                                   EXHIBIT 10.16

                       [LOGO OF TEAM SABCO APPEARS HERE]

                             SPONSORSHIP AGREEMENT

THIS SPONSORSHIP AGREEMENT (hereinafter the Agreement) is made and entered into this 19th day of December 1997, by and between SABCO RACING, INC., a North Carolina corporation with a place of business in Iredell County, North Carolina (hereinafter Sabco), and Prolong Super Lubricants, Anaheim, Calif. (Hereinafter to be referred to as Prolong);

                                  WITNESSETH:

     WHEREAS, Sabco is engaged in the business of operating NASCAR Winston Cup  Series race cars and wishes to provide advertising space and advertising,  promotional and marketing assistance to Prolong; and

     WHEREAS, Prolong desires to become a major associate sponsor of all three Sabco entries during the 1998, 1999 and year-2000 NASCAR Winston Cup Series racing seasons. These entries shall mean the Sabco No. 40, all NASCAR Winston Cup Series races during this three-year period; the Sabco No. 42, all NASCAR Winston Cup Series races during this three-year period; and Sabco No. 46, all NASCAR Winston Cup Series races during this three-year period. Prolong shall use its sponsorship of the Sabco entries for advertising, promoting and marketing itself.        WHEREAS, the parties desire to set forth in this Agreement their respective rights and obligations;

     NOW, THEREFORE, in consideration of the mutual promises and agreements set  forth herein, and for other good and valuable consideration, the parties hereto  agree as follows:

     1.    Term.  The term of this Agreement shall commence with the first race             ----- of the 1998 Winston Cup season and shall continue until the final race of the  year-2000 Winston Cup season.

     2.    Services to be provided by Sabco.  Sabco shall perform the following            --------------------------------- services for Prolong during the term hereof:

     A.    Drivers.  The drivers for the 33 Winston Cup events to be held             -------- during the 1998 season in which Prolong is an associate sponsor shall be  Sterling Marlin (40), Joe Nemechek (42) and Wally Dallenbach Jr. (46), unless  due to injury or for some unforeseeable reason, either is unable to drive, in  which event Sabco shall choose a substitute driver to drive their respective  Sabco/Prolong-sponsored entry.  For the duration of this agreement, Sabco  reserves the right to substitute or replace any of the aforementioned drivers  listed without prior notice to Prolong or prior approval from Prolong.

     B.    Decal location.  Sabco will designate Prolong as an associate sponsor            --------------- on its No. 40, No. 42 and No. 46 Winston Cup race cars in the aforementioned 33 events. Sabco shall cause each car to be painted with paint schemes approved by each's primary sponsor and shall cause to display Prolong associate sponsor decal signage upon the middle side panel (between car number and rear tire; both sides of car) with dimensions of approximately 6

  inches high by 16 inches long. In addition, Sabco shall provide, subject to Prolong's approval, drive, pit crew, team uniforms, team pit equipment, team race car transporter, show car and show car transporter bearing prominent Prolong associate sponsor identification as well as team pit equipment with size and placement commensurate with level of sponsorship

    3.  Driver Appearances.  Sabco shall provide unto Prolong five aggregate          ------------------ driver appearances (2) two-hours each at no fee. Prolong shall be responsible  for all first class travel expenses relating to each driver appearance, i.e.  hotel, airfare, meals, etc.  Additional appearances by Sabco drivers shall be at the discounted rate of [ * ] ($[ * ]) Dollars per day per driver, [ * ].

        Sabco shall further provide the services of each driver for one free day for commercial use (up to six hours each) for still photo shoot, TV and  radio/commercial production.  Prolong shall be responsible for all first class  travel expenses relating to each driver appearance, i.e. hotel, airfare, meals,  etc.

        All Sabco drivers, while under contract with Team SABCO, shall allow their likeness, voice, picture and signature to be used for commercial purposes endorsing Prolong at no additional costs during the term of this agreement.

   4.   Compensation. Prolong agrees to pay unto Sabco the sum [ * ] [ * ]          ------------ Dollars ($[ * ]) for services to be provided by Sabco over this three year period of 1998, 1999 and year-2000.  This sponsorship fee of $ [ * ] shall be





paid to Sabco in the following installments:  Year One (1998): $ [ * ] (four  equal installments of  $ [ * ] to be paid on 3/15/98, 6/15/98, 8/15/98 and  10/15/98); Year Two (1999): $ [ * ] (four equal installments of $ [ * ] to be  paid on 3/15/99, 6/15/99, 8/15/99 and 10/15/99); Year Three (year-2000): $ [ * ] (four equal installments of $ [ * ] to be paid on 3/15/2000, 6/15/2000,8/15/2000 and 10/15/2000).

   5.   Show Car. Sabco agrees to provide at no expense to Prolong for its use         -------- in promoting its sponsorship, five (5) free show car appearance days whereas Prolong can deem which of the Sabco show cars to use. This shall mean that Prolong may schedule any combination of Sabco's three show cars (based on availability) not to exceed a total of five show days (travel days are considered a show date). Sabco will provide transportation of show car and will provide an attendant to stay with the car during its display period. For any show car appearance requested by Prolong over and above the five (5) free appearances, Sabco will make available unto Prolong a show car at a discounted rate of [ * ] Dollars ($ [ * ]) per day. All travel days to and from the site of a show car appearance, as well as the actual day upon which show car is on display will be charged as a show date. It is further understood that the parties will agree in advance upon a schedule of places and events for the show car to be displayed at such times as will not interfere with Sabco's racing schedule.

    6.  Media, Public Relations and Sponsor Communications. Sabco will use its         -------------------------------------------------- best efforts to obtain favorable exposure for Prolong and will be available to assist Prolong with public relations activities to a reasonable extent. This shall include making members of Sabco available for media interviews, press conferences or other public relations activity, as reasonably requested by Prolong, at or near race sites on dates Sabco is at race sites pursuant to their obligations hereunder. Sabco shall provide at its expense a staff member to handle race team's media and public relations needs and shall cause Prolong to receive prominent mention and display within press kits featuring the Sabco No. 40, 42 and 46 race cars. In each of the 1998, 1999 and year-2000 races in which Prolong is designated as an associate sponsor, Sabco shall fax to Prolong officers on the Monday following the race, race results and a summary of the prior weekend activities.

     *  CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

         7.  Exclusivity. During the term of this Agreement, Sabco will not             ----------- represent or accept as a primary, secondary, or associate sponsor any other  company reasonably deemed to be competitive with Prolong products.

       8.  Confidentiality. During and after the term of this Agreement, each             --------------- party hereto, its employees and agents agree not to disclose any business  results, trade practices or other business information of the other party, its  employees or agents, which they may learn as a result of the performance of this Agreement.

       9.  Indemnification.            ---------------          A.  Sabco shall indemnify, defend and hold harmless Prolong, its         officers, directors, employees and representatives from and against any        and all losses, claims, suits, damages, liabilities, costs and expenses,        including attorney fees and count costs incurred by any of them arising        out of:

(i)        Any breach of any warrant made by Sabco herein;

(ii)       Any acts done or words spoken

(iii)      Any claims by any persons arising from acts or omissions of any            nature by Sabco, its employees or agents, including but not limited            to, claims arising during the court of competition or practice in the            performance of this Agreement.

       B.  Prolong shall indemnify, defend and hold harmless Sabco, its  officers, directors, employees and representatives, from and against any and all losses, claims, suits, damages, liabilities, costs and expenses, including  attorney fees and court costs incurred by any of them, arising out of:

(i)        The use of any logo, design or materials furnished to Sabco by             Prolong hereunder;

(ii)       Any breach of any warranty made by Prolong herein;

(iii)      Any acts done or words spoken by Prolong, its officers, directors,             agents, employees and representatives;

(iv)       Any claims by any persons arising from acts of omissions of any        nature by Prolong, its officers, directors, agents, employees or        representatives, including, but not limited to, claims arising under any        product liability theory with respect to Prolong's products.

       10. Nature of Relationship. The parties expressly acknowledge and agree             ---------------------- that Sabco is acting as an independent contractor. Each party is responsible for all taxes relating to its operation, including payroll taxes for its employees,  and nothing in this Agreement is intended to create a relationship, express or





implied, of employer-employee between Sabco and Prolong. Except as expressly  authorized herein, neither party may contract for or otherwise obligate the  other party without the party's prior express written consent.

       11.  Insurance.  Sabco shall provide at its expense and maintain throughout           --------- the term of this Agreement and any option period spectator liability insurance  in an amount not less than $1 million single limit coverage with respect to any  liability relating to the activities of Sabco in the performance of this  Agreement.  Sabco shall, within 90 days of the execution of this Agreement,  supply Prolong with a copy of such policy of insurance or a certificate thereof, and such policies shall be cancelable only upon 10 days written notice to  Prolong.

     12.  Notices, Statements and Payments.  All notices, statements and            -------------------------------- payments required under this Agreement shall be sent to the parties at the  following addresses:

SABCO RACING, INC. 114 Meadow Hill Circle Mooresville, North Carolina 28115 Attn:  Felix Sabates

PROLONG SUPER LUBRICANTS 1210 North Barsten Way Anaheim, California 92806 Attn: Jerry Grant

All notices, statements and payments shall be deemed delivered when deposited  in the United States mail postage prepaid, when hand delivered if delivered  personally, when telecopied if the sender's telecopier confirms transmission  (with respect to notices and statements) or when wire transferred in federal  funds (with respect to payments).

     13.  Waivers.  A waiver of any provision of this Agreement shall be            -------- enforceable only if the waiver is in writing signed by the party against whom  the waiver is sought to be enforced.  A failure by a party at any time to  exercise any rights hereunder shall not constitute a waiver of such rights at  another time.

     14.  Entire Agreement.  This Agreement contains the entire agreement and            ---------------- understanding between the parties with respect to the subject matter hereof and  supersedes all prior written or oral agreements between them with respect to the subject matter hereof.

     15.  Assignment.  This Agreement may not be assigned by either party            ---------- without the prior written consent of the other party.

     16.  Significance of Headings.  Paragraph headings contained herein are            ------------------------ solely for the purpose of aiding the speedy location of subject matter and are  not in any sense to be given weight in the construction of this Agreement.   Accordingly, in case of any question with respect to the construction of this  Agreement, it is to be construed as though paragraph headings had been omitted.

