Exhibit 10.2

SENIOR UNSECURED BRIDGE LOAN AGREEMENT

Dated as of June 30, 2010

among

QEP RESOURCES, INC.,

as the Borrower,

DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,

as Administrative Agent,

and

The Lenders Party Hereto

BANK OF AMERICA, N.A.,

and

BMO CAPITAL MARKETS FINANCING, INC.,

as Co-Syndication Agents,

JPMORGAN CHASE BANK, N.A.,

and

WELLS FARGO BANK, N.A.,

as Co-Documentation Agents

DEUTSCHE BANK SECURITIES INC.,

BANC OF AMERICA SECURITIES LLC,

BMO CAPITAL MARKETS CORP.,

J.P. MORGAN SECURITIES INC.

and

WELLS FARGO SECURITIES, LLC,

Joint Lead Arrangers and Joint Book Managers

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TABLE OF CONTENTS

 

Section

        Page

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01

  

Defined Terms

   1

1.02

  

Other Interpretive Provisions

   17

1.03

  

Accounting Terms

   17

1.04

  

Rounding

   17

1.05

  

References to Agreements and Laws

   18

1.06

  

Times of Day

   18

1.07

  

Oil and Gas Definitions

   18

ARTICLE II.

COMMITMENTS

2.01

  

Loans

   18

2.02

  

Borrowing, Conversions and Continuations of Loans

   18

2.03

  

Voluntary Prepayments

   19

2.04

  

Mandatory Prepayments

   19

2.05

  

Repayment of Loans

   21

2.06

  

Interest

   21

2.07

  

Fees

   21

2.08

  

Computation of Interest and Fees

   22

2.09

  

Evidence of Debt

   22

2.10

  

Payments Generally

   22

2.11

  

Sharing of Payments by Lenders

   23

2.12

  

Extension of Maturity Date

   23

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01

  

Taxes

   24

3.02

  

Illegality

   27

3.03

  

Inability to Determine Rates

   27

3.04

  

Increased Cost and Reduced Return; Capital Adequacy; Reserves on Loans

   27

3.05

  

Compensation for Losses

   28

3.06

  

Matters Applicable to All Requests for Compensation

   28

3.07

  

Survival

   28

ARTICLE IV.

CONDITIONS PRECEDENT TO CLOSING DATE AND FUNDING DATE

4.01

  

Conditions Precedent to Closing Date

   29

4.02

  

Conditions Precedent to Borrowing

   31

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

5.01

  

No Default

   31

5.02

  

Organization and Good Standing

   31

5.03

  

Authorization

   32

 

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Section

        Page

5.04

  

No Conflicts or Consents

   32

5.05

  

Enforceable Obligations

   32

5.06

  

Audited Financial Statements

   32

5.07

  

Other Obligations and Restrictions

   32

5.08

  

Full Disclosure

   32

5.09

  

Litigation

   33

5.10

  

Labor Disputes and Acts of God

   33

5.11

  

ERISA Plans and Liabilities

   33

5.12

  

Environmental and Other Laws

   33

5.13

  

Borrower’s Subsidiaries

   33

5.14

  

Title to Properties; Licenses

   33

5.15

  

Government Regulation

   34

5.16

  

Solvency

   34

5.17

  

Status

   34

5.18

  

Use of Proceeds

   34

5.19

  

Compliance with Laws

   34

5.20

  

Patriot Act

   34

ARTICLE VI.

AFFIRMATIVE COVENANTS OF BORROWER

6.01

  

Payment and Performance

   34

6.02

  

Books, Financial Statements and Reports

   35

6.03

  

Other Information and Inspections

   36

6.04

  

Notice of Material Events

   36

6.05

  

Maintenance of Properties

   37

6.06

  

Maintenance of Existence and Qualifications

   37

6.07

  

Payment of Trade Liabilities, Taxes, etc.

   37

6.08

  

Insurance

   37

6.09

  

Interest

   37

6.10

  

Compliance with Agreements and Law

   37

6.11

  

Environmental Matters

   38

6.12

  

Evidence of Compliance

   38

6.13

  

Use of Proceeds

   38

6.14

  

Subordination of Intercompany Indebtedness

   38

6.15

  

Reserve Reports

   38

ARTICLE VII.

NEGATIVE COVENANTS OF BORROWER

7.01

  

Indebtedness

   39

7.02

  

Limitation on Liens

   39

7.03

  

Limitation on Investments and New Businesses

   40

7.04

  

Limitation on Mergers

   40

7.05

  

Limitation on Issuance of Securities by Subsidiaries of Borrower

   40

7.06

  

Transactions with Affiliates

   40

7.07

  

Prohibited Contracts

   40

7.08

  

ERISA

   40

7.09

  

Limitation on Sales of Property

   40

7.10

  

Swap Contracts

   41

7.11

  

Financial Covenants

   41

7.12

  

Limitation on Priority Debt

   42

 

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Section

        Page

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

8.01

  

Events of Default

   42

8.02

  

Remedies upon Event of Default

   43

8.03

  

Application of Funds

   44

ARTICLE IX.

ADMINISTRATIVE AGENT

9.01

  

Appointment and Authority

   44

9.02

  

Rights as a Lender

   44

9.03

  

Exculpatory Provisions

   45

9.04

  

Reliance by Administrative Agent

   45

9.05

  

Delegation of Duties

   45

9.06

  

Resignation of Administrative Agent

   46

9.07

  

Non-Reliance on Administrative Agent and Other Lenders

   46

9.08

  

Administrative Agent May File Proofs of Claim

   46

9.09

  

Other Agents; Arrangers and Managers

   47

ARTICLE X.

MISCELLANEOUS

10.01

  

Amendments, Etc.

   47

10.02

  

Notices; Effectiveness; Electronic Communications

   48

10.03

  

No Waiver; Cumulative Remedies; Enforcement

   49

10.04

  

Expenses; Indemnity; Damage Waiver

   49

10.05

  

Intentionally Left Blank

   51

10.06

  

Payments Set Aside

   51

10.07

  

Successors and Assigns

   51

10.08

  

Confidentiality

   53

10.09

  

Set-off

   54

10.10

  

Interest Rate Limitation

   54

10.11

  

Counterparts

   54

10.12

  

Integration

   54

10.13

  

Survival of Representations and Warranties

   54

10.14

  

Severability

   54

10.15

  

Replacement of Lenders

   55

10.16

  

Governing Law; Jurisdiction, Etc.

   55

10.17

  

Waiver of Jury Trial

   56

10.18

  

No Advisory or Fiduciary Responsibility

   56

10.19

  

Electronic Execution of Assignments and Certain Other Documents

   56

10.20

  

USA PATRIOT Act Notice

   56

10.21

  

Time of the Essence

   56

10.22

  

ENTIRE AGREEMENT

   57

SCHEDULES

 

SCHEDULE 1.01

   Subject Notes

SCHEDULE 2.01

   Commitments and Pro Rata Shares

SCHEDULE 5.07

   Obligations and Restrictions

SCHEDULE 5.10

   Labor Disputes and Acts of God

SCHEDULE 5.11

   ERISA Matters

SCHEDULE 5.12

   Environmental Matters

SCHEDULE 5.13

   Subsidiaries and Other Equity Interests

SCHEDULE 10.02

   Administrative Agent’s Office, Certain Addresses for Notices

 

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EXHIBITS

 

EXHIBIT A:    Form of Borrowing Request EXHIBIT B:    Form of Loan Notice
EXHIBIT C:    Form of Request for Maturity Date Extension EXHIBIT D:    Form of
Note EXHIBIT E:    Form of Compliance Certificate EXHIBIT F:    Assignment and
Assumption EXHIBIT G:    Opinion Matters EXHIBIT H:    Form of Subordinated
Promissory Note

 

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SENIOR UNSECURED BRIDGE LOAN AGREEMENT

This SENIOR UNSECURED BRIDGE LOAN AGREEMENT (this “Agreement”) is entered into
as of June 30, 2010, among QEP RESOURCES, INC., a Delaware corporation (the
“Borrower”), each Lender from time to time party hereto and DEUTSCHE BANK AG
CAYMAN ISLANDS BRANCH, as Administrative Agent.

WHEREAS, on the date hereof, Questar Corporation (the “Parent”) is amending its
existing revolving credit facility, dated as of March 11, 2008, by and among the
Borrower, Bank of America, N.A., as administrative agent thereunder, and the
lenders party thereto (as so amended, the “Amended Revolving Credit Facility”).

WHEREAS, the Parent intends to (i) enter into certain internal transactions (the
“Internal Wexpro Spin”) pursuant to which the Borrower will distribute 100% of
the equity interests of Wexpro Company to the Parent, (ii) make a cash
contribution to the common equity capital of the Borrower the gross proceeds of
which shall equal an amount not less than $250.0 million (the “Equity
Contribution”), (iii) distribute to its shareholders all of the outstanding
common stock of the Borrower (the “Spin Off”) and (iv) cause the Borrower to
enter into this Agreement.

WHEREAS, in no event later than the time required under the Indenture (as
defined herein), Borrower will make a change of control offer to purchase the
Subject Notes (as defined herein) in compliance with the terms of the Indenture
(the “Subject Notes Change of Control Offer”).

WHEREAS, the funds needed to purchase, on the settlement date, tendered Subject
Notes accepted for payment pursuant to the Subject Notes Change of Control Offer
shall be provided through (i) the issuance of senior notes, (ii) cash on hand,
(iii) borrowings available under the Amended Revolving Credit Facility, and/or
(iv) borrowings under this Agreement.

WHEREAS, the transactions described above are collectively referred to herein as
the “Transactions.”

WHEREAS, the Borrower has requested that the Lenders provide a senior unsecured
bridge loan facility, and the Lenders are willing to do so on the terms and
conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Acquired Debt” means, with respect to any specified Person, (i) Indebtedness of
any other Person existing at the time such other Person is merged with or into
or became a Subsidiary of such specified Person, including, without limitation,
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
and (ii) Indebtedness secured by a Lien encumbering any assets acquired by such
specified Person existing at the time such assets are acquired by such Person,
and any refinancing of the foregoing indebtedness on similar terms, taking into
account current market conditions.

“Administrative Agent” means Deutsche Bank AG Cayman Islands Branch in its
capacity as administrative agent under any of the Loan Documents, or any
successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.

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“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be “controlled by” any other Person if such other Person possesses,
directly or indirectly, power

(a) to vote 20% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managing general
partners; or

(b) to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.

“Agents” means the Administrative Agent, the Syndication Agents and the
Documentation Agents.

“Aggregate Commitments” means, at any time, the sum of the Commitments of all
the Lenders at such time. The Aggregate Commitments shall be $500,000,000 on the
Closing Date.

“Agreement” means this Agreement.

“Amended Revolving Credit Facility” has the meaning specified in the recitals
hereto.

“Applicable Rate” means, with respect to (i) Base Rate Loans, a percentage per
annum equal to 1.50% and (ii) LIBO Rate Loans, a percentage per annum equal to
2.50% .

“Arrangers” means Deutsche Bank Securities Inc., Banc of America Securities LLC,
BMO Capital Markets Corp., J.P. Morgan Securities Inc., and Wells Fargo
Securities, LLC in their capacity as joint lead arrangers and joint book
managers.

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit F.

“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external legal counsel.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2009,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by the
Administrative Agent as its “prime rate”. The “prime rate” is a rate set by the
Administrative Agent based upon various factors including the Administrative
Agent’s costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in such rate announced by the
Administrative Agent shall take effect at the opening of business on the day
specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

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“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrowing” means the borrowing of the Loans made on the Funding Date by the
Lenders pursuant to Section 2.01.

“Borrowing Request” means the request by the Borrower for the Borrowing in
accordance with Section 2.02, in the form of Exhibit A or any other form
approved by the Administrative Agent.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any LIBO Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.

“Change of Control” means:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time (such right, an “option right”)), directly or
indirectly, of 35% or more of the equity securities of the Borrower entitled to
vote for members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right); or

(b) a majority of the members of the board of directors or equivalent governing
body of the Borrower ceases to be composed of individuals (i) who were members
of that board or equivalent governing body on July 1, 2010, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body (excluding, in the case of both clause
(ii) and clause (iii), any individual whose initial nomination for, or
assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors).

“Change of Control Notice” has the meaning specified in Section 2.04(b)(ii).

“Change of Control Payment Date” has the meaning specified in
Section 2.04(b)(i).

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commitment” means, as to each Lender, its obligation to make a single Loan to
the Borrower on the Funding Date pursuant to Section 2.01 in an amount not to
exceed the amount set forth opposite such Lender’s name on Schedule 2.01.

 

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“Compliance Certificate” means a certificate substantially in the form of
Exhibit E.

“Consolidated EBITDAX” means, for any period, for the Borrower and its
Restricted Subsidiaries on a consolidated basis, an amount equal to Consolidated
Net Income for such period plus (a) the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Interest Charges for
such period, (ii) the provision for Federal, state, local and foreign income
taxes payable by the Borrower and its Restricted Subsidiaries for such period,
(iii) depreciation, depletion and amortization expense, (iv) exploration
expense, (v) impairment and abandonment expense, (vi) any extraordinary losses
(including losses on sales of assets outside of the ordinary course of
business), (vii) all costs, fees, expenses or charges incurred or paid during
such period, or any amortization thereof for such period, in each case, in
connection with the distribution of the Borrower by Parent to its shareholders,
and (viii) unrealized losses under Swap Contracts, minus (b) the following to
the extent included in calculating such Consolidated Net Income: (i) Federal,
state, local and foreign income tax credits of the Borrower and its Restricted
Subsidiaries for such period, (ii) all non-cash items increasing Consolidated
Net Income for such period (other than deferred revenue from the sale of
production dedicated under production payment or similar arrangements),
(iii) gains on sales of assets outside the ordinary course of business, and
(iv) unrealized gains under Swap Contracts, provided, however, that Consolidated
EBITDAX shall be calculated on a pro forma basis to give effect to any
acquisitions or divestitures (in a single transaction or series of related
transactions) having an aggregate fair market value equal to or exceeding
$50,000,000 during the relevant calculation period (including pro forma effect
of any expense or cost reductions or increases that have occurred or are
reasonably expected to occur as a result of such transaction) made by the
Borrower or its Restricted Subsidiaries during the relevant calculation period
as if such acquisition or divestiture had occurred on the first day of such
calculation period. For purposes of determining the Consolidated Leverage Ratio
for the fiscal quarters ended on each such date Consolidated EBITDAX shall be
calculated on a pro forma basis to exclude the EBITDAX of Wexpro Company for
such period. The “EBITDAX of Wexpro Company” shall be calculated for Wexpro
Company in a manner consistent with the definition of “Consolidated EBITDAX” set
forth above.

