VR4-Grizzly, LP v. MarkWest Western Oklahoma Gas Company, LLC

IN THE DISTRICT COURT OF OKLAHOMA COUNTY STATE OF OKLAHOMA VR4-GRIZZLY, LP, Plaintiff, v. 1. MARKWEST WESTERN OKLAHOMA GAS COMPANY, LLC.; and, 2. CONCORD ENERGY, LLC, Defendants. PETITION Plaintiff, VR4-Grizzly, LP, for its claim, states: THE PARTIES, JURISDICTION AND VENUE 1. Plaintiff, VR4-Grizzly, LP (hereinafter "Plaintiff") is a Texas limited partnership doing business in Dallas County, Texas at 2626 Cole Ave. Suite 750, Dallas, TX 75204. 2. Defendant, MarkWest Western Oklahoma Gas Company, LLC (hereinafter "MarkWest"), is a limited liability company existing under the laws of the state of Oklahoma, and it may be served through its agent for service of process, the CT Corporation System, 1833 S. Morgan Rd., Oklahoma City, OK 73128. 3. Defendant, Concord Energy, LLC (hereinafter "Concord"), is a foreign limited liability company existing under the laws of Colorado, whose principal place of business is 7901 Shaffer Parkway, Littleton, CO 80127, and may be served through its agent for the service of process, the CT Corporation System, 1833 S. Morgan Rd., Oklahoma City, OK 73128. 4. The Court has jurisdiction over this action. 5. Venue is proper in this Court pursuant to 12 O.S. §§ 134 and 137. STATEMENT OF PERTINENT FACTS 6. In early 2021, Plaintiff bought a non-operating interest in several natural gas wells in Atoka, Coal, and Hughes Counties, Oklahoma, from Grizzly Operating. Plaintiff’s net production from these wells was approximately 15,000 MMBtu of natural gas each day. 7. A non-operating working interest is an equity and cost-bearing interest in oil and gas wells but is not responsible for the intraday operations related to producing the well. 8. Before natural gas can be consumed by a residential or commercial customer, it has to be (1) gathered, (2) transported, (3) processed and (4) marketed. Most natural gas produced at the wellhead has multiple components such as methane, ethane, propane and butane. 9. On January 15, 2007, Antero Resources Midstream Corporation (hereinafter “Antero”) entered into a Gas Gathering Agreement with MarkWest. The Gas Gathering Agreement is attached as Exhibit A. 10. Prior to the events giving rise to this lawsuit, Plaintiff took assignment of the Gas Gathering Agreement. 11. The Gas Gathering Contract is an “In-Kind” contract. This means that the producer of the natural gas – Plaintiff - relies on MarkWest to gather the produced gas at each individual lease, transport this gas to a processing plant and remove all of the natural gas liquids like ethane and propane from the gas at its processing plants. This is necessary before the gas is marketable for consumption by an end user. 12. In return for this service, Plaintiff agreed in the Gas Gathering Contract to compensate MarkWest via payment of various fees for providing these services. 13. Plaintiff is the “Producer” under the Gas Gathering Agreement. Plaintiff owns or controls gas to be produced and saved from the wells, lands, leaseholds and other sources within the Woodford Shale area. (Gas Gathering Agreement at Whereas Provision.) 14. MarkWest is the “Gatherer” under the Gas Gathering Agreement. Under the Gas Gathering Agreement, MarkWest agreed to receive the gas produced by Plaintiff, dehydrate it, remove any CO2 present and then deliver it to the pipeline carrier designated by Plaintiff. (Gas Gathering Agreement at Art. II, § 2.1-2.4.) 15. With an "in-kind" contract such as the Gas Gathering Agreement, it is necessary for the producer – Plaintiff – to find a buyer for the gas it produces. 16. On January 26, 2021, Plaintiff and Concord entered into a Base Contract for Sale and Purchase of Natural Gas attached hereto as Exhibit B (hereinafter referred to the “Sale / Purchase Agreement”). 17. Pursuant to the Sale / Purchase Agreement, Concord was obligated to buy Plaintiff’s gas at a fixed price for a fixed amount of gas and a variable price for any gas produced by Plaintiff in excess of the fixed amount. (Sale / Purchase Agreement.) 18. Under the Sale / Purchase Agreement, Plaintiff agreed to deliver and sell to Concord a fixed volume of 9,989 MMBtu/day to the Enable East Pool, priced at the Index Futures pricing of Enable East, less $.05/MMBtu as a fee to Concord. 19. Index Futures pricing is based on the previous month closing price for the front month delivery. The Sale / Purchase Agreement included a fixed volume of 9,989 MMBtu per day at a price of $2.61 per MMBtu. 20. The Sale / Purchase Agreement also states that all volumes of gas in excess of the fixed volume of 9,989 MMBTU of gas (the variable volume) will also be delivered to the Enable East Pool, priced at the Enable East Gas Daily Average (“GDA”), less $0.12/MMBtu. The initial variable volume was approximately 6,715 MMBtu per day. 21. The GDA is the closing price for gas traded each day in the Enable East Pool. The price varies day to day based on supply and demand and other factors and is settled daily. 22. On January 11, 2021, Plaintiff appointed, designated and constituted Concord to act as its agent for administrative functions under the Gas Gathering Agreement. The appointment was made via letter dated January 11, 2021 (hereinafter referred to as “The Agency Authorization”) executed by Plaintiff and Concord and attached hereto as Exhibit C. 23. Under The Agency Authorization, Plaintiff appointed Concord as its agent under the Gas Gathering Agreement for administrative functions, including making nominations of gas on Plaintiff's behalf. Further, under the terms of the Agreement, Concord agreed to perform the following functions: i. giving and receiving notices, statements, invoices, correspondence and communications under the Agreement, ii. negotiating amendments and modifications to the Agreement, iii. day-to-day operational matters involving the Agreement, and iv. exercising all other rights and giving all consents and approvals of Producer under the Agreement. (The Agency Authorization at ¶ 1.) 24. In sum, Plaintiffs' Gas Gathering Agreement with Mark West provided Plaintiff with the gathering, transportation and processing of its gas. The Agency Authorization provided Plaintiff with the ability to nominate its gas for delivery and sale. And, Plaintiff's Sale / Purchase Agreement with Concord provided Plaintiff a way to sell the gas. 25. Under the Gas Gathering Agreement, MarkWest agreed to receive gas delivered by Plaintiff at the Receipt Point. (Gas Gathering Agreement at Art. II, § 2.1.) 26. The Receipt Point is the contractually designated location where Plaintiff is to deliver its gas to MarkWest. (Gas Gathering Agreement at Art. II, § 2.1.) 27. Under the Gas Gathering Agreement, the Receipt Point was Antero CDP No. 1 in Pittsburg, Oklahoma. (Gas Gathering Agreement at Exhibit A.) 28. Under the Gas Gathering Agreement, MarkWest was required to measure the amount of gas Plaintiff delivers to it and also when it leaves MarkWest’s plant. The Gas Gathering Agreement states in pertinent part: Gatherer shall measure the Producer's Gas delivered by Producer hereunder using an electronic flow meter ("EFM"), which Gatherer shall install, or caused to be installed, at the Receipt Points and Delivery Points. Measurement shall be made by Gatherer in accordance with the requirements of applicable provisions in ANSI/AP! 2530, "Orifice Metering of Natural Gas" (American Gas Association Gas Measurement Committee Report No. 3) of the Natural Gas Department of the American Gas Association, as amended from time to time, or by any other method commonly used in the industry and mutually acceptable to the parties. EFM equipment shall be designed and installed in accordance with the procedures set forth in the Manual of Petroleum Standards, Chapter 21.1 (Latest Revision). Producer shall have access to Gatherer's metering equipment and information received from such metering equipment at reasonable hours. (Gas Gathering Agreement at Art. V, § 5.1)(emphasis added). 29. Once the gas is delivered to the receipt point into MarkWest’s custody, MarkWest transports the gas via pipeline to the Coalgate Gas Processing Plant (the “Coalgate Plant”) in Coal County, Oklahoma. 30. At the Coalgate Plant, the gas is processed. Processing natural gas consists of removing water, carbon dioxide and other contaminants from the saleable hydrocarbons and fluids. Once this is done, the natural gas is termed “pipeline quality dry natural gas” which meets the requirements to be injected into transportation pipelines and comingled with other such gas that also meets the requirements for transportation to market and sale. 31. Once MarkWest processes Plaintiff's gas, MarkWest then delivers the gas to "Delivery Points." (Gas Gathering Agreement at Art. II, § 2.2.) A delivery point is the "outlet flange of the measurement facilities at the points of interconnection as they may exist . . . ." (Gas Gathering Agreement at Art. I, § 1.5.) 32. In this case, the Delivery Point was the outlet flange at the Coalgate Plant where MarkWest's plant connected to a downstream pipeline. 33. MarkWest failed to install a metering device at the Coalgate Plant to measure the outflow of gas from the plant. 34. In February 2021, Plaintiff delivered the following daily volumes of gas to MarkWest under the Gas Gathering Agreement and the Sale / Purchase Agreement with Concord: <table> <tr> <th>Day</th> <th>Gas Delivered (Fixed Volume)</th> <th>Gas Delivered (Variable Volume)</th> <th>Total Gas Delivered</th> </tr> <tr><td>1</td><td>9,989</td><td>5,074</td><td>15,063</td></tr> <tr><td>2</td><td>9,989</td><td>5,113</td><td>15,102</td></tr> <tr><td>3</td><td>9,989</td><td>5,023</td><td>15,012</td></tr> <tr><td>4</td><td>9,989</td><td>5,029</td><td>15,018</td></tr> <tr><td>5</td><td>9,989</td><td>5,024</td><td>15,013</td></tr> <tr><td>6</td><td>9,989</td><td>4,972</td><td>14,961</td></tr> <tr><td>7</td><td>9,989</td><td>4,907</td><td>14,896</td></tr> <tr><td>8</td><td>9,989</td><td>4,777</td><td>14,766</td></tr> <tr><td>9</td><td>9,989</td><td>4,721</td><td>14,710</td></tr> <tr><td>10</td><td>9,989</td><td>2,950</td><td>12,939</td></tr> <tr><td>11</td><td>9,989</td><td>4,926</td><td>14,915</td></tr> <tr><td>12</td><td>9,989</td><td>4,295</td><td>14,284</td></tr> <tr><td>13</td><td>9,989</td><td>3,945</td><td>13,934</td></tr> <tr><td>14</td><td>9,989</td><td>2,890</td><td>13,879</td></tr> <tr><td>15</td><td>9,989</td><td>3,583</td><td>13,572</td></tr> <tr><td>16</td><td>9,989</td><td>3,651</td><td>13,640</td></tr> </table> <table> <tr> <th>Day</th> <th>Daily Enable East Gas Daily Average Price</th> </tr> <tr> <td>1</td> <td>$2.570</td> </tr> <tr> <td>2</td> <td>$2.695</td> </tr> </table> 35. In February 2021, the Sale / Purchase Agreement required Concord to pay Plaintiff IF pricing of Enable East minus a fee of $0.05 per MMBtu for its services under the Sale / Purchase Agreement. This price applied to Plaintiff’s fixed volume deliveries. The net price owed Plaintiff for its fixed volume deliveries was $2.61 per MMBtu. (Sale / Purchase Agreement at Exhibit A.) 36. In February 2021, the Sale / Purchase Agreement required Concord to pay Plaintiff Enable East Gas Daily Average East minus a fee of $0.12 per MMBtu for its services under the Sale / Purchase Agreement. This price applied to Plaintiff’s variable volume deliveries. The net daily price owed Plaintiff for its variable volume deliveries is contained in the following table: <table> <tr> <th></th> <th></th> </tr> <tr> <td>3</td> <td>$2,860</td> </tr> <tr> <td>4</td> <td>$2,765</td> </tr> <tr> <td>5</td> <td>$2,815</td> </tr> <tr> <td>6</td> <td>$3,430</td> </tr> <tr> <td>7</td> <td>$3,430</td> </tr> <tr> <td>8</td> <td>$3,430</td> </tr> <tr> <td>9</td> <td>$3,355</td> </tr> <tr> <td>10</td> <td>$3,500</td> </tr> <tr> <td>11</td> <td>$6,105</td> </tr> <tr> <td>12</td> <td>$34,385</td> </tr> <tr> <td>13</td> <td>$375,810</td> </tr> <tr> <td>14</td> <td>$375,810</td> </tr> <tr> <td>15</td> <td>$375,810</td> </tr> <tr> <td>16</td> <td>$375,810</td> </tr> <tr> <td>17</td> <td>$300,000</td> </tr> <tr> <td>18</td> <td>$428,640</td> </tr> <tr> <td>19</td> <td>$34,450</td> </tr> <tr> <td>20</td> <td>$4,550</td> </tr> <tr> <td>21</td> <td>$4,550</td> </tr> <tr> <td>22</td> <td>$4,550</td> </tr> <tr> <td>23</td> <td>$2,695</td> </tr> <tr> <td>24</td> <td>$2,650</td> </tr> <tr> <td>25</td> <td>$2,530</td> </tr> <tr> <td>26</td> <td>$2,360</td> </tr> <tr> <td>27</td> <td>$2,360</td> </tr> <tr> <td>28</td> <td>$2,360</td> </tr> </table> (Sale / Purchase Agreement at Exhibit A.) 37. In February 2021, the total daily amounts Plaintiff was owed for its gas deliveries was as follows: <table> <tr> <th rowspan="2">Day</th> <th colspan="2"> </th> <th rowspan="2">Total Due for Deliveries</th> </tr> <tr> <th>Amount Due for Fixed Volume Deliveries</th> <th>Amount Due for Variable Volume Deliveries</th> </tr> <tr> <td>1</td> <td>$25,571.84</td> <td>$12,431.30</td> <td>$38,004.14</td> </tr> <tr> <td>2</td> <td>$25,571.84</td> <td>$13,165.98</td> <td>$38,739.82</td> </tr> </table> <table> <tr> <th>3</th> <td>$25,571.84</td> <td>$13,763.02</td> <td>$39,337.86</td> </tr> <tr> <th>4</th> <td>$25,571.84</td> <td>$13,301.71</td> <td>$38,877.55</td> </tr> <tr> <th>5</th> <td>$25,571.84</td> <td>$13,539.68</td> <td>$39,116.52</td> </tr> <tr> <th>6</th> <td>$25,571.84</td> <td>$16,457.32</td> <td>$42,035.16</td> </tr> <tr> <th>7</th> <td>$25,571.84</td> <td>$16,242.17</td> <td>$41,821.01</td> </tr> <tr> <th>8</th> <td>$25,571.84</td> <td>$15,811.87</td> <td>$41,391.71</td> </tr> <tr> <th>9</th> <td>$25,571.84</td> <td>$15,272.44</td> <td>$40,853.28</td> </tr> <tr> <th>10</th> <td>$25,571.84</td> <td>$9,971.00</td> <td>$35,552.84</td> </tr> <tr> <th>11</th> <td>$25,571.84</td> <td>$29,482.11</td> <td>$55,064.95</td> </tr> <tr> <th>12</th> <td>$25,571.84</td> <td>$147,168.18</td> <td>$172,752.02</td> </tr> <tr> <th>13</th> <td>$25,571.84</td> <td>$1,482,097.05</td> <td>$1,507,681.89</td> </tr> <tr> <th>14</th> <td>$25,571.84</td> <td>$1,461,434.10</td> <td>$1,487,019.94</td> </tr> <tr> <th>15</th> <td>$25,571.84</td> <td>$1,346,097.05</td> <td>$1,371,683.89</td> </tr> <tr> <th>16</th> <td>$25,571.84</td> <td>$1,371,644.19</td> <td>$1,397,232.03</td> </tr> <tr> <th>17</th> <td>$25,571.84</td> <td>$1,092,162.96</td> <td>$1,117,751.80</td> </tr> <tr> <th>18</th> <td>$25,571.84</td> <td>$1,601,379.24</td> <td>$1,626,969.08</td> </tr> <tr> <th>19</th> <td>$25,571.84</td> <td>$131,861.53</td> <td>$157,452.37</td> </tr> <tr> <th>20</th> <td>$25,571.84</td> <td>$15,784.09</td> <td>$41,375.93</td> </tr> <tr> <th>21</th> <td>$25,571.84</td> <td>$15,890.41</td> <td>$41,483.25</td> </tr> <tr> <th>22</th> <td>$25,571.84</td> <td>$18,663.59</td> <td>$44,257.43</td> </tr> <tr> <th>23</th> <td>$25,571.84</td> <td>$11,499.95</td> <td>$37,094.79</td> </tr> <tr> <th>24</th> <td>$25,571.84</td> <td>$11,549.45</td> <td>$37,145.29</td> </tr> <tr> <th>25</th> <td>$25,571.84</td> <td>$10,857.05</td> <td>$36,453.89</td> </tr> <tr> <th>26</th> <td>$25,571.84</td> <td>$10,295.04</td> <td>$35,892.88</td> </tr> <tr> <th>27</th> <td>$25,571.84</td> <td>$9,811.20</td> <td>$35,410.04</td> </tr> <tr> <th>28</th> <td>$25,571.84</td> <td>$10,035.20</td> <td>$35,635.04</td> </tr> <tr> <th colspan="2">$716,011.52</th> <th>$8,917,668.88</th> <th>$9,634,086.40</th> </tr> </table> 38. As a result of gas deliveries made by Plaintiff in February 2021, Plaintiff was owed a total of $9,634,086.40 under the Sale / Purchase Agreement. 39. Of the $9,634,086.40 owed Plaintiff for gas deliveries in February 2021, Plaintiff was only paid $2,155,629.93 resulting in a loss to Plaintiff of $7,478,456.47. 40. As a result, Plaintiff suffered actual damages of at least $7,478,456.47 (exclusive of costs, interest and attorneys’ fees) for gas it delivered in February 2021 and for which it was not paid. 41. To wrongfully avoid paying Plaintiff $7,478,456.47 under the Sale / Purchase Agreement, Concord and MarkWest conspired to alter, after the fact, the data related to Plaintiff’s gas deliveries. 42. For selected days in February 2021, Concord and MarkWest conspired to show Plaintiff delivered less gas than it actually delivered. The effect of the conspiracy between Concord in MarkWest was to reduce the money owed Plaintiff under the Sale / Purchase Agreement. 43. For selected days in February 2021, Concord and MarkWest conspired to show Plaintiff delivered no gas on some days and no gas on other days. 44. The purpose of the conspiracy was to alter, after the fact, the data to improperly show Plaintiff delivered less gas when the variable price of gas was higher and more gas when the variable price of gas was lower. 45. For example, the following occurred: a. Concord and MarkWest conspired to show Plaintiff delivered 22,392 MMBtu’s of gas on February 28, 2021 when the price owed Plaintiff was $2.36 per MMBtu. Plaintiff had never, and was not capable of, delivering 22,392 MMBtu’s of gas on one day. Plaintiff delivered 14,469 MMBtu’s of gas on that day. b. Concord and MarkWest also conspired to show Plaintiff delivered a total of 5,189 MMBtu of gas on February 15, 2021. The records show, however, that Plaintiff delivered a total of 13,572 MMBtu’s of gas that day. The variable price of gas that day was $375.810. c. The net effect of the conspiracy between Concord and MarkWest was to manipulate the data to show Plaintiff delivered less gas on days when it was owed a higher price and more gas on the days Plaintiff was owed a lower price. 46. As a result of the conspiracy between Concord and MarkWest, Plaintiff lost at least $7,478,456.47 in money owed under the Sale / Purchase Agreement resulting in an improper windfall to Concord and MarkWest as a result of their improper conduct. THEORY OF RECOVERY I: BREACH OF CONTRACT - MARKWEST 47. Under the Gathering Agreement, MarkWest was required to meter the gas received from Plaintiff and when it left MarkWest’s plant. 48. Following each month’s deliveries of gas by Plaintiff to MarkWest, MarkWest was required to report the delivery quantities to Plaintiff and report any variances or imbalances to Plaintiff. 49. In February 2021, despite repeated requests from Plaintiff, MarkWest failed to accurately meter or record gas received from Plaintiff. 50. In March, 2021, when MarkWest balanced the deliveries for the month of February 2021, MarkWest failed to credit Plaintiff with volumes of gas that Plaintiff delivered to MarkWest for processing during February 2021. 