     17.  Governing Law, Jurisdiction and Venue.  This Agreement shall be            ------------------------------------- governed by and construed in accordance with the substantive laws of the State  of North Carolina.  The parties hereto hereby submit to jurisdiction and venue  in any state or federal court located in North Carolina as well as any other  jurisdiction having venue and competent jurisdiction of any law suit arising out of or relating to this Agreement; provided, however, if any

  proceedings are instituted in a jurisdiction other than North Carolina, any  party may remove such proceeding to any State or Federal Court in North  Carolina.

       18.  Further Execution; Cooperation. The parties agree to execute and              ------------------------------ deliver such further agreements, instruments and other documents as the other  party may reasonably deem necessary to effectuate the purposes and provisions of this Agreement. The parties further agree to cooperate with each other in any  manner reasonably requested by the other party to effectuate the purposes and  provisions of this Agreement.

       19.  Counterparts. This Agreement may be executed in counterparts and the             ------------ signature page of any party, and photocopies and facsimiles thereof, may be  appended to any counterpart and when so appended shall constitute an original  signature.

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be  executed by their duly elected officers as of the day and year first above  written.





                               SABCO RACING, INC. ATTEST:                                                                 BY /s/ Armando Fitz                                   -------------------------------- /s/ Jerry Grant                Armando Fitz - Vice President Business Operations - --------------------------    Jerry Grant - Secretary

                               PROLONG SUPER LUBRICANTS ATTEST:

                               BY /s/ Elton Alderman /s/ ILLEGIBLE                     --------------------------------- - --------------------------              Elton Alderman - President                  Secretary 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
answer:
10229


question:
Exhibit 10.6

OPERATIONS AND MAINTENANCE AGREEMENT

Between

Piñon Gathering Company, LLC

And

SandRidge Midstream, Inc.













TABLE OF CONTENTS

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              PAGE ARTICLE I DEFINITIONS     1   ARTICLE II ENGAGEMENT OF OPERATOR     6   2.1 Engagement     6   2.2 Independent Contractor     6   2.3 Owner Cooperation     6   ARTICLE III TERM; RESIGNATION OR REMOVAL OF OPERATOR     7   3.1 Term     7   3.2 Owner Default     7   3.3 Operator Default     7   3.4 Cooperation with Owner or Successor Operator     8   3.5 Effect of Termination     8   3.6 No Breach     8   ARTICLE IV DUTIES AS OPERATOR     9   4.1 Duties as Operator     9   4.1.1 Operation and Maintenance of the Gathering System     9   4.1.2 Purchase of Material and Supplies     9   4.1.3 Personnel     9   4.1.4 Payment of Operating Expenses     9   4.1.5 Proposed Operating Expense Budget     10   4.1.6 Capital Projects     10   4.1.7 Emergencies     11   4.1.8 Reporting By Operator     11   4.1.9 Commercial Activities     12   4.1.10 Regulatory Affairs     12   4.1.11 Devotion of Time     12   4.2 Standard of Care     12   4.3 Limitation of Authority     13   4.3.1 Binding Owner     13   4.3.2 Asset Sales     13   4.3.3 Material Alteration of Owner's Business     13   4.3.4 Debt 13         ARTICLE V COST REIMBURSEMENT     13   5.1 Responsibility for Costs and Expenses     13   5.2 Procedure     13







TABLE OF CONTENTS

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              PAGE 5.2.1 Invoicing and Payment     13   5.2.2 Disputes     14   5.3 Setoff     14   ARTICLE VI ACCOUNTING; REPORTS; RECORDS     14   6.1 Accounting Methods     14   6.2 Financial Statements     14   6.3 Accounting and Taxation     15   6.3.1 Maintenance of Accounts     15   6.3.2 Preparation of Tax Returns     15   6.3.3 Owner to Supply Information     16   6.4 Banking     16   6.5 Independent Audits     16   6.6 Credit Inquiries     17   ARTICLE VII FORCE MAJEURE     18   7.1 Procedure     18   7.2 Strikes     18   ARTICLE VIII INSURANCE AND INDEMNIFICATION     18   8.1 Operator Insurance     18   8.2 Contractors     19   8.3 Notice of Claims     20   8.4 Mutual Release and Indemnification     20   8.4.1 Owner's Indemnification     20   8.4.2 Operator's Indemnification     20   ARTICLE IX GENERAL PROVISIONS     21   9.1 Notices     21   9.2 Rights     21   9.3 Applicable Laws     22   9.4 Rules of Construction     22   9.5 Governing Law     22   9.6 Dispute Resolution     22   9.6.1 Negotiation     22   9.6.2 Jurisdiction and Venue     22   9.6.3 Jury Waiver     23   9.6.4 Costs and Expenses     23   9.7 Limitation of Liability     23







TABLE OF CONTENTS

EXHIBITS:

     EXHIBIT A — DUTIES AND RESPONSIBILITIES OF OPERATOR

     EXHIBIT B — FORM OF MONTHLY OPERATING AND FINANCIAL REPORT

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              PAGE 9.8 Entirety of Agreement, Amendments     23   9.9 Waivers     24   9.10 Exhibits     24   9.11 Headings     24   9.12 Assignment     24   9.13 Rights and Remedies     24   9.14 Counterparts     24   9.15 No Third Party Beneficiary     24   9.16 Further Assurances     25







OPERATIONS AND MAINTENANCE AGREEMENT

     This OPERATIONS AND MAINTENANCE AGREEMENT dated June 30, 2009 (the Effective Date), is made and entered into by and between  Piñon Gathering Company, LLC, a Delaware limited liability company (Owner), with offices at 333 Clay Street, Suite 4150, Houston, Texas 77002,  and SandRidge Midstream, Inc., a Texas corporation (Operator), with offices at 123 Robert S. Kerr Avenue, Oklahoma City, Oklahoma 73102.

RECITALS

     A. Pursuant to that certain Membership Interest Purchase Agreement between Operator and TCW Pecos Midstream, L.L.C., a Texas limited  liability company (TCW Pecos Midstream) dated as of even date herewith (the Membership Interest Purchase Agreement), TCW Pecos  Midstream has purchased from Operator all issued and outstanding membership interests in Owner, which owns the Gathering System (as  hereinafter defined).

     B. Owner wishes to retain Operator to maintain and operate the Gathering System and advance the commercial interests of Owner through the  negotiation and execution of agreements relative to the commercial offerings provided by Owner, as well as administering the business and  regulatory affairs of Owner relating to the Gathering System, all in accordance with the terms and conditions set forth below.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, Operator and Owner  hereby agree as follows:

ARTICLE I  DEFINITIONS

     Except as otherwise defined in this Article I, capitalized terms used in this Agreement shall have the meanings assigned to them in the Gathering  Agreement.

     Adjustment Claims shall have the meaning set forth in Section 6.5.

     Affiliate means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common  control with, such specified Person through one or more intermediaries or otherwise. For the purposes of this definition, control means, where  used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies  of such Person, whether through the ownership of Voting Securities or interests, by contract or otherwise, and the terms controlling and  controlled have correlative meanings.

     Agreement means this Operations and Maintenance Agreement (including all exhibits), as amended from time to time in accordance with the  terms hereof.

     Audit Costs shall have the meaning set forth in Section 6.5.









     Business Day means any calendar day, other than a Saturday or Sunday, on which commercial banks in Dallas, Texas are open for business.

     Calendar Year means the time period from January 1 through December 31 of the same calendar year.

     Capital Project means any capital expenditure to repair, maintain, construct, expand, or modify the Gathering System.

     Capital Project Proposal shall have the meaning set forth in Section 4.1.6.

     Claim means any lawsuit, claim, proceeding, investigation, review, audit or other cause of action of any kind.

     Company Conveyance means that certain Assignment of Membership Interests dated as of June 30, 2009, between Operator and TCW Pecos  Midstream, together with all amendments, modifications or waivers thereto.

     Confidentiality and Disclosure Agreement means that certain Confidentiality and Disclosure Agreement dated as of June 30, 2009, between  SandRidge Energy, Inc., TCW Asset Management Company, and Piñon Gathering Company, LLC, together with all amendments, modifications or  waivers thereto.

     Constituent of Concern means any substance defined as a hazardous substance, hazardous waste, hazardous material, toxic substance, solid  waste, pollutant or contaminant by an Environmental Law.

     Dedicated Gas shall have the meaning ascribed to such term in the Gathering Agreement.

     Effective Date shall have the meaning set forth in the preamble to this Agreement.

     Emergency means a sudden or unexpected event that causes, or risks causing, imminent material damage to the Gathering System, death or  injury to any Person, or material damage to property or the environment.

     Emergency Work shall have the meaning set forth in Section 4.1.7.

     Enterprise Gathering Agreement means that certain Gas Gathering Agreement dated as of June 26, 2009, between Enterprise Products  Operating, LLC and Operator, together with all amendments, modifications or waivers thereto.

     Environmental Law means all applicable Laws and Environmental Permits of any Governmental Authority relating to the environment, natural  resources, or the protection thereof, including, without limitation: (a) all requirements pertaining to liability for reporting, management, licensing,  permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of a Constituent of Concern; and (b) CERCLA,  the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq. the Federal Clean Water Act, the Federal

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Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource Conservation and Recovery Act), the Federal Toxic Substances  Control Act, and the Federal Insecticide, Fungicide and Rodenticide Act, the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., and the Safe  Drinking Water Act, 42 U.S.C. § 300f et seq. and any applicable Law relating to health, safety, the environment, natural resources or the protection  thereof, each as amended from time to time, including any regulations promulgated pursuant thereto, and any state or local counterparts.

     Environmental Permits all permits, licenses, registrations, authorizations, certificates and approvals, and any other similar items, of  Governmental Authorities required by Environmental Laws and necessary for or held in connection with the ownership and/or operation the  Gathering System or any of the transactions contemplated hereby.

     Force Majeure means any cause or causes not reasonably within the control of the Party claiming suspension and which, by the exercise of  reasonable diligence, such Party is unable to prevent or overcome, including, without limitation, acts of God, acts, omissions to act, and/or delays  in action of federal, state, or local government or any agency thereof, strikes, lockouts, work stoppages, or other industrial disturbances, acts of a  public enemy, sabotage, wars, blockades, insurrections, riots, acts of terror, epidemics, landslides, lightning, earthquakes, fires, storms, storm  warnings, floods, washouts, extreme cold or freezing weather, arrests and restraints of governments and people, civil or criminal disturbances,  interruptions by governmental or court orders, present and future valid orders of any regulatory body having jurisdiction, explosions, mechanical  failures, breakage, or accident to equipment installations, machinery, compressors, or lines of pipe, and associated repairs, freezing of wells or lines  of pipe, partial or entire failure of wells, pipes, facilities, or equipment, electric power unavailability or shortages, failure of pipelines or carriers to  transport, partial or entire failure or refusal of operators of upstream or downstream pipelines or facilities to receive gas, governmental regulations,  and inability to obtain or timely obtain, or obtain at a reasonable cost, after exercise of reasonable diligence, pipe, materials, equipment, rights-of- way, servitudes, governmental approvals, or labor, including those necessary for the facilities provided for in this Agreement.