“Consolidated EBITDA-Midstream” means, for any period, the sum of Consolidated
Net Income-Midstream for such period plus (a) the following to the extent
deducted in calculating such Consolidated Net Income-Midstream: (i) Consolidated
Interest Charges-Midstream for such period, (ii) the provision for Federal,
state, local and foreign income taxes payable by the Midstream Subsidiaries and
their respective Restricted Subsidiaries for such period, (iii) depreciation and
amortization expense, (iv) any impairment and abandonment expense, (v) any
extraordinary losses of the Midstream Subsidiaries and their Restricted
Subsidiaries (including losses on sales of assets outside of the ordinary course
of business), (vi) all costs, fees, expenses or charges incurred or paid during
such period, or any amortization thereof for such period, in each case, in
connection with the distribution of the Borrower by Parent to its shareholders,
and (vii) unrealized losses under Swap Contracts, and minus (b) the following to
the extent included in calculating such Consolidated Net Income-Midstream:
(i) Federal, state, local and foreign income tax credits of the Midstream
Subsidiaries and their respective Restricted Subsidiaries for such period,
(ii) all non-cash items increasing Consolidated Net Income-Midstream for such
period, (iii) gains on sales of assets outside the ordinary course of business
and (iv) unrealized gains under Swap Contracts, provided, however, that
Consolidated EBITDA-Midstream shall be calculated on a pro forma basis to give
effect to any acquisitions or divestitures (in a single transaction or series of
related transactions) having an aggregate fair market value equal to or
exceeding $50,000,000 during the relevant calculation period (including pro
forma effect of any expense or cost reductions or increases that have occurred
or are reasonably expected to occur as a result of such transaction) made by the
Midstream Subsidiaries or their respective Restricted Subsidiaries during the
relevant calculation period (and subsequent to such period and on or before the
date of incurrence of the Consolidated Funded Debt giving rise to the need to
calculate compliance with Section 7.11(c)) as if such acquisition or divestiture
had occurred on the first day of the relevant calculation period.

“Consolidated Funded Debt” means the aggregate of the Indebtedness of the
Borrower and its Subsidiaries described in clauses (a), (b), (d), (e), (f), (g),
(h) and (i) of the definition of Indebtedness in Section 1.01, on a consolidated
basis after elimination of intercompany items.

“Consolidated Funded Debt to Capitalization Ratio” means, at the time of
determination, the ratio of (a) Consolidated Funded Debt to (b) the sum of
Consolidated Funded Debt plus Shareholders’ Equity.

 

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“Consolidated Interest Charges” means, for any period, for the Borrower and its
Restricted Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, amortization or write-off of debt discount, fees, charges,
issuance costs and commissions and related expenses of the Borrower and its
Restricted Subsidiaries in connection with borrowed money (including capitalized
interest) or in connection with the deferred purchase price of assets, in each
case to the extent treated as interest in accordance with GAAP, and (b) the
portion of rent expense of the Borrower and its Restricted Subsidiaries with
respect to such period under capital leases that is treated as interest in
accordance with GAAP.

“Consolidated Interest Charges-Midstream” means, for any period, for the
Midstream Subsidiaries and their respective Restricted Subsidiaries on a
consolidated basis, the sum of (a) all interest, premium payments, debt
discount, fees, charges and related expenses of the Midstream Subsidiaries and
their respective Restricted Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred purchase
price of assets, in each case to the extent treated as interest in accordance
with GAAP, and (b) the portion of rent expense of the Midstream Subsidiaries and
their respective Restricted Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Debt as of such date to (b) Consolidated EBITDAX for
the period of the four fiscal quarters most recently ended.

“Consolidated Net Income” means, for any period, for the Borrower and its
Restricted Subsidiaries on a consolidated basis, the net income of the Borrower
and its Restricted Subsidiaries (excluding extraordinary gains and extraordinary
losses) for that period.

“Consolidated Net Income-Midstream” means, for any period, for the Midstream
Subsidiaries and their respective Restricted Subsidiaries on a consolidated
basis, the net income of the Midstream Subsidiaries and their respective
Restricted Subsidiaries (excluding extraordinary gains and extraordinary losses)
for that period.

“Consolidated Net Tangible Assets” means, at any date of determination, the
total amount of consolidated assets of the Borrower and its Restricted
Subsidiaries after deducting therefrom: (a) all current liabilities (excluding
(i) any current liabilities that by their terms are extendable or renewable at
the option of the obligor thereon to a time more than 12 months after the time
as of which the amount thereof is being computed, and (ii) current maturities of
long-term debt); and (b) the value of all goodwill, trade names, trademarks,
patents and other like intangible assets, all as set forth on the consolidated
balance sheet of the Borrower and its Restricted Subsidiaries prepared in
accordance with GAAP.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of the Borrower’s
non-credit-enhanced, senior unsecured long-term debt; provided that if a Debt
Rating is issued by each of the foregoing rating agencies, then the lower of
such Debt Ratings shall apply.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means an interest rate equal to 2% per annum plus the rate
otherwise applicable to such Loan as provided in Section 2.06.

 

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“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans required to be funded by it hereunder within one Business Day of the
date required to be funded by it hereunder, (b) has otherwise failed to pay over
to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Documentation Agents” means JPMorgan Chase Bank, N.A. and Wells Fargo Bank,
N.A. in their capacity as co-documentation agents.

“Dollar” and “$” mean lawful money of the United States.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval system
utilized by companies to electronically transmit required SEC filings for
securities offerings and disclosure statements.

“Eligible Assignee” has the meaning specified in Section 10.07(g).

“Engagement and Fee Letter” means the letter agreement, dated June 15, 2010,
among the Borrower, the Administrative Agent, the Agents and the Arrangers.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Equity Contribution” has the meaning specified in the recitals hereto.

“Equity Interests,” “equity interests” and “equity securities” means, with
respect to any Person, all of the shares of capital stock of (or other ownership
or profit interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or such
other interests), and all of the other ownership or profit interests in such
Person (including partnership, member or trust interests therein), whether
voting or non-voting, and whether or not such shares, warrants, options, rights
or other interests are outstanding on any date of determination. The term Equity
Interests shall also include other securities or instruments that have both debt
and equity features.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal (within the meanings of Sections 4203 and 4205 of ERISA) by
the Borrower or any ERISA Affiliate from a Multiemployer Plan or receipt by the
Borrower or any ERISA Affiliate of notice from a Multiemployer Plan that it is
in reorganization (within the meaning of Section 4241 of ERISA); (d) the filing
of a notice by the Plan administrator of intent to terminate, the treatment of a
Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate under Section 4042 of ERISA
a Pension Plan or Multiemployer Plan; (e) an event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA (other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA) upon the
Borrower or any ERISA Affiliate.

“Event of Default” has the meaning specified in Section 8.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Indebtedness” has the meaning set forth in Section 4.01(d).

“Extended Maturity Date” has the meaning specified in the definition of
“Maturity Date.”

“Extension Effective Date” has the meaning set forth in Section 2.12(a).

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded, if
necessary, to the nearest 1/100 of 1%) charged to the Administrative Agent on
such day on such transactions as determined by the Administrative Agent.

“Foreign Lender” means any Lender that is organized under the Laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fund” has the meaning set forth in Section 10.07(g).

“Funding Date” means the date that all conditions precedent in Section 4.02 are
satisfied or waived in accordance with Section 10.01 and the Borrower makes a
Borrowing.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

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“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term “Guarantee” as a verb has a corresponding meaning.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business);

(e) indebtedness (excluding prepaid interest thereon) secured by (or for which
the holder of such indebtedness has an existing right, contingent or otherwise,
to be secured by) a Lien on property owned or being acquired by such Person
(including indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;

(f) capital leases and Synthetic Lease Obligations;

(g) the amount of deferred revenue attributed to any forward sale of production
for which such Person has received payment in advance other than on ordinary
trade terms;

(h) all obligations or undertakings of such Person with respect to payments
received by such Person in consideration of oil, gas, or other minerals yet to
be acquired or produced at the time of payment (including obligations under
“take-or-pay” contracts, contracts to deliver oil, gas or other minerals in
return for payments already received and the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment) or with respect to other
obligations to deliver goods or services in consideration of advance payments
therefore; and

 

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(i) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes. As used in this
definition, “Excluded Taxes” means, with respect to the Administrative Agent,
any Lender, or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the Laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located, (c) any backup withholding tax that is required by the
Code to be withheld from amounts payable to a Lender that has failed to comply
with clause (A) of Section 3.01(e)(ii), and (d) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrower under
Section 10.15), any United States withholding tax that (i) is required to be
imposed on amounts payable to such Foreign Lender pursuant to the Laws in force
at the time such Foreign Lender becomes a party hereto (or designates a new
Lending Office) or (ii) is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with clause
(B) of Section 3.01(e)(ii), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 3.01(a)(ii). As used in this
definition, “Change in Law” means the occurrence, after the date of this
Agreement, of any of the following: (a) the adoption or taking effect of any
law, rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, guideline
or directive (whether or not having the force of law) by any Governmental
Authority.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Indenture” means the Indenture dated as of March 1, 2001 by and among the
Borrower and Wells Fargo Bank, N.A., as successor trustee, together with each
officer’s certificate under which the Subject Notes were issued.

“Initial Maturity Date” has the meaning specified in the definition of “Maturity
Date”.

“Interest Payment Date” means (a) as to any LIBO Rate Loan, the last day of each
Interest Period applicable to such Loan and the Maturity Date; and (b) as to any
Base Rate Loan, the last Business Day of each March, June, September and
December and the Maturity Date

“Interest Period” means, as to each LIBO Rate Loan, the period commencing on the
date such LIBO Rate Loan is converted to or continued as a LIBO Rate Loan and
ending on the date (a) one, two, three or six months thereafter, or (b) subject
to availability to and in the sole discretion of the Administrative Agent, one,
two or three weeks thereafter, in any case as selected by the Borrower in its
Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

 

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“Internal Wexpro Spin” has the meaning specified in the recitals hereto.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

“Investment Grade Date” means the first date upon which the Borrower receives
the following Debt Rating: (i) at least one Debt Rating of BBB- or better from
S&P or Baa3 or better from Moody’s, and (ii) a second Debt Rating of at least
BB+ from S&P or Ba1 from Moody’s, as applicable, in each case, without negative
outlook or negative watch.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” means the Persons listed on Schedule 2.01 hereto and any other Person
that shall have become a party hereto pursuant to an Assignment and Assumption,
other than any such Person that ceased to be a party hereto pursuant to an
Assignment and Assumption.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“LIBO Rate” means, for any Interest Period, the rate per annum determined by the
Administrative Agent to be the arithmetic mean of the offered rates for deposits
in Dollars with a term comparable to such Interest Period that is equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately 11:00
A.M., London, England time, on the second full Business Day preceding the first
day of such Interest Period; provided, however, that (i) if no comparable term
for an Interest Period is available, the LIBO Rate shall be determined using the
weighted average of the offered rates for the two terms most nearly
corresponding to such Interest Period and (ii) if such rate is not available at
such time for any reason, “LIBO Rate” shall mean, with respect to each day
during each Interest Period pertaining to the Borrowing, the rate per annum
equal to the rate at which the Administrative Agent is offered deposits in
Dollars at approximately 11:00 A.M., London, England time, two Business Days
prior to the first day of such Interest Period in the London interbank market
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to its portion of the amount of
such Borrowing to be outstanding during such Interest Period.

“LIBO Rate Loan” means a Loan that bears interest at a rate based on the LIBO
Rate.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” has the meaning specified in Section 2.01.

 

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“Loan Documents” means this Agreement, each Note and the Engagement and Fee
Letter.

“Loan Notice” means a written notice of (a) a conversion of Loans from one Type
to the other, or (b) a continuation or election of an Interest Period with
respect to LIBO Rate Loans, pursuant to Section 2.02(c), which shall be
substantially in the form of Exhibit B or any other form approved by the
Administrative Agent.

“Loan Parties” means the Borrower.

“Material Adverse Effect” means a material and adverse effect upon (a) the
Transactions, (b) the property, assets, business, operations, liabilities or
condition (financial or otherwise) of the Borrower and its Restricted
Subsidiaries taken as a whole since December 31, 2009 or (c) the rights or
remedies of the Lenders or the ability of the Borrower and its Restricted
Subsidiaries to perform their obligations to the Lenders under this Agreement.

“Maturity Date” means (i) if the maturity has not been extended in accordance
with Section 2.12, the date that is 364 days after the Funding Date; provided
that, if such date shall not be a Business Day, the Maturity Date shall be the
immediately preceding Business Day (the “Initial Maturity Date”) or (ii) if the
Initial Maturity Date has been extended in accordance with Section 2.12, the
date that is 364 days after the Initial Maturity Date; provided that, if such
date shall not be a Business Day, the Maturity Date shall be the immediately
preceding Business Day (the “Extended Maturity Date”).

“Midstream Assets” means all of the gas gathering, processing, treatment,
compression, trunk lines and associated equipment owned by the Midstream
Subsidiaries and their respective Restricted Subsidiaries.

“Midstream Services” means the provision of gathering, transporting,
terminalling, treating, storing, and processing hydrocarbons and other similar
activities.

“Midstream Subsidiaries” means, collectively, QEP Field Services and any other
Subsidiary of the Borrower that the Borrower, with the approval of the
Administrative Agent, designates as a Midstream Subsidiary, in each case for so
long as such Subsidiary is engaged solely in the business of providing Midstream
Services and its assets are comprised only of Midstream Assets and assets
related and incidental thereto.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“Net Cash Proceeds” means:

(a) with respect to any incurrence or issuance of any Indebtedness, or the sale
or issuance of any Equity Interests, all cash or cash equivalents received by
the Borrower or any of its Restricted Subsidiaries after payment of all
reasonable attorneys’, accountants’, consultants’ and financial advisors’ fees
and usual and customary underwriting commissions, closing costs, and other
reasonable expenses associated therewith; and

(b) with respect to any Disposition, all cash or cash equivalents (including any
cash received by way of deferred payment pursuant to a promissory note or
otherwise, as and when received) received by the Borrower or any of its
Restricted Subsidiaries in connection with and as consideration therefor, on or
after the date of consummation of such transaction, after deduction of
(i) income taxes payable in connection with or as a result of such transaction,
(ii) the principal amount of any Indebtedness that is secured by the applicable
asset and that is required to be repaid in connection with such transaction
(other than Indebtedness under the Loan Documents) and (iii) payment of all
usual and customary brokerage commissions and all other reasonable fees and
expenses related to such transaction (including, without limitation, reasonable
attorneys’, accountants’, consultants’ and financial advisors’ fees, costs
incurred in connection with environmental reviews and inspections, and closing
costs incurred in connection with such transaction).

 

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Notwithstanding the foregoing, “Net Cash Proceeds” shall exclude proceeds from
the settlement of Swap Contracts at termination in the ordinary course of
business.

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing the Loan made by such Lender, substantially in the form of Exhibit D.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of the Borrower arising under any Loan Document, whether
such Obligations are direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue under the Loan
Documents after the commencement by or against the Borrower of any proceeding
under any Debtor Relief Laws naming the Borrower as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

“oil and gas properties” means fee, leasehold or other interests in or under
mineral estates or oil, gas and other liquid or gaseous hydrocarbon leases,
including, without limitation, overriding royalty and royalty interests,
leasehold estate interests, net profits interests, production payment interests
and mineral fee interests, together with contracts executed in connection
therewith and all tenements, hereditaments, appurtenances and properties, real
or personal, appertaining, belonging, affixed or incidental thereto.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

“Outstanding Amount” means with respect to Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any prepayments or
repayments of Loans, as the case may be, occurring on such date.

“Parent” has the meaning specified in the recitals hereto.

