(a) The Parties acknowledge and agree that, as of the Effective Date, Manager may not be able to provide all the Services contemplated hereunder and the Parties intend to transition certain of the Services performed as of the Effective Date from CEP Services Company, Inc. to Manager or its Affiliates.  Accordingly, Manager shall notify Company of the In-Service Date if and when such transition, in Manager’s reasonable determination, has been completed or waived by Manager. The Parties agree that the “ In-Service Date ” shall be the date specified in a Notice given by Manager to Company prior to such date. Each of the Parties acknowledges and agrees that there are a number of contingencies that may affect the actual In-Service Date.  Accordingly, neither Party will have any right or remedy under this Agreement against the other Party if the In-Service Date does not occur or occurs later than any estimated or expected In-Service Date, except that if the In-Service Date has not occurred by December 31, 2014, Manager or Company may terminate this Agreement on 30 days prior Notice to such other Party.

(b) Notwithstanding anything in this Agreement to the contrary, until the In-Service Date, it shall be a condition precedent to Manager’s agreements and obligations under this Agreement that: (i) the Transition Date (as defined in the Transition Agreement) shall have occurred, and (ii) SOG shall have retained a sufficient number of individuals , as determined by Manager, to assist in the performance of the Services , either through the retention of Eligible Employees (as defined in the Transition Agreement) or otherwise .  If any of these conditions precedent is not satisfied to the satisfaction of Manager or waived by Manager, in its sole discretion, Manager shall have the right to terminate this Agreement on 30 days’ written Notice to Company.    

(c)  If this Agreement is terminated pursuant to this   Section 2 , each Party shall be released from any and all obligations under this Agreement, other than for breaches, violations or inaccuracies of any representations, warranties or covenants hereunder prior to termination, covenants which by their nature are intended to survive termination, and under Section 6 (with respect to any accrued but unpaid obligations as of the date of termination or expiration (and including, without limitation, any severance costs incurred prior to or after termination or expiration, as provided in the definition of Overhead Costs)), Section 8(d) ,   Section 8(e) ,   Section 8(f) ,   Section 9 ,   Section 11 ,   Section 12 ,   Section 13 ,   Section 14 ,   Section 15 ,   Section 17 ,   Section 19 ,   Section 22 ,   Section 23 ,   Section 24 ,   Section 25 ,   Section 27 ,   Section 29 and Section 31 hereof, which shall survive such termination (together with Section 1 to the extent applicable).

(d) The business and affairs of Company shall be managed by or under the direction of the Board.

(e) The Board shall have the power and authority to appoint and dismiss such officers with such titles, authority , duties and compensation, if any, to be paid by Company (but not, for the avoidance of doubt, Manager or any other non-Affiliate of Company), as determined by the Board (“ Officers ”).

(f) The authority and functions of the Board, on the one hand, and of the Officers, on the other, shall be specified in the Operating Agreement .

(g) Unless provided otherwise by resolution of the Board, the Officers shall have the titles, power, authority and duties described in the Operating Agreement.  

(h) The Officers shall act on behalf of Company under this Agreement in overseeing the Services provided to Company pursuant to the terms of this Agreement.

(i) Overhead Services .  Manager will provide all general and administrative overhead services and other general and administrative services to Company and its Subsidiaries, including, without limitation, us ing its commercially reasonable efforts , consistent with this Agreement, to provide support as reasonably requested by the Board and the Officers, in accordance with the terms and conditions of this Agreement, to enable the Board and Officers to fulfill their respective functions and duties to Company as contemplated by the Operating Agreement and the Delaware Limited Liability Compa ny Act or any successor statute , including providing such reports as may be reasonably requested by the Board from time to time .

(j) Technical .  Manager will provide in-house geological, geophysical and reserve engineering services that are required to determine the optimum exploration, development and operation of the Properties, including, without limitation, the use and interpretation of any seismic data owned by, licensed to or otherwise available to Manager or Company relating to the Properties.

(k) Lease and Land Administration .  Manager will provide all necessary or useful Lease and land administration services to Company and its Subsidiaries, including, without

limitation, administering all Leases and division orders, and maintaining all land, Lease and other related records, providing associated services, and paying rentals, shut-in payments and other Lease payments.

(l) Marketing and Sale of Hydrocarbons .  Manager will provide all marketing, gas control and contract administration services necessary or useful to sell the Hydrocarbons produced from the Properties on behalf of Company and its Subsidiaries and collect such proceeds as the agent of Company and its Subsidiaries.  Manager shall arrange for the marketing and sale of Hydrocarbons from th e Properties and   shall, among other things use commercially reasonable efforts to (i)  collect all production funds from the purchasers of such Hydrocarbons ,   (ii)  arrange for the timely payment of severance taxes to any Governmental Authorities ,   (iii)  make timely payment to royalty owners and third part y working interest owners, (iv)  pay all required third part y marketing fees and (v) remit to Company and its Subsidiaries their respective net proceeds from the sale of Hydrocarbons after making all necessary or appropriate allocations and distributions in connection with the receipt of such proceeds (including those payments referred to in clauses (ii), (iii) and (iv) above and as contemplated by Section 6(f) ).  Payment of such net proceeds to Company shall be made by Manager   promptly (and in any event within 10 Business Days) after revenues are received by Manager from the purchasers of Hydrocarbons and subsequently processed through Manager’s revenue allocation system.

(m) Accounting .  Manager will perform all revenue and joint interest accounting functions attributable to the Properties, including, without limitation:

(i) royalty and other lease payments,

(ii) payment of accounts payable,

(iii) collection of production proceeds,

(iv) computation and payment of severance and other taxes based on production,

(v) gas balancing, and

(vi) general ledger and financial reporting activities.

(n) Operations .  To the extent any Properties subject to development and operation are not subject to a JOA, Manager will enter into a JOA, or cause (on behalf of Company) a JOA to be entered into with respect to such Properties.

(o) Information Systems .  Manager, in its sole discretion, may utilize Company’s and its Subsidiaries’ existing computers and/or facilities or provide computer use and/or facilities necessary to manage and operate the Properties and maintain the records of Company and its Subsidiaries.

(p) Budgets and Forecasts .

(i) Budget .  At least 30 days before the beginning of each calendar year, Manager will prepare operating and capital budgets and forecasts for Company and its Subsidiaries (the “ Draft Budget ”).  The Draft Budget shall detail the Development Activities planned to be commenced dur ing the relevant calendar   year, which shall specify the amou nts expected to be spent by Company during such calendar y ear to conduct such Development Activities, and to otherwise own its Properties and conduct its business during such calendar   year.  The Board shall approve or reject   the Draft Budget no later than 15 days prior to the start of the calendar   year .  If the Board approves the Draft Budget, the Draft Budget shall be deemed the approved budget (the “ Approved Budget ”) for purposes of this Agreement, until revised in accordance with Section 4(h)(ii) .     If the Board fails to approve a Draft Budget by the commencement of a calendar year, then until a Draft Budget for such calendar year is approved, the Approved Budget submitted by Manager and approved by the Board for the prior calendar year, if any, as adjusted for supplements to such Approved Budget attributable to any subsequent Asset Acquisition(s), including in respect of costs and expenses to the extent incurred pursuant to the contractual obligations of Company, and other costs and expenses approved as provided in this Agreement, together with appropriate cost of living / inflation adjustments, shall be the Approved Budget for the current calendar year until a new Approved Budget is adopted. 

(ii) Approval of Additional Activities .  From time to time prior to the termination of this Agreement, Manager may present to the Board supplemental Development Activities or other activities that Manager proposes to be undertaken by Company and that are not included in the applicable Approved Budget for such calendar year , and revisions to a previously Approved Budget that Manager recommends be adopted by the Board .  If the Board approves such revised b udget, the revised b udget shall be deemed the Approved Budget as used in this Agreement.

(iii) Permitted Overruns .  Manager agrees to use its commercially reasonable efforts to conduct its activities and operations in accordance with the Approved Budget, if any, it being understood and agreed by the Parties that the Approved Budget is to be used as a guideline in conducting activities and operations and not as a limit on amounts payable to or by Manager hereunder; provided, however, that notwithstanding anything herein to the contrary, in no event shall Manager or any of its Affiliates be required to modify their respective method or manner of providing Services (including its method of allocating resources or employees) or reduce or modify the level of management and general and administrative support Services provided hereunder and w henever any provision of this Agreement or Approved Budget permits Manager to make an expenditure or conduct a Development Activity or other operation, or Manager is authorized under this Agreement or otherwise to take any action or to perform a Service, Manager will be permitted to make such expenditure, conduct such Development Activity or other operation, take such action or perform such

Service notwithstanding that there is no Approved Budget for the relevant period (or no budgeted amounts therefor) or the aggregate or any individual expenditures during any Approved Budget period exceed the amount(s) set forth in the Approved Budget for such period for such Development Activity or other operation, action or Service, and Company shall be responsible for all costs and expenses associated therewith (including with respect to costs and expenses associated with Emergencies) in accordance with Section 6(b) , subject to the provisions of Section 9 ;   provided, further , that notwithstanding anything herein to the contrary, Manager, SOG and their other Affiliates shall maintain sole and complete discretion with respect to the retention and dismissal of their respective employees, utilization of such employees to perform Services, and compensation determinations with respect to such employees and, to the extent any related costs and expenses are Overhead Costs, Company shall be responsible therefor in accordance with Section 6(b) , subject to the provisions of Section 9 .  For the avoidance of doubt, in no event shall Company be entitled to challenge or dispute any amounts payable hereunder on the grounds that Manager has not complied with this Section 4(h)(iii) , unless any amount results from any Development Activities or operations on Company’s behalf (other than Emergencies, the general and administrative Services under this Agreement , and Development Activities and operations in accordance with the Approved Budget ) that Company timely directed Manager in writing not to perform or cause to be performed (to the extent within Manager’s control), and such direction would not be in conflict with or cause Manager, an Affiliate of Manager, Company or any Subsidiary to violate or breach any Legal Requirement or contract to which Manager, an Affiliate of Manager, Company or any Subsidiary is a party or under which Manager or its Affiliates may be liable .

(q) Compliance .  Manager will take all actions, file all reports and notices and obtain all necessary Permits to cause the operations of Company   and its Subsidiaries, including with respect to the Properties, to be in compliance with all applicable Legal Requirements in all material respects; provided, however, that   Manager shall not be obligated to undertake any remedial or similar action in regard to such compliance unless Company has previously advanced or otherwise made available to Manager sufficient funds specifically for such use.

(r) Insurance .  Manager will arrange and maintain insurance policies (other than directors and officers liability insurance policies), subject to the terms hereof and, if applicable, the Contract Operating Agreement.

(s) Accounting .  Manager will maintain a general ledger with respect to the business and attendant accounting matters of Company   and its Subsidiaries in accordance with , to the extent applicable, generally accepted accounting principles in all material respects .  Manager shall prepare or assist the Officers in preparing all annual reports, quarterly reports, current reports, proxy statements and other filings required to be filed with or furnished to the Commission by Company.

(t) Bank Accounts .  Manager will maintain and, to the extent required, open bank accounts on behalf of Company and its Subsidiaries (the “ Accounts ”).  Funds of Company held

by Manager shall be employed or applied for the exclusive benefit of Company, except as otherwise provided herein.  Manager shall invest any cash held on behalf of Company only in Permitted Investments and shall hold all such Permitted Investments and any cash in trust on behalf of Company, except as otherwise provided herein.

(u) Acquisition, Disposition and Financing Services .  Manager will assist Company in connection with Transactions; provided, however, that   Manager shall not enter into any agreements with respect to such Transactions without first obtaining approval of the Board or Officers, as appropriate.  No Services shall be required to be rendered by Manager in connection with a Transaction which Manager determines, in its sole discretion, would result in a violation of Legal Requirements or require a Permit not then in the possession of Manager.

(v) Outside Professionals and Other Persons .  Manager will coordinate with and assist the Officers to manage and supervise the outside accountants and attorneys of Company and coordinate the annual audit of Company’s books and records and the preparation of Company’s tax returns (but subject in any event to the ultimate authority of the Board or Officers, as appropriate).  It is understood and agreed by Company that certain of the Services may be provided directly or indirectly by other Persons, including SOG pursuant to the Contract Operating Agreement or otherwise.  Notwithstanding the foregoing, a Management Fee shall be payable hereunder for all such Services, to the extent that such payment is not duplicative of any payments made under the Contract Operating Agreement, License Agreement or a Related Contract, but subject in all cases to Manager’s right to charge the Administrative Fee for all such Services (to the extent performed by SOG), including, without limitation, those performed under the Contract Operating Agreement or other Related Contracts.

(w) Standard of Care .  Manager shall provide the Services in a manner consistent with management and administrative practices that it provides to other Persons or would provide for itself in the performance of services similar to the Services.     To the extent that Manager is permitted to arrange for contracts with t hird p arties for goods and services in connection with the provision of Services, Manager shall use commercially reasonable efforts (i) to obtain such goods and services at rates competitive with those otherwise generally available in the area in which services or materials are to be furnished, and (ii) to obtain from such t hird p arties such customary warranties and guarantees as may be reasonably required with respect to the goods and services so furnished.  In the course of providing the Services, Manager shall use commercially reasonable efforts not to cause any Lien to be imposed upon any of the Properties arising from the provision of Services under this Agreement except as approved by the Board or Officers, as appropriate, and Permitted Liens .