51. Under the Gas Gathering Agreement, the parties agreed to actively cooperate with each other, and the pipelines, to review appropriate data to identify any imbalance, and to eliminate or remedy any imbalance as soon as either party becomes aware of an imbalance. The parties further agree to manage daily receipts and deliveries so that the imbalances shall be kept as near to zero as practicable. 52. Rather than cooperating with Plaintiff, and rather than managing daily receipts and deliveries so that imbalances be kept as near zero as possible, MarkWest knowingly created and relied upon false gas receipt and delivery numbers to cover up the fact that MarkWest wrongfully took Plaintiff's gas. 53. During the month of February 2021, MarkWest received volumes of gas from Plaintiff and was required under the Gathering Agreement to credit the price of the gas it received in February 2021 to Plaintiff's account for payment to Plaintiff in March 2021. 54. MarkWest failed to credit the value of the gas delivered to it by Plaintiff in February 2021. Instead, MarkWest either wrongfully diverted Plaintiff's funds to a third-party that was not authorized to receive Plaintiff's payment or kept Plaintiff's gas and sold it for its own improper profit. 55. These acts constitute a breach of the Gathering Agreement by MarkWest. 56. As a result of MarkWest’s breach of the Gathering Agreement, volumes of Plaintiff’s gas were delivered to MarkWest, but MarkWest did not correctly show the deliveries by changing the data related to the deliveries after the fact. 57. Plaintiff’s damages for breach of the Gathering Agreement by MarkWest may be calculated by multiplying the market value (at the appropriate daily price) of the volume of gas delivered by Plaintiff by the amount of gas for which MarkWest wrongfully refused, and continues to refuse, to pay Plaintiff. That amount equals at least $7,478,456.47. 58. As a result of the conduct of MarkWest, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY II: BREACH OF CONTRACT - CONCORD 59. Plaintiff adopts and repleads all facts stated above. 60. Under the Sale / Purchase Agreement, Concord was required to purchase Plaintiff’s gas after delivery, at rates specified in the Sale / Purchase Agreement. 61. Under the Sale / Purchase Agreement, Concord was required to pay Plaintiff the amounts due it for a given month in the immediately following month. 62. In February 2021, Plaintiff delivered gas to Concord. Despite receiving the gas from Plaintiff, Concord failed to pay Plaintiff for all of the gas it purchased in February 2021. 63. In March 2021 and thereafter, Concord intentionally altered Plaintiff’s account with it by improperly changing the data to show Plaintiff delivered more gas when the variable price was low and less gas when the variable price was high. The intentional effect of these improper reallocations by Concord was to reduce the amount of sales proceeds Plaintiff was owed under the Sale / Purchase Agreement. 64. Concord’s conduct breached the Sale / Purchase Agreement and the Agency Agreement. 65. Plaintiff’s damages for breach of the Sale / Purchase Agreement by Concord may be calculated by multiplying the market value (at the appropriate daily price) of the volume of gas delivered by Plaintiff by the amount of gas for which Concord wrongfully refused, and continues to refuse, to pay Plaintiff. Those amounts equal at least $7,478,456.47. 66. As a result of the conduct of Concord, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY III: INTERFERENCE WITH A CONTRACT - MARKWEST 67. Plaintiff adopts and repleads all facts stated above. 68. Plaintiff and Concord were parties to the Sale / Purchase Agreement. 69. MarkWest was actually aware of the Sale / Purchase Agreement because (i) MarkWest worked directly with Concord, as agent for Plaintiff, under the Agency Authorization; and (ii) MarkWest delivered Plaintiff’s gas to Concord for its sale. 70. MarkWest interfered with or made it impossible to perform the Sale / Purchase Agreement when it wrongfully reported the amount of gas received from and delivered by Plaintiff. 71. Gas was delivered by Plaintiff to MarkWest and Plaintiff was entitled to payment for the gas under the Sale / Purchase Agreement. Plaintiff did not receive payment for all of the gas it sold Concord as a result of MarkWest’s conduct. 72. MarkWest’s interference was intentional and done to improperly and wrongfully reduce the amount of money due Plaintiff. 73. MarkWest was substantially certain its actions would interfere with the Sale / Purchase Agreement because it had actual notice of the Sale / Purchase Agreement and conspired with Concord to manipulate the data to show Plaintiff was owed less money. 74. MarkWest used inappropriate or unfair means to interfere with the Sale / Purchase Agreement. 75. Plaintiff suffered actual damages as a result of MarkWest’s interference with the Sale / Purchase Agreement in an amount equal to the volume of gas it wrongfully refused to credit to Plaintiff’s account with Concord which can be calculated by multiplying the prices at which the gas either was, or should have been, sold and the volume of gas delivered to MarkWest by Plaintiff. That amount is at least $7,478,456.47. 76. As a result of MarkWest’s conduct, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY IV: FALSE REPRESENTATION – MARKWEST AND CONCORD 77. Plaintiff adopts and repleads all facts stated above. 78. In March 2021, when Concord and MarkWest were settling the prior months’ accounts with Plaintiff, Concord and MarkWest conspired to improperly alter the data related to the gas delivered by Plaintiff. 79. Concord and MarkWest failed to pay Plaintiff for its gas. 80. MarkWest represented to Plaintiff that a “force majeure event” had occurred in mid-February 2021 necessitating a post hoc reallocation of the amount of gas Plaintiff delivered to MarkWest. 81. MarkWest did not provide notice to Plaintiff of this purported “force majeure event” in real time because no force majeure event occurred in February 2021. 82. In late February, 2021 Concord and MarkWest both reported actual deliveries of Plaintiff’s gas and such reports showed substantial delivery of the gas. 83. Then, notwithstanding Concord’s and MarkWest’s prior reporting and acknowledgment of Plaintiff’s deliveries, Concord and MarkWest falsely altered the data related to Plaintiff’s gas deliveries in February 2021. 84. Concord and MarkWest intentionally altered Plaintiff’s account by improperly changing the data to show Plaintiff delivered more gas when the variable price was low and less gas when the variable price was high. The intentional effect of these improper reallocations by Concord and MarkWest was to reduce the amount of sales proceeds Plaintiff was owed under the Sale / Purchase Agreement. 85. The above representations were intentionally false when made by Concord and MarkWest. 86. To its detriment, Plaintiff relied on the statements made by Concord and MarkWest. Plaintiff’s reliance resulted in damages in an amount at least equal to the volume of gas not credited to Plaintiff’s account with Concord at the prices at which the gas either was, or should have been, sold on those days under the Sale / Purchase Agreement. That amount is at least $7,478,456.47. 87. Given the conduct of Concord and MarkWest, and their conspiracy to manipulate the data used in calculating the amounts owed Plaintiff, the use of GDA pricing is warranted. 88. Using GDA pricing for all gas delivered by Plaintiff results in the price of gas purchased by Concord to be $13,553,549.17. Reduction of that amount by $2,155,628.93 – the amount Concord paid Plaintiff – results in damages to Plaintiff of $11,397,920.24. 89. As a result of the conduct of MarkWest and Concord, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY V: CONVERSION – CONCORD AND MARKWEST 90. Plaintiff adopts and repleads all facts stated above. 91. Plaintiff was the owner of all gas produced by it in February 2021, including at all times it was in possession of MarkWest. 92. Concord and/or MarkWest intentionally took possession of all gas produced by Plaintiff in February 2021 and did not compensate Plaintiff for the gas. 93. Plaintiff did not consent to the wrongful taking of its gas by Concord and MarkWest. 94. The effect of the conduct of Concord and MarkWest was to wrongfully convert Plaintiff's gas to their own and sell that gas for their own profit despite each had actual knowledge the gas was owned by Plaintiff and Concord was obligated to pay Plaintiff for the wrongly converted gas. 95. Concord and MarkWest wrongfully converted Plaintiff's gas to use as their own. The total dollar value of the converted gas is at least $13,553,549.17. Reduction of that amount by $2,155,628.93 – the amount paid Plaintiff – results in damages to Plaintiff of $11,397,920.24. 96. As a result of the conduct of MarkWest and Concord, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY VI: BREACH OF AGENCY AGREEMENT - CONCORD 97. Plaintiff adopts and repleads all facts stated above. 98. On January 11, 2021, Plaintiff appointed, designated and constituted Concord to act as its agent for administrative functions under the Gas Gathering Agreement. The appointment was made via letter dated January 11, 2021 (hereinafter referred to as "The Agency Authorization") executed by Plaintiff and Concord and attached hereto as Exhibit C. 99. Under The Agency Authorization, Plaintiff appointed Concord as its agent under the Gas Gathering Agreement for administrative functions, including the nomination of Plaintiff's gas. Further, under the terms of the Agreement, Concord agreed to perform the following functions: i. giving and receiving notices, statements, invoices, correspondence and communications under the Agreement, ii. negotiating amendments and modifications to the Agreement, iii. day-to-day operational matters involving the Agreement, and iv. exercising all other rights and giving all consents and approvals of Producer under the Agreement. 100. As a result of The Agency Authorization, Concord was contractually obligated to act in a manner consistent with the best interests of Plaintiff. 101. Concord breached The Agency Authorization by acting in a manner contrary to its obligations to Plaintiff thereunder. 102. To wrongfully avoid paying Plaintiff $7,478,456.47 under the Sale / Purchase Agreement, Concord and MarkWest conspired to alter, after the fact, the data related to Plaintiff's gas deliveries. 103. For selected days in February 2021, Concord and MarkWest conspired to show Plaintiff delivered less gas than it actually delivered. The effect of the conspiracy between Concord and MarkWest was to reduce the money owed Plaintiff under the Sale / Purchase Agreement. 104. For selected days in February 2021, Concord and MarkWest conspired to show Plaintiff delivered no gas on some days and no gas on other days. 105. The purpose of the conspiracy was to alter, after the fact, the data to improperly show Plaintiff delivered less gas when the variable price of gas was higher and more gas when the variable price of gas was lower. 106. Concord’s breach of The Agency Authorization was the direct cause of Plaintiff’s damages. 107. As a result of Concord’s conduct, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY - VII BREACH OF FIDUCIARY DUTY - CONCORD 108. Plaintiff adopts and repleads all facts stated above. 109. On January 11, 2021, Plaintiff appointed, designated and constituted Concord to act as its agent for administrative functions under the Gas Gathering Agreement. The appointment was made via letter dated January 11, 2021 (hereinafter referred to as “The Agency Authorization”) executed by Plaintiff and Concord and attached hereto as Exhibit C. 110. Under The Agency Authorization, Plaintiff appointed Concord as its agent under the Gas Gathering Agreement for administrative functions under the terms of the Agreement, including the following functions: i. giving and receiving notices, statements, invoices, correspondence and communications under the Agreement, ii. negotiating amendments and modifications to the Agreement, iii. day-to-day operational matters involving the Agreement, and iv. exercising all other rights and giving all consents and approvals of Producer under the Agreement. 111. As a result of The Agency Authorization, a fiduciary relationship existed between Plaintiff reasonably placed its trust and confidence in the integrity and loyalty of Concord. Concord knowingly accepted Plaintiff’s trust and confidence and undertook to act on behalf of Plaintiff. 112. Concord breached its fiduciary duty to Plaintiff. Concord played two (2) roles in the events leading to this lawsuit. On the one hand, Concord acted as Plaintiff’s agent to, among other things, nominate Plaintiff’s gas in good faith. On the other hand, Concord agreed to purchase the gas that it nominated on behalf of Plaintiff. Concord had a duty to exercise its nominating duties in good faith both contractual and it was factually necessary as a matter of good faith and fairness. 113. To wrongfully avoid paying Plaintiff $7,478,456.47 under the Sale / Purchase Agreement, Concord and MarkWest conspired to alter, after the fact, the data related to Plaintiff’s gas deliveries. 114. For selected days in February 2021, Concord and MarkWest conspired to show Plaintiff delivered less gas than it actually delivered. The effect of the conspiracy between Concord in MarkWest was to reduce the money owed Plaintiff under the Sale / Purchase Agreement. 115. The purpose of the conspiracy was to alter, after the fact, the data to improperly show Plaintiff delivered less gas when the variable price of gas was higher and more gas when the variable price of gas was lower. 116. The breach of Concord’s fiduciary duty to Plaintiff was the direct cause of Plaintiff’s damages. 117. As a result of Concord’s conduct, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY VIII: BAILMENT – MARKWEST 118. Plaintiff adopts and repleads all facts stated above. 119. Plaintiff was the owner of all gas produced by it in February 2021, including at all times it was in possession of MarkWest. This included a total of 401,147 BBtu’s of gas. 120. When Plaintiff delivered its gas to MarkWest, MarkWest was acting as a bailee for hire of Plaintiff’s gas which totaled 401,147 BBtu’s of gas. The value of that gas at GDA pricing was $13,553,549.17. 121. MarkWest had a duty to use at least ordinary care to preserve Plaintiff’s gas. 122. MarkWest violated its duty of care to Plaintiff by either permitting Plaintiff’s gas to be intentionally diverted to a non-owner of the gas and sold for its own profit, by negligently failing to meter the outflow of case from the Coalgate Plant or by conspiring with Concord to show Plaintiff delivered less gas than it actually delivered. The effect of the conspiracy between Concord in MarkWest was to reduce the money owed Plaintiff under the Sale / Purchase Agreement. 123. In any event, Plaintiff was not compensated by Concord for gas it delivered to MarkWest. 124. MarkWest was aware that the gas delivered to it by Plaintiff each day from February 12, 2021 to February 17, 2021, had a total value of at least $13,553,549.17 at GDA pricing. 125. As a result of the conduct of MarkWest, Plaintiff suffered damages as set forth below. THEORY OF RECOVERY IX: CIVIL CONSPIRACY 126. Plaintiff adopts and repleads all facts and allegations stated above. 127. Concord and MarkWest maliciously conspired to commit some or all the improper and unlawful acts alleged above. 128. The acts of Concord and MarkWest alleged above give rise to underlying causes of action sounding in contract, tort and equity as alleged above. 129. Both Concord and MarkWest undertook the unlawful act of stealing Plaintiff's gas and the moneys due Plaintiff under the Sale / Purchase Agreement and altering the data related to the Gas Gathering Agreement in an effort to cover-up the theft of the gas. 130. The manipulation of Plaintiff's production and delivery data by Concord and MarkWest was done in concert by them and serves as evidence that Concord and MarkWest had a meeting of the minds to conspire to illegally take Plaintiff's gas and illegally take the moneys owed Plaintiff for the sale of its gas. 131. The submission, wire transfer and electronic transfer of each page of the manipulated data by Concord and MarkWest to Plaintiff and others were acts in furtherance of the civil conspiracy between Concord and MarkWest. 132. Both Concord and MarkWest acted unlawfully by fraudulently altering the data related to Plaintiff's gas sales to intentionally, improperly and wrongfully reduce the amount due Plaintiff under the Sale / Purchase Agreement. The transmission of the fraudulent documents by wire and electronic means was, itself, unlawful and fraudulent. 133. The actual damages suffered by Plaintiff as a result of the civil conspiracy between Concord and MarkWest are at least $13,553,549.17 given the stolen gas could have been sold by Plaintiff at GDA pricing had it not been stolen. 134. The conspiracy committed by Concord and MarkWest resulted in actual damages to Plaintiffs as set forth below. ACTUAL DAMAGES 135. As a result of MarkWest’s breach of contract, Plaintiff has been damaged in an amount in excess of $7,478,456.47. 136. As a result of Concord’s breach of contract, Plaintiff has been damaged in an amount in excess of $7,478,456.47. 137. As a result of MarkWest’s interference with a contract, Plaintiff has been damaged in an amount in excess of $7,478,456.47. 138. As a result of MarkWest’s false representations, Plaintiff has been damaged in an amount in excess of $11,397,920.24. 139. As a result of Concord’s false representations, Plaintiff has been damaged in an amount in excess of $11,397,920.24. 140. As a result of Concord’s conversion, Plaintiff has been damaged in an amount in excess of $13,553,549.17. 141. As a result of MarkWest’s conversion, Plaintiff has been damaged in an amount in excess of $13,553,549.17. 142. As a result of Concord’s breach of the Agency Authorization, Plaintiff has been damaged in an amount in excess of $7,478,456.47. 143. As a result of Concord’s breach of its fiduciary duty, Plaintiff has been damaged in an amount in excess of $7,478,456.47. 144. As a result of MarkWest’s status as a bailee for hire, Plaintiff has been damaged in an amount in excess of $13,553,549.17. 