“Participant” has the meaning specified in Section 10.07(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

 

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“Permitted Liens” means:

(a) operators’ liens under customary operating agreements, liens arising under
gas transportation and purchase agreements on the gas being transported or
processed which secure related gas transportation and processing fees only,
statutory Liens for taxes, assessments and governmental charges, statutory
mechanics’, materialmen’s, carriers’, workman’s and warehousemen’s Liens, and
other similar statutory Liens, provided that in each case under this
subparagraph (a), such Liens secure only indebtedness, liabilities and
obligations which are not delinquent for a period of more than 30 days or which
are being contested by appropriate proceedings and for which adequate reserves
are provided on the books of the contesting Loan Party;

(b) Liens on oil and gas properties which arise in the ordinary course of
business under joint operating agreements or farm-out agreements that are
entered into by the Loan Parties in the ordinary course of their business;
provided that such Liens are in each case limited to the properties that are the
subject of the relevant agreement and do not secure debt for borrowed money;

(c) Liens on oil and gas properties which do not have developed reserves
(producing or non-producing) properly attributable thereto;

(d) Liens on the Loan Parties’ office facilities;

(e) Liens on property securing non-recourse Indebtedness of Restricted
Subsidiaries permitted pursuant to Section 7.01(d) which is acquired with
proceeds or developed with proceeds of such non-recourse Indebtedness;

(f) Liens to secure the Obligations;

(g) Liens of the type described in clause (ii) of the definition of Acquired
Debt securing Acquired Debt (owed by Restricted Subsidiaries) of the type
described in such clause; provided that such Acquired Debt meets the
requirements of Section 7.01(e);

(h) Liens on cash or cash equivalents securing obligations of the Loan Parties
under Swap Contracts in an aggregate amount not to exceed the limitation set
forth in Section 7.10(i)(B);

(i) pledges of cash and cash equivalents incurred or deposits made to secure
obligations (other than Indebtedness) under workers’ compensation laws or
similar legislation or to secure public or statutory obligations, in each case
in the ordinary course of business;

(j) encumbrances consisting of easements, restrictions, servitudes, permits,
conditions, covenants, exceptions or reservations in any property of any Loan
Party for the purpose of roads, pipelines, transmission lines, transportation
lines, distribution lines that do not secure Indebtedness or other monetary
obligations and, in the aggregate, are not substantial in amount and do not
materially impair the use of such property by any Loan Party in the operation of
its business and which do not in any case materially detract from the value of
the property subject thereto or would be violated in any material respect by
existing or proposed operations of any Loan Party;

(k) deposits made in the ordinary course of business to secure the performance
of bids, trade contracts (other than for debt for borrowed money) leases (other
than Indebtedness) and surety bonds;

(l) Liens securing Indebtedness of the Borrower, or of a Restricted Subsidiary
incurred pursuant to Section 7.01(h), to finance the acquisition, construction
or improvement of fixed or capital assets, provided that (i) such Liens and the
Indebtedness secured thereby shall be created substantially simultaneously with
the acquisition, construction or improvement of such fixed or capital assets,
(ii) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness, (iii) the amount of Indebtedness initially
secured thereby is not more than 100% of the purchase price or cost of
construction or improvement of such fixed or capital asset;

 

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(m) the interest or title of a lessor under any lease entered into by any Loan
Party in the ordinary course of its business and covering only the assets so
leased;

(n) Liens not securing Indebtedness arising solely by virtue of any statutory or
common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies and burdening only deposit accounts or other funds
maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account or is subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the FRB and no such deposit account is intended by any Loan Party
to provide collateral to the depository institution; and

(o) Liens not otherwise permitted so long as the aggregate outstanding principal
amount of the obligations secured thereby does not exceed (as to all Loan
Parties) $10,000,000 at any time;

provided that nothing in this definition shall in and of itself constitute or be
deemed to constitute an agreement or acknowledgment by the Administrative Agent
or any Lender that the Indebtedness subject to or secured by any such Permitted
Lien ranks (apart from the effect of any Lien included in or inherent in any
such Permitted Liens) in priority to the Obligations.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Present Value” means the net present value of projected future cash flows from
proved reserves owned by the Borrower and its Restricted Subsidiaries based upon
the most recently delivered Reserve Report (using the customary discount rate
(which shall be, in the case of the Initial Present Value (defined below), 9%)
and commodity price deck utilized in calculating “Present Value” pursuant to the
Amended Revolving Credit Facility and giving effect to the Borrower’s hedging
arrangements). For purposes of calculating the Present Value, a maximum of 35%
of the Present Value will be included from proved reserves that are not proved
developed producing reserves and a maximum of 20% of the Present Value will be
included from reserves located in countries other than the United States and
Canada. If, during any period between the December 31 (or January 1, if Reserve
Reports are dated as of January 1) effective dates of Reserve Reports, the
aggregate fair market value, in the reasonable opinion of the Borrower, of oil
and gas properties disposed of or purchased by the Borrower and the Restricted
Subsidiaries shall exceed $250,000,000, then the Present Value for such period
shall be reduced or increased, as the case may be, from time to time, by an
amount equal to the value assigned such oil and gas properties in the most
recent calculation of the Present Value for such period (or if no value was
assigned, by an amount agreed to by the Borrower and the Administrative Agent).
The Present Value shall reflect the deferred revenue with respect to production
payments included in Consolidated Funded Debt, at a value that is equal to the
amount of deferred revenues so included in Consolidated Funded Debt. Until
redetermined in connection with the Reserve Report dated as of December 31, 2010
or January 1, 2011, as applicable, delivered pursuant to Section 6.15, the
Present Value shall be $4,657,660,000 (the “Initial Present Value”).

“Priority Debt” means, at any time, the sum of (without duplication)
(i) Indebtedness of Restricted Subsidiaries of the type permitted by Sections
7.01(d), 7.01(e), 7.01(g) or 7.01(h); (ii) Indebtedness of the Borrower secured
by Permitted Liens of the type described in clauses (c), (e), (g), (l) or (o) of
the definition of “Permitted Liens”; and (iii) Indebtedness of the Borrower and
Restricted Subsidiaries owed to any depository institution that has a right of
set off or similar right of remedy on deposits or other funds of the Borrower or
its Restricted Subsidiaries of the type permitted by clause (n) of the
definition of Permitted Liens (other than Indebtedness under this Agreement owed
to a Lender), provided that the amount of such Indebtedness owed to a depository
institution that constitutes “Priority Debt” shall not be greater than the
amount of such deposits and other funds maintained with such depository
institution.

 

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“Pro Rata Share” means, with respect to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
and the denominator of which is the amount of the Aggregate Commitments at such
time; provided that if the commitment of each Lender to make Loans have been
terminated pursuant to Section 8.02, then the Pro Rata Share of each Lender
shall be determined based on the Pro Rata Share of such Lender immediately prior
to such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof. The initial Pro Rata Share of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Register” has the meaning specified in Section 10.07(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Maturity Date Extension” means a notice in the form of Exhibit C
hereto.

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans has been terminated pursuant to Section 8.02, Lenders holding in the
aggregate more than 50% of the Total Outstandings; provided that the Commitment
of, and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.

“Reserve Report” means a report prepared as of December 31 or January 1 of each
year by the Borrower and its Restricted Subsidiaries with respect to the oil and
gas properties of the Borrower and the Restricted Subsidiaries with at least 80%
of the Present Value of such oil and gas properties audited by an independent
engineering firm selected by the Borrower and reasonably acceptable to the
Administrative Agent.

“Responsible Officer” means the chairman of the board, chief executive officer,
president, chief financial officer, or vice president and controller of the
Borrower. Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other equity
interest of the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other equity interest or of any option,
warrant or other right to acquire any such capital stock or other equity
interest.

“Restricted Subsidiary” means any Subsidiary of the Borrower that is not an
Unrestricted Subsidiary.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Shareholders’ Equity” means the remainder of (i) the Borrower’s assets on a
consolidated basis minus (ii) the sum of (x) the Borrower’s liabilities on a
consolidated basis (such assets and liabilities to be calculated excluding
unrealized non-cash gains or losses resulting from “mark-to-market” adjustments
pursuant to FAS 133) plus (y) all treasury stock of the Borrower and its
Subsidiaries.

“Spin Off” has the meaning specified in the recitals hereto.

“Spin Off Agreements” has the meaning specified in Section 4.01(a)(ii).

 

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“Spin Off Date” means the date on which the Spin Off is consummated.

“Subject Notes” means the debt securities described on Schedule 1.01 hereto.

“Subject Notes Change of Control Offer” has the meaning specified in the
recitals hereto.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrower.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Syndication Agents” means Bank of America, N.A. and BMO Capital Markets
Financing, Inc. in their capacity as co-syndication agents.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

“Transactions” has the meaning specified in the recitals hereto.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
LIBO Rate Loan.

“United States” and “U.S.” mean the United States of America.

 

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“Unrestricted Subsidiary” means any Person in which the Borrower does not
presently own an interest (directly or indirectly) which hereafter becomes a
Subsidiary of the Borrower and which, within 90 days thereafter, is designated
as an Unrestricted Subsidiary by the Borrower by notice given to the
Administrative Agent; provided that the Borrower may not designate as an
Unrestricted Subsidiary any Subsidiary in which it has made an Investment of
more than $25,000,000 (directly or indirectly) by any means other than newly
issued stock or treasury stock of the Borrower, which may be used to make an
Investment in Unrestricted Subsidiaries without limit; and provided further that
in the event the book value of the assets of any Unrestricted Subsidiary at any
time exceeds $25,000,000, such Subsidiary shall cease to be an Unrestricted
Subsidiary and shall automatically become a Restricted Subsidiary.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(b) (1) The words “hereto,” “hereof” and “hereunder” and words of similar import
when used in any Loan Document shall refer to such Loan Document as a whole and
not to any particular provision thereof.

(2) Article, Section, Exhibit and Schedule references are to the Loan Document
in which such reference appears.

(3) The term “including” is by way of example and not limitation.

(4) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including.”

(d) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) All accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent
basis, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.

(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

1.04 Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to

one place more than the number of places by which such ratio is expressed herein
and rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

 

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1.05 References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

1.06 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Central time (daylight or standard, as applicable).

1.07 Oil and Gas Definitions. For purposes of this Agreement, the terms “proved
reserves” and “proved developed producing reserves,” whether or not such terms
are capitalized, have the meaning given such terms from time to time and at the
time in question by the Society of Petroleum Engineers of the American Institute
of Mining Engineers. The terms “proved oil or gas reserves” and “proved reserves
of oil, gas or other liquid or gaseous hydrocarbons” shall have the same meaning
as “proved reserves.”

ARTICLE II.

COMMITMENTS

2.01 Loans. Subject to the terms and conditions set forth herein, each Lender
agrees to make a single loan in Dollars to the Borrower on the Funding Date
(each such loan, a “Loan”) in principal amount not to exceed such Lender’s
Commitment. Once repaid or prepaid, Loans may not be reborrowed. Any portion of
the Commitments not utilized by the Borrower on the Funding Date shall be
automatically and permanently terminated. Loans will initially be Base Rate
Loans and may, thereafter, be Base Rate Loans or LIBO Rate Loans, as further
provided herein.

2.02 Borrowing, Conversions and Continuations of Loans.

(a) Request for Borrowing. To request the Borrowing, the Borrower shall notify
the Administrative Agent of such request in writing not later than 11:00 A.M.
(New York City time) on the requested date of the proposed Borrowing(which shall
be a Business Day). The Administrative Agent shall give to each Lender prompt
notice thereof on the same Business Day by facsimile transmission or electronic
messaging system. Such Borrowing Request shall be irrevocable and shall specify
the following: (A) the requested date of the proposed Borrowing (which shall be
a Business Day), (B) the aggregate amount of the Borrowing, (C) that such Loan
shall be a Base Rate Loan, and (D) the location and number of the Borrower’s
account to which funds are to be disbursed.

(b) Funding of the Borrowing. Each Lender shall, before 1:00 p.m. (New York City
time) on the date of the Borrowing, make available to the Administrative Agent
at the Administrative Agent’s Account, in same day funds, such Lender’s ratable
portion of the Borrowing. After the Administrative Agent’s receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article IV, the
Administrative Agent will make such funds available to the Borrower by
(A) promptly crediting the amounts so received, in like funds, to an account of
the Borrower maintained on the books and records of the Administrative Agent, in
each case in accordance with instructions provided to (and reasonably acceptable
to) the Administrative Agent by the Borrower in the Borrowing Request, or
(B) wire transfer of such funds.

(c) Conversion, Continuation and Interest Periods. Each conversion of Loans from
one Type to the other and each continuation of LIBO Rate Loans shall be made
upon the Borrower’s irrevocable written notice to the Administrative Agent. Each
such notice must be received by the Administrative Agent not later than 11:00
a.m. (New York City time) three Business Days prior to the requested date of
conversion to or continuation of LIBO Rate Loans or of any conversion of LIBO
Rate Loans to Base Rate Loans, provided, however, that if the Borrower wishes to
request LIBO Rate Loans having an Interest Period other than one, two, three or
six months in duration as provided in the definition of “Interest Period,” the
applicable notice must be received by the Administrative Agent

 

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not later than 10:00 a.m. three Business Days prior to the requested date of
such conversion or continuation, whereupon the Administrative Agent shall give
prompt notice to the Lenders of such request and determine whether the requested
Interest Period is acceptable to all of them. Not later than 11:00 a.m., three
Business Days before the requested date of such conversion or continuation, the
Administrative Agent shall notify the Borrower (which notice may be by
telephone) whether or not the requested Interest Period has been consented to by
all of the Lenders. Each conversion to or continuation of LIBO Rate Loans shall
be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof. Each conversion to Base Rate Loans shall be in a principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan
Notice (whether telephonic or written) shall specify (i) whether the Borrower is
requesting a conversion of Loans from one Type to the other or a continuation of
LIBO Rate Loans, (ii) the requested date of the conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal amount of
Loans to be converted or continued, (iv) the Type of Loans to which existing
Loans are to be converted, and (v) if applicable, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period.” If the Borrower
fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable LIBO Rate
Loans. If the Borrower requests a conversion to or continuation of LIBO Rate
Loans in any such Loan Notice, but fails to specify an Interest Period, it will
be deemed to have specified an Interest Period of one month. If no timely notice
of a conversion or continuation is provided by the Borrower, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described above.

(d) Except as otherwise provided herein, a LIBO Rate Loan may be continued or
converted only on the last day of an Interest Period for such LIBO Rate Loan.
During the existence of a Default, no Loans may be converted to or continued as
LIBO Rate Loans without the consent of the Required Lenders.

(e) The Administrative Agent shall promptly notify the Borrower and the Lenders
of the interest rate applicable to any Interest Period for LIBO Rate Loans upon
determination of such interest rate. The determination of the LIBO Rate by the
Administrative Agent shall be conclusive in the absence of manifest error. At
any time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in the Administrative Agent’s
prime rate used in determining the Base Rate promptly following the public
announcement of such change.

(f) After giving effect to the Borrowing, all conversions of Loans from one Type
to the other, and all continuations of Loans as the same Type, there shall not
be more than ten Interest Periods in effect with respect to Loans.