(x) Independent Contractor Relationship .  With respect to its performance of the Services, Manager is an independent contractor, with the authority to control, oversee and direct the performance of the details of, and the means and manner of performance of, the Services   free of control and supervision by Company ,   Company having contracted herein solely for the result of such S ervi ces.  Neither Manager nor any P erson used or employed by Manager shall be deemed for any purpose to be the employee or servant of Company   or any of its Subsidiaries in performance of any work or services, or any part thereof, under this Agreement.  Without

limiting the foregoing, Manager, to the extent applicable when providing Services on behalf of Company and its Subsidiaries, shall (i) maintain proper books and records that show the assets, liabilities and transactions of Company and its Subsidiaries separate from those of any other Person and prepare financial statements of Company and its Subsidiaries in the same manner, (ii)   not commingle the funds received by Manager on behalf of Company and its Subsidiaries with any other Person’s funds, including those of Manager or its Affiliates , except to the extent production funds are received by Manager prior to remitting proceeds to royalty owners, working interest owners, and Company or as otherwise contemplated by this Agreement , and (iii) maintain separate bank accounts belonging only to, or maintained by, Company and its Subsidiaries , subject to Section 6(f) and Section 6(g) .  Nothing in this Agreement shall prohibit Manager and Company from acknowledging to t hird p arties their status as Parties to this Agreement.

(y) No Joint Venture or Partnership .  This Agreement is not intended to and shall not be construed as creating a joint venture, partnership or other association between Company and Manager within the meaning of the common law or under the laws of any state.

(z) Company Information .  It is contemplated by the Parties that, during the t erm of this Agreement ,   Company will be required to provide certain notices, information and data necessary for Manager to perform the Services and its obligations under this Agreement .  Manager shall be permitted to rely on any information or data provided by Company to Manager in connection with the performance of its duties and provision of Services under this Agreement.

(aa) Performance of Services by Company .  The Parties understand and agree that until the In-Service Date, Manager is under no obligation to provide any of the Services.  Notwithstanding the foregoing, Manager may, in its sole discretion, perform any Service contemplated herein to the extent that Company or its Subsidiaries fail to adequately and timely perform such Services or request Manager to provide such Services.

(bb) Performance of Services by Third Part ies .  Subject to the discretion of the Board or Officers, as appropriate, regarding the retention and dismissal of any Person under (i) – (iv) below, the Parties understand and agree that Manager is authorized in the performance of the Services to engage or retain, as agent on Company’s behalf, any necessary third party, including, without limitation, consultants, advisers, accountants, auditors and attorneys , including, without limitation:

(i) reserve engineering consultants or advisers for preparation of reserve engineering reports (but subject in any event to the ultimate authority of the Board);

(ii) accountants and auditors for preparation of financial reporting and information and tax returns (but subject in any event to the ultimate authority of the Board);

(iii) attorneys for issues related directly to the business of Company ;   and

(iv) any agreements with purchasers of H ydrocarbon products produced from the Properties or providers of transportation services for such production .

(cc) Accounts Receivable .  The Parties understand and agree that Manager or an Affiliate thereof, in the performance of the Services, may incur accounts receivable in connection with the management of Properties hereunder or under the Contract Operating Agreement or Related Contract, to the extent Company has operations thereon and non-working interest owners are billed with respect thereto.  In such event, Company shall be billed for such amounts in accordance with the procedures set forth in   Section 6(f)   and receive credit therefor if and to the extent that   third part ies remit payment for such amounts to Manager or such Affiliate directly .  Other than to the extent due to the gross negligence, willful misconduct or fraudulent conduct of Manager, i n no event will Manager or any Affiliate have any liability for any amounts that are not collected from such third part ies.  Any and all payments made to Manager or an Affiliate thereof for reimbursements incurred pursuant to this Section 5(g) shall be in addition to, and not considered to be a part of, the Management Fee to be paid in accordance wit h   Section 6(b) .

(dd) Dealing with Company Assets .  Without limiting any other powers or duties of Manager provided in this Agreement, Manager is hereby authorized, in Company’s name and on its behalf or in the name of Manager but subject to the terms of this Agreement, to execute, deliver, accept, assign, amend, extend, terminate, license or release (all of the foregoing, either manually or electronically), in the ordinary course of Company’s business:

(i) for Company, contracts for the purchase of goods or services wholly or partially including, without limitation, purchase contracts, localization documents, purchase orders, releases for goods or services, licensing agreements or letters of intent or memoranda of understanding associated with negotiations for contracts for the purchase of goods or services;

(ii) certificates, licenses and reports of any nature and permits and other governmental authorizations of any kind and documents related thereto; and

(iii) site access agreements and other documents customary or advisable associated with environmental compliance and control.

(ee) Asset-Based Fee .  Company shall pay to Manager quarterly, for each fiscal quarter, commencing with the fiscal quarter in which the In-Service Date occurs, in arrears, within 20 Business Days after the end of such fiscal quarter (subject to Section 6(f) (ii) ), a fee (the “ Asset-Based Fee ”) equal to the product of (i) 0.375% (expressed as a decimal) and (ii) the Asset-Based Fee Base as of the Calculation Date at the conclusion of such fiscal quarter ;   provided , that the Asset-Based Fee   payable in respect of the quarter in which the   In-Service Date occurs shall be prorated based on the number of days in such quarter after the In-Service Date .  Manager shall provide to the Board, as promptly as practicable before the due date, Manager’s calculation of each Asset-Based Fee due, together with supporting records and documentation therefor.  Company shall provide Manager access to its books and records to the extent necessary for Manager to comply with the foregoing sentence.

(ff) Charge for Services .  In consideration for certain administrative, overhead and other costs incurred by Manager prior to the Effective Date and/or In-Service Date to permit Manager to provide the Services hereunder, Company shall pay Manager a fee totaling $1,000,000.00, of which (i) $500,000.00 shall be paid on the Effective Date and (ii) the remaining $500,000.00 shall be paid on the In-Service Date (or if such date is not a Business Day, on the first Business Day thereafter).  In addition to the foregoing fee payable in accordance with the immediately preceding sentence, and the Transaction Advisory Fee described below, Company shall compensate Manager for the provision of the Services by paying Manager an amount equal to Manager’s Overhead Costs (also referred to herein as the “ Management Fee ”).  T o the extent costs and expenses described under Section II 3 and II 4 of COPAS and any overhead charges described under Section III of COPAS have been allocated to Company or any Subsidiary under COPAS and paid by Company pursuant to the terms of the Contract Operating Agreement ,   Manager shall credit such amounts to Company against the Management Fee, but such amounts shall be subject to the Administrative Fee .

(gg) Transaction Advisory Fee .  Simultaneously with the closing of each Transaction (including, to the extent not previously included in the fee calculation, any subsequent closing or date on which “carried interest” consideration or deferred or earn-out payments are made) ,   Company shall pay to Manager a fee (the “ Transaction Advisory Fee ”) not to exceed 2.00% of the Transaction Value (including with respect to any subsequent closing or date on which “carried interest” consideration or deferred or earn-out payments are made) of such Transaction , each amount to be determined by Manager in its sole discretion .  Manager shall provide to Company , as promptly as practicable before the Board or Officers, as appropriate, considers the applicable Transaction for approval, Manager’s Transaction Advisory Fee(s) .

(hh) Taxes .  In addition to the other sums payable under this Agreement, Company shall pay, and hold Manager harmless against, all sales, use or other taxes, or other fees or assessments imposed by any Legal Requirement in connection with the provision of the Services, other than income, franchise or margin taxes measured by Manager’s net income or margin and

any gross receipts of other privilege taxes imposed on Manager.  Manager and Company shall cooperate with each other and use commercially reasonable efforts to assist the other in entering into such arrangements as the other may reasonably request in order to minimize, to the extent lawful and feasible, the payment or assessment of any taxes relating to the transactions contemplated by this Agreement; provided, however, that   nothing in this Section 6(d) shall obligate either Party to cooperate with, or assist, the other Party in any arrangement proposed by the other Party that would, as determined by such Party in such Party’s sole discretion, have a detrimental effect on such Party.

(ii) Audit Rights .  At all times during the term of this Agreement, Manager shall maintain books of account, receipts, disbursements, Permits and all other records relating to the Services performed hereunder (the “ Records ” ) , and all accounting Records shall be maintained in all material respects in accordance with generally accepted accounting principles.  Company shall have the right, upon 30 days’ prior Notice to Manager , and at reasonable times during usual business hours of Manager or its Affiliate s to , no more than twice per year,   audit the Records ;   provided, however, that   such audit does not unreasonably interfere with the operations of Manager or its Affiliates.  Company shall bear all costs and expenses incurred in connection with any audit.  Manager shall, and shall ca use its Affiliate s to, subject to the provisions of Section 6(h) ,   review and respond in a timely manner to any claims or inquiries made by Company regarding matters revealed by any such audit .   Notwithstanding anything herein to the contrary, Manager shall not be obligated to disclose or make available to Company any information prohibited by Legal Requirement or restricted by contractual obligations of confidentiality.   This Section 6 (e)   shall survive termination or expiration of this Agreement for a period of two years from termination o r expiration with respect to periods prior to such termination or expiration.

(jj) Invoicing and Payment; Issuance of Company Securities .

(i) Manager may invoice Company from time to time, including, without limitation, advance requests for the current month’s estimated costs , fees, and expenses, as determined by Manager in its sole discretion .  Any over or under payments will be reconciled in subsequent invoices with appropriate credits or deductions, as applicable.  Company sha ll pay invoiced amounts promptly, and in any event within 10 days, after the receipt of each such invoice.  Notwithstanding the foregoing or anything else in this Agreement to the contrary , Manager may elect to retain proceeds that it receives on behalf of Company to the extent it would otherwise invoice Company for such amounts and in such event it shall show any such retained amounts as a credit on such invoice.   Failure by Manager to submit an invoice for any amounts due hereunder shall not relieve Company of its payment obligations under this Agreement when due hereunder.

(ii) Manager may elect to receive (a) the $1,000,000.00 fee described in Section 6(b) , (b) the Asset Based Fee for a fiscal quarter and (c) any Transaction Advisory Fee, in each case, that has not been paid, in any series or class of Member Interest (including any Common Units or Class A Units (as each such term is defined in the Operating Agreement)) selected by Manager with a per interest/unit value based upon, in the case of Common Units, the average closing price per unit on the principal National Securities Exchange (as defined in the

Operating Agreement) on which the Common Units are listed or traded for the 30 Trading Days (as defined in the Operating Agreement) preceding the date the Equity Election Notice is sent, as specified in such Notice, or if not Common Units or otherwise traded on a National Securities Exchange, based on the fair market value thereof, as determined by Manager and the Board (or, in the event of a dispute, by an Independent Appraiser, subject in each such case to Section 6(h) ).  To exercise the right specified in this Section 6(f)(ii) , Manager shall deliver Notice of its election (the “ Equity Election Notice ”) to the Board. Any such election must be made before payment of the $1,000,000.00 fee described in Section 6(b) ,   the Asset Based Fee in respect of the relevant fiscal quarter or the Transaction Advisory Fee, as applicable, and will be effective as of the first day of such fiscal quarter.  Manager will be entitled to receive such Member Interests no later than 20 Business Days after commencement of the relevant fiscal quarter or receipt by Company of the Equity Election Notice, whichever is later; provided , however, that the issuance of Member Interests to Manager shall not occur prior to the approval of (i) the listing or admission for trading of such Member Interests (or the Member Interests into which such Member Interests are convertible, as the case may be) by the principal National Securities Exchange upon which such Member Interests are then listed or admitted for trading, (ii) the issuance of any series or class of Member Interests, if any such approval is required pursuant to the rules and regulations of such National Securities Exchange or the Operating Agreement, respectively and (iii) the Board, if required by applicable Legal Requirements or the Operating Agreement.  If such approvals have not been obtained on or before the 30th calendar day following the Board’s receipt of the Equity Election Notice and such approvals are required for the issuance of such Member Interests, then Manager shall have the right to either rescind the election to receive Member Interests or elect to receive other Company securities having such terms as the Parties may approve that do not require such approvals, that will provide (i) the same economic value, in the aggregate, as such Member Interests specified in the Equity Election Notice would have had at the time of the Board’s receipt of the Equity Election Notice, as determined by the Parties, and (ii) if desired by Manager, and conditioned upon the receipt of any approval from Company’s unitholders to the extent required pursuant to the rules and regulations of the principal National Securities Exchange upon which such Member Interests are then listed or admitted for trading, for the subsequent conversion of such Company securities into Common Units within not more than 12 months following the Board’s receipt of the Equity Election Notice upon the satisfaction of one or more conditions that are acceptable to the Parties.  Company agrees not to take any action, including amending the Operating Agreement, that would restrict or prohibit Manager from making an Equity Election Notice hereunder or under Section 8(f) or Company from complying with an Equity Election Notice, other than as contemplated by Amendment No. 5 to the Operating Agreement at the request of the Class Z Member (as defined therein), and other than in connection with the issuance of the new Member Interests referred to in Exhibit A .

