EXHIBIT 10.1

U.S.$113,500,000

FIRST LIEN CREDIT AGREEMENT

Dated as of August 7, 2006

Among

GBGH, LLC

as Borrower

and

THE INITIAL LENDERS NAMED HEREIN

as Initial Lenders

and

CREDIT SUISSE

as First Lien Administrative Agent

and

CREDIT SUISSE

as First Lien Collateral Agent

and

CREDIT SUISSE SECURITIES (USA) LLC

as Sole Lead Arranger and Sole Bookrunner

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TABLE OF CONTENTS

 

Section

        Page ARTICLE I    DEFINITIONS AND ACCOUNTING TERMS   

SECTION 1.01. Certain Defined Terms

   3

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions

   31

SECTION 1.03. Accounting Terms

   32 ARTICLE II    AMOUNTS AND TERMS OF THE ADVANCES   

SECTION 2.01. The Advances

   33

SECTION 2.02. Making the Advances

   33

SECTION 2.03. Repayment of Advances

   34

SECTION 2.04. Interest

   34

SECTION 2.05. Agents’ Fees

   35

SECTION 2.06. Prepayments

   35

SECTION 2.07. Conversion of Advances

   38

SECTION 2.08. Increased Costs

   39

SECTION 2.09. Illegality

   40

SECTION 2.10. Payments and Computations

   40

SECTION 2.11. Taxes

   41

SECTION 2.12. Sharing of Payments, Etc.

   44

SECTION 2.13. Use of Proceeds

   45

SECTION 2.14. Evidence of Debt

   45 ARTICLE III    CONDITIONS OF LENDING AND DRAWINGS FROM THE EXPANSION
ACCOUNTS   

SECTION 3.01. Conditions Precedent to Borrowing

   46

SECTION 3.02. Conditions Precedent to Drawings from the Expansion Account.

   57

SECTION 3.03. Determinations Under Sections 3.01 and 3.02

   57 ARTICLE IV    REPRESENTATIONS AND WARRANTIES   

SECTION 4.01. Representations and Warranties of the Borrower

   58

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ARTICLE V    COVENANTS OF THE BORROWER   

SECTION 5.01. Affirmative Covenants

   66

SECTION 5.02. Negative Covenants

   73

SECTION 5.03. Reporting Requirements

   79

SECTION 5.04. Financial Covenants

   85 ARTICLE VI    EVENTS OF DEFAULT   

SECTION 6.01. Events of Default

   85 ARTICLE VII    THE ADMINISTRATIVE AGENT   

SECTION 7.01. Authorization and Action

   89

SECTION 7.02. Agents’ Reliance, Etc.

   90

SECTION 7.03. Credit Suisse and Affiliates

   90

SECTION 7.04. Lender Credit Decision

   91

SECTION 7.05. Indemnification

   91

SECTION 7.06. Successor Agents

   92 ARTICLE VIII    MISCELLANEOUS   

SECTION 8.01. Amendments, Etc.

   92

SECTION 8.02. Notices, Etc.

   93

SECTION 8.03. No Waiver; Remedies

   95

SECTION 8.04. Costs and Expenses

   95

SECTION 8.05. Right of Set-off

   97

SECTION 8.06. Binding Effect

   97

SECTION 8.07. Assignments and Participations

   98

SECTION 8.08. Execution in Counterparts

   101

SECTION 8.09. Confidentiality

   102

SECTION 8.10. Release of Collateral

   102

SECTION 8.11. Patriot Act Notice

   102

SECTION 8.12. Jurisdiction, Etc.

   102

SECTION 8.13. Governing Law

   103

SECTION 8.14. Intercreditor Agreement

   103

SECTION 8.15. Waiver of Jury Trial

   103

SECTION 8.16. Limitation on Liability

   103

 

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SCHEDULES Schedule I   -      Commitments and Applicable Lending Offices
Schedule II   -      Guarantors Schedule 4.01(a)   -      Equity Interests
Schedule 4.01(b)   -      Loan Parties Schedule 4.01(c)   -      Subsidiaries
Schedule 4.01(e)   -      Authorizations, Approvals, Actions, Notices and
Filings Schedule 4.01(o)   -      Perfection Filings Schedule 4.01(q)   -     
Plans, Multiemployer Plans and Welfare Plans Schedule 4.01(r)   -     
Environmental Disclosure Schedule 4.01(v)   -      Liens Schedule 4.01(w)   -
     Owned Real Property Schedule 4.01(x)   -      Leased Real Property (Lessee)
Schedule 4.01(z)   -      Material Contracts Schedule 4.01(aa)   -      Natural
Gas Reserve Reports Schedule 5.01(d)   -      Insurance Requirements
Schedule 5.01(e)   -      Preservation of Corporate Existence, Etc. EXHIBITS
Exhibit A   -      Form of Note Exhibit B   -      Form of Notice of Borrowing
Exhibit C   -      Form of Assignment and Acceptance Exhibit E   -      Form of
Guaranty Exhibit F   -      Form of Security Agreement Exhibit G   -      Form
of UK Debenture Exhibit H   -      Form of UK Share Pledge Exhibit I   -     
Form of Marathon Pledge Agreement Exhibit J   -      Form of USE Overseas Pledge
Agreement Exhibit K   -      Form of Equity Support Agreement Exhibit L   -     
Form of Intercreditor Agreement Exhibit M   -      Form of Formalities
Certificate Exhibit N   -      Form of Solvency Certificate Exhibit O   -     
Form of Opinion of Hunton & Williams LLP Exhibit P   -      Form of Account
Control Agreement

 

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FIRST LIEN CREDIT AGREEMENT

FIRST LIEN CREDIT AGREEMENT, dated as of August 7, 2006, among GBGH, LLC, a
Delaware limited liability company (the “Borrower”), Credit Suisse, Cayman
Islands Branch (“Credit Suisse”), as collateral agent (together with any
successor collateral agent for the First Lien Secured Parties (as hereinafter
defined) appointed pursuant to the Intercreditor Agreement (as hereinafter
defined), the “First Lien Collateral Agent”), CREDIT SUISSE, as administrative
agent (together with any successor administrative agent appointed pursuant to
Article VII, the “First Lien Administrative Agent” and, together with the First
Lien Collateral Agent, the “Agents”) for the Lenders (as hereinafter defined),
and CREDIT SUISSE SECURITIES (USA) LLC (“Credit Suisse Securities”), as sole
lead arranger (together with any successor lead arranger, the “Lead Arranger”)
and as sole bookrunner (together with any successor bookrunner, the
“Bookrunner”).

PRELIMINARY STATEMENTS:

(1) The Borrower was organized by US Energy Overseas Investments LLC, a Delaware
limited liability company (“USE Overseas”), and Marathon Capital Holdings (UK),
LLC, a Delaware limited liability company (“Marathon”), in connection with the
acquisition (the “Acquisition”) of (i) the Natural Gas Field Licenses (as
hereinafter defined) and (ii) Knapton Generating Station, a 42 MW gas-fired
power plant located in North Yorkshire, England (the “Knapton Generating
Station”) and certain gas gathering and processing assets (the “Gas Collection
and Processing Assets”, together with the Natural Gas Field Licenses and the
Knapton Generating Station, the “Acquired Assets”). All of the common stock of
USE Overseas is owned by U.S. Energy Systems, Inc., a Delaware corporation
(“USEY”), and all of the preferred stock of USE Overseas is owned by VTEX
Energy, Inc., a Nevada corporation (“VTEX”).

(2) On the Effective Date, the Acquisition will be effected through (i) the
contribution by VTEX of an approximately 25% equity interest in Viking Petroleum
UK Limited, a company organized under the laws of England and Wales (“Viking
Petroleum”), the joint holder with Viking UK Gas Limited, a wholly owned
subsidiary of Viking Petroleum (“Viking Gas”), of a 99% interest in the Natural
Gas Field Licenses, to USE Overseas pursuant to a Contribution Agreement, dated
as of August 7, 2006 (the “VTEX Contribution Agreement”), between VTEX and USE
Overseas, which equity interest will then be contributed by USE Overseas to the
Borrower, (ii) the purchase of an approximately 65% equity interest in Viking
Petroleum by the Borrower’s wholly owned, direct subsidiary, UK Energy Systems
Limited, a company organized under the laws of England and Wales (“UK Energy”),
pursuant to the purchase and sale agreement, dated as of March 9, 2006, as
amended as of May 1, 2006, as amended on June 2, 2006 and as further amended on
August 3, 2006 (the “TCW Purchase and Sale Agreement”), among UK Energy, Viking,
LLC, a Nevada limited liability company, and TCW Global Project Fund II, Ltd.,
an exempt company organized under the laws of the Cayman Islands (“TCW”),
(iii) the purchase of an approximately 2% equity interest in Viking Petroleum by
UK Energy pursuant to the letter agreement, dated as of August 7, 2006 (the
“Lobban Purchase Agreement”), between UK Energy and Anthony Lobban, (iv) the
purchase of an approximately 8% equity interest in Viking Petroleum by UK Energy
pursuant to the letter agreement, dated as of August 7, 2006 (the “Erasmus
Purchase Agreement”), between UK

 

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Energy and Lourens Daniel John Erasmus and (iv) the purchase of the Knapton
Generating Station and a 1% interest in the Natural Gas Field Licenses by the
Borrower’s wholly owned, indirect subsidiary, RGS Energy Limited, a company
organized under the laws of England and Wales (“RGS”), through an asset purchase
pursuant to the purchase and sale agreement, dated as of August 7, 2006 (the
“Scottish Power Purchase and Sale Agreement”, and together with the VTEX
Contribution Agreement, the TCW Purchase and Sale Agreement, the Lobban Purchase
Agreement, the Erasmus Purchase Agreement and all other documents relating to
the Acquisition, the “Purchase and Sale Agreements”), between RGS, UK Energy and
Scottish Power Generation Limited (“SPGL”).

(3) Simultaneously with the Acquisition, RGS will enter into (i) a long-term
power purchase agreement (the “Power Purchase Agreement”) with ScottishPower
Energy Management Limited, a company organized under the laws of Scotland
(“SPEM”) and UK Energy, that will provide for the sale of power to SPEM and
(ii) a long-term gas sales agreement (the “Gas Sales Agreement”, and together
with the Power Purchase Agreement, the “Power and Gas Sales Agreements”) with
SPEM and UK Energy that will provide for the sale of gas to SPEM. To service the
Power and Gas Sales Agreements, RGS will enter into a novation (the “Novation of
Master Gas Purchase Agreement”) with SPGL, Viking Petroleum and Viking Gas, of
the master agreement (the “Master Gas Purchase Agreement”), dated 8 April 1993,
between Kelt UK Limited, Marinex Exploration Ltd., Tullow Exploration Limited
and Edinburgh Oil & Gas plc, as amended or novated from time to time. In
addition, RGS and Viking Gas will enter into an operation and maintenance
agreement (the “Operation and Maintenance Agreement”) and RGS and SPEM will
enter into a transitional services agreement (the “Transitional Services
Agreement”). Finally, Viking Gas will enter into a management services agreement
(the “Management Services Agreement”) with Madison Energy Management Limited, a
company organized under the laws of England and Wales (“Madison”).

(4) Following the Acquisition, the Borrower intends to further develop the
natural gas fields subject to the Natural Gas Field Licenses in a several phase
process which will involve resolving certain operational issues, expanding the
gas collection system and constructing a pipeline (collectively, the “Expansion”
and together with the Acquisition, the “Transaction”).

(5) The Borrower has requested that, in connection with the consummation of the
Transaction, the Lenders provide a senior secured first lien term loan facility
of U.S.$113,500,000 (the “Facility”) to be drawn in full on the Effective Date
and (i) to pay a portion of the aggregate purchase price of the Acquisition,
(ii) to fund the Working Capital Account, the Debt Service Reserve Account, the
Additional Debt Service Reserve Account, the Debt Service During Development
Account and the Major Maintenance Account, (iii) to pay the fees, costs and
expenses incurred in connection with the Transaction and the Facility (including
the fees in connection with any Hedge Agreements entered into in accordance with
the Loan Documents) and certain other transactions contemplated thereby and
(iv) for deposit into the Expansion Accounts to fund certain costs associated
with the Expansion.

(6) Simultaneously with the transactions contemplated hereunder, the Borrower
will enter into a U.S.$29,500,000 senior secured second lien term loan facility
with Credit Suisse, as second lien administrative agent and as second lien
collateral agent, the lenders party thereto and certain others (the “Second Lien
Facility”).

 

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(7) The Lenders have indicated their willingness to agree to the Borrower’s
request referred to above on the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

“Acceptable Hedge Provider” means: (a)(i) a financial institution whose
long-term unsecured debt is rated at least “A” by S&P and “A2” by Moody’s (and,
if the long-term unsecured indebtedness of such financial institution is rated
“A” by S&P or “A2” by Moody’s, such financial institution shall not be on
“negative watch” or “negative outlook” by such rating agency) or (ii) a
non-financial institution whose long-term unsecured debt is rated at least “AA”
by S&P and “Aa2” by Moody’s (and, if the long-term unsecured indebtedness of
such non-financial institution is rated “AA” by S&P or “Aa2” by Moody’s, such
non-financial institution shall not be on “negative watch” or “negative outlook”
by such rating agency), (b) with respect to Hedge Agreements involving energy
commodities (including gas, power and emissions credits), which has significant
experience in energy commodity trading and (c) which is approved by the First
Lien Administrative Agent (such approval not to be unreasonably withheld).

“Accepting Lenders” has the meaning specified in Section 2.06(b)(vii).

“Account Bank” has the meaning specified in the Intercreditor Agreement.

“Account Control Agreement” has the meaning specified in Section 3.01(a)(v).

“Accounts” has the meaning specified in the Intercreditor Agreement.

“Acquired Assets” has the meaning specified in the Preliminary Statements.

“Acquisition” has the meaning specified in the Preliminary Statements.

“Additional Debt Service Reserve Account” has the meaning specified in the
Intercreditor Agreement.

 

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“Additional Hedge Premium” means (a) to the extent that the Borrower elects to
extend the Initial Interest Rate and Currency Hedge Agreement, U.S.$20,000,000
and (b) to the extent that the Borrower enters into one or more Replacement
Interest Rate and Currency Hedge Agreements, the amount payable as an upfront
fee or premium to the Hedge Providers thereunder.

“Advance” means an advance by a Lender to the Borrower pursuant to Article II
and refers to a Base Rate Advance or a Eurodollar Rate Advance.

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term “control” (including the terms “controlling,” “controlled
by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Interests, by
contract or otherwise.

“Agent Parties” has the meaning specified in Section 8.02(c).

“Agents” has the meaning specified in the recital of parties to this Agreement.

“Agreement Value” means, for each Hedge Agreement, on any date of determination,
an amount determined by the First Lien Administrative Agent equal to the amount,
if any, that would be payable by any Loan Party or any of its Subsidiaries to
its counterparty to such Hedge Agreement in accordance with its terms as if
(a) such Hedge Agreement was being terminated early on such date of
determination, (b) such Loan Party or Subsidiary was the sole “Affected Party”
and (c) the First Lien Administrative Agent was the sole party determining such
payment amount.

“Annual Budget and Operating Plan” has the meaning specified in Section 5.03(l).

“Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

“Applicable Margin” means 4.50% per annum for Base Rate Advances and 5.50% per
annum for Eurodollar Rate Advances.

“Applicable Reserve Report” means the most recent reserve report or certificate
required to be delivered under Section 5.03(n) or (o).

“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.

“Assignee” has the meaning specified in Section 8.07.

 

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“Assignee Group” means two or more Assignees that are Affiliates of one another
or two or more Approved Funds managed by the same investment advisor.

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Assignee (with the consent of any party whose consent is required
by Section 8.07), and accepted by the First Lien Administrative Agent, in
accordance with Section 8.07 and in substantially the form of Exhibit C hereto
or any other form approved by the First Lien Administrative Agent.

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.

“Base Case Model” has the meaning specified in Section 3.01(a)(xxv).

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the higher of:

(a) the rate of interest announced by Credit Suisse in New York, New York, from
time to time, as Credit Suisse’s prime rate; and

(b)  1/2 of 1% per annum above the Federal Funds Rate.

“Base Rate Advance” means an Advance that bears interest as provided in
Section 2.04(a)(i).

“Bookrunner” has the meaning specified in the recital of parties to this
Agreement.

“Borrower” has the meaning specified in the recital of parties to this
Agreement.

“Borrowing” means a borrowing consisting of Advances made on the Effective Date
by the Lenders.

“Business” means the business of (a) owning and operating the Knapton Generating
Station, (b) owning and operating the Gas Collection and Processing Assets,
(c) carrying out the Expansion Work and (d) otherwise exploring for and
extracting petroleum (including natural gas) from the areas subject to the
Natural Gas Field Licenses, together with all activities ancillary or related to
carrying out the foregoing.

“Business Day” means a day of the year on which banks are not required or
authorized by law to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.

“Business Interruption Insurance Proceeds” means any and all proceeds of any
insurance, indemnity, warranty or guaranty payable from time to time with
respect to the partial or complete interruption of the operation of the Project
(excluding any casualty, liability or similar proceeds).

 

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“Capital Expenditures” means, for any Person for any period, the sum of, without
duplication, (a) all expenditures made, directly or indirectly, by such Person
or any of its Subsidiaries during such period for equipment, fixed assets, real
property or improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with GAAP,
reflected as additions to property, plant or equipment on a Consolidated balance
sheet of such Person or have a useful life of more than one year plus (b) the
aggregate principal amount of all Debt (including Obligations under Capitalized
Leases) assumed or incurred in connection with any such expenditures.

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

“Carbon Credit Hedge Agreement” means the Emission Allowances Trade Agreement
for the EU Scheme, dated August 7, 2006, entered into between Credit Suisse
Energy, LLC and RGS.

“Carbon Credit Hedge Collateral Deed” means the Collateral Deed, dated 7 August
2006, entered into between Credit Suisse Energy, LLC and RGS.

“Cash Equivalents” means any of the following, to the extent owned by the
Borrower or any of its Subsidiaries free and clear of all Liens other than Liens
created under the Collateral Documents and having a maturity of not greater than
90 days from the date of acquisition thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender or a member of the Federal Reserve System, issues (or the parent of which
issues) commercial paper rated as described in clause (c) below, is organized
under the laws of the United States or any State thereof and has combined
capital and surplus of at least U.S.$1,000,000,000, (c) commercial paper in an
aggregate amount of no more than U.S.$10,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least “Prime-1” (or the then equivalent grade) by
Moody’s Investors Service, Inc. or “A-1” (or the then equivalent grade) by
Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., (d) readily
marketable debt obligations issued or guaranteed by the Government of the United
Kingdom or by an instrumentality or agency of the Government of the United
Kingdom having an equivalent credit rating, maturing in one year after the
relevant date of calculation and not convertible or exchangeable to any other
security or (e) Investments, classified in accordance with GAAP as Current
Assets of the Borrower or any of its Subsidiaries, in money market funds that
are registered under the Investment Company Act of 1940, as amended, that are
administered by financial institutions that have the highest rating obtainable
from either Moody’s or S&P and the portfolios of which are limited solely to
Investments of the character, quality and maturity described in clauses (a),
(b) and (c) of this definition.

“Cash Flow Available for Debt Service” means, for any period, (a) Revenues for
such period minus (b) the aggregate amount of operating expenses paid by the
Borrower

 

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and its Subsidiaries during such period in accordance with the Loan Documents
minus (c) the aggregate amount of Capital Expenditures of the Borrower and its
Subsidiaries paid in cash during such period in accordance with the Loan
Documents.

“Casualty Event” means an event that causes any portion of the Project or any
other property of the Borrower or its Subsidiaries intended to be incorporated
therein to be damaged, destroyed or rendered unfit for normal use for any reason
whatsoever.

“Certificates of Title” has the meaning specified in Section 3.01(a)(xxxiv).

“Change of Control” means the occurrence of any of the following:

(a)(i) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Interests in USEY (or other securities convertible into
such Voting Interests) representing 35% or more of the combined voting power of
all Voting Interests in USEY (without taking into account any shares issuable
pursuant to USEY’s Series G, Series H or Series I warrants issued on the
Effective Date), (ii) during any period of up to 24 consecutive months,
commencing on or after the Effective Date, individuals who at the beginning of
such 24-month period were directors of USEY shall cease for any reason to
constitute a majority of the board of directors of USEY, or (iii) any Person or
two or more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of “control” of USEY
within the meaning of Rule 405 of the U.S. Securities Act of 1933, as amended;

(b) at any time prior to Phase II Completion, USEY shall cease to, directly or
indirectly, own and control 75% of the Voting Interests and 75% of the common
Equity Interests in the Borrower; or

(c) at any time on or after Phase II Completion, USEY shall cease to own and
control greater than 50% of the Voting Interests and 50% of the common Equity
Interests in the Borrower.

“Collateral” means all “Collateral” referred to in the Collateral Documents and
all other property that is or is intended to be subject to any Lien in favor of
the First Lien Collateral Agent for the benefit of the First Lien Secured
Parties.

“Collateral Documents” means the Security Agreement, the UK Debenture, the UK
Share Charge, the Marathon Pledge Agreement, the USE Overseas Pledge Agreement,
the Account Control Agreement, each of the collateral documents, instruments and
agreements delivered pursuant to Section 5.01(j), and each other agreement that
creates or purports to create a Lien in favor of the First Lien Collateral Agent
for the benefit of the First Lien Secured Parties.

“Commitment” means the amount set forth opposite such Lender’s name on Schedule
I.

 

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“Communications” has the meaning specified in Section 8.02(b).

“Companies Act” shall mean the Companies Act 1985 of England and Wales (as
amended).

“Confidential Information” means information that USEY, any Loan Party or any
Pledgor furnishes to any Agent or any Lender in a writing designated as
confidential, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to such Agent
or such Lender from a source other than USEY, the Loan Parties or the Pledgors.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

“Conversion,” “Convert” and “Converted” each refer to a conversion of Advances
of one Type into Advances of the other Type pursuant to Section 2.07 or 2.09.

“Credit Suisse” has the meaning specified in the recital of parties to this
Agreement.

“Credit Suisse Securities” has the meaning specified in the recital of parties
to this Agreement.

“CS International” means Credit Suisse International.

“Current Assets” of any Person means all assets of such Person that would, in
accordance with GAAP, be classified as current assets of a company conducting a
business the same as or similar to that of such Person, after deducting adequate
reserves in each case in which a reserve is proper in accordance with GAAP.

“Debt” of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables not overdue by
more than 60 days incurred in the ordinary course of such Person’s business),
(c) all Obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Obligations of such Person as
lessee under Capitalized Leases, (f) all Obligations of such Person under
acceptance, letter of credit or similar facilities, (g) all Obligations of such
Person to purchase, redeem, retire, defease or otherwise make any payment in
respect of any Equity Interests in such Person or any other Person or any
warrants, rights or options to acquire such Equity Interests, valued, in the
case of Redeemable Preferred Interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, that in
accordance with GAAP would be included in determining total liabilities as shown
on the liability side of a balance sheet of such Person, (h) all Obligations of
such Person in respect of Hedge Agreements, valued at the Agreement Value
thereof, (i) all Obligations, contingent or otherwise, of such Person for
production payments from property operated

 

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by or on behalf of such Person and other similar arrangements with respect to
natural resources, (j) all Guaranteed Debt and Synthetic Debt of such Person and
(k) all indebtedness and other payment Obligations referred to in clauses
(a) through (j) above of another Person secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become liable
for the payment of such indebtedness or other payment Obligations.

“Debt for Borrowed Money” shall mean, as of any date with respect to any Person,
(a) Debt for money borrowed and (b) all Obligations of such Person as lessee
under Capitalized Leases. For purposes of this definition, interest which is
accrued but not paid when due on the scheduled due date for such interest shall
be deemed Debt for Borrowed Money.

“Debt Service” means, for any period, the sum of any payments due in respect of
the Secured Obligations and the Second Lien Obligations (other than any
mandatory or voluntary prepayments of principal (and interest payable in
connection therewith) required or permitted under the Loan Documents and the
Second Lien Loan Documents), whether for principal, interest, fees or otherwise
during such period, with interest payments netted against payments payable to
the Borrower under the Initial Interest Rate and Currency Hedge Agreement or any
Replacement Interest Rate and Currency Hedge Agreement.

“Debt Service Coverage Ratio” means, for any period, the ratio of (a) Cash Flow
Available for Debt Service for such period to (b) Debt Service payable during
such period.

“Debt Service During Development Account” has the meaning specified in the
Intercreditor Agreement.

“Debt Service Reserve Account” has the meaning specified in the Intercreditor
Agreement.

“Declining Date” has the meaning specified in Section 2.06(b)(vii).

“Declining Lender” has the meaning specified in Section 2.06(b)(vii).

“Deed of Termination and Release” means the Deed of Termination and Release,
dated August 7, 2006, between Viking Petroleum, Deutsche Bank Trust Company
Americas, TCW, Viking BV, Viking, LLC and Deutsche Bank, AG.

“Default” means any Event of Default or any event that would constitute an Event
of Default but for the passage of time or the requirement that notice be given
or both.

“Default Interest” has the meaning set forth in Section 2.04(b).

 

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“Dollar”, “U.S. Dollar”, “U.S.$” and the sign “$” each means the lawful currency
of the United States of America.

“Dollar Expansion Account” has the meaning specified in the Intercreditor
Agreement.

“Dollar Revenue Account” has the meaning specified in the Intercreditor
Agreement.

“Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on Schedule
I hereto or in the Assignment and Acceptance pursuant to which it became a
Lender, as the case may be, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the First Lien Administrative
Agent.

“EBITDA” means, for any period, the sum, determined on a Consolidated basis, of
(a) net income (or net loss), (b) interest expense, (c) income tax expense,
(d) depreciation expense and (e) amortization expense, in each case of the
Borrower and its Subsidiaries, determined in accordance with GAAP for such
period.

“Effective Date” has the meaning specified in Section 3.01.

“Engagement Letter” means the Amended and Restated Engagement Letter, dated
January 19, 2006 and amended and restated as of August 7, 2006, between the
Borrower, USEY and Credit Suisse Securities.

“Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement; in
each case notified in writing to the Borrower or which the Borrower may
reasonably anticipate receiving, relating in any way to any Environmental Law,
any Environmental Permit or Hazardous Material or arising from alleged injury or
threat to health, safety or the environment, including, without limitation,
(a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.

“Environmental Law” means any statute, law, directive, ordinance, rule,
regulation, code, order, writ, judgment, injunction, decree or judicial or
agency interpretation, policy or guidance which in all cases are legally
binding, in each case of or in any relevant jurisdiction, including, without
limitation, the United Kingdom, or any relevant legal jurisdiction within the
United Kingdom, and the European Union, relating to pollution or protection of
the environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.

“Environmental Permit” means any permit, approval, license or other
authorization required under or issued pursuant to any Environmental Law,
including, without limitation, greenhouse gas emissions permits and allowances
or credits related to greenhouse gas emissions.