2.03 Voluntary Prepayments. The Borrower may, upon notice to the Administrative
Agent, at any time or from time to time voluntarily prepay Loans in whole or in
part without premium or penalty; provided that (i) such notice must be received
by the Administrative Agent not later than 11:00 a.m. (A) three Business Days
prior to any date of prepayment of LIBO Rate Loans and (B) one Business Day
prior to any date of prepayment of Base Rate Loans; (ii) any prepayment of LIBO
Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall
be in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof, or, if less, the entire principal amount thereof then outstanding. Each
such notice shall specify the date and amount of such prepayment and the Type(s)
of Loans to be prepaid. The Administrative Agent will promptly notify each
Lender of its receipt of each such notice, and of the amount of such Lender’s
Pro Rata Share of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Each such
prepayment shall be applied to the Loans of the Lenders in accordance with their
respective Pro Rata Shares.

2.04 Mandatory Prepayments.

(a) (i) Substantially simultaneously with (and in any event no later than three
Business Days following) the receipt by the Borrower or any Restricted
Subsidiary of Net Cash Proceeds from any Disposition on or after the Closing
Date, the Borrower shall pay an amount equal to the amount of Net Cash Proceeds
received by

 

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the Borrower or any of its Subsidiaries in such Disposition (x) to the extent
such Disposition occurs prior to the Funding Date, to reduce the Aggregate
Commitment or (y) to the extent such Disposition occurs after the Funding Date,
to prepay outstanding Loans; provided that no such prepayment shall be required
to the extent Net Cash Proceeds of all Dispositions occurring after the Closing
Date are less than $25,000,000.

(ii) Substantially simultaneously with (and in any event no later than three
Business Days following) the receipt by the Borrower of Net Cash Proceeds from
any sale of Equity Interests of the Borrower on or after the Closing Date, the
Borrower shall apply an amount equal to the amount of such Net Cash Proceeds
(x) to the extent such sale occurs prior to the Funding Date, to reduce the
Aggregate Commitment or (y) to the extent such sale occurs after the Funding
Date, to prepay outstanding Loans.

(iii) Substantially simultaneously with (and in any event no later than three
Business Days following) the receipt by the Borrower or any of its Subsidiaries
of Net Cash Proceeds from the issuance or incurrence of Indebtedness on or after
the Closing Date other than (i) Indebtedness incurred under the Amended
Revolving Credit Facility (as in effect on the date hereof), (ii) Indebtedness
incurred pursuant to Sections 7.01(a) through 7.01(h), (iii) Indebtedness owed
by the Borrower to any Restricted Subsidiary and (iv) other Indebtedness if the
aggregate principal amount of all such other Indebtedness incurred since the
Closing Date does not exceed $10,000,000, the Borrower shall apply an amount
equal to the amount of such Net Cash Proceeds (x) to the extent such issuance or
incurrence of Indebtedness occurs prior to the Funding Date, to reduce the
Aggregate Commitment or (y) to the extent such issuance or incurrence of
Indebtedness occurs after the Funding Date, to prepay outstanding Loans.

(iv) Mandatory prepayments pursuant to this Section 2.04(a) shall be made upon
notice to the Administrative Agent not later than 11:00 a.m. (New York City
time) (A) three Business Days prior to the applicable mandatory prepayment of
LIBO Rate Loans and (B) one Business Day prior to the applicable mandatory
prepayment of Base Rate Loans. Each such notice shall specify the proposed date
and aggregate principal amount applicable mandatory prepayment and the Type(s)
of Loans to be prepaid. Upon receipt of a notice of a mandatory prepayment
pursuant to this clause (iv), the Administrative Agent shall promptly notify
each Lender of the contents thereof on the same Business Day and of such
Lender’s ratable share of such mandatory prepayment and such notice shall not
thereafter be revocable. Each such mandatory prepayment shall be applied to the
Loans of the Lenders in accordance with their respective Pro Rata Shares.

(b) (i) In the event of any Change of Control, each Lender shall have the right,
at such Lender’s option, to require the Borrower, and the Borrower must offer
to, prepay the outstanding principal amount of each Lender’s Loans, together
with accrued and unpaid interest thereon, pursuant to a change of control offer
on the date (the “Change of Control Payment Date”) which is no less than ten
Business Days and no more than 25 Business Days after the date the Change of
Control Notice (as defined below) is mailed or required to be mailed (or sent by
overnight courier) (or such later date as is required by applicable law).

(ii) The Borrower shall send, by first-class mail, postage prepaid (or by
pre-paid overnight courier), to the Administrative Agent, within ten Business
Days after the occurrence of each Change of Control, a notice of the occurrence
of such Change of Control (the “Change of Control Notice”), specifying a date by
which a Lender must notify the Borrower of such Lender’s intention to exercise
the prepayment right hereunder and describing the procedure that such Lender
must follow to exercise such right.

(iii) Each Change of Control Notice shall state:

(A) that a Change of Control has occurred, that each Lender has the right to
require the Borrowers to prepay the outstanding principal amount of the Loans
plus accrued and unpaid interest thereon to the date of prepayment and that the
change of control offer is being made pursuant to this Section 2.04(b);

(B) the Change of Control Payment Date; and

(C) the circumstances and relevant facts regarding such Change of Control,
including the identity of the purchaser and pro forma financial information.

 

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On or before the applicable Change of Control Payment Date, the Borrower shall
pay to the Administrative Agent funds sufficient to prepay all Loans required to
be prepaid under this clause (b), and upon receipt of such funds, the
Administrative Agent shall promptly thereafter distribute such funds ratably to
the respective applicable Lenders.

(c) All mandatory prepayments pursuant to this Section 2.04 shall be accompanied
by interest on the principal amount prepaid accrued to the date of such
mandatory prepayment.

2.05 Repayment of Loans. The Borrower shall repay to the Lenders on the Maturity
Date the aggregate principal amount of Loans outstanding on such date.

2.06 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each LIBO Rate Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the LIBO Rate for such Interest
Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus to Applicable
Rate. The interest rates provided under subsections (i) and (ii) of this
Section 2.06(a) shall automatically increase by 0.50% per annum on the 90th day
after the Funding Date, and by 0.50% on each 90th day thereafter until the 361st
day after the Funding Date; provided, however, that such interest rate shall
increase by an additional 0.50% on the first anniversary of the Funding Date if
the Maturity Date shall have been extended beyond such date in accordance with
Section 2.12.

(b) Upon the request of the Required Lenders, while any Event of Default exists,
the Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

(c) Interest on the Loans shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.07 Fees.

(a) Duration Fee. If the Loans have not been repaid in full in cash on or prior
to:

(i) the 180th day after the Funding Date, a fully earned and non–refundable
duration fee equal to 0.75% of the aggregate principal amount of Loans then
outstanding shall be due and payable for the ratable benefit of each Lender; and

(ii) the 270th day after the Funding Date, a fully earned and non–refundable
duration fee equal to 0.75% of the aggregate principal amount of Loans then
outstanding shall be due and payable in full on such date for the ratable
benefit of each Lender.

(b) Extension Fee. The Borrower agrees to pay to the Administrative Agent, for
the account of each Lender, an extension fee equal to 1.00% of the total
principal amount of Loans extended in accordance with Section 2.12. The
extension fee shall be payable to each Lender on the Extension Effective Date in
proportion to the amount extended by such Lender on the Extension Effective
Date.

(c) Other Fees.

(i) The Borrower shall pay to the Administrative Agent for its own account such
fees as may from time to time be agreed in writing by Borrower and
Administrative Agent.

 

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(ii) The Borrower shall pay to the initial Lenders such fees in the amounts and
at the times specified in the Engagement and Fee Letter as shall have been
separately agreed upon in the amounts and at the times so specified. Such fees
shall be fully earned when paid and shall not be refundable for any reason
whatsoever, except as otherwise agreed in writing among the initial Lenders and
the Borrower.

2.08 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by the Administrative Agent’s “prime
rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

2.09 Evidence of Debt. The Loan made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Loans made by the Lenders to the Borrower and the
interest and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the Borrower
hereunder to pay any amount owing with respect to the Obligations. In the event
of any conflict between the accounts and records maintained by any Lender and
the accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error. Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loan in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loan and payments with respect thereto.

2.10 Payments Generally.

(a) All payments to be made by the Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 P.M. (New York
City time) on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Pro Rata Share (or other applicable share as
provided herein) of such payment in like funds as received by wire transfer to
such Lender’s Lending Office. All payments received by the Administrative Agent
after 2:00 P.M. (New York City time) shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.

(b) If any payment to be made by the Borrower shall come due on a day other than
a Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be.

(c) (i) Unless the Administrative Agent shall have received notice from a Lender
prior to 12:00 noon on the proposed date of the Borrowing that such Lender will
not make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with and at the time required by
Section 2.02 and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the Federal Funds Rate plus any
administrative, processing or similar fees customarily charged by the
Administrative Agent in connection with the foregoing, and (B) in the case of a
payment to be made by the Borrower, the interest rate applicable to Base Rate
Loans. If the Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall

 

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promptly remit to the Borrower the amount of such interest paid by the Borrower
for such period. If such Lender pays its share of the applicable Borrowing to
the Administrative Agent, then the amount so paid shall constitute such Lender’s
Loan included in such Borrowing. Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

(ii) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders, as the case may be, the amount due. In
such event, if the Borrower has not in fact made such payment, then each of the
Lenders, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender, in
immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Rate.

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (c) shall be conclusive, absent
manifest error.

(d) If any Lender makes available to the Administrative Agent funds for the Loan
to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(e) The failure of any Lender to make its Loan, to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan, to
purchase its participation or to make its payment under Section 10.04(c).

(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or it will obtain the funds for any Loan in
any particular place or manner.

2.11 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on the Loan made by it, held by it resulting in such
Lender’s receiving payment of a proportion of the amount of such Loan or
participations and accrued interest thereon greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase (for
cash at face value) participations in the Loan, or make such other adjustments
as shall be equitable, so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Loans and other amounts owing them;
provided that the provisions of this Section shall not be construed to apply to
(x) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in its Loan to
any assignee or participant, other than to the Borrower or any Subsidiary
thereof (as to which the provisions of this Section shall apply).

2.12 Extension of Maturity Date.

(a) No less than ten days prior to the Maturity Date, the Borrower may, upon
notice to the Administrative Agent, request a 364 day extension of the Maturity
Date. The Administrative Agent shall promptly notify the Lenders of such Request
for Maturity Date Extension and the Maturity Date shall be extended to the date
which is 364 days after the Initial Maturity Date, effective as of the date the
Administrative Agent has received the documents required to be delivered by
Section 2.12(b) (the “Extension Effective Date”). The Administrative Agent and
the Borrower shall promptly confirm to the Lenders such extension and the
Extension Effective Date.

 

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(b) Notwithstanding the foregoing, the extension of the Maturity Date pursuant
to this Section shall not be effective with respect to any Lender unless:

(i) on the Extension Effective Date no Default shall have occurred and be
continuing, and no Default shall occur, as a result of such extension;

(ii) on and as of the Extension Effective Date the representations and
warranties contained in Article V of this Agreement are true and correct as
though made on and as of the Extension Effective Date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date);

(iii) all necessary governmental and material third party approvals and/or
consents in connection with the transactions contemplated by this Agreement
shall have been obtained and remain in effect and all applicable waiting periods
shall have expired without any action being taken by any competent authority
which restrains, prevents, or imposes materially adverse conditions upon the
transactions contemplated by this Agreement, or otherwise referred to herein;

(iv) there shall not exist any judgment, order, injunction or other restraint
prohibiting or imposing materially adverse conditions upon the transactions
contemplated by this Agreement;

(v) all costs, fees, expenses (including, without limitation, reasonable legal
fees and expenses) and other compensation contemplated hereby, payable to each
Agent and the Lenders or otherwise payable in respect of the Transactions shall
have been paid to the extent due and properly invoiced;

(vi) there shall be no conflict with, or default under, any material agreement
of Borrower or any of its Restricted Subsidiaries, subject to such exceptions as
may be agreed upon;

(vii) the Borrower shall deliver to the Administrative Agent (A) copies of
corporate resolutions certified by the Secretary or Assistant Secretary of the
Borrower, or such other evidence as may be satisfactory to the Administrative
Agent, demonstrating that the extension of the Maturity Date pursuant to this
Section has been duly authorized by all necessary corporate action and (B) a
certificate signed by a Responsible Officer dated as of the Extension Effective
Date certifying that the conditions in subsections (i), (ii), (iii), (iv) and
(vi) of this Section 2.12(b) have been satisfied; and

(viii) the Borrower shall deliver to the Administrative Agent an opinion of
counsel addressing such matters relating to such extension as the Administrative
Agent may reasonably request.

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.

(i) Any and all payments by or on account of any obligation of the Borrower
hereunder or under any other Loan Document shall to the extent permitted by
applicable Laws be made free and clear of and without reduction or withholding
for any Taxes. If, however, applicable Laws require the Borrower or the
Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld
or deducted in accordance with such Laws as determined by the Borrower or the
Administrative Agent, as the case may be, upon the basis of the information and
documentation to be delivered pursuant to subsection (e) below.

(ii) If the Borrower or the Administrative Agent shall be required by the Code
to withhold or deduct any Taxes, including both United States Federal backup
withholding and withholding taxes, from any payment, then (A) the Administrative
Agent shall withhold or make such deductions as are determined by the
Administrative

 

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Agent to be required based upon the information and documentation it has
received pursuant to subsection (e) below, (B) the Administrative Agent shall
timely pay the full amount withheld or deducted to the relevant Governmental
Authority in accordance with the Code, and (C) to the extent that the
withholding or deduction is made on account of Indemnified Taxes or Other Taxes,
the sum payable by the Borrower shall be increased as necessary so that after
any required withholding or the making of all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent or a Lender receives an amount equal to the sum it would
have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable Laws.

(c) Tax Indemnifications.

(i) Without limiting the provisions of subsection (a) or (b) above, the Borrower
shall, and does hereby, indemnify the Administrative Agent, and each Lender, and
shall make payment in respect thereof within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) withheld or deducted by the Borrower or the Administrative
Agent or paid by the Administrative Agent or such Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
The Borrower shall also, and does hereby, indemnify the Administrative Agent,
and shall make payment in respect thereof within 10 days after demand therefor,
for any amount which a Lender for any reason fails to pay indefeasibly to the
Administrative Agent as required by clause (ii) of this subsection. A
certificate as to the amount of any such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(ii) Without limiting the provisions of subsection (a) or (b) above, each Lender
shall, and does hereby, indemnify the Administrative Agent, and shall make
payment in respect thereof within 10 days after demand therefor, against any and
all Taxes and any and all related losses, claims, liabilities, penalties,
interest and expenses (including the fees, charges and disbursements of any
counsel for the Administrative Agent) incurred by or asserted against the
Administrative Agent by any Governmental Authority as a result of the failure by
such Lender to deliver, or as a result of the inaccuracy, inadequacy or
deficiency of, any documentation required to be delivered by such Lender, to the
Borrower or the Administrative Agent pursuant to subsection (e). Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under this Agreement or any other Loan
Document against any amount due to the Administrative Agent under this clause
(ii).

(iii) The agreements in clauses (i) and (ii) of this Section 3.01(c) shall
survive the resignation and/or replacement of the Administrative Agent, any
assignment of rights by, or the replacement of, a Lender and the repayment,
satisfaction or discharge of all other Obligations.