     GAAP means generally accepted accounting principles, consistently applied.

     Gathering Agreement means that certain Gas Gathering Agreement dated as of even date herewith by and between SandRidge Exploration  and Production, LLC, as Shipper, and Owner, as Gatherer, as amended, restated or otherwise modified from time to time.

     Gathering System shall have the meaning ascribed to such term in the Gathering Agreement.

     Governmental Authority means any federal, state, municipal, local or similar governmental authority, regulatory or administrative agency,  court or arbitral body with jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Gathering System.

     Guaranty Agreements means, collectively, that certain (a) Guaranty Agreement dated as of June 30, 2009, by SandRidge Energy, Inc. in favor  of TCW Pecos Midstream, (b) Guaranty

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Agreement dated as of June 30, 2009, by SandRidge Energy, Inc. in favor of Owner, (c) Guaranty Agreement dated as of June 30, 2009, by  SandRidge Exploration and Production, LLC in favor of Owner, and (d) Guaranty Agreement dated as of June 30, 2009, by Operator in favor of  Owner, in each case, together with all amendments, modifications or waivers thereto.

     Intercompany Conveyance means that certain Assignment, Bill of Sale and Conveyance dated as of June 30, 2009, between Operator and  Owner, together with all amendments, modifications or waivers thereto.

     Law means any statute, writ, law, common law, rule, regulation, ordinance, order, judgment, injunction, award, determination or decree of a  Governmental Authority, or any requirement under the common law.

     LLC Agreement means that certain Amended and Restated Limited Liability Company Agreement of Piñon Gathering Company, LLC,  together with all amendments, modifications or waivers thereto.

     Liability Claim means a Claim arising out of the administration, operation, or maintenance of the Gathering System, or arising out of or  incidental to the activities carried on or work performed or required by this Agreement.

     Loss means any loss, cost, expense, liability, damage, sanction, judgment, lien, fine, or penalty, including reasonable attorney's and  consultant's fees and expenses, incurred, suffered or paid by, or resulting to, the applicable indemnified Persons on account of (i) injuries  (including death) to any Person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or  arising out of the matters for which the indemnifying Party has indemnified the applicable indemnified Persons, (ii) any failure of any  representation or warranty made by Operator in this Agreement to be true and correct when made, or (iii) the breach of any covenant or agreement  made or to be performed by the indemnifying Party pursuant to this Agreement.

     Material Overpayment shall have the meaning set forth in Section 6.5.

     Membership Interest Purchase Agreement shall have the meaning set forth in the first recital of this Agreement.

     Operator shall have the meaning set forth in the preamble to this Agreement.

     Operator Change of Control means the occurrence of an event where upon (i) at least seventy-five percent (75%) of the equity interests in  Operator and (ii) at least seventy-five percent (75%) of the monthly volumes of Dedicated Gas projected to be produced during the period  extending from the date of calculation to the estimated date of the Trigger Event shall cease to be owned, directly or indirectly, by the same Person.

     Operator Indemnified Parties means, collectively, Operator, its successors and permitted assigns, and their respective Affiliates,  shareholders, members, partners, officers, directors, employees, and agents.

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     Operator Parties means, collectively, Operator, Operator's Affiliates, and their respective successors and assigns; Operator Party means  any such Person individually.

     Owner shall have the meaning set forth in the preamble to this Agreement.

     Owner Indemnified Parties means, collectively, Owner, its successors and permitted assigns, and their respective Affiliates, shareholders,  members, partners, officers, directors, employees, and agents.

     Owner Operating Expense Account means the bank account designed by Owner as its operating expense account.

     Owner Revenue Account means the bank account designed by Owner as its revenue account.

     Party means either Owner or Operator, as applicable, and Parties means both Owner and Operator.

     Person means an individual, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a  trust, an unincorporated organization, or any other entity or organization, including a government or political subdivision or an agency or  instrumentality thereof.

     Preventing Factors shall have the meaning set forth in Section 6.3.1.

     Proposed Operating Expense Budget means, with respect to each period, the Proposed Operating Expense Budget established pursuant to  the Gathering Agreement for such period.

     Shipper shall have the meaning set forth in the Gathering Agreement.

     Subject Gathering Agreements means, collectively, the Gathering Agreement, the Enterprise Gathering Agreement and any gathering  agreements entered into in accordance with Section 4.1.9.

     Tax or Taxes means any (i) federal, state, provincial, county, local or foreign taxes, charges, fees, levies or other assessments, including all  sales and use, goods and services, ad valorem, transfer, gains, profits, excise, franchise, real and personal property, gross receipt, value added,  capital stock, production, business and occupation, disability, employment, payroll, license, estimated, stamp, custom duties, severance,  unemployment, social security, Medicare, alternative minimum or withholding taxes or charges imposed by any Governmental Authority, and  including any interest and penalties (civil or criminal) on or additions to any such taxes, but expressly excluding any income tax or tax based on  income, such as, without limitation, the franchise tax set forth in V.T.C.A. Tax Code Section 171.0001 et. seq., as the same may be amended or  recodified from time to time, and (ii) liability for items in (i) of any other Person by contract, operation of Law (including Treasury  Regulation 1.1502-6) or otherwise.

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     Tax Returns means any return, report, election, declaration, statement, notice, information return, schedule, or other document (including any  related or supporting information) filed or required to be filed with any Governmental Authority in connection with the determination, assessment,  collection or administration of any Taxes or any income tax or tax based on income, such as, without limitation, the franchise tax set forth in  V.T.C.A. Tax Code Section 171.0001 et. seq., as the same may be amended or recodified from time to time, or the administration of any laws,  regulations or administrative requirements relating to any Taxes or any amendment thereof.

     Transaction Documents means, collectively, this Agreement, the Gathering Agreement, the Membership Interest Purchase Agreement, the  Intercompany Conveyance, the Company Conveyance, the Guaranty Agreements, the Confidentiality and Disclosure Agreement and the LLC  Agreement.

     Trigger Event shall have the meaning ascribed to such term in the Gathering Agreement.

     Voting Securities means, as it relates to a Person, securities of any class of such Person entitling the holders thereof to vote in the election  of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that if such Person is a limited  partnership, Voting Securities of such Person shall be the general partner interest in such Person.

ARTICLE II  ENGAGEMENT OF OPERATOR

2.1 Engagement.

     Owner hereby appoints and retains Operator to manage, operate, and maintain the Gathering System and to administer the business and  regulatory affairs of Owner relating to the Gathering System in accordance with the terms and conditions set forth herein, and Operator hereby  accepts such appointment.

2.2 Independent Contractor.

     The Parties expressly understand and agree that Operator is acting and shall perform and execute the provisions of this Agreement as an  independent contractor unrelated to Owner or any Owner Affiliate, and the work performed by Operator hereunder shall be subject to Owner's  general right of inspection and approval. Nothing in this Agreement is intended to create a relationship, expressed or implied, of employer- employee or principal-agent between Owner and Operator or between Owner and any individual employed or provided to work hereunder by  Operator.

2.3 Owner Cooperation.

     Owner shall cooperate with Operator and provide Operator with such information as Operator may reasonably request from time to time in  connection with the performance of Operator's duties hereunder.

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ARTICLE III  TERM; RESIGNATION OR REMOVAL OF OPERATOR

3.1 Term.

     This Agreement shall commence on the Effective Date and, unless terminated earlier pursuant to Section 3.2 or 3.3 of this Agreement, shall  continue until the twentieth (20th) anniversary of the Effective Date; provided, however, (i) Operator shall have the right to terminate this  Agreement at any time upon no less than 120 days prior written notice to Owner, if Operator provides a substitute operator acceptable to Owner,  as determined in its reasonable discretion, who (A) has experience operating similar assets, (B) has the ability to provide at least the same quality  of service as Operator, (C) has the financial ability to perform the obligations hereunder, and (D) is ready, willing and able to execute an operation  and maintenance agreement substantially similar to this Agreement and acceptable to Owner, as determined in its reasonable discretion, and  (ii) Owner shall have the right to terminate this Agreement at any time upon no less than 120 days prior written notice to Operator.

3.2 Owner Default.

     Operator may terminate this Agreement at any time upon the occurrence of any of the following:

If any of the above occurs and Operator elects to terminate this Agreement, then Operator may give a written notice of termination to Owner,  which termination shall be effective on the date specified by Operator in such notice, provided that such termination date shall be within 60 days  of the date such notice is delivered to Owner. Operator's notice of breach to Owner under Section 3.2(b) or (c) shall state with particularity the  breach alleged by Operator. To the extent Owner disputes the basis for Operator's notice of breach, then the matter shall be addressed under  Section 9.6. Nothing in this Section 3.2 shall be construed to limit or preclude any remedy Operator may have at law or in equity with respect to any  material breach by Owner.

3.3 Operator Default.

     Owner may terminate this Agreement at any time upon the occurrence of any of the following:

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  (a)   the dissolution or bankruptcy of Owner;

  (b)   Owner fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or  indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or

  (c)   other than as set forth in clause (b) above, Owner breaches or fails to observe or perform any material term, condition, or obligation  contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of  written notice from Operator of any such breach.

  (a)   the dissolution or bankruptcy of Operator;







If any of the above occurs and Owner elects to terminate this Agreement, then Owner may give a written notice of termination to Operator, which  termination shall be effective on the date specified by Owner in the notice, provided that such termination date shall be within 60 days of the date  the notice is delivered to Operator. Owner's notice of breach to Operator under Section 3.3(c) or (d) shall state with particularity the breach alleged  by Owner. To the extent Operator disputes the basis for Owner's notice of breach, then the matter shall be addressed under Section 9.6. Nothing in  this Section 3.3 shall be construed to limit or preclude any remedy Owner may have at law or in equity with respect to any material breach by  Operator.

3.4 Cooperation with Owner or Successor Operator.

     Upon the termination of this Agreement, Operator shall cooperate in the transition of operations to Owner or a successor operator and upon  Owner's request, will promptly deliver all books and records and other property (including, without limitation, intellectual property) of Owner to  Owner or the successor operator, as applicable.

