Fill and Sign the Gas Processing Rights Agreement Form

Page 1 of 6 GAS PROCESSING RIGHTS AGREEMENT This Gas Processing Rights Agreement (the “Agreement”) is entered into effective _____, (the “Effective Date”) between _____ (the “Owner”), and _____ (the “Processor”). Owner and Processor may be referred to in this Agreement collectively as the “Parties,” or individually as a “Party.” Owner has volumes of gas available which are not currently being processed. Processor has expressed a desire to obtain the processing rights related to those volumes of gas avai lable from Owner. In consideration of the mutual agreements and covenants contained in this Agreement, and other good and valuable consideration, the sufficiency and receipt of which is acknowledged, the Parties agree and stipulate as follows: 1. DEFINITIONS 1. Specific Definitions. The following terms shall have the following meanings throughout this Agreement: “Agreement” means this Gas Processing Rights Agreement, including any schedules or exhibits, all of which are attached and incorporated for all purposes, and any and all amendments and modifications to this Gas Processing Rights Agreement. “Delivery Point” means the point where Owner's pipeline interconnects with: (i) the i nlet of a Plant; or, (ii) any other interconnection on Owner's pipeline as mutually agreed to by the Parties for delivery of gas from Owner for processing pursuant to this Agreement. “Plant BTU Reduction (“PBR”)” means the sum of the BTU reductions attributable to removal of plant products and plant fuel, flare, and other uses and losses incidental to proc essing or other losses or uses that occur for any reason within any particular Plant. “PBR Make-Up” means the BTU's of gas that Processor redelivers to Owner to replace the PBR. PBR Make-Up will equal PBR on a BTU basis.“Plant” means any plant or plants with a direct interconnect with Owner's pipeline system (now or later existing) and through which Processor processes gas under this Agreement. “Redelivery Point” means the interconnect between Owner's pipeline and the tail gate of any Plant, or, any interconnect mutually agreeable by the Parties at which Processor re delivers gas to Owner. “Residue Gas” means the gas returned by Processor to Owner at the tailgate of any Pl ant after processing has occurred. Page 2 of 6 1.2 Other Definitions. Other terms may be defined elsewhere in the text of this Agreement and shall have the meanings indicated throughout this Agreement. 2. GAS COMMITMENT, DELIVERY, AND REDELIVERY 2.1 Gas Commitment and Delivery by Owner. Processor's obligation to process and Owner's obligation to deliver gas under this Agreement is strictly on an interruptible basis, subject to termination upon ____ (____) days written notice by either Party. During the term of this Agreement, to the extent Owner has any gas available for processing, Owner may make t hat gas available to Processor for processing under this Agreement at any Delivery Point designa ted by Processor. Prior to the beginning of each calendar month, Owner shall notify Processor, verbally or in writing, as to the amount of gas Owner estimates it can make avail able for processing during that calendar month. Additionally, Owner shall, in good faith, attempt to ke ep Processor reasonably informed whenever subsequent changes occur relative to those estimates. This information is subject to change without notice, and Owner does not warrant its accuracy. 2.2 Processor's Right to Accept or Reject Deliveries. Processor shall have the right, but not the obligation, to accept and process all or any part of the gas which Owner actua lly makes available to Processor. Within ____ business days after receipt of notice by Owner of the quantity of gas available to Processor, Processor shall notify Owner of the quantity, by Plant, of Owner's gas which Processor estimates it will process during the next succeeding calendar month. Additionally, Processor shall, in good faith, attempt to keep Owner reasonably informed whenever subsequent changes occur relative to those estimates. That information is subject to change without notice, and Processor does not warrant its accuracy. 2.3 Redelivery to Owner. Processor shall redeliver to Owner a BTU equivalent of all gas delivered by Owner at no cost to Owner. To the extent practicable, Processor shall redel iver the equivalent BTUs in the same month in which Processor takes delivery of BTUs for processing. Processor shall, concurrent with deliveries from Owner, redeliver the BTUs to Owner at any Redelivery Point in the form of (i) all Residue Gas allocated by each Plant as gas delivered from Owner, (ii) the estimated PBR Make-Up associated with the gas being processed, and (iii ) any PBR Make-Up for past periods to correct imbalances. Each month, Processor shall notify Owner of the volumes of PBR Make-Up and the Redelivery Point at which Processor will redeliver t o Owner. Processor's processing shall not render the Residue Gas redelivered to Owner by Processor incapable of meeting Owner's gas quality specifications, as contained in Owner's then effective Rate Schedules or any superseding Rate Schedules, and any other gas redelivered to Owner on behalf of Processor shall also meet Owner's quality specifications. 