Exhibit 10.3

 

 

 

NINTH AMENDMENT

TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF SEPTEMBER 25, 2017

AMONG

OASIS PETROLEUM NORTH AMERICA LLC,

AS BORROWER,

THE GUARANTORS PARTY HERETO,

WELLS FARGO BANK, N.A., AS ADMINISTRATIVE AGENT,

AND

THE LENDERS PARTY HERETO

 

 

 

--------------------------------------------------------------------------------

NINTH AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS NINTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Ninth Amendment”) dated as of September 25, 2017, is among OASIS PETROLEUM
NORTH AMERICA LLC, a Delaware limited liability company (the “Borrower”); the
Guarantors party hereto (the “Guarantors” and collectively with the Borrower,
the “Credit Parties”); the DevCos party hereto; each of the lenders party to the
Credit Agreement referred to below (collectively, the “Lenders”) party hereto;
and WELLS FARGO BANK, N.A., as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the “Administrative
Agent”) and as the issuing bank (in such capacity, the “Issuing Bank”).

R E C I T A L S:

A. Parent, OP LLC, the Borrower, the Administrative Agent and the Lenders are
parties to that certain Second Amended and Restated Credit Agreement dated as of
April 5, 2013, as amended by that certain First Amendment to Second Amended and
Restated Credit Agreement dated as of September 3, 2013, that certain Second
Amendment to Second Amended and Restated Credit Agreement dated as of
September 30, 2014, that certain Third Amendment to Second Amended and Restated
Credit Agreement dated as of April 13, 2015, that certain Fourth Amendment to
Second Amended and Restated Credit Agreement dated as of November 13, 2015, that
certain Fifth Amendment to Second Amended and Restated Credit Agreement dated as
of February 23, 2016, that certain Sixth Amendment to Amended and Restated
Credit Agreement dated as of August 8, 2016, that certain Seventh Amendment to
Second Amended and Restated Credit Agreement dated as of October 14, 2016 and
that certain Eighth Amendment to Credit Agreement dated as of April 10, 2017
(the “Credit Agreement”), pursuant to which the Lenders have made certain credit
available to and on behalf of the Borrower.

B. The Borrower, the Guarantors, the DevCos, the Administrative Agent and the
Lenders party hereto desire to amend certain provisions of the Credit Agreement
as set forth herein effective as of the Ninth Amendment Effective Date (as
defined below).

C. Furthermore, the Administrative Agent and the Required Lenders desire to
reaffirm the Borrowing Base at $1,600,000,000 after giving effect to the
amendments contained in this Ninth Amendment.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Defined Terms. Each capitalized term used herein but not otherwise
defined herein has the meaning given such term in the Credit Agreement, as
amended by this Ninth Amendment. Unless otherwise indicated, all section
references in this Ninth Amendment refer to sections of the Credit Agreement.

--------------------------------------------------------------------------------

Section 2. Amendments to Credit Agreement. In reliance on the representations,
warranties, covenants and agreements contained in this Ninth Amendment, and
subject to the conditions precedent contained in Section 4 hereof, the Credit
Agreement (other than the schedules thereto) is hereby amended to read in its
entirety as set forth on Exhibit A attached hereto.

Section 3. Borrowing Base Redetermination. Pursuant to Section 2.07 of the
Credit Agreement, the Administrative Agent and the Required Lenders agree that
for the period from and including the Ninth Amendment Effective Date to but
excluding the next Redetermination Date, the amount of the Borrowing Base shall
be equal to $1,600,000,000. Notwithstanding the foregoing, the Borrowing Base
may be subject to further adjustments from time to time pursuant to
Section 2.07(e), Section 8.13(c), Section 9.12(d), Section 9.12(f) or
Section 9.12(g). The parties hereto agree that the redetermination provided for
herein shall not constitute a Scheduled Redetermination nor an Interim
Redetermination. For the avoidance of doubt, the next Scheduled Redetermination
shall be the October 1, 2017 Scheduled Redetermination.

Section 4. Conditions Precedent. This Ninth Amendment shall become effective as
of the date when each of the following conditions is satisfied (or waived in
accordance with Section 12.02 of the Credit Agreement) (the “Ninth Amendment
Effective Date”):

4.1 The Administrative Agent shall have received from the Borrower, each
Guarantor, each DevCo and the Lenders counterparts (in such number as may be
requested by the Administrative Agent) of this Ninth Amendment signed on behalf
of such Person.

4.2 The Administrative Agent shall have received a certificate of the Secretary
or an Assistant Secretary of each DevCo setting forth (a) resolutions of its
board of directors or other appropriate governing body with respect to the
authorization of such DevCo to execute and deliver the Loan Documents to which
it is a party and to enter into the transactions contemplated in those
documents, (b) the officers of such DevCo who are authorized to sign the Loan
Documents to which such DevCo is a party and who will, until replaced by another
officer or officers duly authorized for that purpose, act as its representative
for the purposes of signing documents and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby, (c) specimen signatures of such authorized officers, and
(d) the articles or certificate of incorporation and by-laws or other applicable
organizational documents of such DevCo, certified as being true and complete.
The Administrative Agent and the Lenders may conclusively rely on such
certificate until the Administrative Agent receives notice in writing from the
Borrower to the contrary.

4.3 The Administrative Agent shall have received certificates of the appropriate
State agencies with respect to the existence, qualification and good standing of
each DevCo.

4.4 The Administrative Agent shall have received from each party thereto duly
executed counterparts (in such number as may be requested by the Administrative
Agent) of the Intercreditor Agreement, the DevCo Mortgages and the DevCo
Guaranty Agreements.

 

2

--------------------------------------------------------------------------------

4.5 The Administrative Agent shall have received duly executed Security
Instruments and other documents necessary for the Credit Parties to be in
compliance with Section 8.14(b) of the Credit Agreement, including without
limitation any supplements and/or joinders to the Guaranty and Security
Agreement and UCC financing statements with respect to the General Partner.

4.6 The Administrative Agent shall have received an opinion of (a) DLA Piper LLP
(US), special counsel to the Credit Parties and the DevCos, substantially in a
form and of substance reasonably acceptable to the Administrative Agent, and
(b) local counsel in each of the following states: Montana, North Dakota and any
other jurisdictions requested by the Administrative Agent, substantially in a
form and of substance reasonably acceptable to the Administrative Agent.

4.7 The Administrative Agent shall have received a certificate of insurance
coverage of the Credit Parties evidencing that the Credit Parties and DevCos are
carrying insurance in accordance with the terms of the Credit Agreement.

4.8 The Administrative Agent shall have received satisfactory title information
as the Administrative Agent may reasonably require with respect to the status of
title to the Midstream Properties of the DevCos.

4.9 The Administrative Agent shall have received, at least ten (10) Business
Days prior to the Ninth Amendment Effective Date all Flood Deliverables with
respect to the DevCo Collateral.

4.10 Each of the Midstream MLP IPO and the Midstream MLP Contribution shall have
been consummated (or will be consummated substantially concurrently with the
effectiveness of this Ninth Amendment), and after giving effect to such
consummation, (a) the Credit Parties shall receive cash consideration in respect
of the Midstream MLP Contribution of at least $113,000,000, and (b) the Parent
shall have directly or indirectly (i) sole ownership of the Equity Interests in
the General Partner (other than the Class B Units), (ii) ownership of at least
50% of the limited partnership units of the Midstream MLP and (iii) ownership of
at least 60% of the Equity Interests in Beartooth and 90% of the Equity
Interests in Bobcat.

4.11 No Default shall have occurred and be continuing as of the date hereof
prior to and after giving effect to the terms of this Ninth Amendment.

4.12 The Administrative Agent shall have received such other documents as the
Administrative Agent or its special counsel may reasonably require.

The Administrative Agent is hereby authorized and directed to declare this Ninth
Amendment to be effective when it has received documents confirming or
certifying, to the satisfaction of the Administrative Agent, compliance with the
conditions set forth in this Section 4 or the waiver of such conditions as
permitted hereby. Such declaration shall be final, conclusive and binding upon
all parties to the Credit Agreement for all purposes.

 

3

--------------------------------------------------------------------------------

Section 5. Miscellaneous.

5.1 Confirmation and Effect. The provisions of the Credit Agreement, as amended
by this Ninth Amendment, shall remain in full force and effect following the
effectiveness of this Ninth Amendment. Each reference in the Credit Agreement to
“this Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of
similar import shall mean and be a reference to the Credit Agreement as amended
hereby, and each reference in any other Loan Document to the Credit Agreement or
any word or words of similar import shall be and mean a reference to the Credit
Agreement as amended hereby.

5.2 No Waiver. Neither the execution by the Administrative Agent or the Lenders
of this Ninth Amendment, nor any other act or omission by the Administrative
Agent or the Lenders or their officers in connection herewith, shall be deemed a
waiver by the Administrative Agent or the Lenders of any Defaults or Events of
Default which may exist, which may have occurred prior to the date of the
effectiveness of Ninth Amendment or which may occur in the future under the
Credit Agreement and/or the other Loan Documents. Similarly, nothing contained
in this Ninth Amendment shall directly or indirectly in any way whatsoever
either: (a) impair, prejudice or otherwise adversely affect the Administrative
Agent’s or the Lenders’ right at any time to exercise any right, privilege or
remedy in connection with the Loan Documents with respect to any Default or
Event of Default, (b) except as expressly provided herein, amend or alter any
provision of the Credit Agreement, the other Loan Documents, or any other
contract or instrument, or (c) constitute any course of dealing or other basis
for altering any obligation of the Borrower or any right, privilege or remedy of
the Administrative Agent or the Lenders under the Credit Agreement, the other
Loan Documents, or any other contract or instrument.

5.3 Ratification and Affirmation; Representations and Warranties. Each Credit
Party and each DevCo hereby (a) acknowledges the terms of this Ninth Amendment;
(b) ratifies and affirms its obligations under, and acknowledges its continued
liability under, each Loan Document to which it is a party and agrees that each
Loan Document to which it is a party remains in full force and effect as
expressly amended hereby and (c) represents and warrants to the Lenders that as
of the date hereof, after giving effect to the terms of this Ninth Amendment:
(i) all of the representations and warranties contained in each Loan Document to
which it is a party are true and correct in all material respects (or, if
already qualified by materiality, Material Adverse Effect or a similar
qualification, true and correct in all respects), except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, such representations and warranties shall continue to be true and
correct in all material respects (or, if already qualified by materiality,
Material Adverse Effect or a similar qualification, true and correct in all
respects) as of such specified earlier date, (ii) no Default or Event of Default
has occurred and is continuing and (iii) no event or events have occurred which
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.

5.4 Counterparts. This Ninth Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of this Ninth Amendment by facsimile or email transmission
shall be effective as delivery of a manually executed counterpart hereof.

 

4

--------------------------------------------------------------------------------

5.5 No Oral Agreement. This Ninth Amendment, the Credit Agreement and the other
Loan Documents executed in connection herewith and therewith represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous, or unwritten oral agreements of the parties. There are no
subsequent oral agreements between the parties.

5.6 GOVERNING LAW. THIS NINTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

5.7 Payment of Expenses. In accordance with Section 12.03 of the Credit
Agreement, the Borrower agrees to pay or reimburse the Administrative Agent for
all of its reasonable out-of-pocket costs and reasonable expenses incurred in
connection with this Ninth Amendment, any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

5.8 Severability. Any provision of this Ninth Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

5.9 Successors and Assigns. This Ninth Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

5.10 Loan Document. This Ninth Amendment shall constitute a “Loan Document”
under and as defined in Section 1.02 of the Credit Agreement.

5.11 No Novation. The parties hereto agree that this Ninth Amendment (including
Exhibit A attached hereto) does not in any way constitute a novation of the
existing Credit Agreement, but is an amendment of the Credit Agreement.

[Signatures Begin Next Page]

 

5

--------------------------------------------------------------------------------

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

 

BORROWER:   OASIS PETROLEUM NORTH AMERICA LLC   By:  

/s/ Michael H. Lou

  Name:   Michael Lou   Title:   Executive Vice President and Chief    
Financial Officer GUARANTORS:   OASIS PETROLEUM INC.   OASIS PETROLEUM LLC  
OASIS PETROLEUM MARKETING LLC   OASIS WELL SERVICES LLC   OASIS MIDSTREAM
SERVICES LLC   OMS HOLDINGS LLC   By:  

/s/ Michael H. Lou

  Name:   Michael Lou   Title:   Executive Vice President and Chief    
Financial Officer   OMP GP LLC   By:  

/s/ Michael H. Lou

  Name:   Michael Lou   Title:   President DEVCOS:   BEARTOOTH DEVCO LLC  
BOBCAT DEVCO LLC   By:  

/s/ Richard Robuck

  Name:   Richard Robuck   Title:   Senior Vice President and Chief Financial  
  Officer

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

ADMINISTRATIVE AGENT,     ISSUING BANK AND LENDER:   WELLS FARGO BANK, N.A.,  
as Administrative Agent, Issuing Bank and as a Lender   By:  

/s/ Andrew Ostrov

  Name:   Andrew Ostrov   Title:   Director

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

LENDERS:   CITIBANK, N.A., as a Lender   By:  

/s/ Eamon Baqui

  Name:   Eamon Baqui   Title:   Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as a Lender By:  

/s/ Brett Fenn

Name:   Brett Fenn Title:   Authorized Officer

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

ROYAL BANK OF CANADA, as a Lender By:  

/s/ Mark Lumpkin, Jr.

Name:   Mark Lumpkin, Jr. Title:   Authorized Signatory

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender By:  

/s/ Mark Brewster

Name:   Mark Brewster Title:   Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

COMPASS BANK, as a Lender By:  

/s/ Kari McDaniel

Name:   Kari McDaniel Title:   Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH, as a Lender By:  

/s/ William M. Reid

Name:   William M. Reid Title:   Authorized Signatory By:  

/s/ Trudy Nelson

Name:   Trudy Nelson Title:   Authorized Signatory

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender By:  

/s/ Dusan Lazarov

Name:   Dusan Lazarov Title:   Director By:  

/s/ Peter Cucchiara

Name:   Peter Cucchiara Title:   Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

ING CAPITAL LLC, as a Lender By:  

/s/ Josh Strong

Name:   Josh Strong Title:   Director By:  

/s/ Charles Hall

Name:   Charles Hall Title:   Managing Director

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

CITIZENS BANK, N.A., as a Lender By:  

/s/ Hernando Garcia

Name:   Hernando Garcia Title:   Director

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

U.S. BANK NATIONAL ASSOCIATION, as a Lender By:  

/s/ John C. Lozano

Name:   John C. Lozano Title:   Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

ZB, N.A. DBA AMEGY BANK, as a Lender By:  

/s/ John Moffitt

Name:   John Moffitt Title:   Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

BOKF, NATIONAL ASSOCIATION DBA BANK OF TEXAS, as a Lender By:  

/s/ Daniel Fain

Name:   Daniel Fain Title:   AVP, Energy Lending

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

BRANCH BANKING AND TRUST COMPANY, as a Lender By:  

/s/ James Giordano

Name:   James Giordano Title:   Senior Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

COMERICA BANK, as a Lender By:  

/s/ William B. Robinson

Name:   William B. Robinson Title:   Senior Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender By:  

/s/ Nupur Kumar

Name:   Nupur Kumar Title:   Authorized Signatory By:  

/s/ Lea Baerlocher

Name:   Lea Baerlocher Title:   Authorized Signatory

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

REGIONS BANK, as a Lender By:  

/s/ William A. Philipp

Name:   William A. Philipp Title:   Managing Director

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

IBERIABANK, as a Lender By:  

/s/ Stacy Goldstein

Name:   Stacy Goldstein Title:   Senior Vice President

Signature Page to

Ninth Amendment to Second Amended and Restated Credit Agreement

(Oasis Petroleum North America LLC)

--------------------------------------------------------------------------------

EXHIBIT A

Amended Credit Agreement

[See attached.]

Exhibit A

--------------------------------------------------------------------------------

EXHIBIT A TO NINTH AMENDMENT

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF

APRIL 5, 2013

AMONG

OASIS PETROLEUM INC.,

AS PARENT,

OASIS PETROLEUM NORTH AMERICA LLC,

AS BORROWER,

THE OTHER CREDIT PARTIES PARTY HERETO,

WELLS FARGO BANK, N.A.,

AS ADMINISTRATIVE AGENT

AND

THE LENDERS PARTY HERETO

SOLE LEAD ARRANGER AND SOLE BOOKRUNNER

WELLS FARGO SECURITIES, LLC

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

         Page     ARTICLE I      Definitions and Accounting Matters   

Section 1.01

  Terms Defined Above      1  

Section 1.02

  Certain Defined Terms      1  

Section 1.03

  Types of Loans and Borrowings      31  

Section 1.04

  Terms Generally; Rules of Construction      31  

Section 1.05

  Accounting Terms and Determinations; GAAP      31    

ARTICLE II

    

The Credits

  

Section 2.01

  Commitments      32  

Section 2.02

  Loans and Borrowings      32  

Section 2.03

  Requests for Borrowings      33  

Section 2.04

  Interest Elections      34  

Section 2.05

  Funding of Borrowings; Funding by Lenders      35  

Section 2.06

  Termination and Reduction of Aggregate Maximum Credit Amounts; Optional
Increase and Reduction of Aggregate Elected Commitment Amounts      36  

Section 2.07

  Borrowing Base      39  

Section 2.08

  Letters of Credit      44  

Section 2.09

  Loans and Borrowings Under Existing Credit Agreement      50     ARTICLE III
     Payments of Principal and Interest; Prepayments; Fees   

Section 3.01

  Repayment of Loans      51  

Section 3.02

  Interest      51  

Section 3.03

  Alternate Rate of Interest      52  

Section 3.04

  Prepayments      52  

Section 3.05

  Fees      54     ARTICLE IV      Payments; Pro Rata Treatment; Sharing of
Set-offs   

Section 4.01

  Payments Generally; Pro Rata Treatment; Sharing of Set-offs      55  

Section 4.02

  Presumption of Payment by the Borrower      57  

Section 4.03

  Certain Deductions by the Administrative Agent      57  

Section 4.04

  Disposition of Proceeds      57     ARTICLE V      Increased Costs; Break
Funding Payments; Taxes   

Section 5.01

  Increased Costs      58  

Section 5.02

  Break Funding Payments      59  

Section 5.03

  Taxes      59  

Section 5.04

  Mitigation Obligations; Replacement of Lenders      62  

Section 5.05

  Illegality      63  

 

i

--------------------------------------------------------------------------------

 

ARTICLE VI

    

Conditions Precedent

  

Section 6.01

  Effective Date      63  

Section 6.02

  Each Credit Event      66    

ARTICLE VII

    

Representations and Warranties

  

Section 7.01

  Organization; Powers      67  

Section 7.02

  Authority; Enforceability      67  

Section 7.03

  Approvals; No Conflicts      68  

Section 7.04

  Financial Condition; No Material Adverse Change      68  

Section 7.05

  Litigation      69  

Section 7.06

  Environmental Matters      69  

Section 7.07

  Compliance with the Laws and Agreements; No Defaults or Borrowing Base
Deficiency      70  

Section 7.08

  Investment Company Act      70  

Section 7.09

  Taxes      71  

Section 7.10

  ERISA      71  

Section 7.11

  Disclosure; No Material Misstatements      72  

Section 7.12

  Insurance      72  

Section 7.13

  Restriction on Liens      73  

Section 7.14

  Subsidiaries      73  

Section 7.15

  Location of Business and Offices      73  

Section 7.16

  Properties; Titles, Etc.      74  

Section 7.17

  Maintenance of Properties      75  

Section 7.18

  Gas Imbalances, Prepayments      75  

Section 7.19

  Marketing of Production      75  

Section 7.20

  Swap Agreements and Qualified ECP Guarantor      76  

Section 7.21

  Use of Loans and Letters of Credit      76  

Section 7.22

  Solvency      76  

Section 7.23

  Foreign Corrupt Practices      76  

Section 7.24

  OFAC      77  

Section 7.25

  OP International      77  

Section 7.26

  EEA Financial Institutions      77  

Section 7.27

  DevCo Properties      77  

Section 7.28

  FERC      79  

Section 7.29

  State Regulation      79  

Section 7.30

  Title to Refined Products      79  

Section 7.31

  Flood Insurance Related Matters      79    

ARTICLE VIII

    

Affirmative Covenants

  

Section 8.01

  Financial Statements; Other Information      80  

Section 8.02

  Notices of Material Events      83  

Section 8.03

  Existence; Conduct of Business      83  

Section 8.04

  Payment of Obligations      84  

 

ii

--------------------------------------------------------------------------------

Section 8.05

  Performance of Obligations under Loan Documents      84  

Section 8.06

  Operation and Maintenance of Properties      84  

Section 8.07

  Insurance      85  

Section 8.08

  Books and Records; Inspection Rights      85  

Section 8.09

  Compliance with Laws      85  

Section 8.10

  Environmental Matters      86  

Section 8.11

  Further Assurances      87  

Section 8.12

  Reserve Reports      87  

Section 8.13

  Title Information      89  

Section 8.14

  Additional Collateral; Additional Guarantors      90  

Section 8.15

  ERISA Compliance      92  

Section 8.16

  DevCo Properties      92  

Section 8.17

  Marketing Activities      93  

Section 8.18

  Commodity Exchange Act Keepwell Provisions      94  

Section 8.19

  DevCo Guaranty      94  

Section 8.20

  Ownership of DevCo Equity Interests      94  

Section 8.21

  Ownership of General Partner Equity Interests      94    

ARTICLE IX

    

Negative Covenants

  

Section 9.01

  Financial Covenants      95  

Section 9.02

  Debt      95  

Section 9.03

  Liens      96  

Section 9.04

  Dividends, Distributions and Redemptions; Repayment of Senior Notes and
Amendment to Terms of Senior Notes      97  

Section 9.05

  Investments, Loans and Advances      99  

Section 9.06

  Nature of Business; International Operations      101  

Section 9.07

  Proceeds of Notes      101  

Section 9.08

  Limitation on Leases      101  

Section 9.09

  ERISA Compliance      102  

Section 9.10

  Sale or Discount of Receivables      102  

Section 9.11

  Mergers, Etc.      102  

Section 9.12

  Sale of Properties and Liquidation of Swap Agreements      103  

Section 9.13

  Environmental Matters      104  

Section 9.14

  Transactions with Affiliates      105  

Section 9.15

  Subsidiaries      105  

Section 9.16

  Negative Pledge Agreements; Dividend Restrictions      105  

Section 9.17

  Gas Imbalances, Take-or-Pay or Other Prepayments      105  

Section 9.18

  Swap Agreements      106  

Section 9.19

  Covenants of Parent, OP LLC and General Partner      107  

Section 9.20

  Non-Qualified ECP Guarantors      107  

Section 9.21

  Changes to Organizational Documents of General Partner      107    

ARTICLE X

    

Events of Default; Remedies

  

Section 10.01

  Events of Default      107  

Section 10.02

  Remedies      110  

 

iii

--------------------------------------------------------------------------------

  ARTICLE XI      The Agents   

Section 11.01

  Appointment; Powers      111  

Section 11.02

  Duties and Obligations of Administrative Agent      111  

Section 11.03

  Action by Administrative Agent      112  

Section 11.04

  Reliance by Administrative Agent      113  

Section 11.05

  Subagents      113  

Section 11.06

  Resignation of Administrative Agent      113  

Section 11.07

  Agents as Lenders      114  

Section 11.08

  No Reliance      114  

Section 11.09

  Administrative Agent May File Proofs of Claim      114  

Section 11.10

  Authority of Administrative Agent to Release Collateral and Liens      115  

Section 11.11

  The Arranger      115  

Section 11.12

  Intercreditor Agreement      115     ARTICLE XII      Miscellaneous   

Section 12.01

  Notices      116  

Section 12.02

  Waivers; Amendments      116  

Section 12.03

  Expenses, Indemnity; Damage Waiver      118  

Section 12.04

  Successors and Assigns      121  

Section 12.05

  Survival; Revival; Reinstatement      124  

Section 12.06

  Counterparts; Integration; Effectiveness      125  

Section 12.07

  Severability      125  

Section 12.08

  Right of Setoff      125  

Section 12.09

  GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS      126  

Section 12.10

  Headings      127  

Section 12.11

  Confidentiality      127  

Section 12.12

  Interest Rate Limitation      128  

Section 12.13

  EXCULPATION PROVISIONS      129  

Section 12.14

  Collateral Matters; Swap Agreements      129  

Section 12.15

  No Third Party Beneficiaries      130  

Section 12.16

  USA Patriot Act Notice      130  

Section 12.17

  True-Up Loans      130  

Section 12.18

  Restatement; Existing Credit Agreement      130  

Section 12.19

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      130
 

Section 12.20

  No Advisory or Fiduciary Responsibility      131  

 

iv

--------------------------------------------------------------------------------

ANNEXES, EXHIBITS AND SCHEDULES

 

Annex I    List of Maximum Credit Amounts and Elected Commitments Exhibit A   
Form of Note Exhibit B    Form of Borrowing Request Exhibit C    Form of
Interest Election Request Exhibit D    Form of Compliance Certificate
Exhibit E-1    Security Instruments Exhibit E-2    Form of Second Amended and
Restated Guaranty and Security Agreement Exhibit F    Form of Assignment and
Assumption Exhibit G    Form of Elected Commitment Increase Certificate
Exhibit H    Form of Additional Lender Certificate Exhibit I-1    Form of U.S.
Tax Compliance Certificate (Foreign Lenders; Not Partnerships) Exhibit I-2   
Form of U.S. Tax Compliance Certificate (Foreign Participants; Not Partnerships)
Exhibit I-3    Form of U.S. Tax Compliance Certificate (Foreign Participants;
Partnerships) Exhibit I-4    Form of U.S. Tax Compliance Certificate (Foreign
Lenders; Partnerships) Schedule 7.05    Litigation Schedule 7.06   
Environmental Matters Schedule 7.14    Subsidiaries Schedule 7.16   
Title Defects Schedule 7.18    Gas Imbalances Schedule 7.19    Marketing
Contracts Schedule 7.20    Swap Agreements Schedule 9.05    Investments

 

v

--------------------------------------------------------------------------------

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 5, 2013, is
among: Oasis Petroleum Inc., a Delaware corporation (the “Parent”); Oasis
Petroleum LLC, a Delaware limited liability company (“OP LLC”), Oasis Petroleum
North America LLC, a Delaware limited liability company (the “Borrower”); each
of the Lenders from time to time party hereto; and Wells Fargo Bank, N.A. (in
its individual capacity, “Wells Fargo”), as administrative agent for the Lenders
(in such capacity, together with its successors in such capacity, the
“Administrative Agent”).