3.5 Effect of Termination.

     Any termination of this Agreement pursuant to this Article III will release Operator from, and Owner agrees to indemnify Operator against any  liability accruing or accrued hereunder after the effective date of termination, except with respect to the obligations and liabilities of Operator that  survive termination. Termination of this Agreement shall not relieve the Parties from any liability or obligation accruing or accrued prior to the date  of such termination or deprive a Party not in breach (other than a breach which occurs because such Party is rightfully withholding performance in  response to a breach by the other Party) of its right to any remedy otherwise available to such Party.

3.6 No Breach.

     No violation of any of the terms or conditions of this Agreement shall be deemed a breach of this Agreement by Owner if and to the extent such  violation or failure results, directly or indirectly, from a breach of the Gathering Agreement by Shipper.

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  (b)   an Operator Change of Control;

  (c)   Operator fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements  or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or

  (d)   other than as set forth in clause (c) above, Operator breaches or fails to observe or perform any material term, condition, or obligation  contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of  written notice from Owner of any such breach.







ARTICLE IV  DUTIES AS OPERATOR

4.1 Duties as Operator.

     Operator shall be responsible for (1) administering the regulatory, business, and financial affairs of Owner; (2) maintaining the financial and  product accounting records of Owner; (3) preparing and distributing financial statements; (4) complying with any and all instructions it receives  from Owner with respect to the operation and maintenance of the Gathering System, provided that such instructions are consistent with applicable  Laws; (5) performing the requirements and obligations of Owner set forth in the Subject Gathering Agreements; and (6) taking any actions  necessary to avoid any exercise of remedies by any shipper under any Subject Gathering Agreement.

     4.1.1 Operation and Maintenance of the Gathering System.

     4.1.1.1 Operation of the Gathering System. Operator shall manage and operate the Gathering System, supervise the operation and  maintenance of the Gathering System and the construction and future modifications to the Gathering System, negotiate agreements in  Owner's name with third parties related to the operation of Owner's business (provided that (i) Owner shall have the right to approve or  disapprove any such agreements, and (ii) if approved, except as provided in Section 4.1.2, Owner, and not Operator, shall execute all such  agreements), comply with any instructions it receives from Owner with respect to the operation and maintenance of the Gathering System,  provided that such instructions are consistent with applicable Laws, and perform all other services and functions related thereto, including,  but not limited to, those services and functions listed on Exhibit A, subject to the limits, requirements, and restrictions otherwise set forth in  this Agreement.

     4.1.1.2 Maintenance Authority. Subject to the terms, conditions and limitations set forth in this Agreement, Owner hereby authorizes and  empowers Operator, and Operator agrees, in the name of and on behalf of Owner, to do and perform any and all acts reasonably necessary  for the prudent operation and maintenance of the Gathering System.

     4.1.1.3 Operator Recommendations. In the event that Operator makes a good-faith recommendation in writing regarding an operational  issue to Owner, and Owner does not, for any reason whatsoever, approve such recommendation, then Operator shall not be liable and Owner  hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is  attributable to, the failure to implement such recommendation.

     4.1.1.4 Compliance With Owner Instructions. Notwithstanding anything to the contrary in this Agreement, in the event that Owner  instructs Operator to take any action or refrain from taking any action in connection with the operation or maintenance of the Gathering  System and Operator in good faith

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disagrees with Owner because, among other reasons, it is not consistent with prudent operating standards, then Operator shall notify Owner  of such disagreement in writing, and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any  Claim or Loss that arises from, or is attributable to, Operator's compliance with Owner's instructions.

     4.1.1.5 Environmental Laws. Operator shall comply in all respects with all Environmental Laws and all Environmental Permits.

     4.1.2 Purchase of Services, Materials and Supplies. Except as otherwise provided below and subject to the limitations herein, Operator  shall, on Owner's behalf and as its agent, purchase or cause to be purchased necessary services, materials and supplies and incur such  expenses and enter into such commitments as may be necessary to operate and maintain the Gathering System, including, but not limited to,  (i) contracts for the maintenance, repair and replacement of the Gathering System and, if requested by Owner, constructions of additions to the  Gathering System; and (ii) contracts for power, fuel, other utilities, and communication facilities as may be necessary in connection with proper  operation and maintenance of the Gathering System and for providing adjustments and replacements thereto.

     4.1.3 Personnel. Except as otherwise provided below and subject to the limitations herein, Operator, in its reasonable judgment, shall employ  such personnel, with Operator or an Affiliate as their employer, as it may deem necessary to operate and maintain the Gathering System and to  provide adjustments and replacements thereto and to perform its other obligations hereunder. In addition to Operator's or Operator's Affiliates'  employees who are either full-time or part-time dedicated to operating and maintaining the Gathering System, Operator may: (i) utilize from time  to time its other employees or the employees of Operator's Affiliates in services in connection therewith at a usual and customary rate of  compensation; and/or (ii) engage the services of third-party contractors in the performance of such functions.

     4.1.4 Payment of Operating Expenses. Operator shall promptly pay all costs and expenses incurred in operating and maintaining the  Gathering System as they become due, and Owner shall reimburse Operator for such costs and expenses in accordance with, and to the extent  provided in, Section 5.1.

     4.1.5 Proposed Operating Expense Budget. Operator shall (i) administer and otherwise comply with the budget process set forth in  Section 6.6 of the Gathering Agreement and (ii) operate and maintain the Gathering System in compliance with the Proposed Operating Expense  Budget established for the Gathering System; provided, however, if Owner instructs Operator to perform any services outside of the scope of  the services contemplated in the Proposed Operating Expense Budget, then Owner shall reimburse Operator for the costs and expenses  associated therewith.

     4.1.6 Capital Projects. Operator may propose an unbudgeted Capital Project at any time by giving notice to Owner. The notice (the Capital  Project Proposal) must specifically describe the proposed Capital Project and shall include the following:

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     (1) a good-faith estimate of the total cost of engineering, construction, operation, and maintenance of the proposed Capital Project, and  preliminary engineering designs and plans, and

     (2) general requirements or provisions for the Capital Project, including construction of the Capital Project and insurance coverage.

Owner shall approve or reject the proposed Capital Project set forth in the applicable Capital Project Proposal within 30 days from the date of  receipt of the same, such approval not to be unreasonably withheld, conditioned or delayed. If Owner approves the applicable Capital Project,  then Operator shall have the right and authority with respect to the approved Capital Project to make expenditures, or enter into contracts to  incur expenditures, without further authorization by Owner, up to the cost approved by Owner with respect to the applicable Capital Project.

     4.1.7 Emergencies. Notwithstanding any provision of this Agreement, in the event of an Emergency, Operator shall proceed with  maintenance or repair work or with any other action when necessary to minimize damage and to end the Emergency (Emergency Work),  without regard to the limits set forth in this Article IV. Operator shall, as soon as reasonably practicable, notify Owner of the existence or  occurrence of the Emergency, setting forth the nature of the emergency, the corrective action taken or proposed to be taken, and the actual or  estimated cost of such corrective action. Emergency Work shall include only such work as is necessary to immediately address the Emergency  and does not include any work necessary to restore the Gathering System or improve the Gathering System in order to permit continued  operations.

     4.1.8 Reporting By Operator. Operator shall (by either (i) submitting written reports or (ii) providing Owner with access to Operator's  internet website containing the relevant information, at Operator's discretion) provide to Owner the following reports, based on the best data  available at the time of preparation and subject to revision based on acquisition of more accurate data:

     (1) a daily report of the prior day's 24 hour volume of natural gas throughput on the Gathering System;

     (2) as soon as available, and in any event within 30 days after the end of each calendar month, a report of environmental, health, or safety  incidents that are material or potentially material, including year-to-date data, for such month;

     (3) as soon as available, and in any event within 30 days after the end of each calendar month, a report concerning any government  agency inspections, inquiries, citations, or other actions for such month;

     (4) as soon as available, and in any event within 30 days after the end of each calendar month, an operational report on major repairs and  other operational details materially affecting the operations of the Gathering System during such month;

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     (5) promptly after the sending thereof, all notices and information sent to Shipper (as defined in the Gathering Agreement) under the  Gathering Agreement or to any other shipper under any gathering agreement;

     (6) as soon as available, and in any event within 30 days after the end of each calendar month, a monthly operating and financial report  which shall be substantially in the form of Exhibit B and shall include such information as reasonably requested by Owner;

     (7) as soon as available, and in any event within 30 days after the end of each Calendar Year, a certificate from the president or chief  executive officer of Operator stating that no event or condition exists or has occurred that violates, results in a breach of, or constitutes a  default on the part of any Operator Party under, any of the terms, conditions or provisions of any Transaction Document; and

     (8) such other information regarding the Gathering System or the operation and maintenance of the Gathering System as Owner may from  time to time reasonably request.

     4.1.9 Commercial Activities. Operator shall negotiate on behalf of Owner all agreements for gathering services provided by Owner;  provided that (i) Owner shall have the right to approve or disapprove any such agreements, and (ii) if approved, Owner, and not Operator, shall  execute all such agreements. When Operator receives payments or remittances from customers of Owner, Operator shall deposit and promptly  forward all such payments or remittances to Owner. Operator shall make no allowances or adjustments in accounts, unless given specific  advance authorization by Owner.

     4.1.10 Regulatory Affairs. Operator shall be responsible for preparing and submitting all regulatory filings pertaining to the Gathering  System required by any Governmental Authority.

     4.1.11 Devotion of Time. The employees of Operator designated to perform the functions under this Agreement shall devote such time to  Owner's business as necessary to accomplish the responsibilities of Operator as set forth in this Article IV. Owner recognizes that the  employees of Operator shall not be obligated to devote full time to Owner's business and that such employees of Operator may act on behalf of  Operator or its Affiliates in activities not associated with this Agreement.

4.2 Standard of Care.

     Operator shall perform its duties and obligations hereunder and its responsibilities as Operator of the Gathering System, (i) in a good and  workmanlike manner, (ii) in conformity with the good practices in the natural gas gathering industry, (iii) in accordance with all valid and applicable  Laws, including, without limitation, all Environmental Laws and Environmental Permits, (iv) in accordance with the Subject Gathering Agreements,  and (v) in accordance with the Proposed Operating Expense Budget.

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4.3 Limitation of Authority.

     Notwithstanding anything in this Agreement, Operator shall seek prior approval of Owner prior to taking the following actions:

     4.3.1 Binding Owner. Endorsing the name of Owner on any contract, commercial paper, or instruments of any nature or otherwise creating  any obligation binding upon Owner except as expressly permitted under this Agreement.

     4.3.2 Asset Sales. Acquiring or disposing of any assets of Owner in a single transaction or in a series of related transactions, with a fair  market value exceeding $100,000, provided, however that Operator is expressly permitted to terminate leases or other contracts in respect of  rental equipment regardless of value.