145. As a result of MarkWest’s and Concord’s civil conspiracy, Plaintiff has been damaged in an amount in excess of $13,553,549.17. PUNITIVE DAMAGES 146. The conduct of MarkWest was clearly and convincingly reckless, intentional and done with malice toward Plaintiff for which Plaintiff seeks punitive damages in an amount in excess of $75,000.00. 147. The conduct of Concord was clearly and convincingly reckless, intentional and done with malice toward Plaintiff for which Plaintiff seeks punitive damages in an amount in excess of $75,000.00. FIRST FILING OF CASE 148. On March 10, 2023, Plaintiff initiated an action against MarkWest and Concord in the District Court for Oklahoma County. The case was assigned the number CJ-2023-1342. 149. On November 17, 2025, the case was dismissed without prejudice. 150. Pursuant to 12 O.S. § 100, Plaintiff had one year – until November 17, 2026 – to refile this action. Therefore, this action is timely. 151. The allegations in this Petition arise out of the same operative events giving rise to the allegations in the Oklahoma County case that was dismissed (CJ-2023-1342). Therefore, all allegations and theories of recovery asserted herein are timely under Oklahoma law. 152. WHEREFORE, Plaintiff prays judgment against Mark West and Concord each in an amount in excess of $75,000.00 exclusive of costs, interest and attorneys’ fees. Respectfully submitted, Larry A. Tawwater, OBA No. 8852 Darren M. Tawwater, OBA No. 18854 B. Adam Myers, OBA No. 33985 B. Trevor Nation, OBA No. 36734 THE TAWWATER LAW FIRM, P.L.L.C. 14001 Quail Springs Parkway Oklahoma City, Oklahoma 73134 Telephone: (405) 607-1400 Facsimile: (405) 607-1450 [email protected] [email protected] [email protected] ATTORNEYS FOR PLAINTIFFS EXHIBIT A GAS GATHERING AGREEMENT Entered into by and between Antero Resources Midstream Corporation, as Producer and MarkWest Western Oklahoma Gas Company, L.L.C., as Gatherer Effective as of the 15th day of January, 2007. TABLE OF CONTENTS <table> <tr> <th> </th> <th>Page</th> </tr> <tr> <td>I. Definitions</td> <td>1</td> </tr> <tr> <td>II. Services Provided by Gatherer</td> <td>3</td> </tr> <tr> <td>III. Obligations of Producer</td> <td>4</td> </tr> <tr> <td>IV. Operational Imbalance and Cash Balancing</td> <td>4</td> </tr> <tr> <td>V. Measurement</td> <td>6</td> </tr> <tr> <td>VI. Gas Quality and Specifications</td> <td>7</td> </tr> <tr> <td>VII. Gathering, Compression, Treating Fees, Deemed Fuel and Deemed System Loss</td> <td>9</td> </tr> <tr> <td>VIII. Billing, Payment and Reporting</td> <td>10</td> </tr> <tr> <td>IX. Taxes</td> <td>11</td> </tr> <tr> <td>X. Control, Possession, Title and Additional Indemnification</td> <td>11</td> </tr> <tr> <td>XI. Representations and Warranties</td> <td>12</td> </tr> <tr> <td>XII. Force Majeure</td> <td>13</td> </tr> <tr> <td>XIII. Term</td> <td>14</td> </tr> <tr> <td>XIV. Assignments</td> <td>14</td> </tr> <tr> <td>XV. Notices</td> <td>15</td> </tr> <tr> <td>XVI. Miscellaneous</td> <td>16</td> </tr> </table> GAS GATHERING AGREEMENT THIS GAS GATHERING AGREEMENT (this "Agreement") is made and entered into as of this 15th day of January, 2007 (the "Effective Date"), by and between Antero Resources Midstream Corporation, hereinafter referred to as "Producer", and MarkWest Western Oklahoma Gas Company, L.L.C. hereinafter referred to as "Gatherer." (Producer and Gatherer may at times be referred to herein as a "Party" or, collectively, as "Parties") WITNESSETH WHEREAS, Producer owns or controls certain Gas to be produced and saved from the wells, lands, leaseholds and other sources within the Woodford shale area; WHEREAS, Producer and Gatherer desires that Gatherer receive and gather Producer's Gas at the Receipt Point and deliver Producer's Gas to Producer or for Producer's account at the Delivery Points under the terms and conditions herein. NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, Gatherer and Producer hereby agree as follows: Article I. DEFINITIONS Except as otherwise provided, the following terms, when capitalized, whether in the singular, plural or possessive, shall have the meaning set forth below: 1.1 "BTU" shall mean British Thermal Unit, which is the quantity of heat required to raise the temperature of one (1) pound avoirdupois of pure water from fifty-eight and five tenths degrees Fahrenheit (58.5°F) to fifty-nine and five tenths degrees Fahrenheit (59.5°F) at a pressure of fourteen and six hundred and ninety-six thousandths pounds per square inch absolute (14.696 psia). 1.2 "Business Day" shall mean the days of a week excluding weekends, federal holidays and any additional days on which federal banks are not open for business. 1.3 "Day" shall mean a period of twenty-four (24) consecutive hours which shall commence for operational issues at 9:00 o'clock a.m. Central Standard Time on one calendar day and end at 9:00 o'clock a.m. Central Standard Time on the following calendar day; and, for any other issues (including, but not limited to, non-operational contract issues), such twenty-four (24) consecutive hour period shall commence at 12:01 a.m. Central Standard Time on one calendar day and end at 12:01 a.m. Central Standard Time on the following calendar day. 1.4 "Deemed Fuel", "Deemed System Loss", and "Measured Treating Fuel and Loss" shall have the meanings set forth in Article VII and/or in Exhibit B herein. 1.5 "Delivery Points" shall mean the outlet flange of the measurement facilities at the points of interconnection as they may exist, between Gatherer's System and the existing interstate and intrastate pipelines of Enogex Inc. ("Enogex") and CenterPoint Energy Gas Transmission ("CEGT"). The term "Delivery Points" shall have the same meaning with respect to any additional Pipeline Carriers, and shall apply to any other future delivery points on the System. 1.6 "Fees" refers collectively to the "Gathering Fee", "Compression Fee", and "Treating Fee." The terms "Gathering Fee", "Compression Fee", and "Treating Fee" shall have the meanings set forth in Article VII and in Exhibit B. 1.7 "Gas" includes gas well gas produced from wells classified as gas wells by any governmental authority having jurisdiction, casinghead gas produced from oil wells so classified, and flash gas vaporized from crude oil and condensate therefrom after production. 1.8 "BTUs", "Heating Content" or "Heating Value" shall mean the gross ideal heating value of and the number of BTUs measured in the Gas in accordance with GPA Standards 2145 & 2172 at Standard Base Conditions. 1.9 "MSCF" or "mscf" shall mean one thousand (1,000) Standard Cubic Feet of Gas at Standard Base Conditions. 1.10 "MMBTU" or "mmbtu" shall mean one million BTU (1,000,000 BTUs). 1.11 "Month" shall mean a calendar month. 1.12 "Pipeline Carriers" means the pipelines receiving Producer's Gas at the Delivery Points including the interstate and intrastate pipelines of Enogex, CEGT, and any other interstate or intrastate pipeline receiving Producer's Gas at any Delivery Point. 1.13 "Producer's Gas" shall include (1) all Gas owned or controlled by Producer and/or its wholly-owned affiliates or (2) Gas which Producer has the right to deliver for gathering at the Receipt Point listed on Exhibit A. 1.14 "Receipt Point" shall be the points listed on Exhibit A where Producer shall deliver Producer's Gas to Gatherer and where Gatherer shall receive Producer's Gas in accordance with the terms of this Agreement. 1.15 "Standard Base Conditions" shall mean a pressure of fourteen and sixty five hundredths pounds per square inch absolute (14.65 psia) at a temperature of sixty degrees Fahrenheit (60°F). 1.16 "Standard Cubic Foot" shall mean the volume of gas contained in one cubic foot of space at Standard Base Conditions. 1.17 "System" shall mean all delivery, compression, gathering, measurement, Treating, processing and dehydration facilities, and other related facilities constructed, acquired or used by Gatherer to fulfill its obligations under this Agreement with respect to Producer's Gas. "System" shall also be construed to include all of Gatherer's delivery, compression, gathering, measurement, Treating, processing, dehydration facilities, and other related facilities constructed by or used by Gatherer in connection with Gas received by Gatherer from other parties on pipelines contiguously connected to pipelines used by Gatherer in connection with Producer's Gas. 1.18 "Treating" or "Treat" shall mean the removal of unwanted components from a natural gas stream, including, but not limited to water and Carbon Dioxide ("CO2") by utilizing industry accepted processes including, but not limited to, mechanical separation, chemical reaction, adsorption and absorption. 1.19 "Well" shall mean any well productive of Gas, from any formations, which is now or hereafter completed by Producer where Gas from such Well is delivered to Gatherer at the Receipt Point listed on Exhibit A. The commitments and obligations of Gatherer under this Agreement shall extend to and include all of Producer's Gas from such a Well. See Amendment 7; 13 Article II. SERVICES PROVIDED BY GATHERER 2.1 Gatherer shall, at Gatherer's sole cost and expense, install all facilities that are required to receive Gas delivered by Producer at the Receipt Point(s) in accordance with the terms of this Agreement and deliver to the Pipeline Carrier(s) designated by Producer at the Delivery Point(s), a thermally equivalent quantity of Producer's Gas less only Deemed Fuel, Deemed System Loss, and Measured Treating Fuel and Loss. 2.2 Gatherer shall compress Producer's Gas to a pressure such that Producer's Gas can be delivered at the Delivery Points into the pipelines owned and/or controlled by the Pipeline Carriers, provided however, Gatherer shall not be required to deliver the Gas at a pressure greater than one thousand pounds per square inch gauge (1,000 psig). 2.3 Gatherer shall install all facilities needed or required to dehydrate Producer's Gas as necessary to cause Producer's Gas to meet the water content specifications of the pipelines owned and/or controlled by the Pipeline Carriers. 2.4 Gatherer shall install all CO2 Treating facilities needed or required to remove CO2 such that the CO2 content in Producer's Gas at the Delivery Points shall meet the specifications of the pipelines owned and/or controlled by the Pipeline Carriers, provided that the CO2 content in Producer's Gas delivered to the Receipt Point(s) shall not exceed 10%. 2.5 It is expressly agreed that Gatherer will have no duty under this Agreement to Treat Producer's Gas for the purpose of removing Hydrogen Sulfide ("H2S") or Nitrogen ("N2"). Article III. OBLIGATIONS OF PRODUCER 3.1 Producer shall deliver Producer's Gas to Gatherer at the Receipt Point(s) at a pressure sufficient to effect delivery into Gatherer's System, against the pressure prevailing therein from time to time; provided, however, that Producer shall not be required to deliver Producer's Gas at a pressure greater than fifty five pounds per square inch gauge (55 psig). 3.2 Producer hereby commits that any and all existing and future Wells connected to the Receipt Point(s) listed on Exhibit A shall become dedicated to the Agreement. 3.3 Producer's Gas delivered under this Agreement shall be delivered to Gatherer at the Receipt Point(s) as closely as is practicable to uniform hourly and daily rates of flow. 3.4 Producer shall be solely responsible for making timely arrangements for the further disposition of Producer's Gas at and from the Delivery Points. 3.5 Gas gathered hereunder shall not be subjected to processing for extraction of liquid hydrocarbons (other than by conventional mechanical separation) prior to delivery at the Receipt Point(s). 3.6 Add by Amendment NO. 2 Article IV. OPERATIONAL IMBALANCE AND CASH BALANCING 4.1 The Parties recognize that Gatherer shall be designated by the Pipeline Carriers as the point operator and shall be considered by the Pipeline Carriers to be responsible for the operation of the System's pipeline interconnections to the Pipeline Carriers. As such, with respect to operational balancing agreements or similar agreements with all Pipeline Carriers ("OBA(s)") related to the existing pipeline interconnects, Gatherer shall either be appointed and act as agent of Producer or enter into independent OBA's. Upon entering into all such arrangements for the OBA's, Gatherer shall be responsible for the administration of all such OBA's and for all terms and conditions of any such OBA. 4.2 The Parties recognize that certain Gas imbalances may occur between the quantity of Producer's Gas received by Gatherer less Deemed Fuel, Deemed System Loss, and Measured Treating Fuel and Loss ("Net Receipt") and the quantity of Producer's Gas nominated by Producer for delivery by Gatherer to Producer or for Producer's account at the Delivery Point(s) ("Net Nomination"). Throughout each Month the parties agree to actively communicate and cooperate with each other, and with any interconnecting pipeline, to review appropriate data to identify any imbalance, and to eliminate or remedy any imbalance as soon as either party becomes aware of an imbalance. The parties further agree to manage daily receipts and deliveries so that the imbalances shall be kept as near to zero as practicable. At the end of each Month, any imbalance in MMBTUs between the Net Receipt and the Net Nominations (with such difference being referred to as the "Imbalance") shall be balanced by means of a payment to Producer from Gatherer or a payment to Gatherer from Producer, as applicable, valued at the "Cash-Out Price." To the extent that the Monthly Net Receipt amounts are greater than the Monthly Net Nomination amounts, a payment shall be due Producer, and Gatherer will make such payment to Producer for the imbalance based on the difference between the Monthly Net Receipt amounts and the Monthly Net Nomination amounts, multiplied by the Cash-Out Price. To the extent the Monthly Net Receipt amounts are less than the Monthly Net Nomination amounts, a payment shall be due Gatherer, and Gatherer will invoice Producer for the imbalance based on the difference between the Monthly Net Receipt amounts and the Monthly Net Nomination amounts, multiplied by the Cash-Out Price during the applicable Month in which the volume imbalance was generated. As used in this Agreement, the "Cash-Out Price" shall be determined as to each applicable Month and shall mean a price per MMBTU equal to either (1) if the receiving pipeline's applicable cash-out price is not imposed for the applicable Month(s), the price will be the daily index price averaged for such Month for the applicable receiving pipeline as published in the Daily Price Survey section of Platt's Gas Daily, or (2) if the receiving pipeline's applicable cash-out price is imposed is imposed for the applicable Month(s), that price will be the "Cash-Out Price". Should the information necessary to calculate the "Cash-Out Price" not exist for the receiving pipeline or cease to be available, Gatherer and Producer shall work in good faith to determine a comparable substitute publication and/or daily posting(s) or other indexes providing equivalent data. 4.3 Producer shall be solely responsible for submitting appropriate nominations to Gatherer for the redelivery of Producer's Gas, less the applicable fuel and loss, at the Delivery Point and shall be responsible for any and all delivery imbalances occurring with respect to Producer's Gas which is moving under applicable OBA's or Producer's Pipeline Carrier transportation agreement(s) or other agreement(s) to the extent that such imbalances are caused by Producer's failure to make proper and timely nominations. Producer shall indemnify and hold Gatherer harmless from any and all costs, expense, liabilities, or damages (including without limitation, pipeline imbalances, penalties, court costs, and attorney fees) arising due to any such pipeline imbalances on under applicable OBA's or Producer's Pipeline Carrier transportation agreement(s) or other agreement(s) caused by Producer's failure to make proper and timely nominations, provided such indemnification shall apply without duplication of the Cash-Out payments to Gatherer provided for in Section 4.2 above. Gatherer shall indemnify and hold Producer harmless from and against any and all costs, expense, liabilities, or damages (including without limitation, pipeline imbalances, penalties, court costs, and attorney fees) arising due to any such pipeline imbalances under applicable OBA's or Producer's Pipeline Carrier transportation agreement(s) or other agreement(s) caused by Gatherer's failure to properly and timely give effect to Producer's nominations, however, Gatherer shall not be responsible for eliminating any imbalances between Producer and any third party. Furthermore, Gatherer shall not be obligated to materially deviate from its normal operating and accounting procedures to reduce or eliminate any such imbalances. Article V. MEASUREMENT 5.1 Gatherer shall receive Producer's Gas at the Receipt Point(s) on a wet MMBTU basis at Standard Base Conditions and shall redeliver Producer's Gas at each Delivery Point on a dry MMBTU basis at Standard Base Conditions. 5.2 Gatherer shall measure the Producer's Gas delivered by Producer hereunder using an electronic flow meter ("EFM"), which Gatherer shall install, or caused to be installed, at the Receipt Points and Delivery Points. Measurement shall be made by Gatherer in accordance with the requirements of applicable provisions in ANSI/API 2530, "Orifice Metering of Natural Gas" (American Gas Association Gas Measurement Committee Report No. 3) of the Natural Gas Department of the American Gas Association, as amended from time to time, or by any other method commonly used in the industry and mutually acceptable to the parties. EFM equipment shall be designed and installed in accordance with the procedures set forth in the Manual of Petroleum Standards, Chapter 21.1 (Latest Revision). Producer shall have access to Gatherer's metering equipment and information received from such metering equipment at reasonable hours. In addition, Producer shall have the right to install check measurement / monitoring equipment at the Receipt Points and Delivery Points - including the right to install Producer's check measurement equipment on the Gatherer's meter tube(s) and/or orifice unions. All such check measurement equipment shall be installed so such equipment shall not interfere with the operations of Gatherer's equipment. 