 

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“EPS Maintenance Agreement” means the Scheduled Maintenance Agreement, dated
August 7, 2006, entered into between European Power Systems Ltd. and Viking Gas.

“Equity Contribution” means the funds contributed, or caused to be contributed,
by USEY to the Borrower in the amount of U.S.$11,300,000 to consummate the
Transaction.

“Equity Interests” means, with respect to any Person, shares of capital stock of
(or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
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 other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.

“Equity Support Agreement” has the meaning set forth in Section 3.01(a)(x).

“Equity Support Letter of Credit” has the meaning specified in the Equity
Support Agreement.

“Erasmus Purchase Agreement” has the meaning specified in the Preliminary
Statements.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the controlled group of any Loan Party, or under common control with
any Loan Party, within the meaning of Section 414 of the Internal Revenue Code.

“ERISA Event” means (a)(i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the 30 day
notice requirement with respect to such event has been waived by the PBGC or
(ii) the requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application pursuant to Section 303 of ERISA or
Section 412(d) of the Code for a minimum funding waiver with respect to a Plan;
(c) the provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of

 

11

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ERISA (including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (e) the
conditions for imposition of a lien under Section 302(f) of ERISA shall have
been met with respect to any Plan; (f) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA; or (g) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the termination
of, or the appointment of a trustee to administer, such Plan.

“Eurocurrency Liabilities” has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.

“Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the First Lien Administrative Agent.

“Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the Borrowing, the rate per annum determined by the
First Lien Administrative Agent at approximately 11:00 A.M. (London time) on the
date that is two Business Days prior to the beginning of the relevant Interest
Period by reference to the British Bankers’ Association Interest Settlement
Rates for deposits in Dollars (as set forth by the Bloomberg Information Service
or any successor thereto or any other service selected by the First Lien
Administrative Agent which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period; provided that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the “Eurodollar Rate” shall be the interest rate
per annum determined by the First Lien Administrative Agent to be the average of
the rates per annum at which deposits in Dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London, England
by the First Lien Administrative Agent at approximately 11:00 A.M. (London time)
on the date that is two Business Days prior to the beginning of such Interest
Period.

“Eurodollar Rate Advance” means an Advance that bears interest as provided in
Section 2.04(a)(ii).

“Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar
Rate Advances comprising part of the Borrowing means the reserve percentage
applicable two Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement)

 

12

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for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.

“Events of Default” has the meaning specified in Section 6.01.

“Excess Cash Flow” means, as of any Quarterly Payment Date, the aggregate amount
then on deposit in the Revenue Accounts after giving effect to any transfers
from the Revenue Accounts on such Quarterly Payment Date pursuant to priorities
first through eleventh of Section 7.6(a) and priorities first through ninth of
Section 7.6(b) of the Intercreditor Agreement on such Quarterly Payment Date.

“Excess Cash Flow Payment Date” has the meaning specified in the Intercreditor
Agreement.

“Excess Cash Period” means the period from the Effective Date, until the first
day following the first full calendar quarter during which the aggregate
principal amount outstanding under the Facility on each day of such calendar
quarter is equal to or less than 50% of the aggregate principal amount of the
Facility outstanding on the Effective Date immediately following the Borrowing.

“Expansion” has the meaning specified in the Preliminary Statements.

“Expansion Accounts” means the Dollar Expansion Account and the Sterling
Expansion Account.

“Expansion Account Drawing” has the meaning specified in Section 3.02.

“Expansion Costs” means the costs and expenses set forth in (a) prior to the
delivery and effectiveness of the first Annual Budget and Operating Plan
hereunder, the Base Case Model and (b) after the delivery and effectiveness of
the first Annual Budget and Operating Plan hereunder, the then effective Annual
Budget and Operating Plan, in each case, that are required to complete the
Expansion Work.

“Expansion Work” means the engineering, design, procurement, construction,
installation, startup and testing associated with the Expansion.

“Facility” has the meaning given thereto in the Preliminary Statements.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the First Lien Administrative Agent from three Federal
funds brokers of recognized standing selected by it.

 

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“Fee Letter” means the Agency Fee Letter dated August 7, 2006 between the
Borrower and Credit Suisse, acting as the First Lien Administrative Agent, as
the First Lien Collateral Agent, as the Second Lien Administrative Agent and as
the Second Lien Collateral Agent.

“First Lien Administrative Agent” has the meaning specified in the recital of
parties to this Agreement.

“First Lien Administrative Agent’s Account” means the account of the First Lien
Administrative Agent specified by the First Lien Administrative Agent in writing
to the Lenders from time to time.

“First Lien Collateral Agent” has the meaning specified in the recital of
parties to this Agreement.

“First Lien Debt for Borrowed Money” shall mean, as of any date with respect to
any Person, (a) Debt for money borrowed (other than Debt outstanding under the
Second Lien Loan Documents) and (b) all Obligations of such Person as lessee
under Capitalized Leases. For purposes of this definition, interest which is
accrued but not paid when due on the scheduled due date for such interest shall
be deemed Debt for Borrowed Money.

“First Lien Obligations” means (a) all Obligations outstanding under the Loan
Documents, including, without limitation, this Agreement and (b) all interest
accrued or accruing in respect of the Obligations described in clause (a) (or
which would, absent the commencement of any Insolvency or Liquidation
Proceeding, accrue) before and after commencement of any Insolvency or
Liquidation Proceeding, in accordance with the rate specified in the relevant
Loan Documents, whether or not the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.

“First Lien Net Debt to Proven Reserve Ratio” means, with respect to any date,
the ratio of (a) the Consolidated First Lien Debt for Borrowed Money of the
Borrower and its Subsidiaries on such date to (b) the Proven Reserves on such
date.

“First Lien Proven Reserve Coverage Ratio” means, with respect to any date, the
ratio of (a) the PV-10 Value on such date to (b) the Consolidated First Lien
Debt for Borrowed Money of the Borrower and its Subsidiaries on such date.

“First Lien Secured Parties” means the Agents and the Lenders.

“First Lien Total Leverage Ratio” means, with respect to any period, the ratio
of (a) the Consolidated First Lien Debt for Borrowed Money of the Borrower and
its Subsidiaries on the last day of such period to (b) EBITDA for the
consecutive 12-month period immediately preceding the last day of such period.

 

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“Fiscal Year” means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on December 31 in any calendar year.

“Floating Rate Loan” means any Advance that bears interest at a rate determined
by reference to the Eurodollar Rate or the Base Rate.

“Foreign Benefit Arrangement” has the meaning specified in Section 4.01(q)(vi).

“Foreign Plan” has the meaning specified in Section 4.01(q)(vi).

“Fund” means any Person (other than an individual) 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.

“GAAP” means UK GAAP or US GAAP, as applicable based upon the jurisdiction of
organization or incorporation, as the case may be, of the relevant Person.

“Gas Collection and Processing Assets” has the meaning specified in the
Preliminary Statements.

“Gas Hedge Agreement” means the Letter Agreement, dated August 7 2006, entered
into between UK Energy and J. Aron & Company.

“Gas Sales Agreement” has the meaning specified in the Preliminary Statements.

“Governmental Authority” means any nation or government, any state, province,
city, municipal entity or other political subdivision thereof, and any
governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board, bureau or
similar body, whether federal, state, provincial, territorial, local or foreign.

“Governmental Authorization” means any authorization, approval, consent,
franchise, license, covenant, order, ruling, permit, certification, exemption,
notice, declaration or similar right, undertaking or other action of, to or by,
or any filing, qualification or registration with, any Governmental Authority.

“Guaranteed Debt” means, with respect to any Person, any Obligation or
arrangement of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other payment Obligations (“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity

 

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capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, assets, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof. The amount of any Guaranteed
Debt shall be deemed to be an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Debt is made (or,
if less, the maximum amount of such primary obligation for which such Person may
be liable pursuant to the terms of the instrument evidencing such Guaranteed
Debt) or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder), as determined by such Person in good faith.

“Guarantors” means the Subsidiaries of the Borrower listed on Schedule II
hereto.

“Guaranty” has the meaning specified in Section 3.01(a)(ii).

“Hazardous Materials” means (a) radioactive materials, mold, asbestos-containing
materials, polychlorinated biphenyls and radon gas, (b) greenhouse gasses,
including without limitation, carbon dioxide, methane, nitrous oxide and hydro
fluorocarbons, and (c) any other chemicals, materials or substances whether
natural or man-made and whether in solid, liquid or gaseous form, designated or
classified as hazardous or toxic or as a pollutant or contaminant, or otherwise
regulated, under any Environmental Law.

“Hedge Agreements” means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts, gas, power and emissions credit hedging arrangements and other
similar hedging agreements.

“Hedge Provider” means any Person (other than the Borrower, any Guarantor or any
affiliates thereof) party to any Hedge Agreement entered into in accordance with
the terms of this Agreement.

“Increased Base Amount” has the meaning specified in Section 2.11(g).

“Indemnified Party” has the meaning specified in Section 8.04(b).

“Independent Engineer” means, with respect to matters relating to (a) the
Knapton Generating Station, the Independent Power Plant Engineer, (b) all
natural gas fields, natural gas wells and gas gathering equipment that form part
of the Project, the Independent Natural Gas Development Consultant, and (c) all
pipeline facilities that form part of the Project, the Independent Pipeline
Construction Consultant.

“Independent Environmental Consultant” has the meaning specified for such term
in the Intercreditor Agreement.

 

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“Independent Insurance Consultant” has the meaning specified for such term in
the Intercreditor Agreement.

“Independent Natural Gas Development Consultant” has the meaning specified for
such term in the Intercreditor Agreement.

“Independent Pipeline Construction Consultant” has the meaning specified for
such term in the Intercreditor Agreement.

“Independent Power Plant Engineer” has the meaning specified for such term in
the Intercreditor Agreement.

“Independent UK Gas Market Consultant” has the meaning specified for such term
in the Intercreditor Agreement.

“Independent UK Power Market Consultant” has the meaning specified for such term
in the Intercreditor Agreement.

“Information Memorandum” means the information memorandum dated June 2006 used
by the Lead Arranger in connection with the syndication of the Commitments.

“Initial Declined Amount” has the meaning specified in Section 2.06(b)(vii).

“Initial Declined Amount Notice” has the meaning specified in
Section 2.06(b)(vii).

“Initial Interest Rate and Currency Hedge Agreement” means the Letter Agreement,
dated August 7, 2006, entered into between the Borrower and CS International.

“Initial Lenders” means the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the Initial
Lenders.

“Insolvency or Liquidation Proceeding” means:

(a) any voluntary or involuntary case or proceeding under the Bankruptcy Code
with respect to any Loan Party or Pledgor;

(b) any other voluntary or involuntary insolvency, reorganization or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding with respect to any Loan Party or Pledgor or with
respect to a material portion of their respective assets;

(c) any liquidation, dissolution, reorganization or winding up of Loan Party or
Pledgor whether voluntary or involuntary and whether or not involving insolvency
or bankruptcy; or

 

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(d) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of any Loan Party or Pledgor.

“Insurance Proceeds” means any and all proceeds of any insurance, indemnity,
warranty or guaranty payable from time to time with respect to any Casualty
Event other than Business Interruption Insurance Proceeds.

“Interconnection Agreement” means the Agreement for the Connection to Northern
Electricity Distribution Ltd.’s Distribution System, dated August 7, 2006,
entered into between Northern Electricity Distribution Ltd. and RGS.

“Intercreditor Agreement” has the meaning specified in Section 3.01(a)(xi).

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the
same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the First
Lien Administrative Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:

(a) the Borrower may not select any Interest Period with respect to any
Eurodollar Rate Advance that ends after any principal repayment installment date
for the Facility unless, after giving effect to such selection, the aggregate
principal amount of Base Rate Advances and of Eurodollar Rate Advances having
Interest Periods that end on or prior to such principal repayment installment
date shall be at least equal to the aggregate principal amount of Advances under
the Facility due and payable on or prior to such date;

(b) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, however, that,
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and

(c) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

 

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“Investment” in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation (or similar transaction) and any
arrangement pursuant to which the investor incurs Debt of the types referred to
in clause (i) or (k) of the definition of “Debt” in respect of such Person.

“Knapton Generating Station” has the meaning specified in the Preliminary
Statements.

“Knowledge” means, as to any Person, the actual awareness of, if such Person is
a natural Person, such natural Person or, if such Person is not a natural
Person, a Responsible Officer of such Person, of the fact, event or
circumstance; provided, however, that each such natural Person and each
Responsible Officer of a Person that is not a natural Person shall in any event
be deemed to have “Knowledge” of any matter as to which such natural Person or
such Responsible Officer of such Person that is not a natural Person has been
given notice pursuant to and in accordance with the provisions of any
Transaction Document to which such Person or natural Person is a party.

“Lead Arranger” has the meaning specified in the recital of parties to this
Agreement.

“Lease of Producers’ Facilities, Connection Works and Related Works” means the
Lease of Producers’ Facilities, Connection Works and Related Works, dated
23 December 1994, between, among others, Scottish Power plc, Kelt U.K. Limited
and Tullow Exploration Limited, as amended or novated from time to time.

“Leased Real Property” means those properties set forth on Schedule 4.01(x).

“Lenders” means the Initial Lenders and each Person that shall become a Lender
hereunder pursuant to Section 8.07 for so long as such Initial Lender or Person,
as the case may be, shall be a party to this Agreement.

“Lien” means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.

“Loan Documents” means (a) this Agreement, (b) the Notes, (c) the Guaranty,
(d) the Intercreditor Agreement, (e) the Equity Support Agreement, (f) the
Collateral Documents, (g) the Engagement Letter and (h) the Fee Letter, in each
case as amended.

“Loan Parties” means the Borrower and the Guarantors.

“Lobban Purchase Agreement” has the meaning specified in the Preliminary
Statements.

 

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“London Accounts” has the meaning specified in the Intercreditor Agreement.

“Madison” has the meaning specified in the Preliminary Statements.

“Major Maintenance Account” has the meaning specified in the Intercreditor
Agreement.

“Make-Whole Fixed Rate” means, with respect to any Advance to be prepaid on any
date of prepayment, a fixed rate of interest determined by the First Lien
Administrative Agent in its sole discretion five (5) Business Days prior to the
date of such prepayment to be equal to the mid-market Remaining Non-Par Call
Term swap transaction with a notional amount equal to the then outstanding
principal amount of such Advance, a term equal to the Remaining Non-Par Call
Term and a floating rate of interest equal to the Eurodollar Rate plus the
Applicable Margin then in effect.

“Make-Whole Premium” means, with respect to any Advance to be prepaid on any
date of prepayment, an amount equal to the greater of (a) 4.0% of the then
outstanding principal amount of such Advance and (b) the excess of (i) the
present value at such date of prepayment of (A) 103% of the then outstanding
principal amount of such Advance plus (B) an amount equal to the amount of
interest that would accrue on the outstanding principal amount of such Advance
during the then applicable Remaining Non-Par Call Term at the Make-Whole Fixed
Rate computed using a discount rate equal to the Treasury Rate plus 50 basis
points over (ii) the then outstanding principal amount of such Advance.

“Management Services Agreement” has the meaning specified in the Preliminary
Statements.

“Marathon” has the meaning specified in the Preliminary Statements.

“Marathon Pledge Agreement” has the meaning specified in Section 3.01(a)(viii).

“Margin Stock” has the meaning specified in Regulation U.

“Master Gas Purchase Agreement” has the meaning specified in the Preliminary
Statements.

“Material Adverse Change” means any material adverse change in the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole, (b) the rights
and remedies, taken as a whole, of any Agent or the Lenders under the
Transaction Documents or (c) the ability of any Loan Party to perform its
Obligations under any Transaction Document to which it is or is to be a party.

 

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“Material Contract” means, with respect to any Person, each contract to which
such Person is a party involving aggregate consideration payable to or by such
Person of U.S.$2,500,000 or more in any year or otherwise material to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of such Person.

“Material Project Agreements” means the Purchase and Sale Agreements, the
Management Services Agreement, the Power and Gas Sales Agreements, the Master
Gas Purchase Agreement, the Novation of Master Gas Purchase Agreement, the
Operation and Maintenance Agreement, the Lease of Producers’ Facilities,
Connection Works and Related Works, the Novation of Lease of Producers’
Facilities, Connection Works and Related Works, the Transitional Services
Agreement, the TCT Maintenance Agreement, the EPS Maintenance Agreement, the
Interconnection Agreement and each Replacement Material Project Agreement; each
a “Material Project Agreement”.

“Moody’s” means Moody’s Investor Services, Inc., and its successors.

“Multiemployer Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.

“Multiple Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.

“Natural Gas Field Licenses” means “Licenses” as such term is defined in the UK
Debenture.

“Net Cash Proceeds” means, (a) with respect to any sale, lease, transfer or
other disposition of any asset of the Borrower or any of its Subsidiaries (other
than any sale, lease, transfer or other disposition of assets pursuant to clause
(i) or (iii) of Section 5.02(e)), the excess, if any, of (i) the sum of cash and
Cash Equivalents received in connection with such sale, lease, transfer or other
disposition (including any cash or Cash Equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of
any Debt (other than Debt under the Loan Documents) that is secured by such
asset and that is required to be repaid in connection with such sale, lease,
transfer or other disposition thereof, (B) the reasonable and customary
out-of-pocket costs, fees, commissions, premiums and expenses incurred by the
Borrower or its Subsidiaries, and (C) federal, state, provincial, foreign and
local taxes reasonably estimated in respect of such sale, lease, transfer or
other disposition (on a Consolidated basis) to be actually payable within the
current or the immediately succeeding tax year as a result of any gain
recognized in connection therewith; provided, however, that Net Cash Proceeds
shall not include any such amounts to the extent such amounts are reinvested in
capital assets used or useful in the business of the Borrower and its
Subsidiaries within 6 months after the date of receipt thereof;

 

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(b) with respect to the incurrence or issuance of any Debt by the Borrower or
any of its Subsidiaries (other than Debt incurred or issued pursuant to clause
(i), (ii), (iii), (v), (vi) or (vii) of Section 5.02(b)), the excess of (i) the
sum of the cash and Cash Equivalents received in connection with such incurrence
or issuance over (ii) the underwriting discounts and commissions or other
similar payments, and other out-of-pocket costs, fees, commissions, premiums and
expenses incurred by the Borrower or any of its Subsidiaries in connection with
such incurrence or issuance to the extent such amounts were not deducted in
determining the amount referred to in clause (i); and

(c) with respect to the sale or issuance of any Equity Interests (including,
without limitation, the receipt of any capital contribution) by any Person, the
excess of (i) the sum of the cash and Cash Equivalents received in connection
with such sale or issuance over (ii) the underwriting discounts and commissions
or similar payments, and other out-of-pocket costs, fees, commissions, premiums
and expenses, incurred by the Borrower or any of its Subsidiaries in connection
with such sale or issuance to the extent such amounts were not deducted in
determining the amount referred to in clause (i).

“Net Debt to Proven Reserve Ratio” means, with respect to any date, the ratio of
(a) the Consolidated Debt for Borrowed Money of the Borrower and its
Subsidiaries on such date to (b) the Proven Reserves on such date.

“Note” means a promissory note of the Borrower payable to the order of any
Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from the Advances made by
such Lender.

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

“Novation of Lease of Producers’ Facilities, Connection Works and Related Works”
means the Novation of the Lease of Producers’ Facilities, Connection Works and
Related Works dated August 7, 2006, between SPGL, RGS, Viking Petroleum and
Viking Gas.

“Novation of Master Gas Purchase Agreement” has the meaning specified in the
Preliminary Statements.

“Obligation” means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other

 

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amounts payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any of the
foregoing that any Lender, in its sole discretion, may elect to pay or advance
on behalf of such Loan Party.

“Operation and Maintenance Agreement” has the meaning specified in the
Preliminary Statements.

“Optional Extension Provision” means the provision set forth in the Initial
Interest Rate and Currency Hedge Agreement providing for the extension of the
term thereof to December 30, 2013.

“Other Taxes” has the meaning specified in Section 2.11(b).

“Owned Real Property” means those properties set forth on Schedule 4.01(w).

“Partial Release” means the Partial Release of Security Interest, dated
August 7, 2006, between JPMorgan Chase Bank and TCW.

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. 107-56, signed into law October 26, 2001.

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

“Permitted Encumbrances” means the Liens on the Owned Real Property and Leased
Real Property listed in Schedules 4.01(w) and (x) that are set forth in the
Certificates of Title.

“Permitted Liens” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b); (b) Liens imposed by law,
such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens
and other similar Liens arising in the ordinary course of business securing
obligations that (i) are not overdue for a period of more than 30 days and
(ii) individually or together with all other Permitted Liens outstanding on any
date of determination do not materially adversely affect the use of the property
to which they relate; (c) pledges or deposits in the ordinary course of business
to secure obligations under workers’ compensation laws or similar legislation or
to secure public or statutory obligations; (d) deposits to secure the
performance of bids, trade contracts and leases (other than Debt), statutory
obligations, surety bonds (other than bonds related to judgments or litigation),
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (e) Liens securing judgments (or the payment of
money not constituting a Default under Section 6.01(g) or securing appeal or
other surety bonds related to such judgments, (f) Permitted Encumbrances,
(g) Liens created under the Third Lien Pledge Agreement, dated August 7, 2006,
from USE Overseas to Silver Point Finance, LLC (including as amended in
accordance with the Intercreditor Agreement) provided that such Liens are
subject to the terms of the Intercreditor Agreement and (h) any Liens created or
outstanding with the prior written consent of the First Lien Collateral Agent.

 

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“Person” means an individual, firm, company, partnership, corporation (including
a business trust), limited liability company, joint stock company, trust, any
association, joint venture or other entity, or a government or any political
subdivision or agency thereof (in each case whether or not having a separate
legal personality).

“Phase I Completion” has the meaning specified in the Equity Support Agreement.

“Phase II Completion” has the meaning specified in the Equity Support Agreement.

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

“Platform” has the meaning specified in Section 8.02(b).

“Pledgors” means USE Overseas and Marathon.

“Power and Gas Sales Agreements” has the meaning specified in the Preliminary
Statements.

“Power Purchase Agreement” has the meaning specified in the Preliminary
Statements.

“PPI” means, with respect to any period, the U.S. Producers Price Index for
finished goods (WPUSOP 3110) for such period.

“Preferred Interests” means, with respect to any Person, Equity Interests issued
by such Person that are entitled to a preference or priority over any other
Equity Interests issued by such Person upon any distribution of such Person’s
property and assets, whether by dividend or upon liquidation.

“Prepayment Amount” has the meaning specified in Section 2.06(b)(vii).

“Prepayment Date” has the meaning specified in Section 2.06(b)(vii).

“Prepayment Notice” has the meaning specified in Section 2.06(b)(vii).

“Project” means the Acquired Assets plus all additional facilities constructed
and assets acquired by the Borrower or its Subsidiaries in connection with the
Expansion.

“Projected Cash Flow Available for Debt Service” means, for any period, (a) the
amount of Revenues projected during such period minus (b) the aggregate amount
of operating expenses of the Borrower and its Subsidiaries projected to be paid
during such period in accordance with the Loan Documents, minus (c) the
aggregate amount of Capital Expenditures of the Borrower and its Subsidiaries
projected to be paid in cash during such period in accordance with the Loan
Documents, in each case calculated by the Borrower in accordance with the
provisions of Section 1.03.

 

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“Projected Debt Service” means for, any period, the sum of any payments
projected to be due, without duplication, in respect of the Secured Obligations
and the Second Lien Obligations (other than any mandatory or voluntary
prepayments of principal (and interest payable in connection therewith) required
or permitted under the Loan Documents and the Second Lien Loan Documents),
whether for principal, interest, fees or otherwise during such period,
calculated in accordance with Section 1.03; provided that with respect to
interest payments, “Projected Debt Service” shall include actual and (without
duplication) scheduled payments projected to be paid to the Borrower under the
Initial Interest Rate and Currency Hedge Agreement and any Replacement Interest
Rate and Currency Hedge Agreement during such period.

“Projected Debt Service Coverage Ratio” means, for any period, the ratio of
(a) Projected Cash Flow Available for Debt Service to (b) Projected Debt
Service, in each case, for such period.

“Proven Reserve Coverage Ratio” means, with respect to any date, the ratio of
(a) the PV-10 Value on such date to (b) the Consolidated Debt for Borrowed Money
of the Borrower and its Subsidiaries on such date.

“Proven Reserves” means the proven reserves of the Borrower’s and its
Subsidiaries’ natural gas properties as set forth in the Applicable Reserve
Report.

“Prudent Industry Practices” means those practices, methods, equipment,
specifications and standards of safety and performance, as are commonly used by
professional and reputable construction, engineering and operations and
maintenance firms performing engineering and construction or operations and
maintenance services in the United Kingdom power generation and natural gas
extraction industries for facilities similar to the Project that, in the
exercise of reasonable judgment and in light of the facts known at the time the
decision was made, are considered good, safe and prudent practices in connection
with the design and construction and operation and maintenance of equipment,
facilities and improvements, with commensurate standards of safety, performance,
dependability, efficiency and economy.

“Purchase and Sale Agreements” has the meaning specified in the Preliminary
Statements.

“PV-10 Value” means, as of any date of determination, the present value of
future cash flows from the Proven Reserves, utilizing the average of the
“Three-Year Strip Price” for natural gas (UK National Balancing Point) quoted on
the International Petroleum Exchange (or its successor) as of the date as of
which the information set forth in the relevant reserve report or certificate is
provided (as adjusted for basis differentials) and utilizing a 10% discount
rate.

“Quarterly Payment Date” has the meaning specified in the Intercreditor
Agreement.

 

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“Redeemable” means, with respect to any Equity Interest, any such Equity
Interest that (a) the issuer has undertaken to redeem at a fixed or determinable
date or dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or (b) is
redeemable at the option of the holder.

“Register” has the meaning specified in Section 8.07(d).

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

“Related Documents” means the Second Lien Loan Documents, the Material Project
Agreements and the Unsecured Hedge Agreements.

“Remaining Non-Par Call Term” means, as of any date of determination, the period
of time between such date of determination through and including the sixth
anniversary of the Borrowing.

“Replacement Material Project Agreement” has the meaning specified in
Section 6.01(u).

“Replacement Hedge Agreement” means, with respect to any Unsecured Hedge
Agreement, a Hedge Agreement entered into by the Loan Party party to such
Unsecured Hedge Agreement, as the case may be, and an Acceptable Hedge Provider
on identical economic terms to such Unsecured Hedge Agreement, as the case may
be, and on terms otherwise acceptable to the Required Lenders.

“Replacement Interest Rate and Currency Hedge Agreement” has the meaning
specified in Section 5.01(p)(ii).

“Required Lenders” means, at any time, Lenders owed or holding at least a
majority in interest of the sum of the aggregate principal amount of the
Advances outstanding at such time.

“Responsible Officer” means, with respect to (i) any Agent or Lender, an officer
of such Agent or Lender in the department responsible for administering the
Facility and (ii) any Loan Party, the chief executive officer, president, chief
financial officer, general manager, any other officer having substantially the
same authority and responsibility and any other officer having management
responsibility for matters related to the Project.