     4.3.3 Material Alteration of Owner's Business. Altering Owner's business in a material manner.

     4.3.4 Debt. Incurring any indebtedness on behalf of Owner, except for trade credit incurred by Operator in the ordinary course of business or  within its expenditure authority set forth in this Agreement.

ARTICLE V  COST REIMBURSEMENT

5.1 Responsibility for Costs and Expenses.

     Owner shall reimburse Operator for all costs and expenses incurred by Operator relating to the operation and maintenance of the Gathering  System incurred in accordance with the terms hereof.

5.2 Procedure.

     5.2.1 Invoicing and Payment. Operator shall invoice Owner, monthly, for all costs and expenses incurred hereunder during the immediately  preceding month and, without duplication, in any prior month. Owner shall pay all such amounts prior to the later of (a) 50 days after the end of  the month in which the expenses were incurred or (b) 10 days after the date of receipt of each invoice. Invoices received after 1:00 pm local time  will be deemed received on the next Business Day. If the day on which any payment is due is not a Business Day, then the relevant payment  shall be due upon the immediately succeeding Business Day. Any amounts which remain due and owing after the due date shall bear interest at  the lower of the prime rate as published in the Money Rates section of The Wall Street Journal plus two percent (2%) per annum and the  maximum lawful rate of interest, compounded daily from the date such payment is due until such payment is made. Notwithstanding anything  herein to the contrary, any indemnification payments required to be made by a Party hereunder shall be made to the indemnified Party upon  receipt by the indemnifying Party of written demand therefor from the indemnified Party.

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     5.2.2 Disputes. If a good faith dispute arises as to the amount payable under any invoice issued by Operator, Owner shall pay the amount  not in dispute on or before the due date, and if Owner elects to withhold any portion of a payment which otherwise would be due if not for such  dispute, Owner shall provide Operator a written notice of such dispute on or before the date such payment is due setting forth, in reasonable  detail, its reasons for withholding the disputed amount. If it is subsequently determined, whether by mutual agreement of the Parties or  otherwise, that Owner is required to pay all or any portion of the disputed and withheld amounts, then in addition to paying such amounts,  Owner shall pay interest accrued on such amounts (including amounts withheld) at the default interest rate described in Section 5.2.1 from the  original due date until paid in full.

5.3 Setoff.

     5.3.1 All payments required to be made hereunder by Operator shall be (i) absolute and unconditional, (ii) calculated without reference to  any netting, set-off, counterclaim or other right which Operator may have against Owner, including, without limitation, any right to set-off  against any amounts owed by Owner under this Agreement or any other Transaction Document, and (iii) made free and clear of and without  any deduction for or on account of any such netting, set-off or counterclaim.

     5.3.2 Owner is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to net, set-off and apply any  payments owing to Owner against any and all of the obligations of any Operator Party under this Agreement or any other Transaction  Document. Owner agrees to promptly notify Operator after any such netting, set-off or application is made; provided that the failure to give  such notice shall not affect the validity of such netting, set-off or application.

ARTICLE VI  ACCOUNTING; REPORTS; RECORDS

6.1 Accounting Methods.

     Operator shall keep proper and complete records and books of account, which shall fully and accurately reflect all transactions and other  matters relative to Owner's business as are usually entered into records and books of account, and the same shall be supported by purchase  orders, invoices, payrolls or other customary or necessary records pertaining thereto. Owner's financial books and records shall be kept in  accordance with GAAP and shall be maintained on an accrual basis, and Owner shall provide Operator with the applicable income tax provisions.  The costs of any audit of Owner's books or records shall be borne by Owner.

6.2 Financial Statements.

     Operator shall deliver to Owner the financial statements of Owner prepared, in each case, in accordance with GAAP (and subject, where  applicable, to normal year-end adjustments) as follows:

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  (a)   promptly upon availability, and in any event within 30 days after the end of each







6.3 Accounting and Taxation.

     6.3.1 Maintenance of Accounts. Operator shall perform Owner's Tax and financial accounting with respect to the Gathering System, except to  the extent that Operator is prohibited or prevented from doing so by Law, or by the administrative practice of any taxing office, or by the fact  that to do so requires information that is in the possession of Owner, but not of Operator and that Owner cannot legally furnish to Operator (all  of which are herein called Preventing Factors).

     6.3.2 Preparation of Tax Returns.

     6.3.2.1 Income Tax Returns. Unless otherwise instructed by Owner, Operator shall, on behalf of Owner, (i) provide all the necessary  financial and other data for a tax preparer (appointed by Owner) to prepare all Tax Returns for taxes measured or based on income required to  be filed by Owner in connection with its ownership and operation of the Gathering System no later than 75 days prior to the filing date for the  relevant Tax Return (taking into account all valid extensions approved by Owner prior to filing), (ii) cooperate with Owner and its  accountants in their preparation of such Tax Returns and review all modifications to such Tax Returns indicated by Owner, and (iii) help  facilitate completion of such Tax Returns by no later than 45 days prior to the filing date for the relevant Tax Return.

     6.3.2.2 Other Tax Returns. Unless otherwise instructed by Owner, Operator shall, on behalf of Owner, (i) prepare and file all Tax Returns  and all

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      month, (i) an unaudited balance sheet as of the end of such month; and (ii) an unaudited statement of income or loss for the interim period  through such month end;

  (b)   promptly upon availability, and in any event within 45 days after the end of each of the first three quarterly periods of each fiscal year,  Owner's balance sheet as of the end of such quarterly period and statements of Owner's earnings and cash flows for the period from the  beginning of the then current fiscal year to the end of such quarterly period; and

  (c)   promptly upon availability and in any event within 90 days after the end of each fiscal year, complete financial statements of Owner,  together with all notes thereto, prepared in reasonable detail in accordance with GAAP, together with an unqualified opinion, based on an  audit using generally accepted auditing standards, by an independent certified public accounting firm selected by Owner, stating that  such financial statements have been so prepared. These financial statements shall contain a balance sheet as of the end of such fiscal  year and statements of earnings, of cash flows, and of changes in Owner's equity for such fiscal year, each setting forth in comparative  form the corresponding figures for the preceding fiscal year. Owner shall engage an auditor for this purpose no later than 45 days after the  end of each fiscal year.







other regulatory or state filings required to be filed by Owner in connection with its ownership and operation of the Gathering System other  than those Tax Returns described in Section 6.3.2.1 no later than the filing date for the relevant Tax Return or other filing (taking into account  all valid extensions approved by Owner prior to filing).

     6.3.3 Owner to Supply Information. Upon the request of Operator, Owner shall (except to the extent it is prohibited by Law from doing so)  promptly (i) furnish Operator with any information needed by Operator in order to carry out its obligations under Section 6.3, (ii) cooperate with  Operator in minimizing Taxes and (iii) execute such agency, power-of-attorney or other similar documents reasonably required by Operator in  order to carry out its duties under this Section 6.3. If, at any time, Operator determines that because of one or more Preventing Factors it cannot  perform its obligations under Section 6.3, then Operator shall notify Owner in writing, specifying the Preventing Factors concerned and the  Taxes and the Governmental Authorities to which such Preventing Factors apply. Any incremental Tax or penalty resulting from Owner's failure  to comply with this Section 6.3.3 shall be the responsibility of Owner.

6.4 Banking.

     6.4.1 Except as provided in Section 6.4.2, all revenues and other funds of Owner shall be deposited in its name in the Owner Revenue  Account. Withdrawals from the Owner Revenue Account will be made only by Owner or Persons designated by Owner from time to time.  Operator shall have view only access to the Owner Revenue Account. Owner will provide the Operator with copies of reconciled bank  statements on a monthly basis, for accounting and audit purposes.

     6.4.2 All Operations Fees (as defined in the Gathering Agreement) shall be deposited in the name of Owner in the Owner Operating Expense  Account. Withdrawals from the Owner Operating Expense Account will be made only by Owner, Operator or other Persons designated by  Owner from time to time.

     6.4.3 Notwithstanding the foregoing, all funds of Owner will be used solely for the business of Owner. All interest and other benefits  pertaining to the Owner Revenue Account and the Owner Operating Expense Account belong to Owner. At no time may Operator commingle  the funds in the Owner Revenue Account, the Owner Operating Expense Account or any other bank account of Owner with Operator's funds  or the funds of any other Person, nor may such funds be subject to liens or Claims of any kind in favor of Operator or its creditors.

6.5 Independent Audits.

     Upon reasonable prior written notice to Operator, Owner shall have the right during normal business hours to audit or examine all books and  records of Operator to the extent they relate to Operator's performance hereunder as well as the relevant books of account of Operator's  contractors, relating to the performance of Operator's obligations under this Agreement. Operator shall cooperate with Owner's auditors by  (i) making the applicable books

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and records available for inspection by Owner's auditors, and (ii) making such copies of books and records as may be reasonably requested by  such auditors. In no event shall Owner's audits unreasonably interfere with Operator's operations. Owner will be responsible for all costs of any  such audit; provided that if, in any audit, Owner discovers overpayments by Owner of at least $250,000 in the aggregate (Material  Overpayment), Operator will reimburse Owner for such Material Overpayment and all reasonable costs incurred by Owner in connection with  such audit (Audit Costs). Owner shall have up until two years after the close of a Calendar Year in which to make an audit of Operator's records  for such Calendar Year. Except for any bill or statement with respect to which an Adjustment Claim is made within the two-year audit period, the  bills and statements rendered for the Calendar Year prior to such two-year audit period shall be conclusively established as correct. An  Adjustment Claim shall mean a written claim by Owner to Operator requesting a refund or other financial adjustment in respect of any  overpayment by Owner (including in the case of a Material Overpayment, all Audit Costs) and setting forth in reasonable detail the basis for such  claim. Operator shall, within 10 days of receipt of an Adjustment Claim, provide Owner with the requested refund or other financial adjustment;  provided that if Operator shall dispute in good faith some or all of the amounts set forth in such Adjustment Claim, Operator may elect to withhold  any disputed amounts, pending resolution of the dispute. If the Parties shall fail to resolve their dispute with respect to the remaining Adjustment  Claim amount within 15 Business Days, Owner may, at its sole option, refer such dispute for resolution in accordance with the terms of Section 9.6.  Unless otherwise resolved by the Parties, any bill or statement that is the subject of an Adjustment Claim shall be conclusively established as  correct if dispute resolution procedures have not been initiated under Section 9.6 of this Agreement within 180 days of the submission of an  Adjustment Claim. Any and all information pertaining to Operator and its business that is disclosed to Owner or discovered by Owner in  connection with any audit hereunder shall be subject to the Confidentiality and Disclosure Agreement without regard to whether it has been  designated as such and Owner shall be subject to the same restrictions and standard of care set forth therein with respect to Operator's  confidential information.