(d) Evidence of Payments. Upon request by the Borrower or the Administrative
Agent, as the case may be, after any payment of Taxes by the Borrower or by the
Administrative Agent to a Governmental Authority as provided in this
Section 3.01, the Borrower shall deliver to the Administrative Agent or the
Administrative Agent shall deliver to the Borrower, as the case may be, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of any return required by Laws to report such
payment or other evidence of such payment reasonably satisfactory to the
Borrower or the Administrative Agent, as the case may be.

(e) Status of Lenders; Tax Documentation.

(i) Each Lender shall deliver to the Borrower and to the Administrative Agent,
at the time or times prescribed by applicable Laws or when reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation prescribed by applicable Laws or by the taxing
authorities of any jurisdiction and such other reasonably requested information
as will permit the Borrower or the Administrative

 

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Agent, as the case may be, to determine (A) whether or not payments made
hereunder or under any other Loan Document are subject to Taxes, (B) if
applicable, the required rate of withholding or deduction, and (C) such Lender’s
entitlement to any available exemption from, or reduction of, applicable Taxes
in respect of all payments to be made to such Lender by the Borrower pursuant to
this Agreement or otherwise to establish such Lender’s status for withholding
tax purposes in the applicable jurisdiction.

(ii) Without limiting the generality of the foregoing, if the Borrower is a
resident for tax purposes in the United States,

(A) any Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Borrower and the
Administrative Agent executed originals of Internal Revenue Service Form W-9 or
such other documentation or information prescribed by applicable Laws or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent, as the case may be, to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements; and

(B) each Foreign Lender that is entitled under the Code or any applicable treaty
to an exemption from or reduction of withholding tax with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the
Borrower or the Administrative Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

(I) executed originals of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,

(II) executed originals of Internal Revenue Service Form W-8ECI,

(III) executed originals of Internal Revenue Service Form W-8IMY and all
required supporting documentation,

(IV) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code and
(y) executed originals of Internal Revenue Service Form W-8BEN, or

(V) executed originals of any other form prescribed by applicable Laws as a
basis for claiming exemption from or a reduction in United States Federal
withholding tax together with such supplementary documentation as may be
prescribed by applicable Laws to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made.

(iii) Each Lender shall promptly (A) notify the Borrower and the Administrative
Agent of any change in circumstances which would modify or render invalid any
claimed exemption or reduction, and (B) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary (including the redesignation of its Lending
Office) to avoid any requirement of applicable Laws of any jurisdiction that the
Borrower or the Administrative Agent make any withholding or deduction for taxes
from amounts payable to such Lender.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender, or have any obligation to pay to any Lender, any
refund of Taxes withheld or deducted from funds paid for the account of such

 

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Lender. If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses incurred by the Administrative Agent or such Lender, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agents or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
This subsection shall not be construed to require the Administrative Agent or
any Lender to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to the Borrower or any other Person.

3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund on the Funding Date
the Loan, or to determine or charge interest rates based upon the LIBO Rate,
then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, any obligation of such Lender to continue LIBO Rate Loans
or to convert Base Rate Loans to LIBO Rate Loans shall be suspended until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice,
the Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, convert all LIBO Rate Loans of
such Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such LIBO Rate Loan
to such day, or immediately, if such Lender may not lawfully continue to
maintain such LIBO Rate Loan. Upon any such prepayment the Borrower shall also
pay accrued interest on the amount so prepaid. Each Lender agrees to designate a
different Lending Office if such designation will avoid the need for such notice
and will not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.

3.03 Inability to Determine Rates

If the Required Lenders determine that for any reason adequate and reasonable
means do not exist for determining the LIBO Rate for any requested Interest
Period with respect to a proposed LIBO Rate Loan, or that the LIBO Rate for any
requested Interest Period with respect to a proposed LIBO Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain LIBO Rate Loans
shall be suspended until the Administrative Agent (upon the instruction of the
Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower
may revoke any pending request for a conversion to or continuation of LIBO Rate
Loans.

3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Loans.

(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, or such Lender’s compliance
therewith, there shall be any increase in the cost to such Lender of maintaining
LIBO Rate Loans or a reduction in the amount received or receivable by such
Lender in connection with the foregoing (excluding for purposes of this
subsection (a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Lender is organized or has its Lending
Office, and (iii) reserve requirements contemplated by Section 3.04(c)), then
from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction.

(b) If any Lender determines that the introduction of any Law regarding capital
adequacy or any change therein or in the interpretation thereof, or compliance
by such Lender (or its Lending Office) therewith, has the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of such Lender’s obligations hereunder (taking into
consideration its policies with respect to capital

 

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adequacy and such Lender’s desired return on capital), then from time to time
upon demand of such Lender (with a copy of such demand to the Administrative
Agent), the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such reduction.

(c) The Borrower shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each LIBO
Rate Loan equal to the actual costs of such reserves allocated to such Loan by
such Lender (as determined by such Lender in good faith, which determination
shall be conclusive), which shall be due and payable on each date on which
interest is payable on such Loan; provided the Borrower shall have received at
least 15 days’ prior notice (with a copy to the Administrative Agent) of such
additional interest from such Lender. If a Lender fails to give notice 15 days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable 15 days from receipt of such notice.

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any continuation, payment or prepayment of any Loan on a day other than the
last day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise); or

(b) any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay or continue any Loan on the date or in the
amount notified by the Borrower; or

(c) any assignment of a LIBO Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to
Section 10.15;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05 each Lender shall be deemed to have funded each LIBO Rate Loan
made by it at the LIBO Rate for such Loan by a matching deposit or other
borrowing in the London interbank eurodollar market for a comparable amount and
for a comparable period, whether or not such LIBO Rate Loan was in fact so
funded.

3.06 Matters Applicable to All Requests for Compensation.

(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.

(b) Upon any Lender’s making a claim for compensation under Section 3.01 or 3.04
or if the Borrower is required to pay any amount for the account of any Lender
pursuant to Section 3.01, the Borrower may replace such Lender in accordance
with Section 10.15.

3.07 Survival. All of the Borrower’s obligations under this Article III shall
survive termination of this Agreement, repayment of the Loans and repayment of
all other Obligations hereunder.

 

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ARTICLE IV.

CONDITIONS PRECEDENT TO CLOSING DATE AND FUNDING DATE

4.01 Conditions Precedent to Closing Date. This Agreement shall be effective on
the date (the “Closing Date”) on which the following conditions precedent shall
have been satisfied or waived:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the Borrower and
each in form and substance satisfactory to the Administrative Agent and each of
the Lenders:

(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;

(ii) executed copies of the definitive agreements relating to the Internal
Wexpro Spin and the Spin Off (including, but not limited to, all schedules and
exhibits thereto) (collectively, the “Spin Off Agreements”) in the forms
previously approved by the Agents;

(iii) a copy of the Amended Revolving Credit Facility entered into and effective
on even date herewith;

(iv) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of the Borrower as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents;

(v) solvency certificates, in form and substance reasonably satisfactory to the
Agents, from the chief financial officers of Parent and Borrower;

(vi) pro forma consolidated balance sheet and statement of income of Borrower
and its subsidiaries and a pro forma consolidated statement of income of the
Borrower for the year ended December 31, 2009 and three month period ended
March 31, 2010 prepared after giving effect to the Transactions, as if the
Transactions had occurred at the beginning of such period;

(vii) all agreements relating to, and the corporate and capital structure of,
the Borrower and its subsidiaries, and all organizational documents of the
Borrower and its subsidiaries, in each case as the same will exist after giving
effect to the consummation of the Transactions on or prior to the Spin Off Date;

(viii) such documents and certifications as the Administrative Agent may
reasonably require to evidence that the Borrower is validly existing and in good
standing in the jurisdiction of its incorporation;

(ix) all documentation and other information required by regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including, without limitation, the PATRIOT Act;

(x) a favorable opinion of Latham & Watkins LLP to be addressed to the
Administrative Agent and each Lender, as to the matters set forth in Exhibit G
and such other matters concerning the Borrower and the Loan Documents as the
Required Lenders may reasonably request;

(xi) a certificate of a Responsible Officer of the Borrower either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and such consents,
licenses and approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;

 

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(xii) a certificate signed by a Responsible Officer of the Borrower certifying
that the conditions specified in Sections 4.02(a) and 4.02(b) have been
satisfied; and

(xiii) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent or the Required Lenders reasonably may require.

(b) The Internal Wexpro Spin and the Spin Off shall be consummated on the date
hereof in accordance with the terms of the Spin Off Agreements, without giving
effect to any waiver, consent or other modification, alteration, amendment or
change thereof that is materially adverse to the Agents without the consent of
the Arrangers;

(c) The Administrative Agent shall be reasonably satisfied with the Borrower’s
available liquidity after giving effect to the Transactions, including the
Borrower’s ability to fund up to $650 million of the purchase price for Subject
Notes that may be accepted for payment pursuant to the Subject Notes Change of
Control Offer.

(d) The Administrative Agent shall have received all costs, fees, expenses and
other amounts due and payable to each Agent and Lender on or prior to the Spin
Off Date, including, to the extent invoiced, reimbursement or payment of all
expenses (including, without limitation, Attorney Costs) required to be
reimbursed or paid by the Borrower.

(e) After giving effect to the consummation of the Spin Off, the Borrower and
its Subsidiaries shall have no outstanding preferred equity or Indebtedness
(excluding intercompany Indebtedness) for borrowed money, except for
Indebtedness incurred pursuant to (i) the Subject Notes, (ii) the Amended
Revolving Credit Facility and (iii) other existing Indebtedness and disclosed
contingent liabilities, if any, as shall be permitted by the Agents (the
“Existing Indebtedness”).

(f) The Borrower shall have received the Equity Contribution.

(g) After giving effect to the Transactions, there shall be no conflict with, or
default under, any material agreement of Parent or the Borrower or any of their
respective subsidiaries (including any such agreements (i) entered into pursuant
to the Transactions and (ii) in respect of Existing Indebtedness), except for
such conflicts or defaults as would not reasonably be expected to have a
Material Adverse Effect or imposing materially adverse conditions upon any of
the Transactions.

(h) All necessary governmental (domestic and foreign) and material third party
approvals and/or consents in connection with the Transactions shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any authority having jurisdiction
which restrains, prevents, or imposes materially adverse conditions upon, the
consummation of the Transactions. Additionally, there shall not exist any
judgment, order, injunction or other restraint prohibiting or imposing
materially adverse conditions upon any of the Transactions.

(i) No litigation by any entity (private or governmental) shall be pending or
threatened with respect to the Transactions, and which has had, or could
reasonably be expected to have, a Material Adverse Effect.

(j) As of the Spin Off Date, the representations and warranties of the Borrower
contained in Article V shall be true and correct in all material respects on and
as of the Spin Off Date (except that such representations and warranties that
specifically refer to a prior given date or period shall be required to be true
and correct in all material respects as of the respective date or for the
respective period, as the case may be), before and after giving effect to the
Transactions, as though made on and as of the Spin Off Date.

 

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Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

4.02 Conditions Precedent to Borrowing. The obligation of each Lender to provide
Loans on the Funding Date is subject to satisfaction or waiver of the following
conditions precedent as of the Funding Date:

(a) the Subject Notes Change of Control Offer shall have been made in a manner
consistent with the Indenture and all applicable laws (including the Exchange
Act and rules and regulations promulgated thereunder);

(b) no Default or Event of Default under this Agreement shall have occurred and
be continuing;

(c) the Borrower shall have delivered to the Administrative Agent the Borrowing
Request in accordance with Section 2.02(a);

(d) all necessary governmental and material third party approvals and/or
consents in connection with the Subject Notes Change of Control Offer and the
transactions contemplated by this Agreement shall have been obtained and remain
in effect;

(e) there shall not exist any judgment, order, injunction or other restraint
prohibiting or imposing materially adverse conditions upon the Subject Notes
Change of Control Offer or the transactions contemplated by this Agreement;

(f) the Administrative Agent shall have received all fees, costs, expenses and
other amounts due and payable to each Agent and Lender or otherwise payable in
respect of the Transactions, including, to the extent invoiced, reimbursement or
payment of all expenses (including, without limitation, Attorney Costs) required
to be paid by the Borrower;

(g) the Funding Date shall have occurred not more than 75 days following the
Spin Off Date;

(h) the representations and warranties of the Borrower contained in Sections
5.01, 5.02, 5.03, 5.04, 5.05, 5.15, 5.16, 5.17, 5.18, 5.19 and 5.20 shall be
true and correct in all material respects as of the Funding Date (except that
such representations and warranties that specifically refer to a prior given
date or period shall be required to be true and correct in all material respects
as of the respective date or for the respective period); and

(i) the representations and warranties of the Borrower contained in Article V
made on and as of the Spin Off Date were true and correct in all material
respects on and as of the Spin Off Date.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

To confirm each Lender’s understanding concerning Loan Parties and Loan Parties’
businesses, properties and obligations and to induce each Lender to enter into
this Agreement and to extend credit hereunder, the Borrower represents and
warrants to the Administrative Agent and each Lender that:

5.01 No Default. No event has occurred and is continuing which constitutes a
Default.

5.02 Organization and Good Standing. Each Loan Party is duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
organization, having all powers required to carry on its business and enter into
and carry out the transactions contemplated hereby. Each Loan Party is duly
qualified, in good standing, and authorized to do business in all other
jurisdictions within the United States wherein the character of the properties
owned or held by it or the nature of the business transacted by it makes such
qualification necessary, except as would not, individually or in the aggregate,
have a Material Adverse Effect. Each Loan Party has taken all actions and
procedures customarily taken in order to enter, for the purpose of conducting
business or owning

 

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property, each jurisdiction outside the United States wherein the character of
the properties owned or held by it or the nature of the business transacted by
it makes such actions and procedures desirable, except as would not,
individually or in the aggregate, have a Material Adverse Effect.

5.03 Authorization. The Borrower has duly taken all action necessary to
authorize the execution and delivery by it of the Loan Documents and to
authorize the consummation of the transactions contemplated thereby and the
performance of its obligations thereunder. The Borrower is duly authorized to
borrow funds hereunder.

5.04 No Conflicts or Consents. The execution and delivery by the Borrower of the
Loan Documents, the performance of its obligations under such Loan Documents,
and the consummation of the transactions contemplated by the various Loan
Documents, do not and will not (a) conflict with any provision of (i) any Law,
(ii) the Organization Documents of the Borrower, or (iii) any agreement,
judgment, license, order or permit applicable to or binding upon the Borrower,
(b) result in the acceleration of any Indebtedness owed by the Borrower, or
(c) result in or require the creation of any Lien upon any assets or properties
of the Borrower, except as expressly contemplated or permitted in the Loan
Documents. Except as expressly contemplated in the Loan Documents no consent,
approval, authorization or order of, and no notice to or filing with, any
Governmental Authority or third party is required in connection with the
execution, delivery or performance by the Borrower of any Loan Document or to
consummate any transactions contemplated by the Loan Documents.

5.05 Enforceable Obligations. This Agreement is, and the other Loan Documents
when duly executed and delivered will be, legal, valid and binding obligations
of the Borrower, enforceable in accordance with their terms except as such
enforcement may be limited by bankruptcy, insolvency or similar Laws of general
application relating to the enforcement of creditors’ rights.