“Revenue Accounts” means the Dollar Revenue Account and the Sterling Revenue
Account.

“Revenues” shall mean, for any period, the sum, computed without duplication, of
all cash payments received by the Borrower and its Subsidiaries on a
Consolidated basis during such period (or, in the case of any future period,
projected by the Borrower to be received during such period), including, without
limitation, any tax refunds, pension plan reversions, Business Interruption
Insurance Proceeds, indemnity payments and

 

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purchase price adjustments received in connection with any purchase and sale
agreement. Revenues shall exclude, to the extent included, (a) proceeds of Debt,
(b) Insurance Proceeds paid in respect of any Casualty Event and (c) proceeds of
equity contributions to the Borrower or any of its Subsidiaries.

“RGS” has the meaning specified in the Preliminary Statements.

“S&P” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill
Companies, Inc., and its successors.

“Scottish Power Purchase and Sale Agreement” has the meaning specified in the
Preliminary Statements.

“Second Lien Administrative Agent” has the meaning specified in the Second Lien
Loan Documents.

“Second Lien Collateral Agent” has the meaning specified in the Second Lien Loan
Documents.

“Second Lien Credit Agreement” means the Second Lien Credit Agreement, dated as
of the date hereof, among the Borrower, Credit Suisse, as second lien
administrative agent and second lien collateral agent, the lenders party thereto
and Credit Suisse Securities, as sole lead arranger and sole bookrunner.

“Second Lien Facility” has the meaning specified in the Preliminary Statements.

“Second Lien Loan Documents” means the “Loan Documents” as defined in the Second
Lien Credit Agreement and all other instruments, agreements and other documents
evidencing or governing the Second Lien Obligations or providing for any
guaranty or other right in respect thereof.

“Second Lien Obligations” means the “Obligations” under and as defined in the
Second Lien Credit Agreement.

“Secured Obligations” means the “First Lien Obligations” as defined in the
Intercreditor Agreement.

“Security Agreement” has the meaning specified in Section 3.01(a)(iii).

“Single Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, subject to Title IV of ERISA, that (a) is
maintained for employees of any Loan Party or any ERISA Affiliate and no Person
other than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been or were to
be terminated.

“Solvent” and “Solvency” mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total

 

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amount of liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature and (d) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

“SPEM” has the meaning specified in the Preliminary Statements.

“SPGL” has the meaning specified in the Preliminary Statements.

“Sponsor Funding Account” has the meaning specified in the Intercreditor
Agreement.

“Sponsor Prepayment Amount Notice” means “Prepayment Amount Notice” as defined
in the Equity Support Agreement.

“Sponsor Prepayment Contribution” means “Prepayment Contribution” as defined in
the Equity Support Agreement.

“Sponsor Prepayment Event” means “Prepayment Event” as defined in the Equity
Support Agreement.

“Sterling”, “Pound Sterling” and the sign “£” each means the lawful currency of
the United Kingdom.

“Sterling Expansion Account” has the meaning specified in the Intercreditor
Agreement.

“Sterling Revenue Account” has the meaning specified in the Intercreditor
Agreement.

“Subordinated Debt” means any other Debt of any Loan Party that is subordinated
to the Obligations of such Loan Party under the Loan Documents on, and that
otherwise contains, terms and conditions satisfactory to the Required Lenders.

“Subsidiary” of any Person means any firm, company, corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the right or power to direct, in the case of any entity of
which such Person or any of its Subsidiaries is a general partner,

 

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or both the beneficial ownership of and the right or power to direct, in any
other case, such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

“Synthetic Debt” means, with respect to any Person, without duplication of any
clause within the definition of “Debt,” all (a) Obligations of such Person under
any lease that is treated as an operating lease for financial accounting
purposes and a financing lease for tax purposes (i.e., a “synthetic lease”),
(b) Obligations of such Person in respect of transactions entered into by such
Person, the proceeds from which would be reflected on the financial statements
of such Person in accordance with GAAP as cash flows from financings at the time
such transaction was entered into (other than as a result of the issuance of
Equity Interests) and (c) Obligations of such Person in respect of other
transactions entered into by such Person that are not otherwise addressed in the
definition of “Debt” or in clause (a) or (b) above that are intended to function
primarily as a borrowing of funds (including, without limitation, any minority
interest transactions that function primarily as a borrowing).

“Taxes” has the meaning specified in Section 2.11(a).

“TCT Maintenance Agreement” means the Field Support Services Agreement, dated
August 7, 2006, entered into between TransCanada Turbines UK Limited and Viking
Gas.

“TCW” has the meaning specified in the Preliminary Statements.

“TCW Purchase and Sale Agreement” has the meaning specified in the Preliminary
Statements.

“Total Leverage Ratio” means, with respect to any period, the ratio of (a) the
Consolidated Debt for Borrowed Money of the Borrower and its Subsidiaries on the
last day of such period to (b) EBITDA for the consecutive 12-month period
immediately preceding the last day of such period.

“Transaction” has the meaning specified in the Preliminary Statements.

“Transaction Documents” means, collectively, the Loan Documents and the Related
Documents.

“Transitional Services Agreement” has the meaning specified in the Preliminary
Statements.

“Treasury Rate” means, with respect to the calculation of any Make-Whole Fixed
Rate in connection with the voluntary prepayment of any Advance, the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at least five
(5) Business Days prior to the

 

29

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date fixed for such prepayment (or, if such Statistical Release is no longer
published, any publicly available source for similar market data)) most nearly
equal to the Remaining Non-Par Call Term; provided, however, that if the
Remaining Non-Par Call Term is not equal to the constant maturity of a United
States Treasury security for which a weekly yield is given, the Treasury Rate
will be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) form the weekly average yields of United States Treasury securities
for which such yields are given, except that if the Remaining Non-Par Call Term
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

“Type” refers to the distinction between Advances bearing interest at the Base
Rate and Advances bearing interest at the Eurodollar Rate.

“UK Debenture” has the meaning specified in Section 3.01(a)(iv).

“UK Energy” has the meaning specified in the Preliminary Statements.

“UK GAAP” means generally accepted accounting principles, as in effect in the
United Kingdom and on the date of determination.

“UK Guarantor” means any Guarantor incorporated under the laws of England and
Wales.

“UK Share Charge” has the meaning specified in Section 3.01(a)(vii).

“Unsecured Hedge Agreements” means the Gas Hedge Agreement, the Carbon Credit
Hedge Agreement, the Initial Interest Rate and Currency Hedge Agreement, any
Replacement Interest Rate and Currency Hedge Agreement and any Replacement Hedge
Agreement entered into with respect to any of the foregoing.

“US GAAP” means generally accepted accounting principles, as in effect in the
United States of America and on the date of determination.

“USE Overseas” has the meaning specified in the Preliminary Statements.

“USE Overseas Pledge Agreement” has the meaning specified in
Section 3.01(a)(ix).

“USEY” has the meaning specified in the Preliminary Statements.

“Viking BV” means Viking Petroleum B.V., a company organized under the laws of
The Netherlands.

“Viking Gas” has the meaning specified in the Preliminary Statements.

“Viking Petroleum” has the meaning specified in the Preliminary Statements.

 

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“VIP” means Viking International Petroleum Limited, a company organized under
the laws of England and Wales.

“Voting Interests” means shares of capital stock issued by a corporation, or
equivalent Equity Interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.

“VTEX” has the meaning specified in the Preliminary Statements.

“VTEX Contribution Agreement” has the meaning specified in the Preliminary
Statements.

“Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that
is maintained for employees of any Loan Party or in respect of which any Loan
Party could have liability.

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.

“Working Capital Account” has the meaning specified in the Intercreditor
Agreement.

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In
this Agreement and the other Loan Documents the definitions of terms shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise:

(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, restated, supplemented, modified,
renewed or extended as provided therein and in the other Loan Documents;

(b) any reference herein to any Person shall be construed to include such
Person’s permitted successors and assigns;

(c) the words “herein,” “hereof” and “hereunder,” and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof;

(d) all references herein to Sections shall be construed to refer to Sections of
this Agreement;

 

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(e) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights; and

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

SECTION 1.03. Accounting Terms. (a) Use of GAAP. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.

(b) Determination of Projected Debt Service Coverage Ratio. For purposes of this
Agreement, the calculation of the Projected Debt Service Coverage Ratio for any
relevant period shall be made by the Borrower, using data and assumptions
consistent with the Base Case Model, except:

(i) to the extent that any such data or assumptions are inconsistent with
(whether more or less favorable to the Borrower than those contained in) the
then-applicable Annual Budget and Operating Plan for all or any portion of the
applicable future period, the relevant determinations of the Projected Debt
Service Coverage Ratio shall be made using the data and assumptions set forth in
the then applicable Annual Budget and Operating Plan;

(ii) where the First Lien Administrative Agent in consultation with the
Independent Engineer (if applicable) has notified the Borrower that the data or
assumptions contained in the Base Case Model are inconsistent with (whether more
or less favorable to the Borrower than) the most recent reports delivered
pursuant to Section 5.03, the relevant determinations of the Projected Debt
Service Coverage Ratio shall be made using data and assumptions which are
consistent with the then-applicable Annual Budget and Operating Plan and most
recent reports delivered pursuant to Section 5.03 or which are otherwise
approved by the First Lien Administrative Agent;

(iii) with respect to any Floating Rate Loan for which a Hedge Agreement that
has the economic effect of swapping the Borrower’s floating rate interest
exposure with respect to such Floating Rate Loan for fixed rate interest
exposure is not in place for any period (or part thereof) for which a
calculation of the Projected Debt Service Coverage Ratio is to be made for
purposes of this Agreement, such calculation shall be made assuming that
interest will accrue on such Floating Rate Loan during such period at the rate
equal to the rate applicable to such Floating Rate Loan as of the date of such
calculation; and

(iv) with respect to any Floating Rate Loan for which a Hedge Agreement that has
the economic effect of swapping the Borrower’s floating rate interest exposure
with respect to such Floating Rate Loan for fixed rate interest exposure is in
place for any entire period with respect to which a calculation of the Projected
Debt Service Coverage is to be made for purposes of this Agreement (and as to
which no termination event has occurred), the relevant determinations of the
Projected Debt Service Coverage Ratio for

 

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such period shall be made assuming that interest will accrue on such Floating
Rate Loan during such period at a rate equal to the sum of the Applicable Margin
for the relevant period plus the rate utilized by the Borrower as the “Fixed
Rate Payer” under, and as defined in, the relevant Hedge Agreement to determine
the amount payable to the Hedge Provider party thereto.

(c) Rounding. Whenever either the Debt Service Coverage Ratio or the Projected
Debt Service Coverage Ratio is required to be calculated under this Agreement,
such calculation shall be computed to the nearest two (2) decimal places.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make a single Advance to the Borrower on
the Effective Date, with the amount of the Advance being equal to the amount set
forth opposite such Lender’s name on Schedule I hereto. The Borrowing shall
consist of the respective Advances made simultaneously by the Lenders to the
Borrower. Amounts borrowed under this Section 2.01 and repaid or prepaid may not
be reborrowed.

SECTION 2.02. Making the Advances. (a) The Borrowing shall be made on notice,
given not later than 10:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of the Borrowing
consisting of Eurodollar Rate Advances, or the date of the proposed Borrowing in
the case of the Borrowing consisting of Base Rate Advances, by the Borrower to
the First Lien Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier or electronic communication. Such notice of the
Borrowing (the “Notice of Borrowing”) shall be by telephone, confirmed
immediately in writing, or by telecopier or electronic communication, in
substantially the form of Exhibit B hereto, specifying therein the requested
(i) date of the Borrowing, (ii) Type of Advances comprising the Borrowing, and
(iii) in the case of the Borrowing consisting of Eurodollar Rate Advances,
initial Interest Period for each such Advance. Each Lender shall, before 11:00
A.M. (New York City time) on the date of the Borrowing, make available for the
account of its Applicable Lending Office to the First Lien Administrative Agent
at the First Lien Administrative Agent’s Account, in same day funds, such
Lender’s ratable portion of the Borrowing. After the First Lien Administrative
Agent’s receipt of such funds and upon fulfillment of the conditions set forth
in Article III, the First Lien Administrative Agent will make such funds
available to the Borrower by transferring such funds to the Accounts as directed
by the Borrower and as contemplated by the Intercreditor Agreement.

(b) Anything in subsection (a) above to the contrary notwithstanding, the
Borrower may not select Eurodollar Rate Advances for the Borrowing if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Sections 2.07, 2.08 or 2.09.

(c) The Notice of Borrowing shall be irrevocable and binding on the Borrower. In
the case of where the Borrowing is to be comprised of Eurodollar Rate Advances,

 

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the Borrower shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the
date specified in the Notice of Borrowing for the Borrowing the conditions set
forth in Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of the Borrowing when such Advance, as
a result of such failure, is not made on such date.

(d) Unless the First Lien Administrative Agent shall have received notice from a
Lender that such Lender will not make available to the First Lien Administrative
Agent such Lender’s ratable portion of the Borrowing, the First Lien
Administrative Agent may assume that such Lender has made such portion available
to the First Lien Administrative Agent on the date of the Borrowing in
accordance with subsection (a) of this Section 2.02 and the First Lien
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the First Lien
Administrative Agent, such Lender and the Borrower severally agree to repay or
pay to the First Lien Administrative Agent forthwith on demand such
corresponding amount and to pay interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid or paid to the First Lien Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at such time under Section 2.04 to
Advances comprising the Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall repay to the First Lien Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Lender’s Advance as part of the Borrowing for purposes of this Agreement.

(e) The failure of any Lender to make the Advance to be made by it as part of
the Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of the Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of the Borrowing.

SECTION 2.03. Repayment of Advances. The Borrower shall repay to the First Lien
Administrative Agent for the ratable account of the Lenders the aggregate
outstanding principal amount of the Advances in quarterly installments equal to
1.00% of the Borrowing outstanding on the Effective Date immediately following
the Borrowing, beginning on March 31, 2007 and continuing on the last Business
Day of each June, September, December and March thereafter and ending on
March 31, 2013 (which amounts shall be reduced as a result of the application of
prepayments in accordance with Section 2.06), and the Borrower shall repay the
remaining outstanding amount of the Borrowing on August 7, 2013.

SECTION 2.04. Interest. (a) Scheduled Interest. The Borrower shall pay interest
on the unpaid principal amount of each Advance owing to each Lender from the
date of such Advance until such principal amount shall be paid in full, at the
following rates per annum:

(i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in
effect from time to time plus (y) the Applicable Margin in effect from time to
time, payable in

 

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arrears quarterly on the last Business Day of each December, March, June and
September during such periods and on the date such Base Rate Advance shall be
Converted or paid in full.

(ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for such
Interest Period for such Advance plus (y) the Applicable Margin in effect from
time to time, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be Converted
or paid in full.

(b) Default Interest. Upon the occurrence and during the continuance of any
Event of Default, the Borrower shall pay interest (“Default Interest”) on
(i) the unpaid principal amount of the Advance owing to each Lender, payable in
arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate
per annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and
(ii) to the fullest extent permitted by law, the amount of any interest, fee or
other amount payable hereunder that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has
accrued pursuant clause (a)(i) or (a)(ii) above and, in all other cases, on Base
Rate Advances pursuant to clause (a)(i) above.

(c) Notice of Interest Period and Interest Rate. Promptly after receipt of the
Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant
to Section 2.07 or a notice of selection of an Interest Period pursuant to the
terms of the definition of “Interest Period,” the First Lien Administrative
Agent shall give notice to the Borrower and each Lender of the applicable
Interest Period and the applicable interest rate determined by the First Lien
Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

SECTION 2.05. Agents’ Fees. The Borrower shall pay to each Agent for its own
account such fees as may from time to time be agreed between the Borrower and
such Agent.

SECTION 2.06. Prepayments. (a) Optional. (i) The Borrower may, upon at least one
Business Day’s notice in the case of Base Rate Advances and three Business Days’
notice in the case of Eurodollar Rate Advances, in each case to the First Lien
Administrative Agent stating the proposed date and aggregate principal amount of
the prepayment, which shall be in an aggregate amount of U.S.$1,000,000 or
integral multiples in excess thereof (unless such amount represents the entire
amount outstanding), and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances in whole or ratably in
part, together with (A) in the case of the prepayment of each Eurodollar Rate
Advance, and in the case of the prepayment in full of Base Rate Advances,
accrued interest to the date of such prepayment on the aggregate principal
amount prepaid, (B) any Make-Whole Premium or prepayment penalty payable
pursuant to clause (ii) below and (C) if any prepayment of a Eurodollar Rate
Advance is

 

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made on a date other than the last day of an Interest Period for such Advance,
such Borrower shall also pay any amounts owing pursuant to Section 8.04(c). Each
such prepayment of Advances shall be applied ratably to the quarterly
installments and final installment due under Section 2.03. Prepayments made
pursuant to this Section 2.06(a) may not be declined by any Lender.

(ii) In connection with any prepayment under this Section 2.06(a), the Borrower
shall pay (A) if the prepayment occurs during the period from the date of the
Borrowing to and including the first anniversary of the Borrowing, the
Make-Whole Premium or (B) a prepayment penalty on the principal amount so
prepaid equal to: (1) 2.00% of the aggregate principal amount of Advances
prepaid, if the prepayment occurs during the period from but excluding the first
anniversary of the date of the Borrowing to and including the second anniversary
of the date of the Borrowing, and (2) 1.00% of the aggregate principal amount of
Advances prepaid, if the prepayment occurs during the period from but excluding
the second anniversary of the date of the Borrowing to and including the third
anniversary of the date of the Borrowing.

(b) Mandatory. (i) The Borrower shall, on each Excess Cash Flow Payment Date,
prepay an aggregate principal amount of the Advances in an amount equal to
(A) prior to Phase II Completion, 90% of the Excess Cash Flow for such Excess
Cash Flow Payment Date and (B) following Phase II Completion, 100% of the Excess
Cash Flow for such Excess Cash Flow Payment Date. Each such prepayment shall be
applied ratably to the quarterly installments and final installment due under
Section 2.03.

(ii) The Borrower shall, within 30 days of (a) in the case of clauses (b) and
(c) of the definition of “Net Cash Proceeds”, receipt of any Net Cash Proceeds
by any Loan Party or any of its Subsidiaries and (b) in the case of clause
(a) of the definition of “Net Cash Proceeds”, the expiration of the 6-month
period for reinvestment in capital assets as set forth therein (provided that
the Borrower shall have given written notice to the First Lien Administrative
Agent of its intention to reinvest such amounts within 30 days of receipt of
such amounts), in each case, prepay an aggregate principal amount of the
Advances comprising the Borrowing in an amount equal to the amount of such Net
Cash Proceeds; provided, however, that, with respect to amounts described in
clause (c) of the definition of “Net Cash Proceeds”, the Borrower shall only be
required to prepay an aggregate principal amount of the Advances comprising the
Borrowing in an amount equal to 50% of the amount of such Net Cash Proceeds.
Each such prepayment shall be applied ratably to the quarterly installments and
final installment due under Section 2.03.

(iii) The Borrower shall prepay an aggregate principal amount of the Advances
comprising the Borrowing in an amount equal to the amount of any Insurance
Proceeds received by the Borrower or the First Lien Collateral Agent to the
extent contemplated by Sections 7.11 and 7.12 of the Intercreditor Agreement.
Each such prepayment shall be applied ratably to the quarterly installments and
final installment due under Section 2.03.

(iv) Within ten (10) Business Days of Phase II Completion, the Borrower shall
prepay an aggregate principal amount of the Advances comprising the Borrowing
equal to the amount (if any) remaining in the Expansion Accounts and not
otherwise required to fund Expansion Costs. Each such prepayment shall be
applied ratably to the quarterly installments and final installment due under
Section 2.03.

 

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(v) Upon the occurrence of a Sponsor Prepayment Event, within ten (10) Business
Days of receipt by the Borrower and the Sponsor of a Sponsor Prepayment Amount
Notice, the Borrower shall prepay an aggregate principal amount of the Advances
comprising the Borrowing equal to the amount of the Sponsor Prepayment
Contribution required to be made by the Sponsor in connection with such Sponsor
Prepayment Event pursuant to Section 2.1.1(c) of the Equity Support Agreement;
provided that the application of any Sponsor Prepayment Contribution to the
prepayment of the Advances in accordance with the terms of the Intercreditor
Agreement shall be deemed to satisfy the Borrower’s obligations under this
Section 2.06(b)(v). Each such prepayment shall be applied ratably to the
quarterly installments and final installment due under Section 2.03.

(vi) All prepayments under this subsection (b) shall be made together with
accrued interest to the date of such prepayment on the principal amount prepaid,
together with any amounts owing pursuant to Section 8.04(c).

(vii) If at any time the Borrower is required to make a prepayment pursuant to
this subsection (b), each Lender, at its option, may elect not to accept such
prepayment. The First Lien Administrative Agent shall give each Lender written
notice of any prepayment required to be made by the Borrower pursuant to this
subsection (b) (a “Prepayment Notice”) indicating the date on which such
prepayment shall be made (the “Prepayment Date”) (which date shall be ten
Business Days after the date of such Payment Notice) and the amount of such
prepayment (the “Prepayment Amount”). Any Lender declining such prepayment (a
“Declining Lender”) shall give written notice to the First Lien Administrative
Agent by 11:00 A.M. (New York City time) at least seven Business Days prior to
the Prepayment Date (the “Declining Date”). Promptly following the Declining
Date, the First Lien Administrative Agent shall notify (a “Initial Declined
Amount Notice”) the Lenders other than the Declining Lenders (such Lenders being
the “Accepting Lenders”) as to the amounts that would otherwise have been
applied to prepay the Advances, as applicable, owing to the Declining Lenders
(the “Initial Declined Amount”). The Accepting Lenders may elect to accept their
ratable share of the Initial Declined Amount as an additional prepayment and
shall notify the First Lien Administrative Agent in writing of such election by
11:00 A.M. (New York City time) at least five Business Days prior to the
Prepayment Date. To the extent (A) any Lender fails to respond in writing to the
Prepayment Notice at least seven Business Days prior to the Prepayment Date or
(B) any Accepting Lender fails to respond in writing to the Initial Declined
Amount Notice at least five Business Days prior to the Prepayment Date, then
such Lender, with respect to such Prepayment Amount, or such Accepting Lender,
with respect to such Initial Declined Amount, shall be deemed to have declined
to accept its pro rata share of such Prepayment Amount or Initial Declined
Amount, as the case may be.

(viii) If at any time the First Lien Administrative Agent shall have received
funds as a result of the Sponsor’s making of a Sponsor Prepayment Contribution
and any

 

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such funds have not been applied to prepayment of the Advances in accordance
with Section 2.06(b)(v) as a result of the Declining Lenders declining such
prepayment in accordance with Section 2.06(b)(vii) above, the First Lien
Administrative Agent shall promptly cause such funds to be transferred to the
Account Bank for deposit into the Dollar Revenue Account.

(c) Application of Prepayments. (i) In connection with any voluntary prepayments
by the Borrower of the Advances pursuant to Section 2.06(a), any voluntary
prepayment thereof shall be applied first to Base Rate Advances to the full
extent thereof before application to Eurodollar Rate Advances, in each case in a
manner that minimizes the amount of any payments required to be made by the
Borrower pursuant to Section 8.04(c).

(ii) In connection with any mandatory prepayments by the Borrower of the
Advances pursuant to Section 2.06(b), such prepayments shall be applied on a pro
rata basis to the then outstanding Advances being prepaid irrespective of
whether such outstanding Advances are Base Rate Advances or Eurodollar Rate
Advances; provided that if no Lenders exercise the right to waive a given
mandatory prepayment of the Advances pursuant to Section 2.06(b)(vii), then,
with respect to such mandatory prepayment, the amount of such mandatory
prepayment shall be applied first to the Advances that are Base Rate Advances to
the full extent thereof before application to Advances that are Eurodollar Rate
Advances in a manner that minimizes the amount of any payments required to be
made by the Borrower pursuant to Section 8.04(c).

SECTION 2.07. Conversion of Advances. (a) Optional. The Borrower may on any
Business Day, upon notice given to the First Lien Administrative Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of this Section and
Sections 2.08 and 2.09, Convert all Advances of one Type comprising the
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances.
Each such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted, and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for each such Advance. Each notice of Conversion shall
be irrevocable and binding on the Borrower.

(b) Mandatory. (i) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising the Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than U.S.$5,000,000, such Advances shall
automatically Convert into Base Rate Advances and shall not thereafter be
converted into Eurodollar Rate Advances.

(ii) If the Borrower shall fail to select the duration of any Interest Period
for any Eurodollar Rate Advances in accordance with the provisions contained in
the definition of “Interest Period” in Section 1.01, the First Lien
Administrative Agent will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor and subject to the limitations set
forth in the definition of “Interest Period”, be deemed to have an Interest
Period of the same duration as the Interest Period then ending.

 

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(iii) Upon the occurrence and during the continuance of any Event of Default,
(x) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.

SECTION 2.08. Increased Costs. (a) If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or of making, funding
or maintaining Eurodollar Rate Advances (excluding, for purposes of this
Section 2.08, any such increased costs resulting from (x) taxes (as to which
Section 2.11 shall govern) and (y) changes in the basis of taxation of overall
net income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender is organized or has
its Applicable Lending Office or any political subdivision thereof), then the
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the First Lien Administrative Agent), pay to the First Lien
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.

(b) If, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender or any
corporation controlling such Lender as a result of or based upon the existence
of such Lender’s commitment to lend hereunder and other commitments of such
type, then, upon demand by such Lender or such corporation (with a copy of such
demand to the First Lien Administrative Agent), the Borrower shall pay to the
First Lien Administrative Agent for the account of such Lender, from time to
time as specified by such Lender, additional amounts sufficient to compensate
such Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender’s commitment to lend. A certificate as to such amounts submitted
to the Borrower by such Lender shall be conclusive and binding for all purposes,
absent manifest error.

(c) If, with respect to any Eurodollar Rate Advances under the Facility, the
Required Lenders notify the First Lien Administrative Agent that the Eurodollar
Rate for any Interest Period for such Advances will not adequately reflect the
cost to such Lenders of making, funding or maintaining their Eurodollar Rate
Advances for such Interest Period, the First Lien Administrative Agent shall
forthwith so notify the Borrower and the Lenders, whereupon (i) each such
Eurodollar Rate Advance under the Facility will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance
and (ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the First Lien Administrative
Agent shall notify such Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.

 

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(d) In the event that a Lender demands payment from the Borrower for amounts
owing pursuant to subsection (a) or (b) of this Section 2.08 or is unable to
make Eurodollar Rate Advances as permitted in Section 2.09, the Borrower may,
upon payment of such amounts and subject to the requirements of Sections 8.04
and 8.07, substitute for such Lender another financial institution, which
financial institution shall assume the Commitments of such Lender and purchase
the Advances owing to, and the Notes held by, such Lender in accordance with
Section 8.07, provided, however, that (i) no Event of Default shall have
occurred and be continuing, (ii) the Borrower shall have satisfied all of its
obligations in connection with the Transaction Documents with respect to such
Lender, and (iii) if such assignee is not an Assignee permitted under
Section 8.07, (A) such assignee is reasonably acceptable to the First Lien
Administrative Agent and (B) the Borrower shall have paid to the First Lien
Administrative Agent a processing and recordation fee of U.S.$3,500.

