Document:

Exhibit 10.6

 

AMENDED AND RESTATED WATER
DEDICATION AND GATHERING AGREEMENT

BETWEEN

DAKOTA FLUID SOLUTIONS LLC,
F/K/A MESA OIL SERVICES, LLC

AND

EMERALD OIL, INC. &
EMERALD WB LLC

 

     

     

    

 

AMENDED AND RESTATED
WATER DEDICATION AND GATHERING AGREEMENT

 

THIS
AMENDED AND RESTATED WATER DEDICATION AND GATHERING AGREEMENT ("Agreement") is entered into on May 26, 2015, but
effective as of the 1st day of July, 2014 (the "Effective Date") by and between DAKOTA FLUID SOLUTIONS LLC, formerly
known as MESA OIL SERVICES, LLC ("Gatherer"), and EMERALD OIL, INC. and EMERALD WB LLC (collectively,
"Producer"). The term "Producer"
shall also include any other Affiliates of Emerald Oil, Inc. or
Emerald WB LLC that own or control leasehold interests or Water from leasehold interests located within the Area of Dedication
at any time while this Agreement remains in effect. Producer
and Gatherer are sometimes referred to herein individually as a "Party"
and collectively as the "Parties".

 

RECITALS

 

A.
Producer is the operator of certain oil and gas leases, wells, and/or lands within the area described in Exhibit "A"
attached hereto and by reference made a part hereof (the "Area of Dedication "), and may acquire additional interests
in oil and gas leases and/or lands within the Area of Dedication during the term of this Agreement (such current and future interests
are referred to as the "Leases").

 

B.
Producer desires to have Gatherer receive, gather and deliver all the Water, as defined in Exhibit "C" of this Agreement,
produced from the Wells and Leases within the Area of Dedication ("Producer's Water").

 

C.
The Parties have previously entered into that certain Disposal Well Services Agreement ("Original SWD Agreement ")
dated July 30, 2012, for the disposal of Producer' s Water in the Sanders and Spackler Salt Water Disposal Wells,
described more specifically in Exhibit "B" and concurrent with entering into this
Agreement, the Parties desire to supersede and replace that Original SWD Agreement to provide for gathering of Producer's Water
by Gatherer's Water System, as further described herein, and delivery of Producer's Water for disposal at the Sanders and Spackler
Salt Water Disposal Wells and/or any additional salt water disposal wells hereafter operated by Gatherer and/or any other salt
water disposal systems in which Gatherer arranges for the connection to and disposal in (collectively, the "SWD Wells").

 

D.
Gatherer desires to receive Producer's Water at the Receipt Points and deliver Producer's Water at the Delivery Points (as such
terms are defined herein), utilizing the facilities constructed, owned and operated by Gatherer.

 

E.
The Parties entered into that certain Water Dedication and Gathering Agreement dated effective July l, 2014,
as amended by that certain Amendment No. 1 dated effective November 19, 2014 (the "Original
Agreement' ) and desire now to amend and restate the Original Agreement in its entirety, effective as of July 1, 2014, to address
and incorporate additional facilities to be constructed and operated by Gatherer at the request of Producer to receive Producer's
Water, from the same Initial System DSUs as identified in Exhibit "B-1" herein at certain new "Infill Receipt Points"
in exchange for additional consideration to Gatherer.

 

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F.
The Parties also desire now to name and include Emerald WB LLC as a Producer Party to this Agreement and to have Emerald WB LLC
ratify the Original Agreement.

 

Now
therefore, in consideration of the mutual covenants and
agreements contained in this Agreement, the Parties agree
as follows:

 

ARTICLE I

REPRESENTATIONS &
COMMITMENTS OF PRODUCER

 

1.1         Producer's
Representations. Producer represents and warrants to Gatherer,
its successors and assigns, that Producer is the operator of or has the right to operate the
Wells listed on Exhibit "B-2" and that Producer
has constructed, intends to construct, or shall cause to
be constructed, the facilities necessary, if any, to enable
Producer to deliver to Gatherer at the Receipt Points all of Producer's Water in accordance with the terms and provisions
of this Agreement, as well as any other facilities committed to by Producer under this Agreement.

 

1.2         Dedication.
Producer hereby dedicates and/or commits to the performance of this Agreement and all of the terms and conditions herein for the
Primary Term, as defined herein, as a covenant running
with the land all of Producer's Water produced from the Wells. Producer
covenants to deliver all of Producer's Water to Gatherer at the Receipt Points without other disposition except as otherwise provided
in this Agreement.

 

1.3         Producer's
Reservations. Producer, as a reasonable and prudent operator, hereby reserves the right
to use Water for Producer's Well operations and to operate
the Wells free from any control by Gatherer in such manner as Producer, in
Producer's sole discretion, may deem advisable,
including without limitation the right to enter
into farmouts of any oil and gas lease subject to this Agreement, to
abandon any Well and surrender any lease. Producer shall
not be required to produce any Well or Wells in any manner which in its sole judgment and discretion would not constitute good
operating practice, nor shall Producer be obligated to
drill additional Wells or to deepen, repair or rework any existing Wells.

 

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1.4         Release
Rights.

 

a.           Alternate
Transport In Lieu of Temporary Release. The remedies provided
in this Section 1.4(a) shall only apply with respect to the Infill Receipt Points beginning on the date that Gatherer provides
notice to Producer that the Infill Receipt Points are ready to accept Producer's Water, and
prior to such date Producer is responsible for transport of Producer's Water from wells located at the Infill Receipt Points at
Producer's sole cost and expense. Producer shall bear all trucking costs prior to the Commitment
Period. Notwithstanding any other provision herein, during
any period after the Initial System In-Service Date, as defined in Section 2.4, in the event (i) Gatherer is unable or fails to
accept delivery of any of Producer's Water into Gatherer's Water System for any reason, including Force Majeure, (ii) the Barrels
of Producer's Water that Gatherer is unable or fails to
accept delivery of would not exceed of the operational capacity of Gatherer's Water
System, considered with respect to Gatherer 's
Water System as a whole or the applicable Receipt Point, and
(iii) there exists no uncured material breach of this Agreement on the part of Producer which causes Gatherer's inability
or failure to accept delivery of Producer 's
Water, then Gatherer remains obligated under Section 1.5 below to receive Producer's Water at the Receipt Points and truck or otherwise
transport, to the SWD Wells or other proper disposal locations at Gatherer's option, all such Barrels of Producer's
Water which Gatherer has failed to accept into Gatherer's Water System ("Alternate Transport Barrels").
Gatherer shall bear all costs to truck or otherwise transport the Alternate Transport Barrels
from the Receipt Point to the SWD Wells or other proper disposal location. Trucking
or other alternative transport by Gatherer shall be deemed a release from this Agreement of Producer's dedication obligation under
this Agreement only to the limited extent it is a release from any obligation of Producer to deliver or Gatherer to receive and
gather Producer's Water specifically onto the Water Gathering System for gathering, with all other terms and conditions of this
Agreement, including but not limited to, Producer's obligation
to pay the Base Fees attributable to the Alternate Transport Barrels, remaining in full force and effect. The Alternate Transport
obligations set forth herein shall only apply to the Alternate Transport Barrels, and
further do not extend to Producer's separate rights and obligations under the New SWD Agreement. Furthermore,
during any Accounting Period in which an Alternate Transport Release occurs, the Alternate
Transport Barrels shall be deemed Delivered Barrels for purposes of calculating the Shortfall Payment for such Accounting Period.

 

b.           Temporary
Release. Notwithstanding any other provision herein, during any period after the
Initial System In-Service Date,
as defined in Section 2.4, in the event (i)
Gatherer is unable or fails to
accept delivery of
any of Producer's Water into Gatherer's Water System for
any reason,
including Force Majeure,
(ii) the Barrels of Producer's Water that Gatherer is unable or fails to accept delivery of would exceed the operational capacity
of Gatherer's Water System, considered with respect to Gatherer's Water System as a whole or the applicable Receipt Point, and
(iii) Gatherer does not otherwise elect to truck such excess Barrels of Producer's
Water in the same manner as set forth in Section l.4(a), notwithstanding the fact that the operational capacity of Gatherer's
Water System is exceeded, then Producer shall be temporarily
released from the dedication under this Agreement,
and at Producer 's
election,
in its sole discretion,
from the dedication under New
SWD Agreement ("Temporary
Release")
, upon
delivering written notice to
Gatherer, and Gatherer's
acknowledgement of receipt of such
notice. Failure of Gatherer to respond (or accept delivery
of the Excess Barrels of Producer's Water) within twenty-four (24) hours to a waiver request from Producer shall be deemed to
be a confirmation by Gatherer of the lack of capacity on Gatherer's Water System. The Temporary Release of Producer 's
Water shall only apply to those quantities of Producer's
Water, which Gatherer has
failed to accept at
the Receipt Points
as provided in this Section l .4(b) ("Temporary
Released Barrels"). Producer shall be solely responsible for all costs and expenses associated with the trucking or other
transport of the Temporary Released Barrels and the costs and expenses associated with the disposal of the Temporary Released
Barrels, to the extent Producer elects not to dispose
of such Barrels into the SWD Wells, and such costs and expenses are not subject to reimbursement by Gatherer. Furthermore, the
Temporary Released Barrels shall be considered Delivered Barrels for purposes of calculating the Shortfall Payment for such Accounting
Period.