5.3 The accuracy of Gatherer's measuring equipment shall be verified by meter calibrations and orifice inspections, and a chromatographic analysis shall be conducted, using means and methods generally acceptable in the gas industry once every three (3) Months or more often as determined by Gatherer. Measuring equipment found to be measuring and/or reading inaccurately shall be adjusted to measure and read accurately. Gatherer shall give Producer two (2) days notice of upcoming tests. If Producer fails to have a representative present, the results of the test shall nevertheless be considered accurate until the next test. Gatherer shall, upon written request of Producer, conduct a test of Gatherer's measuring equipment and/or a chromatographic analysis, provided that in no event shall Gatherer be required to test its equipment more frequently than once a Month. All tests of such measuring equipment shall be made at Gatherer's expense, except that Producer shall bear the expense of any additional tests made at Producer's request. 5.4 If for any reason, any measuring equipment is inoperative or inaccurate by more than two percent (2%) in the measurement of Gas, then the volume of Producer's Gas delivered by Producer to Gatherer during the period of such inaccuracy shall be determined on the basis of the best data available using the first of the following methods which is feasible: (a) By using the registration of any check measuring equipment installed and accurately registering; or (b) By using a percentage factor to correct the error, if the percentage of error is ascertainable by calibration, test, or mathematical calculations; or (c) By comparing deliveries made during preceding periods under similar delivery conditions when the meter was registering accurately. 5.5 Any adjustment based on such determination shall be made for such period of inaccuracy as may be definitely known or, if not known, then for one half (1/2) the period since the date of the last meter test. In no event, however, shall any adjustment based on measurement of quantities, pressure or quality, extend back to transactions beyond six (6) months from the date the error was first made known by one party hereunder to the other. 5.6 Each party shall have the right to inspect the other party's equipment; and other measurement or test data during business hours; but the reading, calibration, and adjustment of such equipment shall be done by the party installing and furnishing same. Unless the parties agree otherwise, each party shall preserve for two (2) years, all of its original test data, accounting materials and other records pertinent to the actions taken, and the performance delivered, under this Agreement Article VI. GAS QUALITY AND SPECIFICATIONS 6.1 Producer shall deliver to Gatherer at the Receipt Point(s) Gas which is commercially free of dust, rust, gum and gum forming constituents, dirt, paraffin, impurities, and other solid or liquid matter which might cause injury to or interference with the proper operation of the lines, meters, regulators and other appliances through which it flows. Subject to the other provisions of this Article VI, Producer's Gas as delivered to the Receipt Points, shall also conform to the following specifications (the "Specifications"): (i) Oxygen No oxygen (ii) Free Water No free water (iii) H2S No more than one quarter (1/4) grain per one hundred (100) Standard Cubic Feet of Gas (iv) Total Sulfur Including mercaptan and hydrogen sulfide, not to exceed one half (1/2) grain per one hundred (100) Standard Cubic Feet of Gas (v) Temperature No more than one hundred twenty degrees Fahrenheit (120°F) and no less than sixty degrees Fahrenheit (60°F) (vi) Carbon Dioxide No more than ten percent (10%) by volume (vii) Nitrogen No more than two percent (2%) by volume (viii) Heating Value Shall have a heating value of at least 975 Btu per cubic foot (viii) Other Any additional or more stringent specification imposed by the Pipeline Carriers (other than the specification for Carbon Dioxide) 6.2 If, at any time during the term of this Agreement, either party ascertains that Producer's Gas fails to meet the Specifications such party shall immediately notify the other of the extent of the deviation from the Specifications. Producer shall determine the expected duration of such failure and notify the Gatherer of the efforts Producer is undertaking to remedy such deficiency. In the event Producer cannot (or elects not to) remedy such deficiency, Gatherer may refuse to accept delivery of Producer's Gas, or accept delivery of Producer's Gas pursuant to mutually agreed upon increased Fees or other adjustments to revenues by Gatherer to compensate Gatherer for addressing such deficiencies. In such case, Gatherer and Producer shall work in good faith to determine a solution to the Specification deficiencies. 6.3 Producer shall reimburse Gatherer the reasonable and actual costs to dispose of any water and free liquids from Producer's Wells that is delivered into the System. Any such costs shall be invoiced to Producer on a Monthly basis. Article VII. GATHERING, COMPRESSION, TREATING FEES, DEEMED FUEL, AND DEEMED SYSTEM LOSS 7.1 For the gathering services provided by Gatherer hereunder, Producer shall pay Gatherer a gathering fee ("Gathering Fee") equal to the per MMBTU rate set forth in Exhibit B. 7.2 For the compression services provided by Gatherer hereunder, Producer shall pay Gatherer a compression fee ("Compression Fee") equal to the per MMBTU rate set forth in Exhibit B. 7.3 If the CO\(_2\) content in the Producer's Gas delivered by Producer at any Receipt Point(s) exceeds the CO\(_2\) content permitted by the applicable Pipeline Carriers, then Producer shall pay a Treating fee ("Treating Fee") with respect to that Gas. The Treating Fee shall be the per MSCF rate set forth in Exhibit B. Gatherer will measure the actual Treating fuel and loss at each Treating plant location ("Measured Treating Fuel and Loss"). 7.4 Commencing on January 1, 2008, and annually thereafter, the Fees specified above, shall be subject to increases on an annual basis, with the percentage increase, compared to the preceding year, in the Consumer Price Index as published by the Department of Labor, in the subsection titled "Not Seasonally Adjusted U.S. City Average All Items" ("CPI"); provided, however, that no such increase in Fees may exceed an increase of three percent (3%) for any given year. 7.5 Gatherer shall assess a charge for compression fuel ("Deemed Fuel") and lost and unaccounted for Gas ("Deemed System Loss") as set forth on Exhibit B. 7.6 The dehydration services shall be provided without additional compensation from Producer to Gatherer, and fuel utilized in dehydration shall be considered as part of the Deemed Fuel set forth above. Article VIII. BILLING, PAYMENT, AND REPORTING 8.1 On or before the fifteenth (15th) day of each Month, Gatherer shall render an invoice to Producer for the preceding Month's services by Gatherer. Gatherer shall provide Producer with information to support Gatherer’s invoice identified on a “Receipt Point by Receipt Point” basis, and shall also show the cumulative information indicating the total quantity of Producer’s Gas delivered hereunder, the amount due therefore, and information sufficient to explain and support any adjustments made by Gatherer in determining the amount billed. Except where other provisions of this Agreement provide shorter deadlines for the payment of certain sums and/or invoices under the terms of this Agreement, Producer shall pay Gatherer or Gatherer shall pay Producer, as the case may be, at the address shown hereunder within thirty (30) days of receipt of invoice. If the correct amount is not paid when due, interest on any unpaid and undisputed portion shall accrue at an annual effective interest rate equal to the prime rate, as quoted by the Wall Street Journal, plus two percent (2%) or at the highest rate permitted by applicable law, whichever is lower, from due date until date paid, with such interest to be compounded monthly. If Producer does not pay Gatherer all undisputed amounts within the later of (i) ninety (90) days following receipt of invoice or (ii) thirty (30) days following notice from Gatherer that undisputed amounts are due, then Gatherer may suspend receipt of Gas hereunder without prejudice to any other available remedies at law or in equity. Whenever Producer is entitled to be paid any sums by Gatherer under the terms of this Agreement, then unless specifically provided otherwise with regard to specific situations under the terms of this Agreement, payment shall be due from Gatherer and interest shall be owing under the same time frames and procedures set forth above in this paragraph 8.1 in relation to sums owing by Producer to Gatherer. 8.2 Either party may, at its option, recoup any sums (or portions thereof) owing by the other party by netting out of such party’s payments to the other party all or part of the sums owed by the other Party under this Agreement. When a party elects to net out certain indebtedness of the other party, such party shall promptly send to the other party a description of (a) the source or nature of the indebtedness of the other party that has been recouped in whole or in part by such party in the above-referenced manner, including the dollar amount of such recoupment, and (b) the indebtedness of the party that has been reduced through such recoupment. 8.3 If any overcharge or undercharge due to clerical or arithmetic error shall at any time be found relative to any invoice or other statement delivered by Gatherer in connection with this Agreement, whether outstanding or paid, Gatherer shall refund any amount of overcharge, or Producer shall pay any amount of undercharge, as the case may be, within thirty (30) days after final determination thereof; provided, however, that all statements that have not been challenged in writing or corrected in writing, within twenty-four (24) Months from the end of the Month in which the statement was received by the party for whom it was intended, shall be conclusively deemed to be correct and accurate, and no retroactive adjustment shall be made beyond such twenty-four (24) Month period with regard to any such statements. 8.4 Both parties hereto shall have the right at any and all reasonable times to examine the books and records of, and to audit, the other party to the extent necessary to verify the accuracy of any statement, charge, computation, or demand made pursuant to this Agreement. Prior to such examination, the party requesting confidential information of the other party shall, if requested by the other party, execute a confidentiality agreement of reasonable form and scope after giving the other party 15 days written notice. Article IX. TAXES 9.1 Gatherer shall have no duties or liabilities under this Agreement with regard to the reporting of production taxes imposed with respect to the Producer's Gas delivered and gathered hereunder, except to the extent that any such reporting obligations are specifically imposed by statutes, rules and regulations and/or other laws on Gatherer. 9.2 Gatherer shall file all reports and pay all ad valorem or other similar taxes, fees, or assessments imposed by any governmental authority with respect to the System and ownership thereof. 9.3 Producer shall pay or bear all severance or other similar taxes, fees, or assessments imposed by any governmental authority on Producer's Gas delivered hereunder, except to the extent that any portion of such taxes is to be borne by other persons or entities under the terms of applicable statutes, rules and regulations and/or other laws. Further, Producer represents that it has timely filed, or shall in the future timely file, any and all reports which it was, or may be, required to file with respect to production or severance taxes to be paid on Producer's Gas. Producer shall indemnify and hold Gatherer harmless with respect to any claims that may be made against Gatherer by virtue of any failure on the part of Producer to file any and all of such reports, or with respect to Producer's failure to pay or bear any and all taxes which Producer is obligated to pay, under the above provisions of Section 9.1. Gatherer likewise shall indemnify and hold Producer harmless with respect to any claims that may be made against Producer by virtue of either (a) any failure on the part of Gatherer to file any and all of the reports provided for above in this Section 9.3, and/or (b) any failure on the part of Gatherer to pay any and all taxes which Gatherer is obligated to pay pursuant to the above provisions of Section 9.1. Article X. CONTROL, POSSESSION, TITLE AND ADDITIONAL INDEMNIFICATION 10.1 Producer shall indemnify and hold Gatherer harmless from liability with respect to Producer's Gas or Producer's operations for the delivery of such Gas prior to the Gas being delivered into Gatherer's System. Gatherer shall indemnify and hold Producer harmless from liability with respect to Producer's Gas delivered into the System and prior to delivery thereof at the Delivery Point, except for any such liability relating to the title to Producer's Gas, which liability shall remain with Producer. 10.2 Producer warrants that it possesses either title to, or the right to deliver to Gatherer, all of Producer's Gas delivered or caused to be delivered hereunder. Producer warrants that Producer's Gas is free from all liens and adverse claims of every kind and agrees to indemnify Gatherer from all suits, actions, debts, accounts, damages, costs, losses, and expenses arising from or out of adverse claims of any or all persons, including governmental entities, as to title to Producer's Gas or as to royalties or charges thereof. Notwithstanding the indemnification of Producer by Gatherer for all of Producer's Gas delivered into the System after receipt thereof by Gatherer and prior to delivery thereof at the Delivery Point, title to the Producer's Gas delivered or caused to be delivered by Producer to Gatherer hereunder at the Receipt Points shall remain with Producer and shall not pass to nor vest in Gatherer at any point under this Agreement. 10.3 Gatherer shall be entitled to and shall own all condensate and pipeline drip collected in the System at locations beyond the Receipt Point. 10.4 Producer agrees to defend, indemnify and hold Gatherer, its parent, subsidiary and affiliate companies, their agents, employees, directors, officers, servants, invitees and insurers (together, the "Gatherer Group"), harmless from and against any and all losses, claims, demands, liabilities or causes of action of every kind and character, in favor of any person or party, for loss or damage to property of Producer Group (as defined below) or injury to or illness or death of any employee of Producer Group, which loss, damage, injury, illness or death relates to, arises out of or is incident to the work or services performed by Producer under this Agreement, and regardless of the cause of such loss, damage, injury, illness or death, except to the extent that any such losses, claims, demands, liabilities or damages, are the result of the negligence or willful misconduct of Gatherer, or its officers, employees, contractor, agents or representatives. Producer shall fully defend any such claim, demand or suit at its sole expense, even if the same is groundless. This indemnity shall be limited to the extent necessary for compliance with applicable State and Federal laws. 10.5 Gatherer agrees to defend, indemnify and hold Producer, its joint interest owners, and their respective parent, subsidiary and affiliate companies, and the agents, employees, directors, officers, servants, invitees and insurers of each such entity (together, the "Producer Group"), harmless from and against any and all losses, claims, demands, liabilities or causes of action of every kind and character, in favor of any person or party, for loss or damage to property of Gatherer Group or injury to or illness or death of any employee of Gatherer Group or any employee of subcontractors of Gatherer, which loss, damage, injury, illness or death relates to, arises out of or is incident to the work or services performed by Gatherer under this Agreement, and regardless of the cause of such damage, injury, illness or death, except to the extent that any such losses, claims, demands, liabilities or damages, are the result of the negligence or willful misconduct of Producer, or its officers, employees, contractor, agents or representatives. Gatherer shall fully defend any such claim demand or suit at its sole expense, even if the same is groundless. This indemnity shall be limited to the extent necessary for compliance with applicable State and Federal laws. Article XI. REPRESENTATIONS AND WARRANTIES 11.1 Gatherer represents and warrants that: 11.1.1 Gatherer is a limited liability company validly existing and in good standing under the laws of the State of Oklahoma, with the requisite power and authority to own its properties and assets and to carry on its business as now being conducted. 11.1.2 Gatherer has the power and requisite authority to execute and deliver this Agreement and to consummate and perform the transactions contemplated hereby. 11.2 Producer represents and warrants that: 11.2.1 Producer is a corporation validly existing and in good standing under the laws of the State of Delaware, with the requisite power and authority to own its properties and assets and to carry on its business as now being conducted. 11.2.2 Producer has the power and requisite authority to execute and deliver this Agreement and to consummate and perform the transactions contemplated hereby. 