(kk) Account Access .     In addition to the foregoing, Manager may pay (i) all costs and expenses incurred in connection with its performance of the Services and (ii) all financial obligations of Company or its Subsidiaries that may be due and owing either out of the Accounts or out of its own funds; provided, however, that   Company shall fully reimburse Manager for any and all costs and expenses Manager pays out of its own funds pursuant to Section 6(g) .  Company shall ensure that Manager is duly authorized to draw upon all of the Accounts (and shall make all necessary arrangements with its financial institution(s)) for purposes of permitting Manager to pay (or reimburse itself for) any costs, expenses or fees due and owing to Manager hereunder, as determined by Manager.  In the event Manager reasonably anticipates that the funds in the Accounts are not sufficient to pay (or reimburse itself for) any costs, expenses or fees due for any month or other period, then Manager shall request Company to cause sufficient funds to be deposited in the Accounts to cover all such anticipated costs, expenses and fees and shall provide Company with reasonable documentation to support such request.  Company shall cause such funds to be deposited in the Accounts within 15 days of Manager’s request; it being understood that if Company fails to make such deposits, Manager shall not be liable in any manner for any costs, expenses or other liabilities Company, its Subsidiaries or Manager may incur as a result of Company’s failure to timely deposit such funds.  Notwithstanding anything to the contrary contained herein, Manager shall have no obligation to pay any costs and expenses referenced above out of its own funds (and seek reimbursement from Company), it being intended instead that Company, at Manager’s request, will ensure that the funds to pay such costs and expenses are deposited in the Accounts as described above.

(ll) Disputed Charges .

(i) THE BOARD MAY, ONLY WITHIN 180 DAYS AFTER PAYMENT, RECEIPT OF AN INVOICE FROM MAN A GER OR WITHDRAWAL BY MANAGER FROM THE ACCOUNTS ,   AS APPLICABLE, TAKE WRITTEN EXCEPTION TO ANY CHARGE, ON THE GROUND THAT THE SAME WAS NOT A N   ACTUAL   (OR, IF APPLICABLE, REASONABLE) COST , FEE OR EXPENSE INCURRED BY OR DUE TO MANAGER , OR ON ACCOUNT OF ANY ERROR OR INACCURACY ON ANY INVOICE .  WITH RESPECT TO ANY INVOICES, PAYMENTS OR WITHDRAWALS MADE IN ADVANCE OF THE PERFORMANCE OF ANY SERVICES, INCURRENCE OF EXPENSES OR SATISFACTION OF CONDITIONS NECESSARY TO DETERMINE THE AMOUNT OF ANY FEES PAYABLE HEREUNDER, SUCH 180 DAY PERIOD SHALL COMMENCE UPON THE CONCLUSION OF THE MONTH IN WHICH SUCH SERVICES WERE RENDERED, EXPENSES INCURRED OR THE SATISFACTION OF ALL CONDITIONS NECESSARY TO DETERMINE THE AMOUNT OF SUCH FEE(S), AS THE CASE MAY BE.  COMPANY SHALL NEVERTHELESS PAY MANAGER ANY INVOICED OR OTHER AMOUNT IN FULL WHEN DUE OR REQUESTED, OR DEPOSIT SUCH AMOUNTS INTO THE ACCOUNTS WHEN SO REQUESTED FOR WITHDRAWAL BY MANAGER.  SUCH PAYMENT OR DEPOSIT SHALL NOT BE DEEMED A WAIVER OF THE RIGHT OF COMPANY TO RECOUP OR RECEIVE CREDIT FOR ANY CONTESTED PORTION OF ANY AMOUNT SO PAID.  IF THE AMOUNT AS TO WHICH

SUCH WRITTEN EXCEPTION IS TAKEN, OR ANY PART THEREOF, IS ULTIMATELY DETERMINED NOT TO BE A N ACTUAL (OR, IF APPLICABLE, REASONABLE) COST , FEE OR EXPENSE INCURRED BY OR DUE MANAGER, OR IS OTHERWISE AN ERROR OR INACCURACY, SUCH AMOUNT OR PORTION THEREOF (AS THE CASE MAY BE) SHALL BE CREDITED AGAINST FUTURE AMOUNTS DUE HEREUNDER OR, UPON EXPIRATION OR TERMINATION OF THIS AGREEMENT AFTER ALL SUCH CREDITS HAVE BEEN APPLIED, REFUNDED BY MANAGER TO COMPANY .   COMPANY SHALL HAVE NO RIGHT TO DISPUTE ANY PAYMENT, INVOICE OR WITHDRAWAL AFTER SUCH 180 DAY PERIOD, AND SHALL BE DEEMED TO HAVE WAIVED ANY CLAIMS OR RIGHTS WITH RESPECT TO SUCH AMOUNTS TO THE EXTENT NOT DISPUTED WITHIN SUCH PERIOD.

(ii) If, within 20 days after receipt of any written exception pursuant to Section 6(h) (i) , the Board and Manager have been unable to resolve any dispute, either of the Board or Manager may submit the dispute to an Independent Appraiser (in the case of disagreements with respect to valuation matters, as provided in the definitions of “Asset-Based Fee Base,” “Contract Purchase Price,” “Contract Sales Price,” and “Independent Appraiser,” and in Section 6(f)(ii) ) or an independent third party auditing firm (with respect to any other matter) that is mutually agreeable to the Board, on the one hand, and Manager, on the other hand, as applicable.  If an auditing firm is used to resolve the dispute and the Parties are unable to agree on an independent third part y auditing firm 15 days after a matter is to have been submitted to an independent third party auditing firm , within seven days after the end of such 15 day period, each Party shall submit the names of three firms that have no prior material relationship with such Party , and each Party shall be entitled to strike one name from the other Party’s list of firms, and the independent third party auditing firm shall be selected by lot from the remaining firms.  The Parties shall cooperate with such Independent Appraiser or auditing firm and shall provide such Independent Appraiser or auditing firm access to such books and records as may be reasonably necessary to permit a determination by such Independent Appraiser or auditing firm.  The resolution by such Independent Appraiser or auditing firm shall be final and binding on the Parties.

(mm) Audit Rights of Manager .  Manager shall have the right, upon 30 days’ prior Notice to Company , and at reasonable times during usual business hours of Company or its Affiliate s to , no more than twice per year,   audit Company’s records to confirm the appropriate amounts due to Manager under this Agreement ;   provided, however, that   such audit does not unreasonably interfere with the operations of Company or its Affiliates.  Manager shall bear all costs and expenses incurred in connection with any audit.  Company shall, and shall ca use its Affiliate s to, review and respond in a timely manner to any claims or inquiries made by Manager regarding matters revealed by any such audit .  Notwithstanding anything herein to the contrary, Company shall not be obligated to disclose or make available to Manager any information prohibited by Legal Requirements or restricted by contractual obligations of confidentiality.   This Section 6 (i)   shall survive termination or expiration of this Agreement for a period of two years

from the date of termination of expiration with respect to periods prior to such termination or expiration.

(nn) New Interests .  On or before the first Asset Acquisition after the Effective Date, Company shall issue to Manager or its designee, free and clear of all Liens (except those Liens arising under applicable securities laws and under the Operating Agreement), the New Interests pursuant to an amendment to the Operating Agreement, a purchase agreement and other ancillary documents in form and substance acceptable to Manager.  Company acknowledges and agrees that Manager would be damaged irreparably if Company’s obligations under this Section 6(j) are not perf ormed in accordance with their specific terms or are otherwise breached. Accordingly, Company agrees that Manager will be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Section 6(j)   and to enforce specifically this Section 6(j)   and its terms and provisions in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other remedy to which it may be entitled, at law or in equity.

(oo) Company Representations .  Company represents and warrants to Manager, as of the Effective Date, as follows:

(i) Organization; Requisite Power and Authority .  Company (a) is, together with each Subsidiary, validly existing and in good standing under the laws of the State of Delaware or other applicable jurisdiction of organization or formation, as the case may be, and (b) has all requisite power and authority, and is duly authorized, to enter into this Agreement and to carry out the transactions contemplated hereby .

(ii) Due Authorization .  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary action, including by Special Approval (as defined in the Operating Agreement), on the part of Company .

(iii) No Conflict .  The execution, delivery and performance by Company of this Agreement and the consummation of the transactions contemplated by this Agreement do not (a) violate in any material respect any provision of any Legal Requirement applicable to Company or any Subsidiary, or violate its certificate of formation or Operating Agreement (or similar organizational documents, as the case may be) or any order, judgment or decree of any court or other Governmental Authority binding on Company or any Subsidiary; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material Company Contractual Obligation; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of Company or any Subsidiary or result in the acceleration of any indebtedness owed by Company or any Subsidiary; (d) result in any default, noncompliance, suspension, revocation, impairment, forfeiture or

nonrenewal of any Permit material to Company’s or any Subsidiary’s operations or any of its properties; or (e) require any approval of equityholders or any approval or consent of any Person under any Company Contractual Obligation or the certificate of formation of Company or the Operating Agreement (or similar organizational documents, as the case may be) of Company or any Subsidiary, except in the case of each of the foregoing clauses for such approvals or consents which have been obtained or are otherwise contemplated by this Agreement .

(iv) Binding Obligation .  This Agreement has been duly executed and delivered by Company and is the legal, valid and binding obligation of Company, enforceable against Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability (whether enforcement is sought in equity or at law) .

(pp) Manager Representations .  Manager represents and warrants to Company, as of the Effective Date, as follows:

(i) Organization; Requisite Power and Authority .  Manager (a) is validly existing and in good standing under the laws of the State of Texas   and (b) has all requisite power and authority,   and is duly authorized, to enter into this Agreement and to carry out the transactions contemplated hereby.

(ii) Due Authorization .  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary action on the part of Manager.

(iii) No Conflict .  The execution, delivery and performance by Manager of this Agreement and the consummation of the transactions contemplated by this Agreement do not (a) violate in any material respect any provision of any Legal Requirement applicable to Manager, or violate its certificate of formation or limited liability company agreement or any order, judgment or decree of any court or other Governmental Authority binding on Manager; (b) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, any material contract or agreement to which Manager is a party or by which its assets are bound; (c) result in, or require the creation or imposition of, any Lien upon any of the properties or assets of Manager or result in the acceleration of any indebtedness owed by Manager; (d) result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any Permit material to Manager’s operations or any of its properties; or (e) require any approval of equityholders or any approval or consent of any Person under any contract or agreement to which Manager is a party or by which its assets are bound or the certificate of formation o r limited liability company agreement of Manager, except for such approvals or consents which have been obtained or otherwise contemplated by this Agreement.

(iv) Binding Obligation .  This Agreement has been duly executed and delivered by Manager and is the legal, valid and binding obligation of Manager , enforceable against Manager in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability (whether enforcement is sought in equity or at law).

(qq) Covenants of Manager .  Except for the transactions described in this Agreement (including, without limitation, those described in Section 4(d) ), Manager covenants and agrees with Company as follows:

(i) Manager will not commingle its assets with those of Company   or its Subsidiaries, except to the extent production funds are received by Manager prior to remitting proceeds to royalty owners, working interest owners, and Company or as otherwise contemplated by this Agreement.

(ii) Manager will not hold title to any assets owned by Company or its Subsidiaries and will cause each of Company and its Subsidiaries to hold its assets in its own name.

(iii) Manager will maintain separate accounts, financial statements, books and records from those of Company or its Subsidiaries.

(iv) Manager shall use commercially reasonable efforts to make Persons available to serve as Officers of Company if approved by the Board.

(v) Manager will notify Company of any Change of Control of Manager within 10 Business Days of such Change of Control.

(vi) Manager will comply with applicable Legal Requirements in all material respects in its performance of the Services.

(rr) Term .  This Agreement will take effect and become binding on the Parties as of the Effective Date, subject to Section 2 .  Subject to Section 2 , the respective rights, duties, and obligations of the Parties hereunder shall commence on the Effective Date and shall, unless terminated as provided herein, (i ) continue initially until May 8, 2024 , (ii ) be renewed and shall continue automatically thereafter for an additional 10 year term unless both Manager and Company provides Notice to the other Party of its desire not to renew this Agreement at least 180 days prior to May 8, 2024, and (iii) be renewed and shall continue automatically thereafter for additional one year terms unless either Party provides Notice to the other Party hereto of its desire not to renew this Agreement at least 180 days prior to such anniversary date . Notwithstanding the foregoing,   Manager or Company may terminate this Agreement at any time after the 24-month anniversary of the In-Service Date by giving Notice of termination to the other Party at least 180 days prior to the date as of which such termination is to be effective ;   provided , further , that Manager may terminate this Agreement at any time on or after termination

or expiration of the Transition Agreement, effective no earlier than 180 days after Manager provides Notice to Company of Manager’s desire to so terminate .  

(ss) Termination by Manager .  This Agreement may be terminated at any time by Manager upon Company’s material breach of this Agreement, if (i) such breach is not remedied within 60 days (or 30 days in the event of a failure to make any payment hereunder, which shall be deemed a material breach hereunder) after Company’s receipt of Notice thereof, or such longer period (except for a material breach arising out of a failure to make payment hereunder) as is reasonably required to cure such breach; provided, however, that   Company commences to cure such breach within the applicable period and proceeds with due diligence to cure such breach, and (ii) such breach is continuing at the time Notice of termination is delivered to Company.