 

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c.           Permanent
Release. Except for the six (6) month period commencing as of the Initial System In-Service Date, and subject to Section 2.6
in the context of future expansion beyond the Initial System, as applicable, in the event Gatherer has not accepted delivery of
the entire quantity of Producer's Water made available by Producer at the Receipt Points for
any reason whatsoever , including, without limitation,
Force Majeure or necessary maintenance affecting Gatherer's Water System or the SWD Wells, for a continuous period of ninety (90)
consecutive days, or one hundred and twenty (120) days
within a one hundred eighty (180) day period, Gatherer
shall have the obligation to seek and put into place alternative, reasonably equivalent, gathering or trucking
arrangements, as well as disposal arrangements if necessary, for Producer's Water, subject
to the same Water Gathering Fees and other terms and conditions of this Agreement, then either Party shall have the right to have
the portion of Producer's Water affected thereby permanently released from this Agreement (a "Permanent Release"),
and at Producer 's election,
in its sole discretion,
from the dedication under New SWD Agreement, by delivering written notice thereof to the other Party within thirty (30) days after
the expiration of any such ninety (90) consecutive day period, or one hundred eighty (180) day period as applicable. Furthermore,
the applicable Minimum Barrels for each Accounting Period remaining during the Commitment Period shall be reduced by the Barrels
produced from the Leases and Wells subject to Permanent Release for each such Accounting Period (the "Permanently
Released Barrels").

 

1.5         Further
Arrangements. Gatherer commits that, during the Primary
Term and any Extended Term of this Agreement, as defined in Section 7.1 below, it will maintain all necessary arrangements to provide
for the further transportation, disposition, and disposal
of Producer's Water consistent with Producer's required communications under Section 2.8 herein and subject to Force Majeure,
following Gatherer's
receipt of Producer's Water at the Receipt Points. Gatherer will use reasonable efforts to enter into trucking arrangements as
needed at the Receipt Points or Delivery Points to facilitate the further
transport, disposition and disposal of Producer's Water. For all Barrels of Producer's Water received by Gatherer at the Receipt
Points hereunder, Producer shall pay all Water Gathering Fees otherwise due on those Barrels under this Agreement as if received
into Gatherer's Water System as well as fees for such Barrels
arising under the New SWD Agreement whether or not such Barrels are in fact gathered on the Gatherer's Water System under this
Agreement, and Gatherer shall bear one hundred percent (100%) of the costs of any trucking fees or similar charges to transport,
redeliver, and dispose of Producer's Water by alternative transportation means or at alternative
disposal facilities.

 

1.6         Memorandum
of Agreement. Upon execution of this Agreement, the Parties
shall execute a new Memorandum of Dedication of Water Production
under this Agreement, in substantially the form attached as Exhibit "D" including a legal description of the Area of
Dedication that corrects and replaces the Memorandum of the Original Agreement by expressly including Emerald WB LLC as a dedicating
party, together with any of Producer's other Affiliates which own or control leasehold interests or Water from leasehold interests
located within the Area of Dedication, during the Primary Term or Extended Term of this Agreement. Such Memorandum shall be placed
of record in each county in which the Wells are located with Producer to bear all costs. In
the event of any Permanent Release or termination of this Agreement, in
whole or in part, the Parties shall execute appropriate instruments to be placed of record in each county in which the Wells are
located, providing notice of the amended Area of Dedication
or termination of this Agreement.

 

1.7        Superseding
and Replacement of SWD Agreement. Producer acknowledges and agrees that as a condition precedent to Producer's rights and Gatherer's
obligations under this Agreement, the Original SWD Agreement shall be superseded and replaced by a new agreement (the "New
SWD Agreement "), entered into on or before
the Effective Date of this Agreement, as needed to accomplish the purpose of this Agreement, and Producer shall execute the same.
To the extent of a conflict between the terms of this Agreement and the terms of the New SWD Agreement, the terms of this Agreement
shall control.

 

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ARTICLE II

FACILITIES

 

2.1         Gatherer's
Water System. Gatherer will construct, operate and maintain a Water gathering system comprised of the Initial System, and any Future
Receipt Points, Future Delivery Points, and expansions of Gatherer's Water System constructed pursuant to Section 2.6
(collectively "Gatherer's Water System") located as necessary to enable Gatherer
to receive and gather Producer's Water from the Area of Dedication at the Receipt Points and deliver Producer's Water to the Delivery
Points. Gatherer shall construct and operate Gatherer's Water System in a workman-like manner and in accordance with good oilfield
practices, and in compliance with any applicable permits and licenses and all applicable rules, laws and regulations. Gatherer's
Water System will consist of:

 

i.            "Receipt
Points" shall be at the inlet of Gatherer's Metering Facilities located at the locations described on Exhibit
"B" as RP1 through RP8 (the "Initial Receipt Points") and as RP10
through RP14 and RP16 (the "Infill Receipt Points"),together with any additional locations installed as part of
any expansion of Gatherer's Water System beyond the Initial System (the "Future Receipt Points").

 

ii.          
"Delivery Points" shall be the inlet flange of the disposal station piping of the SWD Wells located at the locations
described on Exhibit "B" (the "Initial Delivery Points"), together with any additional locations installed
as part of any expansion of Gatherer's Water System beyond
the Initial System (the "Future Delivery Points").

 

iii.         
"Gatherer 's Receipt Point Facilities"
means all facilities owned, operated, and maintained by Gatherer at the Receipt Points
to facilitate the connection of the Producer's Water Facilities (as
defined below) with the Gathering Lines.

 

iv.          "Metering
Facilities" including suitable custody
transfer measurement equipment located at or near the Receipt Points to measure the Barrels
of Producer's Water received by Gatherer.

 

v.           "Gathering
Lines" means water gathering pipelines extending from the Receipt Points to the Delivery Points, together with appurtenances
thereto, with sufficient capacity across Gatherer's Water System to receive, gather and deliver Producer's Capacity, as defined
in Section 3.1, attributable to such Receipt Point.

 

vi.          “Gatherer's
Delivery Point Facilities” means all facilities owned, operated and maintained by Gatherer at the Delivery Points,
but not including disposal facilities covered under the New SWD Agreement.

 

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2.2         Rights-of-Way.
At the time of executing this Agreement, Producer has completed its acquisition of rights-of-way (the "ROW" or
"ROWs") from certain landowners within the Area of Dedication ("Landowners") authorizing the
construction, installation and operation of multiple pipelines within the same right-of-way corridor. Producer shall be able to
assign the ROWs in part to Gatherer, so as to grant Gatherer the right to install a single Water gathering line and related facilities
in the corridor of the ROW in connection with the construction, installation, and operation of the Initial System. Due to Producer's
existing relationship with the Landowners, and in an effort to maximize efficiency, Producer will continue to interface directly
with the Landowners until such time as the ROWs have been partially assigned to Gatherer, except as described below. Producer has
tendered compensation to the respective Landowner and has recorded the respective ROW with the McKenzie County Clerk and Recorder.
With respect to each ROW, until such time as Producer assigns
the ROWs to Gatherer, Producer shall indemnify and hold harmless Gatherer, its Affiliates, and their respective employees, officers,
directors, contractors and subcontractors (collectively, "Gatherer Indemnified Parties")from and against any and
all trespass claims or claims arising out of the invalidity of any ROW brought by third party landowners arising from Gatherer's
ingress to, egress from, entry upon, and use of such ROWs for survey, construction, installation and operation of the Gatherer's
Water System except to the extent arising from the gross negligence or willful misconduct of Gatherer Indemnified Parties.