6.6 Credit Inquiries.

     If a customer, vendor, or other Person requests financial information concerning Owner, Operator may provide such customer, vendor, or  Person a certificate or affidavit, on behalf of Owner, to the effect that Owner owns the Gathering System, free and clear of any mortgage or other  liens or encumbrances except for (1) encumbrances consisting of zoning or planning restrictions, servitudes, permits, and other restrictions or  limitations on the use of immovable property that do not materially detract from the value of, or impair the use of, the Gathering System by Owner  in the operation of its business, (2) liens arising by operation of law in the ordinary course of business and in an aggregate amount that is not  material in relation to the value of the Gathering System, (3) liens for current taxes, assessments, or governmental charges or levies, and (4) such  other liens or encumbrances, if any, of which Operator has actual knowledge at the time.

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ARTICLE VII  FORCE MAJEURE

7.1 Procedure.

     If either Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, other than the  obligation to indemnify and to make payments then or thereafter due hereunder, upon such Party giving notice and full particulars of such Force  Majeure in writing to the other Party as soon as reasonably possible after the occurrence of the cause relied on, then the obligations of the Party  giving such notice, so far as they are affected by such Force Majeure, will be suspended during the continuance of any inability so caused but for  no longer period, and such cause must as far as possible be remedied with all reasonable and diligent dispatch by the Party claiming such in order  to put itself in a position to carry out its obligations under this Agreement. Such notifying Party must also provide notice of the date of termination  of such Force Majeure event. A Force Majeure event affecting the performance by either Party shall not relieve it of liability in the event of its  negligence, where such negligence was a cause of the Force Majeure event, or in the event of its failure to use commercially reasonable efforts to  remedy the situation and remove the cause with all reasonable dispatch.

7.2 Strikes.

     It is understood and agreed that the settlement of strikes or lockouts is entirely within the discretion of the Party directly involved in the strike  or lockout, and that the above requirement that any Force Majeure must be remedied with all reasonable dispatch will not require the settlement of  strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the  difficulty.

ARTICLE VIII  INSURANCE AND INDEMNIFICATION

8.1 Operator Insurance.

     8.1.1 Operator, with respect to Operator's activities provided for under this Agreement, shall maintain the following insurance coverage with  responsible insurance carriers and/or through a program of self-insurance:

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  (a)   Workers' Compensation. Operator shall maintain statutory worker's compensation insurance, covering all of its and its Affiliates'  employees and statutory employees, in accordance with the benefits afforded by the statutory Worker's Compensation Acts applicable  to the state, territory, or district of hire, supervision, or place of accident. In addition, Operator shall maintain employer's liability  insurance with a limit of not less than one million dollars ($1,000,000) each accident, one million dollars ($1,000,000) disease each  employee, and one million dollars ($1,000,000) disease policy limit. Where not prohibited by law, Operator shall waive its right of  subrogation against Owner.

  (b)   Commercial General Liability Insurance. Operator shall maintain Commercial General Liability Insurance covering its operations under this  Agreement

  including, without limitation, bodily injury, death, property damage, independent contractors, products/completed operations,  contractual, and personal injury liability, with a limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars  ($2,000,000) in the annual aggregate.






     8.1.2 To the extent of the liabilities assumed by Operator in this Agreement, Operator shall name Owner Indemnified Parties as additional  insured on all insurance policies, except Workers' Compensation. The Owner Indemnified Parties' additional insured status will not limit the  application of insurance protection as required by this Agreement which arises out of the Operator's indemnity obligations. These policies shall  provide primary coverage for claims in which Operator has agreed to hold harmless and/or to indemnify the Owner Indemnified Parties. No  other insurance clause may be invoked by any insurer. This coverage shall apply whether or not the indemnification is valid. Operator shall  have its insurer(s) waive its right of subrogation against Owner Indemnified Parties on all insurance carried. Unless expressly stated to the  contrary elsewhere in this Agreement or prohibited by applicable law or legal statute, Operator's indemnification obligations under this  Agreement shall not be limited by amount or in scope to coverage provided by insurance which is required under this Agreement.

     8.1.3 Upon request, Operator agrees to furnish to Owner certificates of insurance or other evidence satisfactory to Owner to demonstrate  that the required insurance has been procured and is in force. The certificate shall accurately reflect the required insurance coverages and shall  provide that in the event of modification, expiration, cancellation or material change in a policy affecting the certificate holder, thirty days prior  written notice shall be given to the certificate holder. Operator waives all rights against Owner for recovery of damages to the extent such  damages are covered by the insurance maintained in accordance with this Section 8.1.

8.2 Contractors.

     Operator shall attempt to obtain reasonable indemnification and insurance protection from contractors performing services for Owner to protect  Owner and Operator. Operator shall require each of its contractors to carry insurance coverage substantially equivalent to the insurance required  of Operator above, and to include provisions for its contractors to name Owner and Operator as additional insureds, with the exception of  Workers' Compensation Insurance, and state that such policies will be primary to and non-contributory with any other insurance maintained by  Operator and Owner. With respect to Workers' Compensation

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  (c)   Commercial Automobile Insurance. Operator shall maintain Commercial Automobile Insurance coverage, including, without limitation,  bodily injury and property damage for owned, hired, rented, and non-owned automotive equipment with a limit of not less than one million  dollars ($1,000,000) per accident.

  (d)   Umbrella Liability Insurance. Operator shall maintain Umbrella Liability Insurance coverage covering in excess of (a), (b), and (c) above,  excluding Worker's Compensation, in the amount of ten million dollars ($10,000,000).







Insurance, the applicable contractor shall be required to cause its insurers to wave all rights of recovery or subrogation against Owner and  Operator, where not prohibited by law.

8.3 Notice of Claims.

     In the event that Operator receives notice, either in writing or orally, of an asserted or threatened Liability Claim against Operator or Owner,  Operator shall provide Owner within 10 days of receipt of such Liability Claim a copy of any demand letter, petition, or similar documentation of the  Liability Claim.

8.4 Mutual Release and Indemnification.

     8.4.1 Owner's Indemnification. SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTION 9.7 OF THIS  AGREEMENT, OWNER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OPERATOR INDEMNIFIED PARTIES FROM AND AGAINST ALL CLAIMS AND  LOSSES ARISING OUT OF OR RELATING TO (I) ALLEGATIONS OF DEATH OR BODILY INJURY OR DAMAGE TO PROPERTY, TO THE EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OWNER, ITS AFFILIATES OR ITS OR THEIR RESPECTIVE OFFICERS,  DIRECTORS, EMPLOYEES, OR CONTRACTORS IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE HEREOF; PROVIDED THAT OWNER SHALL  NOT BE REQUIRED TO INDEMNIFY THE OPERATOR INDEMNIFIED PARTIES AGAINST SUCH CLAIMS AND LOSSES TO THE EXTENT SUCH CLAIMS AND  LOSSES ARE ATTRIBUTABLE TO THE ACTS OR OMISSIONS OF ANY OPERATOR INDEMNIFIED PARTIES, (II) ANY BREACH OF THIS AGREEMENT BY OWNER,  AND (III) ANY AGREEMENTS RELATING TO THE GATHERING SYSTEM BETWEEN OWNER AND THIRD PARTIES NOT AFFILIATED WITH THE OPERATOR  PARTIES. THE DUTY TO INDEMNIFY, DEFEND AND HOLD HARMLESS UNDER THIS SECTION 8.4.1 SHALL CONTINUE IN FULL FORCE AND EFFECT,  NOTWITHSTANDING THE EXPIRATION OR EARLY TERMINATION OF THIS AGREEMENT, WITH RESPECT TO ANY CLAIMS OR LOSSES BASED ON FACTS OR  CONDITIONS THAT OCCURRED PRIOR TO SUCH EXPIRATION OR TERMINATION.

     8.4.2 Operator's Indemnification. SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTION 9.7 OF THIS  AGREEMENT, OPERATOR SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OWNER INDEMNIFIED PARTIES FROM AND AGAINST ALL CLAIMS AND  LOSSES ARISING OUT OF OR RELATING TO (I) ALLEGATIONS OF DEATH OR BODILY INJURY OR DAMAGE TO PROPERTY, TO THE EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OPERATOR, ITS AFFILIATES OR ITS OR THEIR RESPECTIVE  OFFICERS, DIRECTORS, EMPLOYEES, OR CONTRACTORS IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE HEREOF; PROVIDED THAT  OPERATOR SHALL NOT BE REQUIRED TO INDEMNIFY THE OWNER INDEMNIFIED PARTIES AGAINST SUCH CLAIMS OR LOSSES TO THE EXTENT SUCH  CLAIMS OR LOSSES ARE ATTRIBUTABLE TO THE ACTS OR OMISSIONS OF ANY OWNER INDEMNIFIED PARTY, AND (II) ANY BREACH OF THIS AGREEMENT  BY OPERATOR. THE DUTY TO INDEMNIFY, DEFEND AND HOLD HARMLESS UNDER THIS SECTION 8.4.2 SHALL CONTINUE IN FULL FORCE AND EFFECT,  NOTWITHSTANDING THE EXPIRATION OR EARLY TERMINATION OF THIS AGREEMENT, WITH RESPECT TO ANY CLAIMS OR LOSSES BASED ON FACTS OR  CONDITIONS THAT OCCURRED PRIOR TO SUCH EXPIRATION OR TERMINATION.

20







ARTICLE IX  GENERAL PROVISIONS

9.1 Notices.

     Except as specifically provided otherwise herein, any notice, claim, or other communication provided for in this Agreement or any notice that  either Party may desire to give to the other shall be in writing and shall be: (i) sent by facsimile transmission; (ii) delivered by hand; (iii) sent by  United States mail with all postage fully prepaid; or (iv) delivered by courier with charges paid in accordance with the customary arrangements  established by such courier, in each of the foregoing cases addressed to the Party at the following addresses:

or at such other address as either Party may at any time designate by giving written notice to the other Party. Such notices, invoices, allocation  statements, claims, or other communications shall be deemed received as follows: (i) if delivered personally, upon delivery; (ii) if sent by United  States mail, whether by express mail, registered mail, certified mail or regular mail, the notice shall be deemed to have been received on the day  receipt is refused or is confirmed orally or in writing by the receiving Party; (iii) if sent by a courier service, upon delivery; or (iv) if sent by  facsimile, the Business Day following the day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed  orally or in writing by the receiving Party.