5.06 Audited Financial Statements.

(a) The Audited Financial Statements (i) fairly present the Borrower’s
consolidated financial position at the respective dates thereof and the
consolidated results of the Borrower’s operations and the Borrower’s
consolidated cash flows for the respective periods thereof, and (ii) show all
material indebtedness and other liabilities, direct or contingent, of the
Borrower and its Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments and Indebtedness. The Audited Financial Statements
were prepared in accordance with GAAP.

(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries dated March 31, 2010, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the Borrower’s consolidated financial
condition as of the date thereof and their results of operations for the period
covered thereby, subject, in the case of clauses (i) and (ii), to the absence of
footnotes and to normal year-end adjustments.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have, a Material Adverse Effect.

5.07 Other Obligations and Restrictions. No Loan Party has any outstanding
indebtedness, liabilities or obligations of any kind (including contingent
obligations, tax assessments, and unusual forward or long-term commitments)
which are, in the aggregate, material to the Borrower or material with respect
to the Borrower’s consolidated financial condition and not shown in the Audited
Financial Statements or disclosed on Schedule 5.07. Except as shown in the
Audited Financial Statements or disclosed on Schedule 5.07, no Loan Party is
subject to or restricted by any franchise, contract, deed, charter restriction,
or other instrument or restriction which would reasonably be expected to cause a
Material Adverse Effect.

5.08 Full Disclosure. No certificate, statement or other information delivered
herewith or heretofore by any Loan Party to any Lender in connection with the
negotiation of this Agreement or in connection with any transaction contemplated
hereby contains any untrue statement of a material fact or omits to state any
material fact known to any Loan Party (other than industry-wide risks normally
associated with the types of businesses conducted

 

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by Loan Parties) necessary to make the statements contained herein or therein
not misleading as of the date made or deemed made. There is no fact known to the
Borrower (other than industry-wide risks normally associated with the types of
businesses conducted by Loan Parties) that has not been disclosed by the
Borrower to each Lender in writing which would reasonably be expected to have a
Material Adverse Effect.

5.09 Litigation. Except as disclosed in the Annual Report of the Borrower on
Form 10-K as of December 31, 2009 filed with the Securities and Exchange
Commission, there are no actions, suits or legal, equitable, arbitrative or
administrative proceedings pending, or to the knowledge of any Loan Party
threatened, against any Loan Party before any Governmental Authority which,
either individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, and there are no outstanding judgments, injunctions,
writs, rulings or orders by any such Governmental Authority against any Loan
Party which, either individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.

5.10 Labor Disputes and Acts of God. Except as disclosed on Schedule 5.10,
neither the business nor the properties of any Loan Party has been affected by
any fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), which, either individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect.

5.11 ERISA Plans and Liabilities. All currently existing Pension Plans are
listed on Schedule 5.11. Except as disclosed in the Audited Financial Statements
or on Schedule 5.11, no ERISA Event has occurred with respect to any Pension
Plan and all ERISA Affiliates are in compliance with ERISA in all material
respects. No ERISA Affiliate is required to contribute to, or has incurred any
other absolute or contingent liability under Section 4201 or 4243 of ERISA in
respect of, any Multiemployer Plan. Except as set forth on Schedule 5.11, no
failure to meet the minimum funding standard of Section 412(a) of the Code
exists with respect to any Pension Plan, whether or not waived by the Secretary
of the Treasury or his delegate, and as of December 31, 2009, the value of the
accumulated benefit obligation of each Pension Plan does not exceed the current
value of the assets of such Pension Plan available for the payment of such
benefits by more than $30,000,000.

5.12 Environmental and Other Laws. The Borrower and its Subsidiaries conduct in
the ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower has reasonably concluded that, except as
disclosed in the Annual Report of the Borrower on Form 10-K as of December 31,
2009 filed with the Securities and Exchange Commission, or on Schedule 5.12,
such Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

5.13 Borrower’s Subsidiaries. As of the Closing Date the Borrower does not have
any Subsidiary or own any stock in any other corporation or association except
those listed on Schedule 5.13 and except in cases where the Borrower owns less
than 5% of the outstanding capital stock of any such corporation. As of the
Closing Date neither the Borrower nor any Loan Party is a member of any general
or limited partnership, limited liability company, joint venture formed under
the laws of the United States or any State thereof or association of any type
whatsoever except those listed on Schedule 5.13 and associations, joint ventures
or other relationships which are established pursuant to a standard form
operating agreement or similar agreement or which are partnerships for purposes
of federal income taxation only, which are not corporations or partnerships (or
subject to the Uniform Partnership Act) under applicable state Law, and whose
businesses are limited to the exploration, development and operation of oil, gas
or mineral properties, pipelines or gathering systems and interests owned
directly by the parties in such associations, joint ventures or relationships.
As of the Closing Date the Borrower owns, directly or indirectly, the equity
interests in each of its Subsidiaries which is indicated on Schedule 5.13.

As of the Closing Date, the Borrower has no Unrestricted Subsidiaries.

5.14 Title to Properties; Licenses. Each Loan Party has good and defensible
title to substantially all of its material properties and assets, free and clear
of all Liens other than Permitted Liens and of all impediments to the use of
such properties and assets in such Loan Party’s business. Each Loan Party
possesses all licenses, permits, franchises, patents, copyrights, trademarks and
trade names, and other intellectual property (or otherwise possesses

 

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the right to use such intellectual property without violation of the rights of
any other Person) which are reasonably necessary to carry out its business as
presently conducted and as presently proposed to be conducted hereafter, and no
Loan Party is in violation in any material respect of the terms under which it
possesses such intellectual property or the right to use such intellectual
property, except as would not, individually or in the aggregate, have a Material
Adverse Effect.

5.15 Government Regulation.

(a) The Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. Following the application of
the proceeds of each Borrowing, not more than 25% of the value of the assets
(either of the Borrower only or of the Borrower and its Subsidiaries on a
consolidated basis) subject to the provision of Section 7.01 or Section 7.09 or
subject to any restriction contained in any agreement or instrument between the
Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness
and within the scope of Section 8.01(g) will be margin stock.

(b) Neither the Borrower nor any other Loan Party owing Obligations is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 (as any of the preceding acts have
been amended) or any other Law which regulates the incurring by such Person of
Indebtedness.

5.16 Solvency. Upon giving effect to the Transactions, the Borrower will be
solvent (as such term is used in applicable bankruptcy, liquidation,
receivership, insolvency or similar Laws).

5.17 Status. The obligations of the Borrower hereunder rank at least pari passu
in priority of payment with all of its other unsecured senior Indebtedness.

5.18 Use of Proceeds. The proceeds of the Loans shall be used by the Borrower
solely to fund the purchase price of the Subject Notes that are properly
tendered and not withdrawn pursuant to a Subject Notes Change of Control Offer
required to be made under the Indenture.

5.19 Compliance with Laws. Each of the Borrower and its Subsidiaries is in
compliance with all Laws, regulations and orders of any Governmental Authority
applicable to it or its property or assets and all indentures, agreements and
other instruments binding upon it or its property or assets, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

5.20 Patriot Act. The Borrower has provided each Lender with information that
identifies the Borrower, including the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower, and has
been requested from the Borrower pursuant to Section 326 of the PATRIOT Act and
Section 10.20 of this Agreement, in accordance with the PATRIOT Act.

ARTICLE VI.

AFFIRMATIVE COVENANTS OF BORROWER

To conform with the terms and conditions under which each Lender is willing to
have credit outstanding to the Borrower, and to induce each Lender to enter into
this Agreement and extend credit hereunder, the Borrower warrants, covenants and
agrees that until the full and final payment of the Obligations (other than
contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted) and termination of the Commitments of all Lenders:

6.01 Payment and Performance. The Borrower will pay all amounts due under the
Loan Documents in accordance with the terms thereof and will observe, perform
and comply with every covenant, term and condition expressed or implied in the
Loan Documents. The Borrower will cause each other Loan Party to observe,
perform and comply with every such term, covenant and condition in any Loan
Document.

 

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6.02 Books, Financial Statements and Reports. Each Loan Party will at all times
maintain full and accurate books of account and records. The Borrower will
maintain and will cause its Subsidiaries to maintain a standard system of
accounting, will maintain its fiscal year, and will furnish (or provide
electronic access pursuant to the last paragraph of this Section 6.02) the
following statements and reports to the Administrative Agent and each Lender at
the Borrower’s expense:

(a) Within five (5) days after the date required to be delivered to the SEC, but
no later than ninety-five (95) days after the end of each fiscal year, complete
consolidated financial statements of the Borrower together with all notes
thereto, which shall be prepared in reasonable detail in accordance with GAAP
and shall not be subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit,
together with an unqualified opinion based on an audit using generally accepted
auditing standards, by Ernst & Young LLP or another independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, stating that such consolidated financial statements have been
so prepared. These financial statements shall contain a consolidated balance
sheet as of the end of such fiscal year and consolidated statements of earnings,
of cash flows, and of changes in shareholders’ equity for such fiscal year, each
setting forth in comparative form the corresponding figures for the preceding
fiscal year. On the date of delivery of such financial statements to the
Administrative Agent and each Lender, the Borrower will furnish to
Administrative Agent and each Lender a Compliance Certificate signed by a
Responsible Officer of the Borrower, stating that such financial statements
fairly present the financial condition of the Borrower, stating that such Person
has reviewed the Loan Documents, containing all calculations required to be made
to show compliance or non-compliance with the provisions of Section 7.11 and
Section 7.12, and further stating that there is no condition or event at the end
of such fiscal year or at the time of such certificate which constitutes a
Default or specifying the nature and period of existence of any such condition
or event.

(b) Within five (5) days after the date required to be delivered to the SEC, but
no later than fifty (50) days after the end of each fiscal quarter, the
Borrower’s consolidated balance sheet and income statement as of the end of such
fiscal quarter and a consolidated statement of cash flows for the period from
the beginning of the then current fiscal year to the end of such fiscal quarter,
all in reasonable detail and prepared in accordance with GAAP, subject to
changes resulting from normal year-end adjustments. In addition, the Borrower
will, together with each such set of financial statements, furnish a Compliance
Certificate signed by a Responsible Officer of the Borrower stating that such
financial statements are accurate and complete (subject to normal year-end
adjustments), stating that such Person has reviewed the Loan Documents,
containing all calculations required to be made by the Borrower to show
compliance or noncompliance with the provisions of Section 7.11 and
Section 7.12, and further stating that there is no condition or event at the end
of such fiscal quarter or at the time of such certificate which constitutes a
Default or specifying the nature and period of existence of any such condition
or event.

(c) Promptly upon their becoming available, the Borrower shall provide copies of
all registration statements, periodic reports and other statements and schedules
filed by any Loan Party with any securities exchange, the SEC or any similar
Governmental Authority.

(d) Concurrently with the delivery of the financial statements under Sections
6.02(a) and (b), unaudited consolidating financial statements with a separate
presentation in such statements of the financials of the Midstream Subsidiaries
and their respective Restricted Subsidiaries and a calculation of the
Consolidated EBITDA-Midstream as of the date of such financial statements.

Documents required to be furnished or delivered pursuant to Section 6.02(a),
(b), (c), or (d) or (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrower’s behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website (including EDGAR) or
whether sponsored by the Administrative Agent); provided that (i) the Borrower
shall deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent or
such Lender and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by electronic mail

 

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electronic versions i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates required by Sections 6.02(a)
and (b) to the Administrative Agent. Except for such Compliance Certificates,
the Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Affiliates, or the
respective securities of any of the foregoing, and who may be engaged in
investment and other market-related activities with respect to such Persons’
securities. The Borrower hereby agrees that (w) all Borrower Materials that are
to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative
Agent, the Arrangers and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.08); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Side Information”; and (z) the
Administrative Agent and the Arrangers shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Side Information.”

6.03 Other Information and Inspections. The Borrower will furnish to each Lender
any information which the Administrative Agent or any Lender may from time to
time reasonably request concerning any covenant, provision or condition of the
Loan Documents or any matter in connection with Loan Parties’ businesses and
operations. The Borrower will permit, and will cause the other Loan Parties to
permit, representatives appointed by the Administrative Agent (including
independent accountants, auditors, agents, attorneys, appraisers and any other
Persons) to visit (with reasonable prior written notice unless an Event of
Default has occurred and is continuing) and inspect during normal business hours
any of the Loan Parties properties, including its books of account, other books
and records, and any facilities or other business assets, and to make extra
copies therefrom and photocopies and photographs thereof, and to write down and
record any information such representatives obtain. The Borrower will permit,
and will cause the other Loan Parties to permit, the Administrative Agent or any
Lender or its representatives to investigate and verify the accuracy of the
information furnished to the Administrative Agent or any Lender in connection
with the Loan Documents and to discuss all such matters with its officers,
employees and representatives.

6.04 Notice of Material Events. The Borrower will promptly and in any event
within five Business Days after Borrower’s knowledge thereof, notify the
Administrative Agent and each Lender in writing, stating that such notice is
being given pursuant to this Agreement, of:

(a) the occurrence of any event which has had or would reasonably be expected to
have a Material Adverse Effect,

(b) the occurrence of any Default,

(c) the acceleration of the maturity of any Indebtedness owed by any Loan Party
having a principal balance of more than $35,000,000, or of any default by any
Loan Party under any indenture, mortgage, agreement, contract or other
instrument to which any of them is a party or by which any of them or any of
their properties is bound, if such default would have a Material Adverse Effect,

(d) the occurrence of any ERISA Event,

 

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(e) any single claim of $35,000,000 or more, any notice of potential liability
under any Environmental Laws which would reasonably be expected to exceed such
amount, or any other material adverse claim asserted against any Loan Party or
with respect to any Loan Party’s properties,

(f) the filing of any suit or proceeding against any Loan Party in which an
adverse decision would have a Material Adverse Effect, and

(g) any material change in the accounting or financial reporting practices of
the Borrower or its Subsidiaries.

Upon the occurrence of any of the foregoing matters set forth in clauses
(a) through (f), the Loan Parties will take all necessary or appropriate steps
to remedy promptly any such Material Adverse Effect, Default, acceleration,
default or ERISA Event, to protect against any such adverse claim, to defend any
such suit or proceeding, and to resolve all controversies on account of any of
the foregoing.

6.05 Maintenance of Properties. Each Loan Party will maintain, preserve,
protect, and keep all property used or useful in the conduct of its business in
good condition (ordinary wear and tear excepted) and in compliance with all
applicable Laws in all material respects, and will from time to time make all
repairs, renewals and replacements needed to enable the business and operations
carried on in connection therewith to be promptly and advantageously conducted
at all times in accordance with industry standards.

6.06 Maintenance of Existence and Qualifications. Each Loan Party will maintain
and preserve its existence and its rights and franchises in full force and
effect and will qualify to do business in all states or jurisdictions where
required by applicable Law, except where the failure so to qualify will not have
a Material Adverse Effect.

6.07 Payment of Trade Liabilities, Taxes, etc. Each Loan Party will timely file
all required tax returns; timely pay all taxes, assessments, trade liabilities,
royalties, and other governmental charges or levies imposed upon it or upon its
income, profits or property; and maintain appropriate accruals and reserves for
all of the foregoing in accordance with GAAP. Each Loan Party may, however,
delay paying or discharging any of the foregoing so long as it is in good faith
contesting the validity thereof by appropriate proceedings and has set aside on
its books adequate reserves therefor.