 

Producer shall
use commercially reasonable efforts to obtain any third party consents required to assign its ROWs to Gatherer (each a "Consent
to Assign ") . In the event Producer, despite
commercially reasonable efforts, is unable to obtain any Consent to Assign Producer shall continue to hold such ROW for the benefit
of Gatherer until such time as the Consent to Assign is obtained. Concurrently
with the execution of this Agreement, Producer shall partially assign the ROWs to Gatherer, pursuant to the form of assignment
attached hereto as Exhibit "G'', and within thirty (30) days of receipt of detailed invoice and reasonably requested supporting
documentation, Gatherer shall pay Producer twenty percent (20%) of the actual and direct costs incurred
in obtaining the ROWs (based on five (5) pipelines allowed within a ROW and adjusted up or
down for fewer or more pipelines properly located within a single ROW)

 

However, if
Gatherer determines that any ROW is unnecessary for the Initial System or is insufficient, lacking,
or otherwise defective, such that Gatherer in its reasonable
discretion must acquire a new right-of-way in lieu thereof, such
ROW shall not be assigned to Gatherer and Gatherer shall not pay any portion of the costs associated with such ROW.

 

Gatherer may
proceed to interface with and acquire the real property interests it requires, including
additional rights-of-way or amendments to ROWs to serve the Infill Receipt Points directly from the Landowners
or other owners of such interests ("Gatherer ROWs"). In the event that Gatherer,
despite commercially reasonable efforts, is unable to obtain any right-of-way deemed necessary
for Gatherer in its reasonable discretion to construct and install the portions of the Initial System serving the Infill Receipt
Points prior to May 31, 2015 (an "OutstandingROW'), Gatherer may proceed with re-routing the course of the affected
portion of the Initial System and acquire additional Gatherer ROWs to circumvent any uncooperative third party landowners with
Gatherer to bear such Outstanding ROW costs and re-routing costs in the aggregate up to Eighty-Three Thousand Three Hundred and
Thirty Three dollars ($83,333), which costs shall not be included in the Actual Construct Costs.
In the event the Outstanding ROW costs are anticipated to exceed $83,333 the Parties shall
promptly meet to develop a mutually agreeable plan to complete acquisition of Outstanding ROW.
The Initial System Target In-Service Date shall be extended, as an Excused Delay as defined
in Section 2.4 below, by the number of days, if
any, that the construction and installation of the Initial System is delayed in order to acquire
the Outstanding ROW or agree on a course of action, or otherwise due directly to the Outstanding ROW.

 

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2.3         Producer's
Water Facilities and Construction. Producer at its own expense will construct, operate and maintain all
facilities upstream of the
Receipt
Points
as identified in Exhibits "B" and "B-2" necessary to
enable Producer to
deliver all of
Producer's
Water to Gatherer at
the Receipt Points
as identified in Exhibits "B" and "B-2" in
a workman like manner and in accordance with good oil field practices, and in compliance with any applicable permits and licenses
and all applicable rules, laws, and regulations. "Producer's
Water Facilities" will consist of the facilities listed below. Producer shall provide the following facilities:

 

i.            "Piping"
connecting Producer's Wells to the Receipt Points.

 

ii.          
"Pumps" located upstream of each Receipt Point sufficient to effectuate the flow of Producer's Water into and
on Gatherer's Water System and to allow Gatherer's Water System to operate at maximum capacity.

 

iii.          "Storage" or tankage facilities upstream of each Receipt Points having at least 24 hours of storage capacity for
Producer's Water to be delivered to each Receipt Point.

 

iv.         "Utilities"
including electrical or .other power at the Receipt
Points furnished to Gatherer and sufficient for Gatherer's Receipt Point Facilities.

 

v.           "Filtering'
for Water as set forth in Exhibit "F".

 

2.4         Initial
System. The "Initial System" will
consist of the initial facilities of Gatherer, described generally above and on Exhibit "B", as necessary to connect
the Initial Receipt Points and Infill Receipt Points with the Initial Delivery Points, also described on Exhibit "B".
The Parties have agreed upon the configuration, design
and construction of Gatherer's Water System and have deemed the Initial System as sufficient to serve all of Producer's Minimum
Barrels commitment stated in Exhibit "E" and that the Initial System is sufficient to serve all of Producer's anticipated
Barrels of Producer's Water from the Wells identified on Exhibit "B-2" (collectively, the "Initial System Wells")
at the Initial Receipt Point or Infill Receipt Point listed in the column "Gatherer Receipt Point Construction Responsibilities"
next to each such Well.

 

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Subject
to events of Force Majeure, severe winter weather, frost laws, road restrictions and other requirements or delays imposed by government
agencies including without limitation delays in issuing ROWs on federal lands needed for the portion of Gatherer's
Water System serving the Infill Receipt Points, whether or not within the scope of Force Majeure, that would make the diligent
pursuit of similar construction or installation operations unreasonable for a reasonably prudent McKenzie County North Dakota
gatherer faced with similar conditions (whether one or more, "Excused
Delays "), Gatherer shall diligently construct,
install and complete (y) the portion of Gatherer's
Water System serving the Initial Receipt Points as described on Exhibit "B" and Exhibit "B-2" on or before
June 1, 2015
(the "Start-Up Target Date") and (z) all of the Initial System including the Initial and Infill Receipt Points
on or before August 31,
2015,
as extended by the number of Days equal to any Excused Delay event (the "initial
System Target In-Service Date ")
. The
Parties each agree that their respective obligations to meet the Start-Up Target Date are on a reasonable commercial efforts basis
with no credits or penalties applicable to either Party for non-achievement. Producer acknowledges and agrees that any receipt,
gathering and delivery of Water by Producer prior
to the Initial System In-Service Date shall incur the applicable Water Gathering Fees and shall be provided on an interruptible
basis at Gatherer's sole discretion as Gatherer may be completing the installation and construction of its Water Gathering System
and may also need to undertake calibration and other activities to achieve the Initial System In-Service Date during that period,
provided however, that Gatherer shall notify Producer twenty four (24) hours or as soon as practicable prior to any activities
of Gatherer that may reasonably be expected to cause an interruption or otherwise prevent Gatherer from receiving Water from any
Receipt Point from which Gatherer has previously accepted Water, and Gatherer shall keep Producer fully informed of the progress
of such activities and any anticipated resumption of service from such Receipt Point(s). The
date on
which Gatherer has
completed
the construction
and installation of
the Initial System,
in its
entirety so
as to be
capable
of receiving
Producer's
Water from all
of the Initial Receipt Points and
Infill Receipt
Points identified
on Exhibits
"B"
and
"B-2"
shall be
the "Initial System In-Service
Date". For avoidance of doubt, such completion by Gatherer shall be a deemed achievement of the Initial System
In-Service Date notwithstanding the Initial System's partial or complete inability to accept and flow Water on the Initial System
when such inability arises solely from Producer's delay or failure to complete its responsibilities and obligations under this
Agreement, as extended by Force Majeure or in the case of delay or failure to complete re-run piping if caused by frost laws imposed
by government agencies.

 

i.            In
the event, subject to Force Majeure or Excused Delay, Gatherer
fails to complete its construction of the Initial System, in its entirety per Section 2.4, Exhibit "B" and Exhibit "B-2",
on or before the Initial System Target In-Service Date, and Producer has completed all facilities upstream of the Initial and Infill
Receipt Points per Section 2.3, Exhibit
"B" and Exhibit "B-2", and is otherwise ready, willing and able to deliver Producer's Water to that portion
of the Initial System that is not completed, the following shall occur:

 

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a.           the
applicable Minimum Barrels for each Accounting Period, or portion thereof, between the Initial System Target In-Service Date and
the Initial System In-Service Date, shall be reduced by the daily Barrels of Producer's
Water produced from the Initial System In-Service Date Wells that would have been transported on the Initial System had such System
been in operation for each such Accounting Period (the "Gatherer's Initial System Delay Pre-Inservice Barrels");
and

 

b.
         Producer shall receive a credit against the Water Gathering Fees owed by Producer in that Accounting Period (or if none are owed
in that Accounting Period, beginning in the next occurring Accounting Period in which Water Gathering Fees are owed by Producer
and continuing for each successive Accounting Period until the credit is used in full, with the credit amount equal to the Base
Fee for the Gatherer's Initial System Delay Pre-Inservice Barrels, up
to a maximum total credit of Two Million dollars ($2,000,000)
for all Gatherer's Initial System Delay Pre-Inservice Barrels under this Agreement together with all "Gatherer's Initial System
Delay Pre-Inservice Barrels [or Volumes]" under the Related Dedication Agreements described in Section 8.3 herein ("Initial
System Pre-Inservice Credit") .