(tt) Termination by Company .  This Agreement may be terminated at any time by Company, subject to approval of the Board, only upon (i) Manager’s material breach of this Agreement, if (A) such breach is not remedied within 60 days after Manager’s receipt of Notice thereof, or such longer period as is reasonably required to cure such breach; provided, however, that   Manager commences to cure such breach within the applicable period and proceeds with due diligence to cure such breach, and (B) such breach is continuing at the time Notice of termination is delivered to Manager, (ii) a Change of Control of Manager, if (A) Company provides Notice of its desire to terminate this Agreement within five Business Days after receiving Notice of such Change in Control, and (B) Company pays the estimated termination payments required to be paid by Company pursuant to Section 8(f) at the time it delivers its termination Notice (as estimated by Manager in its reasonable discretion) and Company and/or Manager, as the case may be, shall make any additional payments (in the case of Company) or shall make any refunds (in the case of Manager) of termination payments due under Section 8(f) within 30 days of termination.

(uu) Return of Records .  Upon the termination or expiration of this Agreement , subject to the License Agreement and the Transition Agreement, Manager shall deliver to Company as promptly as reasonably possible, all records, reports, books, data and other material(s) related to Company or any of its Subsidiaries, the Properties or the performance of the Services to the extent such materials constitute Confidential Information of Company or Subsidiary books and records maintained by Manager on behalf of such Persons and, in each case, that do not constitute Manager Confidential Information, Operator Confidential Information (as defined in the Contract Operating Agreement), or Data or Derivatives (as defined in the License Agreement) and are in the possession of Manager and its Affiliates.

(vv) Transition Services .  If this Agreement is terminated other than pursuant to Section 8(b) ,   Manager shall, until the effective d ate of termination , continue to provide the Services (and shall be compensated therefor as provided herein) in accordance with this Agreement and upon request from the Board or Officers, as appropriate, will reasonably cooperate with Company in the transition of such S ervices to a new manager appointed by Company by using commercially reasonable efforts to facilitate the transfer of opera tions and the management of Properties to the successor manager .

(ww) Termination Payment .    

(i) In the event this Agreement is terminated or expires for any reason other than (A) under the second sentence of Section 8(a) or by Company under Section 8(c) , (B) by Manager for failure of the conditions precedent set forth in Section 2 , or (C) by Manager or Company if the In-Service Date has not occurred by the date specified in Section 2(a) , then, within 30 days of termination or expiration of this Agreement, Company shall pay to Manager, in addition to the amount described in Section 8(f)(ii) , an amount equal to $ 5, 0 00,000.00 plus the product of (x) 5.00% and (y) the aggregate Transaction Value of all Asset Acquisitions that have been consummated on or before the date on which termination or expiration became effective.

(ii) Notwithstanding anything herein to the contrary, in the event of expiration or termination of this Agreement for any reason, each Party shall pay to the other Party any accrued but unpaid obligations of such Party as of the date of termination or expiration, in addition to any severance costs incurred by Manager and its Affiliates prior to or after termination or expiration, as provided in the definition of Overhead Costs.  

(iii) Further, if this Agreement is terminated by Company under Section 8(a) after the 24-month anniversary of the In-Service Date on 180 d ays ' Notice, as specified therein, in addition to the payment under Section 8(f)(i) and the payment of any severance costs incurred prior to or after such termination , as provided in the definition of Overhead Costs and Section 8(f)(ii) , Company shall also be required to pay all other fixed and variable, direct and indirect costs and expenses incurred by Manager, prior to or after termination, as estimated by Manager, that result or will result from such termination of this Agreement, upon the later to occur of (A) the payments contemplated above and (B) 10 Business Days after Manager furnishes to Company an invoice therefor supported by reasonable documentation thereof .    

(iv) Within 10 Business Days of termination or expiration of this Agreement, Manager may elect to receive the payment due under this Section 8(f) in Member Interests, effective as of the date of termination or expiration, by no later than the 30 th day following termination or expiration (or in the case of expenses effective 10 Business Days after Company’s receipt of the invoice therefor accompanied by reasonable supporting documentation therefor), in accordance with and subject to the provisions set forth in Section 6(f) (ii) , by providing Company with an Equity Election Notice within the initial 10 Business Day period following termination or expiration of this Agreement.

(xx) Limitation of Manager Party Liability .  Notwithstanding Manager’s agreement to perform, or cause to be performed, the Services in accordance with the provisions hereof, Company acknowledges, on its own behalf and on behalf of its Subsidiaries, that performance by Manager or any other Person of Services pursuant to this Agreement will not subject Manager, its Affiliates or their respective equity holders, directors, officers, members, agents or employees

(each, a “ Manager Party ”) to any Losses whatsoever (including, without limitation, any Losses arising under a JOA due to the breach or default by a third party under such JOA), except as directly caused by the gross negligence, willful misconduct or fraudulent conduct on the part of such Manager Party; provided, however, that   Manager’s and each other Manager Party’s aggregate liability, collectively, as a result of such gross negligence, willful misconduct or fraudulent conduct within any 12 month period under this Agreement and any Related Contracts entered into as of the Effective Date will be limited to an amount not to exceed the aggregate Management Fee, Transaction Advisory Fee and Asset-Based Fee paid by Company to Manager during the preceding 12 months; provided, however , that if any of such Losses are covered by any insurance policy of Company, the aggregate liability of such Manager Party with respect to such Losses shall be reduced by the amount recovered by Company under such policy in respect of such Losses .

(yy) Company Indemnification .  EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, COMPANY, ON ITS OWN BEHALF AND ON BEHALF OF ITS SUBSIDIARIES, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS EACH MANAGER PARTY FROM ANY AND ALL LOSSES ARISING FROM, IN CONNECTION WITH, OR RELATING TO (I) THE PROVISION OR USE OF ANY SERVICE OR PRODUCT PROVIDED HEREUNDER, TO THE EXTENT NOT DIRECTLY CAUSED BY THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT OF SUCH MANAGER PARTY AND (II) ANY MATERIAL BREACH, VIOLATION OR INACCURACY OF ANY COVENANT, REPRESENTATION OR WARRANTY OF COMPANY OR ITS AFFILIATES HEREUNDER.    

(zz) Company Special Indemnification .  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, COMPANY SHALL REIMBURSE EACH MANAGER PARTY WITHIN 10 DAYS OF RECEIPT FOR ANY REASONABLE, DOCUMENTED, OUT-OF-POCKET LEGAL OR PROFESSIONAL FEES AND EXPENSES (PROVIDED THAT, THE MANAGER PARTIES SHALL NOT BE REQUIRED TO PROVIDE COPIES OF ANY DETAILED TIME ENTRIES OR INFORMATION THAT MAY BE ATTORNEY-CLIENT PRIVILEGED) INCURRED IN THE EVALUATION, DEFENSE OR SETTLEMENT OF ANY AND ALL CLAIMS OF THIRD PARTIES THAT HOLD OR OWN ANY SECURITIES OF COMPANY AS OF THE EFFECTIVE DATE IN ANY WAY ARISING FROM, OUT OF OR IN CONNECTION WITH, OR OTHERWISE RELATING TO, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING WITHOUT LIMITATION THE TRANSACTIONS AND AGREEMENTS REFERRED TO IN SECTION 6(j) ) , THE CONTRACT OPERATING AGREEMENT, THE TRANSITION AGREEMENT, THE LICENSE AGREEMENT, AND ANY OTHER RELATED CONTRACTS EXECUTED AND DELIVERED ON THE EFFECTIVE DATE EXCEPT AS MAY BE AGREED IN WRITING BY THE PARTIES OR TO THE EXTENT SPECIFICALLY COMMUNICATED TO COMPANY IN WRITING BY MANAGER .

(aaa) Manager Indemnification .  EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT AND SUBJECT TO THE PROVISIONS OF SECTION 9 (a) and   SECTION   9(c) , MANAGER HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS COMPANY AND ITS SUBSIDIARIES AND AFFILIATES AND EACH OF THEIR RESPECTIVE EQUITY HOLDERS, MANAGERS, OFFICERS, UNITHOLDERS, AGENTS

AND EMPLOYEES FROM ANY AND ALL LOSSES TO THE EXTENT ARISING FROM, IN CONNECTION WITH, OR RELATING TO A MANAGER PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT IN MANAGER’S PERFORMANCE OF THE SERVICES.

(bbb) Negligence; Strict Liability .  EXCEPT AS EXPRESSLY PROVIDED IN SECTION 9(b) ,   SECTION 9(c) AND SECTION  9 (f)(iv) , THE INDEMNITY OBLIGATION IN SECTION 9(b) , SECTION 9(c)   AND SECTION 9 (f)(iv)   SHALL APPLY REGARDLESS OF CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS (INCLUDING, WITHOUT LIMITATION, SOLE NEGLIGENCE, CONCURRENT NEGLIGENCE OR STRICT LIABILITY), BREACH OF DUTY (STATUTORY OR OTHERWISE), VIOLATION OF LAW OR OTHER FAULT OF ANY INDEMNIFIED PERSON OR ANY PRE-EXISTING DEFECT; PROVIDED, HOWEVER, THAT   SOLELY WITH RESPECT TO SECTION 9(b) , THIS PROVISION SHALL NOT APPLY TO THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT OF ANY INDEMNIFIED PERSON OR IN ANY WAY LIMIT OR ALTER ANY QUALIFICATIONS SET FORTH IN SUCH INDEMNITY OBLIGATION EXPRESSLY RELATING TO GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT.  BOTH PARTIES AGREE THAT THIS STATEMENT COMPLIES WITH THE REQUIREMENT KNOWN AS THE “EXPRESS NEGLIGENCE RULE” TO EXPRESSLY STATE IN A CONSPICUOUS MANNER AND TO AFFORD FAIR AND ADEQUATE NOTICE THAT THIS AGREEMENT HAS PROVISIONS REQUIRING ONE PARTY TO BE RESPONSIBLE FOR THE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANOTHER PARTY.

(ccc) Exclusion of Damages; Disclaimers .

(i) NO PARTY SHALL BE LIABLE TO ANY OTHER PERSON UNDER THIS AGREEMENT OR FOR EXEMPLARY, PUNITIVE, CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM IN WHICH ANY ACTION IS BROUGHT; PROVIDED, HOWEVER, THAT   THIS SECTION  9(e)(i) SHALL NOT LIMIT A PARTY’S RIGHT TO RECOVERY UNDER SECTION 9(b) OR SECTION 9(f) (iv) FOR ANY DAMAGES TO THE EXTENT SUCH PARTY IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A MATTER FOR WHICH SUCH PARTY IS OTHERWISE ENTITLED TO INDEMNIFICATION UNDER SECTION 9(b) OR   SECTION 9(f) (iv) , AS THE CASE MAY BE.

(ii) OTHER THAN AS SET FORTH IN SECTION 5(a) HEREOF, MANAGER DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO SERVICES RENDERED OR PRODUCTS PROCURED FOR COMPANY OR ITS SUBSIDIARIES, OR ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, ANY AND ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY PURPOSE (WHETHER MANAGER

KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.

(iii) MANAGER MAKES NO EXPRESS OR IMPLIED WARRANTY, GUARANTY OR REPRESENTATION, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR PARTICULAR PURPOSE, SUITABILITY OR MERCHANTABILITY REGARDING ANY EQUIPMENT, MATERIALS, SUPPLIES OR SERVICES ACQUIRED FROM VENDORS, SUPPLIERS OR SUBCONTRACTORS .  COMPANY’S AND ITS SUBSIDIARIES’ EXCLUSIVE REMEDIES WITH RESPECT TO EQUIPMENT, MATERIALS, SUPPLIES OR SERVICES OBTAINED BY MANAGER FROM VENDORS, SUPPLIERS AND SUBCONTRACTORS SHALL BE THOSE UNDER THE VENDOR, SUPPLI ER AND SUBCONTRACTOR WARRANTIES, IF ANY, A ND MANAGER’S ONLY OBLIGATION, ARISING OUT OF OR IN CONNECTION WITH ANY SUCH WARRANTY OR BREACH THEREOF, SHALL BE TO USE DILIGENT EFFORTS TO ENFORCE SUCH WARRANTIES ON BEHALF OF COMPANY, AND COMPANY (AND ITS SUBSIDIARIES) SHALL HAVE NO OTHER REMEDIES AGAINST MANAGER WITH RESPECT TO EQUIPMENT, MATERIALS, SUPPLIES OR SERVICES OBTAINED BY MANAGER FROM ITS VENDORS, SUPPLIERS AND SUBCONTRACTORS.