SECTION 2.09. Illegality. Notwithstanding any other provision of this Agreement,
if any Lender shall notify the First Lien Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate
Advance will automatically, upon such demand, Convert into a Base Rate Advance
that bears interest at the rate set forth in Section 2.04(a)(i) and (b) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the First Lien Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

SECTION 2.10. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes, irrespective of any right of counterclaim
or set-off, not later than 11:00 A.M. (New York City time) on the day when due
in U.S. dollars to the First Lien Administrative Agent at the First Lien
Administrative Agent’s Account in immediately available funds. The First Lien
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or fees ratably (other than
amounts payable pursuant to Sections 2.08, 2.11 or 8.04(c)) to the Lenders for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.

(b) The Borrower hereby authorizes each Lender, if and to the extent payment
owed to such Lender is not made when due hereunder or under the Note held by
such Lender, to charge from time to time against any or all of the Borrower’s
accounts with such Lender any amount so due.

(c) All computations of interest based on the Base Rate (other than such
computations of the Base Rate that are based on the Federal Funds Rate) shall be
made by the First Lien Administrative Agent on the basis of a year of 365 or 366
days, as the case may be,

 

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and all computations of interest based on the Eurodollar Rate or the Federal
Funds Rate and of facility fees shall be made by the First Lien Administrative
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest or facility fees are payable. Each determination
by the First Lien Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.

(d) Whenever any payment hereunder or under the Notes shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.

(e) Unless the First Lien Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the First Lien
Administrative Agent may assume that the Borrower has made such payment in full
to the First Lien Administrative Agent on such date and the First Lien
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrower shall not have so made such
payment in full to the First Lien Administrative Agent, each Lender shall repay
to the First Lien Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the First Lien Administrative Agent, at the Federal Funds Rate.

SECTION 2.11. Taxes. (a) Subject to the exclusions and limitations of this
Section 2.11 and, if applicable, subject to compliance with Section 2.11(e), any
and all payments by the Borrower to or for the account of any Lender or the
First Lien Administrative Agent hereunder or under the Notes or any other
documents to be delivered hereunder shall be made, in accordance with
Section 2.10 or the applicable provisions of such other documents, free and
clear of and without deduction or withholding for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto imposed by the United States of America, the United Kingdom
or any other jurisdiction from which a Loan Party makes a payment hereunder, or
any political subdivisions thereof or therein, excluding, in the case of each
Lender and the First Lien Administrative Agent, taxes imposed on its overall net
income, branch profit taxes and franchise taxes imposed on it in lieu of net
income taxes, by the jurisdiction under the laws of which such Lender or the
First Lien Administrative Agent (as the case may be) is organized or in which is
located such Lender’s Applicable Lending Office (or the First Lien
Administrative Agent’s office from which its administration activities of the
Facility occur) or any jurisdiction otherwise in which such Lender or the First
Lien Administrative Agent is engaged in a trade or business or any political
subdivision thereof or therein and payments hereunder become subject to tax as a
result of such trade or business (all such non excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being hereinafter referred to as “Taxes”). If the
Borrower shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder or under any Note or any other documents to
be delivered hereunder to any Lender or

 

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the First Lien Administrative Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions or withholdings on
account of Taxes (including deductions applicable to additional sums payable
under this Section 2.11(a)) such Lender or the First Lien Administrative Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions or withholdings been required to be made, (ii) the
Borrower shall make such deductions or withholdings, and (iii) the Borrower
shall pay the full amount of Taxes deducted or withheld to the relevant taxation
authority or other authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any and all present or future stamp or
documentary or similar taxes or any other excise or property taxes, charges or
similar levies or value added tax or any other tax of a similar nature that
arise on account of any payment made or required to be made hereunder or under
the Notes or any other documents to be delivered hereunder or from the
execution, delivery, recording, enforcement or registration of, performance
under, or otherwise with respect to, this Agreement or the Notes or any other
documents to be delivered hereunder, together with all liabilities with respect
thereto (including penalties, interest and additions to tax) (hereinafter
referred to as “Other Taxes”).

(c) Without duplication of the Borrower’s obligation to pay increased amounts on
account of Taxes and Other Taxes pursuant to Sections 2.11(a) and (b),
respectively, the Borrower shall indemnify each Lender and the First Lien
Administrative Agent for and hold it harmless against the full amount of Taxes
and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section 2.11)
imposed on or paid by such Lender or the First Lien Administrative Agent (as the
case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. Such Lender or the First Lien
Administrative Agent (as the case may be) shall give prompt written notice to
the Borrower of receipt by a Responsible Officer of such Lender or the First
Lien Administrative Agent of notice of the imposition of any Tax or Other Tax.
Payment by the Borrower pursuant to this indemnification shall be made within 30
days from the date such Lender or the First Lien Administrative Agent (as the
case may be) makes written demand therefor. The failure of a Lender or the First
Lien Administrative Agent (as the case may be) to provide notice to the Borrower
shall not relieve the Borrower of any of its obligations under this
Section 2.11(c). Notwithstanding the foregoing, where notice is not given to the
Borrower within 90 days after a Responsible Officer of a Lender or the First
Lien Administrative Agent (as the case may be) receives written notice of the
assertion of Taxes or Other Taxes and the Borrower does not otherwise have
notice of such assertion, no indemnification shall be required for penalties
(including, for the avoidance of doubt and without limitation, penalty
interest), additions to tax and expenses imposed or accrued on such Taxes or
Other Taxes from the date 90 days after the receipt by a Responsible Officer of
such Lender or the First Lien Administrative Agent (as the case may be) of
written notice of the assertion of such taxes until 30 days after the date such
notice was actually received by the Borrower.

(d) Within 30 days after the date of any payment of Taxes, the Borrower shall
furnish to the First Lien Administrative Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing such
payment to the extent such a receipt is issued therefor, or other written proof
of payment thereof that is reasonably satisfactory to the First Lien
Administrative Agent. In the case of any payment hereunder or under the Notes or

 

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any other documents to be delivered hereunder by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the First Lien Administrative
Agent, at such address, an opinion of counsel acceptable to the First Lien
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of this subsection (d) and subsection (e), the terms “United States”
and “United States person” shall have the meanings specified in Section 7701 of
the Internal Revenue Code.

(e) Notwithstanding any provision to the contrary in this Agreement, on the date
a Person becomes a Lender hereunder, such Person agrees that, to the extent that
such Person is at such time legally entitled to do so, and at such other times
as reasonably requested by the Borrower or the First Lien Administrative Agent
in writing, such Person must provide to the Borrower and the First Lien
Administrative Agent two properly completed and duly executed originals of each
of the following, as applicable: (i) Form W-8ECI (in the case of a non-U.S.
Person claiming exemption from U.S. withholding because the income is
effectively connected with a U.S. trade or business), (ii) Form W-8BEN (in the
case of a non-U.S. Person claiming exemption from, or reduction of, U.S.
withholding tax under an income tax treaty or under the portfolio interest
exemption), (iii) with respect to any interest in this Agreement in which a
participation has been sold, a Form W-8IMY along with accompanying Form W-8BEN
(claiming exemption from withholding under the portfolio interest exemption),
(iv) any other applicable form, certificate or document necessary to establish
such non-U.S. Person’s entitlement to exemption from U.S. withholding tax or
reduced rate with respect to all payments to be made to such non-U.S. Person
under this Agreement, or (v) in the case of any other Person, Form W-9 (claiming
exemption from U.S. backup withholding tax), or any successor forms. Each Lender
agrees that from time to time after the date of this Agreement, when a lapse in
time or change in circumstances that is under the control of such Lender renders
the previous certification obsolete or inaccurate in any material respect, such
Lender will, to the extent that such Lender is at such time legally entitled to
do so, deliver to the Borrower and the First Lien Administrative Agent two new
accurate and complete original signed copies of the applicable certification
form. Notwithstanding anything to the contrary in this Section 2.11 (subject to
Section 2.11(g)), (i) a Lender shall only be entitled to payment on account of
or indemnification for Taxes or Other Taxes imposed by the United States of
America (including any political subdivision thereof or therein) if there is a
subsequent change of applicable treaty, law or regulation after the date of this
Agreement and in the event of such change of applicable treaty, law or
regulation, the Borrower will be liable for payment on account of or
indemnification for an amount equal to the increase in Taxes or Other Taxes that
results from such subsequent change of treaty, law or regulation, and (ii) a
Lender shall not be entitled to a payment on account of or indemnification under
Section 2.11(a) or (c) with respect to Taxes or Other Taxes imposed by the
United States of America for any period with respect to which a Lender has
failed to provide the Borrower with the appropriate form, certificate or other
document described in this Section 2.11(e) (other than if such failure is due to
a change in law, or in the interpretation or application thereof, occurring
subsequent to the date on which a form, certificate or other document originally
was required to be provided, or if such form, certificate or other document
otherwise is not required under this Section 2.11(e)); provided, however, that
should a Lender become subject to Taxes or Other Taxes imposed by the United
States of America because of its failure to deliver a form, certificate or other
document required hereunder, the Borrower shall take such steps as the Lender
shall reasonably request to assist the Lender to recover such Taxes or Other
Taxes.

 

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(f) To the extent the United Kingdom imposes a withholding tax on any payments
hereunder, each Lender that is entitled to an exemption from or a reduction of
U.K. withholding tax shall take such steps as may be reasonably practical to
permit such payments to be made without such withholding tax or at a reduced
rate (including submitting any forms required by applicable law), provided that
no Lender shall have any obligation under this clause (f) with respect to U.K.
withholding tax if in the reasonable judgment of such Lender such compliance
would subject such Lender to any material cost or expense not reimbursed or
indemnified pursuant to the terms of this Agreement or would otherwise prejudice
such Lender’s interest in any material aspect.

(g) Notwithstanding any provision to the contrary in this Agreement, in the
event that a Lender that is not an Initial Lender and who purchased its interest
in this Agreement without the consent of the Borrower pursuant to
Section 8.07(a), seeks (i) payment of additional amounts pursuant to
Section 2.11(a), (ii) payment of Other Taxes pursuant to Section 2.11(b), or
(iii) indemnification for Taxes or Other Taxes pursuant to Section 2.11(c), the
amount of any such payment or indemnification will be no greater than what it
would have been had the Initial Lender not transferred, assigned or sold its
interest in this Agreement. If the amount of payment or indemnification to which
the Initial Lender was entitled had been increased as provided under
Section 2.11(e) (the “Increased Base Amount”), the amount of payment or
indemnification to which the Lender who purchased the interest from the Initial
Lender is entitled shall be no less than the lesser of (i) the Increased Base
Amount and (ii) the Lender’s otherwise applicable amount under this
Section 2.11.

SECTION 2.12. Sharing of Payments, Etc. If any Lender shall obtain at any time
any payment (whether voluntary, involuntary, through the exercise of any right
of set off, or otherwise, other than as a result of an assignment pursuant to
Section 8.07) (a) on account of Obligations due and payable to such Lender
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of Obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender’s ratable share
(according to the proportion of (i) the

 

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purchase price paid to such Lender to (ii) the aggregate purchase price paid to
all Lenders) of such recovery together with an amount equal to such Lender’s
ratable share (according to the proportion of (i) the amount of such other
Lender’s required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered; provided further
that, so long as the Obligations under the Loan Documents shall not have been
accelerated, any excess payment received by any Lender shall be shared on a pro
rata basis only with other Lenders. Each of the Loan Parties agrees that any
Lender so purchasing an interest or participating interest from another Lender
pursuant to this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such interest or participating interest, as the case may be, as fully as if
such Lender were the direct creditor of the respective Loan Party in the amount
of such interest or participating interest, as the case may be.

SECTION 2.13. Use of Proceeds. The proceeds of the Advances shall be available
(and the Borrower agrees that it shall use such proceeds) solely on the
Effective Date, together with the proceeds of the Second Lien Facility and the
Equity Contribution, (a) to pay the purchase price of the Acquisition, (b) to
fund the Working Capital Account, the Debt Service Reserve Account, the
Additional Debt Service Reserve Account, the Debt Service During Development
Account and the Major Maintenance Account in accordance with the provisions of
the Intercreditor Agreement, (c) to pay the fees, costs and expenses incurred in
connection with the Transaction and the Facility (including fees payable in
connection with any Hedge Agreements entered into in accordance with the Loan
Documents) and certain other transactions contemplated thereby and (d) to
deposit any remaining funds into the Expansion Accounts to fund certain costs
associated with the Expansion in accordance with the provisions of the Loan
Documents. Notwithstanding the foregoing, none of the proceeds of the Advances
to be made under this Agreement may be used in any way that infringes with
Section 151 of the Companies Act unless the use of such proceeds is lawfully
permitted by virtue of the procedure set out in Sections 155 to 158 of the
Companies Act.

SECTION 2.14. Evidence of Debt. (a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Advance owing to such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder. The Borrower agrees that upon
notice by any Lender to the Borrower (with a copy of such notice to the First
Lien Administrative Agent) to the effect that a promissory note or other
evidence of indebtedness is required or appropriate in order for such Lender to
evidence (whether for purposes of pledge, enforcement or otherwise) the Advances
owing to, or to be made by, such Lender, the Borrower shall promptly execute and
deliver to such Lender, with a copy to the First Lien Administrative Agent, a
Note, in substantially the form of Exhibit A, payable to the order of such
Lender in a principal amount equal to the amount set forth opposite such
Lender’s name on Schedule I hereto. All references to Notes in the Loan
Documents shall mean Notes, if any, to the extent issued hereunder.

(b) The Register maintained by the First Lien Administrative Agent pursuant to
Section 8.07(d) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of the Borrowing made hereunder, the Type of Advances comprising the
Borrowing and, if appropriate, the Interest

 

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Period applicable thereto, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder, and (iv) the amount of any sum received by the First Lien
Administrative Agent from the Borrower hereunder and each Lender’s share
thereof.

(c) Entries made in good faith by the First Lien Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement, absent manifest
error; provided, however, that the failure of the First Lien Administrative
Agent or such Lender to make an entry, or any finding that an entry is
incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement.

ARTICLE III

CONDITIONS OF LENDING AND DRAWINGS FROM THE EXPANSION ACCOUNTS

SECTION 3.01. Conditions Precedent to Borrowing. Section 2.01 of this Agreement
shall become effective on and as of the first date (the “Effective Date”) on
which the following conditions precedent have been satisfied (and the obligation
of each Lender to make Advances hereunder is subject to the satisfaction of such
conditions precedent before or concurrently with the Effective Date):

(a) The First Lien Administrative Agent shall have received on or before the
Effective Date the following, each dated such day (unless otherwise specified),
in form and substance satisfactory to the First Lien Administrative Agent
(unless otherwise specified) and (except for the Notes) in sufficient copies for
each Lender:

(i) The Notes payable to the order of the Lenders to the extent requested by the
Lenders pursuant to the terms of Section 2.14.

(ii) A guaranty in substantially the form of Exhibit E hereto (the “Guaranty”),
duly executed by each Guarantor.

(iii) A first lien security agreement in substantially the form of Exhibit F
hereto (the “Security Agreement”), duly executed by the Borrower, together with:

(A) certificates representing the Initial Pledged Equity referred to therein
accompanied by undated stock powers executed in blank and instruments evidencing
the Initial Pledged Debt referred to therein, indorsed in blank;

(B) evidence of the completion of all other recordings and filings of or with
respect to the Security Agreement that the First Lien Collateral Agent may deem
necessary or desirable in order to perfect and protect the security interest
created thereunder; and

 

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(C) evidence that all other action that the First Lien Collateral Agent may deem
necessary or desirable in order to perfect and protect the first priority liens
and security interests created under the Security Agreement has been taken
(including, without limitation, receipt of duly executed payoff letters, UCC-3
termination statements and landlords’ and bailees’ waiver and consent
agreements).

(D) A consent to assignment of the Initial Interest Rate and Currency Hedge, in
form and substance reasonably acceptable to the First Lien Administrative Agent,
duly executed by CS International.

(iv) A first lien debenture in substantially the form of Exhibit G hereto (the
“UK Debenture”), duly executed by each UK Guarantor, together with, in the case
of each UK Guarantor:

(A) copies of the Relevant Agreements (as defined in the UK Debenture) to which
such UK Guarantor is a party, each in form and substance satisfactory to the
First Lien Administrative Agent, duly executed by each party to such Relevant
Agreement other than the Loan Parties;

(B) a copy of all notices required to be sent under the UK Debenture and/or the
UK Share Charge and of all third party consents required in connection with the
creation, perfection or registration of the UK Debenture or the UK Share Charge;

(C) evidence in the form of certified copies of the executed documents required
for the completion of the financial assistance whitewash procedures for Viking
Petroleum and Viking Gas under Sections 155-158 of the English Companies Act
1985 including a signed letter from the auditors of Viking Petroleum and Viking
Gas addressed to the First Lien Collateral Agent for the purpose of
Section 155(2) of the Companies Act and confirmation that the relevant
directors’ statutory declarations have been filed at Companies House or an
undertaking from Hunton & Williams LLP on behalf of the Borrower that such
filing will take place within two Business Days of the date of such statutory
declarations;

(D) in relation to the matters described in clause (C) above, copies of the
statutory declarations, auditors’ report and net assets letter in the form set
out in Technical Release FRAG 26/94 issued on behalf of the Institute of
Chartered Accountants of England and Wales, or any replacement form, (addressed,
where possible, to the First Lien Collateral Agent, on behalf of itself and each
of the Lenders);

 

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(E) all share or membership interest certificates in relation to such UK
Guarantor and each Subsidiary of such UK Guarantor, except for Viking Petroleum,
whose shares are subject to the UK Debenture and/or the UK Share Charge;

(F) executed blank stock transfers (nominally stamped, if applicable) or other
relevant transfer documents in relation to all those shares specified in clause
(E) above; and

(G) such other documents as the First Lien Administrative Agent may reasonably
request (including, without limitation, tax identification numbers and
addresses).

(v) An account control agreement in substantially the form of Exhibit P hereto
(the “Account Control Agreement”) in respect of the Accounts (other than the
London Accounts), duly executed by the Borrower and the Account Bank.

(vi) With respect to each Power and Gas Sales Agreement, a direct agreement with
respect to such Power and Gas Sales Agreement in form and substance satisfactory
to the First Lien Administrative Agent.

(vii) A share charge in substantially the same form of Exhibit H hereto (the “UK
Share Charge”), duly executed by the Borrower together with such other documents
as the First Lien Collateral Agent may reasonably request.

(viii) A first lien pledge agreement in substantially the form of Exhibit I
hereto (the “Marathon Pledge Agreement”), duly executed by Marathon and the
First Lien Collateral Agent, together with certificates representing the Pledged
Equity (as defined in the Marathon Pledge Agreement) accompanied by undated
stock powers executed in blank and, to the extent there is any Pledged Debt (as
defined in the Marathon Pledge Agreement), instruments evidencing the Pledged
Debt indorsed in blank.

(ix) A first lien pledge agreement in substantially the form of Exhibit J hereto
(the “USE Overseas Pledge Agreement”), duly executed by USE Overseas and the
First Lien Collateral Agent, together with certificates representing the Pledged
Equity (as defined in the USE Overseas Pledge Agreement) accompanied by undated
stock powers executed in blank and, to the extent there is any Pledged Debt (as
defined in the USE Overseas Pledge Agreement), instruments evidencing the
Pledged Debt indorsed in blank.

(x) An equity support agreement in substantially the form of Exhibit K hereto
(the “Equity Support Agreement”), duly executed by the Borrower, USEY, the First
Lien Collateral Agent and the Second Lien Collateral Agent.

(xi) A collateral agency and intercreditor agreement in substantially the form
of Exhibit L hereto (the “Intercreditor Agreement”), duly executed by the

 

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Borrower, the Guarantors, the Pledgors, the First Lien Administrative Agent, the
Second Lien Administrative Agent, the First Lien Collateral Agent, the Second
Lien Collateral Agent and Silver Point Finance, LLC, as Third Lien Collateral
Agent and Third Lien Administrative Agent.

(xii) A copy of a resolution of the board of directors of each UK Guarantor:

(A) approving the terms of, and the transactions contemplated by, the UK
Debenture and any other Collateral Document to which it is a party and resolving
that it execute, deliver and perform the UK Debenture and any other Collateral
Document to which it is a party;

(B) authorizing a specified person or persons to execute the UK Debenture and
any other Collateral Documents on its behalf; and

(C) authorizing a specified person or persons, on its behalf, to sign and/or
despatch all other documents and notices to be signed and/or despatched by it
under or in connection with the UK Debenture and any Collateral Document to
which it is a party.

(xiii) A specimen of the signature of each person authorized by the resolution
referred to in clause (xii) above.

(xiv) A search in respect of each UK Guarantor at the Companies Registry or
other applicable commercial register showing, to the extent such a search is
capable of showing such information, no Lien existing over its assets which are
not permitted to exist under the Loan Documents and no appointment of a
receiver, liquidator or administrator or the presentation of any petition or
application in respect of any of the same (or any analogous procedure in any
applicable jurisdiction).

(xv) Certified copies of the resolutions of the Board of Directors of each Loan
Party, USEY and each Pledgor approving the Transaction, the transactions
contemplated by the Loan Documents and each Transaction Document to which it is
or is to be a party, and of all documents evidencing other necessary corporate
action and governmental and other third party approvals and consents, if any,
with respect to the Transaction and each Transaction Document to which it is or
is to be a party.

(xvi) A copy of a certificate of the Secretary of State of Delaware, dated
reasonably near the Effective Date certifying (A) as to a true and correct copy
of the charter or certificate of formation of the Borrower, USEY and each
Pledgor and each amendment thereto on file in such Secretary’s office and
(B) that (1) such amendments are the only amendments to such Person’s charter or
certificate of formation, as the case may be, on file in such Secretary’s
office, (2) such Person has paid all franchise taxes to the date of such
certificate and (3) such Person is duly formed or incorporated and in good
standing or presently subsisting under the laws of the State of Delaware.

 

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(xvii) A certified copy of the certificate of incorporation (and any relative
certificate of incorporation on change of name) of each UK Guarantor and the
memorandum and articles of association of each UK Guarantor.

(xviii) A certificate of the Borrower, USEY and each Pledgor signed on behalf of
such Person by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the Effective Date (the statements made in which
certificate shall be true on and as of the Effective Date), certifying as to
(A) the absence of any amendments to the charter or certificate of formation and
limited liability company agreement, as the case may be, of such Person since
the date of the Secretary of State’s certificate referred to in
Section 3.01(a)(xvi) or the date the resolutions of the board of directors of
such Person referred to in Section 3.01(a)(xv) were adopted, (B) a true and
correct copy of the limited liability company agreement or bylaws, as the case
may be, of such Person as in effect on the date on which the resolutions
referred to in Section 3.01(a)(xv) were adopted and on the Effective Date,
(C) the due incorporation or formation, as the case may be, and good standing or
valid existence of such Person as a limited liability company or corporation
organized under the laws of Delaware, and the absence of any proceeding for the
dissolution or liquidation of such Person, (D) by the Borrower only, the
entering into and full force and effect of the Related Documents and (E) by the
Borrower only, as to the matters set forth in Sections 3.01(c), (d), (e), (f),
(h), (m), (n) and (p).

(xix) A certificate signed by a director of each UK Guarantor, confirming that
each copy document relating to it provided pursuant to this Section 3.01 is
correct, complete and in full force and effect as at a date no earlier than the
Effective Date.

(xx) A formalities certificate from each UK Guarantor dated no earlier than the
Effective Date or such other date as the First Lien Administrative Agent may
require in the form set out as Exhibit M or such other form as may be agreed by
the First Lien Administrative Agent and such UK Guarantor.

(xxi) A certificate of the Secretary or an Assistant Secretary of each Loan
Party, USEY and each Pledgor certifying the names and true signatures of the
officers of such Person authorized to sign each Transaction Document to which it
is or is to be a party and the other documents to be delivered hereunder and
thereunder.

(xxii) Certified copies of each of the Related Documents (other than the Second
Lien Loan Documents), duly executed by the parties thereto and in form and
substance satisfactory to the Lenders, together with all agreements, instruments
and other documents delivered in connection therewith as the First Lien
Administrative Agent shall request.

 

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(xxiii) Evidence satisfactory to the First Lien Administrative Agent that the
Borrower shall have paid the premium under the Initial Interest Rate and
Currency Hedge Agreement and satisfied all other payment and delivery
obligations and conditions precedent thereunder.

(xxiv) A certificate, in substantially the form of Exhibit N, attesting to the
Solvency of the Loan Parties (on a Consolidated basis) after giving effect to
the transactions contemplated by the Transaction Documents, from the Borrower’s
President.

(xxv) A pro forma Consolidated balance sheet and related pro forma consolidated
statements of income and cash flows of the Borrower and its Subsidiaries as of
and for the twelve-month period ending on the last day of the most recently
completed four-fiscal quarter period, prepared after giving effect to the
Transaction as if the Transaction had occurred as of such date (in the case of
such balance sheet) or at the beginning of such period (in the case of such
other financial statements), which financial statements shall not be materially
inconsistent with the forecasts previously provided to the First Lien
Administrative Agent, and a Base Case Model in form and substance satisfactory
to the First Lien Administrative Agent that includes quarterly projections for
the first two years after the Effective Date and annual projections for each
year thereafter during the term of the Facility and that reflects assumptions
and other inputs consistent with the consultants’ reports delivered pursuant to
Section 3.01(a)(xxviii) (the “Base Case Model”).

(xxvi) A letter, in form and substance satisfactory to the First Lien
Administrative Agent, from the Borrower to Weiser LLP, its independent certified
public accountants, advising such accountants that the Agents and the Lenders
have been authorized to exercise all rights of the Borrower to require such
accountants to disclose any and all financial statements and any other
information of any kind that they may have with respect to the Borrower and its
Subsidiaries and directing such accountants to comply with any reasonable
request of any Agent or any Lender for such information.

(xxvii) Copies of all certificates representing the policies, endorsements and
other documents required under Section 5.01(d) to be in effect as of the
Effective Date, accompanied by (A) a certificate of the Borrower signed by its
President or Vice President or Chief Financial Officer certifying that the
copies of each of the policies, endorsements and other documents delivered
pursuant to this Section 3.01(a)(xxvii) are true, correct and complete copies
thereof, (B) letters from the Borrower’s insurance brokers or insurers (commonly
referred to as “undertaking letters”), dated not earlier than fifteen (15) days
prior to the Effective Date, stating with respect to each such insurance policy
that (1) such policy is in full force and effect, (2) all premiums theretofore
due and payable thereon have been paid and (3) the underwriters of such
insurance have agreed that the policies, when issued, will contain the
provisions required under Section 5.01(d) and (C) a report from the Independent
Insurance Consultant in form and

 

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substance reasonably satisfactory to the Lenders confirming that such required
insurance is in full force and effect in accordance with the terms of this
Agreement.