 

ii.           In
the event Gatherer has completed its construction of the Initial System, in its entirety per Section 2.4,
Exhibit "B'' and Exhibit "B-2" on or before the Initial System Target In-Service
Date, but subject to Force Majeure or in the case of delay or failure to complete re-run piping if caused by frost laws imposed
by government agencies, Producer has failed to complete all facilities upstream of the Initial and Infill Receipt Points per Section
2.3, Exhibit "B" and Exhibit "B-2",
and Gatherer is otherwise ready, willing and able to gather
Producer's Water on that portion of the Initial System, then the following shall occur:

 

a.           the
applicable Minimum Barrels for each Accounting Period, or portion thereof, between the Initial System Target In-Service Date and
the Initial System In-Service Date, shall be reduced by the Barrels of Producer's
Water produced from the Initial System In-Service Date Wells that would have been transported on the Initial System had Producer's
Water Facilities been in operation for each Accounting Period (the "Producer's
Initial System Delay Pre Inservice Barrels").

 

b.           Producer
shall pay Gatherer an amount equal to the per Barrel Base Fee for the Producer's
Initial System Delay Pre-Inservice Barrels beginning in the first Accounting Period following the Initial System In-Service Date
and continuing for each successive Accounting Period until the payment is satisfied in full, up to a maximum of Two Million dollars
($2,000,000), for all Producer's Initial System Delay Pre-Inservice
Barrels under this Agreement together with all "Producer's
Initial System Delay Inservice Barrels [or Volumes]" as defined under the Related Dedication Agreements described in Section
8.3 herein ("Initial System Pre-Inservice Fee").

 

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iii.          In
addition to Producer's remedies under Section 2.4(i), in
the event Gatherer fails to complete its construction of the Initial System, in its entirety per Section 2.4,
Exhibit "B" and Exhibit "B-2", on or before the date that is sixty (60)
Days after the Initial System Target In-Service Date, and Producer has completed all facilities upstream of the Initial and Infill
Receipt Points per Section 2.3, Exhibit "B" and Exhibit "B-2" and is otherwise ready, willing and able to deliver
Producer's Water to that portion of the Initial System that is not completed, Producer shall have the option, exercisable in its
sole discretion, to elect by written notice to Gatherer to construct and install the remainder of the Initial System, at Producer's
sole cost and expense, whereupon Producer shall not owe any Base Fees for any of Producer's Water delivered to the Initial and
Infill Receipt Points or flowing through that portion of the Initial System constructed and installed by Producer, until such time
as the amount of Base Fees otherwise attributable to such Water, but retained by Producer, is equal to one hundred and ten percent
(110%) of the total of Actual Construct Costs incurred by Producer to complete the construction and installation of the remainder
of the Initial System.

 

iv.          Gatherer
shall keep Producer reasonably informed of the progress on the construction and installation of the Initial System, and any Excused
Delays in connection therewith. Producer shall have the right to have its representative present during any onsite construction
or installation operations of the Initial System.

 

2.5         Disposal
Facilities. All facilities downstream of the Delivery Points, including the SWD Wells, as necessary to enable the disposal of all
of Producer's Water in the SWD Wells shall be addressed under the New SWD Agreement.

 

2.6         Future
Expansion Beyond the Initial System. After installation of the Initial System, Gatherer will install and connect such Future
Receipt Points, Future Delivery Points, and expansions
of Gatherer's Water System, including but not limited to, installing additional or "looped"
gathering lines or a larger diameter pipe that Gatherer in its sole judgment determines are
necessary or desirable to gather Producer's Water dedicated under this Agreement from subsequent completed Wells drilled or acquired
by Producer within the Area of Dedication as set forth in this Section 2.6. For avoidance of doubt, any expansion of Gatherer's
Water System to serve Producer's Wells located outside the Area of Dedication is not contemplated by or covered under the scope
of this Agreement. The Parties agree that Gatherer will own and operate any and all future expansions to Gatherer's
Water System including any Producer Built Gathering Facility, as defined herein.

 

i.            In
addition to providing Gatherer with annual drilling plans and quarterly updates to those plans under Section 2.8
below, Producer shall give Gatherer written notice (a "Connection Notice ") one hundred twenty (120) to ninety
(90) Days prior to the completion of any new Well located within the Area of Dedication but outside of the Initial System DSUs,
or within ten (10) days after acquiring any such completed Well, specifying: the Well name, Well location; the location of the
nearest Receipt Point or proposed Future Receipt Point, as applicable, for
such Well; drilling, completions and anticipated recompletion details; the minimum anticipated initial and annual Barrels of Producer's
Water from such Well together with the anticipated available Barrels of Producer 's
Water from the drilling spacing unit ("DSU')
in which the Well is located as may be requested by Gatherer; and if a Distant Expansion
under subsection (iv) below applies, also specifying up to four (4) DSUs that are each directly adjacent to or cornering the DSU
(the "Contiguous DSUs") of the Distant Well (defined below) for possible Permanent Release at Producer's sole
discretion under subsection (iv)(a) below if (iv)(a) applies and the anticipated available Barrels of Producer's
Water from the four (4) Contiguous DSUs as may be requested by Gatherer (the anticipated Barrels from the DSU of the Distant Well
and the four (4) Contiguous DSU Barrels if requested, are collectively the "Connection Barrels") .
Concurrently with its Connection Notice under this Agreement, Producer shall provide Gatherer
with the Connection Notices concerning the Well as required under the Related Dedication Agreements described in Section 8.3 of
this Agreement. If a Well that is the subject of a Connection Notice is not completed within one hundred twenty (120) Days of the
Connection Notice, following good faith discussions with Producer, Gatherer shall then have the option to deem the Connection Notice
as invalid and of no further effect.

 

    	11 

     

    

 

ii.           In
the event the Well, or the Future Receipt Point, if applicable, as identified in the Connection Notice requires less than or equal
to a three (3) mile expansion of Gatherer 's Water System
from an existing Receipt Point or Delivery Point, as Gatherer's Water System exists as of the date of the Connection Notice (a
"Nearby Well"), Gatherer shall have the first option to construct, install and place into operation an expansion
of Gatherer's Water System to connect to the Nearby Well at Gatherer's sole cost and expense, in exchange for Gatherer's ability
to charge Producer an additional fee per Barrel for any Water from such Nearby Well or any other Well Producer flows through such
expansion constructed by Gatherer, based on the sample calculation set forth in Exhibit "H," such that Gatherer has recouped
Actual Construct Costs incurred by Gatherer to construct the expansion plus incremental operating expenses and capital expenditures
needed to modify or upsize the Initial System or a prior expansion of the Initial System to accommodate the Connection Barrels,
over a five (5) year period and receive a seven and a half percent (7.5%) internal rate of return ("IRR"
as calculated by the Microsoft Excel IRR function financial formula) and trued up quarterly
("Expansion Fee"). For the avoidance of doubt the Expansion Fee shall be in addition to all other Water Gathering
Fees due for the Connection Barrels and such Expansion Fee shall be reduced equitably if Gatherer, in its sole discretion, elects
to construct and install an expansion of larger size or greater capacity than requested by Producer in its Connection Notice or
required to serve Producer's Connection Barrels.

 

m.          Subject
to Force Majeure and the condition that Producer has in fact completed such a Nearby Well, in the event Gatherer fails to timely
construct, install and make available for operation on or before the later of ninety (90) days from receipt of the Connection Notice
or the date the Well identified in the respective Connection Notice is completed, an expansion of Gatherer's Water System to connect
the Connection Barrels from the Nearby Well, following good faith discussions with Gatherer, Producer shall have the option either
to:

 

a.           Construct
and install an expansion of Gatherer's Water System to connect to the Nearby Well, at
Producer 's sole cost and expense, in exchange for Producer
receiving a credit against any Base Fee component of the Water Gathering Fees otherwise owed Gatherer for any Water from such Nearby
Well or any other Well flowing through such expansion constructed by Producer,
until such time as the amount of the Base Fee component of the Water Gathering Fees otherwise
attributable to such Water, but retained by Producer, is equal to the total of Actual Construct Costs incurred by Producer to construct
the expansion based on the sample calculations set forth in Exhibit "H" such that Producer has recouped its Actual Construct
Costs incurred by Producer to construct the expansion plus incremental operating expenses and capital expenditures
needed to modify or upsize the Initial System or a prior expansion of the Initial System to accommodate the Connection Barrels,
over a five (5) year period and receive a seven and a half percent (7.5%)
IRR and trued up quarterly ("Expansion Credit”); or

 

    	12 

     

    

 

b.         
Subject to Section l.4(c), obtain a Permanent Release from
this Agreement of the Nearby Well and any of the Leases located within the same DSU as the Nearby
Well but not located
within an Initial System DSU.