11.2.3 There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by or threatened against Producer. Article XII. FORCE MAJEURE 12.1 If either party is rendered unable, wholly or in part by Force Majeure, to carry out its obligations under this Agreement, then the obligations of the affected party, except for any payments due in accordance with this Agreement, so far as the performance of such obligations is prevented or delayed by such Force Majeure, shall be suspended during the continuance of any inability so caused, but for no longer period. Such cause as well as its impacts shall, to the extent possible, be remedied and/or mitigated with all reasonable dispatch. The affected party shall give notice and full particulars of such Force Majeure in writing by mail or telecopy or other electronic facility to the other party as soon as practicable after the occurrence of the cause relied on. 12.2 The term "Force Majeure", as employed herein, shall mean acts of God; strikes, lockouts, or other industrial disturbances; acts of the public enemy, wars, sabotage, blockades, military action, earthquakes, fires, storms or storm warnings, floods; arrests and restraints of governments and people; civil disturbances; explosions; damages to or failure of System facilities due to acts of unaffiliated parties; and compliance with, or inability of any party hereto to obtain necessary materials, supplies, or permits, only where such inability is due to, existing or future rules, regulations, orders, laws, or proclamations of governmental authorities (Federal State or local) including both civil and military, and and any other causes, whether of the kind herein enumerated, which are not within the reasonable control of, and not due to the fault or negligence of the party claiming suspension. 12.3 It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulty, and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvertible in the discretion of the party having the difficulty. 12.4 Should an event of Force Majeure render Gatherer unable to take delivery of any of Producer's Gas at any Receipt Point for a period exceeding five (5) consecutive calendar days, then Producer may, upon not less than three (3) days prior written notice to Gatherer, temporarily deliver Producer's Gas from such Receipt Point to a third party for gathering and/or Processing; provided, however, that Producer's Gas shall be delivered to Gatherer upon the earlier of the end of the temporary sale or on the first Day of the Month following the Month that the Force Majeure event is rectified to allow delivery to Gatherer. 12.5 Should an event of Force Majeure render Gatherer unable to take delivery of any of Producer's Gas at any Receipt Points for a period exceeding thirty (30) consecutive calendar days, then unless Gatherer reimburses Producer, within 5 days of receipt of an invoice from Producer, for all out of pocket third party costs incurred by Producer to acquire and construct the required facilities to move Producer's Gas to an alternate market during the Force Majeure event, Producer may, upon not less than three (3) days prior written notice to Gatherer, permanently deliver Producer's Gas from those Receipt Points impacted by the Force Majeure event to an alternate party for gathering, compression and Treating, and will be released from further obligation with respect to those impacted Receipt Points under this Agreement. Article XII. TERM 13.1 This Agreement shall be effective from January 15, 2007 and remain until January 31, 2008, whereupon this Agreement shall be automatically renewed for successive renewal terms of one (1) month each, unless terminated by either party by giving the other party thirty (30) days notice in writing prior to the end of the primary term or any successive renewal term. Article XIV. ASSIGNMENTS 14.1 This Agreement shall extend to and be binding upon the parties hereto, their successors, and assigns. This Agreement and the rights, duties or obligations of the parties hereunder may be assigned or conveyed in whole; provided, however, neither party shall assign or transfer this Agreement and any rights, duties or obligations hereunder, without the prior written consent of the other party, which consent shall not be unreasonably withheld, but discretion shall be allowed as to parties financial conditions and other factors that could affect a party's rights, liabilities, obligations and duties. All assignments and conveyances of either all the wells and leaseholds that are ultimately covered by this Agreement or the System shall be subject to this Agreement and shall not relieve the assignor of its duties hereunder; No transfer of, or succession to, the interest of any party hereto, either in whole or partially, shall affect or bind the other party until the first Day of the Month following the Month in which the other party shall have received written notification thereof. Article XV. NOTICES 15.1 Except as herein otherwise provided, any notice, request, demand, payment, invoice, statement, or bill provided for in this Agreement or any notice which either party may desire to give to the other shall be in writing and shall be sent by United States Mail (by regular mail, express mail, certified mail, registered mail or any other available form of United States Mail delivery or other express delivery service that delivers with a speed the same or more rapid than United States Mail, at the election of the sending party) to the below-indicated address of the party intended to receive the same, as the case may be, or to such other address as either party shall designate by future written notice to the other party. Notice shall be considered to have been given as of the date it is received at the applicable and approved address for the recipient thereof. If to PRODUCER: For Notices and Requests: ANTERO RESOURCES MIDSTREAM CORPORATION 1625 17th Street, Suite 300 Denver, Colorado 80202 Attn: VP Marketing Statements, Bills, or Invoices; ANTERO RESOURCES MIDSTREAM CORPORATION 1625 17th Street, Suite 300 Denver, Colorado 80202 Attn: Accounts Payable If to GATHERER: For Notices and Requests: MARKWEST EASTERN OKLAHOMA GAS COMPANY, L.L.C. 6655 S. Lewis, Ste. 350 Tulsa OK 741362500 City West, Ste. 740 With a copy to: MARKWEST ENERGY PARTNERS, L.P. 1515 Arapahoe Street, Suite 700 Denver, CO 80202 For Statements, Bills, or Invoices MARKWEST WESTERN OKLAHOMA GAS COMPANY, L.L.C. 1515 Arapahoe Street, Suite 700 Denver, CO 80202 For Payments Wire: MARKWEST WESTERN OKLAHOMA GAS COMPANY, L.L.C. Bank One ABA Routing # Operating Account # Article XVI. MISCELLANEOUS 16.1 The interpretation and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma. 16.2 This Agreement contains the entire understanding of the parties superseding all other agreements, whether oral or written, express or implied previously entered into by the Parties shall not be superseded, but rather shall remain in force and effect. As a result of the Parties entering into this Agreement, all prior agreements between the Parties hereto that relate to the subject matter of this Agreement have (except as qualified in the preceding sentence) been terminated and replaced by this Agreement. This Agreement may not be changed orally, but only by an agreement in writing signed by the Party against whom enforcement of any waiver, change, modification, extension, or discharge is sought. Every covenant, term, and provision of the Agreement shall be construed simply according to its fair meaning and not strictly for or against any Party. Any waiver of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by Producer or Gatherer. 16.3 Producer, to the extent it may legally and validly do so (and with no representation or warranty being made by Producer that it has such ability), hereby quitclaims to Gatherer the non-exclusive and concurrent right to use (including the right to ingress and egress) Producer's leaseholds, properties, and premises underlying the System in order to carry out the provisions of this Agreement with the right to remove same before or after the expiration of this Agreement and the right to free access at all reasonable times to any part of said leaseholds, properties, and premises. 16.4 The captions, titles or headings in this Agreement are for the convenience of the parties in identification of the provisions hereof and shall not constitute a part of this Agreement nor be considered in the interpretation of this Agreement, and the following shall apply: This Agreement was prepared jointly by the parties hereto and not by any party to the exclusion of the other. 16.5 The failure either Party to exercise any right or rights hereunder shall not be considered a waiver of such right or rights in the future. 16.6 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. 16.7 The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other person or entity other than any person or entity entitled to indemnity under this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed in several counterparts, each of which is an original, as of the date first written above. PRODUCER: ANTERO RESOURCES MIDSTREAM CORPORATION By: [Hand signed] Title: Vice President GATHERER: MARKWEST EASTERN OKLAHOMA GAS COMPANY, L.L.C. By: [Hand signed] Randy Nickerson Title: Sr. Vice President and Chief Commercial Officer ZBO ATTACHMENTS: Exhibit A: RECEIPT POINTS Exhibit B: GATHERING, COMPRESSION, TREATING FEES, DEEMED FUEL AND DEEMED SYSTEM LOSS EXHIBIT A RECIEPT POINTS Receipt Point Section Township Range County, State Antero CDP No. 1 12 6N 12E Pittsburg, OK. EXHIBIT B GATHERING, COMPRESSION, TREATING FEES, DEEMED FUEL AND DEEMED SYSTEM LOSS Gathering Fee: $0.095 per MMBTU (but not be less than $0.095 per MSCF) of Seller's Gas measured at each Receipt Point. Compression Fee: $0.18 per MMBTU (but not be less than $0.18 per MSCF) of Seller's Gas measured at each Receipt Point for a total of three (3) stages of compression. Treating Fee: $0.0 per MSCF for Seller's Gas with an average CO2 content less than or equal to 2%; $0.09 per MSCF for Seller's Gas with an average CO2 content greater than 2% but less than or equal to 6%; $0.11 per MSCF for Seller's Gas with an average CO2 content greater than 6%, up to a maximum of 10%. Deemed Fuel: The Deemed Fuel charge shall be 1.8% of the BTUs of Seller's Gas measured at the Receipt Point(s) for each stage of compression. Three (3) stages of compression shall be used. If Treating is required, actual allocated Treating fuel shall be charged in addition to the Deemed Fuel. Deemed System Loss: The Deemed System Loss shall be equal to 1.2% of the quantity of Seller's Gas measured at the Receipt Point(s). If Treating is required, actual allocated Treating loss shall be charged in addition to the Deemed System Loss. EXHIBIT B Base Contract for Sale and Purchase of Natural Gas This Base Contract is entered into as of the following date: January 25, 2021 The parties to this Base Contract are the following: <table> <tr> <th> </th> <th> PARTY A<br>VR4-Grizzly, LP<br>2826 Cole Ave., Suite 750, Dallas, TX, 75204<br>www.venderaresources.com </th> <th> PARTY NAME<br>Concord Energy LLC </th> <th> PARTY B<br>Concord Energy LLC<br>1401 17th St #1500, Denver, CO 80202<br>www.concordenergy.com </th> </tr> <tr> <td>ADDRESS</td> <td></td> <td>ADDRESS</td> <td>1401 17th St #1500, Denver, CO 80202</td> </tr> <tr> <td>BUSINESS WEBSITE</td> <td>www.venderaresources.com</td> <td>BUSINESS WEBSITE</td> <td>www.concordenergy.com</td> </tr> <tr> <td>CONTRACT NUMBER</td> <td></td> <td>CONTRACT NUMBER</td> <td>NA</td> </tr> <tr> <td>D-U-N-S® NUMBER</td> <td>US FEDERAL 86-1566383</td> <td>D-U-N-S® NUMBER</td> <td>11-363-7503</td> </tr> <tr> <td>TAX ID NUMBERS</td> <td>US FEDERAL: 47-0872913</td> <td>TAX ID NUMBERS</td> <td>O OTHER:</td> </tr> <tr> <td>JURISDICTION OF ORGANIZATION</td> <td>Colorado</td> <td>JURISDICTION OF ORGANIZATION</td> <td>Colorado</td> </tr> <tr> <td>COMPANY TYPE</td> <td>Limited Partnership</td> <td>COMPANY TYPE</td> <td>Limited Partnership</td> </tr> <tr> <td>GUARANTOR (IF APPLICABLE)</td> <td></td> <td></td> <td></td> </tr> </table> CONTACT INFORMATION <table> <tr> <th> </th> <th>COMMERCIAL</th> <th>SCHEDULING</th> <th>CONTRACT AND LEGAL NOTICES</th> <th>CREDIT</th> <th>TRANSACTION CONFIRMATIONS</th> <th>Risk Management</th> <th>Natural Gas Scheduling</th> <th>Contract Administration</th> <th>Risk Management</th> </tr> <tr> <td>ATTN: David Swain<br>TEL#: 469.206.0111<br>EMAIL: [email protected]</td> <td>ATTN: Risk Management<br>TEL#: 303-468-1241<br>EMAIL: [email protected]</td> <td>ATTN: Natural Gas Scheduling<br>TEL#: 303-468-1239<br>EMAIL: [email protected]</td> <td>ATTN: Contract Administration<br>TEL#: 303-468-1769<br>EMAIL: [email protected]</td> <td>ATTN: John Evenstad<br>TEL#: 303-468-1769<br>EMAIL: [email protected]</td> <td>ATTN: Risk Management<br>TEL#: 303-468-1247<br>EMAIL: [email protected]</td> <td>ATTN: David Swain<br>TEL#: 469.206.0111<br>EMAIL: [email protected]</td> <td>ATTN: David Swain<br>TEL#: 469.206.0111<br>EMAIL: [email protected]</td> <td>ATTN: David Swain<br>TEL#: 469.206.0111<br>EMAIL: [email protected]</td> <td>ATTN: David Swain<br>TEL#: 469.206.0111<br>EMAIL: [email protected]</td> </tr> </table> ACCOUNTING INFORMATION <table> <tr> <th> </th> <th>INVOICES<br>PAYMENTS<br>SETTLEMENTS</th> <th>WIRE/ACH TRANSFER NUMBERS (IF APPLICABLE)</th> <th>ACH NUMBERS (IF APPLICABLE)</th> <th>CHECKS (IF APPLICABLE)</th> </tr> <tr> <td>ATTN: Michael Nymeyer<br>TEL#: 469.248.3014<br>EMAIL: [email protected]</td> <td>ATTN: Accounting<br>TEL#: 303-468-1247<br>EMAIL: [email protected]</td> <td>BANK: Union Bank, San Francisco, CA<br>ABA: 122000496<br>ACCT: 4521000184<br>OTHER DETAILS:</td> <td>BANK: Union Bank, San Francisco, CA<br>ABA: 122000496<br>ACCT: 4521000184<br>OTHER DETAILS:</td> <td>ATTN: </td> <td>ADDRRES:</td> </tr> <tr> <td>BANK: VeraBank, Henderson, TX<br>ABA: 111903151<br>Acct: 1021014186<br>OTHER DETAILS:</td> <td></td> <td></td> <td></td> <td>ATTN: </td> <td>ADDRESS:</td> </tr> <tr> <td>BANK: ____________<br>ABA: ________________<br>ACCT: _______________<br>OTHER DETAILS: _____________________________</td> <td></td> <td></td> <td></td> <td>ATTN: </td> <td>ADDRESS:</td> </tr> </table> Base Contract for Sale and Purchase of Natural Gas This Base Contract incorporates by reference for all purposes the General Terms and Conditions for Sale and Purchase of Natural Gas published by the North American Energy Standards Board. The parties hereby agree to the following provisions offered in said General Terms and Conditions. In the event the parties fail to check a box, the specified default provision shall apply. Select the appropriate box(es) from each section. Section 1.2 ■ Oral (default) OR □ Written Section 2.7 ■ 2 Business Days after receipt (default) OR □ ______ Business Days after receipt Section 2.8 □ Seller (default) OR ■ Party A__________________ Section 3.2 ■ Cover Standard (default) OR □ Spot Price Standard Note: The following Spot Price Publication applies to both of the immediately preceding. Section 2.31 ■ Gas Daily Midpoint (default) OR □ __________________________ Section 6 ■ Buyer Pays At and After Delivery Point (default) OR □ Seller Pays Before and At Delivery Point Section 7.2 ■ 25th Day of Month following Month of delivery (default) OR □ Day of Month following Month of delivery Section 7.2 ■ Wire transfer (default) OR □ Automated Clearinghouse Credit (ACH) □ Check Section 7.7 ■ Netting applies (default) OR □ Netting does not apply □ Special Provisions: □ Addendum(s): Section 10.2 ■ No Additional Events of Default (default) □ Indebtedness Cross Default □ Party A: ______________________ □ Party B: ______________________ □ Transactional Cross Default Specified Transactions: Section 10.3.1 ■ Early Termination Damages Apply (default) OR □ Early Termination Damages Do Not Apply Section 10.3.2 ■ Other Agreement Setoffs Apply (default) □ Bilateral (default) □ Triangular OR □ Other Agreement Setoffs Do Not Apply Section 15.5 Choice Of Law Colorado Section 15.10 Confidentiality ■ Confidentiality applies (default) OR □ Confidentiality does not apply IN WITNESS WHEREOF, the parties hereto have executed this Base Contract in duplicate. VR4-Grizzly, LP By: Collin Lansing Collin Lansing COO & General Counsel Concord Energy LLC By: John P. Evenstad John Evenstad Attorney-In-Fact General Terms and Conditions Base Contract for Sale and Purchase of Natural Gas SECTION 1. PURPOSE AND PROCEDURES 1.1. These General Terms and Conditions are intended to facilitate purchase and sale transactions of Gas on a Firm or Interruptible basis. "Buyer" refers to the party receiving Gas and "Seller" refers to the party delivering Gas. The entire agreement between the parties shall be the Contract as defined in Section 2.9. The parties have selected either the "Oral Transaction Procedure" or the "Written Transaction Procedure" as indicated on Oral Transaction Procedure: 1.2. The parties will use the following Transaction Confirmation procedure. Any Gas purchase and sale transaction may be effectuated in an EDI transmission or telephone conversation with the offer and acceptance constituting the agreement of the parties. The parties shall be legally bound from the time they so agree to transaction terms and may each rely thereon. Any such transaction shall be considered a "writing" and to have been "signed". Notwithstanding the foregoing sentence, the parties agree that Confirming Party shall, and the other party may, confirm a telephonic transaction by sending the other party a Transaction Confirmation by facsimile, EDI or mutually agreeable electronic means within three Business Days of a transaction covered by this Section 1.2 (Oral Transaction Procedure) provided that the failure to send a Transaction Confirmation shall not invalidate the oral agreement of the parties. Confirming Party adopts its confirming letterhead, or the like, as its signature on any Transaction Confirmation as the identification and authentication of Confirming Party. If the Transaction Confirmation contains any provisions other than those relating to the commercial terms of the transaction (i.e., price, quantity, performance obligation, delivery point, period of delivery and/or transportation conditions), which modify or supplement the Base Contract or General Terms and Conditions of this Contract (e.g., arbitration or additional representations and warranties), such provisions shall not be deemed to be accepted pursuant to Section 1.3 but must be expressly agreed to by both parties; provided that the foregoing shall not invalidate any transaction agreed to by the parties. Written Transaction Procedure: 1.2. The parties will use the following Transaction Confirmation procedure. Should the parties come to an agreement regarding a Gas purchase and sale transaction for a particular Delivery Period, the Confirming Party shall, and the other party may, record that agreement on a Transaction Confirmation and communicate such Transaction Confirmation by facsimile, EDI or mutually agreeable electronic means, to the other party by the close of the Business Day following the date of agreement. The parties acknowledge that their agreement will not be binding until the exchange of nonconflicting Transaction Confirmations or the passage of the Confirm Deadline without objection from the receiving party, as provided in Section 1.3. 