(iv) COMPANY, ON ITS OWN BEHALF AND ON BEHALF OF EACH SUBSIDIARY, ACKNOWLEDGES AND AGREES THAT MANAGER AND/OR SOG MAY UTILIZE COMPANY OR SUBSIDIARY EMPLOYEES FOR THE PROVISION OF, OR ASSISTING IN PROVIDING, THE SERVICES HEREUNDER.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL ANY MANAGER PARTY HAVE ANY LIABILITY OR BE RESPONSIBLE FOR ANY LOSSES ARISING FROM THE ACTS OR OMISSIONS OF COMPANY OR SUBSIDIARY EMPLOYEES, REGARDLESS OF THE NEGLIGENCE, GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT OF ANY MANAGER PARTY, AND COMPANY SHALL INDEMNIFY, DEFEND AND HOLD EACH MANAGER PARTY HARMLESS FROM ANY LOSSES RESULTING OR ARISING FROM ANY SUCH ACTS OR OMISSIONS.  COMPANY, ON ITS OWN BEHALF AND ON BEHALF OF EACH SUBSIDIARY, FURTHER ACKNOWLEDGES THAT MANAGER SHALL HAVE NO RESPONSIBILITY OR LIABILITY FOR FAILURE TO PROVIDE SERVICES TO THE EXTENT COMPANY OR SUBSIDIARY EMPLOYEES ARE UTILIZED OR FOR ENSURING ANY LEVEL OF SERVICE OR QUALITY FROM ANY COMPANY OR SUBSIDIARY EMPLOYEE, IT BEING UNDERSTOOD COMPANY OR SUCH SUBSIDIARY SHALL REMAIN RESPONSIBLE FOR ITS EMPLOYEES

AND THE QUALITY AND LEVEL OF SERVICE PROVIDED BY SUCH EMPLOYEES.

(ddd) Claims; Defense and Settlement .

(i) Whenever any claim arises for indemnification hereunder, the indemnified Person shall promptly Notify the indemnifying Party of the claim and, when known, the facts constituting the basis for such claim, except that in the event of any claim for indemnification hereunder resulting from or in connection with any claim or legal proceedings by a third party, except as otherwise expressly provided in this Section 9 , such Notice shall specify, if known, the amount or an estimate of the amount of the Losses asserted by such third party.

(ii) In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a Person who is not a Party, the indemnifying Party, may, upon Notice to the indemnified Person, assume the defense of any such claim or legal proceeding.  Except with the written consent of the indemnified Person, the indemnifying Party shall not consent to the entry of any judgment or settlement arising from any such claim or legal proceedings which, in each case, provides for any non-monetary relief or does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified Person of a release from all Losses in respect thereof, unless in the latter case the indemnifying Party has actually paid to the indemnified Person the full amount of such judgment or settlement.  Any indemnified Person shall be entitled to participate in (but not control) the defense of any such claim or litigation resulting therefrom.  If the indemnifying Party does not elect to control the litigation as provided above, the indemnified Person may defend against such claim or litigation in such manner as it may deem appropriate, including, without limitation, settling such claim or litigation, after giving Notice of the same to the indemnifying Party, on such terms as such indemnified Person may deem appropriate, and the indemnifying Party shall promptly reimburse the indemnified Person (subject to Section 9 (a) and Section 9(c) ) from time to time as such Losses are incurred.  All indemnification hereunder shall be effected by payment of cash or delivery of a certified or official bank check in the amount of the indemnification Losses.

(iii) Except as provided above, all claims for Losses brought by third parties against Company or any Subsidiary (x) arising out of or in any way relating to the provision of Services hereunder and (y) not discharged by insurance required hereunder, shall only be settled or, with Manager’s concurrence, defended by Manager, at Company’s expense ;  provided, however , that, notwithstanding anything in this Agreement to the contrary, without limiting Company’s indemnification obligations hereunder, Manager shall (as between Company and Manager) be entitled to assume and control Manager’s and any Manager Party’s defense and settlement of proceedings involving any claim of a third party asserted by such Person in its capacity as a security holder, or an affiliate of a security holder, of Company based upon, in connection with or

arising from the transactions contemplated by this Agreement in any proceeding in which any Manager Party is a named party, and Manager and any Manager Party may each retain separate counsel for such purposes, the costs and expenses of which would be subject to the reimbursement provisions of Section 9(c) .

(eee) The remedies of each Party set forth herein are in addition to any other remedy to which it may be entitled, at law or in equity.

(fff) Manager shall obtain and maintain from insurers who are reliable and acceptable to Manager and authorized to do business in the state or states or jurisdictions in which Services are to be performed by Manager or other Service provider, insurance coverages in the types and minimum limits as Manager determines to be appropriate and as is consistent with standard industry practice.  Manager agrees upon Company’s reasonable request from time to time or at any time to provide Company with certificates of insurance and copies of such policies evidencing such insurance coverage.  Except with respect to workers’ compensation coverage, the policies shall name Company as an additional insured and shall contain waivers by the insurers of any and all rights of subrogation to pursue any claims or causes of action against Company.  Manager shall use commercially reasonable efforts to ensure that the policies shall provide that they will not be cancelled or reduced without giving Company at least 30 days’ prior Notice of such cancellation or reduction.

(ggg) Company Confidential Information .  Manager shall maintain the confidentiality of all Confidential Information; provided, however, that   Manager may disclose such Confidential Information (i) to its Affiliates to the extent deemed by Manager to be reasonably necessary or desirable to enable it to perform the Services   ( provided, however, that   such Affiliate has entered into a confidentiality agreement containing terms no less favorable than set forth in this Section 12   or such Affiliate is informed of the confidentiality and non-use provisions of this Agreement and agrees to comply with such provisions); (ii) to the extent necessary for Manager or its Affiliates to provide services for third parties that have interests in the Properties; (iii) in any judicial or alternative dispute resolution proceeding to resolve disputes between Manager or its Affiliates and Company or its Affiliates arising hereunder; (iv) to the extent disclosure is legally required under applicable Legal Requirements ( provided, however, that   prior to making any legally required disclosures in any judicial, regulatory or dispute resolution proceeding, Manager shall promptly Notify the Board thereof and, if requested by the Board, at Company’s sole cost and expense, seek a protective order or other relief to prevent or reduce the scope of such disclosure); (v) to Manager’s or its Affiliates’ existing or potential lenders, investors, joint interest owners, purchasers or other parties with whom Manager  or its Affiliates may enter into contractual relationships, to the extent deemed by Manager to be reasonably necessary or desirable to enable it to perform the Services or to obtain the financing or to pursue such other transaction or contractual arrangement for which such disclosure is necessary or desirable, as applicable ( provided, however, that   such third party has entered into a confidentiality agreement for the benefit of Company containing terms no less favorable than set forth in this Section 12 ); (vi) if authorized by the Board or Officers, as appropriate, in writing; and (vii) to the extent such Confidential Information was already known to Manager or its Affiliates (through a source other than Company or its representatives or Affiliates) or becomes publicly available (other than through a breach by Manager of its obligations arising under this Section 12(a) ) or is independently made known to Manager or its Affiliates (by a source not known by Manager or such Affiliate, as the case may be, to be in breach of a confidentiality obligation with respect to such disclosure).  Manager acknowledges and agrees that (x) the Confidential Information is being furnished to it for the sole and exclusive purpose of enabling it to perform the Services and (y) the Confidential Information may not be used by it for any other purposes, unless disclosure is permitted by clauses (i), (ii), (iii), (iv), (v) and (vi) above, and in such event may be used solely to the extent contemplated by such clauses, or by clause (vii).

(hhh) Manager Confidential Information .  Company shall maintain the confidentiality of all Manager Confidential Information ;   provided, however, that   Company may disclose Manager Confidential Information (i)  to third party advisors of Company to the extent deemed by Company to be reasonably necessary or desirable to enable it to evaluate or consummate an

Asset Acquisition in the case of Acquisition Information ( provided, however ,   that   such third party has entered into a confidentiality agreement containing terms no less favorable than set forth in this Section 12 or such third party is informed of the confidentiality and non-use provisions of this Agreement and agrees to comply with such provisions ); (ii) in order to permit Manager to perform the Services, as determined in advance by Manager in writing ( provided, however , that if Manager does not consent to such disclosure and as a result thereof, Manager is not able to perform the Services, Company shall not be in breach of this Agreement as a result thereof);  ( iii)  in any judicial or alternative dispute resolution p roceeding to resolve disputes between Company or its Affiliates and Manager or its Affiliates arising hereunder; ( iv)  to the extent disclosure is legally required under applicable Legal Requirements ( provided, however, that   prior to making any legally required disclosures in any judicial, regulatory or dispute resolution proceeding, Company shall promptly Notify Manager thereof and , if requested by Manager ,   at Manager’s sole cost and expense, seek a protective order or other relief to prevent or reduce the scope of such disclosure ) ; ( v)  to Company’s existing or potential lenders, investors, joint interest owners, purchasers or other parties with whom Company may enter into contractual relationships in the case of Acquisition Information , to the extent deemed by Company to be reasonably necessary or desirable to enable it to evaluate or cause the consummation of the related Asset Acquisition  ( provided, however, that   such third party has entered into a confidentiality agreement for the benefit of Manager containing terms no less favorable than set forth in this Section 12 ) ; ( vi)  if authorized by Manager in writing ; and ( vii)  to the extent such Manager Confidential Information was already known to Company (through a source other than Manager or its representatives or Affiliates) or becomes publicly available ( other than through a breach by Company of its obligation s arising under this Section 12(b) ) or is independently made known to Company or its Affiliates (by a source not known by Company or such Affiliate, as the case may be, to be in breach of a confidentiality obligation with respect to such disclosure) .  Company acknowledges and agrees that (x) the Manager Confidential Information is being furnished to it for the sole and exclusive purpose of enabling it to perform the Services and (y) the Manager Confidential Information may not be used by it for any other purposes, unless disclosure is permitted by clauses (i), (ii), (iii), (iv), (v) and (vi) above, and in such event may be used solely to the extent contemplated by such clause, or by clause (vii).

(iii) Remedies and Enforcement .  Manager and Company each acknowledge and agree that a breach by it of its obligations under this Section 12 would cause irreparable harm to the other Party and that monetary damages would not be adequate to compensate the other Party.  Accordingly, Manager and Company agree that the other Party shall be entitled to immediate equitable relief, including, without limitation, a temporary or permanent injunction, to prevent any threatened, likely or ongoing violation of this Section 12 , without the necessity of posting bond or other security.  Manager’s and Company’s right to equitable relief shall be in addition to other rights and remedies available to Manager or Company, for monetary damages or otherwise.

(jjj) Business Conduct .  Nothing in this Section 12 shall prohibit Manager or any of its Affiliates or other Persons to whom it provides similar services from conducting business in the areas where the Properties are located or otherwise competing with Company or its Subsidiaries.

(kkk) Subject to clause (e) below, each of the Company Releasing Parties does hereby remise, release, settle, and forever quitclaim and discharge each of the SOG Released Parties from and against any and all claims, actions, causes of action, suits, defenses, covenants, liabilities, demands, contracts, agreements, obligations, damages, costs, and expenses (including attorneys’ fees) of every kind whatsoever, in law or in equity, civil or criminal, known or unknown, suspected or unsuspected, accrued or unaccrued, contingent or absolute, which any Company Releasing Party hereto ever had or now has against or with respect to any SOG Released Party, including, without limitation, those based upon, arising from or relating to (i) the Contribution Agreement, (ii) any securities of Company and (iii) the Lawsuit , in each case including, without limitation, any “clawback” or similar rights such Company Releasing Party may have relating to payments already made to any SOG Released Party with respect to any indemnity or reimbursement obligation.

(lll) Subject to clause (e) below, each of the SOG Releasing Parties does hereby remise, release, settle, and forever quitclaim and discharge each of the Company Released Parties from and against any and all claims, actions, causes of action, suits, defenses, covenants, liabilities, demands, contracts, agreements, obligations, damages, costs, and expenses (including attorney’s fees) of every kind whatsoever, in law or in equity, civil or criminal, known or unknown, suspected or unsuspected, accrued or unaccrued, contingent or absolute, which any SOG Releasing Party hereto ever had or now has against or with respect to any Company Released Party based upon, arising from or relating to dim in ution in value of any securities of Company beneficially owned by Manager or its Affiliates as of the Effective Date which results or may have resulted from   the costs and expenses paid by Company or the efforts expended by Company representatives in settling the Lawsuit.

(mmm) Subject to clause (e) below, the releases set forth in this Section 13   extend to claims that the Released Parties do not know or suspect to exist at the time of the Effective Date, which, if known, might have affected the Released Parties’ decision to agree to the terms of this Section 13 .  The Released Parties will be deemed to relinquish, to the extent it is applicable, and to the fullest extent permitted by law, the provisions, rights, and benefits of §1542 of the California Civil Code, which provides:

(nnn) Subject to clause (e) below, in addition to the release set forth in this Section 13 , the Released Parties will be deemed to relinquish, to the extent they are applicable, and to the fullest extent permitted by law, the provisions, rights, and benefits of any law of any state or territory of the United States, federal law, or principle of common law, which is similar, comparable, or equivalent to §1542 of the California Civil Code.  The Released Parties

acknowledge that they may discover facts in addition to or different from those known or believed to be true as of the Effective Date, but that it is the intention of the Released Parties to hereby completely, fully, finally, and forever compromise, settle, release, discharge, and extinguish any and all claims, known or unknown, suspected or unsuspected, which now exist, or heretofore existed, and without regard to the subsequent discovery or existence of additional or different facts.  The Released Parties warrant that they have read and understand §1542 of the California Civil Code and have had the opportunity to consult with and be advised by counsel regarding its meaning and effects.

