CLASSIC PIPELINE& GATHERING, LLC 1301 McKinney, Suite 2100 Houston, Texas 77010 ###-###-#### May1, 2014

Classic will operate and maintain one or more lines, meters and related equipment to measure and transport Producer’s Produced Water from existing wells in the Contract Area . With respect to any future wells to be drilled in the Contract Area, the parties hereby agree to use good faith efforts to agree on terms that are “market”, meaning commonly accepted between parties for similar projects, to install, lay, operate and maintain one or more lines, meters and related equipment to receive, transport and dispose of Producer’s Produced Water from the future wells drilled in the Contract Area. Producer shall be under no obligation to deliver Produced Water, or any specific volume of Produced Water, for disposal by Classic under this Agreement.

Classic has the right to dispose of non-hazardous oil and gas waste by injection, under the terms and conditions of various Permit(s) to “Dispose of Non-Hazardous Oil and Gas Waste by Injection Into a Porous Formation Not Productive of Oil and Gas” (the “Disposal Well(s)”).

Producer shall be responsible for all damages resulting to Classic, or any third party, from the operation of the Water System and the transportation of Producer’s Produced Water until delivered into the Water System. All fines, expenses, costs, damages and/or legal fees arising due to damages resulting from or connected in any manner with Producer’s operations and the transportation of Produced Water in Producer’s Water System upstream of the Delivery Point(s) shall be the sole responsibility of Producer.

Classic shall, at its sole risk, cost and expense, obtain all necessary rights-of-way and easements necessary to effect delivery of the Produced Water at the Delivery Point(s). Classic shall obtain any necessary rights, permissions or authority from the owners of the surface upon which the lines are laid. Additionally, Classic shall acquire any required permits or other approvals from each government agency having the requisite authority to do so, granting Classic the necessary approval to transport the Produced Water to the Disposal Wells.

In the event the Produced Water delivered for disposal by Producer is found to be of unsuitable quality due to incompatibility and cause plugging, scale or corrosion, or contain suspended solids or basic sediments, gas or any other material which would render harm to the System, or at an inadequate pressure to enter the System, or the quality of the Produced Water does not comply with the terms and conditions of the applicable Permit(s), Classic shall notify Producer, in writing, specifying the nature of the incompatibility. Upon notification, the disposal of Producer’s Produced Water shall cease until such water has been treated and is of acceptable quality, as determined in good faith by Classic. Costs incurred for treating incompatible water shall be paid by Producer.

The rate of delivery of Producer’s Produced Water must be at a rate not to exceed the capacity of the pipeline and / or the disposal pump and / or any of the Disposal Wells, as reasonably determined solely by Classic, subject to the other limitations set forth in this Agreement.

Classic agrees to dispose of Producer’s Produced Water delivered to it at the Delivery Point(s) so long as the disposal of Producer’s Produced Water does not interfere with the disposal of third parties’ water contracted for disposal as of the date of this Agreement. Should regulatory or mechanical problems develop with the any Disposal Well or equipment which will prevent disposal of Producer’s Produced Water, upon verbal or written notification to Producer’s field personnel, which shall be given with as much lead time as is reasonable under the applicable circumstances, Producer shall immediately stop delivery of its Produced Water into the Water System until Producer is notified that the problem has been corrected and Classic is ready to resume disposing of Producer’s Produced Water.

The volume of Producer’s Produced Water delivered pursuant to this Agreement will be measured by a mutually agreed upon positive displacement meter (“Meter”) purchased and installed by Producer at Producer’s expense, and maintained by Classic at Classic’s expense.

Producer agrees to pay Classic a fee of $1.10 per barrel for each barrel (42 US gallons) of Producer’s Produced Water delivered to Classic. Producer will be billed monthly for the volumes of Produced Water delivered to Classic during the preceding month (and for any costs incurred pursuant to Paragraph 5 above), and Producer shall pay the invoice amount within thirty (30) days of Producer’s receipt of the invoice. Payments shall be made to Classic at the address set forth in Paragraph 12 below.

Producer hereby acknowledges and agrees that upon delivery to Classic, title and ownership to the Produced Water shall pass to Classic. Producer further acknowledges and agrees that Classic may recover oil, condensate and other hydrocarbons (collectively, and without limitation, “Skim Oil”) after assuming title and ownership, and the risk associated therewith, of the Produced Water. Any revenues attributable or related to the recovery and sale of Skim Oil shall be the sole property of Classic, and Producer hereby expressly releases and disclaims any claim to the title and ownership of the Skim Oil or the right to receive any revenue attributed to the sale of the Skim Oil. PRODUCER AGREES TO PROTECT, INDEMNIFY, DEFEND AND HOLD HARMLESS CLASSIC (ITS AFFILIATES, ALL PRINCIPALS, OFFICERS, DIRECTORS, EMPLOYEES AND CONSULTANTS), AND ITS SUCCESSORS AND ASSIGNS, FROM ANY AND ALL CLAIMS ASSERTED BY THIRD PARTIES, INCLUDING BUT NOT LIMITED TO LESSORS/ROYALTY OWNERS OF LEASES IN WHICH PRODUCER HAS A LEASEHOLD INTEREST AND FROM WHICH PRODUCER HAS DELIVERED VOLUMES OF PRODUCED WATER INTO THE DELIVERY POINT(S_, RESULTING FROM, CAUSED BY OR ANY WAY CONNECTED TO THE SKIM OIL, INCLUDING, WITHOUT LIMITATION, CLASSIC’S TITLE AND OWNERSHIP OF THE SKIM OIL, THE RIGHT TO SELL THE SKIM OIL AND THE RIGHT TO RECEIVE REVENUES DERIVED FROM THE SALE OF THE SKIM OIL.

NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, PRODUCER, ITS SUCCESSORS AND ASSIGNS, HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS CLASSIC (ITS AFFILAITES, ALL PRINCIPALS, OFFICERS, DIRECTORS, EMPLOYEES AND CONSULTANTS) FROM ALL ACTIONS, CAUSES OF ACTION, CLAIMS, LOSSES, COST, EXPENSES (INCLUDING ATTORNEY’S FEES AND EXPERT FEES) BROUGHT AGAINST IT (THEM) BY ANY AND ALL PERSONS, INCLUDING, BUT NOT LIMITED TO, ANY PRIVATE CITIZENS, PERSONS OR ORGANIZATIONS AND ANY AGENCY, BRANCH, OR REPRESENTATIVE OF FEDERAL, STATE OR LOCAL GOVERNMENT, ON ACCOUNT OF ANY PERSONAL INJURY, DISEASE, OR DEATH OR DAMAGE, DESTRUCTION, LOSS OF PROPERTY OR CONTAMINATION OF NATURAL RESOURCES (INCLUDING AIR, SOIL, SURFACE WATER, OR GROUND WATER) RESULTING FROM, ARISING OUT OF LIABILITY CAUSED BY, OR CONNECTED IN ANY MANNER to this agreement, including without limitation: (i) WITH PRODUCER’S failure TO OBTAIN, OR THE INSUFFICIENCY OF, ANY NECESSARY RIGHTS-OF-WAY AND EASEMENTS, PERMITS OR APPROVALS, (ii) WITH PRODUCER’S CONSTRUCTION, INSTALLATION, MAINTENANCE AND operation OF THE WATER SYSTEM AND THE PRODUCTION, TRANSPORTATION, HANDLING AND/OR DELIVERY OF THE PRODUCED WATER UPSTREAM OF THE DELIVERY POINT(S) AND (iii) ANY ENVIRONMENTAL CONDITION OF, ON OR RESULTING FROM PRODUCER’S PRODUCTION, TRANSPORTATION, HANDLING AND/OR DELIVERY OF THE PRODUCED WATER AT THE DELIVERY POINT(S), INCLUDING, BUT NOT

LIMITED TO, THE PRESENCE, DISPOSAL, OR RELEASE OF ANY MATERIAL OF ANY KIND IN ON OR UNDER ANY LANDS, CAUSED BY OR CONNECTED WITH ANY ACTS OR OMISSIONS OF PRODUCER OR PRODUCER’S EMPLOYEES, REPRESENTATIVES OR AGENTS.

Notices to the parties shall be in writing (unless otherwise specified in this Agreement) and mailed to the addresses stated below. Notices and payments shall be deemed given when deposited with the United States Postal Service in a properly addressed postage paid envelope. Either party may change its address for notice purposes at any time and from time to time during the term hereof, provided that no change of address shall be binding upon the other party until at least thirty (30) days after the date on which such party has received the written notice announcing the change of address.

1301 McKinney Street, Ste. 2100

1301 McKinney Street, Ste. 2100

Houston, TX 77010

Houston, TX 77010

Attn:

Attn:

Telephone: (713)  ###-###-####

Telephone: (713) 588-8300

Facsimile: (713)  ###-###-####

Facsimile: (713) 588-8301

E-mail:

Email:

The term of this Agreement shall be for three (3) years from and after the Agreed to and Accepted date (below) of this Agreement (“Initial Term”), and year to year thereafter until terminated by either party upon at least one hundred and eighty (180) days advance written notice of termination with such termination to be effective as of the first day of the year following operation of such one hundred and eighty 180 day period.

Each party hereto represents and warrants that the person executing this Agreement on its behalf has full power and/or authority to bind such party to all terms of this Agreement. This Agreement may be executed in any number of counterparts, which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission (e.g., .pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.

This Agreement and all of the terms and conditions thereto shall inure to the benefit of, and be binding upon, all successors and assigns of Classic and Producer. Either party may assign this Agreement, but no assignment shall be effective unless and until the assigning party has given written notice of such assignment to the other party.

This Agreement shall be governed by the laws of the State of Texas, excluding any conflicts of law principles that would refer to the laws of another jurisdiction.

This Agreement embodies the entire agreement and understanding of Classic and Producer with respect of the subject matter contained herein. There are no contemporaneous oral agreements, and there are no promises, warranties, covenants or undertakings not set forth in this Agreement. This Agreement supersedes all prior agreements and understandings between Classic and Producer with respect to the subject matter of this Agreement. No amendment, modification, or alteration of the terms of this Agreement, or waiver by Classic or Producer of any failure to satisfy any term or provision contained herein, shall be binding unless it is in writing and duly executed by the party to be charged thereby.

Sincerely,

Classic Pipeline & Gathering, LLC

By:

/s/ Larry R. Forney

Name:

Larry R. Forney

Title:

Chief Operations Officer

Classic Hydrocarbons Operating, LLC

By:

/s/ John A. Weinzierl

Name:

Title:

President