9.2 Rights.

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

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              To Owner:   Piñon Gathering Company, LLC          c/o TCW Asset Management Company          333 Clay Street, Suite 4150         Houston, Texas 77002         Attention: Clay Taylor         Fax Number: 713.615.7460               with a copy to:  TCW Asset Management Company          865 South Figueroa Street, Suite 1800         Los Angeles, California 90017         Attention: R. Blair Thomas         Fax Number: 213.244.0604               To Operator:  SandRidge Midstream, Inc.         123 Robert S. Kerr Avenue         Oklahoma City, Oklahoma 73102-6406         Attention: Midstream — Manager of Administration         Fax Number: 405.429.5990







9.3 Applicable Laws.

     This Agreement is subject to all valid present and future laws, regulations, rules, and orders of governmental authorities now or hereafter  having jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Gathering System.

9.4 Rules of Construction.

     In construing this Agreement, the following principles shall be followed:

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

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

     9.4.3 the word includes and its syntactical variants mean includes, but is not limited to and corresponding syntactical variant  expressions; and

     9.4.4 the plural shall be deemed to include the singular and vice versa, as applicable.

9.5 Governing Law.

     This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Texas, without regard to choice of  law principles that would require the application of the laws of any other jurisdiction.

9.6 Dispute Resolution.

     9.6.1 Negotiation. Prior to submitting any dispute for resolution by a court, a Party shall provide written notice to the other of the occurrence  of such dispute. If the Parties have failed to resolve the dispute within 15 Business Days after such notice was given, the Parties shall seek to  resolve the dispute by negotiation between senior management personnel of each Party. Such personnel shall endeavor to meet and attempt to  amicably resolve the dispute. If the Parties are unable to resolve the dispute for any reason within 30 Business Days after the original notice of  dispute was given, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 9.6.1  shall not limit a Party's right to initiate litigation prior to the expiration of the time periods set forth herein of such limitations would prevent a  Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g. statutes of limitation, prescription, etc.).

     9.6.2 Jurisdiction and Venue.

     9.6.2.1 Each Party agrees that the appropriate, exclusive and convenient forum for any disputes between any of the Parties arising out of  this Agreement or the transactions contemplated hereby shall be in any state or federal court in

22







Houston or Dallas, Texas, and each of the Parties irrevocably submits to the jurisdiction of such courts solely in respect of any legal  proceeding arising out of or related to this Agreement or the transactions contemplated hereby. The Parties further agree that the Parties  shall not bring suit with respect to any disputes arising out of this Agreement or the transactions contemplated hereby in any court or  jurisdiction other than the above specified courts.

     9.6.2.2 Each Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection  which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the  transactions contemplated hereby in any court referred to in paragraph (a) above. Each of the Parties hereby irrevocably waives, to the  fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such  court.

     9.6.3 Jury Waiver. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT THEY MAY  LEGALLY AND EFFECTIVELY DO SO, THE RIGHT TO A JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING  TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     9.6.4 Costs and Expenses. The prevailing Party in any litigation pertaining to any dispute hereunder shall be entitled to recover its  reasonable costs, expenses, and attorney's fees in connection with such litigation.

9.7 Limitation of Liability.

     NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR SPECIAL,  INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS  AGREEMENT OR THE BREACH THEREOF OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER TORT, NEGLIGENCE, STRICT LIABILITY, BREACH  OF CONTRACT, WARRANTY, INDEMNITY, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, LOSS OF USE, INCREASED COST OF OPERATIONS, LOSS  OF PROFIT OR REVENUE, OR BUSINESS INTERRUPTIONS. IN FURTHERANCE OF THE FOREGOING, EACH PARTY RELEASES THE OTHER PARTY AND  WAIVES ANY RIGHT OF RECOVERY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY  REGARDLESS OF WHETHER ANY SUCH DAMAGES ARE CAUSED BY THE OTHER PARTY'S NEGLIGENCE (AND REGARDLESS OF WHETHER SUCH  NEGLIGENCE IS SOLE, JOINT, CONCURRENT, ACTIVE, PASSIVE, OR GROSS NEGLIGENCE), FAULT, OR LIABILITY WITHOUT FAULT.

9.8 Entirety of Agreement, Amendments.

     This Agreement, including, without limitation, all exhibits hereto, and the other Transaction Documents integrate the entire understanding  between the Parties with respect to the subject matter covered and supersede all prior understandings, drafts, discussions, or statements,

23







whether oral or in writing, expressed or implied, dealing with the same subject matter. This Agreement may not be amended or modified in any  manner except by a written document signed by the Parties that expressly amends this Agreement.

9.9 Waivers.

     No waiver by either Party of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof  (whether or not similar), nor shall such waiver constitute a continuing waiver unless expressly provided. No waiver shall be effective unless made  in writing and signed by the Party to be charged with such waiver.

9.10 Exhibits.

     Exhibits A and B are made a part of this Agreement and incorporated herein by this reference.

9.11 Headings.

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

9.12 Rights and Remedies.

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

9.13 Assignment.

     Operator shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder unless there first shall  have been obtained the written consent thereto of Owner, which consent shall not be unreasonably withheld, conditioned, or delayed. Owner shall  not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder except in connection with the sale or  conveyance of all or any part of the Gathering System. This Agreement shall be binding upon and inure to the benefit of the successors and  assigns of the Parties. Any attempted assignment of this Agreement in violation of this Section 9.13 shall be null and void.

9.14 Counterparts.

     This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original, and all of  which shall be deemed one and the same Agreement.

9.15 No Third Party Beneficiary.

     Except for parties indemnified hereunder, this Agreement is for the sole benefit of the Parties and their respective successors and permitted  assigns, and shall not inure to the benefit of

24







any other Person whomsoever or whatsoever, it being the intention of the Parties that no third Person shall be deemed a third-party beneficiary of  this Agreement.

9.16 Further Assurances.

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

     IN WITNESS WHEREOF, authorized representatives of the Parties have executed this Agreement to be effective on the Effective Date.

25

           OPERATOR:    SANDRIDGE MIDSTREAM, INC.



  By:  /s/ Richard J. Gognat       Richard J. Gognat        Senior Vice President        OWNER:    PIÑON GATHERING COMPANY, LLC



  By:  TCW Asset Management Company, its Manager:               By:  /s/ Clayton R. Taylor         Clayton R. Taylor        Vice President            By:  /s/ Kurt A. Talbot         Kurt A. Talbot        Managing Director 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
answer:
57845


question:
Exhibit 10.16 CONSULTING AGREEMENT This Consulting Agreement (the Agreement) is made and entered into as of this 2nd day of January 2020, by and between Global Technologies, Ltd (hereinafter the Company), a Delaware corporation whose address is 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and Timothy Cabrera (hereinafter the Consultant), an individual whose address is 11718 SE Federal Hwy., Suite 372, Hobe Sound, FL 33455 (individually, a Party; collectively, the Parties). This Agreement is non-exclusive. RECITALS WHEREAS, the Company has asked to retain Consultant to provide various services to the Company as agreed to by both parties and outlined in Section 3; and WHEREAS, the Consultant has advised the Company of its willingness and desire to provide such services as outlined in Section 3 and on the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises herein contained, the Parties hereto hereby agree as follows: 1. CONDITIONS. This Agreement will not take effect, and Consultant will have no obligation to provide any service whatsoever, unless and until the Company sends a signed copy of this Agreement to Consultant (either by mail or facsimile copy). The Company shall be truthful with Consultant in regard to any relevant material regarding the Company, verbally or otherwise, or this entire Agreement will terminate and all consideration paid shall be forfeited without further notice. Upon execution of this Agreement, the Company agrees to cooperate with Consultant in carrying out the purposes of this Agreement, keep Consultant informed of any developments of importance pertaining to the Company's business and abide by this Agreement in its entirety. 2. TERM OF AGREEMENT. This Agreement shall be in full force and effect commencing on January 2, 2020 and shall remain in effect for one (1) year or until Consultant completes the services requested. Either Party shall have the right to terminate this Agreement without notice in the event of the bankruptcy, insolvency, or assignment for the benefit of creditors of the other Party. Either Party shall have the right to terminate this Agreement with notice, and the effective date of termination shall be the date such notice is received (by mail, overnight delivery, or fax) by the terminated Party. 3. CONSULTING SERVICES. During the term of this Agreement, Consultant will perform the services described below (the Consulting Services) for the Company. (a) Transactional Business (i) Further development of the business plan for the Company's subsidiaries; and 1 ____ ____





(ii) Seek and advise the Company on the acquisition of potential products for the Company's subsidiaries; and (iii) Assist in negotiating acquisition or merger consideration as required by the Company; and (iv) Setting up meetings between the Company and acquisition candidates and arranging other liaisons between them; and (v) Assist the Company with certain day to day tasks of managing the Company's subsidiaries; and (vi) Assist in the sale of any inventory held by any of the Company's subsidiaries; and (vii) Assist in the sale of any future products acquired, licensed or developed by the Company and or its subsidiaries. 4. STANDARD OF PERFORMANCE. Consultant shall devote such time and efforts to the affairs of the Company as is reasonably necessary to render the services contemplated by this Agreement. Consultant is not responsible for the performance of any services that may be rendered hereunder if the Company fails to provide the requested information in writing prior thereto. The services of Consultant shall not include the rendering of any legal opinions or the performance of any work that is in the ordinary purview of a certified public accountant. Consultant cannot guarantee results on behalf of the Company but shall use commercially reasonable efforts in providing the services listed above. Consultant's duty is to identify prospective acquisition/joint venture companies for the Company. Consultant will in no way act as a broker-dealer under state securities laws. Because all final decisions pertaining to any particular investment are to be made by the Company, the Company may be required to communicate directly with potential acquisition/joint venture prospective companies. 5. COMPENSATION TO CONSULTANT. As Consultant's entire compensation for its performance under this agreement, the Company shall pay Consultant $250,000,00 cash compensation. In addition, the Consultant shall earn additional cash compensation for the sale of any inventory/assets that were acquired in the acquisition of TCBM Holdings, LLC on November 30, 2019. Any cash compensation paid to Consultant shall be treated as a reduction in principal to the Convertible Note (Note) issued by the Company to Jetco Holdings, LLC (Jetco) on November 30, 2019. For example: The $250,000 cash compensation paid to Consultant shall reduce the Jetco Note principal amount by $250,000. In the event the Consultant were to sale $100,000 of inventory held by the Company, the payout of $100,000 to Consultant will reduce the principal on the Jetco Note by $100,000. Additional compensation to the Consultant for future products sold by the Company, or revenue earned by the Company for services provided will be negotiated by the Company and Consultant at the time of potential revenue recognition. The Consultant will be solely responsible for all tax returns and payments required to be filed with or made to any federal, state or local tax authority with respect to the Consultant's performance of services and receipt of fees under this Agreement. The Company will regularly report amounts paid, if any, to the Consultant by filing Form 1099-MISC and/or other appropriate form with the Internal Revenue Service as required by law. Because the Consultant is an independent contractor, the Company will not withhold or make payments for social security; make consulting contract insurance or disability insurance contributions; or obtain worker's compensation insurance on the Consultant's behalf. The Consultant agrees to accept exclusive liability for complying with all applicable state and federal laws governing self-employed individuals, including obligations such as payment of taxes, social security, disability and other contributions based on fees paid to the Consultant under this Agreement. The Consultant hereby agrees to indemnify and defend the Company against any and all such taxes or contributions, including penalties and interest. 2 ____ ____