(xxviii) Copies of reports from the following consultants in form and substance
satisfactory to the First Lien Administrative Agent: (A) the Independent Power
Plant Engineer, (B) the Independent Natural Gas Development Consultant, (C) the
Independent Environmental Consultant, (D) the Independent UK Gas Market
Consultant, (E) the Independent UK Power Market Consultant and (F) AMEC Group
Ltd.

(xxix) A favorable opinion of Hunton & Williams LLP, special counsel for the
Loan Parties, in substantially the form of Exhibit O hereto and as to such other
matters as any Lender through the First Lien Administrative Agent may reasonably
request.

(xxx) A favorable opinion of Robinson Brog Leinwand Greene Genovese & Gluck
P.C., counsel to USEY and USE Overseas, in form and substance satisfactory to
the First Lien Administrative Agent.

(xxxi) A favorable opinion of Klein & Hill, counsel to Marathon, in form and
substance satisfactory to the First Lien Administrative Agent.

(xxxii) A favorable opinion of Shearman & Sterling (London) LLP, counsel for the
First Lien Administrative Agent, in form and substance satisfactory to the First
Lien Administrative Agent.

(xxxiii) Copies of the Governmental Authorizations referred to in
Section 3.01(f).

(xxxiv) Certificates of title in form and substance satisfactory to the First
Lien Administrative Agent in respect of the Owned Real Property and Leased Real
Property listed in Schedule 4.01(w) and (x) (the “Certificates of Title”).

(xxxv) Evidence satisfactory to the First Lien Administrative Agent of the
matters described in Section 3.01(c).

(xxxvi) A certified copy of an assignment (in a form and substance satisfactory
to the First Lien Administrative Agent) duly executed by Viking Petroleum,
Viking Gas and SPGL pursuant to which Viking Petroleum, Viking Gas and SPGL
assign their respective rights, interest, obligations and liabilities in, under
and pursuant to the Natural Gas Field Licenses to Viking Gas.

(xxxvii) Evidence satisfactory to the First Lien Administrative Agent that the
Secretary of State for Trade and Industry in the United Kingdom has consented to
the assignment of Viking Petroleum, Viking Gas and SPGL’s respective rights,
interest, obligations and liabilities in, under and pursuant to the Natural Gas
Field Licenses to Viking Gas.

 

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(xxxviii) A certified copy of a letter (in a form and substance satisfactory to
the First Lien Administrative Agent) from Northern Electricity Distribution Ltd.
to RGS confirming that Northern Electricity Distribution Ltd. will not enter
into a direct agreement in respect of the Interconnection Agreement in favor of
the First Lien Collateral Agent on behalf of Lenders.

(xxxix) A certified copy of a waiver letter (in a form and substance
satisfactory to the First Lien Administrative Agent) executed by SPGL, Viking
Petroleum and Viking Gas, pursuant to which the parties waive any potential
claims they may have against each other under and pursuant to the Master Gas
Purchase Agreement.

(xl) A list certified by the Borrower to be true, complete and up-to-date of all
accounts of the Borrower and its Subsidiaries including details of the account
number, account name, name and address of the relevant bank in each such account
along with a letter from the Account Bank stating that the Borrower and the
other Loan Parties have established the Accounts with the Account Bank.

(xli) A certificate of the Borrower (signed by a director) certifying that
(A) each of the filings, approvals and consents specified in the Purchase and
Sale Agreements have been obtained (save the filings, approvals and consents
specified therein as not being required to be obtained on or prior to the
Effective Date, provided that these are subject to arrangements which are
satisfactory to the First Lien Administrative Agent), (B) each of the conditions
precedent or similar terms or other conditions specified in each Purchase and
Sale Agreement has been satisfied or, with the consent of the First Lien
Administrative Agent, waived (other than payment of the purchase price under
each Purchase and Sale Agreement, which will be made immediately following
drawdown of the Advances), (C) no Purchase and Sale Agreement has been amended,
varied, novated, supplemented, superseded, waived or terminated except with the
consent of the First Lien Administrative Agent, (D) the Borrower is not aware of
any breach of any warranty or any claim under any of the Purchase and Sale
Agreements which would be likely to give rise to a Default and (E) each of the
filings, approvals, consents, clearances and consultations (including works’
council consents and consultations) required in connection with the Transaction
Documents and the validity and enforceability of the Transaction Documents have
been obtained and are in full force and effect and all applicable waiting
periods have expired or been terminated.

(xlii) Satisfactory official priority searches relating to that Owned Real
Property and Leased Real Property in England and Wales with title registered at
the Land Registry listed in favor of the First Lien Administrative Agent in
respect of such registered titles giving a sufficient period of priority (of at
least 15 days following the Effective Date) and official priority searches
relating to that Owned Real Property and Leased Real Property as is unregistered
in England and Wales of the land charges register maintained by the Land Charges
Department of the Land Registry against the current estate owners for the
current year giving a sufficient period of priority (of at least 12 days
following the Effective Date).

 

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(xliii) Proof that all Liens of a financial nature affecting the Owned Real
Property and Leased Real Property as of the Effective Date have been discharged
fully or an undertaking from the Borrower’s legal counsel that such Liens will
be discharged on the Effective Date, such undertaking to be in a form
satisfactory to the First Lien Administrative Agent.

(xliv) A written undertaking from the Borrower to the legal counsel for the
First Lien Collateral Agent that, any deeds and documents of title relating to
the Owned Real Property and the Leased Real Property which may come into the
possession of the Borrower shall be deposited with the First Lien Collateral
Agent if so requested by the First Lien Collateral Agent on reasonable notice.

(xlv) Written confirmation from the Borrower to the First Lien Administrative
Agent that all Owned Real Property and Leased Real Property will be fully
insured in accordance with the requirements of the Loan Documents from and
including the Effective Date.

(xlvi) Proof of dismissal, settlement and release of any and all claims and
actions purporting to affect the Transactions pending against USEY,
subsidiaries, affiliates, entities organized or created by USEY, and any of the
directors and/or officers thereof, with respect to the litigation captioned
Bernard J. Zahren and Fredric Rose v. U.S. Energy Systems, Inc., et al, Civil
Action No. 1814-N, pending in the Delaware Court of Chancery, New Castle County.

(xlvii) Evidence satisfactory to the First Lien Administrative Agent that (A) UK
Energy shall have paid the premium under the Gas Hedge Agreement and satisfied
all other payment and delivery obligations and conditions precedent thereunder
and (B) RGS shall have satisfied all payment and delivery obligations and
conditions precedent under the Carbon Credit Hedge Agreement (other than the
transfer of emissions credit as contemplated thereby).

(xlviii) Evidence satisfactory to the First Lien Administrative Agent of SPGL’s
authority to enter into the Scottish Power Purchase and Sale Agreement and of
TCW’s authority to enter into the TCW Purchase and Sale Agreement.

(xlix) A certified copy of the Memorandum and Articles of Association of Viking
Gas which have been amended by: (1) adopting the Regulations incorporated in
Table A as set out in the Schedule to the Companies (Tables A to F) Regulations
1985, (2) deleting Article 2 in its entirety, and (3) specifically excluding the
application of Regulation 26 of Table A, and which are otherwise in a form and
substance reasonably satisfactory to the First Lien Administrative Agent.

(l) Evidence satisfactory to the First Lien Administrative Agent that the
Borrower has engaged the Independent Power Plant Engineer, the

 

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Independent Natural Gas Development Consultant and the Independent Pipeline
Construction Consultant, in each case, to provide services following the
Effective Date on terms reasonably satisfactory to the First Lien Administrative
Agent.

(b) The Lenders shall be satisfied with the corporate and legal structure and
capitalization of the Borrower and each of its Subsidiaries the Equity Interests
in which Subsidiaries are being pledged pursuant to the Loan Documents,
including the terms and conditions of the certificate of formation, limited
liability company agreement, bylaws and each class of Equity Interest in the
Borrower and each such Subsidiary and of each agreement or instrument relating
to such structure or capitalization.

(c) All Debt of the Loan Parties and their Affiliates owing to TCW and its
Affiliates shall have been prepaid, redeemed or defeased in full or otherwise
satisfied and extinguished and all Liens on the Collateral granted for the
benefit of TCW or any Affiliate thereof shall have been released.

(d) Before giving effect to the Transaction, there shall have occurred no
Material Adverse Change since December 31, 2005.

(e) There shall exist no action, suit, investigation, litigation or proceeding
affecting any Loan Party, any Pledgor or USEY or any of their respective
Subsidiaries pending or threatened before any Governmental Authority that
(i) could reasonably be expected to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of any
Transaction Document or the consummation of the Transaction.

(f) All Governmental Authorizations and third party consents and approvals
necessary in connection with the Transaction shall have been obtained (without
the imposition of any conditions that are not acceptable to the Lenders), except
for those Governmental Authorizations and third party consents and approvals
listed on Part B of Schedule 4.01(e) which are specified thereon as not being
required as of the date on which this representation is made, and shall remain
in effect; all applicable appeal periods with respect to any such Governmental
Authorizations shall have expired without any action being taken by any
competent authority, and no law or regulation shall be applicable in the
judgment of the Lenders, in each case that restrains, prevents or imposes
materially adverse conditions upon the Transaction or the rights of the Loan
Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any of
them.

(g) The Borrower shall have paid all accrued fees and other compensation of the
Agents and the Lenders and all accrued expenses of the Agents (including the
accrued fees and expenses of counsel and consultants to the First Lien
Administrative Agent) on or prior to the Effective Date.

(h) The Acquisition shall have been consummated strictly in accordance with the
terms of the Purchase and Sale Agreements, without any waiver or amendment not
consented to by the Lenders of any term, provision or condition set forth
therein and in compliance with all applicable laws.

 

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(i) The Borrower shall have entered into the Initial Interest Rate and Currency
Hedge Agreement.

(j) UK Energy shall have entered into the Gas Hedge Agreement and RGS shall have
entered into the Carbon Credit Hedge Agreement.

(k) The Borrower shall have received at least U.S.$29,500,000 in gross cash
proceeds from advances under the Second Lien Facility and at least
U.S.$11,300,000 in gross cash proceeds from the Equity Contribution.

(l) The Borrower shall have caused the Equity Support Balance (as defined in the
Equity Support Agreement) to be equal to the Required Equity Support Amount (as
defined in the Equity Support Agreement).

(m) The representations and warranties contained in each Loan Document are
correct on and as of such date, before and after giving effect to the Borrowing
and to the application of the proceeds therefrom, as though made on and as of
such date, other than any such representations or warranties that, by their
terms, refer to a specific date other than the Effective Date, in which case as
of such specific date.

(n) No Default has occurred and is continuing, or would result from the
Borrowing or from the application of the proceeds therefrom.

(o) The First Lien Administrative Agent shall have received, at least five
Business Days prior to the Effective Date, all documentation and other
information required by any Governmental Authority under applicable “know your
customer” and anti-money laundering rules and regulations, including, without
limitation, the Patriot Act.

(p) The Borrower shall have established, or caused to be established, the
Accounts required by the Intercreditor Agreement.

(q) The First Lien Administrative Agent shall have received such other
financial, business and other information regarding each Loan Party and its
Subsidiaries and approvals, opinions or other documents as any Lender through
the First Lien Administrative Agent may reasonably request.

(r) The First Lien Administrative Agent shall have received a letter, in form
and substance satisfactory to the First Lien Administrative Agent, from a
process agent indicating its acceptance of the appointment by each Guarantor.

 

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SECTION 3.02. Conditions Precedent to Drawings from the Expansion Account. The
right of the Borrower to withdraw funds from either or both of the Expansion
Accounts to fund Expansion Costs (an “Expansion Account Drawing”) shall be
subject to the further conditions precedent:

(a) on the date of such Expansion Account Drawing, the following statements
shall be true:

(i) the representations and warranties contained in each Loan Document are
correct on and as of such date, before and after giving effect to such Expansion
Account Drawing and to the application of the proceeds therefrom, as though made
on and as of such date, other than any such representations or warranties that,
by their terms, refer to a specific date other than the date of such Expansion
Account Drawing, in which case as of such specific date; and

(ii) no more than one additional Expansion Cost Drawing shall have occurred in
the previous 30 days;

(iii) no Default has occurred and is continuing, or would result from such
Expansion Account Drawing or from the application of the proceeds therefrom;

(b) at least five Business Days prior to the date of such Expansion Account
Drawing, the First Lien Administrative Agent shall have received a certificate
signed by a duly authorized officer of the Borrower stating (i) the amount of
such Expansion Account Drawing, (ii) in reasonable detail, the Expansion Costs
to be funded with the proceeds of such Expansion Account Drawing, (iii) at all
times prior to Phase I Completion, that, after giving effect to such Expansion
Account Drawing, the aggregate amount of all Expansion Account Drawings used to
fund Expansion Costs required to achieve Phase I Completion will not exceed
U.S.$11,856,000 and (iv) that such Expansion Account Drawing and the acceptance
by the Borrower of the proceeds of such Expansion Account Drawing shall
constitute a representation and warranty by the Borrower that on the date of
such Expansion Account Drawing the statements set forth in clause (a) above are
true; and

(c) at least five Business Days prior to the date of such Expansion Account
Drawing, the First Lien Administrative Agent shall have received written
confirmation from the Independent Engineer that (i) the costs to be funded with
the proceeds of such Expansion Account Drawing constitute Expansion Costs and
the amount and schedule of such Expansion Costs are consistent with the amounts
and schedules set forth in (A) prior to the delivery and effectiveness of the
first Annual Budget and Operating Plan hereunder, the Base Case Model and
(B) after the delivery and effectiveness of the first Annual Budget and
Operating Plan hereunder, the then effective Annual Budget and Operating Plan,
(ii) the costs to be funded with the proceeds of such Expansion Account Drawing
are currently due or reasonably expected to come due in the next 15 days and
(ii) the Borrower remains in compliance with Section 5.01(t).

SECTION 3.03. Determinations Under Sections 3.01 and 3.02. For purposes of
determining compliance with the conditions specified in Sections 3.01 and 3.02,
each Lender 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 the Lenders unless an officer
of the First Lien Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
prior to the Effective Date or the date of the relevant Expansion Account
Drawing, as the case may be, specifying its objection thereto and such Lender
shall, in the case of a condition specified in Section 3.01, not have made
available to the First Lien Administrative Agent such Lender’s ratable portion
of the Borrowing.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

(a) Organization and Ownership. Each Loan Party and each of its Subsidiaries
(i) is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (ii) is duly qualified and in good standing as a
foreign corporation or company in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so
qualify or be licensed and (iii) has all requisite corporate, limited liability
company or partnership (as applicable) power and authority (including, without
limitation, all Governmental Authorizations, except for those Governmental
Authorizations listed on Part B of Schedule 4.01(e) which are specified thereon
as not being required as of the date on which this representation is made) to
own or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding Equity
Interests in the Borrower and each of its Subsidiaries have been validly issued,
are fully paid and non-assessable and are owned by the Persons and in the
amounts specified on Schedule 4.01(a) hereto free and clear of all Liens, except
those created under the Collateral Documents and the Second Lien Loan Documents.

(b) Loan Parties. Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Loan Parties showing as of the date hereof (as to each Loan
Party) the jurisdiction of its incorporation, the address of its principal place
of business, its U.S. taxpayer identification number or, in the case of each
non-U.S. Loan Party that does not have a U.S. taxpayer identification number,
its unique identification number issued to it by the jurisdiction of its
incorporation, the number of shares, membership interests or partnership
interests (as applicable) of each class of its Equity Interests authorized, and
the number outstanding, on the date hereof and the percentage of each such class
of its Equity Interests owned (directly or indirectly) in such Loan Party and
the number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding Equity Interests in each Loan Party have been validly issued, are
fully paid and non-assessable and are owned by such Loan Party or one or more of
its Subsidiaries free and clear of all Liens, except those created under the
Collateral Documents. The copy of the charter, bylaws, limited liability company
agreement, partnership agreement or other constituent documents of each Loan
Party and each amendment thereto provided pursuant to Section 3.01(a)(xvi) and
3.01(a)(xvii) is a true and correct copy of each such document, each of which is
valid and in full force and effect.

 

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(c) Subsidiaries. Set forth on Schedule 4.01(c) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party.

(d) Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Transaction Document to which it is or is to be a party,
and the consummation of the Transaction, are within such Loan Party’s corporate,
limited liability company or limited partnership (as applicable) powers, have
been duly authorized by all necessary corporate, limited liability company or
limited partnership (as applicable) action, and do not (i) contravene such Loan
Party’s charter, bylaws, limited liability company agreement, partnership
agreement or other constituent documents, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created under the Loan Documents and the
Second Lien Loan Documents, result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of any Loan Party or any
of its Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the violation or
breach of which could reasonably be expected to have a Material Adverse Effect.

(e) Consents and Approvals. No Governmental Authorization, and no notice to or
filing with, any Governmental Authority or any other third party is required for
(i) the due execution, delivery, recordation, filing or performance by any Loan
Party of any Transaction Document to which it is or is to be a party, or for the
consummation of the Transaction, (ii) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (iii) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
first priority nature thereof), (iv) the ownership and operation of the Acquired
Assets, or (v) the exercise by any Agent or any Lender of its rights under the
Transaction Documents or the remedies in respect of the Collateral pursuant to
the Collateral Documents, except for the authorizations, approvals, actions,
notices and filings listed in Schedules 4.01(e) and 4.01(o) hereto. The
authorizations, approvals, actions, notices and filings listed in Part A of
Schedule 4.01(e) have been duly obtained, taken, given or made and are in full
force and effect as at the date of this Agreement. The authorizations,
approvals, actions, notices and filings listed in Part B of Schedule 4.01(e)
shall be duly obtained, taken, given or made and shall be in full force and
effect after the date of this Agreement in accordance with Part B of Schedule
4.01(e). All applicable waiting periods in connection with the Transaction have
expired without any action having been taken by any competent authority
restraining, preventing or imposing materially adverse conditions upon the
Transaction or the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them. The Transaction has been consummated
in accordance with the Transaction Documents and applicable law.

 

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(f) Binding Agreement. This Agreement has been, and each other Transaction
Document when delivered hereunder will have been, duly executed and delivered by
each Loan Party party thereto. This Agreement is, and each other Transaction
Document when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan Party
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditor’s rights generally or by equitable principles relating to
enforceability.

(g) Litigation. There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any Governmental Authority or
arbitrator that (i) could reasonably be expected to have a Material Adverse
Effect or (ii) purports to affect the legality, validity or enforceability of
any Transaction Document or the consummation of the Transaction.

(h) Audited Financial Statements. The Consolidated balance sheet of Viking
Petroleum as at December 31, 2004, and the related Consolidated statements of
income and Consolidated statement of cash flows of Viking Petroleum for the
fiscal year then ended, accompanied by an unqualified opinion of
PriceWaterhouseCoopers, independent public accountants, copies of which have
been furnished to each Lender, fairly present the Consolidated financial
condition of Viking Petroleum as at such date and the Consolidated results of
operations of Viking Petroleum for the period ended on such date, all in
accordance with GAAP applied on a consistent basis, and since December 31, 2005,
there has been no Material Adverse Change.

(i) Pro Forma Financial Statements. The Consolidated and, in relation to the
Borrower, pro forma balance sheets of Viking Petroleum as at December 31, 2005
and the Borrower as at March 31, 2006, and the related Consolidated and, in
relation to the Borrower, pro forma statements of income and cash flows of
Viking Petroleum and the Borrower for each of such periods then ended, as
applicable, certified by the Chief Financial Officer of Viking Petroleum and the
Borrower, copies of which have been furnished to each Lender, fairly present the
Consolidated and, to the extent applicable, pro forma financial condition of
Viking Petroleum and the Borrower as at such dates, as applicable, and the
Consolidated and, to the extent applicable, pro forma results of operations of
Viking Petroleum and the Borrower for the period ended on such dates, in each
case giving effect to the Transaction, all in accordance with GAAP.

(j) Forecasts. The Consolidated forecasted balance sheets, statements of income
and statements of cash flows of the Borrower delivered to the Lenders pursuant
to Section 3.01(a)(xxv) or 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were believed by the management of
the Borrower to be reasonable and fair in light of the conditions existing at
the time of delivery of such forecasts, and represented, at the time of
delivery, the Borrower’s best estimate of its future financial performance it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that the actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount.

 

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(k) Information. Neither the Information Memorandum nor any other information,
exhibit or report furnished by or on behalf of any Loan Party to any Agent or
any Lender in connection with the negotiation and syndication of the Loan
Documents or pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements made therein not misleading in light of the circumstances in
which the same were made.

(l) Margin Stock. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no proceeds
of any Advance will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.

(m) Regulatory Matters. Neither any Loan Party nor any of its Subsidiaries is an
“investment company,” or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making of any Advances
nor the application of the proceeds or repayment thereof by the Borrower, nor
the consummation of the other transactions contemplated by the Transaction
Documents, will violate any provision of any such Act or any rule, regulation or
order of the Securities and Exchange Commission thereunder.

(n) Other Agreements. Other than the Transaction Documents, neither any Loan
Party nor any of its Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction that could reasonably be expected to have a
Material Adverse Effect.

(o) Perfection. Upon filing of the documents set forth on Schedule 4.01(o)
hereto, the security interests created in favor of the First Lien Collateral
Agent for the benefit of the First Lien Secured Parties under the Collateral
Documents constitute a valid and, together with such filings and other actions,
perfected first priority security interest in the Collateral, securing the
payment of the Secured Obligations, and all filings and other actions necessary
or desirable to perfect and protect such security interest have been duly taken.
The Loan Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the liens and security interests created or
permitted under the Loan Documents.

(p) Solvency. After giving effect to the Transactions, each Loan Party is,
individually and together with its Subsidiaries, Solvent.

(q) Employment Matters. (i) Set forth on Schedule 4.01(q) hereto is a complete
and accurate list of all Plans, Multiemployer Plans, Foreign Benefit
Arrangements, Foreign Plans and Welfare Plans of the Borrower and its ERISA
Affiliates.

 

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(ii) No ERISA Event (other than an event described in clause (d) of the
definition thereof) has occurred or is reasonably expected to occur with respect
to any Plan.

(iii) Schedule B (Actuarial Information) to the most recent annual report (Form
5500 Series) for each Plan, copies of which have been filed with the Internal
Revenue Service and furnished to the Lenders, is complete and accurate and
fairly presents the funding status of such Plan.

(iv) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.

(v) Neither any Loan Party nor any ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer Plan is reasonably expected to be in reorganization or
to be terminated, within the meaning of title IV of ERISA.

(vi) With respect to each employee benefit arrangement mandated by non-U.S. law
(a “Foreign Benefit Arrangement”) and with respect to each employee benefit plan
maintained or contributed to by any Loan Party or any Subsidiary of any Loan
Party that is not subject to United States law (a “Foreign Plan”):

(A) Any employer and employee contributions required by law or by the terms of
any Foreign Benefit Arrangement, any Foreign Plan or any contract of employment
have been made, or, if applicable, accrued, in accordance with normal accounting
practices.

(B) The fair market value of the assets of each funded Foreign Plan, the
liability of each insurer for any Foreign Plan funded through insurance or the
book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations, as of the date hereof, with respect to all current and former
participants in such Foreign Plan according to the actuarial assumptions and
valuations most recently used to account for such obligations in accordance with
applicable generally accepted accounting principles.

(C) Each Foreign Plan that is required to be registered has been registered and
has been maintained in good standing with applicable regulatory authorities.

(vii) The Loan Parties and all Subsidiaries of the Loan Parties have in relation
to all of their employees complied in all material respects with all applicable
legislation, regulations, codes of conduct, codes of practice, collective
agreements, terms and conditions of employment, orders, agreements with third
parties, and awards relevant to their conditions of service or to the relations
with the employees or any recognized trade union or body representing the
employees.

 

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(viii) There are no complaints, disputes or claims pending or threatened against
Loan Party or any Subsidiary of a Loan Party of a material nature in relation to
any employee or former employee and, so far as the Loan Parties and all
Subsidiaries are aware, there are no matters which could give rise to any such
complaints, disputes or claims.

(r) Environmental Matters. (i) Except as otherwise set forth on Part I of
Schedule 4.01(r) hereto, the operations and properties of each Loan Party and
each of its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance with such
Environmental Laws and Environmental Permits has been resolved in all material
respects without any material ongoing or future obligation, cost or liability,
and no circumstances exist that could (A) form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of their
properties, (B) form the basis of any material non-compliance with any
Environmental Law by any Loan Party or any of its Subsidiaries or at any of
their properties, or (C) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.

(ii) Except as otherwise set forth on Part II of Schedule 4.01(r) hereto, none
of the properties currently or formerly owned or operated by any Loan Party or
any of its Subsidiaries is or is proposed to be identified as contaminated land
within the meaning of Part IIA of the Environmental Protection Act 1990 in the
United Kingdom or under any analogous Environmental Law, or is adjacent to any
such property; other than as required for the proper functioning and operation
of the Business, there are no and never have been any underground or aboveground
storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons
in which Hazardous Materials are being or have been treated, stored or disposed
on any property currently or formerly owned or operated by any Loan Party or any
of its Subsidiaries; there is no asbestos or asbestos-containing material on any
property currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries; and other than minor releases or spills which may have occurred in
the ordinary course of operating the business, Hazardous Materials have not been
released, discharged or disposed of on any property currently or formerly owned
or operated by any Loan Party or any of its Subsidiaries, and natural gas,
petroleum or petroleum products, byproducts or breakdown products, have not been
released, discharged or disposed of on any property currently or formerly owned
or operated by any Loan Party or any of its Subsidiaries except in accordance
with applicable Environmental Law and pursuant to any required Environmental
Permit, in either case, likely to have given rise to, or which may give rise to,
any regulatory intervention by a Governmental Authority or Material Adverse
Change.

(iii) Except as otherwise set forth on Part III of Schedule 4.01(r) hereto,
neither any Loan Party nor any of its Subsidiaries is undertaking, or has
completed, either individually or together with other parties, any investigation
or assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any Environmental
Law; and all Hazardous Materials generated, used, treated, handled or

 

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stored at, or transported to or from, any property currently or formerly owned
or operated by any Loan Party or any of its Subsidiaries have been disposed of
in a manner not likely to have given rise to, or which may give rise to, any
regulatory intervention by a Governmental Authority or a Material Adverse
Change.

(s) Taxes. (i) Neither any Loan Party nor any of its Subsidiaries is party to
any tax sharing agreement other than a tax sharing agreement approved by the
Required Lenders.

(ii) Each Loan Party and each of its Subsidiaries has filed, has caused to be
filed or has been included in all material tax returns (Federal, state, local
and foreign) required to be filed and has paid all material taxes shown thereon
to be due, together with applicable interest and penalties, except for any such
taxes, interest or penalties that are being contested in good faith as to which
appropriate reserves are maintained.