R E C I T A L S

A. The Parent, OP LLC, the Borrower, the Administrative Agent and other agents
and lenders party thereto are parties to that certain Amended and Restated
Credit Agreement dated as of February 26, 2010, pursuant to which such lenders
provided certain loans and extensions of credit to the Borrower (as renewed,
extended, amended or otherwise modified from time to time prior to the date
hereof, the “Existing Credit Agreement”).

B. The Parent, OP LLC and the Borrower have requested that the Lenders provide
certain loans to and extensions of credit on behalf of the Borrower through an
amendment and restatement of the Existing Credit Agreement.

C. The Lenders have agreed to make such loans and extensions of credit subject
to the terms and conditions of this Agreement.

D. In consideration of the mutual covenants and agreements herein contained and
of the loans, extensions of credit and commitments hereinafter referred to, the
parties hereto agree to amend and restate the Existing Credit Agreement in its
entirety as follows:

ARTICLE I

Definitions and Accounting Matters

Section 1.01 Terms Defined Above. As used in this Agreement, each term defined
above has the meaning indicated above.

Section 1.02 Certain Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“2019 Notes” means the Parent’s 7.25% senior unsecured notes due February 1,
2019 issued with an original aggregate principal amount of $400 million.

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Acquisition Properties” has the meaning assigned to such term
in Section 2.07(e)(ii)(A).

“Additional Lender” has the meaning assigned to such term in Section 2.06(c)(i).

 

1

--------------------------------------------------------------------------------

“Additional Lender Certificate” has the meaning assigned to such term
in Section 2.06(c)(ii)(G).

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the LIBO Rate for such Interest Period multiplied
by the Statutory Reserve Rate.

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

“Affected Loans” has the meaning assigned such term in Section 5.05.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agents” means, collectively, the Administrative Agent and any other agent for
the Lenders from time to time appointed under this Agreement.

“Aggregate Elected Commitment Amounts” at any time shall equal the sum of the
Elected Commitments, as the same may be increased, reduced or terminated
pursuant to Section 2.06(c). As of the Ninth Amendment Effective Date, the
Aggregate Elected Commitment Amounts are $1,150,000,000.

“Aggregate Maximum Credit Amounts” at any time shall equal the sum of the
Maximum Credit Amounts, as the same may be reduced or terminated pursuant
to Section 2.06.

“Agreement” means this Second Amended and Restated Credit Agreement, as amended
by the First Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the
Eighth Amendment and the Ninth Amendment and as the same may be further amended
or supplemented from time to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus  1⁄2 of 1.00% and (c) the Adjusted LIBO Rate for
a one month Interest Period on such day (or if such day is not a Business Day,
the immediately preceding Business Day) plus 1.50%. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
the Adjusted LIBO Rate shall be effective from and including the effective date
of such change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate, respectively.

“Annualized EBITDAX” means, as of the last day of any fiscal quarter, (a) for
the first full fiscal quarter ending after the Trigger Date, EBITDAX for such
quarter multiplied by 4, (b) for the second full fiscal quarter ending after the
Trigger Date, EBITDAX for the two fiscal quarter period ending on such date
multiplied by 2, (c) for the third full fiscal quarter ending after the Trigger
Date, EBITDAX for the three fiscal quarter period ending on such date multiplied
by 4/3, and (d) for each fiscal quarter thereafter, EBITDAX for the four fiscal
quarter period ending on such date.

 

2

--------------------------------------------------------------------------------

“Applicable Margin” means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the Commitment Fee Rate, as the case may be,
the rate per annum set forth in the Total Commitments Utilization Grid below
based upon the Total Commitments Utilization Percentage then in effect:

 

Total Commitments Utilization Grid

 

 

Total Commitments Utilization Percentage

   < 25%      ³ 25% < 50%      ³ 50% < 75%      ³ 75% < 90%      ³ 90%  

ABR Loans

     0.000%        0.250%        0.500%        0.750%        1.000%  

Eurodollar Loans

     1.500%        1.750%        2.000%        2.250%        2.500%  

Commitment Fee Rate

     0.375%        0.375%        0.500%        0.500%        0.500%  

Each change in the Applicable Margin shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change, provided, however, that if at any
time the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a),
then from the time of such failure until the time that the Borrower delivers
such Reserve Report to the Administrative Agent, the “Applicable Margin” means
the rate per annum set forth on the grid when the Total Commitments Utilization
Percentage is at its highest level).

“Applicable Percentage” means, with respect to any Lender, the percentage of the
Aggregate Maximum Credit Amounts represented by such Lender’s Maximum Credit
Amount as such percentage is set forth on Annex I; provided that in the case
of Section 2.08(k) when a Defaulting Lender shall exist, “Applicable Percentage”
as used in such Section 2.08(k) shall mean the percentage of the Aggregate
Maximum Credit Amounts (disregarding any Defaulting Lender’s Maximum Credit
Amounts) represented by such Lender’s Maximum Credit Amount.

“Approved Counterparty” shall mean any Person who, with respect to a Swap
Agreement, is (a) a Secured Swap Party, or (b) any other Person whose issuer
rating or long term senior unsecured debt ratings at the time of entry into such
Swap Agreement is A-/A3 by S&P or Moody’s (or their equivalent) or higher (or
whose obligations under the applicable Swap Agreement are guaranteed by an
Affiliate of such Person meeting such rating standards).

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

“Approved Petroleum Engineers” means (a) Netherland, Sewell & Associates, Inc.,
(b) Ryder Scott Company Petroleum Consultants, L.P., (c) W. D. Von Gonten & Co.,
(d) DeGolyer and MacNaughton and (e) and any other independent petroleum
engineers reasonably acceptable to the Administrative Agent.

 

3

--------------------------------------------------------------------------------

“Arranger” means Wells Fargo Securities, LLC, in its capacities as the sole lead
arranger and sole bookrunner hereunder.

“ASC” means the Financial Accounting Standards Board Accounting Standards
Codification, as in effect from time to time.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 12.04(b)), and accepted by the Administrative Agent, in the form of
Exhibit F or any other form approved by the Administrative Agent.

“Availability Period” means the period from and including the Effective Date to
but excluding the Termination Date.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bank Products” means any of the following bank services: (a) commercial credit
cards, (b) stored value cards, and (c) treasury management services (including,
without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services).

“Bank Products Provider” means any Lender or Affiliate of a Lender that provides
Bank Products to the Borrower or any Guarantor.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

“Borrowing Base” means at any time an amount equal to the amount determined in
accordance with Section 2.07, as the same may be adjusted from time to time
pursuant to Section 8.13(c), Section 9.12(d), Section 9.12(f) or
Section 9.12(g).

“Borrowing Base Deficiency” occurs if at any time the total Revolving Credit
Exposures exceeds the Borrowing Base then in effect.

“Borrowing Base Value” means, with respect to any Oil and Gas Property of a
Credit Party or any Swap Agreement in respect of commodities, the value the
Administrative Agent attributed to such asset in connection with the most recent
determination of the Borrowing Base as confirmed by Required Lenders.

 

4

--------------------------------------------------------------------------------

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or
required by law to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
dealings in dollar deposits are carried out in the London interbank market.

“Call Spread Counterparties” means one or more financial institutions selected
by the Parent to sell the options contemplated by the Permitted Bond Hedge
Transaction(s) and purchase the warrants contemplated by the Permitted Warrant
Transaction(s).

“Capital Expenditures” of a Person means expenditures and costs that are
capitalized on the balance sheet of such Person in accordance with GAAP.

“Capital Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder.

“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of the Borrower or any of its Subsidiaries
having a fair market value in excess of $2,500,000.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof), of Equity Interests representing
more than 35% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Parent, (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Parent by
Persons who were not (i) initial members of the board of directors of Parent,
(ii) nominated (or whose nomination was approved) by the board of directors of
the Parent or (iii) appointed (or whose appointment was approved) by directors
so nominated (or whose nomination was so approved), (c) the Parent fails to own
directly or indirectly all of the Equity Interests of the Borrower, (d) the
General Partner shall cease to be the sole general partner of the Midstream MLP,
with substantially the same powers to manage the Midstream MLP as are granted to
the General Partner under the Midstream MLP Partnership Agreement on the Ninth
Amendment Effective Date, (e) the failure of the Parent, OP LLC and the Borrower
to own directly or indirectly (i) all of the Equity Interests of the General
Partner other than the Class B Units and (ii) Equity Interests representing at
least 85% of total number of Units (as defined in the General Partner LLC
Agreement) issued by the General Partner, (f) the failure of the Parent to have
direct or indirect sole Control of the General Partner or (g) the occurrence of
a “change of control” under any Senior Notes Indenture.

 

5

--------------------------------------------------------------------------------

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation, implementation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 5.01(b)), by any lending office of
such Lender or by such Lender’s or the Issuing Bank’s holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement; provided, however, for the purposes of this Agreement, each of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
guidelines or directives in connection therewith or promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision or the
United States or foreign regulatory authorities, in each case, pursuant to
Basel III, shall be deemed to be a change in law regardless of when such law,
rule or regulation goes into effect or is adopted.

“Class B Unit” has the meaning set forth in the General Partner LLC Agreement,
as in effect on the Ninth Amendment Effective Date.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.

“Collateral” means all Property which is subject to a Lien under one or more
Security Instruments.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such commitment may be
(a) modified from time to time pursuant to Section 2.06 and (b) modified from
time to time pursuant to assignments by or to such Lender pursuant
to Section 12.04(b). The amount representing each Lender’s Commitment shall at
any time be the least of (i) such Lender’s Maximum Credit Amount, (ii) such
Lender’s Applicable Percentage of the then effective Borrowing Base and
(iii) such Lender’s Elected Commitment.

“Commitment Fee Rate” has the meaning set forth in the definition of “Applicable
Margin”.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Consolidated Net Income” means with respect to the Parent, the Consolidated
Subsidiaries and the DevCos, for any period, the aggregate of the net income (or
loss) of the Parent, the Consolidated Subsidiaries and the DevCos, without
duplication, after allowances for taxes for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from such net income (to the extent otherwise included therein) the
following: (a) the net income of the Midstream MLP, its subsidiaries or any
other Person in which the Parent, any Consolidated Subsidiary or a DevCo has an
interest (which interest, in the

 

6

--------------------------------------------------------------------------------

case of a Person other than the Midstream MLP and its subsidiaries, does not
cause the net income of such other Person to be consolidated with the net income
of the Parent, the Consolidated Subsidiaries and the DevCos in accordance with
GAAP), except to the extent of the amount of dividends or distributions actually
paid in cash during such period by the Midstream MLP, its subsidiaries or such
other Person to any Credit Party; (b) the net income (but not loss) during such
period of any Consolidated Subsidiary or any DevCo to the extent that the
declaration or payment of dividends or similar distributions or transfers or
loans by that Consolidated Subsidiary or DevCo is not at the time permitted by
operation of the terms of its charter or any agreement, instrument or
Governmental Requirement applicable to such Consolidated Subsidiary or is
otherwise restricted or prohibited, in each case determined in accordance with
GAAP; (c) the net income (or loss) of any Person acquired in a
pooling-of-interests transaction for any period prior to the date of such
transaction; (d) any extraordinary non-cash gains or losses during such period
and (e) any gains or losses attributable to writeups or writedowns of assets,
including ceiling test writedowns; provided that if the Parent or any
Consolidated Subsidiary shall acquire or dispose of any Property during such
period (including dispositions in connection with the Midstream MLP
Contribution), then Consolidated Net Income shall be calculated after giving pro
forma effect to such acquisition or disposition, as if such acquisition or
disposition had occurred on the first day of such period; provided further that
the aggregate net income (or loss) attributable to each DevCo included in the
determination of Consolidated Net Income for any period shall be limited to the
lesser of (x) such DevCo’s net income (or loss) for the applicable period
multiplied by DevCo Ownership Percentage in such DevCo and (y) the actual amount
of cash distributions made by such DevCo in the applicable period to the Credit
Parties. For the avoidance of doubt, the aggregate net income (or loss)
attributable to the Midstream MLP and its subsidiaries (other than any DevCo)
shall be included in the determination of Consolidated Net Income for any period
in an amount equal to the amount of cash distributions received by the Credit
Parties from the Midstream MLP or its subsidiaries (other than any DevCo) during
such period.

“Consolidated Subsidiaries” means each Subsidiary of the Parent (whether now
existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of the
Parent in accordance with GAAP. For the avoidance of doubt, in no event shall
the Midstream MLP, any of subsidiaries of the Midstream MLP or any DevCo be a
Consolidated Subsidiary for purposes of the Loan Documents.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. For the
purposes of this definition, and without limiting the generality of the
foregoing, any Person that owns directly or indirectly 10% or more of the Equity
Interests having ordinary voting power for the election of the directors or
other governing body of a Person (other than as a limited partner of such other
Person) will be deemed to “control” such other Person. “Controlling” and
“Controlled” have meanings correlative thereto.

“Convertible Notes” means any unsecured senior or senior subordinated Debt
securities (whether registered or privately placed) convertible into Equity
Interests of the Parent (other than Disqualified Capital Stock) incurred
pursuant to a Convertible Notes Indenture.

 

7

--------------------------------------------------------------------------------

“Convertible Notes Indenture” means any indenture among the Parent, as issuer,
the subsidiary guarantors party thereto and the trustee named therein, pursuant
to which the Convertibles Notes are issued, as the same may be amended or
supplemented in accordance with Section 9.04(b).

“Credit Parties” means, collectively, the Borrower and each Guarantor, and
“Credit Party” means any one of the foregoing. For the avoidance of doubt, no
DevCo shall be a Credit Party for purposes of the Loan Documents.

“Current Production” means the lesser of (a) the prior month’s production of
each of crude oil and natural gas, calculated separately, of the Borrower and
its Subsidiaries and (b) the forecasted production, as reasonably determined by
the Borrower, of each of crude oil and natural gas, calculated separately, of
the Borrower and its Subsidiaries for each month for the period ending no sooner
than the latest month for which volumes are hedged under Swap Agreements.

“Debt” means, for any Person, the sum of the following (without duplication):
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services; (d) all
obligations under Capital Leases; (e) all obligations under Synthetic Leases;
(f) all Debt (as defined in the other clauses of this definition) of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) a Lien on any Property of such
Person, whether or not such Debt is assumed by such Person; (g) all Debt (as
defined in the other clauses of this definition) of others guaranteed by such
Person or in which such Person otherwise assures a creditor against loss of the
Debt (howsoever such assurance shall be made) to the extent of the lesser of the
amount of such Debt and the maximum stated amount of such guarantee or assurance
against loss; (h) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others to purchase
the Debt or Property of others; (i) obligations to deliver commodities, goods or
services, including, without limitation, Hydrocarbons, in consideration of one
or more advance payments, other than gas balancing arrangements in the ordinary
course of business; (j) obligations to pay for goods or services even if such
goods or services are not actually received or utilized by such Person (other
than firm transportation or storage, or drilling contracts); (k) any Debt of a
partnership for which such Person is liable either by agreement, by operation of
law or by a Governmental Requirement but only to the extent of such liability;
(l) Disqualified Capital Stock; and (m) the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment. The Debt of any Person shall
include all obligations of such Person of the character described above to the
extent such Person remains legally liable in respect thereof notwithstanding
that any such obligation is not included as a liability of such Person under
GAAP.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

8

--------------------------------------------------------------------------------

“Defaulting Lender” means any Lender that (a) has failed, within three
(3) Business Days of the date required to be funded or paid, to (i) fund any
portion of its Loans, (ii) fund any portion of its participations in Letters of
Credit or (iii) pay over to any Credit Party any other amount required to be
paid by it hereunder; (b) has notified the Borrower or any Credit Party in
writing, or has made a public statement, to the effect that it does not intend
or expect to comply with any of its funding obligations under this Agreement or
generally under other agreements in which it commits to extend credit; (c) has
failed, within three (3) Business Days after request by the Administrative Agent
or a Credit Party, acting in good faith, to provide a certification in writing
from an authorized officer of such Lender that it will comply with its
obligations to fund prospective Loans and participations in then outstanding
Letters of Credit under this Agreement; provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance satisfactory to it and the
Administrative Agent; or (d) has (or whose bank holding company has) been placed
into receivership, conservatorship or bankruptcy or has become subject to a
Bail-In Action; provided that (x) a Lender shall not become a Defaulting Lender
solely as a result of the acquisition or maintenance of an ownership interest in
such Lender or Person controlling such Lender or the exercise of control over a
Lender or Person controlling such Lender by a Governmental Authority or an
instrumentality thereof and (y) the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official
by a supervisory authority or regulator with respect to a Lender or Person under
the Dutch Financial Supervision Act 2007 (as amended from time to time and
including any successor legislation) shall not be deemed an event described in
clause (d) hereof, so long as, in the case of each of clauses (x) and (y), such
ownership interest or such appointment, as applicable, does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such governmental authority or instrumentality)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender.

“DevCo” means Beartooth and Bobcat; provided that any such Person shall only
constitute a DevCo so long as (a) the Parent and OP LLC directly or indirectly
owns Equity Interests in such Person (other than any Equity Interests indirectly
held by the Parent and OP LLC through the Midstream MLP and its subsidiaries)
and (b) less than 100% of the Equity Interests in such Person are owned directly
or indirectly by the Parent and OP LLC (excluding any Equity Interests held
directly or indirectly by the Midstream MLP and its subsidiaries).

“DevCo Collateral” means the Property of a DevCo subject to (or required to be
subject to) the Liens and security interests created by any DevCo Mortgage
executed by such DevCo.

“DevCo Guaranty” means a limited guaranty agreement executed by each of the
DevCos for which the only recourse is the Collateral subject to the DevCo
Mortgage/s executed by the applicable DevCo.

“DevCo Mortgage” means any mortgage or deed of trust executed by a DevCo in
favor of the Administrative Agent for the benefit of the Secured Parties in
order to secure the Indebtedness.

 

9

--------------------------------------------------------------------------------

“DevCo Ownership Percentage” at any time of determination, with respect to any
DevCo, means the aggregate percentage of Equity Interests in such DevCo owned at
such time by the Credit Parties (excluding, for the avoidance of doubt, any
Equity Interests held indirectly by the Credit Parties through the Midstream MLP
or its subsidiaries).

“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible or exchangeable for Debt or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is one year after the earlier
of (a) the Maturity Date and (b) the date on which there are no Loans, LC
Exposure or other obligations hereunder outstanding and all of the Commitments
are terminated.

“dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.

“Drop Down Disposition” means any disposition by (a) OMS of any Equity Interests
in any DevCo owned by the OMS to OMP or its subsidiaries or (b) the Credit
Parties of any Midstream Properties to OMP and its subsidiaries or to any DevCo.

“EBITDAX” means, for any period, the sum of Consolidated Net Income for such
period plus the following expenses or charges to the extent deducted from
Consolidated Net Income in such period: interest, income taxes, depreciation,
depletion, amortization, exploration expenses and other similar noncash charges,
minus all noncash income added to Consolidated Net Income; provided that the
EBITDAX attributable to the DevCos and cash distributions from the Midstream MLP
and its subsidiaries to be included in EBITDAX for each trailing four fiscal
quarter period shall be equal to (a) for the first two trailing four fiscal
quarter periods ending on the last days of the first two fiscal quarters after
the Ninth Amendment Effective Date, $112,000,000 for each such trailing four
fiscal quarter period, (b) for the trailing four fiscal quarter period ending on
the last day of the third fiscal quarter ending after the Ninth Amendment
Effective Date, (i) the sum of $56,000,000 plus the actual EBITDAX attributable
to the DevCos and to the Midstream MLP and its subsidiaries during the third
fiscal quarter after the Ninth Amendment Effective Date multiplied (ii) by 4/3,
(c) for the trailing four fiscal quarter period ending on the last day of the
fourth fiscal quarter ending after the Ninth Amendment Effective Date, the sum
of $56,000,000 plus the actual EBITDAX attributable to the DevCos and to the
Midstream MLP and its subsidiaries during the final two fiscal quarters of such
trailing four fiscal quarter period, (d) for the trailing four fiscal quarter
period ending on the last day of the fifth fiscal quarter ending after the Ninth
Amendment Effective Date, the sum of $28,000,000 plus the actual EBITDAX
attributable to the DevCos and to the Midstream MLP and its subsidiaries for the
final three fiscal quarters of such trailing four fiscal quarter period and
(e) for each fiscal quarter thereafter, the actual EBITDAX attributable to the
DevCos and to the Midstream MLP and its subsidiaries for the four fiscal quarter
period ending on such date.