6. CONFIDENTIAL INFORMATION. The Consultant and the Company acknowledge that each will have access to proprietary information regarding the business operations of the other and agree to keep all such information secret and confidential and not to use or disclose any such information to any individual or organization without the non-disclosing Parties prior written consent. It is hereby agreed that from time to time Consultant and the Company may designate certain disclosed information as confidential for purposes of this Agreement. 7. INDEMNIFICATION. Each Party (the Indemnifying Party) agrees to indemnify, defend, and hold harmless the other Party (the Indemnified Party) from and against any and all claims, damages, and liabilities, including any and all expense and costs, legal or otherwise, caused by the negligent act or omission of the Indemnifying Party, its subcontractors, agents, or employees, incurred by the Indemnified Party in the investigation and defense of any claim, demand, or action arising out of the work performed under this Agreement; including breach of the Indemnifying Party of this Agreement. The Indemnifying Party shall not be liable for any claims, damages, or liabilities caused by the sole negligence of the Indemnified Party, its subcontractors, agents, or employees. The Indemnified Party shall notify promptly the Indemnifying Party of the existence of any claim, demand, or other matter to which the Indemnifying Party's indemnification obligations would apply, and shall give them a reasonable opportunity to settle or defend the same at their own expense and with counsel of their own selection, provided that the Indemnified Party shall at all times also have the right to fully participate in the defense. If the Indemnifying Party, within a reasonable time after this notice, fails to take appropriate steps to settle or defend the claim, demand, or the matter, the Indemnified Party shall, upon written notice, have the right, but not the obligation, to undertake such settlement or defense and to compromise or settle the claim, demand, or other matter on behalf, for the account, and at the risk, of the Indemnifying Party. The rights and obligations of the Parties under this Article shall be binding upon and inure to the benefit of any successors, assigns, and heirs of the Parties. 8. COVENANTS OF CONSULTANT. Consultant covenants and agrees with the Company that, in performing Consulting Services under this Agreement, Consultant will: (a) Comply with all federal and state laws; (b) Not make any representations other than those authorized by the Company; and (c) Not publish, circulate or otherwise use any materials or documents other than materials provided by or otherwise approved by the Company. 3 ____ ____





9. COVENANTS OF THE COMPANY. The Company covenants, represents and warrants to Consultant as follows: (a) Authorization. The Company and its signatories herein have full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby. (b) No Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will violate any provision of the charter or by-laws of the Company or violate any terms of provision of any other material agreement to which the Company is a party or any applicable statute or law. (c) Contracts in Full Force and Effect. All contracts, agreements, plans, policies and licenses to which the Company is a party are valid and in full force and effect. (d) Consents. No consent of any person, other than the signatories hereto, is necessary to the consummation of the transactions contemplated hereby, including, without limitation, consents from parties to loans, contracts, lease or other agreements and consents from governmental agencies, whether federal, state, or local. (e) Consultant Reliance. Consultant has and will rely upon the documents, instruments and written information furnished to Consultant by the Company's officers or designated employees. (f) Company's Material. All representations and statements provided herein about the Company are true and complete and accurate. The Company agrees to indemnify, hold harmless, and defend Consultant, its officers, directors, agents and employees, at the Company's expense for any proceeding or suit which may rise out of any inaccuracy or incompleteness of any such material or written information supplied to Consultant. 10. MISCELLANEOUS PROVISIONS (a) Amendment and Modification. This Agreement may be amended, modified and supplemented only by written agreement of the Company and Consultant. (b) Waiver of Compliance. Any failure of Consultant, on the one hand, or the Company, on the other, to comply with any obligation, agreement, or condition herein may be expressly waived in writing, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. (c) Expenses, Transfer Taxes, Etc. Other than as expressly set forth in this Agreement, the Parties shall bear their own costs and expenses in carrying out the provisions of this Agreement. (d) Compliance with Regulatory Agencies. Each Party agrees that all actions, direct or indirect, taken by it and its respective agents, employees and affiliates in connection with this Agreement and any financing or underwriting hereunder shall conform to all applicable Federal and State securities laws. (e) Notices. Any notices to be given hereunder by any Party to the other may be effected either by personal delivery in writing, by a reputable, national overnight delivery service, by facsimile transmission or by mail, registered or certified, postage prepaid with return receipt requested. Notices shall be addressed to the Contact Person at the addresses appearing on the signature page of this Agreement, but any Party may change his address or Contact Person by written notice in accordance with this subsection. Notices delivered personally shall be deemed delivered as of actual receipt, notices sent by facsimile shall be deemed delivered one (1) day after electronic confirmation of receipt, notices sent by overnight delivery service shall be deemed delivered one (1) day after delivery to the service, mailed notices shall be deemed delivered as of five (5) days after mailing. 4 ____ ____





(f) Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. (g) Delegation. Neither Party shall delegate the performance of its duties under this Agreement without the prior written consent of the other Party. (h) Publicity. Neither Consultant nor the Company shall make or issue or cause to be made or issued, any announcement or written statement concerning this Agreement, or the transactions contemplated hereby for dissemination to the general public without the prior consent of the other Party. This provision shall not apply, however, to any announcement or written statement required to be made by law or the regulations of any Federal or State governmental agency, except that the Party required to disclose shall consult with and make reasonable efforts to accommodate changes to the required disclosure and the timing of such announcement suggested by the other Party. (i) Arbitration and Governing Law. If a dispute arises out of or relates to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure. If they do not reach such solution within a period of 60 days, then, upon notice by either party to the other, all disputes, claims, questions, or differences shall be finally settled by arbitration administered by the American Arbitration Association in accordance with the provisions of its Commercial Arbitration Rules. This Agreement and the legal relations among the Parties hereto shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflict of law doctrine. The Parties agree that the venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein will be the County of Pinellas, State of Florida. (j) Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (k) Headings. The heading of the sections of this Agreement are inserted for convenience only and shall not constitute a part hereto or affect in any way the meaning or interpretation of this Agreement. (l) Entire Agreement. This Agreement including any Exhibits hereto, and the other documents and certificates delivered pursuant to the terms hereto, set forth the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein, and supersedes all prior agreements, promise, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officers employee or representative of any Party hereto. 5 ____ ____





(m) Third Parties. Except as specifically set forth or referred to herein, nothing herein express or implied is intended or shall be construed to confer upon or give to any person or entity other than the Parties hereto and their successors or assigns, any rights or remedies under or by reason of this Agreement. (n) Attorneys' Fees and Costs. If any action is necessary to enforce and collect upon the terms of this Agreement, the prevailing Party shall be entitled to reasonable attorneys' fees and costs, in addition to any other relief to which that Party may be entitled. This provision shall be construed as applicable to the entire Agreement. (o) Survivability. If any part of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, that part shall be severable from the remainder of the Agreement. (p) Further Assurances. Each of the Parties agrees that it shall from time-to-time take such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purposes of this Agreement. (q) Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute either Party becoming the partner of the other, the agent or legal representative of the other, nor create any fiduciary relationship between them, except as otherwise expressly provided herein. It is not the intention of the Parties to create nor shall this Agreement be construed to create any commercial relationship or other partnership. Neither Party shall have any authority to act for or to assume any obligation or responsibility on behalf of the other Party, except as otherwise expressly provided herein. The rights, duties, obligations and liabilities of the Parties shall be separate, not joint or collective. Each Party shall be responsible only for its obligations as herein set out and shall be liable only for its share of the costs and expenses as provided herein. (r) No Authority to Obligate the Company. Without the consent of the Board of Directors of the Company, Consultant shall have no authority to take, nor shall it take, any action committing or obligating the Company in any manner, and it shall not represent itself to others as having such authority. 11. Non-Circumvention. In and for valuable consideration, the Company hereby agrees that Consultant may introduce (whether by written, oral, data, or other form of communication) the Company to one or more opportunities, including, without limitation, existing or potential investors, lenders, borrowers, trusts, natural persons, corporations, limited liability companies, partnerships, unincorporated businesses, sole proprietorships and similar entities (an Opportunity or Opportunities). The Company further acknowledges and agrees that the identity of the subject Opportunities, and all other information concerning an Opportunity (including without limitation, all mailing information, phone and fax numbers, email addresses and other contact information) introduced hereunder are the property of Consultant, and shall be treated as confidential information by the Company, it affiliates, officers, directors, shareholders, employees, agents, representatives, successors and assigns. The Company shall not use such information, except in the context of any arrangement with Consultant in which Consultant is directly and actively involved, and never without Consultant's prior written approval. The Company further agrees that neither it nor its employees, affiliates or assigns, shall enter into, or otherwise arrange (either for it/him/herself, or any other person or entity) any business relationship, contact any person regarding such Opportunity, either directly or indirectly, or any of its affiliates, or accept any compensation or advantage in relation to such Opportunity except as directly though Consultant, without the prior written approval of Consultant. Consultant is relying on the Company's assent to these terms and their intent to be bound by the terms by evidence of their signature. Without the Company's signed assent to these terms, Consultant would not introduce any Opportunity or disclose any confidential information to the Company as herein described. 6 ____ ____





IN WITNESS, WHEREOF, the Parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written. COMPANY: CONSULTANT: GLOBAL TECHNOLOGIES, LTD TIMOTHY CABRERA By: By: Jimmy Wayne Anderson Timothy Cabrera Its: Chairman and CEO Its: Individual capacity Date: January 2, 2020 Dated: January 2, 2020 7 ____ ____ 
Question: Highlight the parts (if any) of this contract related to Anti-Assignment that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?
answer:

13291