(iii) Each Loan Party and each of its Subsidiaries has made adequate reserves in
accordance with GAAP for all taxes not yet due and payable.

(iv) Neither the Borrower nor, to the Borrower’s Knowledge after due inquiry,
any of its Subsidiaries has ever been a party to any understanding or
arrangement constituting a “tax shelter” within the meaning of
Section 6662(d)(2)(C)(iii) of the Internal Revenue Code or within the meaning of
Section 6111(c) or Section 6111(d) of the Internal Revenue Code as in effect
immediately prior to the enactment of the American Jobs Creation Act of 2004, or
has ever “participated” in a “reportable transaction” within the meaning of
Treasury Regulation Section 1.6011-4, except as would not be reasonably expected
to, individually or in the aggregate, have a Material Adverse Effect.

(v) There are no unpaid amounts, as of the date hereof, of final adjustments to
the Federal income tax liability of each Loan Party and each of its Subsidiaries
proposed in writing by the Internal Revenue Service with respect to any taxable
year of any Loan Party and each of its Subsidiaries and Affiliates for which
Federal income tax returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection has not occurred
by reason of extension or otherwise.

(vi) There are no unpaid amounts, as of the date hereof, of final adjustments to
the state, local and foreign tax liability of each Loan Party and its
Subsidiaries proposed by all state, local and foreign taxing authorities (other
than amounts arising from final adjustments to Federal income tax returns). No
issues have been raised by such taxing authorities with respect to open tax
years that, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.

(t) Acts of God. Neither the business nor the properties of any Loan Party or
any of its Subsidiaries are 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) that could reasonably be expected to have a Material Adverse Effect.

 

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(u) Other Debt. Neither the Borrower nor any Guarantor is the obligor in respect
of any Debt other than Debt under the Loan Documents, the Second Lien Loan
Documents, the other Transaction Documents and other Debt permitted under
Section 5.02(b).

(v) Liens. After giving effect to the Transactions contemplated on the Effective
Date, there are no Liens on the property or assets of any Loan Party or any of
its Subsidiaries other than Liens permitted under Section 5.02(a).

(w) Owned Real Property. Set forth on Schedule 4.01(w) hereto is a complete list
of all property interests owned by any Loan Party or any of its Subsidiaries,
showing as of the date hereof, an appropriate description of the relevant
property (including, where applicable, Land Registry Title Numbers) and the
record owner thereof. Other than Permitted Encumbrances, each Loan Party or such
Subsidiary has good, marketable and insurable title to such real property, free
and clear of all Liens, other than Liens created or permitted by the Loan
Documents.

(x) Leased Real Property. Set forth on Schedule 4.01(x) hereto is a complete
list of all leases of real property under which any Loan Party or any of its
Subsidiaries is the lessee, showing as of the date hereof an appropriate
description of the relevant property (including, where applicable, Land Registry
Title Numbers), original lessor, original lessee, term of lease, expiration date
and annual rental cost thereof. Each such lease is the legal, valid and binding
obligation of the lessor thereof, enforceable in accordance with its terms.

(y) Investments. As of the date hereof, no Loan Party or any Subsidiary of any
Loan Party holds any Investments, other than Investments in the Borrower or any
other Loan Party.

(z) Material Contracts and Material Project Agreements. Set forth on Schedule
4.01(z) hereto is a complete list of all Material Contracts of each Loan Party
and its Subsidiaries. Each such Material Contract and each Material Project
Agreement has been duly authorized, executed and delivered by any Loan Party
that is a party thereto and, to the Knowledge of the Borrower by all other
parties thereto, has not been amended or otherwise modified, is in full force
and effect and is binding upon and enforceable against any Loan Party that is a
party thereto, and, to the Knowledge of the Borrower by all parties thereto in
accordance with its terms, and, to the Borrower’s Knowledge, there exists no
default under any Material Contract or Material Project Agreement by any party
thereto.

(aa) Natural Gas Reserve Reports. Set forth on Schedule 4.01(aa) hereto is a
complete list of all natural gas reserve reports regarding the Borrower and its
Subsidiaries that are in the possession of USEY, Marathon or any of their
respective Affiliates. Prior to the Effective Date, true, correct and complete
copies thereof have been made available to the First Lien Administrative Agent.

 

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(bb) Natural Gas Field Licenses. The Natural Gas Field Licenses have been
validly granted to and registered in the name of one or more Loan Parties, are
owned by such Loan Parties and are in full force and effect. No Person has any
right, title or interest in, to or under the Natural Gas Field Licenses or in
the property and rights encompassed thereby, other than Liens permitted by the
Loan Documents. The Natural Gas Field Licenses, under the laws of England and
Wales as currently in effect, are of a duration that extend beyond January 1,
2014, and are sufficient in scope, content and effect to permit the Borrower to
conduct, or cause to be conducted, the ownership and operation of the Project in
accordance with the Base Case Model.

(cc) Immunity. Neither any Loan Party nor any of their respective properties has
any immunity from jurisdiction of any court or from any legal process (whether
through service, notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise).

(dd) No Other Properties or Assets. The Borrower owns no material properties or
assets other than those incidental to the Project and conducts no material
businesses other than businesses directly related to the Project.

(ee) Viking BV. Viking BV owns no properties or assets, other than properties
and assets with an aggregate fair market value of less than U.S.$10,000.

ARTICLE V

COVENANTS OF THE BORROWER

SECTION 5.01. Affirmative Covenants. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, the
Borrower will:

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, compliance with
ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970, except to the extent the failure to so
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries
to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property that, if not paid, could reasonably be expected to result in a Material
Adverse Effect and (ii) all material lawful claims that, if unpaid, might by law
become a Lien upon its property (other than Permitted Liens); provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to pay
or discharge any such tax, assessment, charge or claim that is being contested
in good faith and by proper proceedings and as to which appropriate reserves are
being maintained in accordance with GAAP, unless and until any Lien resulting
therefrom attaches to its property and becomes enforceable against its other
creditors.

 

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(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, with all applicable Environmental Laws and Environmental
Permits; obtain and renew, and cause each of its Subsidiaries to obtain and
renew, all Environmental Permits necessary for its operations and properties;
and conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials, or any
natural gas, petroleum or petroleum products, byproducts or breakdown products
that have been released or are present in violation of Environmental Law, from
any of its properties, in accordance with the requirements of all Environmental
Laws, except, in each case, where any such non-compliance could not be expected
to give rise to any enforcement action by a Governmental Authority on behalf of
itself and/or a third party or otherwise be reasonably likely to result in a
material liability; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.

(d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance as set forth on Schedule 5.01(d).

(e) Preservation of Corporate Existence, Etc. Except as set forth on Schedule
5.01(e), preserve and maintain, and cause each of its Subsidiaries to preserve
and maintain, its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises; provided,
however, that the Borrower and its Subsidiaries may consummate the Transaction
and any other merger or consolidation permitted under Section 5.02(d).

(f) Visitation Rights. At any reasonable time and from time to time, permit any
of the Agents or any of the Lenders, or any agents or representatives thereof,
to examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants; provided that, so long as no
Event of Default shall have occurred and be continuing, (i) no such visit shall
interfere with the normal operation of the Project, (ii) such inspections shall
be conducted only during business hours and upon no less than three (3) Business
Days’ prior notice (except in connection with any emergency occurring at the
Project, in which case such shorter notice as is reasonable in the circumstances
shall apply), and (iii) individual Lenders may not inspect the Project or the
offices of the Borrower or its Subsidiaries independently but shall instead
coordinate their visits with the First Lien Administrative Agent and the
Independent Engineer.

(g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Borrower and each
such Subsidiary in accordance with generally accepted accounting principles in
effect from time to time.

 

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(h) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.

(i) Transactions with Affiliates. Other than transactions solely between Loan
Parties, conduct, and cause each of its Subsidiaries to conduct, all
transactions otherwise permitted under the Loan Documents with any of their
Affiliates on terms that are fair and reasonable and no less favorable to the
Borrower or such Subsidiary than it would obtain in a comparable arm’s length
transaction with a Person not an Affiliate.

(j) Covenant to Guarantee Obligations and Give Security. Upon the acquisition of
any property by any Loan Party, and such property, in the judgment of the First
Lien Collateral Agent, shall not already be subject to a perfected first
priority security interest in favor of the First Lien Collateral Agent for the
benefit of the First Lien Secured Parties, then in each case at the Borrower’s
expense:

(i) within 30 days after such acquisition of property by any Loan Party (or such
longer period as may be necessary to create the Liens required hereby), duly
execute and deliver, and cause each Loan Party to duly execute and deliver, to
the First Lien Collateral Agent such additional mortgages, pledges, assignments,
security agreement supplements, intellectual property security agreement
supplements and other security agreements as specified by, and in form and
substance reasonably satisfactory to the First Lien Collateral Agent, securing
payment of all the Obligations of such Loan Party under the Loan Documents and
constituting Liens on all such properties;

(ii) within 30 days after such acquisition (or such longer period as may be
necessary to create the Liens required hereby), take, and cause each Loan Party
to take, whatever action (including, without limitation, the recording of
mortgages, the filing of Uniform Commercial Code financing statements, the
giving of notices and the endorsement of notices on title documents) may be
necessary or advisable in the reasonable opinion of the First Lien Collateral
Agent to vest in the First Lien Collateral Agent (or in any representative of
the First Lien Collateral Agent designated by it) valid and subsisting Liens on
the properties purported to be subject to the mortgages, pledges, assignments,
security agreement supplements, intellectual property security agreement
supplements and security agreements delivered pursuant to this Section 5.01(j),
enforceable against all third parties in accordance with their terms;

(iii) within 60 days after such acquisition, deliver to the First Lien
Collateral Agent, upon the request of the First Lien Collateral Agent in its
sole discretion, a signed copy of a favorable opinion, addressed to the First
Lien Collateral Agent and the other First Lien Secured Parties, of counsel for
the Loan

 

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Parties reasonably acceptable to the First Lien Collateral Agent as to (1) the
matters contained in clause (i) above, (2) such guaranties, guaranty
supplements, mortgages, pledges, assignments, security agreement supplements,
intellectual property security agreement supplements and security agreements
being legal, valid and binding obligations of each Loan Party thereto
enforceable in accordance with their terms, as to the matters contained in
clause (ii) above, (3) such recordings, filings, notices, endorsements and other
actions being sufficient to create valid perfected Liens on such properties, and
(4) such other matters as the First Lien Collateral Agent may reasonably
request;

(iv) as promptly as practicable after such acquisition, deliver, upon the
reasonable request of the First Lien Collateral Agent, to the First Lien
Collateral Agent with respect to each newly acquired parcel of real property
owned or held by each Loan Party and each newly acquired or newly formed
Subsidiary title reports, surveys and engineering, soils and other reports, and
environmental assessment reports, each in scope, form and substance satisfactory
to the First Lien Collateral Agent, provided, however, that to the extent that
any Loan Party or any of its Subsidiaries shall have otherwise received any of
the foregoing items with respect to such real property, such items shall,
promptly after the receipt thereof, be delivered to the First Lien Collateral
Agent; and

(v) at any time and from time to time, promptly execute and deliver, and cause
each Loan Party to execute and deliver, any and all further instruments and
documents and take, and cause each Loan Party to take, all such other action as
the First Lien Collateral Agent may deem necessary or desirable in obtaining the
full benefits of, or in perfecting and preserving the Liens of, such guaranties,
mortgages, pledges, assignments, security agreement supplements, intellectual
property security agreement supplements and security agreements, including,
without limitation, in the case of any newly formed Subsidiary incorporated in
England or Wales, completing the financial assistance whitewash procedures under
Sections 155-158 of the Companies Act to enable such Subsidiary to enter into
any documents contemplated by this Agreement, including those requirements
specifically set out in Section 3.01(a)(iv).

(k) Further Assurances. (i) Promptly upon request by any Agent, or any Lender
through the First Lien Administrative Agent, correct, and cause each of its
Subsidiaries promptly to correct, any material defect or error that may be
discovered in any Loan Document or in the execution, acknowledgment, filing or
recordation thereof; and

(ii) Promptly upon request by any Agent, or any Lender through the First Lien
Administrative Agent, do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register any and all such further acts, deeds,
conveyances, pledge agreements, mortgages, deeds of trust, trust deeds,
assignments, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments as any Agent, or any Lender through the First Lien Administrative
Agent, may reasonably require from time to time in order to (A) carry out more
effectively the purposes of the Loan Documents, (B) to the fullest

 

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extent permitted by applicable law, subject any Loan Party’s or any of its
Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (C) perfect
and maintain the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and (D) assure,
convey, grant, assign, transfer, preserve, protect and confirm more effectively
unto the First Lien Secured Parties the rights granted or now or hereafter
intended to be granted to the First Lien Secured Parties under any Loan Document
or under any other instrument executed in connection with any Loan Document to
which any Loan Party or any of its Subsidiaries is or is to be a party, and
cause each of its Subsidiaries to do so.

(l) Performance of Related Documents and Material Contracts. Perform and
observe, and cause each of its Subsidiaries to perform and observe, in all
material respects, the terms and provisions of each Related Document and
Material Contract to be performed or observed by it, maintain each such Related
Document and Material Contract in full force and effect, enforce such Related
Document and Material Contract in accordance with its terms in all material
respects, take all such action to such end as may be from time to time requested
by the First Lien Administrative Agent and, upon request of the First Lien
Administrative Agent, make to each other party to each such Related Document or
Material Contract such demands and requests for information and reports or for
action as any Loan Party or any of its Subsidiaries is entitled to make under
such Related Document or Material Contract, except in each such case where
non-performance could not be reasonably expected to have a Material Adverse
Effect.

(m) Preparation of Environmental Reports. Upon (i) the occurrence of any
Environmental Action or (ii) the occurrence of any Event of Default, provide to
the First Lien Administrative Agent and the First Lien Collateral Agent within
60 days of request, at the expense of the Borrower, an environmental site
assessment report for any of its or its Subsidiaries’ properties described in
such request, prepared by an environmental consulting firm acceptable to the
First Lien Administrative Agent and the First Lien Collateral Agent, indicating
the status of compliance with Environmental Law and the presence or absence of
Hazardous Materials and any natural gas, petroleum or petroleum products,
byproducts or breakdown products that have been released or are present in
violation of Environmental Law, and the estimated cost of any compliance,
removal or remedial action under Environmental Law or in connection with such
Hazardous Materials or natural gas, petroleum or petroleum products, byproducts
or breakdown products, in each case, on such properties; without limiting the
generality of the foregoing, if the First Lien Administrative Agent or the First
Lien Collateral Agent determines at any time that a material risk exists that
any such report will not be provided within the time referred to above, the
First Lien Administrative Agent or the First Lien Collateral Agent may retain an
environmental consulting firm to prepare such report at the expense of the
Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary that
owns any property described in such request to grant at the time of such request
to the Agents, the Lenders, such firm and any agents or representatives thereof
an irrevocable non-exclusive license, subject to the rights of tenants, to enter
onto their respective properties to undertake such an assessment.

 

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(n) Compliance with Terms of Leaseholds. Make all payments and otherwise perform
all material obligations in respect of all leases of real property to which the
Borrower or any of its Subsidiaries is a party, keep such leases in full force
and effect and not allow such leases to lapse or be terminated or any rights to
renew such leases to be forfeited or cancelled, except in circumstances where
the landlord under a lease is successful in preventing a new tenancy from being
granted following the expiry of a lease pursuant to Section 30(i) of the
Landlord Tenant Act of 1954 and notify the First Lien Administrative Agent of
any material defaults under such leases and cooperate with the First Lien
Administrative Agent in all respects to cure any such default, and cause each of
its Subsidiaries to do so.

(o) Accounts. (i) Establish (or cause to be established) and maintain at all
times in accordance with the Intercreditor Agreement, the Accounts as
contemplated therein and (ii) cause all of Revenues to be deposited into the
Revenue Accounts and apply the funds deposited or credited therein and in the
other Accounts in accordance with the terms of the Intercreditor Agreement.

(p) Hedge Agreements. (i) Maintain all Unsecured Hedge Agreements in effect in
accordance with their terms.

(ii) On or prior to June 30, 2009, either (A) exercise the Optional Extension
Provision contained in the Initial Interest Rate and Currency Hedge Agreement or
(B) enter into one or more Hedge Agreements with an Acceptable Hedge Provider
that have the equivalent economic effect of protecting the Borrower from
interest rate and currency fluctuations in respect of the Advances as those that
would apply if the Borrower exercised the Optional Extension Provision contained
in the Initial Interest Rate and Currency Hedge Agreement or on terms otherwise
acceptable to the Required Lenders (such Hedge Agreements being “Replacement
Interest Rate and Currency Hedge Agreements”) and, in either case, pay to the
relevant Hedge Provider, the Additional Hedge Premium payable in respect
thereof.

(q) Consultants. Cooperate with all reasonable requests of consultants engaged
by the Agents or the Lenders.

(r) Expansion Account. Use amounts on deposit in the Expansion Accounts solely
to fund Expansion Costs; provided that any amounts remaining on deposit in the
Expansion Account following Phase II Completion shall be applied in accordance
with Section 2.06(b)(iv).

(s) United Kingdom Secretary of State. Procure that Viking Gas will, within the
period which is 10 days from the Effective Date, notify to the Secretary of
State for Trade and Industry of the United Kingdom all information required
under paragraph 5 of the Open Permission (Creation of Security Rights Over
Licenses) in relation to the creation of a Lien over the Natural Gas Field
Licenses as contemplated by the UK Debenture.

(t) Expansion Work. Diligently prosecute, or cause its Subsidiaries to
diligently prosecute, the Expansion Work (i) in accordance with Prudent Industry
Practices, and (ii)

 

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such that Phase I Completion could reasonably be expected to occur on or before
March 7, 2007, the condition specified in clause (a) of Phase II Completion
could reasonably be expected to occur on or before August 7, 2007 and Phase II
Completion could reasonably be expected to occur on or before August 7, 2009.

(u) Natural Gas Field Licenses. Keep the Natural Gas Field Licenses in full
force and effect and keep all other rights and concessions necessary for the
operation of the Project in full force and effect.

(v) Local Planning Permissions. Obtain within 8 months of the Effective Date, a
variation and renewal of each of the planning permissions granted for the
existing user of the Knapton Generating Station, the original pipeline sites and
the well sites (other than the planning permissions granted in respect of the
Pickering and East Heslerton wellsites), so as to extend the validity of these
permissions to at least the eighth (8th) anniversary of the Effective Date.

(w) Transfer of Proceeds. Procure that all intercompany loans in respect of
proceeds of the Advances which the Borrower makes to any Subsidiary from time to
time shall be structured in a manner reasonably satisfactory to the First Lien
Administrative Agent.

(x) Additional Corporate Matters. Procure that, within the period which is 20
Business Days from the Effective Date, the following steps are taken in a form
and manner satisfactory to the First Lien Administrative Agent in respect of the
constitutional documents of the UK Guarantors:

(i) Delivery to the First Lien Administrative Agent of certified true copies of
the following constitutional documents of each of UK Energy, Viking Petroleum,
Viking Gas, RGS and Madison, updated to contain the relevant particulars of the
current shareholders, officers of each such UK Guarantor and security created by
the UK Debenture:

(A) the register of charges;

(B) the register of applications or allotments;

(C) the register of share transfers;

(D) the register of directors;

(E) the register of company secretaries; and

(F) the share certificates of Viking Petroleum and an executed blank stock
transfer form.

(ii) Amend VIP’s Memorandum and Articles of Incorporation by: (A) deleting
Articles 3 and 4 in their entirety, and (B) specifically excluding the
application of Regulation 26 of Table A of the Schedule to the Companies (Tables

 

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A to F) Regulations 1985 (“Table A”). A certified true copy of the amended
Memorandum and Articles of Association shall be delivered to the First Lien
Administrative Agent.

(iii) Amend Viking Petroleum’s Memorandum and Articles of Incorporation by:
(1) deleting Articles 4 and 6 in their entirety, and (2) specifically excluding
the application of Regulation 26 of Table A. A certified true copy of the
amended Memorandum and Articles of Association shall be delivered to the First
Lien Administrative Agent.

(iv) Deliver to the First Lien Administrative Agent satisfactory evidence of:
(1) the release of all warrant certificates held by TCW, and (2) the
cancellation of the stock transfer form (undated and unsigned) transferring one
1 share in Viking Petroleum from VIP to Deutsche Bank Trust Company Americas.

(v) Deliver to the First Lien Administrative Agent satisfactory evidence of the
cancellation of the stock transfer form (undated and unsigned) transferring
3,100,000 shares from Viking Petroleum to Deutsche Bank Trust Company Americas.

(y) Amend the Memorandum and Articles of Incorporation of each of UK Energy, RGS
and Madison, by: (A) deleting Articles 5 and 20 in their entirety, and
(B) specifically excluding the application of Regulation 26 of Table A to each
such UK Guarantor. A certified true copy of each such amended Memorandum and
Articles of Association shall be delivered to the First Lien Administrative
Agent.

(z) Viking BV. Procure that Viking BV shall be wound up and dissolved as soon as
practicable after the Effective Date but in any event within 60 days after the
Effective Date.

SECTION 5.02. Negative Covenants. So long as any Advance or any other Obligation
of any Loan Party under any Loan Document shall remain unpaid, the Borrower will
not, at any time:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with
respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign or file
or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer
to exist, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist, any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:

(i) Liens created under the Loan Documents;

(ii) Liens created under the Second Lien Loan Documents;

 

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(iii) Permitted Liens;

(iv) Liens existing prior to the Effective Date and released on the Effective
Date pursuant to the Deed of Termination and Release and the Partial Release;

(v) purchase money Liens upon or in real property or equipment acquired or held
by the Borrower or any of its Subsidiaries in the ordinary course of business to
secure the purchase price of such property or equipment or to secure Debt
incurred solely for the purpose of financing the acquisition, construction or
improvement of any such property or equipment to be subject to such Liens, or
Liens existing on any such property or equipment at the time of acquisition
(other than any such Liens created in contemplation of such acquisition that do
not secure the purchase price), or extensions, renewals or replacements of any
of the foregoing for the same or a lesser amount; provided, however, that no
such Lien shall extend to or cover any property other than the property or
equipment being acquired, constructed or improved, and no such extension,
renewal or replacement shall extend to or cover any property not theretofore
subject to the Lien being extended, renewed or replaced; and provided further
that the aggregate principal amount of the Debt secured by Liens permitted by
this clause (vi) shall not exceed the amount permitted under
Section 5.02(b)(iii) at any time outstanding;

(vi) Liens arising under Capitalized Leases permitted under Section 5.02(b)(iv);
provided that no such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases; and

(vii) Liens created under the Carbon Credit Hedge Collateral Deed.

(b) Debt. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:

(i) Debt under the Loan Documents;

(ii) Debt under the Second Lien Loan Documents;

(iii) Debt secured by Liens permitted by Section 5.02(a)(v) not to exceed in the
aggregate U.S.$1,000,000 at any time outstanding;

(iv) (x) Capitalized Leases not to exceed in the aggregate U.S.$1,000,000 at any
time outstanding, and (y) in the case of Capitalized Leases to which any
Subsidiary of the Borrower is a party, Debt of the Borrower of the type
described in clause (j) of the definition of “Debt” guaranteeing the Obligations
of such Subsidiary under such Capitalized Leases;

(v) Debt in respect of the Carbon Credit Hedge Agreement;

 

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(vi) Debt owed to the Borrower or a wholly owned Subsidiary of the Borrower,
which Debt shall (x) in the case of Debt owed to a Loan Party, be subject to the
security interest granted to the Secured Parties under the Collateral Documents,
and (y) be otherwise permitted under the provisions of Section 5.02(f); and

(vii) unsecured Debt, not to exceed U.S.$2,000,000 at any time outstanding.

(c) Change in Nature of Business. Make, or permit any of its Subsidiaries to
make, any material change in the nature of its business as carried on at the
date hereof; or engage in, or permit any of its Subsidiaries to engage in, any
business other than as carried on as of the Effective Date or as contemplated by
the Transaction Documents.

(d) Mergers, Etc. Merge into or consolidate with any Person or permit any Person
to merge into it, or permit any of its Subsidiaries to do so, except that:

(i) the Borrower and its Subsidiaries may consummate the Transaction;

(ii) any Subsidiary of the Borrower may merge into or consolidate with any other
Subsidiary of the Borrower; provided that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation shall be a
wholly owned Subsidiary of the Borrower; and

(iii) any of the Borrower’s Subsidiaries may merge into the Borrower;

provided, however, that in each case, immediately before and after giving effect
thereto, no Default shall have occurred and be continuing and, in the case of
any such merger to which the Borrower is a party, the Borrower is the surviving
corporation.

(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, or
permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of,
any assets, or grant any option or other right to purchase, lease or otherwise
acquire, or permit any of its Subsidiaries to grant any option or other right to
purchase, lease or otherwise acquire, any assets, except:

(i) sales in the ordinary course of its business;

(ii) in a transaction authorized by Section 5.02(d);

(iii) sales, transfers or other dispositions of assets among Loan Parties
pursuant to the Related Documents; and

(iv) transfers of carbon emissions credits in accordance with the Carbon Credit
Hedge Agreement and the Carbon Credit Hedge Collateral Deed.

 

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(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except:

(i) (A) Investments by the Borrower and its Subsidiaries in their Subsidiaries
outstanding on the date hereof and (B) additional Investments by the Borrower
and its Subsidiaries in Loan Parties;

(ii) loans and advances to employees in the ordinary course of the business of
the Borrower and its Subsidiaries as presently conducted in an aggregate
principal amount not to exceed U.S.$1,000,000 at any time outstanding;

(iii) Investments by the Borrower and its Subsidiaries in Cash Equivalents; and

(iv) Investments under the Carbon Credit Hedge Agreement.

(g) Restricted Payments. Declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Interests now or
hereafter outstanding, return any capital to its stockholders, partners or
members (or the equivalent Persons thereof) as such, prepay any Debt owed by any
Loan Party to any other Loan Party, USEY, USE Overseas, Marathon, VTEX or any
Affiliate thereof, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such, or permit any of its Subsidiaries to do any
of the foregoing, or permit any of its Subsidiaries to purchase, redeem, retire,
defease or otherwise acquire for value any Equity Interests in the Borrower,
other than on an Excess Cash Flow Payment Date and provided that the following
conditions shall have been satisfied:

(i) no Default shall have occurred and be continuing at the time of any action
described above or would result therefrom;

(ii) the amounts required to be deposited in the Debt Service Reserve Account
pursuant to the Intercreditor Agreement have been deposited (or a Debt Service
Reserve Letter of Credit (as defined in the Intercreditor Agreement) has been
posted in substitution therefor);

(iii) the Excess Cash Period shall have expired;

(iv) the Phase II Completion shall have occurred;

(v) all of the Borrower’s obligations under Section 2.06(b)(i) of this Agreement
and Section 2.06(b)(ii) of the Second Lien Credit Agreement shall have been
satisfied; and

(vi) the Debt Service Coverage Ratio on the date of such payment or other action
in accordance with this Section 5.02(g) is (A) for the first fiscal quarter
following the expiration of the Excess Cash Period, 1.00:1.00, (B) for the
second fiscal quarter following the expiration of the Excess Cash Period,
1.00:1.00 and (C) at all times thereafter, at least 1.00:1.00, in each case, for
each of the most recently ended four fiscal quarters immediately preceding such
date;

 

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provided that (i) any Subsidiary of the Borrower may declare and pay cash
dividends to, or pay or prepay any Debt owed to, the Borrower or to any Loan
Party which is a Subsidiary of the Borrower at any time without regard to the
foregoing conditions, (ii) on the Effective Date, the Borrower may distribute up
to U.S.$1,000,000 to USE Overseas to repay amounts owed by VIP to certain
creditors of VIP and (iii) the Borrower may permit distributions of funds on
deposit in (A) the Sponsor Funding Account to the extent contemplated by
Section 7.14(a) of the Intercreditor Agreement and (B) the Debt Service Reserve
Account to the extent contemplated by Section 7.8(b)(i) of the Intercreditor
Agreement.