(ooo) Notwithstanding anything to the contrary herein, this Section 13 does not affect, and none of the Company Releasing Parties or SOG Releasing Parties release   the following claims or potential claims, which shall not be released hereby and shall continue in force and effect:  the Parties’ or their Affiliates’ respective rights and obligations related to future performance under (i) this Agreement, the Contract Operating Agreement, the Transition Agreement, the License Agreement, any other Related Contracts, the Settlement Agreement, the Contribution Agreement , the Registration Rights Agreement , the Operating Agreement or any SOG PSA or (ii) any other agreement executed hereafter by such Party or its Affiliates (collectively, the “ Non-Released Agreements ”), in each case including but not limited to, the right of any Party to enforce the terms of the Non-Released Agreements.

(ppp) This Agreement shall be governed by , construed and enforced in accordance with the internal laws of the State of Texas, without regard to principles of conflicts of laws.

(qqq) Each of Manager and Company (i )  submits itself to the exclusive jurisdiction of the state and federal courts sitting in Harris County, Texas, (ii )  agrees and consents that service of process may be made upon it in any leg al proceeding relating to this A greement by any means allowed under Texas or federal law, and (iii )  waives any objection that it may now or hereafter have to the venue of any such proceeding being in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum .

(rrr) waives, to the maximum extent not prohibited by the Legal Requirements, any right it may have to a trial by jury in respect of any litigation based hereon, or directly or indirectly at any time arising out of, under or in connection with this Agreement or any transaction contemplated hereby or associated herewith ;

(sss) certifies that no party nor any representative or agent or counsel for any party has represented, expressly or otherwise, or implied that such party would not, in the event of litigation, seek to enforce the foregoing waivers ; and

(ttt) acknowledges that it has been induced to enter into this Agreement and the transactions contemplated hereby by, among other things, the mutual waivers and certifications contained in this section .

(uuu) Survival of Agreement .  This Agreement shall survive any merger, business combination or other similar transaction, including a transaction in which Company is conver ted into a limited partnership, and be binding on Company or its successor, as applicable.  To the extent any successor in such transaction would not be bound by this Agreement by operation of law, as a condition precedent to such transaction, such successor entity shall be required to execute and deliver an instrument, in a form acceptable to Manager, agreeing to be bound by this Agreement to the same extent as Company.

(vvv) Unit Splits, Etc .  All unit numbers and amounts derived from unit numbers in this Agreement are to be appropriately adjusted for any unit dividend, unit split, unit combination or other similar transaction, including as a result of any transaction referred to in Section 31(a) .  In the event Company merges, combines with or otherwise converts to another entity by operation of law, merger, or otherwise, as a result of which units are exchanged for or converted into securities of such entity, the provisions hereof shall survive and apply to such securities, and references herein to any type or class of units shall be deemed to include such securities. 

MANAGER:

SP HOLDINGS, LLC

By:

/S/ Antonio R. Sanchez, III

Name:

Antonio R. Sanchez, III

Title:

President

/S

COMPANY :

CONSTELLATION ENERGY PARTNERS LLC

By:

/S/ Stephen R. Brunner

Name:

Stephen R. Brunner

Title:

Chief Executive Officer, Chief Operating Officer and President

1)

$2.00 per common unit price (which reflects the price per Class B Common Unit at the time Company and Sanchez entered into that certain Contribution Agreement dated August 9, 2013),

2)

10% yield (which Manager believes is an appropriate initial yield for Company) which equates to a $0.05 base quarterly distribution ($0.20 per annum),

3)

First target hurdle rate of 115% of the base quarterly distribution, after which the IDRs are entitled to receive 13% of the incremental quarterly distributions until the second target hurdle is met,

4)

Second target hurdle rate of 125% of the base quarterly distribution, after which the IDRs are entitled to receive 23% of the incremental quarterly distributions until the third target hurdle is met,

5)

Third target hurdle rate of 175% of the base quarterly distribution, after which the IDRs are entitled to receive 35.5% of the incremental quarterly distributions until the fourth target hurdle is met, and

6)

Fourth target hurdle rate which is equal to the Target Distribution, or a $0.532 per quarterly distribution ($2.13 per annum) that currently exists in the Operating Agreement, after which the IDRs will be entitled to receive 33% of the incremental quarterly distributions and Company’s existing Management Incentive Interests will be entitled to receive 15% of the incremental quarterly distributions.

(a) When development, management and operation of a Relevant Property is performed by Operator, the Properties shall be operated materially in accordance with the terms of AAPL Form 610-1989 Operating Agreement (together with each exhibit, schedule, appendix and annex thereto, the “ JOA Form ”), together with the 1984-1 COPAS Accounting Procedure (“ COPAS ”) wherever those terms are applicable.  The JOA Form is attached hereto as Exhibit A and the COPAS is attached as Exhibit C to the JOA Form and both are incorporated herein for all purposes.  In the event of a conflict or ambiguity between the terms and conditions of such JOA Form or COPAS, on the one hand, and this Agreement, on the other, the terms and conditions of this Agreement shall prevail and control.

(b) (i)  When development, management and operation of a Relevant Property is performed by a Third Party Operator, Operator and Owner will cause, to the extent within their control, to have such Relevant Property operated pursuant to an operating agreement and accounting procedures in substantially the form of the JOA Form and COPAS, respectively (“ Third Party JOA ”).  As between Owner and its Subsidiaries, on the one hand, and Operator, on the other, Owner shall be solely responsible for all costs, expenses or other charges billed under a Third Party JOA and shall promptly pay, or cause to be paid, such amounts thereunder when required pursuant to the terms of such Third Party JOA.    

(c) The Parties acknowledge and agree that, as of the Effective Date, Operator may not be able to provide all the services contemplated hereunder and the Parties intend to transition certain of the services performed as of the Effective Date from CEP Services Company , Inc. to Operator or its Affiliates.  Accordingly, Operator shall notify Owner of the In-Service Date if and when such transition, in Operator ’s reasonable determination, has been completed or waived by Operator . The Parties agree that the “ In-Service Date ” shall be the date specified in a Notice given by Operator to Owner prior to such date. The In-Service Date may be conditioned upon the occurrence of the “In Service Date” under and as defined in the Services Agreement, as specified by Operator in such Notice.  Each of the Parties acknowledges and agrees that there are a number of contingencies that may affect the actual In-Service Date.  Accordingly, neither Party will have any right or remedy under this Agreement against the other Party if the In-Service Date does not occur or occurs later than any estimated or expected In-Service Date, except that if the In-Service Date has not occurred by December 31, 2014, Operator or Owner may terminate this Agreement on 30 days prior Notice to such other Party.

(d) Notwithstanding anything in this Agreement to the contrary, until the In-Service Date, it shall be a condition precedent to Operator ’s agreements and obligations under this Agreement that: (i) the Transition Date (as defined in the Transition Agreement) shall have

occurred, (ii) Operator shall have retained a sufficient number of individuals, as determined   by Operator , to assist in the performance of the services hereunder , either through the retention of Eligible Employees (as defined in the Transition Agreement) or otherwise and (iii) the “In-Service Date” under and as defined in the Services Agreement shall have occurred.  If any of these conditions precedent is not satisfied to the satisfaction of Operator or waived by Operator , in its sole discretion, Operator shall have the right to terminate this Agreement on 30 days’ written Notice to Owner .

(e) If this Agreement is terminated pursuant to this Section 1 , each Party shall be released from any and all obligations under this Agreement, other than for breaches, violations or inaccuracies of any representations, warranties or covenants hereunder prior to termination, covenants which by their nature are intended to survive termination, and under Section 2(a) ,   4 or 9 (with respect to any accrued but unpaid obligations as of the date of termination or expiration),   11 ,   12 ,   13 ,   14.1 ,   14.2 ,   14.4 ,   14.6 ,   14.9 ,   14.10 ,   14.11 ,   14.12 ,   14.14 ,   14.16   and 14.17   hereof, which shall survive such termination.  The Parties understand and agree that until the In-Service Date, Operator is under no obligation to provide any of the services.  Notwithstanding the foregoing, Operator may, in its sole discretion, perform any service contemplated herein to the extent that Owner or its Subsidiaries fail to adequately and timely perform such services or request Operator to provide such services. 

(f) Operator agrees to use its commercially reasonable efforts to conduct its activities and operations in accordance with the Approved Budget (for the purposes of this Agreement, an Approved Budget includes a prior year’s Approved Budget if an Approved Budget for the current year is not yet in effect, as provided in Section 4(h) of the Services Agreement), if any, it being understood and agreed by the Parties that the Approved Budget is to be used as a guideline in conducting activities and operations and not as a limit on amounts payable to or by Operator hereunder; provided, however,   that notwithstanding anything herein to the contrary, in no event shall Operator or any of its Affiliate s be required to modify thei r respective method or manner of providing services (including its method of allocating resources or employees) and  w henever any provision s of this Agreement or an Approved Budget permits Operator to make an expenditure or conduct a Development Activity or other operation, or Operator is authorized under this Agreement or otherwise to take any action or to perform a service, Operator will be permitted to make such expenditure, conduct such Development Activity or other operation, take such action or perform such service notwithstanding that there is no Approved Budget for the relevant period (or no budgeted amounts therefor) or the aggregate or any individual expenditures during any Approved Budget period exceed the amount(s) set forth in the Approved Budget for such period for such Development Activity or other operation, action or service, and Owner shall be responsible for all costs and expenses associated therewith (including with respect to costs and expenses associated with Emergencies) in accordance with   the provisions of this Agreement and Section 6(b) of the Services Agreement, subject to the provisions of Section 9 o f the Services Agreement; provided, further , that notwithstanding anything herein to the contrary, Operator and its Affiliates shall maintain sole and complete discretion with respect to the retention and dismissal of their respective employees, utilization of such employees to perform services, and compensation determinations with respect to such employees and, to the extent any related costs and expenses are Overhead Costs, Owner shall be responsible therefor in accordance with the provisions of this Agreement and Section 6(b) of the Services Agreement , subject to the provisions of Section 9 of the Services Agreement .  For the

avoidance of doubt, in no event shall Owner be entitled to challenge or dispute any amounts payable hereunder on the grounds that Operator has not complied with this Section 1(f) , unless any amount results from any Development Activities or operations on Owner ’s behalf (other than Emergencies and Development Activities and operations in accordance with the Approved Budget ) that Owner timely directed Operator in writing not to perform or cause to be performed (to the extent within Operator ’s control), and such direction would not be in conflict with or cause Operator , an Affiliate of Operator, Owner or any Subsidiary of Owner to violate or breach any Legal Requirement or contract to which Operator , an Affiliate of Operator, Owner or any Subsidiary of Owner is a party or under which Operator or its Affiliates may be liable .

(g) If Operator is performing services with respect to a Relevant Property pursuant to Section 1 , Operator shall be responsible for performing all services with respect to operating, developing and producing such Relevant Property and marketing the oil, gas and other minerals extracted therefrom, including, without limitation:

(i) p roviding general operational, engineering, geology and management services in order to develop, operate and produce such Relevant Property, including site preparation, engineering for drilling, completion, workovers, lease operations and facilities engineering;

(ii) s upervising drilling, re-drilling , completing or re-completing, workovers, pumping and testing of each well, gauging of tanks, routine maintenance of wells and other field facilities and hiring and supervision of third party contractors for operations on such Relevant Property;

(iii) s timulating or fracturing any formations;

(iv) b uilding and equipping any facilities and pipelines necessary for production or transportation of H ydrocarb ons from the Relevant Property;

(v) p lugging, abandoning and conducting surface and subsurface site clean-up and restoration associated with any wells or facilities;

(vi) n egotiating, purchasing, maintaining and keeping inventory records of all personal property, equipment and supplies, and procurement of services for use on such Relevant Property;

(vii) k eeping records and files related to title to and operation of such Relevant Property;

(viii) p roviding accounting and tax personnel for preparation of financials and tax returns;

(ix) p reparing and filing monthly reports and forms, and preparing incidental reports, as required by regulations of any Governmental Authority with respect to operation of such Relevant Property;

(x) p roviding information in the preparation of all 1099 forms for vendors and joint interest owners as may be required by the Legal Requirements;

(xi) p roviding land, geologic and reservoir engineering expertise;

(xii) c onducting development and operations of such Relevant Property;

(xiii) o btaining all Permits to conduct the development, operation and production of such Relevant Property; and

(xiv) performing any and all duties and providing any and all services that may otherwise be required of the operator under the JOA Form and COPA S applicable to the Relevant Property.

(h) Operator shall not undertake any single project reasonably estimated to require an expenditure in excess of $100,000 except to the extent contemplated in the Company’s budget for the year ended 2014 (with respect to such year and any future years until the adoption of an Approved Budget), in the Approved Budget or otherwise approved by the Board or in connection with the drilling, Sidetracking, Reworking, Deepening, Completing, Recompleting or Plugging Back (as such terms are defined in the  JOA Form attached as Exhibit A hereto) of a well that has been previously authorized by or pursu ant to this Agreement, the relevant budget or the Board; provided, however , that, in case of explosion, fire, flood or other sudden emergency, whether of the same or different nature, Operator may take such steps and incur such expenses as in its opinion are required to deal with the emergency to safeguard life and property but Operator, as promptly as possible, shall report the emergency to the Board.