1.3. If a sending party's Transaction Confirmation is materially different from the receiving party's understanding of the agreement referred to in Section 1.2, such receiving party shall notify the sending party via facsimile, EDI or mutually agreeable electronic means by the Confirm Deadline, unless such receiving party has previously sent a Transaction Confirmation to the sending party. The failure of the receiving party to so notify the sending party in writing by the Confirm Deadline constitutes the receiving party's agreement to the terms of the transaction described in the sending party's Transaction Confirmation. If there are any material differences between timely sent Transaction Confirmations governing the same transaction, then neither Transaction Confirmation shall be binding until or unless such differences are resolved including the use of any evidence that clearly resolves the differences in the Transaction Confirmations. In the event of a conflict among the terms of (i) a binding Transaction Confirmation pursuant to Section 1.2, (ii) the oral agreement of the parties which may be evidenced by a recorded conversation; where the parties have selected the Oral Transaction Procedure of the Base Contract, (iii) the Base Contract, and (iv) these General Terms and Conditions, the terms of the documents shall govern in the priority listed in this sentence. 1.4. The parties agree that each party may electronically record all telephone conversations with respect to this Contract between their respective employees, without any special or further notice to the other party. Each party shall obtain any necessary consent of its agents and employees to such recording. Where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, the parties agree not to contest the validity or enforceability of telephonic recordings entered into in accordance with the requirements of this Base Contract. SECTION 2. DEFINITIONS The terms set forth below shall have the meaning ascribed to them below. Other terms are also defined elsewhere in the Contract and shall have the meanings ascribed to them herein. 2.1. "Additional Event of Default" shall mean Transactional Cross Default or Indebtedness Cross Default, each as and if selected by the parties pursuant to the Base Contract. 2.2. "Affiliate" shall mean, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, "control" of any entity or person means ownership of at least 50 percent of the voting power of the entity or person. 2.3. "Alternative Damages" shall mean such damages, expressed in dollars or dollars per MMBtu, as the parties shall agree upon in the Transaction Confirmation, in the event either Seller or Buyer fails to perform a Firm obligation to deliver Gas in the case of Seller or to receive Gas in the case of Buyer. 2.4. "Base Contract" shall mean a contract executed by the parties that incorporates these General Terms and Conditions by reference; that specifies the agreed selections of provisions contained herein; and that sets forth other information required herein and any Special Provisions and addendums as identified on page one. 2.5. "British thermal unit" or "Btu" shall mean the International BTU, which is also called the Btu (IT). 2.6. "Business Day(s)" shall mean Monday through Friday, excluding Federal Banking Holidays for transactions in the U.S. 2.7. "Confirm Deadline" shall mean 5:00 p.m. in the receiving party's time zone on the second Business Day following the Day a Transaction Confirmation is received or, if applicable, on the Business Day agreed to by the parties in the Base Contract; provided, if the Transaction Confirmation is time stamped after 5:00 p.m. in the receiving party's time zone, it shall be deemed received at the opening of the next Business Day. 2.8. "Confirming Party" shall mean the party designated in the Base Contract to prepare and forward Transaction Confirmations to the other party. 2.9. "Contract" shall mean the legally-binding relationship established by (i) the Base Contract, (ii) any and all binding Transaction Confirmations and (iii) where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, any and all transactions that the parties have entered into through an EDI transmission or by telephone, but that have not been confirmed in a binding Transaction Confirmation, all of which shall form a single integrated agreement between the parties. 2.10. "Contract Price" shall mean the amount expressed in U.S. Dollars per MMBtu to be paid by Buyer to Seller for the purchase of Gas as agreed to by the parties in a transaction. 2.11. "Contract Quantity" shall mean the quantity of Gas to be delivered and taken as agreed to by the parties in a transaction. 2.12. "Cover Standard", as referred to in Section 3.2, shall mean that if there is an unexcused failure to take or deliver any quantity of Gas pursuant to this Contract, then the performing party shall use commercially reasonable efforts to (i) if Buyer is the performing party, obtain Gas, (or an alternate fuel if elected by Buyer and replacement Gas is not available), or (ii) if Seller is the performing party, sell Gas, in either case, at a price reasonable for the delivery or production area, as applicable, consistent with: the amount of notice provided by the nonperforming party; the immediacy of the Buyer's Gas consumption needs or Seller's Gas sales requirements, as applicable; the quantities involved; and the anticipated length of failure by the nonperforming party. 2.13. "Credit Support Obligation(s)" shall mean any obligation(s) to provide or establish credit support for, or on behalf of, a party to this Contract such as cash, an irrevocable standby letter of credit, a margin agreement, a prepayment, a security interest in an asset, guaranty, or other good and sufficient security of a continuing nature. 2.14. "Day" shall mean a period of 24 consecutive hours, coextensive with a "day" as defined by the Receiving Transporter in a particular transaction. 2.15. "Delivery Period" shall be the period during which deliveries are to be made as agreed to by the parties in a transaction. 2.16. "Delivery Point(s)" shall mean such point(s) as are agreed to by the parties in a transaction. 2.17. "EDI" shall mean an electronic data interchange pursuant to an agreement entered into by the parties, specifically relating to the communication of Transaction Confirmations under this Contract. 2.18. "EFP" shall mean the purchase, sale or exchange of natural Gas as the "physical" side of an exchange for physical transaction involving gas futures contracts. EFP shall incorporate the meaning and remedies of "Firm", provided that a party's excuse for nonperformance of its obligations to deliver or receive Gas will be governed by the rules of the relevant futures exchange regulated under the Commodity Exchange Act. 2.19. "Firm" shall mean that either party may interrupt its performance without liability only to the extent that such performance is prevented for reasons of Force Majeure; provided, however, that during Force Majeure interruptions, the party invoking Force Majeure may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by the Transporter. 2.20. "Gas" shall mean any mixture of hydrocarbons and noncombustible gases in a gaseous state consisting primarily of methane. 2.21. "Guarantor" shall mean any entity that has provided a guaranty of the obligations of a party hereunder. 2.22. "Imbalance Charges" shall mean any fees, penalties, costs or charges (in cash or in kind) assessed by a Transporter for failure to satisfy the Transporter's balance and/or nomination requirements. 2.23. "Indebtedness Cross Default" shall mean if selected on the Base Contract by the parties with respect to a party, that it or its Guarantor, if any, experiences a default, or similar condition or event however therein defined, under one or more agreements or instruments, individually or collectively, relating to indebtedness (such indebtedness to include any obligation whether present or future, contingent or otherwise, as principal or surety or otherwise) for the payment or repayment of borrowed money in an aggregate amount greater than the threshold specified in the Base Contract with respect to such party or its Guarantor, if any, which results in such indebtedness becoming immediately due and payable. 2.24. "Interruptible" shall mean that either party may interrupt its performance at any time for any reason, whether or not caused by an event of Force Majeure, with no liability, except such interrupting party may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by Transporter. 2.25. "MMBtu" shall mean one million British thermal units, which is equivalent to one dekatherm. 2.26. "Month" shall mean the period beginning on the first Day of the calendar month and ending immediately prior to the commencement of the first Day of the next calendar month. 2.27. "Payment Date" shall mean a date, as indicated on the Base Contract, on or before which payment is due; Seller for Gas received by Buyer in the previous Month. 2.28. "Receiving Transporter" shall mean the Transporter receiving Gas at a Delivery Point, or absent such receiving Transporter, the Transporter delivering Gas at a Delivery Point. 2.29. "Scheduled Gas" shall mean the quantity of Gas confirmed by Transporter(s) for movement, transportation or management. 2.30. "Specified Transaction(s)" shall mean any other transaction or agreement between the parties for the purchase, sale or exchange of physical Gas, and any other transaction or agreement identified as a Specified Transaction under the Base Contract. 2.31. "Spot Price" as referred to in Section 3.2 shall mean the price listed in the publication indicated on the Base Contract, under the listing applicable to the geographic location closest in proximity to the Delivery Point(s) for the relevant Day; provided, if there is no single price published for such location for such Day, but there is published a range of prices, then the Spot Price shall be the average of such high and low prices. If no price or range of prices is published for such Day, then the Spot Price shall be the average of the following: (i) the price (determined as stated above) for the first Day for which a price or range of prices is published that next precedes the relevant Day; and (ii) the price (determined as stated above) for the first Day for which a price or range of prices is published that next follows the relevant Day. 2.32. "Transaction Confirmation" shall mean a document, similar to the form of Exhibit A, setting forth the terms of a transaction formed pursuant to Section 1 for a particular Delivery Period. 2.33. "Transactional Cross Default" shall mean if selected on the Base Contract by the parties with respect to a party, that it shall be in default, however therein defined, under any Specified Transaction. 2.34. "Termination Option" shall mean the option of either party to terminate a transaction in the event that the other party fails to perform a Firm obligation to deliver Gas in the case of Seller or to receive Gas in the case of Buyer for a designated number of days during a period as specified on the applicable Transaction Confirmation. 2.35. "Transporter(s)" shall mean all Gas gathering or pipeline companies, or local distribution companies, acting in the capacity of a transporter, transporting Gas for Seller or Buyer upstream or downstream, respectively, of the Delivery Point pursuant to a particular transaction. SECTION 3. PERFORMANCE OBLIGATION 3.1. Seller agrees to sell and deliver, and Buyer agrees to receive and purchase, the Contract Quantity for a particular transaction in accordance with the terms of the Contract. Sales and purchases will be on a Firm or Interruptible basis, as agreed to by the parties in a transaction. <table> <tr> <th colspan="2">The parties have selected either the "Cover Standard" or the "Spot Price Standard" as indicated on the Base Contract.</th> </tr> <tr> <th>Cover Standard:</th> <td>3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equal to the positive difference, if any, between the purchase price paid by Buyer utilizing the Cover Standard and the Contract Price, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually delivered by Seller for such Day(s) excluding any quantity for which no replacement is available; or (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in an amount equal to the positive difference, if any, between the Contract Price and the price received by Seller utilizing the Cover Standard for the resale of such Gas, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually taken by Buyer for such Day(s) excluding any quantity for which no sale is available; and (iii) in the event that Buyer has used commercially reasonable efforts to replace the Gas or Seller has used commercially reasonable efforts to sell the Gas to a third party, and no such replacement or sale is available for all or any portion of the Contract Quantity of Gas, then in addition to (i) or (ii) above, as applicable, the sole and exclusive remedy of the performing party with respect to the Gas not replaced or sold shall be an amount equal to any unfavorable difference between the Contract Price and the Spot Price, adjusted for such transportation to the applicable Delivery Point, multiplied by the quantity of such Gas not replaced or sold. Imbalance Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party's invoice, which shall set forth the basis upon which such amount was calculated.</td> </tr> <tr> <th>Spot Price Standard:</th> <td>3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equal to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the Contract Price from the Spot Price; or (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in an amount equal to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the applicable Spot Price from the Contract Price. Imbalance Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party's invoice, which shall set forth the basis upon which such amount was calculated.</td> </tr> </table> 3.3. Notwithstanding Section 3.2, the parties may agree to Alternative Damages in a Transaction Confirmation executed in writing by both parties. 3.4. In addition to Sections 3.2 and 3.3, the parties may provide for a Termination Option in a Transaction Confirmation executed in writing by both parties. The Transaction Confirmation containing the Termination Option will designate the length of nonperformance triggering the Termination Option and the procedures for exercise thereof, how damages for nonperformance will be compensated, and how liquidation costs will be calculated. SECTION 4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES 4.1. Seller shall have the sole responsibility for transporting the Gas to the Delivery Point(s). Buyer shall have the sole responsibility for transporting the Gas from the Delivery Point(s). 4.2. The parties shall coordinate their nomination activities, giving sufficient time to meet the deadlines of the affected Transporter(s). Each party shall give the other party timely prior Notice, sufficient to meet the requirements of all Transporter(s) involved in the transaction, of the quantities of Gas to be delivered and purchased each Day. Should either party become aware that actual deliveries at the Delivery Point(s) are greater or lesser than the Scheduled Gas, such party shall promptly notify the other party. 4.3. The parties shall use commercially reasonable efforts to avoid imposition of any Imbalance Charges. If Buyer or Seller receives an invoice from a Transporter that Includes Imbalance Charges, the parties shall determine the validity as well as the cause of such Imbalance Charges. If the Imbalance Charges were incurred as a result of Buyer's receipt of quantities of Gas greater than or less than the Scheduled Gas, then Buyer shall pay for such Imbalance Charges or reimburse Seller for such Imbalance Charges paid by Seller. If the Imbalance Charges were incurred as a result of Seller's delivery of quantities of Gas greater than or less than the Scheduled Gas, then Seller shall pay for such Imbalance Charges or reimburse Buyer for such Imbalance Charges paid by Buyer. SECTION 5. QUALITY AND MEASUREMENT All Gas delivered by Seller shall meet the pressure, quality and heat content requirements of the Receiving Transporter. The unit of quantity measurement for purposes of this Contract shall be one MMBtu dry. Measurement of Gas quantities hereunder shall be in accordance with the established procedures of the Receiving Transporter. SECTION 6. TAXES The parties have selected either "Buyer Pays At and After Delivery Point" or "Seller Pays Before and At Delivery Point" as indicated on the Base Contract. Buyer Pays At and After Delivery Point: Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government authority ("Taxes") on or with respect to the Gas prior to the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas at the Delivery Point(s) and all Taxes after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party's responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall furnish the other party any necessary documentation thereof. Seller Pays Before and At Delivery Point: Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government authority ("Taxes") on or with respect to the Gas prior to the Delivery Point(s) and all Taxes at the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party's responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall furnish the other party any necessary documentation thereof. SECTION 7. BILLING, PAYMENT, AND AUDIT 7.1. Seller shall invoice Buyer for Gas delivered and received in the preceding Month and for any other applicable charges, providing supporting documentation acceptable in industry practice to support the amount charged. If the actual quantity delivered is not known by the billing date, billing will be prepared based on the quantity of Scheduled Gas. The invoiced quantity will then be adjusted to the actual quantity on the following Month's billing or as soon thereafter as actual delivery information is available. 