(h) Amendments of Constitutive Documents. Except as set forth on Schedule
5.01(e), amend, or permit any of its Subsidiaries to amend, its certificate of
incorporation or bylaws or other constitutive documents other than amendments
that would not be reasonably expected to have a Material Adverse Effect.

(i) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in (i) accounting policies or reporting practices,
except as required by GAAP, or (ii) its Fiscal Year.

(j) Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease or otherwise
satisfy prior to the scheduled maturity thereof in any manner, or make any
payment in violation of any subordination terms of, any Debt, except (i) the
prepayment of the Advances in accordance with the terms of this Agreement and
(ii) with respect to the Second Lien Obligations, any required prepayments in
accordance with the terms of the Transaction Documents, (iii) so long as no
Default has occurred and is continuing, prepayments of Debt permitted under
Section 5.02(b)(iv) or Section 5.02(b)(vii), or (iv) except as permitted by
Section 5.02(g); or amend, modify or change in any manner any term or condition
of the Second Lien Facility, or permit any of its Subsidiaries to do any of the
foregoing.

(k) Amendment, Etc., of Related Documents and Material Contracts. Cancel, assign
or terminate any Related Document or Material Contract or consent to or accept
any cancellation, assignment or termination thereof, amend, modify or change in
any manner any term or condition of any Related Document or Material Contract or
give any consent, waiver or approval thereunder, waive any default under or any
breach of any term or condition of any Related Document or Material Contract,
agree in any manner to any other amendment, modification or change of any term
or condition of any Related Document or Material Contract, or permit any of its
Subsidiaries to do any of the foregoing, except, in each case, to the extent
such actions are taken in the ordinary course of business or relate to
administrative matters and which, in any event, could not reasonably be expected
to have a Material Adverse Effect.

(l) Negative Pledge. Enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or

 

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assumption of any Lien upon any of its property or assets except (i) agreements
in favor of the First Lien Secured Parties or (ii) prohibitions or conditions
under (A) the Second Lien Loan Documents, (B) any purchase money Debt permitted
by Section 5.02(b)(iii) solely to the extent that the agreement or instrument
governing such Debt prohibits a Lien on the property acquired with the proceeds
of such Debt, or (C) any Capitalized Lease permitted by Section 5.02(b)(iv)
solely to the extent that such Capitalized Lease prohibits a Lien on the
property subject thereto.

(m) Partnerships, Etc. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so.

(n) Speculative Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures contracts
(other than the Power Purchase Agreement, the Gas Sales Agreement and the
Unsecured Hedge Agreements) or any similar speculative transactions (including,
without limitation, take-or-pay contracts).

(o) Emissions Credits. Exercise, or permit any of its Subsidiaries to exercise,
the option to transfer emissions credit in lieu of any cash due under the Carbon
Credit Hedge Agreement.

(p) Payment Restrictions Affecting Subsidiaries. Directly or indirectly, enter
into or suffer to exist, or permit any of its Subsidiaries to enter into or
suffer to exist, any agreement or arrangement limiting the ability of any of its
Subsidiaries to declare or pay dividends or other distributions in respect of
its Equity Interests or repay or prepay any Debt owed to, make loans or advances
to, or otherwise transfer assets to or make Investments in, the Borrower or any
Subsidiary of the Borrower (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise),
except (i) the Loan Documents, (ii) the Unsecured Hedge Agreements and (iii) the
Second Lien Loan Documents.

(q) Equity Interests. Issue, or permit any of its Subsidiaries to issue, any
Equity Interests to any Person, except to the extent (i) such Person is a Loan
Party that already holds an Equity Interest in the entity issuing such Equity
Interest and (ii) the requirements of Section 5.01(j) are satisfied with respect
to such issuance.

(r) Formation of Subsidiaries. Organize or invest, or permit any Subsidiary to
organize or invest, in any new Subsidiary.

(s) Other Accounts. Establish or maintain, or permit any of its Subsidiaries to
establish or maintain, any deposit or securities account other than (i) the
Accounts established and maintained pursuant to the Intercreditor Agreement and
the Account Control Agreement, (ii) deposit accounts as to which the Borrower
has delivered to the First Lien Administrative Agent an account control
agreement or form of notice for a charged account to the account bank for such
account in form set out in Schedule 5 to the UK Debenture, in each case, in form
and substance reasonably satisfactory to the First Lien Administrative Agent and
as to which no more than U.S.$1,000,000 or the currency

 

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equivalent thereof is on deposit in the aggregate for all such accounts at any
time and (iii) accounts in existence on the Effective Date (provided that the
Borrower shall cause each such account to be closed and the funds on deposit
therein or credited thereto at the time of such closure to be transferred to the
Revenue Accounts within 30 days after the Effective Date).

(t) Viking BV. (i) Permit Viking BV to engage in any business other than the
winding up of its affairs or (ii) make, or permit any Loan Party to make, any
Investments in or transfer any assets to Viking BV.

(u) Gas Hedge Agreement. Permit UK Energy or any other Loan Party to enter into
any additional transactions under the Gas Hedge Agreement, including entering
into any additional confirmations thereunder.

SECTION 5.03. Reporting Requirements. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, the
Borrower will furnish to the Agents and the Lenders:

(a) Default Notice. As soon as possible and in any event within five Business
Days after the Borrower obtains Knowledge of the occurrence of a Default or any
event, development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of the chief
financial officer of the Borrower setting forth details of such Default and the
action that the Borrower has taken and proposes to take with respect thereto.

(b) Annual Financials. As soon as available and in any event within 120 days
after the end of each Fiscal Year, a copy of the annual audit report for such
year for the Borrower and its Subsidiaries, including therein Consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of such Fiscal
Year and Consolidated statements of income and a Consolidated statement of cash
flows of the Borrower and its Subsidiaries for such Fiscal Year, in each case
accompanied by (i) an opinion as to such audit report of Weiser LLP or other
independent public or chartered accountants of recognized standing acceptable to
the Required Lenders and (ii) a report of such independent public accountants as
to the Borrower’s internal controls required under Section 404 of the
Sarbanes-Oxley Act of 2002, in each case certified in a manner to which the
Required Lenders have not objected, together with (x) a certificate of such
accounting firm to the Lenders stating that in the course of the regular audit
of the business of the Borrower and its Subsidiaries, which audit was conducted
by such accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a Default under
Section 5.04 has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default under Section 5.04 has occurred and is continuing, a
statement as to the nature thereof; provided that, if at any time, as a matter
of policy, such accounting firm is refusing to provide such certificates to
clients generally (and not just for the Borrower and its Subsidiaries), the
Borrower shall not be required to provide the certificate described in this
clause and (y) a schedule in form satisfactory to the First Lien Administrative
Agent of the computations used by such accountants in determining, as of the end
of such Fiscal Year, compliance

 

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with the covenants contained in Section 5.04; provided that, in the event of any
change in generally accepted accounting principles used in the preparation of
such financial statements, the Borrower shall also provide a reconciliation of
such financial statements to GAAP and (z) a certificate of the Chief Financial
Officer of the Borrower stating that no Default has occurred and is continuing
or, if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take with
respect thereto.

(c) Quarterly Financials. As soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal Year,
Consolidated balance sheets of the Borrower and its Subsidiaries as of the end
of such quarter and Consolidated statements of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal quarter and ending with the end of
such fiscal quarter and Consolidated statements of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding date or period of the preceding Fiscal Year, all
in reasonable detail and duly certified (subject to normal year-end audit
adjustments) by the Chief Financial Officer of the Borrower as having been
prepared in accordance with GAAP, together with (i) a certificate of said
officer stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower has taken and proposes to take with respect thereto and
(ii) a schedule in form satisfactory to the First Lien Administrative Agent of
the computations used by the Borrower in determining compliance with the
covenants contained in Section 5.04; provided that, in the event of any change
in generally accepted accounting principles used in the preparation of such
financial statements, the Borrower shall also provide a reconciliation of such
financial statements to GAAP.

(d) Monthly Financials. As soon as available and in any event within 30 days
after the end of each month, a Consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such month and Consolidated statements of
income and a Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous month and
ending with the end of such month and Consolidated statements of income and a
Consolidated statement of cash flows of the Borrower and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending with the
end of such month, setting forth in each case in comparative form the
corresponding figures for the preceding month, all in reasonable detail and duly
certified by the Chief Financial Officer of the Borrower.

(e) Annual Forecasts. As soon as available and in any event no later than 15
days before the end of each Fiscal Year, forecasts prepared by management of the
Borrower, in form satisfactory to the First Lien Administrative Agent, of
balance sheets, income statements and cash flow statements on a quarterly basis
for the Fiscal Year following such Fiscal Year and on an annual basis for each
Fiscal Year thereafter until August 7, 2013.

 

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(f) Litigation. Promptly after the commencement thereof, notice of all actions,
suits, investigations, litigation and proceedings before any Governmental
Authority affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(g).

(g) Agreement Notices. Promptly upon receipt thereof, copies of all material
notices, requests and other documents received by any Loan Party or any of its
Subsidiaries under or pursuant to any Related Document or Material Contract and,
from time to time upon request by the First Lien Administrative Agent, such
information regarding the Related Documents and the Material Contracts as the
First Lien Administrative Agent may reasonably request to the extent that such
information is in the possession of the Borrower or the other Loan Parties.

(h) ERISA. (i) ERISA Events and ERISA Reports. Promptly and in any event within
30 days after any Loan Party or any ERISA Affiliate knows or has reason to know
that any ERISA Event has occurred incurring liability in excess of $500,000, a
statement of the Chief Financial Officer of the Borrower describing such ERISA
Event and the action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto.

(ii) Plan Terminations. Promptly and in any event within five Business Days
after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each
notice from the PBGC stating its intention to terminate any Plan or to have a
trustee appointed to administer any Plan.

(iii) Plan Annual Reports. Promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with respect to
each Plan.

(iv) Multiemployer Plan Notices. Promptly and in any event within five Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, copies of each notice concerning (A) the
imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan or (C) the amount of liability incurred, or that may be
incurred, by such Loan Party or any ERISA Affiliate in connection with any event
described in clause (A) or (B).

(i) Environmental Conditions. As soon as reasonably practicable after the
assertion or occurrence thereof, notice of any Environmental Action against or
of any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be expected
to result in material cost, obligation or liability or (ii) cause any property
owned or occupied by any Loan Party or any of its Subsidiaries to be subject to
any restrictions on ownership, occupancy, use or transferability under any
Environmental Law.

(j) Real Property. As soon as available and in any event within 45 days after
the end of each Fiscal Year, a report supplementing Schedules 4.01(w) and
4.01(x) hereto,

 

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including an identification of all owned and leased real property disposed of by
the Borrower or any of its Subsidiaries during such Fiscal Year, a list and
description (including the street address, county or other relevant
jurisdiction, state, record owner, book value thereof and, in the case of leases
of property, lessor, lessee, expiration date and annual rental cost thereof) of
all real property acquired or leased during such Fiscal Year and a description
of such other changes in the information included in such Schedules as may be
necessary for such Schedules to be accurate and complete.

(k) Insurance. As soon as available and in any event within 45 days after the
end of each Fiscal Year, a report summarizing the insurance coverage (specifying
type, amount and carrier) in effect for the Borrower and its Subsidiaries and
containing such additional information as any Agent, or any Lender through the
First Lien Administrative Agent, may reasonably specify.

(l) Annual Budget and Operating Plan. (i) As soon as available and in any event
not less than 45 days prior to the commencement of the Fiscal Year to which it
relates, an annual budget and operating plan (the “Annual Budget and Operating
Plan”), including a statement of monthly projected production, projected
operating expenses, Capital Expenditures and quarterly cash flows of the
Borrower and its Subsidiaries on a Consolidated basis. Each Annual Budget and
Operating Plan shall be accompanied by a certificate of the Borrower signed by a
duly authorized officer of the Borrower certifying that, to the best of such
officer’s knowledge, the budget is a reasonable estimate for the period covered
thereby and is in compliance with this Section 5.03(l).

(ii) A proposed Annual Budget and Operating Plan submitted pursuant to
Section 5.03(l)(i) shall become effective on the later of (A) the first day of
the relevant Fiscal Year or (B) 45 days after submission in accordance with
Section 5.03(l)(i), in each case unless all or any item of such proposed Annual
Budget and Operating Plan is disapproved by the Required Lenders (following
consultation with the Independent Engineer and the Independent Insurance
Consultant) in a notice to the Borrower explaining the reason for the Required
Lenders’ rejection of any particular item(s) as proposed by the Borrower.

(iii) If any item of a proposed Annual Budget and Operating Plan is disapproved
by the Required Lenders prior to the first day of the relevant Fiscal Year, the
Borrower and the First Lien Administrative Agent shall continue to discuss all
such items for a period of 30 days thereafter, and the Annual Budget and
Operating Plan for the preceding Fiscal Year relating to such disapproved items
shall continue to be applicable (and shall for all purposes hereof be deemed to
be part of the approved Annual Budget and Operating Plan for the current Fiscal
Year) until such time as such items included in the Annual Budget and Operating
Plan for the current Fiscal Year have been approved in writing by the Required
Lenders; provided that until so approved, the budgeted amounts for such
disapproved items shall be escalated by an amount equal to PPI.

(iv) Each Annual Budget and Operating Plan shall (A) be prepared in good faith
on the basis of all facts and circumstances then existing and known to the
Borrower and written assumptions stated therein which the Borrower believes to
be reasonable as to

 

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all factual and legal matters material to such estimates, and reflect the
Borrower’s best estimate of the future results of the Borrower and the Project
and (B) be based on the same format and maintained substantially on the same
basis as, and provide sufficient detail to permit a meaningful comparison to,
previous years. Each Annual Budget and Operating Plan shall include (1) good
faith Dollar- and Sterling denominated estimates of operating costs (by
principal components) and pro forma cash flow projections of the Borrower and
its Subsidiaries on a Consolidated basis for each month covered by the Annual
Budget and Operating Plan, (2) a summary of the major maintenance schedule for
the Project to the end of the then current long term major maintenance cycle
(and related scheduled outages), (3) the Borrower’s good faith estimates of the
costs of such maintenance and its envisioned effect on the operations of the
Project and (4) such other information as may be reasonably requested by the
First Lien Administrative Agent. Any amendment to an Annual Budget and Operating
Plan shall be subject to the prior approval of the Required Lenders as provided
in Section 5.03(l)(v).

(v) If, at any time during any Fiscal Year, (A) operating expenses already paid
and to be paid during such Fiscal Year exceed or could reasonably be expected to
exceed by ten percent (10%) or more the amount of such operating expenses
indicated in the relevant Annual Budget and Operating Plan for such Fiscal Year,
or (B) the Borrower believes it to be reasonably likely that such operating
expenses shall exceed such percentage, then the Borrower shall deliver a
proposed amendment to the relevant Annual Budget and Operating Plan to the First
Lien Administrative Agent and the First Lien Collateral Agent, and such
amendment shall become effective on the date on which it is approved in writing
by the Required Lenders; provided that at any time the statements in clause
(A) and clause (B) above are true, so long as the actual Revenues received by
the Borrower and its Subsidiaries exceed the projected Revenues provided by the
Borrower in the annual forecast delivered pursuant to Section 5.03(e) for such
Fiscal Year by at least the same percentage by which such operating expenses
exceed the amounts indicated therefor in the relevant Annual Budget and
Operating Plan, the Borrower shall not be required to deliver such proposed
amendment to the First Lien Administrative Agent. At the time the Borrower
submits such proposed amendment, the Borrower shall certify the purpose of such
amendment and that such amendment is reasonably necessary or advisable for the
operation and maintenance of the Project. If the Required Lenders do not approve
a proposed amendment, the Required Lenders shall advise the Borrower of the
items which are disapproved and the reason for such disapproval. If all or any
part of a proposed amendment is not approved by the Required Lenders, the
Borrower shall comply with the approved Annual Budget and Operating Plan.

(m) Annual Operating Reports. As soon as available and in any event within 45
days after the end of each Fiscal Year, a report in form and substance
reasonably satisfactory to the First Lien Administrative Agent, with respect to
such Fiscal Year regarding the operations of the Borrower and its Subsidiaries
during such Fiscal Year, which report shall be confirmed by the Independent
Engineer.

(n) Annual Natural Gas Reserve Reports. As soon as available and in any event
within 60 days after the end of each Fiscal Year, a report from the Independent
Natural Gas Development Consultant in form and substance satisfactory to the
First Lien Administrative Agent, with respect to the proven and probable natural
gas reserves of the Borrower and its Subsidiaries as of the end of such Fiscal
Year.

 

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(o) Quarterly Natural Gas Reserve Certificate. As soon as available and in any
event within 30 days after the end of each fiscal quarter other than the fiscal
quarter coinciding with the end of each Fiscal Year, a certificate of the
Borrower signed by a duly authorized officer of the Borrower in form and
substance satisfactory to the First Lien Administrative Agent, with respect to
the proven and probable natural gas reserves of the Borrower and its
Subsidiaries as of the end of such fiscal quarter, which certificate shall be
confirmed by the Independent Natural Gas Development Consultant.

(p) Construction Progress Reports. As soon as available, but in no event more
than 30 days after the end of each month prior to Phase II Completion, a summary
of construction of the Expansion during such month, describing (i) the physical
progress and expenditure during such month, (ii) cumulative expenditure during
such month, (iii) variations of such progress and expenditure from the
construction and payment schedule in effect on the commencement of construction
of the Expansion, (iv) the Borrower’s then-current estimate of the total
Expansion Costs required to achieve Phase I Completion and the then-current
estimate of the total Expansion Costs required to achieve Phase II Completion,
(v) the Borrower’s then-current estimate of the dates of Phase I Completion and
Phase II Completion, (vi) any fact or occurrence of which the Borrower is aware
that (A) may increase the total Expansion Costs, delay Phase I Completion or
Phase II Completion beyond the then-currently estimated dates therefor or have a
material adverse effect on the performance of the Expansion when completed or
(B) may render unreasonable or inappropriate any material assumption on which
the latest Annual Budget and Operating Plan was based, and the anticipated
manner and timing of actions proposed to be taken by the Borrower in reaction to
any such fact or occurrence. In the event that the Independent Engineer or the
Required Lenders find any item in any such construction progress report to be
unreasonable for the timely achievement of Phase I Completion or Phase II
Completion, the Borrower, the Independent Engineer and the First Lien
Administrative Agent shall promptly discuss such item.

(q) Patriot Act Information. From time to time as may be required by any
Governmental Authority, all documentation and other information required by such
Governmental Authority under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation, the Patriot
Act.

(r) Other Information. Such other information respecting the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any Loan Party or any of its Subsidiaries as any Agent, or any Lender through
the First Lien Administrative Agent, may from time to time reasonably request.

 

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SECTION 5.04. Financial Covenants. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, from
and after Phase II Completion, the Borrower will:

(a) Debt Service Coverage Ratio. Following the expiration of the Excess Cash
Period, (i) maintain at the end of each fiscal quarter, a Debt Service Coverage
Ratio of not less than (A) for the first fiscal quarter following the expiration
of the Excess Cash Period, 1.00:1.00, (B) for the second fiscal quarter
following the expiration of the Excess Cash Period, 1.00:1.00 and (C) at all
times thereafter, 1.00:1.00, in each case, for the consecutive 12-month period
immediately preceding the last day of such fiscal quarter and (ii) maintain at
the end of each fiscal quarter a Projected Debt Service Coverage Ratio of not
less than (x) for the first fiscal quarter following the expiration of the
Excess Cash Period, 1.00:1.00, (y) for the second fiscal quarter following the
expiration of the Excess Cash Period, 1.00:1.00 and (z) at all times thereafter,
1.00:1.00, in each case, for the consecutive 12-month period immediately
succeeding the last day of such fiscal quarter.

(b) First Lien Total Leverage Ratio. Following the end of the second fiscal
quarter following Phase II Completion, maintain at the end of each fiscal
quarter a First Lien Total Leverage Ratio of no more than 2.00:1.00.

(c) Total Leverage Ratio. Following the end of the second fiscal quarter
following Phase II Completion, maintain at the end of each fiscal quarter a
Total Leverage Ratio of no more than 3.00:1.00.

(d) First Lien Proven Reserve Coverage Ratio. Following the end of the second
fiscal quarter following Phase II Completion, maintain at the end of each fiscal
quarter a First Lien Proven Reserve Coverage Ratio of not less than 4.00:1.00.

(e) Proven Reserve Coverage Ratio. Following the end of the second fiscal
quarter following Phase II Completion, maintain at the end of each fiscal
quarter a Proven Reserve Coverage Ratio of not less than 2.75:1.00.

(f) First Lien Net Debt to Proven Reserve Ratio. Following Phase II Completion,
maintain at the end of each Fiscal Year a First Lien Net Debt to Proven Reserve
Ratio of not more than U.S.$2.50/Mcfe.

(g) Net Debt to Proven Reserve Ratio. Following Phase II Completion, maintain at
the end of each Fiscal Year a Net Debt to Proven Reserve Ratio of not more than
U.S.$4.00/Mcfe.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of Default. If any of the following events (“Events of
Default”) shall occur and be continuing:

(a) (i) the Borrower shall fail to pay any principal of any Advance when the
same shall become due and payable, (ii) the Borrower shall fail to pay any
interest on any Advance within three Business Days after the same shall become
due and payable, or (iii) any Loan Party shall fail to make any other payment
under any Loan Document within ten Business Days after the same shall become due
and payable;

 

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(b) any representation or warranty made by USEY, any Loan Party or any Pledgor
(or any of its officers) under or in connection with any Loan Document shall
prove to have been incorrect when made and such failure of the facts to be
represented by such Person (i) has resulted or could be reasonably expected to
result in a Material Adverse Effect and (ii) shall continue uncured for thirty
(30) or more days from the earlier of (A) the discovery thereof by such Person
or (B) the receipt by the Borrower of notice of such failure from the First Lien
Administrative Agent;

(c) the Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 2.13, 5.01(e), (i), (j) or (m), 5.02, 5.03 or
5.04;

(d) USEY, any Loan Party or any Pledgor shall fail to perform or observe any
other term, covenant or agreement contained in any Transaction Document (other
than any Unsecured Hedge Agreement) on its part to be performed or observed if
such failure shall remain unremedied for 30 days after the earlier of the date
on which (i) any officer of any Loan Party becomes aware of such failure or
(ii) written notice thereof shall have been given to the Borrower by any Agent
or any Lender;

(e) any Loan Party, any of their respective Subsidiaries or, at any time prior
to the Termination Date (as defined in the Equity Support Agreement), USEY shall
fail to pay any principal of, premium or interest on or any other amount payable
in respect of any Debt of such Person (as the case may be) that is outstanding
in a principal amount (or, in the case of any Hedge Agreement, an Agreement
Value) of at least U.S.$2,500,000 either individually or in the aggregate for
all such Persons (but excluding Debt outstanding hereunder), when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt or otherwise to cause, or
to permit the holder thereof to cause, such Debt to mature; or any such Debt
shall be declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated maturity
thereof;

(f) any Loan Party, any of their respective Subsidiaries or, at any time prior
to the Termination Date (as defined in the Equity Support Agreement), USEY shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
any such Person seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
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bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it)
that is being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any such Person shall take any corporate action to
authorize any of the actions set forth above in this subsection (f);

(g) any judgments or orders, either individually or in the aggregate, for the
payment of money in excess of U.S.$2,500,000 shall be rendered against any Loan
Party, any of their respective Subsidiaries or, at any time prior to the
Termination Date (as defined in the Equity Support Agreement), USEY and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

(h) any non monetary judgment or order shall be rendered against any Loan Party,
any of their respective Subsidiaries or, at any time prior to the Termination
Date (as defined in the Equity Support Agreement), USEY that could reasonably be
expected to have a Material Adverse Effect, and there shall be any period of 60
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect;

(i) any provision of any Loan Document after delivery thereof pursuant to
Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding on or
enforceable against USEY or any Loan Party or Pledgor party to it, or USEY or
any such Loan Party or Pledgor shall so state in writing;

(j) any Collateral Document or financing statement after delivery thereof
pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority lien on
and security interest in the Collateral purported to be covered thereby;

(k) a Change of Control shall occur;

(l) any ERISA Event (other than an event described in clause (d) of the
definition thereof) shall have occurred with respect to a Plan or Plans and such
event or condition together with other such events or conditions, if any, would
subject any Loan Party or ERISA Affiliate to any liability in excess of
U.S.$2,500,000;

(m) any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds U.S.$2,500,000 or requires payments exceeding
U.S.$2,500,000 per annum;

 

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(n) any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding U.S.$2,500,000;

(o) Phase I Completion shall have failed to occur on or before March 7, 2007;

(p) The condition specified in clause (a) of Phase II Completion shall have
failed to occur by August 7, 2007;

(q) Phase II Completion shall have failed to occur on or before August 7, 2009;

(r) USEY shall fail to perform or observe any material term, covenant or
agreement contained in the Equity Support Agreement on its part to be performed
or observed if such failure shall remain unremedied for 10 Business Days;

(s)(i) the Initial Interest Rate and Currency Hedge Agreement or, in the event
the Borrower elects not to exercise the Optional Extension Provision, any
Replacement Interest Rate and Currency Hedge Agreements, shall cease to be in
full force and effect at any time prior to December 30, 2013, (ii) the Gas Hedge
Agreement shall cease to be in full force and effect at any time prior to
August 7, 2011 or (iii) the Carbon Credit Hedge Agreement shall cease to be in
full force and effect at any time prior to the date on which the parties to the
Carbon Credit Hedge Agreement have discharged all of their obligations
thereunder, in each case, for a period of 30 days after the date on which
(A) any officer of any Loan Party becomes aware that such Hedge Agreement has
ceased to be in full force and effect or (B) written notice thereof shall have
been given to the Borrower by any Agent or any Lender and, in each case, the
Loan Party party to such Hedge Agreement shall not have entered into a
Replacement Hedge Agreement with respect to such Hedge Agreement prior to the
expiration of such 30-day period;

(t) the Borrower or any Subsidiary of the Borrower shall fail to perform or
observe any material term, covenant or agreement contained in any Material
Project Agreement on its part to be performed or observed if such failure shall
remain unremedied in 30 Business Days;

(u) any party (other than the Borrower or any Subsidiary of the Borrower) shall
fail to perform or observe any material term, covenant or agreement contained in
any Material Project Agreement on its part to be performed or observed if such
failure shall remain unremedied for 60 Business Days, and the Borrower shall not
have entered into a replacement agreement with respect to such Material Project
Agreement within such

 

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period on terms and conditions and with counterparties reasonably acceptable to
the Required Lenders (each such replacement agreement, a “Replacement Material
Project Agreement”);

(v) (i) the destruction of, or loss with respect to, all or a substantial part
of the Project, (ii) any condemnation, seizure or appropriation of all or a
substantial part of the Project or (iii) the voluntary cessation of all or
substantially all Expansion Work (prior to Phase II Completion) or production
activities of the Project which continues without interruption for 60 days; or

(w) the Obligations of the Loan Parties under the Loan Documents shall fail to
constitute “Senior Debt” or shall fail to constitute the sole “Designated Senior
Debt” under the terms of the Second Lien Loan Documents and any Subordinated
Debt;

then, and in any such event, the First Lien Administrative Agent (i) shall at
the request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Advances, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Advances, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that, in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Bankruptcy
Code, (x) the Commitments of each Lender and the obligation of each Lender to
make Advances shall automatically be terminated and (y) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.