 

10

--------------------------------------------------------------------------------

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means the date on which the conditions specified
in Section 6.01 are satisfied (or waived in accordance with Section 12.02).

“Eighth Amendment” means that certain Eighth Amendment to Second Amended and
Restated Credit Agreement, dated as of April 10, 2017, among the Borrower, the
Guarantors, the Administrative Agent and the Lenders party thereto.

“Elected Commitment” means, as to each Lender, the amount set forth opposite
such Lender’s name on Annex I under the caption “Elected Commitment”, as the
same may be increased, reduced or terminated from time to time in connection
with an optional increase, reduction or termination of the Aggregate Elected
Commitment Amounts pursuant to Section 2.06(c).

“Elected Commitment Increase Certificate” has the meaning assigned to such term
in Section 2.06(c)(ii)(F).

“Engineering Reports” has the meaning assigned such term in Section 2.07(c)(i).

“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety the environment, the preservation or reclamation of
natural resources, or the management, release or threatened release of any
hazardous substance, in effect in any and all jurisdictions in which the Parent,
the Borrower or any Subsidiary is conducting or at any time has conducted
business, or where any Property of the Borrower or any Subsidiary is located,
including without limitation, the Oil Pollution Act of 1990 (“OPA”), as amended,
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the Resource Conservation and Recovery Act of 1976
(“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and other environmental conservation or protection Governmental Requirements.
The term “oil” shall have the meaning specified in OPA, the terms “hazardous
substance” and “release” (or “threatened release”) have the meanings specified
in CERCLA, the terms “solid waste” and “disposal” (or “disposed”) have the
meanings specified in RCRA and the term “oil and gas

 

11

--------------------------------------------------------------------------------

waste” shall have the meaning specified in Section 91.1011 of the Texas Natural
Resources Code (“Section 91.1011”); provided, however, that (a) in the event
either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent
to the effective date of such amendment and (b) to the extent the laws of the
state or other jurisdiction in which any Property of the Borrower or any
Subsidiary is located establish a meaning for “oil,” “hazardous substance,”
“release,” “solid waste,” “disposal” or “oil and gas waste” which is broader
than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such broader
meaning shall apply.

“Environmental Permit” means any permit, registration, license, approval,
consent, exemption, variance, or other authorization required under or issued
pursuant to applicable Environmental Laws.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.

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

“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Borrower or a Subsidiary would be deemed to be a “single
employer” within the meaning of section 4001(b)(1) of ERISA or subsections (b),
(c), (m) or (o) of section 414 of the Code.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation
Schedule published by the Loan Market Association (or any successor person), as
in effect from time to time.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned such term in Section 10.01.

“Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental
charges or levies which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (b) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’,
vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’,
workers’, materialmen’s, construction or other like Liens arising by operation
of law in the ordinary course of business or incident to the exploration,
development, operation and maintenance of Oil and Gas Properties (or in the case
of the DevCos, of the Midstream Properties) each of which is in respect of
obligations that are not delinquent or which are being contested in good faith
by appropriate action and for which adequate reserves have been maintained in
accordance with GAAP;

 

12

--------------------------------------------------------------------------------

(d) contractual Liens which arise in the ordinary course of business under
operating agreements, joint venture agreements, oil and gas partnership
agreements, oil and gas leases, farm-out agreements, division orders, contracts
for the sale, transportation or exchange of oil and natural gas, unitization and
pooling declarations and agreements, area of mutual interest agreements,
overriding royalty agreements, marketing agreements, processing agreements, net
profits agreements, development agreements, gas balancing or deferred production
agreements, injection, repressuring and recycling agreements, salt water or
other disposal agreements, seismic or other geophysical permits or agreements,
and other agreements which are usual and customary in the oil and gas business
(or in the case of the DevCos, usual and customary in the midstream business)
and are for claims which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP, provided that any such Lien referred to in this clause
does not materially impair the use of any material Property covered by such Lien
for the purposes for which such Property is held by the Borrower or any
Subsidiary or any DevCo or materially impair the value of such Property subject
thereto; (e) Liens arising solely by virtue of any statutory or common law
provision relating to banker’s liens, rights of set-off or similar rights and
remedies and burdening only deposit accounts or other funds maintained with a
creditor depository institution, provided that no such deposit account is a
dedicated cash collateral account or is subject to restrictions against access
by the depositor in excess of those set forth by regulations promulgated by the
Board and no such deposit account is intended by Borrower or any of its
Subsidiaries or any DevCo to provide collateral to the depository institution;
(f) easements, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations in any Property of the Borrower or any Subsidiary or
any DevCo for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, that do not secure
any monetary obligations and which in the aggregate do not materially impair the
use of any material Property for the purposes of which such Property is held by
the Borrower or any Subsidiary or materially impair the value of any material
Property subject thereto; (g) Liens on cash or securities pledged to secure
performance of tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts, leases, statutory
obligations, regulatory obligations and other obligations of a like nature
incurred in the ordinary course of business and (h) judgment and attachment
Liens not giving rise to an Event of Default, provided that any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which such
proceeding may be initiated shall not have expired and no action to enforce such
Lien has been commenced; provided, further that (i) Liens described in
clauses (a) through (e) shall remain “Excepted Liens” only for so long as no
action to enforce such Lien has been commenced and no intention to subordinate
the first priority Lien granted in favor of the Administrative Agent and the
Lenders is to be hereby implied or expressed by the permitted existence of such
Excepted Liens and (ii) the term “Excepted Liens” shall not include any Lien
securing Debt for borrowed money other than the Indebtedness.

“Excluded Swap Obligation” means, with respect to any Credit Party or any DevCo
individually determined on a Credit Party by Credit Party basis (or a DevCo by
DevCo, as applicable), any Indebtedness in respect of any Swap Agreement if, and
solely to the extent that, all or a portion of the guarantee of such Person of,
or the grant by such Person of a security interest to secure, such Indebtedness
in respect of any Swap Agreement (or any guarantee

 

13

--------------------------------------------------------------------------------

thereof) is or becomes illegal under the Commodity Exchange Act or any rule,
regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such
Person’s failure for any reason to constitute an “eligible contract participant”
as defined in the Commodity Exchange Act at the time such guarantee or grant of
a security interest becomes effective with respect to such related Indebtedness
in respect of any Swap Agreement. If any Indebtedness in respect of any Swap
Agreement arises under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such Indebtedness in respect of any
Swap Agreement that is attributable to swaps for which such guarantee or
security interest is or becomes illegal.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower or any Guarantor hereunder or under
any other Loan Document, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America or such other jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending
office is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower or any Guarantor is located, (c) in the case of a Foreign Lender (other
than an assignee pursuant to a request by the Borrower under Section 5.04(b)),
any withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to
comply with Section 5.03(f), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts with respect to such
withholding tax pursuant to Section 5.03(a) or Section 5.03(c), and (d) any
United States federal withholding taxes imposed by FATCA.

“FATCA” means Sections 1471 through 1474 of the Code as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, and any agreements entered into
pursuant to Section 1471(b) of the Code.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding 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 (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it; provided that in no event shall the Federal
Funds Effective Rate be less than 0%.

“FERC” means the Federal Energy Regulatory Commission or any of its successors.

 

14

--------------------------------------------------------------------------------

“Fifth Amendment” means that certain Fifth Amendment to Second Amended and
Restated Credit Agreement, dated as of February 23, 2016, among the Borrower,
the Guarantors, the Administrative Agent and the Lenders party thereto.

“Financial Officer” means, for any Person, any vice president, the chief
financial officer, principal accounting officer, treasurer or controller of such
Person. Unless otherwise specified, all references herein to a Financial Officer
means a Financial Officer of the Borrower.

“Financial Statements” means the financial statement or statements of the Parent
and its Consolidated Subsidiaries referred to in Section 7.04(a).

“First Amendment” means that certain First Amendment to Second Amended and
Restated Credit Agreement, dated as of September 3, 2013, among the Borrower,
the Guarantors, the Administrative Agent and the Lenders party thereto.

“Flood Deliverables” means (a) a certificate of a Responsible Officer of the
Borrower certifying as to a true, correct and complete list, as of the date of
such certificate, of all “Buildings” (as defined by the applicable Flood
Insurance Regulations) located on real property that is subject to Liens created
by the Security Instruments, (b) a life of loan flood hazard determination with
respect to all such Buildings, (c) if such real property is located in a special
flood hazard area, evidence of flood insurance in such amounts as are acceptable
to the Administrative Agent, and (d) such other certificates or notices
reasonably required by the Administrative Agent to facilitate compliance with
Governmental Requirements, each in form and substance reasonably satisfactory to
the Administrative Agent.

“Flood Insurance Regulations” means (i) the National Flood Insurance Act of 1968
as now or hereafter in effect or any successor statute thereto, (b) the Flood
Disaster Protection Act of 1973 as now or hereafter in effect or any successor
statute thereto, (c) the National Flood Insurance Reform Act of 1994 (amending
42 USC § 4001, et seq.), as the same may be amended or recodified from time to
time, and (d) the Flood Insurance Reform Act of 2004 and any regulations
promulgated thereunder.

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

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Fourth Amendment” means that certain Fourth Amendment to Second Amended and
Restated Credit Agreement, dated as of November 13, 2015, among the Borrower,
the Guarantors, the Administrative Agent and the Lenders party thereto.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.

 

15

--------------------------------------------------------------------------------

“Gathering System” means the Midstream Properties of the Credit Parties and the
DevCos, as applicable, comprised of any pipeline or gathering system owned or
leased from time to time by any Credit Party or DevCo that is used in the
business of such Credit Party or DevCo.

“General Partner” means OMP GP LLC, a Delaware limited liability company.

“General Partner LLC Agreement” means that certain Amended and Restated Limited
Liability Company Agreement of the General Partner, dated as of May 22, 2017,
and as such agreement may be amended, amended and restated, supplemented or
otherwise modified in compliance with Section 9.21.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government over the
Parent, the Borrower, any Subsidiary, any of their Properties, any Agent, the
Issuing Bank or any Lender.

“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, rule of common law, authorization or other
directive or requirement, whether now or hereinafter in effect, including,
without limitation, Environmental Laws, energy regulations and occupational,
safety and health standards or controls, of any Governmental Authority.

“Guarantors” means:

 

  (a) the Parent;

 

  (b) OP LLC;

 

  (c) Oasis Petroleum Marketing LLC, a Delaware limited liability company;

 

  (d) Oasis Well Services LLC, a Delaware limited liability company;

 

  (e) Oasis Midstream Services LLC (“OMS”);

 

  (f) OMS Holdings LLC;

 

  (g) the General Partner; and

 

  (h) each other Person that guarantees the Indebtedness pursuant to
Section 8.14(b);

provided that, for the avoidance of doubt, no DevCo shall be a Guarantor for
purposes of the Loan Documents.

“Guaranty and Security Agreement” means the Second Amended and Restated Guaranty
and Security Agreement executed by the Credit Parties in substantially the form
of Exhibit E-2 pursuant to which the Credit Parties (a) unconditionally guaranty
on a joint and several basis, payment of the Indebtedness, and (b) grant Liens
and a security interest on the Credit Parties’ personal property constituting
“collateral” as defined therein in favor of the Administrative Agent for the
benefit of the Secured Parties to secure the Indebtedness, as the same may be
amended, modified or supplemented from time to time.

 

16

--------------------------------------------------------------------------------

“Hazardous Material” means any substance regulated or as to which liability
might arise under any applicable Environmental Law and including, without
limitation: (a) any chemical, compound, material, product, byproduct, substance
or waste defined as or included in the definition or meaning of “hazardous
substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic
waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,”
“pollutant,” or words of similar meaning or import found in any applicable
Environmental Law; (b) Hydrocarbons, petroleum products, petroleum substances,
natural gas, oil, oil and gas waste, crude oil, and any components, fractions,
or derivatives thereof; and (c) radioactive materials, explosives, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon, infectious or
medical wastes.

“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws allow as of the date hereof.

“Hydrocarbon Interests” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests therein or thereto, of
whatever nature.

“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
products refined or separated therefrom.

“Indebtedness” means, without duplication, any and all amounts and obligations
of every nature owing or to be owing by the Borrower, any Subsidiary, any
Guarantor or any DevCo (whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising): (a) to the Administrative Agent, the Issuing Bank or any
Lender under any Loan Document; (b) to any Secured Swap Party under any Secured
Swap Agreement; (c) to any Bank Products Provider in respect of Bank Products;
and (d) all renewals, extensions and/or rearrangements of any of the above;
provided that solely with respect to any Guarantor or DevCo that is not an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder, Excluded Swap Obligations of such Guarantor
or such DevCo shall in any event be excluded from “Indebtedness” owing by such
Guarantor.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

17

--------------------------------------------------------------------------------

“Industry Competitor” means any Person (other than Borrower, any Guarantor or
any of their Affiliates or Subsidiaries) that is (or one or more of whose
Affiliates are) actively engaged as one of its principal businesses in lease
acquisitions, exploration and production operations or development of oil and
gas properties (including the drilling and completion of producing wells).

“Initial Reserve Report” means the report of DeGoyler MacNaughton dated as of
February 1, 2013 with respect to certain Oil and Gas Properties of the Borrower
and its Subsidiaries as of December 31, 2012.

“Intercreditor Agreement” means (a) the Intercreditor Agreement among the
DevCos, the Administrative Agent, Wells Fargo Bank, N.A. (or any successor
administrative agent), as administrative agent under the OMP Credit Facility,
and the other parties thereto, which provides that, as among the parties
thereto, the Liens on the DevCo Collateral will be of equal priority to the
Permitted OMP Credit Facility Liens on such DevCo Collateral and that any
proceeds of such DevCo Collateral received by any secured party following any
event of default or any enforcement action shall be allocated among the Secured
Parties, on one hand, and the secured parties with respect to obligations owing
under the OMP Credit Facility, on the other hand, in accordance with the
respective direct ownership percentages of Equity Interests in the applicable
DevCo of the obligors under such credit facilities (for example, and for the
avoidance of doubt, the percentage allocation of such proceeds to the Secured
Parties with respect to any DevCo Collateral shall equal the DevCo Ownership
Percentage with respect to such DevCo at the time such event of default or
enforcement action occurs) and (b) if the OMP Credit Facility is refinanced or
replaced in accordance with the terms of the Intercreditor Agreement, any
successor intercreditor agreement entered into in connection therewith, in each
case as the same may be amended, modified, supplemented or restated from time to
time.

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.04.

“Interest Expense” means, for any period, the sum (determined without
duplication) of the aggregate gross interest expense of the Parent and the
Consolidated Subsidiaries for such period, (1) including (a) interest expense
under GAAP, (b) capitalized interest, and (c) the portion of any payments or
accruals under Capital Leases allocable to interest expense, plus the portion of
any payments or accruals under Synthetic Leases allocable to interest expense
whether or not the same constitutes interest expense under GAAP, but
(2) excluding the amortization of debt discount and fees and expenses related to
the issuance of Debt, Capital Leases, Synthetic Leases, the Senior Notes or the
Indebtedness.

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.

 

18

--------------------------------------------------------------------------------

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine or twelve months) thereafter, as the
Borrower may elect; provided, that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (b) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Interim Redetermination” has the meaning assigned such term in Section 2.07(b).

“Interim Redetermination Date” means the date on which a Borrowing Base that has
been redetermined pursuant to an Interim Redetermination becomes effective as
provided in Section 2.07(d).

“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition (including, without
limitation, any “short sale” or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit with, or advance, loan or capital contribution to, the
assumption of Debt of, the purchase or other acquisition of any other Debt of or
equity participation or interest in, or other extension of credit to, any other
Person (including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding ninety (90) days representing the purchase price of
inventory, material, equipment or supplies sold by such Person in the ordinary
course of business); (c) the purchase or acquisition (in one or a series of
transactions) of Property of another Person that constitutes a business unit or
(d) the entering into of any guarantee of, or other contingent obligation
(including the deposit of any Equity Interests to be sold) with respect to, Debt
or other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; provided that in no
event shall any Permitted Bond Hedge Transactions or any Permitted Warrant
Transaction be considered an “Investment” for purposes of this Agreement.

“Issuing Bank” means Wells Fargo Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided
in Section 2.08(i). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

“LC Commitment” at any time means Fifty Million Dollars ($50,000,000.00).

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

 

19

--------------------------------------------------------------------------------

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

“Lenders” means the Persons listed on Annex I and any Person that shall have
become a party hereto pursuant to an Assignment and Assumption, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption, and any Person that shall have become a party hereto as an
Additional Lender pursuant to Section 2.06(c).

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Letter of Credit Agreements” means all letter of credit applications and other
agreements (including any amendments, modifications or supplements thereto)
submitted by the Borrower, or entered into by the Borrower, with the Issuing
Bank relating to any Letter of Credit.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the greater of (i) 0% and (ii) the rate appearing on Reuters Screen
LIBOR01 Page (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate (rounded upwards, if necessary, to the next 1/100 of 1%) at which dollar
deposits of an amount comparable to such Eurodollar Borrowing and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of Oil
and Gas Properties. The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations. For the
purposes of this Agreement, the Parent, OP LLC, the Borrower, the Subsidiaries
and the DevCos shall be deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person in a transaction intended to
create a financing.

 

20

--------------------------------------------------------------------------------

“Liquidate” means, with respect to any Swap Agreement, the sale, assignment,
novation, unwind or termination of all or any part of such Swap Agreement;
provided that for purposes of this definition, a Swap Agreement shall not be
deemed to have been Liquidated if, (a) such Swap Agreement is novated from the
existing counterparty to an Approved Counterparty, with the Borrower or another
Credit Party being the “remaining party” for purposes of such novation, or
(b) upon its termination, it is replaced, in a substantially contemporaneous
transaction, with one or more Swap Agreements with approximately the same
mark-to-market value and without cash payments to the Borrower or any other
Credit Party in connection therewith. The terms “Liquidated” and “Liquidation”
have correlative meanings thereto.

“Loan Documents” means this Agreement, the Intercreditor Agreement, the Notes,
the Letter of Credit Agreements, the Letters of Credit, the Security Instruments
and each DevCo Guaranty Agreement.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

“Majority Lenders” means, at any time while no Loans or LC Exposure is
outstanding, Lenders having more than fifty percent (50%) of the Aggregate
Maximum Credit Amounts; and at any time while any Loans or LC Exposure is
outstanding, Lenders holding more than fifty percent (50%) of the outstanding
aggregate principal amount of the Loans and participation interests in Letters
of Credit (without regard to any sale by a Lender of a participation in any Loan
under Section 12.04(c)); provided that the Maximum Credit Amounts and the
principal amount of the Loans and participation interests in Letters of Credit
of the Defaulting Lenders (if any) shall be excluded from the determination of
Majority Lenders.

“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, operations, Property or condition (financial
or otherwise) of the Credit Parties, taken as a whole, (b) the ability of the
Credit Parties to perform any of their obligations under any Loan Document,
(c) the validity or enforceability of any Loan Document or (d) the rights and
remedies of or benefits available to the Administrative Agent, any other Agent,
the Issuing Bank or any Lender under any Loan Document.

“Material Indebtedness” means Debt (other than the Loans and Letters of Credit),
or obligations in respect of one or more Swap Agreements, of any one or more of
the Parent, OP LLC, the Borrower, the Subsidiaries and the DevCos in an
aggregate principal amount exceeding $10,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of the Parent,
OP LLC, the Borrower, any Subsidiary or any DevCo in respect of any Swap
Agreement at any time shall be the Swap Termination Value owed by the Parent, OP
LLC, the Borrower, the Subsidiaries and the DevCos, as applicable.

“Material Subsidiary” means, as of any date, any Domestic Subsidiary of Parent,
OP LLC or the Borrower that, together with its subsidiaries, owns Property
having a fair market value of $5,000,000 or more; provided that if the aggregate
fair market value of all Property of all Domestic Subsidiaries that are not
Guarantors exceeds $10,000,000, then Parent, OP LLC and the Borrower shall
promptly designate Domestic Subsidiaries that are not then Guarantors as
Material Subsidiaries (and cause such designated Material Subsidiaries to comply
with Section 8.14(b)) to the extent necessary so that the aggregate fair market
value of all Property owned by Domestic Subsidiaries that are not then
Guarantors is less than $10,000,000.

 

21

--------------------------------------------------------------------------------

“Maturity Date” means the date that is the earlier of (i) April 13, 2020 (the
“Scheduled Maturity Date”) and (ii) ninety (90) days prior to the maturity date
of the 2019 Notes to the extent that the 2019 Notes are not repurchased,
redeemed or refinanced to have a maturity date at least ninety (90) days after
the Scheduled Maturity Date.

“Maximum Credit Amount” means, as to each Lender, the amount set forth opposite
such Lender’s name on Annex I under the caption “Maximum Credit Amounts”, as the
same may be (a) reduced or terminated from time to time in connection with a
reduction or termination of the Aggregate Maximum Credit Amounts pursuant
to Section 2.06(b), (b) modified from time to time pursuant to Section 2.06(c)
or (c) modified from time to time pursuant to any assignment permitted
by Section 12.04(b).

“Midstream MLP” means Oasis Midstream Partners, a Delaware limited partnership.

“Midstream MLP Contribution” means the disposition by the Credit Parties of
certain Midstream Properties of the Credit Parties to OMP and its subsidiaries
and to the DevCos pursuant to that certain Contribution Agreement among the
Parent, OMS Holdings LLC, the Midstream MLP and OMP, dated as of September 25,
2017.

“Midstream MLP IPO” means initial public offering of Equity Interests in the
Midstream MLP on the New York Stock Exchange pursuant to the Form S-1
Registration Statement File No. 333- 217976 initially filed by the Midstream MLP
with the SEC on May 12, 2017, as amended prior to the Ninth Amendment Effective
Date.

“Midstream MLP Partnership Agreement” means that certain Amended and Restated
Agreement of Limited Partnership of the Midstream MLP dated as of September 25,
2017, as the same may be amended, restated or otherwise modified from time to
time to the extent permitted under this Agreement.

“Midstream Properties” means all tangible property used in (a) gathering,
compressing, treating, processing and transporting natural gas, crude,
condensate and natural gas liquids; (b) fractionating and transporting natural
gas, crude, condensate and natural gas liquids; (c) marketing natural gas,
crude, condensate and natural gas liquids; and (d) water distribution, supply,
treatment and disposal services thereof, including, Gathering Systems,
Processing Plants, storage facilities, surface leases, Rights of Way and
servitudes related to each of the foregoing. Unless otherwise specified herein,
“Midstream Properties” shall be deemed to refer to such properties owned or
leased by the Credit Parties or the DevCos, as applicable. Notwithstanding the
foregoing, in no event shall any interest in, or any interest or right derived
from, any oil, gas and mineral leases, or other liquid or gaseous hydrocarbon
leases, mineral fee interests, overriding royalty and royalty interests, net
profit interests or production payment interests be deemed to be Midstream
Properties for purposes of the Loan Documents.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.