 

iv.         In
the event the Well, or the Future Receipt Point or Delivery
Point, if applicable, as identified in the Connection Notice requires more than a three (3) mile expansion of Gatherer's Water
System, as Gatherer's Water System exists as of the date of the Connection Notice ("Distant Well") or involves
a connection of Gatherer's Water System with facilities of third parties not connected to Gatherer's Water System as of the date
of the Connection Notice (one or both situations, a "Distant
Expansion "), the Parties shall promptly pursue good faith negotiations of mutually agreeable terms and conditions of
such expansion and strive to enter into a definitive separate agreement or written amendment setting forth a definitive agreement
as to such Distant Expansion. In the event the Parties
have not reached agreement on or before the later of ninety (90) days from receipt of the Connection Notice or the date the Well
identified in the respective Connection Notice is completed, for the terms of such a Distant Expansion of Gatherer's Water System,
following good faith discussions with Gatherer, Producer
shall have the option to:

 

a.           Subject
to Section 1.4(c), obtain a Permanent Release from this
Agreement of any of the Leases located within the DSU of the Distant Well, and the four (4) Contiguous DSUs but only if such Leases
are not located within an Initial System DSU.

 

v.           Gatherer
shall keep Producer reasonably informed of the progress on the construction and installation of any expansion of Gatherer's Water
System. Producer shall have the right to have its representative present during any onsite construction or installation operations
of any expansion of Gatherer's Water System.

 

2.7         Construction
or Expansion by Producer. In the event Producer elects
to construct, install or expand any portion of Gatherer's
Water System pursuant to an express right provided under this Agreement (a "Producer Built Gathering Facility "),
the following shall apply:

 

i.            Each
Producer Built Gathering Facility shall be constructed and installed by Producer according to
the reasonable design and
construction specifications of Gatherer. In constructing and
installing the Producer Built Gathering Facility, Producer
shall have the right to utilize
any available water pipeline right-of-way or
easement rights of Gatherer and any materials of Gatherer,
at cost.

 

ii.           Upon
completion of any Producer Built
Gathering Facility, Producer shall assign such Producer
Built Gathering Facility to Gatherer, at no charge
to Gatherer, but expressly subject to the terms of this
Agreement, whereupon it shall become part of Gatherer's
Water System.

 

    	13 

     

    

 

m.          If Producer has incurred
Actual Construct Costs pursuant to Section 2.6(iii)(a), once Producer has recouped
all of such Costs pursuant to Section 2.6, Gatherer may begin to assess applicable Base Fee components of Water Gathering Fees
for all Water delivered
by Producer into or flowing
through such Producer Built Gathering Facility. Gatherer may begin to assess all other components of the Water Gathering Fees for
all Water delivered by Producer beginning
upon the commencement of receipt into or
flow through such Producer Built Gathering Facility.

 

iv.         
For the avoidance
of doubt, for
purposes of determining
whether Producer has delivered the Minimum Barrels
in any Accounting Period pursuant to the terms and conditions
set forth on Exhibit "E",
any Water delivered during such Accounting Period for which
Producer does not owe any Base Fee component of the Water
Gathering Fees pursuant to its incurrence of Actual Construct
Costs pursuant to Article 2 of this Agreement shall be
included in the Delivered Barrels.

 

2.8         Producer's
Anticipated Barrels. Upon the execution of this Agreement, and
thereafter by October first (1st) of each calendar year, Producer shall communicate its drilling, completion and recompletion
plans to Gatherer in writing, including
locations, anticipated spud dates,
together with anticipated Barrels to be delivered to Gatherer, for the next
calendar year. Additionally,
during Gatherer's construction of facilities to serve the
Infill Receipt Points, Producer
shall promptly notify Gatherer
of any delay in its drilling and completion schedules
for the Wells identified in
Exhibit "B-2'', including without limitation delays
in completion of any Wells on Exhibit
"B-2" later than June
1, 2015. At all other
times during the Primary Term or
Extended Term, no later than
the last day of each calendar quarter, Producer shall
notify Gatherer in
writing with reasonable detail of any changes or additions to its drilling
plans for the succeeding twelve (12) Accounting Periods. In
addition to providing Connection Notices, pursuant to Section 2.6(i), Producer shall provide
updates to Gatherer, as needed, of specific drilling and
completion plans and actual initial production dates.

 

2.9         Ownership
of Facilities. Producer expressly does not by the terms of this
Agreement, sell, transfer
or assign unto Gatherer
any title or interest whatsoever in the Wells or any pipe,
lines or other equipment
of any nature owned and used by Producer
in the operation of Producer's
Wells, Producer's Water Facilities, Wells,
or Leases. Gatherer expressly does
not by the terms of this Agreement, sell, transfer, or assign unto Producer any title
or· interest whatsoever
in Gatherer's Water System, or any
pipelines, vehicles or other equipment of
any nature owned and used by Gatherer in the operation of Gatherer's Water System or its performance
of services under this Agreement.

 

ARTICLE III

GATHERING SERVICE

 

3.1         Producer's
Capacity. Commencing on the Initial System In-Service Date, Gatherer
shall make capacity available for Producer's Water on Gatherer's Water System up to 8000 Barrels/day at 250 Psig at each of the
five individual Initial Receipt Points, RPI through RPS as described more specifically on Exhibit "B", and up to the
operational capacity of other Receipt Points and the Gathering Lines, ("Producer's Capacity") for the benefit
of Producer's Water, subject to Force Majeure. Initially
Gatherer's Water System shall provide exclusive service for Producer's Water. From
time to time during the Term and on a daily basis, any capacity available on Gatherer's Water System in excess of Producer's
Capacity shall be available to Gatherer for Third Party Water, as defined below in Section 3.4 on such days. Producer 's
Capacity shall be adjusted upward by additional Connection Barrels served by expansions of Gatherer's Water System pursuant to
Section 2.6 of this Agreement to the extent the overall
capacity of Gatherer 's Water System increases as a result
of such expansion, and downward by Permanently Released Barrels pursuant to Section 1.4(c) of this Agreement.

 

    	14 

     

    

 

3.2         Gathering.
Subject to the terms and conditions of this Agreement, and Producer's delivery of all of Producer's
Water within the Area of Dedication to Gatherer at the Receipt Points, Gatherer shall receive at the Receipt Points, gather, and
deliver Producer's Water at the Delivery Points. Delivery
of Producer 's Water to a specific Delivery Point will
be at Gatherer's sole option and discretion.

 

3.3         Uniform
Delivery Rate. The Parties will strive to deliver Producer's Water at the Receipt and Delivery Points on a uniform basis consistently.

 

3.4         Third
Party Service. Producer
acknowledges and understands that over the term of this Agreement and after prior written notice received by Gatherer, Gatherer's
Water System may also receive water delivered to Gatherer by other parties ("Third Party Water") ,
at all times subject to Producer's Capacity and such Third Party Water meeting the Water
Quality Specifications set forth in the attached Exhibit "F" as
such Water Quality Specifications may be updated from time
to time by Gatherer upon thirty (30) days advance written notice to Producer.

 

3.5         Priority
of Service. Producer's
Water, up to Producer's Capacity, shall be accorded highest priority on Gatherer's Water System with respect to capacity allocations,
interruptions, or curtailments.
On a Receipt Point basis and subject to Producer fulfilling its operational obligations System
under this Agreement including effectuating the delivery
of Water into Gatherer's Water, Producer's
Water will be the last Water curtailed from Gatherer's
Water System in the event of an interruption or curtailment affecting specific
Receipt Points rather than Gatherer's Water System as a whole, and all of Producer's
Water affected by a particular Receipt Point will be treated in the same manner in the event
an allocation is necessary. Gatherer agrees not to contract to provide,
at any time, gathering
service on Gatherer's Water System on a basis that has a priority higher than what Producer's Water is entitled to pursuant to
this Section 3.5 and under this Agreement.

 

    	15 

     

    

 

ARTICLE IV

EXHIBITS

 

4.1         Exhibits.
All Exhibits attached to this Agreement are incorporated into and made an integral part of this Agreement by reference including
the General Terms and Conditions set forth in the attached Exhibit "C" (the "GT&C").

 

4.2         Order
of Precedence. In the event of any conflict between the terms as set out in the body of this Agreement and those set out
in the GT&C, the terms in the body of this Agreement shall control.

 

ARTICLE V

CONSIDERATION &

FEES

 

5.1         Fees.
For all of Producer's Water received into Gatherer's
Water System, Gatherer shall
charge and Producer shall pay the applicable "Water Gathering Fees" and any "Shortfall Payment”
described on Exhibit "E" based on the Barrels of Producer's Water received at the Receipt Points. The Water Gathering
Fee does not encompass disposal fees which are incurred under the New SWD Agreement. If and as applicable under Section 2.4(ii)(b),
Gatherer shall charge and Producer shall pay the Initial System Pre-Inservice Fee.
If and as applicable under Section 2.6, Gatherer
shall charge and Producer shall pay the Expansion Fee.