7.2. Buyer shall remit the amount due under Section 7.1 in the manner specified in the Base Contract, in immediately available funds, on or before the later of the Payment Date or 10 Days after receipt of the invoice by Buyer; provided that if the Payment Date is not a Business Day, payment is due on the next Business Day following that date. In the event any payments are due Buyer hereunder, payment to Buyer shall be made in accordance with this Section 7.2. 7.3. In the event payments become due pursuant to Sections 3.2 or 3.3, the performing party may submit an invoice to the nonperforming party for an accelerated payment setting forth the basis upon which the invoiced amount was calculated. Payment from the nonperforming party will be due five Business Days after receipt of invoice. 7.4. If the invoiced party, in good faith, disputes the amount of any such invoice or any part thereof, such invoiced party will pay such amount as it concurs to be correct; provided, however, if the invoiced party disputes the amount due, it must provide supporting documentation acceptable in industry practice to support the amount paid or disputed without undue delay. In the event the parties are unable to resolve such dispute, either party may pursue any remedy available at law or in equity to enforce its rights pursuant to this Section. 7.5. If the invoiced party fails to remit the full amount payable when due, interest on the unpaid portion shall accrue from the date due until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate. 7.6. A party shall have the right, at its own expense, upon reasonable Notice and at reasonable times, to examine and audit and to obtain copies of the relevant portion of the books, records, and telephonic recordings of the other party only to the extent reasonably necessary to verify the accuracy of any statement, charge, payment, or computation made under the Contract. This right to examine, audit, and to obtain copies shall not be available with respect to proprietary information not directly relevant to transactions under this Contract. All invoices and billings shall be conclusively presumed final and accurate and all associated claims for under- or overpayments shall be deemed waived unless such invoices or billings are objected to in writing, with adequate explanation and/or documentation, within two years after the Month of Gas delivery. All retroactive adjustments under Section 7 shall be paid in full by the party owing payment within 30 Days of Notice and substantiation of such inaccuracy. 7.7. Unless the parties have elected on the Base Contract not to make this Section 7.7 applicable to this Contract, the parties shall net all undisputed amounts due and owing, and/or past due, arising under the Contract such that the party owing the greater amount shall make a single payment of the net amount to the other party in accordance with Section 7; provided that no payment required to be made pursuant to the terms of any Credit Support Obligation or pursuant to Section 7.3 shall be subject to netting under this Section. If the parties have executed a separate netting agreement, the terms and conditions therein shall prevail to the extent inconsistent herewith. SECTION 8. TITLE, WARRANTY, AND INDEMNITY 8.1. Unless otherwise specifically agreed, title to the Gas shall pass from Seller to Buyer at the Delivery Point(s). Seller shall have responsibility for and assume any liability with respect to the Gas prior to its delivery to Buyer at the specified Delivery Point(s). Buyer shall have responsibility for and assume any liability with respect to said Gas after its delivery to Buyer at the Delivery Point(s). 8.2. Seller warrants that it will have the right to convey and will transfer good and merchantable title to all Gas sold hereunder and delivered by it to Buyer, free and clear of all liens, encumbrances, and claims. EXCEPT AS PROVIDED IN THIS SECTION 8.2 AND IN SECTION 15.8, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE, ARE DISCLAIMED. 8.3. Seller agrees to indemnify Buyer and save it harmless from all losses, liabilities or claims including reasonable attorneys' fees and costs of court ("Claims"), from any and all persons, arising from or out of claims of title, personal injury (including death) or property damage from said Gas or other charges thereon which attach before title passes to Buyer. Buyer agrees to indemnify Seller and save it harmless from all Claims, from any and all persons, arising from or out of claims regarding payment, personal injury (including death) or property damage from said Gas or other charges thereon which attach after title passes to Buyer. 8.4. The parties agree that the delivery of and the transfer of title to all Gas under this Contract shall take place within the Customs Territory of the United States (as defined in general note 2 of the Harmonized Tariff Schedule of the United States 19 U.S.C. §1202, General Notes, page 3); provided, however, that in the event Seller took title to the Gas outside the Customs Territory of the United States, Seller represents and warrants that it is the importer of record for all Gas entered and delivered into the United States, and shall be responsible for entry and entry summary filings as well as the payment of duties, taxes and fees, if any, and all applicable record keeping requirements. 8.5. Notwithstanding the other provisions of this Section 8, as between Seller and Buyer, Seller will be liable for all Claims to the extent that such arise from the failure of Gas delivered by Seller to meet the quality requirements of Section 5. SECTION 9. NOTICES 9.1. All Transaction Confirmations, invoices, payment instructions, and other communications made pursuant to the Base Contract ("Notices") shall be made to the addresses specified in writing by the respective parties from time to time. 9.2. All Notices required hereunder shall be in writing and may be sent by facsimile or mutually acceptable electronic means, a nationally recognized overnight courier service, first class mail or hand delivered. 9.3. Notice shall be given when received on a Business Day by the addressee. In the absence of proof of the actual receipt date, the following presumptions will apply. Notices sent by facsimile shall be deemed to have been received upon the sending party's receipt of its facsimile machine's confirmation of successful transmission. If the day on which such facsimile is received is not a Business Day or is after five p.m. on a Business Day, then such facsimile shall be deemed to have been received on the next following Business Day. Notice by overnight mail or courier shall be deemed to have been received on the next Business Day after it was sent or such earlier time as is confirmed by the receiving party. Notice via first class mail shall be considered delivered five Business Days after mailing. 9.4. The party receiving a commercially acceptable Notice of change in payment instructions or other payment information shall not be obligated to implement such change until ten Business Days after receipt of such Notice. SECTION 10. FINANCIAL RESPONSIBILITY 10.1. If either party ("X") has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party ("Y") (including, without limitation, the occurrence of a material change in the creditworthiness of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. "Adequate Assurance of Performance" shall mean sufficient security in the form, amount, for a term, and from an issuer, all as reasonably acceptable to X, including, but not limited to cash, a standby irrevocable letter of credit, a prepayment, a security interest in an asset or guaranty. Y hereby grants to X a continuing first priority security interest in, lien on, and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequate Assurance of Performance, the security interest and lien granted hereunder on that Adequate Assurance of Performance shall be released automatically and, to the extent possible, without any further action by either party. 10.2. In the event (each an "Event of Default") either party (the "Defaulding Party") or its Guarantor shall: (i) make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize, or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other party with respect to any Credit Support Obligations relating to the Contract; (vii) fail to give Adequate Assurance of Performance under Section 10.1 within 48 hours but at least one Business Day of a written request by the other party; (viii) not have paid any amount due the other party hereunder on or before the second Business Day following written Notice that such payment is due; or ix) be the affected party with respect to any Additional Event of Default; then the other party (the "Non-Defaulting Party") shall have the right, at its sole election, to immediately withhold and/or suspend deliveries or payments upon Notice and/or to terminate and liquidate the transactions under the Contract, in the manner provided in Section 10.3, in addition to any and all other remedies available hereunder. 10.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than 20 Days after such Notice is given, as an early termination date (the "Early Termination Date") for the liquidation and termination pursuant to Section 10.3.1 of all transactions under the Contract, each a "Terminated Transaction". On the Early Termination Date, all transactions will terminate, other than those transactions, if any, that may not be liquidated and terminated under applicable law ("Excluded Transactions"), which Excluded Transactions must be liquidated and terminated as soon thereafter as is legally permissible, and upon termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be the Early Termination Date for purposes of Section 10.3.1. The parties have selected either "Early Termination Damages Apply" or "Early Termination Damages Do Not Apply" as indicated on the Base Contract. Early Termination Damages Apply: 10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3.2), for which payment has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amount when due under clause (x) above to present value, in a commercially reasonable manner as of the Early Termination Date (to take account of the period between the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions). For purposes of this Section 10.3.1, "Contract Value" means the amount of Gas remaining to be delivered or purchased under a transaction multiplied by the Contract Price, and "Market Value" means, the amount of Gas remaining to be delivered or purchased under a transaction multiplied by the market price for a similar transaction at the Delivery Point determined by the Non-Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider, among other valuations, any or all of the settlement prices of NYMEX Gas futures contracts, quotations from leading dealers in energy swap contracts or physical gas trading markets, similar sales or purchases and any other bona fide third-party offers, all adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a replacement transaction(s) in order to determine the Market Value. Any extension(s) of the term of a transaction to which parties are not bound as of the Early Termination Date (including but not limited to "evergreen provisions") shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to extend the term of a transaction shall be considered in determining Contract Values and Market Values. The rate of interest used in calculating net present value shall be determined by the Non-Defaulting Party in a commercially reasonable manner. Early Termination Damages Do Not Apply: 10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3.2), for which payment has not yet been made by the party that owes such payment under this Contract. The parties have selected either "Other Agreement Setoffs Apply" or "Other Agreement Setoffs Do Not Apply" as indicated on the Base Contract. <table> <tr> <th>Other Agreement Setoffs Apply:</th> </tr> <tr> <th>Bilateral Setoff Option:</th> </tr> <tr> <td>10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the "Net Settlement Amount"). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff any Net Settlement Amount against (i) any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract; and (ii) any amount(s) (including any excess cash margin or excess cash collateral) owed or held by the party that is entitled to the Net Settlement Amount under any other agreement or arrangement between the parties.</td> </tr> <tr> <th>Triangular Setoff Option:</th> </tr> <tr> <td>10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the "Net Settlement Amount"). At its sole option, and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff (i) any Net Settlement Amount against any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract; (ii) any Net Settlement Amount against any amount(s) (including any excess cash margin or excess cash collateral) owed by or to a party under any other agreement or arrangement between the parties; (iii) any Net Settlement Amount owed to the Non-Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Non-Defaulting Party or its Affiliates to the Defaulting Party under any other agreement or arrangement; (iv) any Net Settlement Amount owed to the Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Defaulting Party to the Non-Defaulting Party or its Affiliates under any other agreement or arrangement; and/or (v) any Net Settlement Amount owed to the Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Defaulting Party or its Affiliates to the Non-Defaulting Party under any other agreement or arrangement.</td> </tr> <tr> <th>Other Agreement Setoffs Do Not Apply:</th> </tr> <tr> <td>10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the "Net Settlement Amount"). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party may setoff any Net Settlement Amount against any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract.</td> </tr> </table> 10.3.3. If any obligation that is to be included in any netting, aggregation or setoff pursuant to Section 10.3.2 is unascertained, the Non-Defaulting Party may in good faith estimate that obligation and net, aggregate or setoff, as applicable, in respect of the estimate, subject to the Non-Defaulting Party accounting to the Defaulting Party when the obligation is ascertained. Any amount not then due which is included in any netting, aggregation or setoff pursuant to Section 10.3.2 shall be discounted to net present value in a commercially reasonable manner determined by the Non-Defaulting Party. 10.4. As soon as practicable after a liquidation, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the Net Settlement Amount, and whether the Net Settlement Amount is due or due from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of the Net Settlement Amount, provided that failure to give such Notice shall not affect the validity or enforceability of the liquidation or give rise to any claim by the Defaulting Party against the Non-Defaulting Party. The Net Settlement Amount as well as any setoffs applied against such amount pursuant to Section 10.3.2, shall be paid by the close of business on the second Business Day following such Notice, which date shall not be earlier than the Early Termination Date. Interest on any unpaid portion of the Net Settlement Amount as adjusted by setoffs, shall accrue from the date due until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate. 10.5. The parties agree that the transactions hereunder constitute a "forward contract" within the meaning of the United States Bankruptcy Code and that Buyer and Seller are each "forward contract merchants" within the meaning of the United States Bankruptcy Code. 10.6. The Non-Defaulting Party's remedies under this Section 10 are the sole and exclusive remedies of the Non-Defaulting Party with respect to the occurrence of any Early Termination Date. Each party reserves to itself all other rights, setoffs, counterclaims and other defenses that it is or may be entitled to arising from the Contract. 10.7. With respect to this Section 10, if the parties have executed a separate netting agreement with close-out netting provisions, the terms and conditions therein shall prevail to the extent inconsistent herewith. SECTION 11. FORCE MAJEURE 11.1. Except with regard to a party's obligation to make payment(s), due under Section 7, Section 10.4, and Imbalance Charges under Section 4, neither party shall be liable to the other for failure to perform a Firm obligation, to the extent such failure was caused by Force Majeure. The term "Force Majeure" as employed herein means any cause not reasonably within the control of the party claiming suspension, as further defined in Section 11.2. 11.2. Force Majeure shall include, but not be limited to, the following: (i) physical events such as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as hurricanes, which result in evacuation of the affected area, floods, washouts, explosions, breakage or accident or necessity of repairs to machinery or equipment or lines of pipe; (ii) weather related events affecting an entire geographic region, such as low temperatures which cause freezing or failure of wells or lines of pipe; (iii) interruption and/or curtailment of Firm transportation and/or storage by Transporters; (iv) acts of others such as strikes, lockouts or other industrial disturbances, riots, sabotage, insurrections or wars, or acts of terror; and (v) governmental actions such as necessity for compliance with any court order, law, statute, ordinance, regulation, or policy having the effect of law promulgated by a governmental authority having jurisdiction. Seller and Buyer shall make reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve the event or occurrence once it has occurred in order to resume performance. 11.3. Neither party shall be entitled to the benefit of the provisions of Force Majeure to the extent performance is affected by any or all of the following circumstances: (i) the curtailment of interruptible or secondary Firm transportation unless primary, in-path, Firm transportation is also curtailed; (ii) the party claiming excuse failed to remedy the condition and to resume the performance of such covenants or obligations with reasonable dispatch; or (iii) economic hardship, to include, without limitation, Seller's ability to sell Gas at a higher or more advantageous price than the Contract Price, Buyer's ability to purchase Gas at a lower or more advantageous price than the Contract Price, or a regulatory agency disallowing, in whole or in part, the pass through of costs resulting from this Contract; (iv) the loss of Buyer's market(s) or Buyer's inability to use or resell Gas purchased hereunder, except, in either case, as provided in Section 11.2; or (v) the loss or failure of Seller's gas supply or depletion of reserves, except, in either case, as provided in Section 11.2. The party claiming Force Majeure shall not be excused from its responsibility for Imbalance Charges. 