(i) Operator shall conduct all operations of such Relevant Property in compliance with the terms and conditions of the JOA Form and all applicable Legal Requirements.

(j) Operator will have no liability to Owner or its Subsidiaries for losses sustained or liabilities incurred in connection with Operator’s operation of such Relevant Property except to the extent that such losses or liabilities arise from the gross negligence, willful misconduct or fraudulent conduct of Operator.

(k) Statutory Worker’s Compensation Insurance in accordance with the laws of the state in which the Relevant Property is located and Employer’s Liability Insurance with limits not less than $500,000 for any one person and not less than $500,000 for any one accident.

(l) Commercial General Liability Insurance with limits of not less than $1,000,000 each occurrence and a $2,000,000 general aggregate.  This coverage to include care,

custody and control insurance being a legal and contractual liability for the property of others in Operator’s care, custody or control (included to a separate $1,000,000 limit of liability).

(m) Automobile Public Liability Insurance with limits of not less than $1,000,000 any one occurrence combined single limit for bodily injury and property damage.

(n) Operator shall require all other contractors or subcontractors conducting operations hereunder to carry insurance of such types and in such amounts as Operator deems adequate to protect the Parties hereto.  No liability shall attach to Operator in the exercise of its good faith judgment as to the types and amounts of insurance, if any, to be required of such other contractors.

(o) Without limiting any other provisions of this Agreement, Losses for which no insurance is required to be carried or in excess of the limits set forth above shall be charged to and borne by Owner. 

1.2 Compensation .  The sole compensation payable by Owner to Operator for the services provided by Operator hereunder and under the JOA Form and all Third Party JOAs shall be as follows:  Owner shall promptly pay upon receipt of an invoice from Operator all direct charges under COPAS; provided ,   however that, to the extent costs and expenses described under Section II 3 and II 4 of COPAS and any overhead charges described under Section III of COPAS are allocated to Owner or a Subsidiary under COPAS, Operator shall credit, or cause to be credited, such amounts against corresponding amounts charged and paid under the Services Agreement as part of the Management Fee (to the extent duplicative), provided that an Administrative Fee shall nevertheless be payable with respect to such amounts to the extent required under the Services Agreement.

1.3 Account Access .  In addition to the foregoing, Operator may pay (a) all costs and expenses incurred in connection with its performance of the services provided by Operator hereunder and (b) all financial obligations of Owner or its Subsidiaries that may be due and owing either out of Owner’s bank account(s) (the “ Accounts ”) or out of its own funds; provided ,   however , that Owner shall fully reimburse Operator for any and all costs and expenses Operator pays out of its own funds.  Owner shall ensure that Operator is duly authorized to draw upon all of the Accounts (and shall make all necessary arrangements with its financial institution(s)) for purposes of permitting Operator to pay (or reimburse itself for) any costs or expenses due and owing to Operator hereunder, as determined by Operator.  In the event Operator reasonably anticipates that the funds in the Accounts are not sufficient to pay (or reimburse itself for) any costs or expenses due for any month or other period, then Operator shall request Owner to cause sufficient funds to be deposited in the Accounts to cover all such anticipated costs or expenses and shall provide Owner with reasonable documentation to support such request.  Owner shall cause such funds to be deposited in the Accounts within 15 days of Operator’s request; it being understood that if Owner fails to make such deposits, Operator shall not be liable in any manner for any costs, expenses or other liabilities Owner, its Subsidiaries or Operator may incur as a result of Owner’s failure to timely deposit such funds.  Notwithstanding anything to the contrary contained herein, Operator shall have no obligation to pay any costs and

expenses referenced above out of its own funds (and seek reimbursement from Owner), it being intended instead that Owner, at Operator’s request, will ensure that the funds to pay such costs and expenses are deposited in the Accounts as described above.

(a) Owner (i) is, together with each Subsidiary, validly existing and in good standing under the laws of the State of Delaware or other applicable jurisdiction of organization or formation, as the case may be, and (ii) has all requisite power and authority, and is duly authorized, to enter into this Agreement and to carry out the transactions contemplated hereby.

(b) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary action, including by Special Approval (as defined in the Operating Agreement), on the part of Owner.

(c) The execution, delivery and performance by Owner of this Agreement and the consummation of the transactions contemplated by this Agreement do not (i) violate in any material respect any provision of any Legal Requirement applicable to Owner or any Subsidiary, or violate its certificate of formation or Operating Agreement (or similar organizational documents, as the case may be) or any order, judgment or decree of any court or other Governmental Authority binding on Owner or any Subsidiary; (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contract or agreement to which Owner or any Subsidiary is a party or by which its assets are bound; (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Owner or any Subsidiary or result in the acceleration of any indebtedness owed by Owner or any Subsidiary; (iv) result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any Permit material to Owner’s or any Subsidiary’s operations or any of its properties; or (v) require any approval of equity holders or any approval or consent of any Person under any contract or agreement to which Owner or any Subsidiary is a party or by which its assets are bound or the certificate of formation or Operating Agreement (or similar organizational documents, as the case may be) of Owner or any Subsidiary, except for such approvals or consents which have been obtained or are otherwise contemplated by this Agreement.

(d) This Agreement has been duly executed and delivered by Owner and is the legal, valid and binding obligation of Owner, enforceable against Owner in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability (whether enforcement is sought in equity or at law).

(e) Operator (i) is validly existing and in good standing under the laws of the State of Delaware and (ii) has all requisite power and authority, and is duly authorized, to enter into this Agreement and to carry out the transactions contemplated hereby.

(f) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary action on the part of Operator.

(g) The execution, delivery and performance by Operator of this Agreement and the consummation of the transactions contemplated by this Agreement do not (i) violate in any material respect any provision of any Legal Requirement applicable to Operator, or violate its certificate of incorporation or bylaws or any order, judgment or decree of any court or other Governmental Authority binding on Operator; (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contract or agreement to which Operator is a party or by which its assets are bound; (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets or result in the acceleration of any indebtedness owed by Operator; (iv) result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any Permit material to Operator’s operations or any of its properties; or (v) require any approval of equity holders or any approval or consent of any Person under any contract or agreement to which Operator is a party or by which its assets are bound or the certificate of incorporation or bylaws of Operator, except for such approvals or consents which have been obtained or are otherwise contemplated by this Agreement.

(h) This Agreement has been duly executed and delivered by Operator and is the legal, valid and binding obligation of Operator, enforceable against Operator in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability (whether enforcement is sought in equity or at law).  

1.4 Independent Contractor .  Operator is an independent contractor, free of control and supervision by Owner as to the means and manner of performing all services hereunder, Owner having contracted herein solely for the result of such services.  Except as otherwise provided in the Transition Agreement, neither Operator nor any Person used or employed by Operator shall be deemed for any purpose to be the employee, agent, servant or representative of Owner or any Subsidiary of Owner in performance of any work or services, or any part thereof, under this Agreement.  Neither Owner or any Subsidiary of Owner nor any Person used or employed by Owner or any Subsidiary of Owner shall be deemed for any purpose to be the employee, agent, servant or representative of Operator in performance of any work or services, or part thereof, under this Agreement.  Except as otherwise provided in the Services Agreement or the Transition Agreement, the actual performance and supervision of all work or services performed hereunder shall be by Operator.

1.5 No Partnership .  This Agreement is not intended to create and shall not be construed to create, a relationship of partnership, joint venture, mining partnership, agency or any type of a fiduciary relationship, or any association for profit between the Parties.

1.6 Disputed Charges . 

(a) THE BOARD MAY, ONLY WITHIN 180 DAYS AFTER PAYMENT, RECEIPT OF AN INVOICE FROM OPERATOR OR WITHDRAWAL BY OPERATOR FROM THE ACCOUNTS, AS APPLICABLE, TAKE WRITTEN EXCEPTION TO ANY CHARGE, ON THE GROUND THAT THE SAME WAS NOT AN ACTUAL COST OR EXPENSE INCURRED BY OR DUE TO OPERATOR, OR ON ACCOUNT OF ANY ERROR OR INACCURACY ON ANY INVOICE.  WITH RESPECT TO ANY INVOICES, PAYMENTS OR WITHDRAWALS MADE IN ADVANCE OF THE PERFORMANCE OF ANY SERVICES OR INCURRENCE OF EXPENSES, SUCH 180 DAY PERIOD SHALL COMMENCE UPON THE CONCLUSION OF THE MONTH IN WHICH SUCH SERVICES WERE RENDERED OR EXPENSES INCURRED, AS THE CASE MAY BE.  OWNER SHALL NEVERTHELESS PAY OPERATOR ANY INVOICED OR OTHER AMOUNT IN FULL WHEN DUE OR REQUESTED, OR DEPOSIT SUCH AMOUNTS INTO THE ACCOUNTS WHEN SO REQUESTED FOR WITHDRAWAL BY OPERATOR.  SUCH PAYMENT OR DEPOSIT SHALL NOT BE DEEMED A WAIVER OF THE RIGHT OF OWNER TO RECOUP OR RECEIVE CREDIT FOR ANY CONTESTED PORTION OF ANY AMOUNT SO PAID.  IF THE AMOUNT AS TO WHICH SUCH WRITTEN EXCEPTION IS TAKEN, OR ANY PART THEREOF, IS ULTIMATELY DETERMINED NOT TO BE AN ACTUAL COST OR EXPENSE INCURRED BY OR DUE OPERATOR, OR IS OTHERWISE AN ERROR OR INACCURACY, SUCH AMOUNT OR PORTION THEREOF (AS THE CASE MAY BE) SHALL BE CREDITED AGAINST FUTURE AMOUNTS DUE HEREUNDER OR, UPON EXPIRATION OR TERMINATION OF THIS AGREEMENT AFTER ALL SUCH CREDITS HAVE BEEN APPLIED, REFUNDED BY OPERATOR TO OWNER.  OWNER SHALL HAVE NO RIGHT TO DISPUTE ANY PAYMENT, INVOICE OR WITHDRAWAL AFTER SUCH 180 DAY PERIOD, AND SHALL BE DEEMED TO HAVE WAIVED ANY CLAIMS OR RIGHTS WITH RESPECT TO SUCH AMOUNTS TO THE EXTENT NOT DISPUTED WITHIN SUCH PERIOD.

(b) If, within 20 days after receipt of any written exception pursuant to Section 9.1(a) , the Board and Operator have been unable to resolve any dispute, either of the Board or Operator may submit the dispute to an independent third party auditing firm that is mutually agreeable to the Board, on the one hand, and Operator, on the other hand, as applicable.  If the Parties are unable to agree on an independent third party auditing firm 15 days after a matter is to have been submitted to an independent third party auditing firm, within seven days after the end of such 15 day period, each Party shall submit the names of three firms that have no prior material relationship with such Party, and each Party shall be entitled to strike one name from the other Party’s list of firms, and the independent third party auditing firm shall be selected by lot from the remaining firms.  The Parties shall cooperate with such auditing firm and shall provide such auditing firm access to such books and records as may be reasonably necessary to permit a determination by such auditing firm.  The resolution by such auditing firm shall be final and binding on the Parties.

1.7 Records Maintenance and Audits .  Owner shall have the right, upon 30 days’ prior Notice to Operator, and at reasonable times during usual business hours of Operator

or its Affiliates to, no more than twice per year, audit Operator’s records to confirm the appropriate amounts due to Operator under this Agreement; provided , however , that such audit does not unreasonably interfere with the operations of Operator or its Affiliates.  Owner shall bear all costs and expenses incurred in connection with any audit.  Operator shall, and shall cause its Affiliates to, subject to the provisions of Section 9.1(a) , review and respond in a timely manner to any claims or inquiries made by Owner regarding matters revealed by any such audit.  Notwithstanding anything herein to the contrary, Operator shall not be obligated to disclose or make available to Owner any information prohibited by Legal Requirements or restricted by contractual obligations of confidentiality. This Section 9.2 shall survive termination or expiration of this Agreement for a period of two years from the date of termination or expiration with respect to periods prior to such termination or expiration.

(a) Subject to Section 1 , this Agreement will be effective on the Effective Date and will terminate on the earlier of: (i) the termination or expiration of the Services Agreement or Transition Agreement, at the election of Operator (in the case of the termination or expiration of either the Services Agreement or the Transition Agreement) or Owner (in the case of the termination or expiration of the Services Agreement only) by giving Notice thereof to the other Party, (ii) termination in accordance with Section 11(b) or Section 11(c) below and (iii) termination at any time by either Party after the 24-month anniversary of the “In-Service Date” under, and as defined in, the Services Agreement by giving Notice of termination to the other Party at least 180 days prior to the date as of which such termination is to be effective.

(b) This Agreement may be terminated at any time by Operator upon Owner’s material breach of this Agreement, if (i) such breach is not remedied within 60 days (or 30 days

in the event of a failure to make any payment hereunder, which shall be deemed a material breach hereunder) after Owner’s receipt of Notice thereof, or such longer period (except for a material breach arising out of a failure to make payment hereunder) as is reasonably required to cure such breach; provided ,   however that Owner commences to cure such breach within the applicable period and proceeds with due diligence to cure such breach, and (ii) such breach is continuing at the time Notice of termination is delivered to Owner.  