 

5.2         Annual
Fee Adjustments. The Base Fee,
Meter Fee, and any applicable Miscellaneous Fees, including without limitation the Expansion
Fee, components of the Water Gathering Fees may be adjusted annually during the term of this Agreement,
for the prospective calendar year, the first prospective calendar year being 2020, based on
the percentage change in the annual average in the "Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average
-All items" which occurred in the preceding calendar year as
published by the United States Department of Labor, Bureau of Labor Statistics for the previous calendar year,
but shall never be less than the Base Fee or
Meter Fee, as applicable, set forth in Exhibit "E".

 

    	16 

     

    

 

ARTICLE VI

NOTICES

 

6.1         Notice
Process. All notices and communications required or
permitted under this Agreement shall be in writing and shall be considered as having been given if delivered personally, or when
received by mail, by electronic means (confirmed as received before 5 p.m. at the place of receipt), or by express courier, postage
prepaid, by either Party to the other at the addresses
given below. Routine communications, including monthly
statements, shall
be considered as duly delivered when mailed by ordinary
mail or by electronic means.

 

6.2         Addresses
for Notice. Unless changed
upon written notice by either Party, the addresses
for notice purposes are as follows:

 

		TO:	Emerald Oil, Inc. and/or Emerald
WB LLC 

1600 Broadway, Suite 1360

Denver, CO 80202

Phone: 303-595-5629

Contact: James
Muchmore

 

		TO:	Dakota Fluid Solutions LLC 

1600 Broadway, Suite 1330

Denver,
CO 80202

Phone:
202-213-5998

Contact:
Tim Reynolds

 

ARTICLE VII

TERM

 

7.1         Primary
and Extended Terms. This Agreement shall commence as of the
Effective Date and shall
remain in full force and effect for a primary term of fifteen (15)
years (the "Primary Term")
and shall continue year to year thereafter until terminated
by either Party (the
"Extended
Term") by providing written notice of termination
to the other Party at least sixty (60) days prior to the
expiration of the Primary Term,
or any subsequent annual expiration
date.

 

(10)       Uneconomic
Operations. Subject to any Force
Majeure event affecting Producer's
obligations to deliver Water hereunder,
in addition to all other
rights of Gatherer
under this Agreement, in the
event the sum of actual
direct costs (for the
avoidance of doubt,
excluding overhead, depreciation,
amortization and capital expenditures) incurred by Gatherer
to operate any portion
of Gatherer's Water System (the "Uneconomic Segment” ) during
any ninety (90) day period are in excess of the total
net revenue attributable to the Uneconomic Segment (including
all Water Gathering Fees paid by Producer or
any third party attributable to the
Uneconomic Segment) during such ninety (90) day period,
Gatherer shall have the right to
send written notice (an "Uneconomic Notice ") to Producer of its intent to
terminate receipts of Producer's Water
into the Uneconomic Segment
unless the Water Gathering Fees owed by Producer for Producer's
Water delivered to the Uneconomic Segment are increased
such that Gatherer's total anticipated net revenue attributable
to the Uneconomic Segment is projected to
equal one hundred
and ten percent (110%) of Gatherer's actual direct costs
(for the avoidance of doubt, excluding
overhead, depreciation,
amortization and capital
expenditures) incurred by Gatherer to operate the
Uneconomic Segment. Any increased Gathering Fee shall be
borne pro-rata by Producer
and any third party shipper on
the Uneconomic Segment according to the anticipated Barrels
of Producer's Water
to be delivered to or flowed through the Uneconomic
Segment. Within ten days of Producer 's
receipt of notice from Gatherer,
Producer shall elect by
written notice sent
to Gatherer either to:

 

    	17 

     

    

 

a.           Accept
the increased Water Gathering Fees, or portion thereof,
effective as of the beginning of the next AccoW1ting Period, owed
by Producer for Producer's Water delivered to the Uneconomic Segment, whereupon Gatherer shall not send another Uneconomic Notice
pursuant to this Section 7.2 for at least ninety (90) days; or

 

b.           Elect
to obtain a Permanent Release of Producer's Leases and
Wells directly affected by the Uneconomic Segment, and
at Producer's election, in its sole discretion, from the
dedication W1der New SWD Agreement, by delivery of written
notice to Gatherer insofar as it pertains to the Uneconomic Segment after one hW1dred-eighty (180) days of Producer's receipt of
the Uneconomic Notice under this Section 7.2.

 

ARTICLE VIII

MISCELLANEOUS

 

8.1         Assignment.
This Agreement, including,
without limitation, any
and all renewals, extensions, amendments and/or supplements
hereto shall extend to and inure to the benefit of and be binding upon the Parties, and their respective successors and assigns,
including any purchaser of Producer's interests in the leases that are dedicated W1der this Agreement or subsequent operator of
the Wells and Producer's
Water Facilities and upon any purchaser of Gatherer's Water System, or any part or interest therein which are subject to this Agreement;
provided however, (i) this Agreement shall not be assigned by a Party without the prior written
consent of the other Party, such consent shall not be unreasonably withheld, conditioned
or delayed and (ii) no sale, assignment,
conveyance, or other
transfer (collectively, a "Transfer") of Producer's Leases,
Wells or Producer's Water Facilities, or any part thereof
or interest therein, or
of any part of Gatherer's Water System, shall be made W11ess
the transferee thereof shall assume and agree to be bound
by this Agreement insofar as the same shall affect and relate to Producer' s Leases, the Wells, or Producer 's
Water Facilities, Gatherer's Water System or interests so Transferred. Notwithstanding
the conditions and restrictions set forth on assignment in this Section 8.1, each
Party retains the right to freely assign this Agreement to an Affiliate within the first year following the Effective Date. Interests
owned in the Area of Dedication by a transferee of any of Producer 's
Leases or Wells that were owned prior to the effective date of such Transfer shall not become subject to this Agreement by virtue
of such Transfer. It is further agreed,
however, that nothing herein contained shall in any way prevent a Party hereto from pledging
or mortgaging all or any part of its Leases, Wells,
or Producer's Water
Facilities if Producer, or Gatherer's Water System if Gatherer as security
W1der any mortgage, deed of trust, or other similar lien, or from pledging this Agreement or any
benefits accruing hereW1der to the Party making the pledge, without the assumption of obligations
hereunder by the mortgagee, pledgee or other grantee W1der
such instrument.

 

8.2         No
Third Party Beneficiaries. Nothing in this Agreement, expressed or implied, confers any rights or remedies on any person or entity
not a Party hereto other than successors and assigns of the Parties.

 

    	18 

     

    

 

8.3         Cooperation
Under Related Dedication Agreements. The Parties expressly acknowledge that this Agreement is
one of several agreements executed contemporaneously herewith by Producer, Gatherer, or an
Affiliate of Gatherer pertaining to the gathering or transportation
of crude and gas, and the disposal of
water from the same Leases and Wells and covering the same Area
of Dedication (the "Related
Dedication Agreements "), with certain facilities
to be located, and
services to be provided, under this Agreement in
proximity to those
covered under the Related
Dedication Agreements. The
cooperation and performance by
the Parties and their respective Affiliates
of all of the obligations
under this Agreement and each of the Related Dedication
Agreements is essential for the Parties
to receive the full
benefit of their bargain
under this Agreement and the Related Dedication Agreements. Subject to Force Majeure and any
other applicable provisions under this
Agreement or any Related Dedication Agreement, Gatherer
and each Affiliate of Gatherer which is a party to
a Related Dedication Agreement,
shall construct, install and put into service the
Initial System, pursuant to this
Agreement, and the corresponding crude transportation system and gas gathering system under
the Related Dedication Agreements, in each case,
in their entirety,
as to all of the Initial and Infill Receipt Points together
with any future expansions beyond the Initial System
undertaken pursuant to this Agreement and under
the corresponding provisions of the Related Dedication
Agreements.

 

8.4         Entirety;
Amendment. Subject to Section 8.3,
this Agreement together with the Exhibits
attached hereto, constitutes
the entire agreement and
understanding between the Parties hereto and
supersedes and renders null
and void and of no further force and
effect any prior proposals, understandings, negotiations
or agreements between the Parties relating
to the subject matter hereof,
and all amendments and
letter agreements in
any way relating thereto.
No provision of this Agreement may
be changed, modified,
waived or discharged orally,
and no change, modification,
waiver or amendment
of any provision will be effective except by written instrument
executed by the Parties.

 

8.5         Severability.
Should any part of this Agreement be found to be void, unenforceable
or be required to be
modified by a court or governmental
authority, then only that part of this
Agreement shall be voided, unenforceable , or modified
accordingly. The remainder of this Agreement shall remain
in force and unmodified, subject to Section 6 of the GT&C.