 

22

--------------------------------------------------------------------------------

“Mortgaged Property” means (a) any Property owned by the Borrower or any
Guarantor which is subject to the Liens existing and to exist under the terms of
the Security Instruments and (b) the DevCo Mortgaged Property.

“New Borrowing Base Notice” has the meaning assigned such term
in Section 2.07(d).

“Ninth Amendment” means that certain Ninth Amendment to Second Amended and
Restated Credit Agreement, dated as of September 25, 2017, among the Borrower,
the Guarantors, the Administrative Agent and the Lenders party thereto.

“Ninth Amendment Effective Date” means September 25, 2017.

“Notes” means the promissory notes of the Borrower described in Section 2.02(d)
and being substantially in the form of Exhibit A, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now
or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of the Hydrocarbon Interests; (d) all operating
agreements, contracts and other agreements, including production sharing
contracts and agreements, which relate to any of the Hydrocarbon Interests or
the production, sale, purchase, exchange or processing of Hydrocarbons from or
attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under
and which may be produced and saved or attributable to the Hydrocarbon
Interests, including all oil in tanks, and all rents, issues, profits, proceeds,
products, revenues and other incomes from or attributable to the Hydrocarbon
Interests; (f) all tenements, hereditaments, appurtenances and Properties in any
manner appertaining, belonging, affixed or incidental to the Hydrocarbon
Interests and (g) all Properties, rights, titles, interests and estates
described or referred to above, including any and all Property, real or
personal, now owned or hereinafter acquired and situated upon, used, held for
use or useful in connection with the operating, working or development of any of
such Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment, rental equipment or other personal Property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.

“OMP” means OMP Operating LLC, a Delaware limited liability company.

 

23

--------------------------------------------------------------------------------

“OMP Credit Facility” means any senior secured credit facility pursuant to that
certain Credit Agreement dated September 25, 2017, among OMP, as borrower, the
other credit parties thereto, Wells Fargo Bank, N.A., as administrative agent
and the lenders party thereto, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof.

“OP International” means Oasis Petroleum International LLC, a Delaware limited
liability company.

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or Property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement and any other Loan Document; provided
that, for the avoidance of doubt, “Other Taxes” shall not include Excluded
Taxes.

“Participant” has the meaning set forth in Section 12.04(c)(i).

“Participant Register” has the meaning set forth in Section 12.04(c)(i).

“Permitted Bond Hedge Transaction(s)” means the bond hedge or capped call
options purchased by the Parent or any other Credit Party from the Call Spread
Counterparties to hedge the Parent’s payment and/or delivery obligations due
upon conversion of the Convertible Notes.

“Permitted OMP Credit Facility Liens” means Liens on Midstream Properties owned
by any DevCo that are in favor of Wells Fargo Bank, N.A. (or any successor
administrative agent), as administrative agent under the OMP Credit Facility to
secure the obligations and indebtedness under such OMP Credit Facility and which
Liens are subject to the Intercreditor Agreement.

“Permitted Refinancing Debt” means Senior Notes issued or incurred by the Parent
or any other Credit Party, and Debt constituting guarantees thereof by other
Credit Parties, incurred or issued in exchange for, or the net proceeds of which
are used to extend, refinance, repay, renew, replace (whether or not
contemporaneously), defease, discharge, refund or otherwise Redeem outstanding
Senior Notes, in whole or in part from time to time; provided that the principal
amount of such Permitted Refinancing Debt (or if such Permitted Refinancing Debt
is issued at a discount, the initial issuance price of such Permitted
Refinancing Debt) does not exceed the then outstanding principal amount of the
Senior Notes so exchanged for, extended, refinanced, repaid, renewed, replaced,
defeased, discharged, refunded or otherwise Redeemed (plus the amount of any
premiums and accrued interest paid and fees and expenses incurred in connection
therewith).

“Permitted Warrant Transaction(s)” means one or more net share or cash settled
warrants sold by the Credit Parties to the Call Spread Counterparties,
concurrently with the purchase by the Parent of the Permitted Bond Hedge
Transactions, to offset the cost to the Parent of the Permitted Bond Hedge
Transactions.

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

 

24

--------------------------------------------------------------------------------

“Plan” means any employee pension benefit plan, as defined in section 3(2) of
ERISA, which (a) is currently or hereafter sponsored, maintained or contributed
to by the Borrower, a Subsidiary or an ERISA Affiliate or (b) was at any time
during the six calendar years preceding the date hereof, sponsored, maintained
or contributed to by the Borrower or a Subsidiary or an ERISA Affiliate.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Wells Fargo, as its prime rate in effect at its principal office in
San Francisco; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective. Such
rate is set by the Administrative Agent as a general reference rate of interest,
taking into account such factors as the Administrative Agent may deem
appropriate; it being understood that many of the Administrative Agent’s
commercial or other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any customer and that
the Administrative Agent may make various commercial or other loans at rates of
interest having no relationship to such rate.

“Processing Plants” means the Midstream Properties of the Credit Parties or
DevCos, as applicable, comprised of any processing plants owned or leased from
time to time by any Credit Party or DevCo that are used in the business of such
Credit Party or DevCo.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.

“Proposed Borrowing Base” has the meaning assigned to such term
in Section 2.07(c)(i).

“Proposed Borrowing Base Notice” has the meaning assigned to such term
in Section 2.07(c)(ii).

“Qualified Convertible Notes Offering” means an issuance of Convertible Notes
which satisfies the following conditions: (a) such Convertible Notes have a per
annum interest rate less than or equal to 5%, (b) at the time thereof and after
giving effect to any adjustment of the Borrowing Base in connection therewith,
the Total Commitments Utilization Percentage is less than or equal to 50% and
(c) after giving pro forma effect to such issuance, the Borrower is in
compliance with the financial covenants contained
in Section 9.01(a), Section 9.01(b) and Section 9.01(c).

“Qualified ECP Guarantor” means, in respect of any Swap Agreement, each Credit
Party and each DevCo that (a) has total assets exceeding $10,000,000 at the time
any guaranty of obligations under such Swap Agreement becomes effective or
(b) otherwise constitutes an “eligible contract participant” under the Commodity
Exchange Act or any regulations promulgated thereunder and can cause another
Person to qualify as an “eligible contract participant” at such time by entering
into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Redemption” means with respect to any Debt, the repurchase, redemption,
prepayment, repayment, defeasance or any other acquisition or retirement for
value (or the segregation of funds with respect to any of the foregoing) of such
Debt. “Redeem” has the correlative meaning thereto.

 

25

--------------------------------------------------------------------------------

“Redetermination Date” means, with respect to any Scheduled Redetermination or
any Interim Redetermination, the date that the redetermined Borrowing Base
related thereto becomes effective pursuant to Section 2.07(d).

“Refined Products” means gasoline, diesel fuel, jet fuel, asphalt and asphalt
products, and other refined products of crude oil.

“Register” has the meaning assigned such term in Section 12.04(b)(iv).

“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and such
Person’s Affiliates.

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.

“Remedial Work” has the meaning assigned such term in Section 8.10(a).

“Required Lenders” means, at any time while no Loans or LC Exposure is
outstanding, Lenders having at least sixty-six and two-thirds percent (66 2⁄3%)
of the Aggregate Maximum Credit Amounts; and at any time while any Loans or LC
Exposure is outstanding, Lenders holding at least sixty-six and two-thirds
percent (66 2⁄3%) of the outstanding aggregate principal amount of the Loans and
participation interests in Letters of Credit (without regard to any sale by a
Lender of a participation in any Loan under Section 12.04(c)); provided that the
Maximum Credit Amounts and the principal amount of the Loans and participation
interests in Letters of Credit of the Defaulting Lenders (if any) shall be
excluded from the determination of Required Lenders.

“Requisite Increase Lenders” means, at any time while no Loans or LC Exposure is
outstanding, Lenders having at least ninety percent (90%) of the Aggregate
Maximum Credit Amounts; and at any time while any Loans or LC Exposure is
outstanding, Lenders holding at least ninety percent (90%) of the outstanding
aggregate principal amount of the Loans and participation interests in Letters
of Credit (without regard to any sale by a Lender of a participation in any Loan
under Section 12.04(c)).

“Reserve Report” means a report, in form and substance reasonably satisfactory
to the Administrative Agent, setting forth, as of each January 1st or July 1st
(or such other date in the event of an Interim Redetermination) the oil and gas
reserves located in the United States attributable to the Oil and Gas Properties
of the Borrower and the Subsidiaries, together with a projection of the rate of
production and future net income, taxes, operating expenses and capital
expenditures with respect thereto as of such date, based upon the economic
assumptions consistent with the Administrative Agent’s lending requirements at
the time.

 

26

--------------------------------------------------------------------------------

“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in the
Borrower or any of its Subsidiaries or any DevCo, or any payment (whether in
cash, securities or other Property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in the Borrower or any
of its Subsidiaries or any DevCo or any option, warrant or other right to
acquire any such Equity Interests in the Borrower or any of its Subsidiaries or
any DevCo.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans and its LC
Exposure at such time.

“S&P” means S&P Global Ratings and any successor thereto that is a nationally
recognized rating agency.

“Scheduled Redetermination” has the meaning assigned such term
in Section 2.07(b).

“Scheduled Redetermination Date” means the date on which a Borrowing Base that
has been redetermined pursuant to a Scheduled Redetermination becomes effective
as provided in Section 2.07(d).

“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.

“Second Amendment” means that certain Second Amendment to Second Amended and
Restated Credit Agreement, dated as of September 30, 2014, among the Borrower,
the Guarantors, the Administrative Agent and the Lenders party thereto.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the Bank Products Providers and Secured Swap Parties, and “Secured Party” means
any of them individually.

“Secured Swap Agreements” means any Swap Agreement between the Parent, OP LLC,
the Borrower or any other Credit Party and any Person entered into prior to the
time, or during the time, that such Person or its Affiliate is a Lender
(including any Swap Agreement between such Person in existence prior to the date
hereof), even if such Person subsequently ceases to be a Lender (or an Affiliate
thereof) for any reason (any such Person, a “Secured Swap Party”).

“Secured Swap Indebtedness” means Indebtedness of the type referred to in
clause (b) of the definition of Indebtedness.

 

27

--------------------------------------------------------------------------------

“Secured Swap Party” has the meaning assigned to such term in the definition of
Secured Swap Agreement.

“Security Instruments” means the Guaranty and Security Agreement, each DevCo
Guaranty, the Intercreditor Agreement, mortgages, deeds of trust, the DevCo
Mortgages, and other agreements, instruments or certificates described or
referred to in Exhibit E-1, and any and all other agreements, instruments,
consents or certificates now or hereafter executed and delivered by the Parent,
OP LLC, the Borrower, any other Guarantor, any DevCo or any other Person (other
than Secured Swap Agreements or participation or similar agreements between any
Lender and any other lender or creditor with respect to any Indebtedness
pursuant to this Agreement) as security for the payment or performance of the
Indebtedness, the Notes, this Agreement, or reimbursement obligations under the
Letters of Credit, as such agreements may be amended, modified, supplemented or
restated from time to time.

“Senior Notes” means any unsecured senior or senior subordinated Debt securities
(whether registered or privately placed) issued pursuant to a Senior Notes
Indenture including, for the avoidance of doubt, any Convertible Notes.

“Senior Notes Indenture” means any indenture among the Parent, as issuer, the
subsidiary guarantors party thereto and the trustee named therein, pursuant to
which the Senior Notes are issued, as the same may be amended or supplemented in
accordance with Section 9.04(b), including, for the avoidance of doubt, any
Convertible Note Indenture.

“Seventh Amendment” means that certain Seventh Amendment to Second Amended and
Restated Credit Agreement, dated as of October 14, 2016, among the Borrower, the
Guarantors, the Administrative Agent and the Lenders party thereto.

“Sixth Amendment” means that certain Sixth Amendment to Second Amended and
Restated Credit Agreement, dated as of August 8, 2016, among the Borrower, the
Guarantors, the Administrative Agent and the Lenders party thereto.

“Specified Redemption Test” means, at the time of determination, with respect to
any event in connection with which such determination is made, each of the
following conditions is satisfied: (a) no Default, Event of Default or Borrowing
Base Deficiency has occurred and is continuing or would result from such event,
(b) the amount of the undrawn Commitments after giving effect to such event
shall represent at least 50% of the aggregate Commitments at such time and
(c) the Borrower is able to satisfy each of the conditions contained
in Section 6.02 at the time of determination.

“Statutory Reserve Rate” means, a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

28

--------------------------------------------------------------------------------

“Subsidiary” means (a) any Person of which at least a majority of the
outstanding Equity Interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors, manager or other governing body
of such Person (irrespective of whether or not at the time Equity Interests of
any other class or classes of such Person shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by the Borrower and/or one or more of its
Subsidiaries and (b) any partnership of which the Borrower or any of its
Subsidiaries is a general partner. Unless otherwise indicated herein, each
reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower;
provided, that OP International and its Subsidiaries shall not be considered
“Subsidiaries” for purposes of the Loan Documents; provided further, that none
of the Midstream MLP, any of its subsidiaries and any DevCo shall be considered
a “Subsidiary” of the Parent, OP LLC or the Borrower for purposes of the Loan
Documents.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement, whether exchange
traded, “over-the-counter” or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions (including any agreement, contract or transaction that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act); provided that no phantom stock or similar plan providing for
payments only on account of services provided by current or former directors,
officers, employees or consultants of the Borrower or its Subsidiaries shall be
a Swap Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Agreements, (a) for any date on or after the
date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined by the
counterparties to such Swap Agreements.

“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S. federal income taxes, if
the lessee in respect thereof is obligated to either purchase for an amount in
excess of, or pay upon early termination an amount in excess of, 80% of the
residual value of the Property subject to such operating lease upon expiration
or early termination of such lease.

 

29

--------------------------------------------------------------------------------

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Termination Date” means the earlier of the Maturity Date and the date of
termination of the Commitments.

“Third Amendment” means that certain Third Amendment to Second Amended and
Restated Credit Agreement, dated as of April 13, 2015, among the Borrower, the
Guarantors, the Administrative Agent and the Lenders party thereto.

“Total Commitments Utilization Percentage” means, as of any day, the fraction
expressed as a percentage, the numerator of which is the sum of the Revolving
Credit Exposures of the Lenders on such day, and the denominator of which is the
total Commitments of the Lenders in effect on such day.

“Total Debt” means, at any date, all Debt of the Parent and the Consolidated
Subsidiaries on a consolidated basis, excluding (a) non-cash obligations under
ASC 815 and (b) accounts payable and accrued expenses, liabilities or other
obligations to pay the deferred purchase price of Property or services, from
time to time incurred in the ordinary course of business which are not greater
than sixty (60) days past the date of invoice or delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP.

“Transactions” means, with respect to (a) the Borrower, the execution, delivery
and performance by the Borrower of this Agreement and each other Loan Document
to which it is a party, the borrowing of Loans, the use of the proceeds thereof
and the issuance of Letters of Credit hereunder, and the grant of Liens by the
Borrower on Mortgaged Properties and other Properties pursuant to the Security
Instruments and (b) each Guarantor, the execution, delivery and performance by
such Guarantor of each Loan Document to which it is a party, the guaranteeing of
the Indebtedness and the other obligations under the Guaranty and Security
Agreement by such Guarantor and such Guarantor’s grant of the security interests
and provision of collateral under the Security Instruments, and the grant of
Liens by such Guarantor on Mortgaged Properties and other Properties pursuant to
the Security Instruments.

“Trigger Date” means the first date on which the Aggregate Elected Commitment
Amounts exceed $1,150,000,000.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.

“U.S. Tax Compliance Certificate” has the meaning set forth in Section 5.03(f).

“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower or one or
more of the Wholly-Owned Subsidiaries or are owned by the Borrower and one or
more of the Wholly-Owned Subsidiaries.

 

30

--------------------------------------------------------------------------------

“Withholding Agent” means any Credit Party or the Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

Section 1.03 Types of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings, respectively, may be classified and referred to by Type
(e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).

Section 1.04 Terms Generally; Rules of Construction. The definitions of terms
herein 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, supplemented, restated or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth in the Loan Documents), (b) any reference herein to any law shall be
construed as referring to such law as amended, modified, codified or reenacted,
in whole or in part, and in effect from time to time, (c) any reference herein
to any Person shall be construed to include such Person’s successors and assigns
(subject to the restrictions contained in the Loan Documents), (d) 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, (e) with respect to the determination of any time period, the
word “from” means “from and including” and the word “to” means “to and
including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Annexes, Exhibits and Schedules to, this Agreement. No provision of this
Agreement or any other Loan Document shall be interpreted or construed against
any Person solely because such Person or its legal representative drafted such
provision. Notwithstanding anything herein to the contrary, for the purposes of
calculating any of the ratios tested under Section 9.01, and the components of
each of such ratios, except to the extent expressly stated otherwise, OP
International, any other Subsidiary that is not a Guarantor, any DevCo, the
Midstream MLP and its subsidiaries (including in each case their assets,
liabilities, income, losses, cash flows, and the elements thereof) shall be
excluded, except for any cash dividends or distributions actually paid by any
such Person to the Credit Parties, which shall be deemed to be income to such
Credit Party when actually received by such Person.

Section 1.05 Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the Financial Statements except for changes in which Borrower’s independent
certified public accountants concur and which are disclosed to Administrative
Agent on the next

 

31

--------------------------------------------------------------------------------

date on which financial statements are required to be delivered to the Lenders
pursuant to Section 8.01(a); provided that, unless the Borrower and the Majority
Lenders shall otherwise agree in writing, no such change shall modify or affect
the manner in which compliance with the covenants contained herein is computed
such that all such computations shall be conducted utilizing financial
information presented consistently with prior periods.

ARTICLE II

The Credits

Section 2.01 Commitments. Subject to the terms and conditions set forth herein,
each Lender agrees to make Loans to the Borrower during the Availability Period
in an aggregate principal amount that will not result in (a) such Lender’s
Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the total
Revolving Credit Exposures exceeding the total Commitments. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, repay and reborrow the Loans.

Section 2.02 Loans and Borrowings.

(a) Borrowings; Several Obligations. Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.

(b) Types of Loans. Subject to Section 3.03, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

(c) Minimum Amounts; Limitation on Number of Borrowings. At the commencement of
each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $500,000 and not less than
$1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $250,000 and not less
than $1,000,000; provided that an ABR Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the total Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.08(e). Borrowings of more than one Type may be outstanding at the
same time, provided that there shall not at any time be more than a total of six
(6) Eurodollar Borrowings outstanding. Notwithstanding any other provision of
this Agreement, the Borrower shall not be entitled to request, or to elect to
convert or continue, any Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.

 

32

--------------------------------------------------------------------------------

(d) Notes. If requested by a Lender, the Loans made by each Lender shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A, dated, in the case of (i) any Lender party hereto as of the date
of this Agreement, as of the date of this Agreement, (ii) any Lender that
becomes a party hereto pursuant to an Assignment and Assumption, as of the
effective date of the Assignment and Assumption or (iii) any Lender that becomes
a party hereto in connection with an increase in the Aggregate Elected
Commitment Amounts pursuant to Section 2.06(c), as of the effective date of such
increase, payable to such Lender in a principal amount equal to its Maximum
Credit Amount as in effect on such date, and otherwise duly completed. In the
event that any Lender’s Maximum Credit Amount increases or decreases for any
reason (whether pursuant to Section 2.06, Section 12.04(b) or otherwise), the
Borrower shall deliver or cause to be delivered, to the extent such Lender is
then holding a Note, on the effective date of such increase or decrease, a new
Note payable to such Lender in a principal amount equal to its Maximum Credit
Amount after giving effect to such increase or decrease, and otherwise duly
completed and such Lender shall promptly return to the Borrower the previously
issued Note held by such Lender. The date, amount, Type, interest rate and, if
applicable, Interest Period of each Loan made by each Lender, and all payments
made on account of the principal thereof, shall be recorded by such Lender on
its books for its Note, and, prior to any transfer, may be endorsed by such
Lender on a schedule attached to such Note or any continuation thereof or on any
separate record maintained by such Lender. Failure to make any such notation or
to attach a schedule shall not affect any Lender’s or the Borrower’s rights or
obligations in respect of such Loans or affect the validity of such transfer by
any Lender of its Note.

Section 2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone or e-mail (a) in
the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on
the date of the proposed Borrowing; provided that no such notice shall be
required for any deemed request of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as provided in Section 2.08(e). Each such telephonic or
e-mail Borrowing Request shall be irrevocable and shall be confirmed promptly by
hand delivery or facsimile to the Administrative Agent of a written Borrowing
Request in substantially the form of Exhibit B and signed by the Parent, OP LLC
and the Borrower. Each such telephonic/e-mail and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”;

 

33

--------------------------------------------------------------------------------

(v) the amount of the then effective Borrowing Base, the Aggregate Elected
Commitment Amounts, the current total Revolving Credit Exposures (without regard
to the requested Borrowing) and the pro forma total Revolving Credit Exposures
(giving effect to the requested Borrowing); and

(vi) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Each Borrowing
Request shall constitute a representation that the amount of the requested
Borrowing shall not cause the total Revolving Credit Exposures to exceed the
total Commitments (i.e., the least of (x) the Aggregate Maximum Credit Amounts,
(y) the then effective Borrowing Base and (z) the Aggregate Elected Commitment
Amounts).

Promptly following receipt of a Borrowing Request in accordance with
this Section 2.03, the Administrative Agent shall advise each Lender of the
details thereof and of the amount of such Lender’s Loan to be made as part of
the requested Borrowing.

Section 2.04 Interest Elections.

(a) Conversion and Continuance. Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.04. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

(b) Interest Election Requests. To make an election pursuant to
this Section 2.04, the Borrower shall notify the Administrative Agent of such
election by telephone or e-mail by the time that a Borrowing Request would be
required under Section 2.03 if the Borrower were requesting a Borrowing of the
Type resulting from such election to be made on the effective date of such
election. Each such telephonic or e-mail Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in substantially the
form of Exhibit C and signed by the Borrower.

(c) Information in Interest Election Requests. Each telephonic/e-mail and
written Interest Election Request shall specify the following information in
compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to Section 2.04(c)(iii) and (iv) shall
be specified for each resulting Borrowing);

 

34

--------------------------------------------------------------------------------

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(d) Notice to Lenders by the Administrative Agent. Promptly following receipt of
an Interest Election Request, the Administrative Agent shall advise each Lender
of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) Effect of Failure to Deliver Timely Interest Election Request and Events of
Default and Borrowing Base Deficiencies on Interest Election. If the Borrower
fails to deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default or a Borrowing Base
Deficiency has occurred and is continuing: (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing (and any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective) and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto.

Section 2.05 Funding of Borrowings; Funding by Lenders.

(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent in Houston, Texas and
designated by the Borrower in the applicable Borrowing Request; provided that
ABR Loans made to finance the reimbursement of an LC Disbursement as provided
in Section 2.08(e) shall be remitted by the Administrative Agent to the Issuing
Bank. Nothing herein shall be deemed to obligate any Lender to obtain the funds
for its Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for its Loan in any
particular place or manner.