6.08 Insurance. In accordance with industry standards, each Loan Party will keep
or cause to be kept insured or self-insured, at the option of each Loan Party,
its surface equipment and other property of a character usually insured by
similar Persons engaged in the same or similar businesses. The insurance
coverages and amounts will be reasonably determined by each Loan Party, based on
coverages carried by prudent owners of similar equipment and property.

6.09 Interest. The Borrower hereby promises to the Administrative Agent and each
Lender to pay interest at the Default Rate applicable to the Base Rate Loans on
all Obligations (including Obligations to pay fees or to reimburse or indemnify
any Lender) which the Borrower has in this Agreement promised to pay to the
Administrative Agent and the Lenders and which are not paid when due. Such
interest shall accrue from the date such Obligations become due until they are
paid.

6.10 Compliance with Agreements and Law. Each Loan Party will perform all
material obligations it is required to perform under the terms of each
indenture, mortgage, deed of trust, security agreement, lease, franchise,
agreement, contract or other instrument or obligation to which it is a party or
by which it or any of its properties is bound. Each Loan Party will conduct its
business and affairs in compliance with all Laws applicable thereto, except in
such circumstances in which (a) a requirement of Law is being contested in good
faith by appropriate proceedings diligently conducted; or (b) the failure to
comply therewith could not be reasonably expected to have a Material Adverse
Effect.

 

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6.11 Environmental Matters.

(a) Except as otherwise set forth in Schedule 5.12, each Loan Party will comply
in all material respects with all Environmental Laws now or hereafter applicable
to such Loan Party, as well as all contractual obligations and agreements with
respect to environmental remediation or other environmental matters, and shall
obtain, at or prior to the time required by applicable Environmental Laws, all
environmental, health and safety permits, licenses and other authorizations
necessary for its operations and will maintain such authorizations in full force
and effect.

(b) The Borrower will promptly furnish to the Administrative Agent all written
notices of violation, orders, claims, citations, complaints, penalty
assessments, suits or other proceedings received by the Borrower, or of which it
has notice, pending or threatened against the Borrower, by any Governmental
Authority with respect to any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations in connection with
its ownership or use of its properties or the operation of its business, if the
violation, order, claim, citation, complaint, penalty assessment, suit or other
proceeding could reasonably be expected to have a Material Adverse Effect.

(c) The Borrower will promptly furnish to the Administrative Agent all requests
for information, notices of claim, demand letters, and other notifications,
received by the Borrower in connection with its ownership or use of its
properties or the conduct of its business, relating to potential responsibility
with respect to any investigation or clean-up of Hazardous Material at any
location which could reasonably be expected to have a Material Adverse Effect.

6.12 Evidence of Compliance. Each Loan Party will furnish to each Lender at such
Loan Party’s or the Borrower’s expense all evidence which the Administrative
Agent from time to time reasonably requests in writing as to the accuracy and
validity of or compliance with all representations, warranties and covenants
made by any Loan Party in the Loan Documents, the satisfaction of all conditions
contained therein, and all other matters pertaining thereto.

6.13 Use of Proceeds. The Borrower will use the proceeds of the Loans to fund
the purchase price of the Subject Notes that are properly tendered and not
withdrawn pursuant to a Subject Notes Change of Control Offer required to be
made under the Indenture. In no event shall the funds from any Loan be used
directly or indirectly by any Person for personal, family, household or
agricultural purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any “margin stock” (as such term
is defined in Regulation U promulgated by the Board of Governors of the Federal
Reserve System) or to extend credit to others directly or indirectly for the
purpose of purchasing or carrying any such margin stock.

6.14 Subordination of Intercompany Indebtedness. All indebtedness, liabilities
and obligations of the Borrower to any Restricted Subsidiary shall be made under
and evidenced by a Subordinated Promissory Note substantially in the form of
Exhibit H (with such changes as the Administrative Agent shall approve), a copy
of which Borrower shall deliver to the Administrative Agent.

6.15 Reserve Reports. On or before April 1 of each year, commencing April 1,
2011, the Borrower shall deliver to the Administrative Agent a Reserve Report
dated as of the immediately preceding December 31 or January 1 setting forth the
Present Value of the proved reserves owned by the Borrower and its Restricted
Subsidiaries as contemplated in the definition of Present Value, together with a
statement of the Borrower’s Swap Contracts, provided however that from and after
the Investment Grade Date, this Section 6.15 shall cease to be effective.
Notwithstanding the provisions of Section 6.03, the Borrower shall not be
required to provide the Reserve Report to any Lender and the Administrative
Agent shall not disclose the reserve report or any portion thereof to any Lender
other than as specifically permitted by the Borrower.

 

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ARTICLE VII.

NEGATIVE COVENANTS OF BORROWER

To conform with the terms and conditions under which each Lender is willing to
have credit outstanding to the Borrower, and to induce each Lender to enter into
this Agreement and make the Loans, the Borrower warrants, covenants and agrees
that until the full and final payment of the Obligations (other than contingent
indemnification obligations to the extent no claim giving rise thereto has been
asserted) and termination of the Commitments of all Lenders:

7.01 Indebtedness. No Restricted Subsidiary will in any manner owe or be liable
for Indebtedness except:

(a) capital lease obligations (excluding oil, gas or mineral leases) entered
into in the ordinary course of such Restricted Subsidiary’s business in arm’s
length transactions at competitive market rates under competitive terms and
conditions in all respects; provided that the obligations required to be paid in
any fiscal year under any such capital leases do not in the aggregate exceed
$2,000,000 for all Restricted Subsidiaries;

(b) Indebtedness owed by the Restricted Subsidiaries to the Borrower or
unsecured Indebtedness owed by the Restricted Subsidiaries to a wholly owned
Restricted Subsidiary;

(c) Indebtedness of the Restricted Subsidiaries for plugging and abandonment
bonds issued by third parties or for letters of credit issued in place thereof
which are required by regulatory authorities in the area of operations, and
Indebtedness of the Restricted Subsidiaries for other bonds or letters of credit
which are required by such regulatory authorities with respect to other normal
oil and gas operations;

(d) non-recourse Indebtedness as to which no Loan Party (i) provides any
guaranty or credit support of any kind (including any undertaking, guarantee,
indemnity, agreement or instrument that would constitute Indebtedness) or
(ii) is directly or indirectly liable (as a guarantor or otherwise);

(e) Acquired Debt which meets the following requirements: (i) the documentation
evidencing such Indebtedness shall contain no terms, conditions or defaults
(other than pricing and the grant of a Lien which is permitted under this
Agreement) which are more favorable to the third party creditor than those
contained in this Agreement are to Lenders and (ii) at the time such
Indebtedness is incurred, no Default shall have occurred and be continuing
hereunder;

(f) Indebtedness under Swap Contracts permitted under Section 7.10;

(g) unsecured Indebtedness of the Restricted Subsidiaries not described in
subsections (a) through (g) above which meets the following requirements:
(i) the documentation evidencing such Indebtedness shall contain no terms,
conditions or defaults (other than pricing) which are more favorable to the
third party creditor than those contained in this Agreement are to Lenders and
(ii) at the time such Indebtedness is incurred, no Default shall have occurred
and be continuing hereunder; provided that the outstanding principal balance of
Indebtedness of the Restricted Subsidiaries permitted under this subsection
(h) shall not at any time exceed $30,000,000 in the aggregate; and

(h) Indebtedness of Restricted Subsidiaries (including capital lease
obligations) not described in subsections (a) through (g) above secured by
Permitted Liens in an aggregate principal amount not to exceed $100,000,000 at
any time outstanding.

7.02 Limitation on Liens. Except for Permitted Liens, no Loan Party will create,
assume or permit to exist any Lien upon any of the properties or assets which it
now owns or hereafter acquires. No Loan Party will allow the filing or continued
existence of any financing statement describing as collateral any assets or
property of such Loan Party, other than financing statements which describe only
collateral subject to a Lien permitted under this Section and which name as
secured party or lessor only the holder of such Lien.

 

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7.03 Limitation on Investments and New Businesses. No Loan Party will:

(a) engage directly or indirectly in any business or conduct any operations,
except (i) in connection with or incidental to its present businesses and
operations or complementary to such businesses or operations or (ii) in
connection with businesses or operations that are not material to the Borrower
and its Subsidiaries on a consolidated basis; or

(b) make any acquisitions of or capital contributions to any Person or any other
Investment, except (i) Investments in the ordinary course of business,
(ii) purchases of equity interests in Persons involved in the oil and gas
industry if the aggregate amount of the purchase price for all such purchases
(including the purchase in question) made by the Loan Parties after the date
hereof does not exceed $50,000,000 and (iii) mergers permitted under
Section 7.04.

7.04 Limitation on Mergers. The Borrower will not (i) merge or consolidate with
or into any other Person unless the Borrower is the surviving business entity
and no Default exists prior to such merger or consolidation or will exist
immediately thereafter or (ii) Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person.

7.05 Limitation on Issuance of Securities by Subsidiaries of Borrower. No
Restricted Subsidiary will issue any additional equity securities except to
another Loan Party, and no Loan Party will transfer any such equity securities
owned by it except to another Loan Party.

7.06 Transactions with Affiliates. No Loan Party will engage in any material
transaction with any of its Affiliates on terms which are less favorable in any
material respect to it than those which would have been obtainable at the time
in arms-length dealing with Persons other than such Affiliates.

7.07 Prohibited Contracts. No Loan Party will enter into any Contractual
Obligation (other than this Agreement and other Loan Documents) that limits the
ability (i) of any Subsidiary to make Restricted Payments to any other Loan
Party or to otherwise transfer property to any other Loan Party, (ii) of any
Restricted Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
any Loan Party to create, incur, assume or suffer to exist Liens on property of
such Person; provided, however, that

(a) clauses (i) and (ii) shall not prohibit restrictions or conditions imposed
by an agreement related to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property securing such
Indebtedness; and

(b) clause (iii) shall not be deemed to prohibit a Contractual Obligation
contained in documentation governing unsecured senior Indebtedness of the
Borrower that requires the granting of pari passu liens to secure such
Indebtedness; for purposes of this clause, “senior Indebtedness” means
Indebtedness that is not subordinated to the Obligations.

7.08 ERISA. No ERISA Affiliate will incur any obligation to contribute to any
“multiemployer plan” as defined in Section 4001 of ERISA.

7.09 Limitation on Sales of Property. No Loan Party will Dispose of any of its
material assets or properties or any material interest therein, except:

(a) equipment which is worthless or obsolete or which is replaced by equipment
of equal suitability and value;

(b) inventory (including oil and gas sold as produced and seismic data) which is
sold in the ordinary course of business on ordinary trade terms;

 

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(c) capital stock of any of the Borrower’s Subsidiaries which is transferred to
the Borrower or a wholly owned Subsidiary of the Borrower;

(d) interests in oil and gas properties, or portions thereof, to which no proved
reserves of oil, gas or other liquid or gaseous hydrocarbons are properly
attributed; and

(e) other property which is sold for fair consideration; provided that the
aggregate amount of such property sold during any fiscal year of the Borrower
does not exceed fifteen percent (15%) of the consolidated net book value of the
Borrower’s and its Restricted Subsidiaries’ property, plant and equipment as of
the last day of the previous fiscal year.

7.10 Swap Contracts. No Loan Party will be a party to or in any manner be liable
on any Swap Contract, unless such contracts are entered into as a hedge of
equity oil and gas production (whether production is produced by any Loan Party
or purchased from third parties), to secure a known margin for the purchase and
resale of third party natural gas, crude oil or electricity, or as a hedge of
floating rate Indebtedness or foreign currency needs (and not as a speculative
investment), such contracts are entered into in the ordinary course of the Loan
Parties’ businesses, and

(i) if such contracts are entered into with the purpose and effect of fixing
prices on oil or gas expected to be produced by Loan Parties:

(A) such contracts for any single month (determined, in the case of contracts
that are not settled on a monthly basis, by a monthly proration acceptable to
Administrative Agent) do not, in the aggregate, cover amounts greater than the
Applicable Hedge Percentage for such month; and

(B) (i) such contracts do not require any Loan Party to provide any Lien on any
property to secure the Loan Parties’ obligations thereunder other than Liens on
cash or cash equivalents and any letters of credit in support of the Loan
Parties’ obligations thereunder, and (ii) the aggregate amount of cash and cash
equivalents subject to Liens securing such contracts and the undrawn amount of
all letters of credit supporting such contracts shall not exceed $400,000,000 at
any time.

As used in this subsection, (i) the term “Applicable Hedge Percentage” means,
with respect to any month, the percentage (not to exceed 100%) of the Loan
Parties’ aggregate Projected Oil and Gas Production anticipated to be sold in
the ordinary course of the Loan Parties’ businesses during such month which the
management of the Borrower deems prudent based upon the Loan Parties’ business
strategies, and (ii) the term “Projected Oil and Gas Production” means the
projected production of oil or gas (measured by volume unit or BTU equivalent,
not sales price) for the term of the contracts or a particular month, as
applicable, from properties and interests owned by any Loan Party which have
attributable to them proved oil or gas reserves; and

(ii) if such contracts are entered into with the purpose and effect of fixing
interest rates on a principal amount of Indebtedness of such Loan Party that is
accruing interest at a variable rate, the aggregate notional amount of such
contracts never exceeds the anticipated outstanding principal balance of the
Indebtedness to be hedged by such contracts or an average of such principal
balances calculated using a generally accepted method of matching interest swap
contracts to declining principal balances, and the floating rate index of each
such contract generally matches the index used to determine the floating rates
of interest on the corresponding Indebtedness to be hedged by such contract.

7.11 Financial Covenants.

(a) Consolidated Funded Debt to Capitalization Ratio. As of the last day of each
fiscal quarter of the Borrower, the Consolidated Funded Debt to Capitalization
Ratio will not exceed 0.6 to 1.0.

 

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(b) Leverage Ratio. As of the last day of each fiscal quarter of the Borrower,
the Consolidated Leverage Ratio will not exceed 3.5 to 1.0. From and after the
Investment Grade Date, this Section 7.11(b) shall cease to apply.

(c) Maximum Allowable Debt. Consolidated Funded Debt shall not at any time
exceed the sum of (1) the product of (A) 3.5 times (B) Consolidated
EBITDA-Midstream during the four fiscal quarters ending on such date (or ending
on the last day of the most recently ended fiscal quarter of the Borrower, if
the date of determination is not the last day of a fiscal quarter), plus (2) an
amount equal to (A) the Present Value divided by (B) 1.75. From and after the
Investment Grade Date, this Section 7.11(c) shall cease to apply.

7.12 Limitation on Priority Debt. As of the last day of each fiscal quarter of
the Borrower, Priority Debt shall not exceed an amount equal to 10% of
Consolidated Net Tangible Assets.