 

8.6         Additional
Water Services; Area of Interest.
In the event Producer desires to construct, install, operate
or perform water delivery, water
management or water quality enhancement field services
or Producer desires water gathering services in
areas of McKenzie
County south of Township 150,
Billings County, or Stark County, North Dakota
("Area of Interest")
(such additional types of locations or
desired services
collectively "Additional
Water Services"), Producer
shall give notice to Gatherer regarding
such Additional Water Services, before soliciting such
Additional Water Services or entering into
any binding agreements with any third parties to perform
such Additional Water Services. The selection of Gatherer or any third party to perform such
Additional Water Services shall be in the sole discretion
of Producer, and the
performance of such Additional Water Services shall be
at customary rates and governed by a separate
agreement containing mutually agreeable terms and conditions.

 

8.7         Audit
Rights.

 

a.           Except
for Actual Construct Costs for
which a process of disclosure and agreement is provided
within Section 1(b) of the
GT&C and Initial System
Costs which are further
addressed in Exhibit "E", upon ten (10) days
prior written notice, either Party shall have the right, at reasonable times during normal business hours, but no more frequently
than once each calendar year, at its own expense, to examine
the books and records of the other Party to the extent necessary to audit and verify the accuracy of any statement,
charge, or computation made under or pursuant to this Agreement. All statements,
allocations, measurement, and payments made in any Accounting Period prior to the twenty-four
(24) Month period preceding the Month in which notice of audit is given by the auditing Party shall be conclusively deemed to be
true and correct and the scope of such audit shall be limited to statements, allocations, measurements
and payments made during such twenty-four (24) Month period.

 

    	19 

     

    

 

b.           The
auditing Party shall have ninety (90) days after commencement of the audit in which to submit a written claim, with supporting
detail, for proposed adjustments. If the auditing Party
fails to submit a written report to the audited Party within the ninety (90) day period, then all statements, charges and computations
made under or pursuant to this Agreement that were within the audit period shall be deemed to be appropriate and accurate.
Upon receipt of an audit report, the audited Party shall have ninety (90) days to make all
recommended adjustments, or to notify the auditing Party that it does not agree and its basis for disagreement. Any unresolved
disagreements shall be resolved pursuant to Section 10 of the GT&C.

 

8.8         Amendment
and Restatement of Original Agreement. Upon execution of this Agreement by Gatherer and Producer, this Agreement shall amend, restate,
supersede, and replace the Original Agreement, including any amendments thereto, in its entirety and for all purposes, effective
as of the Effective Date.

 

8.9         Governing
Law; Venue. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NORTH DAKOTA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EXCLUSIVE VENUE FOR
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY EITHER PARTY
IN CONNECTION WITH THIS AGREEMENT OR ARISING OUT OF THE TERMS OR CONDITIONS HEREOF SHALL BE IN THE CITY AND COUNTY OF DENVER, COLORADO.

 

8.10       Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall constitute an original and all of which,
when construed together, shall constitute one and the same instrument.

 

8.11       Ratification.
Emerald WB LLC hereby ratifies, confirms and approves the Agreement in all respects and adopts it as Emerald WB LLC's act and
deed to the same extent as if the Agreement had been executed by Emerald
WB LLC on the date of its original execution, effective as of the Effective Date.

 

[Signature Page Follows]

 

    	20 

     

    

 

THE PARTIES
HERETO have executed this Agreement effective as of the day and year first above written.

 

	GATHERER	PRODUCER
	 	 
	DAKOTA FLUID SOLUTIONS 	 
	LLC, FORMERLY KNOWN AS	 
	MESA OIL SERVICES, LLC	EMERALD OIL, INC.
	 	 
	By: /s/ Tim Reynolds	By: /s/ McAndrew Rudisill
	 	 
	Name: Tim Reynolds	Name: McAndrew Rudisill
	 	 
	Title: Founding Partner	Title: Chief Executive Officer and President
	 	 
	Date: May 26, 2015	Date: May 26, 2015
	 	 
	 	EMERALD WB LLC
	 	 
	 	By:/s/ McAndrew Rudisill
	 	 
	 	Name:  McAndrew Rudisill
	 	 
	 	Title: President
	 	 
	 	Date: May 26, 2015

 

    	21Exhibit 10.7

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(this “Agreement”) is made and entered into effective as of January 1, 2016 (the “Effective Date”)
by and between Emerald Oil, Inc., a Delaware corporation (the “Company”), and McAndrew Rudisill (“Employee”).

 

WITNESSETH:

 

WHEREAS, the Company
and Employee desire to enter into this Agreement pursuant to which Employee shall provide services to the Company as described
herein.

 

NOW, THEREFORE, in
consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and Employee hereby agree as follows:

 

Section
1. Position, Duties, and Responsibilities; Place of Performance.

 

(a)          During
the Term of Employment (defined below), Employee shall be employed and serve as the Chief Executive Officer and President of the
Company and shall have such duties and responsibilities that are commensurate with such title. The Employee shall report to the
Board of the Company and shall carry out and perform all orders, directions and policies given to Employee by the Board of the
Company consistent with his position and title.

 

(b)          Employee
shall devote his best efforts, energy and time to the performance of his duties under this Agreement and shall not engage in any
other business or occupation during the Term of Employment that materially interferes with Employee’s duties and responsibilities
to serve and act in the Company’s best interests. Notwithstanding the foregoing, nothing herein shall preclude Employee from
(i) serving as a member of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity)
of non-competing businesses, (ii) engaging in charitable activities and community affairs, and (iii) managing his personal investments
and affairs; provided, however, that the activities set out in clauses (i), (ii), and (iii) shall be limited by Employee
so as not to materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder.

 

(c)          The
Company agrees to employ Employee, and Employee agrees to serve the Company, on the terms and conditions set forth herein. The
“Term of Employment” shall mean the period commencing on the Effective Date and, unless terminated sooner as
provided in Section 4 hereof, continuing until December 31, 2016; provided, however, that the Term of Employment shall be extended
automatically following December 31, 2016 for a one (1) year term and thereafter for successive one (1) year terms on the first
anniversary of the then current term if neither the Company nor Employee has advised the other in writing in accordance with Section
10 at least sixty (60) days prior to the end of the then current term that such term will not be extended for an additional one
(1) year term.

 

Section
2.          Compensation. 

 

(a)          Base
Salary. During the Term of Employment, Employee shall be paid an annualized base salary (the “Base Salary”),
payable in United States dollars and less applicable taxes and deductions and in accordance with the regular payroll practices
of the Company, of Four Hundred Fifty Thousand Dollars ($450,000) with increases, if any, as may be approved in writing by the
Compensation Committee. 

 

    	 	 	 

     

    

 

(b)          Annual
Bonus. During the Company’s 2016 fiscal year starting January 1, 2016 and ending December 31, 2016 (and subsequent fiscal
years, as applicable), subject to the satisfaction of applicable performance criteria and any other conditions as determined by
the Compensation Committee, the Employee shall be eligible to receive an annual cash bonus award and annual equity bonus award
(collectively, the “Annual Bonus”) as determined by the Compensation Committee in its sole and absolute discretion.

 

Section
3. Employee Benefits.

 

(a)        General. During
the Term of Employment, Employee shall be entitled to participate in health insurance, retirement plans, directors’ and officers’
insurance coverage and other benefits provided to other senior executives of the Company, as in effect from time to time.

 

(b)       Vacation and Time
Off. During each calendar year of the Term of Employment, Employee shall be eligible for twenty (20) days paid vacation, as
well as sick pay and other paid and unpaid time off in accordance with the policies and practices of the Company, as in effect
from time to time.

 

Section 4.          Termination.