2.4 Gas Balancing. In order for the Parties to remain in balance on a BTU basis, Processor agrees to take the necessary steps to assure that under-deliveries or over-deliveries of BTUs are balanced by the end of the month following the month in which Owner notifies Processor of any imbalance. In the event Processor fails to timely eliminate any imbalance, in addition to all other remedies Owner may have, Owner may suspend or partially suspend deliveries of gas for processing under the terms of this Agreement. Page 3 of 6 2.5 Warranty of Title. Processor warrants title to all PBR Make-Up which it redelivers to Owner. OWNER DISCLAIMS ANY WARRANTY OF TITLE, EXPRESS OR IMPLIED. 2.6 Measurement. Measurement of all gas volumes delivered by Owner to Processor, as well as all volumes of Residue Gas and PBR Make-Up redelivered by Processor to Owner, shall be in accordance with Section ____ of Owner's Rate Schedule ____. Where the measurement facilities are not owed by Owner, Processor shall furnish or cause the operator of the measurement facilities to furnish allocation statements to Owner setting forth t he MCFs and BTUs of gas attributable to deliveries by Owner or Processor under this Agreement. 2.7 Compensation Paid to Owner. Processor shall pay Owner ____ (___¢) per each MCF of gas delivered by Owner at the request of Processor to any Plant on behalf of Processor and processed pursuant to this Agreement. 2.8 Benefits and Costs of Processing. Processor shall retain and own ____ percent (____%) of any and all benefits derived from its processing arrangements with Plants, including, without limitation, the liquefiable hydrocarbons and other substances extracted or removed pursuant to this Agreement and any related proceeds. All operations conducted by Processor pursuant to thi s Agreement shall be at Processor's sole cost, and Owner shall not be responsible for any part of those costs. Processor shall have responsibility for the gas and for all related damages or injury after the receipt at a Delivery Point and until Redelivery at a Delivery Point. 3. INDEMNIFICATION Processor agrees to defend, indemnify, and hold Owner harmless for all costs, whether or not resulting from Owner's sole or concurrent negligence, including, without limitation, all injuries to people or property and any other damages, losses, expenses, attorneys' fees and court costs, arising from or in any way related to this Agreement or the rights to process gas provi ded for in this Agreement; provided that to the extent necessary to cover those costs, Owner shall return to Processor compensation received by Owner pursuant to this Agreement for the month in which the obligation to indemnify accrues. 4. TERM This Agreement shall be for a term of ____ (____) months and shall continue on a month-to-month basis. However, either Party may terminate this Agreement at the end of any month on ____ (____) days prior written notice to the other Party. Termination will not extinguish any rights, liabilities, obligations, or imbalances which arose or accrued prior to the termination or otherwise relate to the period prior to termination. 5. MISCELLANEOUS 5.1 Entire Agreement. This Agreement constitutes the entire agreement and supersedes all Page 4 of 6 prior or contemporaneous proposals or agreements, whether oral or written, all previous negotiations and all other communications or understandings between the Parties with respect to the subject matter of this Agreement. All amendments, supplements, and modifications to this Agreement shall be in writing and signed by all of the Parties. 5.2 Counterparts. This Agreement may be executed in multiple counterparts, each of which, when executed, shall be deemed an original, and all of which shall constitut e one and the same Agreement. 5.3 Governing Law. This Agreement has been made and may be performed, in whole or part, in the State of _____. It shall be deemed to be a contract under, and shall be construed, interpreted, and governed by and according to the laws of the State of _____, excluding any conflict of laws provision that, if applied, would result in the application of the l aws of another jurisdiction. 