 

35

--------------------------------------------------------------------------------

(b) Presumption of Funding by the Lenders. Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance
with Section 2.05(a) and may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

Section 2.06 Termination and Reduction of Aggregate Maximum Credit Amounts;
Optional Increase and Reduction of Aggregate Elected Commitment Amounts.

(a) Scheduled Termination of Commitments. Unless previously terminated, the
Commitments shall terminate on the Maturity Date. If at any time the Aggregate
Maximum Credit Amounts, the Borrowing Base or the Aggregate Elected Commitments
Amount is terminated or reduced to zero, then the Commitments shall terminate on
the effective date of such termination or reduction.

(b) Optional Termination and Reduction of Aggregate Credit Amounts.

(i) The Borrower may at any time terminate, or from time to time reduce, the
Aggregate Maximum Credit Amounts; provided that (A) each reduction of the
Aggregate Maximum Credit Amounts shall be in an amount that is an integral
multiple of $1,000,000 and not less than $1,000,000, (B) the Borrower shall not
terminate or reduce the Aggregate Maximum Credit Amounts if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 3.04(c),
the total Revolving Credit Exposures would exceed the total Commitments, and
(C) upon any reduction of the Aggregate Maximum Credit Amounts that results in
the Aggregate Maximum Credit Amounts being less than the Aggregate Elected
Commitment Amounts, the Aggregate Elected Commitment Amounts shall be
automatically reduced (ratably among the Lenders) so that they equal the
Aggregate Maximum Credit Amounts as so reduced.

(ii) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Aggregate Maximum Credit Amounts
under Section 2.06(b)(i) at least three Business Days prior to the effective
date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section 2.06(b)(ii) shall be
irrevocable. Any termination or reduction of the Aggregate Maximum Credit
Amounts shall be permanent and may not be reinstated. Each reduction of the
Aggregate Maximum Credit Amounts shall be made ratably among the Lenders in
accordance with each Lender’s Applicable Percentage.

 

36

--------------------------------------------------------------------------------

(c) Optional Increase and Reduction of Aggregate Elected Commitment Amounts.

(i) Subject to the conditions set forth in Section 2.06(c)(ii), the Borrower may
increase the Aggregate Elected Commitment Amounts then in effect by increasing
the Elected Commitment of a Lender or by causing a Person that is acceptable to
the Administrative Agent that at such time is not a Lender to become a Lender
(an “Additional Lender”). Notwithstanding anything to the contrary contained in
this Agreement, in no case shall an Additional Lender be the Borrower or an
Affiliate of a Borrower.

(ii) Any increase in the Aggregate Elected Commitment Amounts shall be subject
to the following additional conditions:

(A) such increase shall not be less than $50,000,000 unless the Administrative
Agent otherwise consents, and no such increase shall be permitted if after
giving effect thereto the Aggregate Elected Commitment Amounts exceed the
Borrowing Base then in effect;

(B) following any Scheduled Redetermination Date, the Borrower may not increase
the Aggregate Elected Commitment Amounts more than once before the next
Scheduled Redetermination Date;

(C) no Default shall have occurred and be continuing on the effective date of
such increase;

(D) on the effective date of such increase, no Eurodollar Borrowings shall be
outstanding or if any Eurodollar Borrowings are outstanding, then the effective
date of such increase shall be the last day of the Interest Period in respect of
such Eurodollar Borrowings unless the Borrower pays compensation required
by Section 5.02;

(E) no Lender’s Elected Commitment may be increased without the consent of such
Lender;

(F) if the Borrower elects to increase the Aggregate Elected Commitment Amounts
by increasing the Elected Commitment of a Lender, the Borrower and such Lender
shall execute and deliver to the Administrative Agent a certificate
substantially in the form of Exhibit G (an “Elected Commitment Increase
Certificate”); and

(G) if the Borrower elects to increase the Aggregate Elected Commitment Amounts
by causing an Additional Lender to become a party to this Agreement, then the
Borrower and such Additional Lender shall execute and deliver to the
Administrative Agent a certificate substantially in the form of Exhibit H (an
“Additional Lender Certificate”), together with an Administrative Questionnaire
and a processing and recordation fee of $3,500, and the Borrower shall (1) if
requested by the Additional Lender, deliver a Note payable to such Additional
Lender in a principal amount equal to its Maximum Credit Amount, and otherwise
duly completed and (2) pay any applicable fees as may have been agreed to
between the Borrower, the Additional Lender and/or the Administrative Agent.

 

37

--------------------------------------------------------------------------------

(iii) Subject to acceptance and recording thereof pursuant
to Section 2.06(c)(iv), from and after the effective date specified in the
Elected Commitment Increase Certificate or the Additional Lender Certificate (or
if any Eurodollar Borrowings are outstanding, then the last day of the Interest
Period in respect of such Eurodollar Borrowings, unless the Borrower has paid
compensation required by Section 5.02): (A) the amount of the Aggregate Elected
Commitment Amounts shall be increased as set forth therein, and (B) in the case
of an Additional Lender Certificate, any Additional Lender party thereto shall
be a party to this Agreement and have the rights and obligations of a Lender
under this Agreement and the other Loan Documents. In addition, the Lender or
the Additional Lender, as applicable, shall purchase a pro rata portion of the
outstanding Loans (and participation interests in Letters of Credit) of each of
the other Lenders (and such Lenders hereby agree to sell and to take all such
further action to effectuate such sale) such that each Lender (including any
Additional Lender, if applicable) shall hold its Applicable Percentage of the
outstanding Loans (and participation interests) after giving effect to the
increase in the Aggregate Elected Commitment Amounts.

(iv) Upon its receipt of a duly completed Elected Commitment Increase
Certificate or an Additional Lender Certificate, executed by the Borrower and
the Lender or by the Borrower and the Additional Lender party thereto, as
applicable, the processing and recording fee referred to in Section 2.06(c)(ii)
and the Administrative Questionnaire referred to in Section 2.06(c)(ii), if
applicable, the Administrative Agent shall accept such Elected Commitment
Increase Certificate or Additional Lender Certificate and record the information
contained therein in the Register required to be maintained by the
Administrative Agent pursuant to Section 12.04(b)(iv). No increase in the
Aggregate Elected Commitment Amounts shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
Section 2.06(c)(iv).

(v) Upon any increase in the Aggregate Elected Commitment Amounts pursuant to
this Section 2.06(c), (A) each Lender’s Maximum Credit Amount shall be
automatically deemed amended to the extent necessary so that each such Lender’s
Applicable Percentage equals the percentage of the Aggregate Elected Commitment
Amounts represented by such Lender’s Elected Commitment, in each case after
giving effect to such increase, and (B) Annex I to this Agreement shall be
deemed amended to reflect the Elected Commitment of each Lender (including any
Additional Lender) as thereby increased, any changes in the Lenders’ Maximum
Credit Amounts pursuant to the foregoing clause (A), and any resulting changes
in the Lenders’ Applicable Percentages.

(vi) The Borrower may from time to time reduce the Aggregate Elected Commitment
Amounts; provided that (A) each reduction of the Aggregate Elected Commitment
Amounts shall be in an amount that is an integral multiple of $1,000,000 and not
less than $1,000,000 and (B) the Borrower shall not reduce the Aggregate Elected
Commitment Amounts if, (C) after giving effect to any concurrent prepayment of
the Loans in accordance with Section 3.04(c), the total Revolving Credit
Exposures would exceed the Aggregate Elected Commitment Amounts.

 

38

--------------------------------------------------------------------------------

(vii) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Aggregate Elected Commitment Amounts
under Section 2.06(c)(vi) at least three Business Days prior to the effective
date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section 2.06(c)(vii) shall be
irrevocable. Any termination or reduction of the Aggregate Elected Commitment
Amounts shall be permanent and may not be reinstated, except pursuant
to Section 2.06(c)(i). Each reduction of the Aggregate Elected Commitment
Amounts shall be made ratably among the Lenders in accordance with each Lender’s
Applicable Percentage.

(viii) Upon any redetermination or other adjustment in the Borrowing Base
pursuant to this Agreement that would otherwise result in the Borrowing Base
becoming less than the Aggregate Elected Commitment Amounts, the Aggregate
Elected Commitment Amounts shall be automatically reduced (ratably among the
Lenders in accordance with each Lender’s Applicable Percentage) so that they
equal such redetermined Borrowing Base (and Annex I shall be deemed amended to
reflect such amendments to each Lender’s Elected Commitment and the Aggregate
Elected Commitment Amounts.

(ix) Contemporaneously with any increase in the Borrowing Base pursuant to this
Agreement, if (A) the Borrower elects to increase the Aggregate Elected
Commitment Amount and (B) each Lender has consented to such increase in its
Elected Commitment, then the Aggregate Elected Commitment Amount shall be
increased (ratably among the Lenders in accordance with each Lender’s Applicable
Percentage) by the amount requested by the Borrower (subject to the limitations
set forth in Section 2.06(c)(ii)(A)) without the requirement that any Lender
deliver an Elected Commitment Increase Certificate, and Annex I shall be deemed
amended to reflect such amendments to each Lender’s Elected Commitment and the
Aggregate Elected Commitment Amount. The Administrative Agent shall record the
information regarding such increases in the Register required to be maintained
by the Administrative Agent pursuant to Section 12.04(b)(iv).

Section 2.07 Borrowing Base.

(a) Initial Borrowing Base. For the period from and including the Ninth
Amendment Effective Date to but excluding the first Redetermination Date
following the Ninth Amendment Effective Date, the amount of the Borrowing Base
shall be $1,600,000,000. Notwithstanding the foregoing, the Borrowing Base may
be subject to further adjustments in between Scheduled Redeterminations from
time to time pursuant to Section 2.07(e), Section 8.13(c), Section 9.12(d),
Section 9.12(f) or Section 9.12(g).

(b) Scheduled and Interim Redeterminations. The Borrowing Base shall be
redetermined semi-annually in accordance with this Section 2.07(a) a “Scheduled
Redetermination”), and, subject to Section 2.07(d), such redetermined Borrowing
Base shall become effective and applicable to the Borrower, the Agents, the
Issuing Bank and the Lenders on April 1st and October 1st of each year (or, in
each case, such date promptly thereafter as reasonably practicable), commencing
October 1, 2013. In addition, the Borrower may, by notifying the Administrative
Agent thereof, and the Administrative Agent may, at the direction of the
Majority Lenders, by notifying the Borrower thereof, one time during any
12-month period, each elect to cause the Borrowing Base to be redetermined
between Scheduled Redeterminations (an “Interim Redetermination”) in accordance
with this Section 2.07.

 

39

--------------------------------------------------------------------------------

(c) Scheduled and Interim Redetermination Procedure.

(i) Each Scheduled Redetermination and each Interim Redetermination shall be
effectuated as follows: Upon receipt by the Administrative Agent of (A) the
Reserve Report and the certificate required to be delivered by the Borrower to
the Administrative Agent, in the case of a Scheduled Redetermination, pursuant
to Section 8.12(a) and (c), and, in the case of an Interim Redetermination,
pursuant to Section 8.12(b) and (c), and (B) such other reports, data and
supplemental information, including, without limitation, the information
provided pursuant to Section 8.12(c), as may, from time to time, be reasonably
requested by the Administrative Agent (the Reserve Report, such certificate and
such other reports, data and supplemental information being the “Engineering
Reports”), the Administrative Agent shall evaluate the information contained in
the Engineering Reports and shall, in its sole discretion, propose a new
Borrowing Base (the “Proposed Borrowing Base”) based upon such information and
such other information (including, without limitation, the status of title
information with respect to the Oil and Gas Properties as described in the
Engineering Reports and the existence of any other Debt, the Credit Parties’
other assets, liabilities, fixed charges, cash flow, business, properties,
prospects, management and ownership, hedged and unhedged exposure to price,
price and production scenarios, interest rate and operating cost changes) as the
Administrative Agent deems appropriate in its sole discretion and consistent
with its normal oil and gas lending criteria as it exists at the particular
time. In no event shall any Proposed Borrowing Base exceed the Aggregate Maximum
Credit Amounts.

(ii) The Administrative Agent shall notify the Borrower and the Lenders of the
Proposed Borrowing Base (the “Proposed Borrowing Base Notice”):

(A) in the case of a Scheduled Redetermination (1) if the Administrative Agent
shall have received the Engineering Reports required to be delivered by the
Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner,
then on or before March 15th and September 15th of such year following the date
of delivery or (2) if the Administrative Agent shall not have received the
Engineering Reports required to be delivered by the Borrower pursuant
to Section 8.12(a) and (c) in a timely and complete manner, then promptly after
the Administrative Agent has received complete Engineering Reports from the
Borrower and has had a reasonable opportunity to determine the Proposed
Borrowing Base in accordance with Section 2.07(c)(i); and

(B) in the case of an Interim Redetermination, promptly, and in any event,
within fifteen (15) days after the Administrative Agent has received the
required Engineering Reports.

(iii) Any Proposed Borrowing Base that would increase the Borrowing Base then in
effect must be approved or deemed to have been approved by the Requisite
Increase Lenders as provided in this Section 2.07(c)(iii); and any Proposed
Borrowing Base that would decrease or maintain the Borrowing Base then in effect
must be approved or be deemed to have

 

40

--------------------------------------------------------------------------------

been approved by the Required Lenders as provided in this Section 2.07(c)(iii).
Upon receipt of the Proposed Borrowing Base Notice, each Lender shall have
fifteen (15) days to agree with the Proposed Borrowing Base or disagree with the
Proposed Borrowing Base by proposing an alternate Borrowing Base. If at the end
of such fifteen (15) days, any Lender has not communicated its approval or
disapproval in writing to the Administrative Agent, such silence shall be deemed
to be an approval of the Proposed Borrowing Base. If, at the end of such 15-day
period, the Requisite Increase Lenders or the Required Lenders, as applicable,
have approved or deemed to have approved, as aforesaid, then the Proposed
Borrowing Base shall become the new Borrowing Base, effective on the date
specified in Section 2.07(d). If, however, at the end of such 15-day period, the
Requisite Increase Lenders or the Required Lenders, as applicable, have not
approved or deemed to have approved, as aforesaid, then the Administrative Agent
shall poll the Lenders to ascertain the highest Borrowing Base then acceptable
to a number of Lenders sufficient to constitute the Required Lenders and, so
long as such amount does not increase the Borrowing Base then in effect, such
amount shall become the new Borrowing Base, effective on the date specified
in Section 2.07(d).

(d) Effectiveness of a Redetermined Borrowing Base. After a redetermined
Borrowing Base is approved or is deemed to have been approved by the Requisite
Increase Lenders or the Required Lenders, as applicable, pursuant
to Section 2.07(c)(iii), the Administrative Agent shall notify the Borrower and
the Lenders of the amount of the redetermined Borrowing Base (the “New Borrowing
Base Notice”), and such amount shall become the new Borrowing Base, effective
and applicable to the Borrower, the Agents, the Issuing Bank and the Lenders.

(i) in the case of a Scheduled Redetermination, (A) if the Administrative Agent
shall have received the Engineering Reports required to be delivered by the
Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner,
then on the April 1st or October 1st (or, in each case, such date promptly
thereafter as reasonably practicable), as applicable, following such notice, or
(B) if the Administrative Agent shall not have received the Engineering Reports
required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in
a timely and complete manner, then on the Business Day next succeeding delivery
of such New Borrowing Base Notice; and

(ii) in the case of an Interim Redetermination, on the Business Day next
succeeding delivery of such New Borrowing Base Notice.

Such amount shall then become the Borrowing Base until the next Scheduled
Redetermination Date, the next Interim Redetermination Date or the next
adjustment to the Borrowing Base under Section 2.07(e), Section 8.13(c),
Section 9.12(d), Section 9.12(f) or Section 9.12(g), whichever occurs first.
Notwithstanding the foregoing, no Scheduled Redetermination or Interim
Redetermination shall become effective until the New Borrowing Base Notice
related thereto is received by the Borrower.

(e) Reduction of Borrowing Base Upon Issuance of Senior Notes.

 

41

--------------------------------------------------------------------------------

(i) Subject to Section 2.07(e)(ii) below, (x) if the Parent issues any Senior
Notes (including any Convertible Notes and any Permitted Refinancing Debt) (“New
Debt”) during the period between Scheduled Redetermination Dates and not in
conjunction with an Interim Redetermination, then on the Reduction Date (as
defined below), the Borrowing Base then in effect shall be reduced by an amount
equal to the product of 0.25 multiplied by an amount equal to the difference
between (1) the stated principal amount of such New Debt minus (2) the stated
principal amount of previously outstanding Senior Notes to the extent such
previously outstanding principal amount was Redeemed with the proceeds of such
New Debt, and (y) the Borrowing Base as so reduced shall become the new
Borrowing Base immediately upon the Reduction Date, effective and applicable to
the Borrower, the Agents, the Issuing Bank and the Lenders on such date until
the next redetermination or modification thereof hereunder. As used herein, the
term “Reduction Date” means (A) if such New Debt has been issued pursuant to a
Qualified Convertible Notes Offering and the Borrower has delivered notice
pursuant to Section 8.01(r) that it intends to use a portion of the proceeds of
New Debt to Redeem existing Senior Notes, the earlier of (x) the date on which
the Redemption of such Senior Notes is consummated and (y) ninety days following
such issuance of New Debt, and (B) otherwise, the date of the issuance of such
New Debt. For purposes of this Section 2.07(e), if any such Debt is issued at a
discount or otherwise sold for less than “par”, the reduction shall be
calculated based upon the stated principal amount without reference to such
discount.

(ii) The Borrowing Base reduction provided for in Section 2.07(e)(i) shall not
occur on the date such Senior Notes are issued if reasonably prior (and in any
event, at least two Business Days prior) to the issuance of such Senior Notes:

(A) The Borrower delivers written notice to the Administrative Agent and the
Lenders that the Credit Parties intend to issue such Senior Notes to finance all
or a portion of (x) a recent acquisition of Oil and Gas Properties for which the
acquired assets have not yet been included in the most recent redetermination of
the Borrowing Base or (y) a contemplated acquisition of Oil and Gas Properties
(such properties, the “Acquisition Properties”), which notice shall specify the
contemplated principal amount of such Senior Notes and the targeted closing date
of the issuance thereof;

(B) The Borrower delivers to the Administrative Agent and the Lenders a Reserve
Report and such other Engineering Reports reasonably requested by the
Administrative Agent in form and with an “as of” date reasonably satisfactory to
the Administrative Agent which evaluates such Acquisition Properties; and

(C) The Borrower delivers to the Administrative Agent a certificate in form and
substance reasonably acceptable to the Administrative Agent stating that the
Borrower has a reasonable, good faith expectation that the value that the
Lenders will attribute to such Acquisition Properties in the first
redetermination of the Borrowing Base that becomes effective following the
consummation of such contemplated (or recently completed) acquisition will be
greater than or equal to 25% of the stated principal amount of such Senior
Notes;

 

42

--------------------------------------------------------------------------------

Provided, that:

(1) the Borrowing Base shall, subject to clauses (2) and (3) below, be
redetermined giving pro forma effect to the acquisition of such Acquisition
Properties in accordance with the procedures set forth in Section 2.07(c) for an
Interim Redetermination, with such redetermined Borrowing Base to become
effective upon the later to occur of (x) the date the Credit Parties acquire
substantially all of such Acquisition Properties and (y) the date that is 30
days following the date on which the Lenders receive the applicable Engineering
Reports pursuant to clause (B) above or, in either case, such date thereafter as
reasonably practicable (provided that such redetermination shall not constitute
a Scheduled Redetermination or an Interim Redetermination requested by the
Borrower or the Majority Lenders);

(2) if (i) the Credit Parties do not acquire substantially all of such
Acquisition Properties for any reason prior to the date that is 90 days
following the Credit Parties’ issuance of such Senior Notes or (ii) any Credit
Party knows with reasonable certainty that the Credit Parties will not acquire
substantially all of such Acquisition Properties, then, subject to
clause (3) below, the redetermination referred to in the foregoing
clause (1) shall not be effective and the Borrowing Base shall be automatically
reduced upon the earlier to occur of the events described in clauses (i) and
(ii) in accordance with the procedures set forth in Section 2.07(e)(i) by an
amount equal to 25% of the stated principal amount of such Senior Notes;

(3) if upon consummation of such acquisition, the Credit Parties acquire at
least 85% but less than 95% of the total value of such Acquisition Properties
(as reasonably determined by the Administrative Agent), (i) the Borrowing Base
reduction provided for in the foregoing clause (2) shall not occur, (ii) the
redetermination referred to in the foregoing clause (1) shall not be effective
and (iii) the Borrowing Base shall be redetermined giving effect to the
Acquisition Properties actually acquired by the Credit Parties in accordance
with the procedures set forth in Section 2.07(c) for an Interim Redetermination,
with such redetermined Borrowing Base to become effective 15 days (or such
longer period as is reasonably necessary) following the date on which such
acquisition is consummated (provided that such redetermination shall not
constitute a Scheduled Redetermination or an Interim Redetermination requested
by the Borrower or the Majority Lenders), provided further, that this
clause (3) shall only be given effect if the redetermination referred to in
clause (1) resulted in a Proposed Borrowing Base greater than or equal to the
Borrowing Base in effect immediately prior to such redetermination;

(4) the Borrower shall promptly (and in any event, within two Business Days)
provide the Administrative Agent with written notice upon the Borrower knowing
with reasonable certainty that the Credit Parties will not acquire substantially
all of the Acquisition Properties;

(5) for purposes of the foregoing clauses (1) and (2), “substantially all of
such Acquisition Properties” shall mean Oil and Gas Properties with a value (as
reasonably determined by the Administrative Agent) of not less than 95% of the
total value of all of such Acquisition Properties; and

 

43

--------------------------------------------------------------------------------

(6) on the date that any such acquisition occurs, the Borrower shall deliver to
the Administrative Agent a certificate certifying (w) that attached to such
certificate are true, accurate and complete copies of the transaction documents
evidencing and governing the acquisition of such Acquisition Properties,
(x) that the Credit Parties have consummated such acquisition in accordance with
the terms of such documents, (y) as to which Acquisition Properties have been
acquired and which Acquisition Properties were not acquired, and (z) as to the
final purchase price for the Acquisition Properties after giving effect to all
adjustments thereto made at the closing of such acquisition (and specifying by
category and amount each such adjustment).

Section 2.08 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of dollar denominated Letters of Credit for its own
account or for the account of any of its Subsidiaries, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Availability Period; provided that the Borrower may
not request the issuance, amendment, renewal or extension of Letters of Credit
hereunder if a Borrowing Base Deficiency exists at such time or would exist as a
result thereof. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (not less than five (5) Business Days in advance of the
requested date of issuance, amendment, renewal or extension) a notice:

(i) requesting the issuance of a Letter of Credit or identifying the Letter of
Credit to be amended, renewed or extended;

(ii) specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day);

(iii) specifying the date on which such Letter of Credit is to expire (which
shall comply with Section 2.08(c));

(iv) specifying the amount of such Letter of Credit;

(v) specifying the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit; and

(vi) specifying the amount of the then effective Borrowing Base and whether a
Borrowing Base Deficiency exists at such time, the current total Revolving
Credit Exposures (without regard to the requested Letter of Credit or the
requested amendment, renewal or extension of an outstanding Letter of Credit)
and the pro forma total Revolving Credit Exposures (giving effect to the
requested Letter of Credit or the requested amendment, renewal or extension of
an outstanding Letter of Credit).