 

(a)        General.
The Term of Employment shall terminate earlier than as provided in Section 1(c) hereof upon the earliest to occur of (i) Employee’s
death, (ii) a termination by reason of a disability, (iii) a termination by the Company, or (iv) a voluntary election by the Employee
to terminate prior to the end of the Term of Employment (in each case, an “Early Termination”). In the event
an Early Termination occurs as a result of (i) Employee’s death, (ii) a termination by reason of a disability, (iii) a termination
by the Company without Cause (defined below), or (iv) a termination by Employee for Good Reason (defined below), then Employee
or his estate or his beneficiaries, as the case may be, shall be entitled to the following:

 

		(i)	All accrued but unpaid Base Salary through the date of
termination of Employee’s employment;

 

		(ii)	Any unpaid or unreimbursed expenses incurred in accordance
with Section 5 below;

 

		(iii)	Any benefits provided under the Company’s employee
benefit plans upon a termination of employment, in accordance with the terms contained therein;

 

		(iv)	The full amount of remaining and unpaid Base Salary that
would have been paid to Employee had Employee served the duration of the Term of Employment;

 

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		(v)	A lump sum cash payment equal to eighteen (18) times
the “applicable percentage” of the monthly COBRA premium cost applicable to Employee if Employee (or his dependents)
were to elect COBRA coverage (“Monthly COBRA Premium”), or similar coverage as provided by similar state law,
in connection with such termination, (for purposes hereof, the “applicable percentage” shall be the percentage of
Employee’s health care premium costs covered by the Company as of the date of termination);

 

		(vi)	Any unpaid Annual Bonus in respect of any completed fiscal
year that has ended prior to the date of such termination with such amount determined based on actual performance during such
fiscal year as determined by the Compensation Committee;

 

		(vii)	Any Annual Bonus that would have been payable based on
actual performance with respect to the year of termination in the absence of the Employee’s termination, death or disability,
pro-rated for the period the Employee worked prior to his termination, death or disability, and payable at the same time as the
bonus would have been paid in the absence of the Employee’s termination, death or disability; and

 

		(viii)	Immediate vesting of any and all equity or equity-related
awards previously awarded to the Employee, irrespective of type of award.

 

		(b)	In the event Employee elects to voluntarily terminate
his employment prior to the end of the Term of Employment without Good Reason, then Employee shall be entitled to the obligations
set forth in Section 4(a)(i), (ii), (iii) and (vi).

 

		(c)	In the event Company terminates Employee for Cause, then
Employee shall be entitled to the obligations set forth in Section 4(a)(i), (ii) and (iii), as well as a lump sum cash payment
equal to twelve (12) times the Monthly COBRA Premium.

 

		(d)	If, upon a Change of Control of the Company or during the eighteen (18)
month period following such Change of Control, Employee is terminated by the Company (or successor entity, as applicable) without Cause or Employee terminates Employee’s employment
with Good Reason, then the Employee shall be entitled to the obligations set forth in Section 4(a)(i), (ii), (iii), (vi), one times
the 2016 Base Salary, and a lump sum cash payment equal to twelve (12) times the Monthly COBRA Premium.

 

		(e)	The amounts payable to Employee under this Section 4
shall be paid within thirty (30) days from the date of such termination.

 

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		(f)	For purposes of this Agreement, “Cause” shall
be defined as (i) a material breach of the terms and conditions of Employee’s employment agreement with the Company, (ii)
Employee’s act(s) of gross negligence or willful misconduct in the course of Employee’s employment hereunder that
is injurious to the Company or any affiliate of the Company, (iii) willful failure or refusal by Employee to perform in any material
respect Employee’s duties or responsibilities, (iv) misappropriation by Employee of any assets of the Company or any or
any affiliate of the Company, (v) embezzlement or fraud committed by Employee, or at Employee’s direction, (vi) Employee’s
conviction of, or pleading “guilty” or “no contest” to a felony under state or federal law.

 

		(g)	For purposes of this Agreement, “Good Reason”
shall mean, without Employee’s consent, (i) a material diminution in Employee’s title, duties, compensation or responsibilities,
(ii) the failure of the Company to pay any compensation hereunder when due or to perform any other obligation of the Company under
this Agreement, or (iii) the relocation of Employee’s principal place of employment by more than fifty (50) miles.

 

		(h)	For purposes of this Agreement, “Change of Control”
shall mean the first to occur of any of the following: (i) “change of control event” with respect to the Company,
within the meaning of Treas. Reg. 1.409A-3(i)(5); or (ii) During any period of two years, individuals who at the beginning of
such period constitute the Board (and any new Director whose election by the Company’s shareholders was approved by a vote
of at least a majority of the Directors then still in office who either were Directors at the beginning of the period or whose
election or nomination for election was so approved) cease for any reason to constitute a majority thereof; or (iii) A merger,
consolidation, or non-bankruptcy reorganization of the Company with or involving any other entity, other than a merger, consolidation,
or non-bankruptcy reorganization that would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity)
at least 50% of the combined voting power of the securities of the Company (or such surviving entity) outstanding immediately
after such merger, consolidation, or non-bankruptcy reorganization.

 

Section
5. Reimbursement of Business Expenses. Employee is authorized to incur reasonable business expenses in carrying out his
duties and responsibilities under this Agreement, and the Company shall promptly reimburse Employee for all such reasonable business
expenses, subject to documentation in accordance with written Company policy, as in effect from time to time.

 

Section
6. Key-Man Insurance. At any time during the Term of Employment, the Company shall have the right to insure the life of
Employee for the sole benefit of the Company, in such amounts, and with such terms, as it may determine. All premiums payable thereon
shall be the obligation of the Company. Employee shall have no interest in any such policy, but agrees to cooperate with the Company
in procuring such insurance by submitting to physical examinations, supplying all information required by the insurance company,
and executing all necessary documents, provided that no financial obligation is imposed on Employee by any such documents. Upon
the termination of his employment for any reason, Company will allow Employee to convert the insurance policy to a permanent personal
life insurance policy.

 

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Section
7. Waiver and Amendments. Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall
be valid only if made in writing and signed by each of the parties hereto. No waiver by either of the parties hereto of their rights
hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such
waiver specifically states that it is to be construed as a continuing waiver.

 

Section
8. Severability. If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by
a final determination of a court of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired,
and (b) the invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof.

 

Section
9. Governing Law. In the event of any dispute under this Agreement, or relating or arising under the employment relationship
(a “Dispute”), this Agreement shall be governed by the laws of the State of Delaware. Each party shall bear
his, her, or its own costs, including attorneys’ fees; provided, however, that nothing herein shall interfere with either
party’s right to seek or receive damages or costs as may be allowed by applicable statutory law (such as, but not necessarily
limited to, reasonable attorneys’ fees).

 

Section
10. Notices.

 

(a) Every notice or other
communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which
it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party
as herein provided; provided, that unless and until some other address be so designated, all notices and communications
by Employee to the Company shall be mailed or delivered to the Company at its principal executive office at 200 Columbine, Suite
500, Denver, Colorado 80206, and all notices and communications by the Company to Employee may be given to Employee personally
or may be mailed to Employee at Employee’s last known address, as reflected in the Company’s records.

 

(b) Any notice so addressed
shall be deemed to be given (i) if delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail,
on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third
business day after the date of such mailing.

 

Section
11. Section Headings; Mutual Drafting.

 

(a) The headings of the
sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof
or affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

(b) The parties are sophisticated
and have been represented (or have had the opportunity to be represented) by their separate attorneys throughout the transactions
contemplated by this Agreement in connection with the negotiation and drafting of this Agreement and any agreements and instruments
executed in connection herewith. As a consequence, the parties do not intend that the presumptions of laws or rules relating to
the interpretation of contracts against the drafter of any particular clause should be applied to this Agreement or any document
or instrument executed in connection herewith, and therefore waive their effects.

 

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Section
12. Entire Agreement. This Agreement, together with any exhibits attached hereto, constitutes the entire understanding and
agreement of the parties hereto regarding the employment of Employee during the Term of Employment. This Agreement supersedes all
prior negotiations, discussions, correspondence, communications, understandings, and agreements between the parties relating to
the employment of Employee during the Term of Employment.

 

Section
13. Dodd-Frank Act and Other Applicable Law Requirements. Employee agrees (i) to abide by any compensation recovery, recoupment,
anti-hedging or other policy applicable to executives of the Company and its Affiliates, as may be in effect from time to time,
as approved by the Board or a duly authorized committee thereof or as required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (“Dodd-Frank Act”) or other applicable law, and (ii) that the terms and conditions of this Agreement
shall be deemed automatically amended as may be necessary from time to time to ensure compliance by Employee and this Agreement
with such policies, the Dodd-Frank Act, or other applicable law.

 

Section
14. Survival of Operative Sections. Upon any termination of Employee’s employment, the provisions of this Agreement
(together with any related definitions set forth in Section 1 hereof) shall survive to the extent necessary to give effect to the
provisions thereof.

 

Section
15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile
signature.

 

[Remainder of Page Intentionally
Left Blank]

 

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IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first above written.

 

	 	COMPANY:
	 	 
	 	EMERALD OIL, INC.
	 	 	 
	 	By:	/s/ Seth Setrakian
	 	Name:  Seth Setrakian
	 	Title:    Chairman of the Compensation Committee
	 	Date:    November 5, 2015
	 	 
	 	EMPLOYEE:
	 	 	 
	 	By:	/s/ McAndrew Rudisill
	 	Name:  McAndrew Rudisill
	 	Title:   Chief Executive Officer and President
	 	Date:   November 5, 2015

 

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