5.4 Notices. Unless expressly provided otherwise, any notice required or permitted to be given under this Agreement shall be in writing (including telex, facsimile, telecopie r or similar writing) and sent to the address of the Party set forth below, or to such other address of which t he sending Party actually has received written notice: a. If to Owner to: b. If to Processor to: Each notice, demand, or other communication shall be effective, if given by regist ered or certified mail, return receipt requested, as of the third day after the date indi cated on the mailing certificate. If given by any other means, each notice, demand, or other communicat ion shall be effective when delivered at the address specified in this section. 5.5 Representations. Each Party to this Agreement represents it has the legal right to execute and perform this Agreement on its own behalf or on behalf of the individual or entit y for which it is signing. 5.6 Survival of Representations, Warranties, Covenants, and Agreements. The representations, warranties, covenants, and agreements given by the Parties shall survive this Agreement without regard to any action taken pursuant to this Agreement, including, without limitation, the execution of any documents affecting an interest in real property or any investigation made by the Party asserting the breach of this Agreement. 5.7 Expenses. Each of the Parties shall pay all costs and expenses incurred or to be incurred by each Party in negotiating and performing the transactions contemplated by this Agreement. 5.8 Severability. Any term or provision of this Agreement that is invalid or unenforceable in Page 5 of 6 any jurisdiction shall be ineffective as to that jurisdiction, to the extent of the invalidity or unenforceability, without rendering invalid or unenforceable the remaining terms and provisions of this Agreement, or affecting the validity or enforceability of any terms and provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, each provision shall be interpreted to be only so broad as is enforceable . A bankruptcy or similar trustee must accept or, to the extent permitted by law, re ject this Agreement in its entirety. 5.9 Confidentiality. The Parties agree that this Agreement and all information and data exchanged by them shall be maintained in strict and absolute confidence, except a s the Parties are required to disclose in compliance with an applicable law, rule, regulation or order. 5.10 Parties Bound by Agreement. This Agreement shall be binding on and insure to the benefit of the Parties and their respective successors and assigns. 5.11 Assignment. Neither of the Parties shall assign their rights under this Agreement to any other person or entity without the express prior written consent of the other Party. A volunta ry assignment made without the prior written consent of the non-assigning Party is invalid and ineffective. Within ____ (____) days after the non-assigning Party knows or reasonably should have known that the other Party made an involuntary assignment without obtaining the necessa ry prior written consent, the non-assigning Party shall have the option, but not the obligation to: (i) ratify the assignment by consenting to it in writing; (ii) disregard the assignment as inva lid and ineffective; or, (iii) terminate all future rights and obligations under this Agreement. 5.12 Waivers. No action (including, without limitation, any investigation by or on behalf of any Party) or inaction pursuant to this Agreement shall be deemed to constitute a wai ver of compliance with any representation, warranty, covenant, or term contained in this Agreem ent by the Party committing the action or inaction. A waiver by any Party of a particular right, including without limitation the breach of any provision of this Agreement, shall not opera te or be construed as a subsequent waiver of that same right or a waiver of any other right. 5.13 Remedies. The rights, obligations, and remedies created by this Agreement are cumulative and in addition to any other rights, obligations, or remedies otherwise availa ble at law or in equity. Nothing in this Agreement shall be considered an election of remedie s. Without being subject to the limitations required by common law, any Party may enforce this Agreement by an injunction or specific performance. 5.14 No Third-Party Benefit. Nothing contained in this Agreement shall be construed to confer any right, benefit, or interest on or for any person or entity other than the Parties to this Agreement. The Parties have executed this Agreement as of the date of acknowledgment of their signatures, but it shall be deemed effective as of the Effective Date stated above. Owner Page 6 of 6 Processor (Acknowledgments)