 

44

--------------------------------------------------------------------------------

Each notice shall constitute a representation by the Borrower that after giving
effect to the requested issuance, amendment, renewal or extension, as
applicable, (i) the LC Exposure shall not exceed the LC Commitment and (ii) the
total Revolving Credit Exposures shall not exceed the total Commitments (i.e.,
the least of (x) the Aggregate Maximum Credit Amounts, (y) the then effective
Borrowing Base and (z) the Aggregate Elected Commitment Amounts).

If requested by the Issuing Bank, the Borrower also shall submit a letter of
credit application on the Issuing Bank’s standard form in connection with any
request for a Letter of Credit; provided that, in the event of any conflict
between such application or any Letter of Credit Agreement and the terms of this
Agreement, the terms of this Agreement shall control.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in Section 2.08(e), or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to
this Section 2.08(d) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default, the existence of a Borrowing Base
Deficiency or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 3:00 p.m., New York City time, on the date that such LC Disbursement
is made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or, if such notice has
not been received by the Borrower prior to such time on such date, then not
later than 3:00 p.m., New York City time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
New York City time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of

 

45

--------------------------------------------------------------------------------

receipt; provided that the Borrower shall, subject to the conditions to
Borrowing set forth herein, be deemed to have requested, and the Borrower does
hereby request under such circumstances, that such payment be financed with an
ABR Borrowing in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be discharged and replaced by
the resulting ABR Borrowing. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such
Lender’s Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.05 with respect to Loans made by such Lender
(and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the Issuing
Bank the amounts so received by it from the Lenders. Promptly following receipt
by the Administrative Agent of any payment from the Borrower pursuant to
this Section 2.08(e), the Administrative Agent shall distribute such payment to
the Issuing Bank or, to the extent that Lenders have made payments pursuant to
this Section 2.08(e) to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this Section 2.08(e) to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

(f) Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or any Letter of Credit
Agreement, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section 2.08(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related
Parties shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of technical
terms or any consequence arising from causes beyond the control of the Issuing
Bank; provided that the foregoing shall not be construed to excuse the Issuing
Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter

 

46

--------------------------------------------------------------------------------

of Credit comply with the terms thereof. The parties hereto expressly agree
that, in the absence of gross negligence or willful misconduct on the part of
the Issuing Bank (as finally determined by a court of competent jurisdiction),
the Issuing Bank shall be deemed to have exercised all requisite care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy or
e-mail) of such demand for payment and whether the Issuing Bank has made or will
make an LC Disbursement thereunder; provided that any failure to give or delay
in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
until the Borrower shall have reimbursed the Issuing Bank for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.08(e)),
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to ABR Loans. Interest accrued pursuant to this Section 2.08(h) shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Lender pursuant to Section 2.08(e) to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.

(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant
to Section 3.05(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of the Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of the Issuing Bank under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.

 

47

--------------------------------------------------------------------------------

(j) Cash Collateralization. If (i) any Event of Default shall occur and be
continuing and the Borrower receives notice from the Administrative Agent or the
Majority Lenders demanding the deposit of cash collateral pursuant to
this Section 2.08(j), or (ii) the Borrower is required to pay to the
Administrative Agent the excess attributable to an LC Exposure in connection
with any prepayment pursuant to Section 3.04(c) or Section 3.04(e), then the
Borrower shall deposit, in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash equal to, in the case of an Event of Default, the LC Exposure, and in the
case of a payment required by Section 3.04(c) or Section 3.04(e), the amount of
such excess as provided in Section 3.04(c) or Section 3.04(e), as of such date
plus any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Parent, OP LLC, the Borrower or any Subsidiary described in Section 10.01(h)
or Section 10.01(i). The Borrower hereby grants to the Administrative Agent, for
the benefit of the Issuing Bank and the Lenders, an exclusive first priority and
continuing perfected security interest in and Lien on such account and all cash,
checks, drafts, certificates and instruments, if any, from time to time
deposited or held in such account, all deposits or wire transfers made thereto,
any and all investments purchased with funds deposited in such account, all
interest, dividends, cash, instruments, financial assets and other Property from
time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor. The Borrower’s obligation to deposit amounts pursuant
to this Section 2.08(j) shall be absolute and unconditional, without regard to
whether any beneficiary of any such Letter of Credit has attempted to draw down
all or a portion of such amount under the terms of a Letter of Credit, and, to
the fullest extent permitted by applicable law, shall not be subject to any
defense or be affected by a right of set-off, counterclaim or recoupment which
the Borrower or any of its Subsidiaries may now or hereafter have against any
such beneficiary, the Issuing Bank, the Administrative Agent, the Lenders or any
other Person for any reason whatsoever. Such deposit shall be held as collateral
securing the payment and performance of the Borrower’s and the Guarantor’s
obligations under this Agreement and the other Loan Documents. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated, be applied to satisfy other obligations of
the Borrower and the Guarantors under this Agreement or the other Loan
Documents. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, and the Borrower
is not otherwise required to pay to the Administrative Agent the excess
attributable to an LC Exposure in connection with any prepayment pursuant
to Section 3.04(c) or Section 3.04(e), then such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived.

 

48

--------------------------------------------------------------------------------

(k) Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, and any LC Exposure exists
at the time a Lender becomes a Defaulting Lender, then:

(i) all or any part of such LC Exposure shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable
Percentages (calculated without regard to such Defaulting Lender’s Commitment)
but only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving
Credit Exposures does not exceed the total of all non-Defaulting Lenders’
Commitments and (y) the conditions set forth in Section 6.02 are satisfied at
such time;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall, without prejudice to any right or
remedy available to it hereunder or under applicable law, within one
(1) Business Day following notice by the Administrative Agent cash collateralize
such Defaulting Lender’s LC Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) in accordance with the procedures set
forth in Section 2.08(j) for so long as such LC Exposure is outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to this Section 2.08(k), the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 3.05(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
this Section 2.08(k), then the fees payable to the Lenders pursuant
to Section 3.05(a) and Section 3.05(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; or

(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to this Section 2.08(k), then, without prejudice to any
rights or remedies of the Issuing Bank or any Lender hereunder, all commitment
fees that otherwise would have been payable to such Defaulting Lender (solely
with respect to the portion of such Defaulting Lender’s Commitment that was
utilized by such LC Exposure) under Section 3.05(a) and letter of credit fees
payable under Section 3.05(b) with respect to such Defaulting Lender’s LC
Exposure shall be payable to the Issuing Bank until such LC Exposure is cash
collateralized and/or reallocated.

If the Borrower, the Administrative Agent and the Issuing Bank agree in writing
that a Lender is no longer a Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein (which may include
arrangements with respect to any Cash Collateral), that Lender will, to the
extent applicable, purchase at par that portion of outstanding Loans of the
other Lenders or take such other actions as the Administrative Agent may
determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit to be held pro rata by the Lenders in
accordance with the Commitments (without giving effect to Section 2.08(k)(i)),
whereupon such Lender will cease to be a Defaulting Lender; provided that no
adjustments will

 

49

--------------------------------------------------------------------------------

be made retroactively with respect to fees accrued or payments made by or on
behalf of the Borrower while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender.

Notwithstanding any provision of this Agreement to the contrary, so long as any
Lender is a Defaulting Lender, the Issuing Bank shall not be required to issue,
amend or increase any Letter of Credit, unless it is satisfied that the related
exposure will be 100% covered by the Commitments of the non-Defaulting Lenders
and/or cash collateral will be provided by the Borrower in accordance
with Section 2.08(j), and participating interests in any such newly issued or
increased Letter of Credit shall be allocated among non-Defaulting Lenders in a
manner consistent with Section 2.08(k)(i) (and any Defaulting Lender shall not
participate therein). Subject to Section 12.19, no reallocation hereunder shall
constitute a waiver or release of any claim by any party hereunder against a
Defaulting Lender arising from such Lender having become a Defaulting Lender.

Section 2.09 Loans and Borrowings Under Existing Credit Agreement. On the
Effective Date, the Administrative Agent, for the ratable benefit of the Secured
Parties, has acquired from the lenders under the Existing Credit Agreement the
notes, commitments and Liens of the Borrower and the Guarantors existing
thereunder. In connection with such acquisition and the amendment and
restatement of the Existing Credit Agreement as so assigned:

(a) the Borrower shall pay all accrued and unpaid commitments fees, break
funding fees and all other fees that are outstanding under the Existing Credit
Agreement for the account of each lender under the Existing Credit Agreement;

(b) each “ABR Borrowing” outstanding under the Existing Credit Agreement shall
be extended and renewed so as to continue as a new ABR Borrowing under this
Agreement;

(c) each “Eurodollar Borrowing” outstanding under the Existing Credit Agreement
shall be deemed repaid on the Effective Date and funded as a new Eurodollar
Borrowing under this Agreement;

(d) each “Letter of Credit” outstanding under the Existing Credit Agreement
shall be deemed issued and shall be continued as a Letter of Credit under this
Agreement;

(e) the Borrower shall pay all accrued and unpaid letter of credit fees that are
outstanding under the Existing Credit Agreement; and

(f) the Existing Credit Agreement and the commitments thereunder shall be
superseded by this Agreement and such commitments shall terminate.

 

50

--------------------------------------------------------------------------------

ARTICLE III

Payments of Principal and Interest; Prepayments; Fees

Section 3.01 Repayment of Loans. The Borrower hereby unconditionally promises to
pay to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Loan on the Termination Date.

Section 3.02 Interest.

(a) ABR Loans. The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Margin, but in no event to exceed
the Highest Lawful Rate.

(b) Eurodollar Loans. The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin, but in no event to exceed the Highest
Lawful Rate.

(c) Post-Default Rate and Borrowing Base Deficiency Rate. Notwithstanding the
foregoing, (i) if an Event of Default has occurred and is continuing, then all
Loans outstanding shall bear interest, after as well as before judgment, at a
rate per annum equal to two percent (2%) plus the rate applicable to ABR Loans
as provided in Section 3.02(a), but in no event to exceed the Highest Lawful
Rate, and (ii) during any Borrowing Base Deficiency, all Loans outstanding at
such time shall, upon the election of either the Administrative Agent or
Majority Lenders, bear interest, after as well as before judgment, at the rate
then applicable to such Loans, plus the Applicable Margin, if any, plus an
additional two percent (2%), but in no event to exceed the Highest Lawful Rate.

(d) Interest Payment Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Termination Date;
provided that (i) interest accrued pursuant to Section 3.02(c) shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than an optional prepayment of an ABR Loan prior to the Termination Date),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment, and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.

(e) Interest Rate Computations. All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error, and be binding upon the parties hereto.

 

51

--------------------------------------------------------------------------------

Section 3.03 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or

(b) the Administrative Agent is advised by the Majority Lenders that the
Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

Section 3.04 Prepayments.

(a) Optional Prepayments. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.04(b).

(b) Notice and Terms of Optional Prepayment. The Borrower shall notify the
Administrative Agent by telephone or e-mail (confirmed by facsimile) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 12:00 noon, New York City time, three Business Days before the
date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not
later than 12:00 noon, New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 3.02.

(c) Mandatory Prepayments.

(i) If, after giving effect to any termination or reduction of the Aggregate
Maximum Credit Amounts pursuant to Section 2.06(b), or any reduction of the
Aggregate Elected Commitment Amounts pursuant to Section 2.06(c), the total
Revolving Credit Exposures exceeds the total Commitments, then the Borrower
shall (A) prepay the Borrowings on the date of such termination or reduction in
an aggregate principal amount equal to such excess, and (B) if any excess
remains after prepaying all of the Borrowings as a result of an LC Exposure, pay
to the Administrative Agent on behalf of the Lenders an amount equal to such
excess to be held as cash collateral as provided in Section 2.08(j).

 

52

--------------------------------------------------------------------------------

(ii) Upon any redetermination of or adjustment to the amount of the Borrowing
Base in accordance with Section 2.07 or Section 8.13(c), if the total Revolving
Credit Exposures exceeds the redetermined or adjusted Borrowing Base, then the
Borrower shall (A) prepay the Borrowings in an aggregate principal amount equal
to such excess, and (B) if any excess remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(j). The Borrower shall be obligated to
make such prepayment and/or deposit of cash collateral within ninety days
(90) following its receipt of the New Borrowing Base Notice in accordance
with Section 2.07(d) or the date the adjustment occurs; provided that all
payments required to be made pursuant to this Section 3.04(c)(ii) must be made
on or prior to the Termination Date.

(iii) Upon any adjustments to the Borrowing Base pursuant to Section 9.12(d),
Section 9.12(f) or Section 9.12(g), if the total Revolving Credit Exposures
exceeds the Borrowing Base as adjusted, then the Borrower shall (A) prepay the
Borrowings in an aggregate principal amount equal to such excess, and (B) if any
excess remains after prepaying all of the Borrowings as a result of an LC
Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
equal to such excess to be held as cash collateral as provided
in Section 2.08(j). The Borrower shall be obligated to make such prepayment
and/or deposit of cash collateral on the date it or any Subsidiary receives cash
proceeds as a result of a disposition in accordance with Section 9.12(d),
Section 9.12(f) or Section 9.12(g); provided that all payments required to be
made pursuant to this Section 3.04(c)(iii) must be made on or prior to the
Termination Date.

(iv) Upon any adjustments to the Borrowing Base pursuant to Section 2.07(e), if
the total Revolving Credit Exposures exceeds the Borrowing Base as adjusted,
then the Borrower shall (A) prepay the Borrowings in an aggregate principal
amount equal to such excess, and (B) if any excess remains after prepaying all
of the Borrowings as a result of an LC Exposure, pay to the Administrative Agent
on behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(j). The Borrower shall be obligated to
make such prepayment and/or deposit of cash collateral, if required, on the date
it issues such Senior Notes; provided that all payments required to be made
pursuant to this Section 3.04(c)(iv) must be made on or prior to the Termination
Date.

(v) Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be
applied, first, ratably to any ABR Borrowings then outstanding, and, second, to
any Eurodollar Borrowings then outstanding, and if more than one Eurodollar
Borrowing is then outstanding, to each such Eurodollar Borrowing in order of
priority beginning with the Eurodollar Borrowing with the least number of days
remaining in the Interest Period applicable thereto and ending with the
Eurodollar Borrowing with the most number of days remaining in the Interest
Period applicable thereto.

(vi) Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be
applied ratably to the Loans included in the prepaid Borrowings. Prepayments
pursuant to this Section 3.04(c) shall be accompanied by accrued interest to the
extent required by Section 3.02.

 

53

--------------------------------------------------------------------------------

(d) No Premium or Penalty. Prepayments permitted or required under
this Section 3.04 shall be without premium or penalty, except as required
under Section 5.02.

(e) Excess Cash Balances. If at any time while there are any Borrowings
outstanding, the Borrower or any other Credit Party have any cash or cash
equivalents (other than cash collateral) in excess of $100,000,000 in the
aggregate at any time (other than (i) any cash set aside to pay royalty
obligations of the Credit Parties then due and owing to unaffiliated third
parties and for which the Credit Parties have issued checks or have initiated
wires or ACH transfers (or will issue checks or initiate wires or ACH transfers
within one Business Day) in order to pay, (ii) any cash set aside to pay in the
ordinary course of business amounts (other than royalty obligations) of the
Credit Parties then due and owing to unaffiliated third parties and for which
the Credit Parties have issued checks or have initiated wires or ACH transfers
in order to pay and (iii) any cash of the Credit Parties constituting purchase
price deposits held in escrow by an unaffiliated third party pursuant to a
binding and enforceable purchase and sale agreement with an unaffiliated third
party containing customary provisions regarding the payment and refunding of
such deposits) (the “Excess Cash”), then the Borrower shall prepay the
Borrowings in an amount equal to the Excess Cash; provided that to the extent
that any Excess Cash results from the receipt of the proceeds of any sale or
disposition of Property, then the Borrower shall not be required to prepay such
Excess Cash until the fifth Business Day following the receipt of such proceeds.
Each prepayment of Borrowings pursuant to this Section 3.04(e) shall be applied
as directed by the Borrower, provided that if the Borrower does not provide
instructions for the application of such prepayment, such prepayment shall be
applied, first, ratably to any ABR Borrowings then outstanding, and, second, to
any Eurodollar Borrowings then outstanding, and if more than one Eurodollar
Borrowing is then outstanding, to each such Eurodollar Borrowing in order of
priority beginning with the Eurodollar Borrowing with the least number of days
remaining in the Interest Period applicable thereto and ending with the
Eurodollar Borrowing with the most number of days remaining in the Interest
Period applicable thereto. Each prepayment of Borrowings pursuant to
this Section 3.04(e) shall be applied ratably to the Loans included in the
prepaid Borrowings. Prepayments pursuant to this Section 3.04(e) shall be
accompanied by accrued interest to the extent required by Section 3.02.

Section 3.05 Fees.

(a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
applicable Commitment Fee Rate on the average daily amount of the unused amount
of the Commitment of such Lender during the period from and including the date
of this Agreement to but excluding the Termination Date. Accrued commitment fees
shall be payable in arrears on the last day of March, June, September and
December of each year and on the Termination Date, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).

 

54

--------------------------------------------------------------------------------

(b) Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date on
which such Lender’s Commitment terminates and the date on which such Lender
ceases to have any LC Exposure (during the continuation of an Event of Default,
such participation fee shall increase by 2% per annum over the then applicable
rate), (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate
of 0.25% per annum on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the date of this Agreement to but excluding the later of the
date of termination of the Commitments and the date on which there ceases to be
any LC Exposure, and (iii) to the Issuing Bank, for its own account, its
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
date of this Agreement; provided that all such fees shall be payable on the
Termination Date and any such fees accruing after the Termination Date shall be
payable on demand. Any other fees payable to the Issuing Bank pursuant to
this Section 3.05(b) shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days, unless such computation would exceed the Highest Lawful Rate, in which
case interest shall be computed on the basis of a year of 365 days (or 366 days
in a leap year), and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

(c) Administrative Agent Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative Agent.

(d) Defaulting Lender Fees. Subject to Section 2.08(k), the Borrower shall not
be obligated to pay the Administrative Agent any Defaulting Lender’s ratable
share of the fees described in Section 3.05(a) and (b) for the period commencing
on the day such Defaulting Lender becomes a Defaulting Lender and continuing for
so long as such Lender continues to be a Defaulting Lender.

ARTICLE IV

Payments; Pro Rata Treatment; Sharing of Set-offs

Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

55

--------------------------------------------------------------------------------

(a) Payments by the Borrower. The Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, or of amounts payable
under Section 5.01, Section 5.02, Section 5.03 or otherwise) prior to 12:00
noon, New York City time, on the date when due, in immediately available funds,
without defense, deduction, recoupment, set-off or counterclaim. Fees, once
paid, shall be fully earned and shall not be refundable under any circumstances
absent manifest error. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at its offices
specified in Section 12.01, except payments to be made directly to the Issuing
Bank as expressly provided herein and except that payments pursuant
to Section 5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.

(c) Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this Section 4.01(c) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 4.01(c) shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

 

56

--------------------------------------------------------------------------------

Section 4.02 Presumption of Payment by the Borrower. Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders or
the Issuing Bank that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

Section 4.03 Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant
to Section 2.05(b), Section 2.08(d), Section 2.08(e) or Section 4.02, or
otherwise hereunder, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid. If at any time prior to the acceleration or maturity
of the Loans, the Administrative Agent shall receive any payment in respect of
principal of a Loan or a reimbursement of an LC Disbursement while one or more
Defaulting Lenders shall be party to this Agreement, the Administrative Agent
shall apply such payment first to the Borrowing(s) for which such Defaulting
Lender(s) shall have failed to fund its pro rata share until such time as such
Borrowing(s) are paid in full or each Lender (including each Defaulting Lender)
is owed its Applicable Percentage of all Loans then outstanding. After
acceleration or maturity of the Loans, all principal will be paid ratably as
provided in Section 10.02(c).

Section 4.04 Disposition of Proceeds. The Security Instruments contain an
assignment by the Borrower and/or the Guarantors unto and in favor of the
Administrative Agent for the benefit of the Secured Parties of all of the
Borrower’s or each Guarantor’s interest in and to production and all proceeds
attributable thereto which may be produced from or allocated to the Mortgaged
Property. The Security Instruments further provide in general for the
application of such proceeds to the satisfaction of the Indebtedness and other
obligations described therein and secured thereby. Notwithstanding the
assignment contained in such Security Instruments, until the occurrence of an
Event of Default, (a) the Administrative Agent and the Lenders agree that they
will neither notify the purchaser or purchasers of such production nor take any
other action to cause such proceeds to be remitted to the Administrative Agent
or the Lenders, but the Lenders will instead permit such proceeds to be paid to
the Borrower and the Subsidiaries and (b) the Lenders hereby authorize the
Administrative Agent to take such actions as may be necessary to cause such
proceeds to be paid to the Borrower and/or such Subsidiaries.

 

57

--------------------------------------------------------------------------------

ARTICLE V

Increased Costs; Break Funding Payments; Taxes

Section 5.01 Increased Costs.

(a) Eurodollar Changes in Law. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or

(ii) impose on any Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the Issuing Bank determines that any
Change in Law regarding capital or liquidity requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Bank’s
capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy and liquidity),
then from time to time the Borrower will pay to such Lender or the Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company for any such reduction suffered.

(c) Certificates. A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in Section 5.01(a) or
(b) shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender or the Issuing Bank, as the case may
be, the amount shown as due on any such certificate within 10 days after receipt
thereof.

(d) Effect of Failure or Delay in Requesting Compensation. Failure or delay on
the part of any Lender or the Issuing Bank to demand compensation pursuant to
this Section 5.01 shall not constitute a waiver of such Lender’s or the Issuing
Bank’s right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender or the Issuing Bank pursuant to
this Section 5.01 for any increased costs or reductions incurred more than 180
days prior to the date that such Lender or the Issuing Bank, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs
or

 

58

--------------------------------------------------------------------------------

reductions and of such Lender’s or the Issuing Bank’s intention to claim
compensation therefor; provided, further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

Section 5.02 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan into an ABR Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 5.04(b), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market.

A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 and reasonably detailed
calculations therefore, upon request of the Borrower, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

Section 5.03 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower or any Guarantor under any Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower or any Guarantor shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5.03), the Administrative Agent, Lender or Issuing Bank (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower or such Guarantor shall make such
deductions and (iii) the Borrower or such Guarantor shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

(b) Payment of Other Taxes by the Borrower. The Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

 

59

--------------------------------------------------------------------------------

(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the
case may be, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under
this Section 5.03) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto. A written demand under this Section 5.03(c)
shall include a certificate of the Administrative Agent, a Lender or the Issuing
Bank specifying the amount and calculation of such payment or liability under
this Section 5.03 shall be delivered to the Borrower and shall be conclusive
absent manifest error.