ARTICLE VII

THE ADMINISTRATIVE AGENT

SECTION 7.01. Authorization and Action. (a) Each Lender hereby appoints and
authorizes the First Lien Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement and
the other Loan Documents as are delegated to the First Lien Administrative Agent
by the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Obligations of the Loan Parties), the First Lien Administrative Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lenders and all holders of
Notes; provided, however, that the First Lien Administrative Agent shall not be
required to take any action that exposes the First Lien Administrative Agent to
personal liability or that is contrary to this Agreement or applicable law.
Notwithstanding anything to the contrary in any Loan Document, in any
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exercise discretion, approve documentation or any other matter or distribute
proceeds under any Loan Document or take any other action under or otherwise
relating to any Loan Document, the First Lien Administrative Agent may, at its
option, seek to obtain instructions or directions from the Required Lenders.

(b) The First Lien Administrative Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
First Lien Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in accordance with
the foregoing provisions of this Section 7.01(b) in the absence of the First
Lien Administrative Agent’s gross negligence or willful misconduct.

SECTION 7.02. Agents’ Reliance, Etc. Neither the First Lien Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the First
Lien Administrative Agent: (a) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (b) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with the Loan Documents;
(c) shall not have any duty to ascertain or to inquire as to the performance,
observance or satisfaction of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or the existence at any time of any
Default under the Loan Documents or to inspect the property (including the books
and records) of any Loan Party; (d) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
(e) shall not be deemed to have knowledge of any Default or Event of Default
unless the First Lien Administrative Agent shall have received written notice
thereof from the Borrower or a Lender; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or electronic
communication) believed by it to be genuine and signed or sent by the proper
party or parties.

SECTION 7.03. Credit Suisse and Affiliates. With respect to the Advances made by
it and any Notes issued to it, Credit Suisse shall have the same rights and
powers under the Loan Documents as any other Lender and may exercise the same as
though it were not the First Lien Administrative Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include Credit Suisse in
its individual capacity. Credit Suisse and its Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person that may do business with or
own securities of any Loan Party or any such Subsidiary, all as if Credit Suisse
were not the First Lien Administrative Agent and without any duty to account
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shall not have any duty to disclose any information obtained or received by it
or any of its Affiliates relating to any Loan Party or any of its Subsidiaries
to the extent such information was obtained or received in any capacity other
than as the First Lien Administrative Agent.

SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the First Lien Administrative Agent or
any other Lender and based on the financial statements referred to in
Section 4.01 and such other 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 First Lien Administrative Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.

SECTION 7.05. Indemnification. (a) Each Lender severally agrees to indemnify the
First Lien Administrative Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender’s ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
First Lien Administrative Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by the First Lien Administrative
Agent under the Loan Documents (collectively, the “Indemnified Costs”);
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the First Lien Administrative
Agent’s gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without limitation
of the foregoing, each Lender agrees to reimburse the First Lien Administrative
Agent promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the
Borrower under Section 8.04, to the extent that the First Lien Administrative
Agent is not promptly reimbursed for such costs and expenses by the Borrower. In
the case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 7.05 applies whether any such investigation,
litigation or proceeding is brought by any Lender or any other Person.

(b) For purposes of this Section 7.05, each Lender’s ratable share of any amount
shall be determined, at any time, according to the sum of the aggregate
principal amount of the Advances outstanding at such time and owing to the
Lenders. The failure of any Lender to reimburse the First Lien Administrative
Agent, promptly upon demand for its ratable share of any amount required to be
paid by the Lenders to the First Lien Administrative Agent, as provided herein
shall not relieve any other Lender of its obligation hereunder to reimburse the
First Lien Administrative Agent, for its ratable share of such amount, but no
Lender shall be responsible for the failure of any other Lender to reimburse
such Agent, for such other Lender’s ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender hereunder, the
agreement and obligations of each Lender contained in this Section 7.05 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.

 

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SECTION 7.06. Successor Agents. The First Lien Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Required Lenders;
provided, however, that any removal of the First Lien Administrative Agent will
not be effective until it has also been replaced as First Lien Administrative
Agent and released from all of its obligations in respect thereof. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor First Lien Administrative Agent. If no successor First Lien
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring First
Lien Administrative Agent’s giving of notice of resignation or the Required
Lenders’ removal of the retiring First Lien Administrative Agent, then the
retiring First Lien Administrative Agent may, on behalf of the Lenders, appoint
a successor First Lien Administrative Agent, which shall be a commercial bank
organized under the laws of the United States or of any State thereof and having
a combined capital and surplus of at least U.S.$250,000,000. Upon the acceptance
of any appointment as First Lien Administrative Agent hereunder by a successor
First Lien Administrative Agent, such successor First Lien Administrative Agent
shall succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring First Lien Administrative Agent, and the
retiring First Lien Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. Upon the acceptance of any appointment as
First Lien Administrative Agent hereunder by a successor First Lien
Administrative Agent, such successor First Lien Administrative Agent shall
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring First Lien Administrative Agent as to the Facility,
other than with respect to funds transfers and other similar aspects of the
administration of Borrowings under the Facility and payments by the Borrower in
respect of the Facility, and the retiring First Lien Administrative Agent shall
be discharged from its duties and obligations under this Agreement as to the
Facility, other than as aforesaid. If within 45 days after written notice is
given of the retiring First Lien Administrative Agent’s resignation or removal
under this Section 7.06 no successor First Lien Administrative Agent shall have
been appointed and shall have accepted such appointment, then on such 45th day
(a) the retiring First Lien Administrative Agent’s resignation or removal shall
become effective, (b) the retiring First Lien Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (c) the Required Lenders shall thereafter perform all duties of the retiring
First Lien Administrative Agent under the Loan Documents until such time, if
any, as the Required Lenders appoint a successor First Lien Administrative Agent
as provided above. After any retiring First Lien Administrative Agent’s
resignation or removal hereunder as First Lien Administrative Agent shall have
become effective, the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was First Lien
Administrative Agent under this Agreement.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that (a) no amendment, waiver or consent shall, unless
in writing and signed by all of the Lenders, do any of the following at any
time:

(i) waive any of the conditions specified in Section 3.01;

 

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(ii) change (A) the definition of “Required Lenders” or (B) the number of
Lenders or the percentage of (x) the Commitments, or (y) the aggregate unpaid
principal amount of the Advances that, in each case, shall be required for the
Lenders or any of them to take any action hereunder;

(iii) release one or more Guarantors (or otherwise limit such Guarantors’
liability with respect to the Obligations owing to the Agents and the Lenders
under the Guaranties) if such release or limitation is in respect of all or
substantially all of the value of the Guaranties to the Lenders;

(iv) release all or substantially all of the value of the Equity Support
Agreement, other than in accordance with the terms of the Loan Documents;

(v) release all or substantially all of the Collateral in any transaction or
series of related transactions; or

(vi) amend this Section 8.01;

and (b) no amendment, waiver or consent shall, unless in writing and signed by
the Required Lenders and, in the case of clauses (i), (ii) and (iv) below, each
Lender specified below for such amendment, waiver or consent:

(i) increase the Commitments of a Lender without the consent of such Lender;

(ii) reduce the principal of, or stated rate of interest on, the Advances owed
to a Lender or any fees or other amounts stated to be payable hereunder or under
the other Loan Documents to such Lender without the consent of such Lender;

(iii) modify the terms of the Intercreditor Agreement; or

(iv) postpone any date scheduled for any payment of principal of, or interest
on, the Advances pursuant to Section 2.03, 2.04 or 2.06 or any date fixed for
any payment of fees hereunder in each case payable to a Lender without the
consent of such Lender;

provided further that no amendment, waiver or consent shall, unless in writing
and signed by the respective Agent in addition to the Lenders required above to
take such action, affect the rights or duties of such Agent under this Agreement
or the other Loan Documents.

SECTION 8.02. Notices, Etc. (a) All notices and other communications provided
for hereunder shall be either (x) in writing (including facsimile or electronic
communication) and mailed, transmitted by facsimile, sent by nationally
recognized overnight delivery service or

 

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overnight courier, or delivered or (y) as and to the extent set forth in
Section 8.02(b) and in the proviso to this Section 8.02(a), in an electronic
medium and delivered as set forth in Section 8.02(b), if to any Loan Party, to
the Borrower at its address at 545 Madison Avenue, 6th Floor, New York, New
York, 10002, Attention: Adam Greene, Fax: (212) 588-1635, E-mail Address:
agreene@usenergysystems.com; if to any Initial Lender, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other Lender,
at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender; if to the First Lien Collateral Agent, at
its address at Eleven Madison Avenue, New York, New York, 10010, Attention:
Thomas Lynch, Fax: (212) 325-8304, E-mail Address:
thomas.lynch@credit-suisse.com; and if to the First Lien Administrative Agent,
at its address at Eleven Madison Avenue, New York, New York, 10010, Attention:
Thomas Lynch, Fax: (212) 325-8304, E-mail Address:
thomas.lynch@credit-suisse.com; or, as to the Borrower or the First Lien
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written notice to the
Borrower and the First Lien Administrative Agent; provided, however, that
materials and information described in Section 8.02(b) shall be delivered to the
First Lien Administrative Agent in accordance with the provisions thereof or as
otherwise specified to the Borrower by the First Lien Administrative Agent. All
such notices and other communications shall, (i) when mailed or e-mailed, be
effective when deposited in the mails, transmitted by facsimile or sent by
electronic communication, respectively and (ii) when sent by nationally
recognized overnight delivery service or overnight courier, be effective the
next Business Day after being deposited with such service or courier, except, in
each case, that (A) notices and communications to any Agent pursuant to Article
II, III or VII shall not be effective until received by such Agent and
(B) notices and other communications to any Agent pursuant to Article II or VI
shall not be effective if sent by e-mail. Delivery by facsimile or e-mail of an
executed counterpart of a signature page to any amendment or waiver of any
provision of this Agreement or the Notes shall be effective as delivery of an
original executed counterpart thereof.

(b) The Borrower hereby agrees that it will provide to the First Lien
Administrative Agent all information, documents and other materials that it is
obligated to furnish to the First Lien Administrative Agent pursuant to the Loan
Documents, including, without limitation, all notices, requests, financial
statements, financial and other reports, certificates and other information
materials, but excluding any such communication that (i) relates to a request
for a new, or a Conversion of an existing, Borrowing (including any election of
an interest rate or interest period relating thereto), (ii) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any Default or Event of
Default under this Agreement or (iv) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Agreement and/or the Borrowing
(all such non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the First Lien Administrative Agent to an
electronic mail address specified by the First Lien Administrative Agent to the
Borrower. In addition, the Borrower agrees to continue to provide the
Communications to the First Lien Administrative Agent in the manner specified in
the Loan Documents but only to the extent requested by the First Lien
Administrative Agent. The Borrower further agrees that the First Lien
Administrative Agent may make the Communications available to the Lenders by
posting the Communications on IntraLinks or a substantially similar electronic
transmission system (the “Platform”).

 

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(c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE FIRST LIEN ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER
OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE
BORROWER’S OR THE FIRST LIEN ADMINISTRATIVE AGENT’S TRANSMISSION OF
COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY
AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.

(d) The First Lien Administrative Agent agrees that the receipt of the
Communications by the First Lien Administrative Agent at its e-mail address set
forth above shall constitute effective delivery of the Communications to the
First Lien Administrative Agent for purposes of the Loan Documents. Each Lender
agrees that notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective
delivery of the Communications to such Lender for purposes of the Loan
Documents. Each Lender agrees (i) to notify the First Lien Administrative Agent
in writing (including by electronic communication) from time to time of such
Lender’s e-mail address to which the foregoing notice may be sent by electronic
transmission and (ii) that the foregoing notice may be sent to such e-mail
address. Nothing herein shall prejudice the right of the First Lien
Administrative Agent or any Lender to give any notice or other communication
pursuant to any Loan Document in any other manner specified in such Loan
Document.

SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or any
Agent to exercise, and no delay in exercising, any right hereunder or under any
Note or any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on demand upon
presentation of a statement of account and absent manifest error (i) all
reasonable costs and expenses of each Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of, or any
consent or waiver under, the Loan Documents

 

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(including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for each Agent with respect thereto,
with respect to advising such Agent as to its rights and responsibilities, or
the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors’ rights
generally and any proceeding ancillary thereto) and (ii) all costs and expenses
of each Agent and each Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors’ rights generally
(including, without limitation, the reasonable fees and expenses of counsel for
the First Lien Administrative Agent and each Lender with respect thereto).

(b) The Borrower agrees to indemnify, defend and save and hold harmless the Lead
Arranger, each Agent, each Lender and each of their Affiliates, successors and
assigns and their respective officers, directors, employees, agents, advisors,
controlling persons and members (each, an “Indemnified Party”) from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities, costs
and expenses (including, without limitation, reasonable fees, disbursements and
other charges of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(i) the Facility, the actual or proposed use of the proceeds of the Advances,
the Transaction Documents, the Acquisition or any of the transactions
contemplated thereby, or (ii) the actual or alleged presence of Hazardous
Materials, or any natural gas, petroleum or petroleum products, byproducts or
breakdown products that have been released or are present in violation of any
Environmental Law, in each case, on any property of any Loan Party or any of its
Subsidiaries or any Environmental Action relating in any way to any Loan Party
or any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted primarily from such Indemnified Party’s
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 8.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors, any Indemnified Party or any other Person, whether or
not any Indemnified Party is otherwise a party thereto and whether or not the
Transaction is consummated. The Borrower also agrees not to assert any claim
against any Agent, any Lender or any of their Affiliates, or any of their
respective officers, directors, employees, agents and advisors, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Facility, the actual or proposed use of the
proceeds of the Advances, the Transaction Documents or any of the transactions
contemplated by the Transaction Documents.

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.07(b)(i), 2.08 or 2.09, acceleration of the
maturity of the Advances pursuant to Section 6.01 or

 

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for any other reason, or by an Assignee to a Lender other than on the last day
of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07, or if the Borrower
fails to make any payment or prepayment of an Advance for which a notice of
prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.03, 2.06 or 6.01 or otherwise, the Borrower shall, upon
demand by such Lender (with a copy of such demand to the First Lien
Administrative Agent), pay to the First Lien Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion or such failure to pay or prepay, as the case may be,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.

(d) If any Loan Party fails to pay when due any costs, expenses or other amounts
payable by it under any Loan Document, including, without limitation, fees and
expenses of counsel and indemnities, such amount may be paid on behalf of such
Loan Party by the First Lien Administrative Agent or any Lender, in its sole
discretion.

(e) Without prejudice to the survival of any other agreement of any Loan Party
hereunder or under any other Loan Document, the agreements and obligations of
the Borrower contained in Sections 2.10 and 2.11 and this Section 8.04 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.

SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the First Lien
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender shall have made any
demand under this Agreement and although such Obligations may be unmatured. Each
Agent and each Lender agrees promptly to notify the Borrower after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Agent and each Lender and their respective Affiliates under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Agent, such Lender and their respective
Affiliates may have.

SECTION 8.06. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and each Agent and the First Lien
Administrative Agent shall have been notified by each Initial Lender that such
Initial Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, each Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of each Lender.

 

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SECTION 8.07. Assignments and Participations. (a) Each Lender may assign to one
or more Persons (each such Person, an “Assignee”) all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
this Agreement, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender, an Affiliate of any Lender
or an Approved Fund of any Lender or an assignment of all of a Lender’s rights
and obligations under this Agreement, the aggregate amount of the Commitments
being assigned to such Assignee pursuant to such assignment (determined as of
the date of the Assignment and Acceptance with respect to such assignment) shall
in no event be less than U.S.$1,000,000 (or such lesser amount as shall be
approved by the First Lien Administrative Agent and the Borrower), (iii) each
such assignment made as a result of a demand by the Borrower shall be arranged
by the Borrower after consultation with the First Lien Administrative Agent and
shall be either an assignment of all of the rights and obligations of the
assigning Lender under this Agreement or an assignment of a portion of such
rights and obligations made concurrently with another such assignment or other
such assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (iv) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower unless and until
such Lender shall have received one or more payments from either the Borrower or
one or more Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, (v) no such
assignments shall be permitted without the consent of the First Lien
Administrative Agent (such consent not to be unreasonably withheld or delayed),
(vi) the parties to each assignment shall execute and deliver to the First Lien
Administrative Agent an Assignment and Acceptance via an electronic settlement
system acceptable to the First Lien Administrative Agent (or, if previously
agreed with the First Lien Administrative Agent, manually), for its acceptance
and recording in the Register, together with any Note or Notes (if any) subject
to such assignment, and shall pay to the First Lien Administrative Agent a
processing and recordation fee of $3,500 (which fee may be waived or reduced in
the sole discretion of the First Lien Administrative Agent) and (vii) following
each such assignment, the First Lien Administrative Agent shall provide notice
thereof to the Borrower; provided, however, that for each such assignment made
as a result of a demand by the Borrower, the Borrower shall pay to the First
Lien Administrative Agent the applicable processing and recordation fee;
provided, however, that concurrent assignments to members of an Assignee Group
and concurrent assignments from members of an Assignee Group to a single
Assignee (or to an Assignee and members of its Assignee Group) will be treated
as a single assignment for purposes of determining whether the minimum amount
set forth in clause (ii) has been met; provided, however, that the failure to
provide the notice described in clause (vii) shall not invalidate such
assignment.

(b) Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it

 

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pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder and (ii) the Lender assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than its rights under
Sections 2.10, 2.11 and 8.04 to the extent any claim thereunder relates to an
event arising prior to such assignment) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto).

(c) By executing and delivering an Assignment and Acceptance, each Lender
assignor thereunder and each assignee thereunder confirm to and agree with each
other and the other parties thereto and hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon any Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Assignee; (vi) such assignee appoints and authorizes each
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender, as the case may be.

(d) The First Lien Administrative Agent, acting for this purpose (but only for
this purpose) as the agent of the Borrower, shall maintain at its address
referred to in Section 8.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment under each Facility of, and
principal amount of the Advances owing under each Facility to, each Lender from
time to time (the “Register”). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the
Agents and the Lenders shall treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Agent or any Lender at
any reasonable time and from time to time upon reasonable prior notice.

 

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(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee, together with any Note or Notes (if any) subject to such
assignment, the First Lien Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower and each other Agent. In the case of any assignment by a Lender, within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the First Lien Administrative Agent in
exchange for the surrendered Note or Notes (if any) a new Note to the order of
such Assignee in an amount equal to the Commitment assumed by it under each
Facility pursuant to such Assignment and Acceptance and, if any assigning Lender
that had a Note or Notes prior to such assignment has retained a Commitment
hereunder under such Facility, a new Note to the order of such assigning Lender
in an amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A hereto.

(f) Each Lender may sell participations to one or more Persons (other than any
Loan Party or any of its Affiliates) in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments, the Advances owing to it and the Note or Notes (if
any) held by it); provided, however, that (i) such Lender’s obligations under
this Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral or the value of the Guaranties.

(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided, however, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender.

(h) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Advances owing to it
and the Note or Notes (if any) held by it) in favor of any Federal Reserve Bank
in accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

 

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(i) Notwithstanding anything to the contrary contained herein, any Lender that
is a Fund may create a security interest in all or any portion of the Advances
owing to it and any Note or Notes held by it to the trustee for holders of
obligations owed, or securities issued, by such Fund as security for such
obligations or securities; provided that, unless and until such trustee actually
becomes a Lender in compliance with the other provisions of this Section 8.07,
(i) no such pledge shall release the pledging Lender from any of its obligations
under the Loan Documents and (ii) such trustee shall not be entitled to exercise
any of the rights of a Lender under the Loan Documents even though such trustee
may have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.

(j) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the First Lien
Administrative Agent and the Borrower (an “SPC”) the option to provide all or
any part of any Advance that such Granting Lender would otherwise be obligated
to make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Advance and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Advance, the Granting Lender shall be obligated to make such Advance pursuant to
the terms hereof. The making of an Advance by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Advance
were made by such Granting Lender. Each party hereto hereby agrees that (i) no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, (ii) no SPC shall be entitled to
the benefits of Sections 2.08 and 2.11 (or any other increased costs protection
provision) and (iii) the Granting Lender shall for all purposes, including,
without limitation, the approval of any amendment or waiver of any provision of
any Loan Document, remain the Lender of record hereunder. In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior Debt of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under the laws of the United States or any
State thereof. Notwithstanding anything to the contrary contained in this
Agreement, any SPC may (i) with notice to, but without prior consent of, the
Borrower and the First Lien Administrative Agent and with the payment of a
processing fee of U.S.$500, assign all or any portion of its interest in any
Advance to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Advances to any rating agency,
commercial paper dealer or provider of any surety or guarantee or credit or
liquidity enhancement to such SPC. This subsection (j) may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Advances are being funded by the SPC at the time of such amendment.

SECTION 8.08. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery by
telecopier of an executed counterpart of a signature page to this Agreement
shall be effective as delivery of an original executed counterpart of this
Agreement.

 

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SECTION 8.09. Confidentiality. Neither any Agent nor any Lender shall disclose
any Confidential Information to any Person without the consent of the Borrower,
other than (a) to such Agent’s or such Lender’s Affiliates and their officers,
directors, employees, agents and advisors and to actual or prospective Assignees
and participants, and then only on a confidential basis, (b) as required by any
law, rule or regulation or judicial process, (c) as requested or required by any
state, Federal or foreign authority or examiner (including the National
Association of Insurance Commissioners or any similar organization or
quasi-regulatory authority) regulating such Lender, (d) to any rating agency
when required by it, provided that, prior to any such disclosure, such rating
agency shall undertake to preserve the confidentiality of any Confidential
Information relating to the Loan Parties received by it from such Lender, (e) in
connection with any litigation or proceeding to which such Agent or such Lender
or any of its Affiliates may be a party or (f) in connection with the exercise
of any right or remedy under this Agreement or any other Loan Document.

SECTION 8.10. Release of Collateral. Upon the sale, lease, transfer or other
disposition of any item of Collateral of any Loan Party (including, without
limitation, as a result of the sale, in accordance with the terms of the Loan
Documents, of the Loan Party that owns such Collateral) in accordance with the
terms of the Loan Documents, the First Lien Collateral Agent will, at the
Borrower’s expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents.

SECTION 8.11. Patriot Act Notice. Each Lender and each Agent (for itself and not
on behalf of any Lender) hereby notifies the Loan Parties that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies each Loan Party, which information includes the name
and address of such Loan Party and other information that will allow such Lender
or such Agent, as applicable, to identify such Loan Party in accordance with the
Patriot Act. The Borrower shall, and shall cause each of its Subsidiaries to,
provide such information and take such actions as are reasonably requested by
any Agent or any Lender in order to assist the Agents and the Lenders in
maintaining compliance with the Patriot Act.

SECTION 8.12. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the fullest extent permitted by 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 shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.

 

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(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

SECTION 8.13. Governing Law. This Agreement and the Notes shall be governed by,
and construed in accordance with, the laws of the State of New York, USA.

SECTION 8.14. Intercreditor Agreement. Each Lender hereby acknowledges and
agrees that the priority of the Liens in favor of the Lenders and other matters
related to the Loan Documents and the Collateral are subject to and governed by
the Intercreditor Agreement and each Lender hereby further acknowledges and
agrees to be bound by the terms thereof as a “First Lien Secured Party”, as
defined therein. Each Lender, by delivering its signature page hereto, funding
its Advances on the Effective Date and/or executing an Assignment and Acceptance
Agreement (as applicable) shall be deemed to have (a) acknowledged receipt of,
consented to and approved of the Intercreditor Agreement and (b) authorized the
First Lien Administrative Agent and the First Lien Collateral Agent to perform
their respective obligations thereunder.

SECTION 8.15. Waiver of Jury Trial. Each of the Borrower, the Agents and the
Lenders irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances, or the actions of any Agent
or any Lender in the negotiation, administration, performance or enforcement
thereof.

SECTION 8.16. Limitation on Liability. No holder of any membership interest of
the Borrower or any other Person (other than any Loan Party) shall be personally
liable (whether by operation of law or otherwise) for payments due hereunder or
under any other Transaction Document or for the performance of any Obligation,
except as expressly provided in such Transaction Document. The sole recourse of
the Agents and the Lenders for satisfaction of the Obligations shall be against
the Loan Parties and the Collateral and not against any other Person; provided,
however, that (i) nothing in this Section 8.16 shall limit or otherwise
prejudice in any way the right of the Agents and the Lenders to proceed against
any Person with respect to the enforcement of such Person’s obligations (or the
enforcement of the rights of the Agents and the Lenders) expressly provided for
under any Transaction Document to which it is a party, and (ii) recourse against
a Person for such Person’s fraud of intentional misrepresentation shall not be
limited by this Section 8.16.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

THE BORROWER GBGH, LLC By  

 

Name:   Title:   THE FIRST LIEN ADMINISTRATIVE AGENT

Credit Suisse, Cayman Islands Branch,
as First Lien Administrative Agent

By  

 

Name:   Title:   By  

 

Name:   Title:   THE LEAD ARRANGER AND SOLE BOOKRUNNER

CREDIT SUISSE SECURITIES (USA)
LLC, as Lead Arranger and Sole Bookrunner

By  

 

Name:   Title:   By  

 

Name:   Title:  

 

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THE FIRST LIEN COLLATERAL AGENT

Credit Suisse, Cayman Islands Branch,
as First Lien Collateral Agent

By  

 

Name:   Title:   By  

 

Name:   Title:   THE INITIAL LENDERS Credit Suisse, Cayman Islands Branch, as
Lender By  

 

Name:   Title:   By  

 

Name:   Title:  

 

105