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Each of the following events constitutes an Event of
Default under this Agreement:

(a) The Borrower or any other Loan Party fails to pay (i) any amount of
principal of any Loan when and as required to be paid herein, or (ii) any other
amount due and payable hereunder or under any other Loan Document on the earlier
of (x) the fifth day after the date such amount becomes due or (y) the first
Business Day after Administrative Agent notifies the Borrower that such amount
is due;

(b) Any “default” or “event of default” occurs under any Loan Document which
defines either such term, and the same is not remedied within the applicable
period of grace (if any) provided in such Loan Document;

(c) The Borrower fails to duly observe, perform or comply with any term,
covenant or agreement contained in Article VII or in Section 6.03 or
Section 6.04 (with the exception of the failure to provide notice in the event
that any Loan Party changes its name or location of its chief executive office);

(d) The Borrower fails (other than as referred to in subsections (a), (b) or
(c) above) to duly observe, perform or comply with any covenant, agreement,
condition or provision of any Loan Document, and such failure remains unremedied
for a period of thirty (30) days;

(e) Any representation or warranty previously, presently or hereafter made in
writing by or on behalf of any Loan Party in connection with any Loan Document
shall prove to have been false or incorrect in any material respect on any date
on or as of which made, or this Agreement or any Note is asserted to be or at
any time ceases to be valid, binding and enforceable in any material respect as
warranted in Section 5.05 for any reason other than its release or subordination
by Administrative Agent;

(f) Any Loan Party fails to duly observe, perform or comply with any Contractual
Obligation with any Person, if such failure could reasonably be expected to have
a Material Adverse Effect upon the Borrower;

(g) (i) Any Loan Party (A) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$10,000,000, or (B) fails to observe or perform any other agreement or condition
relating to any such Indebtedness or Guarantee or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made,

 

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prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; (ii) there occurs under any Swap
Contract an Early Termination Date (as defined in such Swap Contract) resulting
from (A) any event of default under such Swap Contract as to which the Borrower
or any Restricted Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract
as to which the Borrower or any Restricted Subsidiary is an Affected Party (as
so defined) and, in either event, the Swap Termination Value owed by the
Borrower or such Restricted Subsidiary as a result thereof is greater than
$10,000,000; or (iii) without limiting the foregoing, an “Event of Default”
shall occur under, and as defined in, the Amended Revolving Credit Facility;

(h) The Borrower or any of its Restricted Subsidiaries having assets with a book
value of at least $10,000,000:

(i) institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding;

(ii) becomes unable or admits in writing its inability or fails generally to pay
its debts as they become due, or there is issued or levied any writ or warrant
of attachment or execution or similar process against all or any material part
of the property of any such Person and is not released, vacated or fully bonded
within 30 days after its issue or levy; or

(iii) there is entered against any such Person a final judgment or order for the
payment of money in an aggregate amount exceeding $35,000,000 (to the extent not
covered by independent third-party insurance as to which the insurer does not
dispute coverage), or any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 10 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect;

(i) Either (i) any failure to meet the minimum funding standard of
Section 412(a) of the Code resulting in a liability in excess of $35,000,000
exists with respect to any Pension Plan or any Multiemployer Plan, whether or
not waived by the Secretary of the Treasury or his delegate, or (ii) any ERISA
Event occurs with respect to any Pension Plan or any Multiemployer Plan that has
resulted in or could reasonably be expected to result in liability of Borrower
to such Pension Plan or Multiemployer Plan and the then current value of the
accumulated benefit obligation of such Pension Plan or Multiemployer Plan
exceeds the then current value of the assets of such Pension Plan or
Multiemployer Plan available for the payment of such benefit liabilities by more
than $35,000,000 (or in the case of an ERISA Event involving the withdrawal of a
substantial employer, the withdrawing employer’s proportionate share of such
excess exceeds such amount); or

(j) A Change of Control occurs.

8.02 Remedies upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

(a) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

 

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(b) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of the Administrative Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable), any amounts received on account of the Obligations shall be applied by
the Administrative Agent in the following order:

(a) First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;

(b) Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause
(b) payable to them;

(c) Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and other Obligations, ratably among the
Lenders in proportion to the respective amounts described in this clause
(c) payable to them;

(d) Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause (d) held by them; and

(e) Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.

ARTICLE IX.

ADMINISTRATIVE AGENT

9.01 Appointment and Authority. Each of the Lenders hereby irrevocably appoints
Deutsche Bank AG Cayman Islands Branch to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders and the Borrower shall not have rights as a
third party beneficiary of such provisions.

9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

 

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9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents); provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 8.02 and 10.01) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

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9.06 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders and the Borrower. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be
a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the Borrower
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

9.08 Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.07 and 10.04) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.07 and 10.04.

 

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Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

9.09 Other Agents; Arrangers and Managers. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
“syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead
manager,” “arranger,” “lead arranger” or “co-arranger” shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, in the case of such Lenders, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.

ARTICLE X.

MISCELLANEOUS

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Borrower or
any other Loan Party therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower or the applicable Loan Party, as the case
may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

(a) waive any condition set forth in Section 4.01 without the written consent of
each Lender;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment or mandatory prepayment of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or any fees or other amounts payable hereunder or under any other Loan
Document, without the written consent of each Lender directly affected thereby;
provided, however, that only the consent of the Required Lenders shall be
necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
to reduce any fee payable hereunder;

(e) change Section 2.12 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender; or

(f) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

and provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) the Engagement and Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender.

 

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10.02 Notices; Effectiveness; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower or the Administrative Agent, to the address, telecopier
number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender or any other
Person for losses, claims, damages, liabilities or expenses of any kind (whether
in tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and
non-appealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however that in no event shall any
Agent Party have any liability to the Borrower, any Lender or any other Person
for indirect, special, incidental, consequential or punitive damages (as opposed
to direct or actual damages).

 

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(d) Change of Address, Etc. Each of the Borrower and the Administrative Agent
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Borrower and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender. Furthermore, each Public
Lender agrees to cause at least one individual at or on behalf of such Public
Lender to at all times have selected the “Private Side Information” or similar
designation on the content declaration screen of the Platform in order to enable
such Public Lender or its delegate, in accordance with such Public Lender’s
compliance procedures and applicable Law, including United States Federal and
state securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that
may contain material nonpublic information with respect to the Borrower or its
securities for purposes of United States Federal or state securities laws.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify the Administrative Agent,
each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

10.03 No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders; provided, however, that the foregoing shall not prohibit (a) the
Administrative Agent from exercising on its own behalf the rights and remedies
that inure to its benefit (solely in its capacity as Administrative Agent)
hereunder and under the other Loan Documents, (b) any Lender from exercising
setoff rights in accordance with Section 10.08 (subject to the terms of
Section 2.12), or (c) any Lender from filing proofs of claim or appearing and
filing pleadings on its own behalf during the pendency of a proceeding relative
to any Loan Party under any Debtor Relief Law; and provided, further, that if at
any time there is no Person acting as Administrative Agent hereunder and under
the other Loan Documents, then (i) the Required Lenders shall have the rights
otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and
(ii) in addition to the matters set forth in clauses (b) and (c) of the
preceding proviso and subject to Section 2.12 any Lender may, with the consent
of the Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent), in connection with the syndication of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent or any Lender
(including the fees, charges and disbursements of any counsel for the

 

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Administrative Agent or any Lender), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made hereunder, including all such reasonable out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans.

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, penalties, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or thereby,
or, in the case of the Administrative Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other Loan
Documents (including in respect of any matters addressed in Section 3.01),
(ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by the Borrower or any
other Loan Party, and regardless of whether any Indemnitee is a party thereto,
IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF
THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and non-appealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower or any other
Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrower or such
other Loan Party has obtained a final and non-appealable judgment in its favor
on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent) or such Related Party such Lender’s
Pro Rata Share (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or against any Related Party of any
of the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.10(e).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and non-appealable judgment of a court of
competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

 

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(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the repayment of the
Loans and the repayment, satisfaction or discharge of all the other Obligations.

10.05 Intentionally Left Blank.

10.06 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.

10.07 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section,
and any other attempted assignment or transfer by any party hereto shall be null
and void. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of the Loans at the time owing to it); provided that
any such assignment shall be subject to the following conditions:

(i) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans assigned.

(ii) Required Consents. No consent shall be required for any assignment except
the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required if such assignment is made on or prior to a date
which is sixty (60) days after the Funding Date.

(iii) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500; provided,
however, that the Administrative Agent may, in its sole discretion, elect to
waive such processing and recordation fee in the case of any assignment. The
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

(iv) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

 

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(v) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

(vi) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Assumption delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amounts of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, in consultation with and with
notice to the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.11 as though it were a
Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the

 

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Borrower’s prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.01 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(e) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) As used herein, the following terms have the following meanings:

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, and (ii) unless an Event of Default has
occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
“Eligible Assignee” shall not include the Borrower or any of the Borrower’s
Affiliates or Subsidiaries.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

10.08 Confidentiality. Each of the Administrative Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its Affiliates, and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent or any Lender on a non-confidential basis from a source
other than the Borrower. For purposes of this Section, “Information” means all
information received from the Borrower or any of its Subsidiaries relating to
the Borrower or any Subsidiary or any of their respective businesses, other than
any such information that is available to the Administrative Agent or any Lender
on a non-confidential basis prior to disclosure by the Borrower or any
Subsidiary; provided that, in the case of information received from the Borrower
or any Subsidiary after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
United States Federal and state securities Laws.

 

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10.09 Set-off. In addition to any rights and remedies of the Lenders provided by
law, upon the occurrence and during the continuance of any Event of Default,
each Lender is authorized at any time and from time to time, without prior
notice to the Borrower or any other Loan Party, any such notice being waived by
the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations owing to
such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.

10.10 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted to a Lender by applicable Law (the “Maximum Rate”). If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.
In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to
the extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.

10.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic imaging means
shall be effective as delivery of a manually executed counterpart of this
Agreement.

10.12 Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.

10.13 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of the Borrowing or extension of the Maturity Date, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied.

10.14 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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10.15 Replacement of Lenders. Under any circumstances set forth herein providing
that the Borrower shall have the right to replace a Lender as a party to this
Agreement, the Borrower may, upon notice to such Lender and the Administrative
Agent, replace such Lender by requiring such Lender to assign its Commitment
(with the assignment fee to be paid by the Borrower in such instance) pursuant
to (and subject to the consents required by) Section 10.07(b) to one or more
Eligible Assignees; provided that such assignment does not conflict with
applicable Laws and such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 3.05) from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts); and provided, further that if the
Borrower elects to exercise such right with respect to any Lender pursuant to
Section 3.06(b), it shall be obligated to replace all Lenders that have made
similar requests for compensation pursuant to Section 3.01 or 3.04. Upon the
making of any such assignment, the Borrower shall pay in full any amounts
payable pursuant to Section 3.05.

10.16 Governing Law; Jurisdiction, Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION

(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY AGREES THAT SECTIONS 5-1401 AND 4-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THE LOAN DOCUMENTS AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT

(d) SERVICE OF PROCESS. IN FURTHERANCE OF THE FOREGOING, THE BORROWER HEREBY
AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED
BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER, AT ITS ADDRESS SET
FORTH IN SCHEDULE 10.02. HEREOF.

 

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10.17 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.18 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrower acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services regarding this
Agreement provided by the Administrative Agent and the Arrangers are
arm’s-length commercial transactions between the Borrower and its Affiliates, on
the one hand, and the Administrative Agent and the Arrangers, on the other hand,
(B) the Borrower has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) the Borrower is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) each of the Administrative Agent and the Arrangers is and
has been acting solely as a principal and, except as expressly agreed in writing
by the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any
other Person and (B) neither the Administrative Agent nor the Arrangers has any
obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Administrative Agent and
the Arrangers and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower and
its Affiliates, and neither the Administrative Agent nor the Arrangers has any
obligation to disclose any of such interests to the Borrower or its Affiliates.
To the fullest extent permitted by law, the Borrower hereby waives and releases
any claims that it may have against the Administrative Agent and the Arrangers
with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

10.19 Electronic Execution of Assignments and Certain Other Documents. The words
“execution,” “signed,” “signature,” and words of like import in any Assignment
and Assumption or in any amendment or other modification hereof (including
waivers and consents) shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use
of a paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

10.20 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act. The
Borrower shall, promptly following a request by the Administrative Agent or any
Lender, provide such documentation and other information that the Administrative
Agent or such Lender reasonably requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the Act.

10.21 Time of the Essence. Time is of the essence of the Loan Documents.

 

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10.22 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY

EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

QEP RESOURCES, INC. By:   /s/ Richard J. Doleshek   Name:     Richard J.
Doleshek   Title:       Executive Vice President and Chief Financial Officer

Signature Page to the

QEP Resources, Inc. Senior Unsecured Bridge Loan Agreement

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DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as Administrative Agent By:   /s/ Paul
O’Leary   Name:     Paul O’Leary   Title:       Director By:   /s/ Carin Keegan
  Name:     Carin Keegan   Title:       Director

Signature Page to the

QEP Resources, Inc. Senior Unsecured Bridge Loan Agreement

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DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as a Lender By:   /s/ Paul O’Leary  
Name:     Paul O’Leary   Title:       Director By:   /s/ Carin Keegan   Name:  
  Carin Keegan   Title:       Director

Signature Page to the

QEP Resources, Inc. Senior Unsecured Bridge Loan Agreement

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BANK OF AMERICA, N.A., as a Lender By:   /s/ Shelly A. McGregor   Name:    
Shelly A. McGregor   Title:       Senior Vice President

Signature Page to the

QEP Resources, Inc. Senior Unsecured Bridge Loan Agreement

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BMO CAPITAL MARKETS FINANCING, INC., as a Lender By:   /s/ Kevin Utsey   Name:  
  Kevin Utsey   Title:       Vice President

Signature Page to the

QEP Resources, Inc. Senior Unsecured Bridge Loan Agreement

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JPMORGAN CHASE BANK, N.A., as a Lender By:   /s/ Muhammad Hasan   Name:    
Muhammad Hasan   Title:       Vice President

Signature Page to the

QEP Resources, Inc. Senior Unsecured Bridge Loan Agreement

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WELLS FARGO BANK, N.A., as a Lender By:   /s/ Christina Faith   Name:    
Christina Faith   Title:       Director

Signature Page to the

QEP Resources, Inc. Senior Unsecured Bridge Loan Agreement

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SCHEDULE 1.01

SUBJECT NOTES

$150.0 aggregate principal amount of the Borrower’s 7.50% Notes due 2011

$250.0 aggregate principal amount of the Borrower’s 6.05% Notes due 2016

$450.0 aggregate principal amount of the Borrower’s 6.80% Notes due 2018

$300.0 aggregate principal amount of the Borrower’s 6.80% Notes due 2020

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SCHEDULE 2.01

COMMITMENTS

AND PRO RATA SHARES

QEP Resources, Inc. Bank Group

 

Lender

   Commitment    % of
Commitment  

Deutsche Bank AG Cayman Islands Branch

   $ 100,000,000.00    20 % 

Bank of America, N.A.

   $ 100,000,000.00    20 % 

BMO Capital Markets Financing, Inc.

   $ 100,000,000.00    20 % 

JPMorgan Chase Bank, N.A.

   $ 100,000,000.00    20 % 

Wells Fargo Bank, N.A.

   $ 100,000,000.00    20 %               

Total

   $ 500,000,000.00    100 % 

Signature Page to Subordinated Promissory Note