(d) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that
Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrower to do so),
(ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 12.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

(e) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
tax with respect to payments made under any Loan Document shall deliver to the
Withholding Agent, at the time or times reasonably requested by the Withholding
Agent, such properly completed and executed documentation reasonably requested
by the Withholding Agent as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
reasonably requested by the Withholding Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Withholding Agent as will enable the Withholding Agent to determine whether or
not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and

 

60

--------------------------------------------------------------------------------

submission of such documentation (other than such documentation set forth
in Section 5.03(f)(ii)(A) and Section 5.03(f)(ii)(B) and Section 5.03(g) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a “United States person” as defined in Section 7701(a)(30) of the
Code,

(A) any Lender that is a “United States person” as defined in Section 7701(a)(3)
of the Code shall deliver to the Withholding Agent on or prior to the date on
which such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Withholding Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Withholding Agent (in such number of copies as shall be requested
by the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Withholding Agent), whichever of the following is
applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN (or IRS
Form W-8BEN-E, as applicable) establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN (or IRS Form W-8BEN-E, as applicable) establishing an
exemption from, or reduction of, U.S. federal withholding tax pursuant to the
“business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit I-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN
(or IRS Form W-8BEN-E, as applicable), a U.S. Tax Compliance Certificate
substantially in the form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or
other certification documents from each beneficial owner, as applicable;
provided that if the Foreign Lender is a partnership and one or more direct or
indirect partners of such Foreign Lender are claiming the portfolio interest
exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate
substantially in the form of Exhibit I-4 on behalf of each such direct and
indirect partner; and

 

61

--------------------------------------------------------------------------------

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Withholding Agent (in such number of copies as shall be requested
by the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Withholding Agent), executed originals of any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. federal withholding tax, duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the
Withholding Agent to determine the withholding or deduction required to be made.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Withholding Agent in writing of its
legal inability to do so.

(g) FATCA. If a payment made to a Lender under this Agreement would be subject
to United States federal withholding tax imposed by FATCA if such Lender fails
to comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Withholding Agent, at the time or times prescribed by law
and at such time or times reasonably requested by the Withholding Agent, such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Withholding Agent as may be necessary for the
Withholding Agent to comply with its obligations under FATCA, to determine that
such Lender has complied with such Lender’s obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this Section 5.03(g), “FATCA” shall include any amendments made to
FATCA after the date of this Agreement.

Section 5.04 Mitigation Obligations; Replacement of Lenders.

(a) Designation of Different Lending Office. If any Lender requests compensation
under Section 5.01, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.03, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant
to Section 5.01 or Section 5.03, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation
under Section 5.01, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.03, if it becomes unlawful for any Lender or its
applicable lending office to make Eurodollar Loans, as

 

62

--------------------------------------------------------------------------------

described in Section 5.05, or while a Lender is a Defaulting Lender, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained
in Section 12.04(b)), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 5.01 or
payments required to be made pursuant to Section 5.03, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

Section 5.05 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its applicable lending
office to honor its obligation to make or maintain Eurodollar Loans either
generally or having a particular Interest Period hereunder, then (a) such Lender
shall promptly notify the Borrower and the Administrative Agent thereof and such
Lender’s obligation to make such Eurodollar Loans shall be suspended (the
“Affected Loans”) until such time as such Lender may again make and maintain
such Eurodollar Loans and (b) all Affected Loans which would otherwise be made
by such Lender shall be made instead as ABR Loans (and, if such Lender so
requests by notice to the Borrower and the Administrative Agent, all Affected
Loans of such Lender then outstanding shall be automatically converted into ABR
Loans on the date specified by such Lender in such notice) and, to the extent
that Affected Loans are so made as (or converted into) ABR Loans, all payments
of principal which would otherwise be applied to such Lender’s Affected Loans
shall be applied instead to its ABR Loans.

ARTICLE VI

Conditions Precedent

Section 6.01 Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 12.02):

(a) The Administrative Agent, the Arranger and the Lenders shall have received
all commitment, facility and agency fees and all other fees and amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all reasonable out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder.

 

63

--------------------------------------------------------------------------------

(b) The Administrative Agent shall have received a certificate of the Secretary
or an Assistant Secretary of the Parent, OP LLC, the Borrower and each other
Guarantor setting forth (i) resolutions of its board of directors or other
appropriate governing body with respect to the authorization of the Parent, OP
LLC, the Borrower or such Guarantor to execute and deliver the Loan Documents to
which it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers of the Parent, OP LLC, the Borrower or such
Guarantor (y) who are authorized to sign the Loan Documents to which the Parent,
OP LLC, the Borrower or such Guarantor is a party and (z) who will, until
replaced by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of such authorized officers, and
(iv) the articles or certificate of incorporation and by-laws or other
applicable organizational documents of the Parent, OP LLC, the Borrower and such
Guarantor, certified as being true and complete. The Administrative Agent and
the Lenders may conclusively rely on such certificate until the Administrative
Agent receives notice in writing from the Borrower to the contrary.

(c) The Administrative Agent shall have received certificates of the appropriate
State agencies with respect to the existence, qualification and good standing of
the Parent, OP LLC, the Borrower and each Guarantor.

(d) The Administrative Agent shall have received a compliance certificate which
shall be substantially in the form of Exhibit D, duly and properly executed by a
Responsible Officer and dated as of the date of Effective Date.

(e) The Administrative Agent shall have received from each party hereto
counterparts (in such number as may be requested by the Administrative Agent) of
this Agreement signed on behalf of such party.

(f) To the extent requested by a Lender, the Administrative Agent shall have
received duly executed Notes payable to each Lender in a principal amount equal
to its Maximum Credit Amount dated as of the date hereof.

(g) The Administrative Agent shall have received from each party thereto duly
executed counterparts (in such number as may be requested by the Administrative
Agent) of the Security Instruments, including the Guaranty and Security
Agreement, the mortgages and the other Security Instruments described on
Exhibit E-1. In connection with the execution and delivery of the Security
Instruments, the Administrative Agent shall:

(i) be reasonably satisfied that the Security Instruments create first priority,
perfected Liens (subject only to Excepted Liens identified in clauses (a) to (d)
and (f) of the definition thereof, but subject to the provisos at the end of
such definition) on at least 80% of the total value of the Oil and Gas
Properties evaluated in the Initial Reserve Report and on all other Property
purported to be pledged as collateral pursuant to the Security Instruments; and

(ii) have received certificates, together with undated, blank stock powers for
each such certificate, representing all of the issued and outstanding Equity
Interests of each of the Guarantors (other than the Parent).

 

64

--------------------------------------------------------------------------------

(h) The Administrative Agent shall have received an opinion of (i) DLA Piper LLP
(US), special counsel to the Borrower, substantially in a form and of substance
reasonably acceptable to the Administrative Agent, and (ii) local counsel in
each of the following states: Montana and North Dakota and any other
jurisdictions requested by the Administrative Agent, substantially in a form and
of substance reasonably acceptable to the Administrative Agent.

(i) The Administrative Agent shall have received a certificate of insurance
coverage of the Credit Parties evidencing that the Credit Parties are carrying
insurance in accordance with Section 7.12.

(j) The Administrative Agent shall have received title information as the
Administrative Agent may reasonably require satisfactory to the Administrative
Agent setting forth the status of title to at least 80% of the total value of
the Oil and Gas Properties evaluated in the Initial Reserve Report.

(k) The Administrative Agent shall be reasonably satisfied with the
environmental condition of the Oil and Gas Properties of the Borrower and its
Subsidiaries.

(l) The Administrative Agent shall have received a certificate of a Responsible
Officer of the Parent, OP LLC and the Borrower certifying that the Parent, OP
LLC and the Borrower has received all consents and approvals required
by Section 7.03.

(m) The Administrative Agent shall have received (i) the financial statements
referred to in Section 7.04(a), and (ii) the Initial Reserve Report accompanied
by a certificate covering the matters described in Section 8.12(c).

(n) The Administrative Agent shall have received appropriate UCC search
certificates reflecting no prior Liens encumbering the Properties of the Parent,
OP LLC, the Borrower and the Subsidiaries for each of the following
jurisdictions: Delaware, North Dakota, Montana and any other jurisdiction
requested by the Administrative Agent; other than Liens permitted
by Section 9.03.

(o) The Administrative Agent shall be reasonably satisfied that after the making
of the initial Loans hereunder and giving effect to the other transactions
contemplated under this Agreement, the Borrower will have an amount not less
than 10% of unused Commitment availability.

(p) The Administrative Agent shall have received such other documents as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

Without limiting the generality of the provisions of Section 11.04, for purposes
of determining compliance with the conditions specified in this Section 6.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required under this Section 6.01 to be consented to or approved by or acceptable
or reasonably satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the Effective Date specifying its
objection thereto. All documents executed or submitted pursuant to
this Section 6.01 by and on behalf of the Borrower or any of its Subsidiaries
shall be in form and substance reasonably

 

65

--------------------------------------------------------------------------------

satisfactory to the Administrative Agent and its counsel. The obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 12.02) at or prior to 2:00 p.m., New
York City time, on April 5, 2013 (and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time). The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.

Section 6.02 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing (including the initial funding), and of the
Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject
to the satisfaction of the following conditions:

(a) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Borrowing Base Deficiency shall have occurred and be
continuing.

(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no event, development or circumstance has occurred or shall then
exist that has resulted in, or could reasonably be expected to have, a Material
Adverse Effect.

(c) The representations and warranties of the Borrower and the Guarantors set
forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects (or, if already qualified by materiality,
Material Adverse Effect or a similar qualification, true and correct in all
respects) on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, except
to the extent any such representations and warranties are expressly limited to
an earlier date, in which case, on and as of the date of such Borrowing or the
date of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, such representations and warranties shall continue to be true and
correct as of such specified earlier date.

(d) The making of such Loan or the issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, would not conflict with, or cause any
Lender or the Issuing Bank to violate or exceed, any applicable Governmental
Requirement, and no Change in Law shall have occurred, and no litigation shall
be pending or threatened, which does or, with respect to any threatened
litigation, seeks to, enjoin, prohibit or restrain, the making or repayment of
any Loan, the issuance, amendment, renewal, extension or repayment of any Letter
of Credit or any participations therein or the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

(e) The receipt by the Administrative Agent of a Borrowing Request in accordance
with Section 2.03 or a request for a Letter of Credit (or an amendment,
extension or renewal of a Letter of Credit) in accordance with Section 2.08(b),
as applicable.

 

66

--------------------------------------------------------------------------------

(f) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, the Borrower together with the other Credit Parties shall not have
any cash or cash equivalents (other than cash collateral) in excess of
$100,000,000 in the aggregate (other than (i) any cash set aside to pay royalty
obligations of the Credit Parties then due and owing to unaffiliated third
parties and for which the Credit Parties have issued checks or have initiated
wires or ACH transfers (or will issue checks or initiate wires or ACH transfers
within 24 hours of such time) in order to pay, (ii) any cash set aside to pay in
the ordinary course of business amounts (other than royalty obligations) of the
Credit Parties then due and owing to unaffiliated third parties and for which
the Credit Parties have issued checks or have initiated wires or ACH transfers
in order to pay and (iii) any cash of the Credit Parties constituting purchase
price deposits held in escrow by an unaffiliated third party pursuant to a
binding and enforceable purchase and sale agreement with an unaffiliated third
party containing customary provisions regarding the payment and refunding of
such deposits).

Each request for a Borrowing and each request for the issuance, amendment,
renewal or extension of any Letter of Credit shall be deemed to constitute a
representation and warranty by the Parent, OP LLC and the Borrower on the date
thereof as to the matters specified in Section 6.02(a) through (c)
and Section 6.02(f).

ARTICLE VII

Representations and Warranties

Each of the Parent, OP LLC and the Borrower represents and warrants to the
Lenders that:

Section 7.01 Organization; Powers. Each of the Parent, OP LLC, the Borrower, the
Subsidiaries and each DevCo is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, have all
requisite power and authority, and have all material governmental licenses,
authorizations, consents and approvals necessary, to own its assets and to carry
on its business as now conducted, and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where failure to have such power, authority, licenses, authorizations,
consents, approvals and qualifications could not reasonably be expected to have
a Material Adverse Effect.

Section 7.02 Authority; Enforceability. The Transactions are within the
Parent’s, OP LLC’s, the Borrower’s, each Guarantor’s and each DevCo’s corporate,
limited liability company or partnership, as applicable, powers and have been
duly authorized by all necessary corporate, limited liability company,
partnership and, if required, shareholder, member or partner action (including,
without limitation, any action required to be taken by any class of directors of
the Parent, OP LLC, the Borrower or any other Person, whether interested or
disinterested, in order to ensure the due authorization of the Transactions).
Each Loan Document to which the Parent, OP LLC, the Borrower, each Guarantor and
each DevCo is a party has been duly executed and delivered by the Borrower, such
Guarantor and such DevCo and constitutes a legal, valid and binding obligation
of the Parent, OP LLC, the Borrower, such Guarantor and such DevCo, as
applicable, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

67

--------------------------------------------------------------------------------

Section 7.03 Approvals; No Conflicts. The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any other third Person (including shareholders or any
class of directors, whether interested or disinterested, of the Parent, OP LLC,
the Borrower or any other Person), nor is any such consent, approval,
registration, filing or other action necessary for the validity or
enforceability of any Loan Document or the consummation of the transactions
contemplated thereby, except such as have been obtained or made and are in full
force and effect other than (i) the recording and filing of the Security
Instruments as required by this Agreement, (ii) those third party approvals or
consents which, if not made or obtained, would not cause a Default hereunder,
could not reasonably be expected to have a Material Adverse Effect or do not
have an adverse effect on the enforceability of the Loan Documents and
(iii) those consents, approvals or filings that are customarily obtained after
the closing of an acquisition of Oil and Gas Properties, (b) will not violate
any applicable law or regulation or the charter, by-laws or other organizational
documents of the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo or
any order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon the
Parent, OP LLC, the Borrower, any Subsidiary or any DevCo or their respective
Properties, or give rise to a right thereunder to require any payment to be made
by the Parent, OP LLC, the Borrower, such Subsidiary or such DevCo, (d) will not
result in the creation or imposition of any Lien on any Property of the Parent,
OP LLC, the Borrower, any Subsidiary or any DevCo (other than the Liens created
by the Loan Documents and the Permitted OMP Credit Facility Liens encumbering
the Property of the DevCos to the extent that such Property consists solely of
Collateral).

Section 7.04 Financial Condition; No Material Adverse Change.

(a) The Parent has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows as of and for
the fiscal year ended December 31, 2012, reported on by PricewaterhouseCoopers
LLP, independent public accountants. Such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of the Parent and its Consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP.

(b) Since December 31, 2012, (i) there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect and (ii) the business of the Parent, OP LLC, the Borrower, the
Subsidiaries and the DevCos has been conducted only in the ordinary course, in
all material respects, consistent with past business practices.

(c) None of the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo has on
the date hereof any material Debt (including Disqualified Capital Stock) or any
contingent liabilities, off-balance sheet liabilities or partnerships,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are, in the aggregate,
material to the balance sheet and statements of income, stockholders equity and
cash flows of the Parent, OP LLC, the Borrower, the Subsidiaries and the DevCos
on a consolidated basis and are not reflected on such balance sheets and
statements of income, stockholders equity and cash flows or otherwise permitted
under Section 9.02.

 

68

--------------------------------------------------------------------------------

Section 7.05 Litigation.

(a) Except as set forth on Schedule 7.05, there are no actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority, including the FERC or any equivalent state regulatory agency, pending
against or, to the knowledge of the Parent, OP LLC or the Borrower, threatened
against or affecting the Borrower or any Subsidiary or any DevCo (i) not fully
covered by insurance (except for normal deductibles) as to which there is a
reasonable possibility of an adverse determination that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, or (ii) that involve any Loan Document or
the Transactions.

(b) Since the date of this Agreement, there has been no change in the status of
the matters disclosed in Schedule 7.05 that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

Section 7.06 Environmental Matters. Except for such matters as set forth on
Schedule 7.06 or that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Parent, OP LLC, the Borrower
or the DevCos:

(a) the Borrower and the Subsidiaries and the DevCos and each of their
respective Properties and operations thereon are, and within all applicable
statute of limitation periods have been, in compliance with all applicable
Environmental Laws;

(b) the Borrower and the Subsidiaries and the DevCos have obtained all
Environmental Permits required for their respective operations and each of their
Properties, with all such Environmental Permits being currently in full force
and effect, and none of Borrower or the Subsidiaries or the DevCos has received
any written notice or otherwise has knowledge that any such existing
Environmental Permit will be revoked or that any application for any new
Environmental Permit or renewal of any existing Environmental Permit will be
protested or denied;

(c) there are no claims, demands, suits, orders, inquiries, or proceedings
concerning any violation of, or any liability (including as a potentially
responsible party) under, any applicable Environmental Laws that is pending or
threatened against the Borrower or the Subsidiaries or the DevCos or any of
their respective Properties or as a result of any operations at the Properties;

(d) none of the Properties of any Credit Party or any DevCo contain or have
contained any: (i) underground storage tanks; (ii) asbestos-containing
materials; or (iii) landfills or dumps; (iv) hazardous waste management units as
defined pursuant to RCRA or any comparable state law; or (v) sites on or
nominated for the National Priority List promulgated pursuant to CERCLA or any
state remedial priority list promulgated or published pursuant to any comparable
state law;

(e) there has been no Release or threatened Release, of Hazardous Materials at,
on, under or from any of Borrower’s or the Subsidiaries’ or the DevCos’
Properties, there are no investigations, remediations, abatements, removals, or
monitorings of Hazardous Materials required under applicable Environmental Laws
at such Properties and none of such Properties are adversely affected by any
Release or threatend Release of a Hazardous Material originating or emanating
from any other real property;

 

69

--------------------------------------------------------------------------------

(f) neither the Borrower nor the Subsidiaries nor the DevCos has received any
written notice asserting an alleged liability or obligation under any applicable
Environmental Laws with respect to the investigation, remediation, abatement,
removal, or monitoring of any Hazardous Materials at, under, or Released or
threatened to be Released from any real properties offsite the Borrower’s or the
Subsidiaries’ or the DevCo’s Properties and there are no conditions or
circumstances that would reasonably be expected to result in the receipt of such
written notice.

(g) there has been no exposure of any Person or property to any Hazardous
Materials as a result of or in connection with the operations and businesses of
any of the Borrower’s or the Subsidiaries’ or the DevCos’ Properties that would
reasonably be expected to form the basis for a claim for damages or compensation
and there are no conditions or circumstances that would reasonably be expected
to result in the receipt of notice regarding such exposure; and

(h) the Borrower and the Subsidiaries and the DevCos have provided to Lenders
complete and correct copies of all environmental site assessment reports,
investigations, studies, analyses, and correspondence on environmental matters
(including matters relating to any alleged non-compliance with or liability
under Environmental Laws) that are in any of the Borrower’s or the Subsidiaries’
or the DevCos’ possession or control and relating to their respective Properties
or operations thereon.

Section 7.07 Compliance with the Laws and Agreements; No Defaults or Borrowing
Base Deficiency.

(a) Each of the Parent, OP LLC, the Borrower, each Subsidiary and each DevCo is
in compliance with all Governmental Requirements applicable to it or its
Property and all agreements and other instruments binding upon it or its
Property, and possesses all licenses, permits, franchises, exemptions, approvals
and other governmental authorizations necessary for the ownership of its
Property and the conduct of its business, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

(b) None of the Parent, OP LLC, the Borrower, any Subsidiary nor any DevCo is in
default nor has any event or circumstance occurred which, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default or would require the Parent, OP LLC, the Borrower, a
Subsidiary or a DevCo to Redeem or make any offer to Redeem under any indenture,
note, credit agreement or instrument pursuant to which any Material Indebtedness
is outstanding or by which the Borrower or any Subsidiary or any DevCo or any of
their respective Properties is bound.

(c) No Default or Borrowing Base Deficiency has occurred and is continuing.

Section 7.08 Investment Company Act. None of the Parent, OP LLC, the Borrower,
any Subsidiary nor any DevCo is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of, or subject to
regulation under, the Investment Company Act of 1940, as amended.

 

70

--------------------------------------------------------------------------------

Section 7.09 Taxes. Each of the Parent, OP LLC, the Borrower, the Subsidiaries
and the DevCos has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the Parent, OP LLC, the
Borrower, such Subsidiary or such DevCo, as applicable, has set aside on its
books adequate reserves in accordance with GAAP or (b) to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect. The charges, accruals and reserves on the books of the Parent,
OP LLC, the Borrower, the Subsidiaries and the DevCos in respect of Taxes and
other governmental charges are, in the reasonable opinion of the Parent, OP LLC
and the Borrower, adequate. No Tax Lien has been filed and, to the knowledge of
the Borrower, no claim is being asserted with respect to any such Tax or other
such governmental charge.

Section 7.10 ERISA.

(a) The Parent, OP LLC, the Borrower, the Subsidiaries, the DevCos and each
ERISA Affiliate have complied in all material respects with ERISA and, where
applicable, the Code regarding each Plan.

(b) Each Plan is, and has been, maintained in substantial compliance with its
terms, ERISA and, where applicable, the Code.

(c) No act, omission or transaction has occurred which could result in
imposition on the Parent, OP LLC, the Borrower, any Subsidiary, any DevCo or any
ERISA Affiliate (whether directly or indirectly) of (i) either a civil penalty
assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a
tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of
fiduciary duty liability damages under section 409 of ERISA with civil penalty
or tax could reasonably be expected to result in a Material Adverse Effect.

(d) Full payment when due has been made of all amounts which the Parent, OP LLC,
the Borrower, the Subsidiaries, the DevCos or any ERISA Affiliate is required
under the terms of each Plan or applicable law to have paid as contributions to
such Plan as of the date hereof.

(e) None of the Parent, OP LLC, the Borrower, the Subsidiaries, the DevCos nor
any ERISA Affiliate sponsors, maintains, or contributes to an employee welfare
benefit plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former employees of
such entities, that may not be terminated by the Parent, OP LLC, the Borrower, a
Subsidiary, a DevCo or any ERISA Affiliate in its sole discretion at any time
without any material liability.

(f) None of the Parent, OP LLC, the Borrower, the Subsidiaries, the DevCos nor
any ERISA Affiliate sponsors, maintains or contributes to, or has at any time in
the six-year period preceding the date hereof sponsored, maintained or
contributed to, any employee pension plan, as defined in section 3(2) of ERISA,
that is subject to Title IV of ERISA, section 302 of ERISA or section 412 of the
Code.

 

71

--------------------------------------------------------------------------------

Section 7.11 Disclosure; No Material Misstatements. The Parent, OP LLC and the
Borrower have disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which they or any
of the Subsidiaries or any of the DevCos is subject, and except for matters that
could reasonably be expected to be known already by the Lenders, all other
matters known to them, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. None of the other reports,
financial statements, certificates or other written information furnished by or
on behalf of the Parent, OP LLC, the Borrower or any Subsidiary or any DevCo to
the Administrative Agent or any Lender or any of their Affiliates in connection
with the negotiation of this Agreement or any other Loan Document or delivered
hereunder or under any other Loan Document (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Parent, OP LLC and the
Borrower represent only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time. There is no fact
peculiar to the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo which
could reasonably be expected to have a Material Adverse Effect or in the future
is reasonably likely to have a Material Adverse Effect and which has not been
set forth in this Agreement or the Loan Documents or the other documents,
certificates and statements furnished to the Administrative Agent or the Lenders
by or on behalf of the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo
prior to, or on, the date hereof in connection with the transactions
contemplated hereby. There are no statements or conclusions in any Reserve
Report which are based upon or include misleading information or fail to take
into account material information regarding the matters reported therein, it
being understood that projections concerning volumes attributable to the Oil and
Gas Properties and production and cost estimates contained in each Reserve
Report are necessarily based upon professional opinions, estimates and
projections and that the Parent, OP LLC, the Borrower, the Subsidiaries and the
DevCos do not warrant that such opinions, estimates and projections will
ultimately prove to have been accurate.