11.4. Notwithstanding anything to the contrary herein, the parties agree that the settlement of strikes, lockouts or other industrial disturbances shall be within the sole discretion of the party experiencing such disturbance. 11.5. The party whose performance is prevented by Force Majeure must provide Notice to the other party. Initial Notice may be given orally; however, written Notice with reasonably full particulars of the event or occurrence is required as soon as reasonably possible. Upon providing written Notice of Force Majeure to the other party, the affected party will be relieved of its obligation, from the onset of the Force Majeure event, to make or accept delivery of Gas, as applicable, to the extent and for the duration of Force Majeure, and neither party shall be deemed to have failed in such obligations to the other during such occurrence or event. 11.6. Notwithstanding Sections 11.2 and 11.3, the parties may agree to alternative Force Majeure provisions in a Transaction Confirmation executed in writing by both parties. SECTION 12. TERM This Contract may be terminated on 30 Day's written Notice, but shall remain in effect until the expiration of the latest Delivery Period of any transaction(s). The rights of either party pursuant to Section 7.6; Section 10; Section 13, the obligations to make payment hereunder, and the obligation of either party to indemnify the other, pursuant hereto shall survive the termination of the Base Contract or any transaction. SECTION 13. LIMITATIONS FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY. A PARTY'S LIABILITY HEREUNDER SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, A PARTY'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY. SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREAFTER PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY, IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. SECTION 14. MARKET DISRUPTION If a Market Disruption Event has occurred then the parties shall negotiate in good faith to agree on a replacement price for the Floating Price (or on a method for determining a replacement price for the Floating Price) for the affected Day, and if the parties have not so agreed on or before the second Business Day following the affected Day then the replacement price for the Floating Price shall be determined within the next two following Business Days with each party obtaining, in good faith and from non-affiliated market participants in the relevant market, two quotes for prices of Gas for the affected Day of a similar quality and quantity in the geographical location closest in proximity to the Delivery Point and averaging the four quotes. If either party fails to provide two quotes then the average of the other party's two quotes shall determine the replacement price for the Floating Price. "Floating Price" means the price or a factor of the price agreed to in the transaction as being based upon a specified index. "Market Disruption Event" means, with respect to an index specified for a transaction, any of the following events: (a) the failure of the index to announce or publish information necessary for determining the Floating Price; (b) the failure of trading to commence or the permanent discontinuation or material suspension of trading on the exchange or market acting as the index; (c) the temporary or permanent discontinuation or unavailability of the index; (d) the temporary or permanent closing of any exchange acting as the index; or (e) both parties agree that a material change in the formula for or the method of determining the Floating Price has occurred. For the purposes of the calculation of a replacement price for the Floating Price, all numbers shall be rounded to three decimal places. If the fourth decimal number is five or greater, then the third decimal number shall be increased by one and if the fourth decimal number is less than five, then the third decimal number shall remain unchanged. SECTION 15. MISCELLANEOUS 15.1. This Contract shall be binding upon and inure to the benefit of the successors, assigns, personal representatives, and heirs of the respective parties hereto, and the covenants, conditions, rights and obligations of this Contract shall run for the full term of this Contract. No assignment of this Contract, in whole or in part, will be made without the prior written consent of the non-assigning party (and shall not relieve the assigning party from liability hereunder), which consent will not be unreasonably withheld or delayed; provided, either party may (i) transfer, sell, pledge, encumber, or assign this Contract or the accounts, revenues, or proceeds hereof in connection with any financing or other financial arrangements, or (ii) transfer its interest to any parent or Affiliate by assignment, merger or otherwise without the prior approval of the other party. Upon any such assignment, transfer and assumption, the transferor shall remain principally liable for and shall not be relieved of or discharged from any obligations hereunder. 15.2. If any provision in this Contract is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Contract. 15.3. No waiver of any breach of this Contract shall be held to be a waiver of any other or subsequent breach. 15.4. This Contract sets forth all understandings between the parties respecting each transaction subject hereto, and any prior contracts, understandings and representations, whether oral or written, relating to such transactions are merged into and superseded by this Contract and any effective transaction(s). This Contract may be amended only by a writing executed by both parties. 15.5. The interpretation and performance of this Contract shall be governed by the laws of the jurisdiction as indicated on the Base Contract, excluding, however, any conflict of laws rule which would apply the law of another jurisdiction. 15.6. This Contract and all provisions herein will be subject to all applicable and valid statutes, rules, orders and regulations of any governmental authority having jurisdiction over the parties, their facilities, or Gas supply, this Contract or transaction or any provisions thereof. 15.7. There is no third party beneficiary to this Contract. 15.8. Each party to this Contract represents and warrants that it has full and complete authority to enter into and perform this Contract. Each person who executes this Contract on behalf of either party represents and warrants that it has full and complete authority to do so and that such party will be bound thereby. 15.9. The headings and subheadings contained in this Contract are used solely for convenience and do not constitute a part of this Contract between the parties and shall not be used to construe or interpret the provisions of this Contract. 15.10. Unless the parties have elected on the Base Contract not to make this Section 15.10 applicable to this Contract, neither party shall disclose directly or indirectly without the prior written consent of the other party the terms of any transaction to a third party (other than the employees, lenders, royalty owners, counsel, accountants and other agents of the party, or prospective purchasers of all or substantially all of a party's assets or of any rights under this Contract, provided such persons shall have agreed to keep such terms confidential) except: (i) in order to comply with any applicable law, order, regulation, or exchange rule, (ii) to the extent necessary for the enforcement of this Contract, (iii) to the extent necessary to implement any transaction, (iv) to the extent necessary to comply with a regulatory agency's reporting requirements including but not limited to gas cost recovery proceedings; or (v) to the extent such information is delivered to such third party for the sole purpose of calculating a published index. Each party shall notify the other party of any proceeding of which it is aware which may result in disclosure of the terms of any transaction (other than as permitted hereunder) and use reasonable efforts to prevent or limit the disclosure. The existence of this Contract is not subject to this confidentiality obligation. Subject to Section 13, the parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with this confidentiality obligation. The terms of any transaction hereunder shall be kept confidential by the parties hereto for one year from the expiration of the transaction. In the event that disclosure is required by a governmental body or applicable law, the party subject to such requirement may disclose the material terms of this Contract to the extent so required, but shall promptly notify the other party, prior to disclosure, and shall cooperate (consistent with the disclosing party's legal obligations) with the other party's efforts to obtain protective orders or similar restraints with respect to such disclosure at the expense of the other party. 15.11. The parties may agree to dispute resolution procedures in Special Provisions attached to the Base Contract or in a Transaction Confirmation executed in writing by both parties 15.12. Any original executed Base Contract, Transaction Confirmation or other related document may be digitally copied, photocopied, or stored on computer tapes and disks (the "Imaged Agreement"). The Imaged Agreement, if introduced as evidence on paper, the Transaction Confirmation, if introduced as evidence in automated facsimile form, the recording, if introduced as evidence in its original form, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings will be admissible as between the parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissibility of the recording, the Transaction Confirmation, or the Imaged Agreement on the basis that such were not originated or maintained in documentary form. However, nothing herein shall be construed as a waiver of any other objection to the admissibility of such evidence. DISCLAIMER: The purposes of this Contract are to facilitate trade, avoid misunderstandings and make more definite the terms of contracts of purchase and sale of natural gas. Further, NAESB does not mandate the use of this Contract by any party. NAESB DISCLAIMS AND EXCLUDES, AND ANY USER OF THIS CONTRACT ACKNOWLEDGES AND AGREES TO NAESB'S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS CONTRACT OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE, NONINFRINGEMENT, MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB 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. EACH USER OF THIS CONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF THIS CONTRACT. TRANSACTION CONFIRMATION FOR IMMEDIATE DELIVERY EXHIBIT A Letterhead/Logo Date: ____________ ________ Transaction Confirmation #: __________________ This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated ____________________. The terms of this Transaction Confirmation are binding unless disputed in writing within 2 Business Days of receipt unless otherwise specified in the Base Contract. SELLER: _____________________________________________________________________________________ Attn: ____________________________________________ Phone: __________________________________________ Fax: _____________________________________________ Base Contract No. _________________________________ Transporter: ____________________________________ Transporter Contract Number: ______________________ BUYER: _____________________________________________________________________________________ Attn: ____________________________________________ Phone: __________________________________________ Fax: _____________________________________________ Base Contract No. _________________________________ Transporter: ____________________________________ Transporter Contract Number: _______________________ Contract Price: $______/MMBtu; or ____________________________ Delivery Period: Begin: _______________ End: _______________ Performance Obligation and Contract Quantity: (Select One) Firm (Fixed Quantity): _____ MMBtus/day □ EFP Firm (Variable Quantity): _____ MMBtus/day Minimum _____ MMBtus/day Maximum subject to Section 4.2. at election of □ Buyer or □ Seller Interruptible: Up to _____ MMBtus/day Delivery Point(s): ____________________________ (If a pooling point is used, list a specific geographic and pipeline location): Special Conditions: Seller: _________________________________________ By: _____________________________________________ Title: ____________________________________________ Date: ___________________________________________ Buyer: _________________________________________ By: _____________________________________________ Title: ____________________________________________ Date: ___________________________________________ TRANSACTION CONFIRMATION FOR IMMEDIATE DELIVERY CONCORD ENERGY LLC Transaction Confirmation #: 384048 Trade Date: 1/25/2021 This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated 1/25/2021. The terms of this Transaction Confirmation are binding unless disputed in writing within 2 Business Days of receipt unless otherwise specified in the Base Contract. Please be advised that Concord Energy LLC has granted BNP Paribas a security interest in, and assignment of, all amounts due or to become due hereunder. SELLER: VR4-Grizzly LP 2626 Cole Ave. Suite 750 Dallas, TX 75204 Attn: David Swain Phone: 469.206.0111 Fax: BUYER: Concord Energy LLC 1401 17th Street, Suite 1500 Denver, CO 80202 Attn: Marcus Divita Phone: 303-468-1247 Fax: 303-468-1901 Contract Price: /MMBtu or IF, Enable Gas East - ($0.0500) Delivery Period: Begin: 12/1/2020 End: 3/31/2021 Contract Quantity: Firm (Fixed Quantity): 9,989 MMBtu's Day Firm (Variable Quantity): ______ MMBtus/day Minimum ______ MMBtus/day Maximum subject to Section 4.2. at election of Buyer or Seller Delivery Point(s): Enable East Pool (If a pooling point is used, list a specific geographic and pipeline location): Special Conditions: VR4 purchased from Grizzly 1/22/21 Seller: VR4-Grizzly, LP By: Collin Lansing Collin Lansing, DCO Date: 1.25.2021 Approved: Buyer: Concord Energy LLC By: Sam Rasure, Trader Date: 1/25/2021 Approved: CONCORD 00014 TRANSACTION CONFIRMATION FOR IMMEDIATE DELIVERY CONCORD ENERGY LLC Trade Date: 1/25/2021 Transaction Confirmation #: 384049 This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated 1/25/2021. The terms of this Transaction Confirmation are binding unless disputed in writing within 2 Business Days of receipt unless otherwise specified in the Base Contract. Please be advised that Concord Energy LLC has granted BNP Paribas a security interest in, and assignment of, all amounts due or to become due hereunder. SELLER: VR4-Grizzly LP 2626 Cole Ave. Suite 750 Dallas, TX 75204 Attn: David Swain Phone: 469.206.0111 Fax: BUYER: Concord Energy LLC 1401 17th Street, Suite 1500 Denver, CO 80202 Attn: Marcus Divita Phone: 303-468-1247 Fax: 303-468-1901 Contract Price: /MMBtu or GDA, Enable Gas, East - ($0.1200) Delivery Period: Begin: 12/1/2020 End: 3/31/2021 Contract Quantity: Firm (Fixed Quantity): 6,715 MMBtu's Day Firm (Variable Quantity): ______ MMBtus/day Minimum ______ MMBtus/day Maximum subject to Section 4.2. at election of Buyer or Seller Delivery Point(s): Enable East Pool (If a pooling point is used, list a specific geographic and pipeline location): Special Conditions: VARIABLE VOLUME Seller: VR4-Grizzly, LP By: Collin Lensing Collin Lensing, CDO Date: 1.25.2021 Approved: ____________________________ Buyer: Concord Energy LLC By: Sam Rasure, Trader Date: 1/25/2021 Approved: ____________________________ EXHIBIT C January 11, 2021 MarkWest Oklahoma Gas Company, L.L.C. 1515 Arapahoe Street Tower 1, Suite 1600 Denver, CO 80202 Attention: Contract Administration Re: Agency Authorization: Gas Gathering Agreement dated as of January 15, 2007, as amended (the “Agreement”), between VR4-Grizzly, LP, as successor in interest to Grizzly Energy LLC ("Producer") and Marathon Petroleum, formerly MarkWest Oklahoma Gas Company, L.L.C. ("Gatherer") (Gatherer’s contract #10280 and #10280R) Ladies and Gentlemen: Please be advised that Producer hereby appoints, designates and constitutes Concord Energy, L.L.C. ("Agent") to serve as its agent for administrative functions under the terms of the Agreement. These functions include, but are not limited to, (i) giving and receiving notices, statements, invoices, correspondence and communications under the Agreement, (ii) negotiating amendments and modifications to the Agreement, (iii) day-to-day operational matters involving the Agreement, and (iv) exercising all other rights and giving all consents and approvals of Producer under the Agreement. Agent hereby accepts and agrees to the terms of this Agency Authorization. Producer hereby directs Gatherer to comply with the instructions of Agent with respect to the Agreement pursuant hereto. Producer and Agent acknowledge and agree that the agency services to be performed by Agent on Producer’s behalf shall be performed at no cost to Gatherer, and neither Gatherer nor its members, agents, employees or affiliates shall have any liability to Agent or Producer for complying with Agent’s instructions with respect to the Agreement pursuant hereto. This Agency Authorization shall be effective as of February 1, 2021 and shall continue and remain in full force and effect thereafter until terminated on the beginning of any month following at least thirty (30) days written notice by Producer or Agent to Gatherer, or until the termination of the Agreement. Written notice of termination shall be given to Gatherer in accordance with the notice provisions set forth in the Agreement, or if none, to Gatherer at the address set forth above or such other address as Gatherer may designate to Producer and Agent in writing from time to time. By execution in the spaces provided below, Producer and Agent agree with the above terms. Producer: VR4-Grizzly, LP By: ________________________________ Name: Collin Lensing Title: COO Agent: Concord Energy, L.L.C. By: ________________________________ Name: Sam Rasrure Title: VP Producer Services