(c) This Agreement may be terminated at any time by Owner, subject to approval of the Board, only upon Operator’s material breach of this Agreement, if (i) such breach is not remedied within 60 days after Operator’s receipt of Owner’s Notice thereof, or such longer period as is reasonably required to cure such breach; provided ,   however that Operator commences to cure such breach within such 60 day period and proceeds with due diligence to cure such breach, and (ii) such breach is continuing at the time Notice of termination is delivered to Operator; provided ,   however , that no such termination shall take effect, and this Agreement shall remain in full force and effect, until such time as the Services Agreement has terminated or expired, unless consented to in writing by Operator.

(d) Within 30 days of receipt of an invoice therefor documenting in reasonable detail such costs and expenses, Owner shall pay any costs or expenses which are paid or to be paid to employees of Operator or its Affiliates or other Persons in connection with the termination or expiration of this Agreement, as determined by Operator in its sole discretion, that are incurred or to be incurred by Operator or its Affiliates, to the extent not duplicative of any costs or expenses paid under the Services Agreement for severance costs in connection with the termination or expiration of this Agreement.   Further more , if this Agreement is terminated by Owner either (i) after the 24-month anniversary of the “In-Service Date” under, and as defined in, the Services Agreement on 180 days’ notice, as specified in Section 11(a) , or (ii) on or after termination of the Services Agreement under Section 8(a) of the Services Agreement after the 24-month anniversary of the “In-Service Date” under, and as defined in, the Services Agreement on 180 days’ Notice, as specified therein, in addition to any other payment due hereunder or thereunder ,   Owner shall also be required to pay (to the extent not duplicative with the Services Agreement) all other fixed and variable, direct and indirect costs and expenses incurred by Operator , prior to or after termination, as estimated by Operator , that result or will result from such termination of this Agreement, upon the later to occur of (A) the making of the payments contemplated above and (B) 10 Business Days after Operator furnishes to Owner an invoice therefor supported by reasonable documentation thereof.

1.8 Indemnification; Limitation on Liability

(a) Notwithstanding Operator’s agreement to perform, or cause to be performed, the services hereunder in accordance with the provisions hereof, Owner acknowledges, on its own behalf and on behalf of its Subsidiaries, that performance by Operator or any other Person of services pursuant to this Agreement will not subject Operator, its Affiliates or their respective equity holders, directors, officers, members, agents or employees (each, an “ Operator Party ”) to any Losses whatsoever (including, without limitation, any Losses arising under a JOA due to the breach or default by a third party under such JOA), except as

directly caused by the gross negligence, willful misconduct or fraudulent conduct on the part of such Operator Party; provided ,   however , that Operator’s and each other Operator Party’s aggregate liability, collectively, as a result of such gross negligence, willful misconduct or fraudulent conduct will be limited as set forth in Section 9(a) of the Services Agreement. For the purposes of this Agreement and the Services Agreement each Operator Party shall be deemed a Manager Party under the Services Agreement .  

(b) EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, OWNER, ON ITS OWN BEHALF AND ON BEHALF OF ITS SUBSIDIARIES, HEREBY RELEASES, AND AGREES TO INDEMNIFY AND HOLD HARMLESS EACH OPERATOR PARTY FROM ANY AND ALL LOSSES ARISING FROM, IN CONNECTION WITH OR RELATING TO (i) THE PROVISION OR USE OF ANY SERVICE OR PRODUCT PROVIDED PURSUANT TO THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY LOSSES ARISING UNDER A JOA FORM OR THIRD PARTY JOA DUE TO THE BREACH OR DEFAULT BY A THIRD PARTY UNDER SUCH JOA FORM OR THIRD PARTY JOA), TO THE EXTENT NOT DIRECTLY CAUSED BY THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT OF SUCH OPERATOR PARTY AND (ii) ANY MATERIAL BREACH, VIOLATION OR INACCURACY OF ANY COVENANT, REPRESENTATION OR WARRANTY OF OWNER OR ITS AFFILIATES HEREUNDER.

(c) EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT AND SUBJECT TO THE PROVISIONS OF SECTION   12.1(a) HEREIN AND SECTION 9(c) OF THE SERVICES AGREEMENT,   OPERATOR HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS OWNER AND ITS SUBSIDIARIES AND AFFILIATES AND EACH OF THEIR RESPECTIVE EQUITY HOLDERS, MANAGERS, OFFICERS, UNITHOLDERS, AGENTS AND EMPLOYEES (EACH, AN “ OWNER PART Y ”) FROM ANY AND ALL LOSSES TO THE EXTENT ARISING FROM, IN CONNECTION WITH, OR RELATING TO A N   OPERATOR PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT IN OPERATOR’S PERFORMANCE OF THE SERVICES DESCRIBED HEREIN .

(d) EXCEPT AS EXPRESSLY PROVIDED IN SECTION 12.1(b)   AND SECTION 12.1(h) , THE INDEMNITY OBLIGATION IN SECTION 12.1(b)   AND SECTION  12.1(h) SHALL APPLY REGARDLESS OF CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS (INCLUDING, WITHOUT LIMITATION, SOLE NEGLIGENCE, CONCURRENT NEGLIGENCE OR STRICT LIABILITY), BREACH OF DUTY (STATUTORY OR OTHERWISE), VIOLATION OF LAW OR OTHER FAULT OF ANY INDEMNIFIED PERSON OR ANY PRE-EXISTING DEFECT; PROVIDED, HOWEVER , THAT, SOLELY WITH RESPECT TO SECTION 12.1(b) , THIS PROVISION SHALL NOT APPLY TO THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT OF ANY INDEMNIFIED PERSON OR IN ANY WAY LIMIT OR ALTER ANY QUALIFICATIONS SET FORTH IN SUCH INDEMNITY OBLIGATION EXPRESSLY RELATING TO GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT.  BOTH  PARTIES AGREE THAT THIS STATEMENT COMPLIES WITH THE REQUIREMENT KNOWN AS THE “EXPRESS NEGLIGENCE RULE” TO EXPRESSLY STATE IN A CONSPICUOUS MANNER AND TO AFFORD FAIR AND ADEQUATE

NOTICE THAT THIS AGREEMENT HAS PROVISIONS REQUIRING ONE PARTY TO BE RESPONSIBLE FOR THE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANOTHER PARTY.

(e) NO PARTY SHALL BE LIABLE TO ANY OTHER PERSON UNDER THIS AGREEMENT FOR EXEMPLARY, PUNITIVE, CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM IN WHICH ANY ACTION IS BROUGHT; PROVIDED, HOWEVER , THAT THIS SECTION 12.1(e) SHALL NOT LIMIT A PARTY’S RIGHT TO RECOVERY UNDER SECTION 12.1(b) OR SECTION 12.1(h) FOR ANY DAMAGES TO THE EXTENT SUCH PARTY IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY IN CONNECTION WITH A MATTER FOR WHICH SUCH PARTY IS OTHERWISE ENTITLED TO INDEMNIFICATION UNDER SECTION  12.1(b) OR SECTION 12.1(h) , AS THE CASE MAY BE.

(f) OTHER THAN AS SET FORTH IN SECTION 7 HEREOF, OPERATOR DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO SERVICES RENDERED OR PRODUCTS PROCURED FOR OWNER OR ITS SUBSIDIARIES, OR ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, ANY AND ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY PURPOSE (WHETHER OPERATOR KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.

(g) OPERATOR MAKES NO EXPRESS OR IMPLIED WARRANTY, GUARANTY OR REPRESENTATION, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR PARTICULAR PURPOSE, SUITABILITY OR MERCHANTABILITY REGARDING ANY EQUIPMENT, MATERIALS, SUPPLIES OR SERVICES ACQUIRED FROM VENDORS, SUPPLIERS OR SUBCONTRACTORS.  OWNER’S AND ITS SUBSIDIARIES’ EXCLUSIVE REMEDIES WITH RESPECT TO EQUIPMENT, MATERIALS, SUPPLIES OR SERVICES OBTAINED BY OPERATOR FROM VENDORS, SUPPLIERS AND SUBCONTRACTORS SHALL BE THOSE UNDER THE VENDOR, SUPPLIER AND SUBCONTRACTOR WARRANTIES, IF ANY, AND OPERATOR’S ONLY OBLIGATION, ARISING OUT OF OR IN CONNECTION WITH ANY SUCH WARRANTY OR BREACH THEREOF, SHALL BE TO USE DILIGENT EFFORTS TO ENFORCE SUCH WARRANTIES ON BEHALF OF OWNER AND OWNER (AND ITS SUBSIDIARIES) SHALL HAVE NO OTHER REMEDIES AGAINST OPERATOR WITH RESPECT TO EQUIPMENT, MATERIALS, SUPPLIES OR SERVICES OBTAINED BY OPERATOR FROM ITS VENDORS, SUPPLIERS AND SUBCONTRACTORS.

(h) OWNER, ON ITS OWN BEHALF AND ON BEHALF OF EACH SUBSIDIARY, ACKNOWLEDGES AND AGREES THAT OPERATOR MAY UTILIZE OWNER OR SUBSIDIARY EMPLOYEES FOR THE PROVISION OF, OR ASSISTING IN PROVIDING, THE SERVICES HEREUNDER.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL ANY OPERATOR

PARTY HAVE ANY LIABILITY OR BE RESPONSIBLE FOR ANY LOSSES ARISING FROM THE ACTS OR OMISSIONS OF OWNER OR SUBSIDIARY EMPLOYEES, REGARDLESS OF THE NEGLIGENCE, GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT CONDUCT OF ANY OPERATOR PARTY, AND OWNER SHALL INDEMNIFY, DEFEND AND HOLD EACH OPERATOR PARTY HARMLESS FROM ANY LOSSES RESULTING OR ARISING FROM ANY SUCH ACTS OR OMISSIONS.  OWNER, ON ITS OWN BEHALF AND ON BEHALF OF EACH SUBSIDIARY, FURTHER ACKNOWLEDGES THAT OPERATOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY FOR FAILURE TO PROVIDE SERVICES TO THE EXTENT OWNER OR SUBSIDIARY EMPLOYEES ARE UTILIZED OR FOR ENSURING ANY LEVEL OF SERVICE OR QUALITY FROM ANY OWNER OR SUBSIDIARY EMPLOYEE, IT BEING UNDERSTOOD OWNER OR SUCH SUBSIDIARY SHALL REMAIN RESPONSIBLE FOR ITS EMPLOYEES AND THE QUALITY AND LEVEL OF SERVICE PROVIDED BY SUCH EMPLOYEES.

1.9 Claims; Defense and Settlement .

(a) Whenever any claim arises for indemnification hereunder, the indemnified Person shall promptly Notify the indemnifying Party of the claim and, when known, the facts constituting the basis for such claim, except that in the event of any claim for indemnification hereunder resulting from or in connection with any claim or legal proceedings by a third party, except as otherwise expressly provided in this Section 12 , such Notice shall specify, if known, the amount or an estimate of the amount of the Losses asserted by such third party.

(b) In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a Person who is not a Party, the indemnifying Party, may, upon Notice to the indemnified Person, assume the defense of any such claim or legal proceeding.  Except with the written consent of the indemnified Person, the indemnifying Party shall not consent to the entry of any judgment or settlement arising from any such claim or legal proceedings which, in each case, provides for any non-monetary relief or does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified Person of a release from all Losses in respect thereof, unless in the latter case the indemnifying Party has actually paid to the indemnified Person the full amount of such judgment or settlement.  Any indemnified Person shall be entitled to participate in (but not control) the defense of any such claim or litigation resulting therefrom.  If the indemnifying Party does not elect to control the litigation as provided above, the indemnified Person may defend against such claim or litigation in such manner as it may deem appropriate, including, without limitation, settling such claim or litigation, after giving Notice of the same to the indemnifying Party, on such terms as such indemnified Person may deem appropriate, and the indemnifying Party shall promptly reimburse the indemnified Person (subject to Section 12.1(a) herein and Section 9(c) of the Services Agreement ) from time to time as such Losses are incurred.  All indemnification hereunder shall be effected by payment of cash or delivery of a certified or official bank check in the amount of the indemnification Losses.

(c) Except as provided above, all claims for Losses brought by third parties against Owner or any Subsidiary (i) arising out of or in any way relating to the provision of services hereunder and (ii) not discharged by insurance required hereunder, shall only be settled

or, with Operator’s concurrence, defended by Operator, at Owner’s expense ;  provided, however , that, notwithstanding anything in this Agreement to the contrary, without limiting Owner’s indemnification obligations hereunder, Operator shall (as between Owner and Operator) be entitled to assume and control Operator’s and any Operator Party’s defense and settlement of proceedings involving any claim of a third party asserted by such Person in its capacity as a security holder, or an Affiliate of a security holder, of Owner based upon, in connection with or arising from the transactions contemplated by this Agreement in any proceeding in which any Operator Party is a named party, and Operator and any Operator Party may each retain separate counsel for such purposes, the costs and expenses of which would be subject to the reimbursement provisions of Section 9(c) of the Services Agreement.

1.10 Remedies Cumulative .  The remedies of each Party set forth herein are in addition to any other remedy to which it may be entitled, at law or in equity.