Section 7.12 Insurance. The Parent, OP LLC and the Borrower have, and have
caused all of their respective Subsidiaries and the DevCos to have, (a) all
insurance policies sufficient for the compliance by each of them with all
material Governmental Requirements and all material agreements and (b) insurance
coverage in at least amounts and against such risk (including, without
limitation, public liability) that are usually insured against by companies
similarly situated and engaged in the same or a similar business for the assets
and operations of the Parent, OP LLC, the Borrower and their respective
Subsidiaries and the DevCos. The Administrative Agent and the Lenders have been
named as additional insureds in respect of such liability insurance policies and
the Administrative Agent has been named as lender loss payee with respect to
Property loss insurance. No Credit Party or DevCo owns any Building or material
Manufactured (Mobile) Home (as defined in the applicable Flood Insurance
Regulation), in either case subject to a mortgage lien of any Security
Instrument, for which such Credit Party or DevCo has not delivered to the
Administrative Agent evidence or confirmation reasonably satisfactory to the
Administrative Agent that (i) such Credit Party maintains flood insurance for
such Building or Manufactured (Mobile) Home that is acceptable to the
Administrative Agent or (ii) such Building or Manufactured (Mobile) Home is not
located in a special flood hazard area.

 

72

--------------------------------------------------------------------------------

Section 7.13 Restriction on Liens. None of the Parent, OP LLC, the Borrower, any
of the Subsidiaries nor any DevCo is a party to any material agreement or
arrangement (other than Capital Leases creating Liens permitted
by Section 9.03(c), but then only on the Property subject of such Capital
Lease), or subject to any order, judgment, writ or decree, which either
restricts or purports to restrict its ability to grant Liens to the
Administrative Agent for the benefit of the Secured Parties on or in respect of
their Properties to secure the Indebtedness and the Loan Documents.

Section 7.14 Subsidiaries. Except as set forth on Schedule 7.14 or as disclosed
in writing to the Administrative Agent (which shall promptly furnish a copy to
the Lenders), which shall be a supplement to Schedule 7.14, the Borrower has no
Subsidiaries and the Borrower has no Foreign Subsidiaries. Each Subsidiary
identified in Schedule 7.14 is a Wholly-Owned Subsidiary other than the General
Partner. 100% of the Equity Interests in each DevCo is owned collectively
directly or indirectly by OMS and directly or indirectly by OMP.

Section 7.15 Location of Business and Offices. The Borrower’s jurisdiction of
organization is the State of Delaware; the name of the Borrower as listed in the
public records of its jurisdiction of organization is “Oasis Petroleum North
America LLC”; and the organizational identification number of the Borrower in
its jurisdiction of organization is 4354265 (or, in each case, as set forth in a
notice delivered to the Administrative Agent pursuant to Section 8.01(m) in
accordance with Section 12.01). The Borrower’s principal place of business and
chief executive offices are located at the address specified in Section 12.01
(or as set forth in a notice delivered pursuant to Section 8.01(m)
and Section 12.01(c)). The jurisdiction of organization of OP LLC is the State
of Delaware; the name of OP LLC as listed in the public records of its
jurisdiction of organization is “Oasis Petroleum LLC”, and the organizational
identification number of OP LLC in its jurisdiction of organization is 4307625
(or, in each case, as set forth in a notice delivered to the Administrative
Agent pursuant to Section 8.01(m) in accordance with Section 12.01). The
principal place of business and chief executive offices of OP LLC are located at
the address specified in Section 12.01 (or as set forth in a notice delivered
pursuant to Section 8.01(m) and Section 12.01(c)). The jurisdiction of
organization of the Parent is the State of Delaware; the name of the Parent as
listed in the public records of its jurisdiction of organization is “Oasis
Petroleum Inc.”, and the organizational identification number of the Parent in
its jurisdiction of organization is 4793429 (or, in each case, as set forth in a
notice delivered to the Administrative Agent pursuant to Section 8.01(m) in
accordance with Section 12.01). The principal place of business and chief
executive offices of the Parent are located at the address specified
in Section 12.01 (or as set forth in a notice delivered pursuant
to Section 8.01(m) and Section 12.01(c)). Each Subsidiary’s jurisdiction of
organization, name as listed in the public records of its jurisdiction of
organization, organizational identification number in its jurisdiction of
organization, and the location of its principal place of business and chief
executive office is stated on Schedule 7.14 (or as set forth in a notice
delivered pursuant to Section 8.01(m)).

 

73

--------------------------------------------------------------------------------

Section 7.16 Properties; Titles, Etc.

(a) Except as set forth in Schedule 7.16, of the Borrower and the Subsidiaries
has good and defensible title to the Oil and Gas Properties evaluated in the
most recently delivered Reserve Report and good title to all its material
personal Properties, in each case, free and clear of all Liens except Liens
permitted by Section 9.03. After giving full effect to the Excepted Liens, the
Borrower or the Subsidiary specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report, other than reductions in such interests
resulting from any actions permitted under Section 9.11 or from the election of
the Borrower to not participate in any operation in respect of an Oil and Gas
Property, and the ownership of such Properties shall not in any material respect
obligate the Borrower or such Subsidiary to bear the costs and expenses relating
to the maintenance, development and operations of each such Property in an
amount in excess of the working interest of each Property set forth in the most
recently delivered Reserve Report that is not offset by a corresponding
proportionate increase in the Borrower’s or such Subsidiary’s net revenue
interest in such Property, other than excesses (i) relating to customary
provisions of operating agreements requiring parties thereto to pay to the
operator the share of costs of a defaulting party, (ii) resulting from the
acquisition of the interest of any non-participating parties pursuant to
customary provisions of joint operating agreements or (iii) resulting from
interests acquired pursuant to compulsory pooling statutes.

(b) All material leases and agreements necessary for the conduct of the business
of the Borrower and the Subsidiaries are valid and subsisting, in full force and
effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which could reasonably be expected to have a
Material Adverse Effect.

(c) The rights and Properties presently owned, leased or licensed by the
Borrower and the Subsidiaries including, without limitation, all easements and
rights of way, include all rights and Properties necessary to permit the
Borrower and the Subsidiaries to conduct their business in all material respects
in the same manner as its business has been conducted prior to the date hereof.

(d) All of the Properties of the Borrower and the Subsidiaries which are
reasonably necessary for the operation of their businesses are in good working
condition and are maintained in accordance with prudent business standards.

(e) The Borrower and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual Property
material to its business, and the use thereof by the Borrower and such
Subsidiary does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect. The Borrower and the
Subsidiaries either own or have valid licenses or other rights to use all
databases, geological data, geophysical data, engineering data, seismic data,
maps, interpretations and other technical information used in their businesses
as presently conducted, subject to the limitations contained in the agreements
governing the use of the same, which limitations are customary for companies
engaged in the business of the exploration and production of Hydrocarbons, with
such exceptions as could not reasonably be expected to have a Material Adverse
Effect.

 

74

--------------------------------------------------------------------------------

Section 7.17 Maintenance of Properties. Except for such acts or failures to act
as could not be reasonably expected to have a Material Adverse Effect, the Oil
and Gas Properties (and Properties unitized therewith) of the Borrower and the
Subsidiaries have been maintained, operated and developed in a good and
workmanlike manner and in conformity with all Governmental Requirements and in
conformity with the provisions of all leases, subleases or other contracts
comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties of the Borrower and the
Subsidiaries. Specifically in connection with the foregoing, except for those as
could not be reasonably expected to have a Material Adverse Effect, (a) no Oil
and Gas Property of the Borrower or any Subsidiary is subject to having
allowable production reduced below the full and regular allowable (including the
maximum permissible tolerance) because of any overproduction (whether or not the
same was permissible at the time) and (b) none of the wells comprising a part of
the Oil and Gas Properties (or Properties unitized therewith) of the Borrower or
any Subsidiary is deviated from the vertical more than the maximum permitted by
Governmental Requirements, and such wells are, in fact, bottomed under and are
producing from, and the well bores are wholly within, the Oil and Gas Properties
(or in the case of wells located on Properties unitized therewith, such unitized
Properties) of the Borrower or such Subsidiary. All pipelines, wells, gas
processing plants, platforms and other material improvements, fixtures and
equipment owned in whole or in part by the Borrower or any of its Subsidiaries
that are necessary to conduct normal operations are being maintained in a state
adequate to conduct normal operations, and with respect to such of the foregoing
which are operated by the Borrower or any of its Subsidiaries, in a manner
consistent with the Borrower’s or its Subsidiaries’ past practices (other than
those the failure of which to maintain in accordance with this Section 7.17
could not reasonably be expected to have a Material Adverse Effect).

Section 7.18 Gas Imbalances, Prepayments. Except as set forth on Schedule 7.18
or on the most recent certificate delivered pursuant to Section 8.12(c), on a
net basis there are no gas imbalances, take or pay or other prepayments which
would require the Borrower or any of the Subsidiaries to deliver Hydrocarbons
produced from the Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor exceeding 75,000 Mcf of gas (on an
Mcf equivalent basis) in the aggregate.

Section 7.19 Marketing of Production. Except for contracts listed and in effect
on the date hereof on Schedule 7.19, and thereafter either disclosed in writing
to the Administrative Agent or included in the most recently delivered Reserve
Report (with respect to all of which contracts the Borrower represents that it
or the Subsidiaries are receiving a price for all production sold thereunder
which is computed substantially in accordance with the terms of the relevant
contract and are not having deliveries curtailed substantially below the subject
Property’s delivery capacity), no material agreements exist which are not
cancelable on 60 days’ notice or less without penalty or detriment for the sale
of production from the Borrower’s or the Subsidiaries’ Hydrocarbons (including,
without limitation, calls on or other rights to purchase, production, whether or
not the same are currently being exercised) that (a) pertain to the sale of
production at a fixed price and (b) have a maturity or expiry date of longer
than six (6) months from the date hereof.

 

75

--------------------------------------------------------------------------------

Section 7.20 Swap Agreements and Qualified ECP Guarantor. Schedule 7.20, as of
the date hereof, and after the date hereof, each report required to be delivered
by the Borrower pursuant to Section 8.01(e), sets forth, a true and complete
list of all Swap Agreements of the Borrower and each Subsidiary, the material
terms thereof (including the type, term, effective date, termination date and
notional amounts or volumes), the net mark to market value thereof, all credit
support agreements relating thereto (including any margin required or supplied)
and the counterparty to each such agreement. The Parent, OP LLC and the Borrower
are each Qualified ECP Guarantors.

Section 7.21 Use of Loans and Letters of Credit. The proceeds of the Loans and
the Letters of Credit shall be used to provide working capital for exploration
and production operations and to provide funding for general corporate purposes.
The Parent, OP LLC, the Borrower, the Subsidiaries and the DevCos are not
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulation
T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit
will be used for any purpose which violates the provisions of Regulations T, U
or X of the Board. None of the Parent, OP LLC or the Borrower nor any of their
respective Subsidiaries will directly or indirectly use the proceeds from the
Loans or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other Person, for the purpose of financing
the activities of any Person subject to any applicable sanctions administered by
OFAC or in violation of the FCPA.

Section 7.22 Solvency. After giving effect to the transactions contemplated
hereby, (a) the aggregate assets (after giving effect to amounts that could
reasonably be received by reason of indemnity, offset, insurance or any similar
arrangement), at a fair valuation, of the Borrower, the Guarantors and the
DevCos, taken as a whole, will exceed the aggregate Debt of the Borrower, the
Guarantors and the DevCos on a consolidated basis, as the Debt becomes absolute
and matures, (b) each of the Borrower, the Guarantors and the DevCos will not
have incurred or intended to incur, and will not believe that it will incur,
Debt beyond its ability to pay such Debt (after taking into account the timing
and amounts of cash to be received by each of the Borrower, the Guarantors and
the DevCos and the amounts to be payable on or in respect of its liabilities,
and giving effect to amounts that could reasonably be received by reason of
indemnity, offset, insurance or any similar arrangement) as such Debt becomes
absolute and matures and (c) each of the Borrower, the Guarantors and the DevCos
will not have (and will have no reason to believe that it will have thereafter)
unreasonably small capital for the conduct of its business.

Section 7.23 Foreign Corrupt Practices. None of the Parent, OP LLC or the
Borrower nor any of their respective Subsidiaries nor any DevCo, nor any
director, officer, agent, employee or Affiliate of the Parent, OP LLC or the
Borrower or any of their respective Subsidiaries or any DevCo is aware of or has
taken any action, directly or indirectly, that would result in a material
violation by such Persons of the FCPA, including without limitation, making use
of the mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any “foreign official” (as such term is defined
in the FCPA) or any foreign political party or official thereof or

 

76

--------------------------------------------------------------------------------

any candidate for foreign political office, in contravention of the FCPA; and,
the Parent, OP LLC and the Borrower, and their respective Subsidiaries and the
DevCos and each of their respective Affiliates have conducted their business in
material compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.

Section 7.24 OFAC. None of the Parent, OP LLC, the Borrower nor any of their
respective Subsidiaries nor any DevCo, nor any director, officer, agent,
employee or Affiliate of the Parent, OP LLC or the Borrower or any of their
respective Subsidiaries or any DevCo is currently subject to any material
sanctions administered by OFAC, and the Parent, OP LLC and the Borrower will not
directly or indirectly use the proceeds from the Loans or lend, contribute or
otherwise make available such proceeds to any Subsidiary, any DevCo joint
venture partner or other Person, for the purpose of financing the activities of
any Person currently subject to any sanctions administered by OFAC.

Section 7.25 OP International. As of the Effective Date, OP International and
its Subsidiaries own no assets other than Equity Interests in subsidiaries that
do not own assets.

Section 7.26 EEA Financial Institutions. No Credit Party or any DevCo is an EEA
Financial Institution.

Section 7.27 DevCo Properties.

(a) Each DevCo has good and valid title to, valid leasehold interests in, or
valid easements, rights of way or other property interests in all of the
Mortgaged Properties owned by it free and clear of all Liens except Excepted
Liens and Permitted OMP Credit Facility Liens.

(b) The Gathering Systems of each DevCo are covered by valid and subsisting
recorded fee deeds, leases, easements, rights of way, servitudes, permits,
licenses and other instruments and agreements (collectively, “Rights of Way”) in
favor of the DevCos (or their predecessors in interest), except where the
failure of the Gathering Systems to be so covered, individually or in the
aggregate, (i) does not interfere with the ordinary conduct of business of such
DevCo, (ii) does not materially detract from the value or the use of the portion
of the Gathering Systems which are not covered and (iii) could not reasonably be
expected to have a Material Adverse Effect.

(c) The Rights of Way of each DevCo establish a contiguous and continuous right
of way for the Gathering Systems and grant the DevCos (or their predecessors in
interest) the right to construct, operate, and maintain the Gathering Systems
in, over, under, or across the land covered thereby in the same way that a
prudent owner and operator would inspect, operate, repair, and maintain similar
assets and in the same way as the DevCos have inspected, operated, repaired, and
maintained the Gathering Systems prior to the Effective Date; provided, however,
(i) some of the Rights of Way granted to the DevCos (or their predecessors in
interest) by private parties and Governmental Authorities are revocable at the
right of the applicable grantor, (ii) some of the Rights of Way cross properties
that are subject to liens in favor of third parties that have not been
subordinated to the Rights of Way, and (iii) some

 

77

--------------------------------------------------------------------------------

Rights of Way are subject to certain defects, limitations and restrictions;
provided, further, none of the limitations, defects, and restrictions described
in clauses (i), (ii) and (iii) above, individually or in the aggregate,
(A) interfere with the ordinary conduct of business of the DevCos,
(B) materially detract from the value or the use of the portion of the Gathering
Systems which are covered or (C) could reasonably be expected to have a Material
Adverse Effect.

(d) Each Processing Plant of the DevCos is or will be located on lands covered
by fee deeds, real property leases, or other instruments (collectively “Deeds”)
in favor of the DevCos (or their predecessors in interest) and their respective
successors and assigns. The Deeds grant the DevCos (or their predecessors in
interest) the right to construct, operate, and maintain such Processing Plant on
the land covered thereby in the same way that a prudent owner and operator would
inspect, operate, repair, and maintain similar assets.

(e) All Rights of Way and all Deeds necessary for the conduct of the business of
the DevCos are valid and subsisting, in full force and effect, and there exists
no breach, default or event or circumstance that, with the giving of notice or
the passage of time or both, would give rise to a default under any such Rights
of Way or Deeds that could reasonably be expected to have a Material Adverse
Effect. All rental and other payments due under any Rights of Way or Deeds by
the DevCos (and their predecessors in interest) have been duly paid in
accordance with the terms thereof, except to the extent that a failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

(f) The rights and Properties presently owned, leased or licensed by the DevCos,
including all Rights of Way and Deeds, include all rights and Properties
necessary to permit the DevCos to conduct their businesses in all material
respects in the same manner as such businesses have been conducted prior to the
date hereof.

(g) Neither the businesses nor the Properties of the DevCos is affected in any
manner that could reasonably be expected to have a Material Adverse Effect as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by a Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy.

(h) No eminent domain proceeding or taking has been commenced or, to the
knowledge of the DevCos is contemplated with respect to all or any portion of
the Midstream Properties of the DevCos, except for that which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

(i) No portion of the Midstream Properties of the DevCos has, since the date of
this Agreement, suffered any material damage by fire or other casualty loss
except that which has heretofore been repaired or replaced or is in the process
of being repaired or replaced.

 

78

--------------------------------------------------------------------------------

(j) Except for such acts or failures to act as could not be reasonably expected
to have a Material Adverse Effect, the offices, plants, gas processing plants,
pipelines, improvements, fixtures, equipment, and other Property owned, leased
or used by each DevCo in the conduct of its business is (i) being maintained in
a state adequate to conduct normal operations, (ii) in good operating condition,
subject to ordinary wear and tear, and routine maintenance or repair,
(iii) sufficient for the operation of such business as currently conducted, and
(iv) in conformity with all Governmental Requirements relating thereto.

Section 7.28 FERC. To the extent, if any, that any portion of the Gathering
Systems of any DevCo is an interstate common carrier pipeline subject to the
jurisdiction of the FERC (an “Interstate Pipeline”):

(a) The rates on file with the FERC with respect to such Interstate Pipeline are
just and reasonable pursuant to the Energy Policy Act, and to the knowledge of
the Parent and the Borrower, no provision of the tariff containing such rates is
unduly discriminatory or preferential.

(b) Each DevCo is in compliance, in all material respects, with all rules,
regulations and orders of the FERC applicable to such Interstate Pipeline.

(c) As of the date of this Agreement, no DevCo is liable for any refunds or
interest thereon as a result of an order from the FERC.

(d) Each applicable DevCo’s report, if any, on Form 6 filed with the FERC
complies as to form with all applicable legal requirements and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements therein not misleading.

(e) Without limiting the generality of Section 7.07(a) of this Agreement, no
certificate, license, permit, consent, authorization or order (to the extent not
otherwise obtained) is required by any DevCo from the FERC to construct, own,
operate and maintain any such Interstate Pipeline or to transport and/or
distribute Refined Products on such Interstate Pipeline under existing contracts
and agreements as the Interstate Pipelines are presently owned, operated and
maintained.

Section 7.29 State Regulation. Each DevCo is in compliance, in all material
respects, with all rules, regulations and orders of all rules, regulations and
orders of any State agency with jurisdiction to regulate its Midstream
Properties, and as of the date of this Agreement, no DevCo is liable for any
refunds or interest thereon as a result of an order from any such State agency.

Section 7.30 Title to Refined Products. No DevCo has title to any of the Refined
Products which are transported and/or distributed through the Gathering Systems,
except pursuant to agreements under which the relevant DevCo does not have any
exposure to commodity price volatility as a result of having title to such
Refined Products.

Section 7.31 Flood Insurance Related Matters. Except as set forth on
Schedule 7.31 as it may be supplemented from time to time by delivery of a
written notice to the Administrative Agent, no Mortgage encumbers improved real
property that contains Buildings or Manufactured (Mobile) Homes (as those terms
are defined in applicable Flood Insurance Regulations). The Credit Parties and
the DevCos have obtained flood insurance in accordance with Section 8.07 with
respect to each Building constituting Mortgaged Property that is located in a
special flood hazard area.

 

79

--------------------------------------------------------------------------------

ARTICLE VIII

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, each of the Parent, OP LLC and the Borrower covenants and agrees
with the Lenders that:

Section 8.01 Financial Statements; Other Information. The Parent, OP LLC and/or
the Borrower will furnish to the Administrative Agent and each Lender:

(a) Annual Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 90 days after the end of
each fiscal year of the Parent, (i) its audited consolidated balance sheet and
related statements of operations, members’ equity and cash flows as of the end
of and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by independent public accountants
of recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Parent and its Consolidated Subsidiaries and the DevCos on a consolidated
basis in accordance with GAAP consistently applied.

(b) Quarterly Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 60 days after the end of
each of the first three fiscal quarters of each fiscal year of the Parent, its
consolidated balance sheet and related statements of operations, members’ equity
and cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Parent and its Consolidated
Subsidiaries and the DevCos on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes.

(c) Certificate of Financial Officer - Compliance. Concurrently with any
delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
certificate of a Financial Officer in substantially the form of Exhibit D hereto
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 8.13(b) and Section 9.01 and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 7.04 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate.

 

80

--------------------------------------------------------------------------------

(d) Certificate of Financial Officer - Consolidating Information. Concurrently
with any delivery of financial statements under Section 8.01(a)
or Section 8.01(b), a certificate of a Financial Officer setting forth
consolidating spreadsheets that show all Subsidiaries of the Parent, excluding
the Borrower, and the eliminating entries, in such form as would be presentable
to the auditors of the Parent.

(e) Certificate of Financial Officer – Swap Agreements. Concurrently with any
delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
certificate of a Financial Officer, in form and substance satisfactory to the
Administrative Agent, setting forth as of the last Business Day of such quarter,
a true and complete list of all Swap Agreements of the Borrower and each
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net mark-to-market
value therefor, any new credit support agreements relating thereto not listed on
Schedule 7.20, any margin required or supplied under any credit support
document, and the counterparty to each such agreement.

(f) Certificate of Insurer - Insurance Coverage. Concurrently with any delivery
of financial statements under Section 8.01(a), a certificate of insurance
coverage from each insurer with respect to the insurance required
by Section 8.07, in form and substance satisfactory to the Administrative Agent,
and, if requested by the Administrative Agent or any Lender, all copies of the
applicable policies.

(g) Other Accounting Reports. Promptly upon receipt thereof, a copy of each
other report or letter submitted to the Parent, OP LLC, the Borrower or any
Subsidiaries by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Parent, OP LLC, the Borrower
or any such Subsidiary, and a copy of any response by the Parent, OP LLC, the
Borrower or any such Subsidiary, or the board of directors or other appropriate
governing body of the Parent, OP LLC, the Borrower or any such Subsidiary, to
such letter or report.

(h) SEC and Other Filings; Reports to Shareholders. Promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent, OP LLC, the Borrower or any
Subsidiary with the SEC, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be.

(i) Notices Under Material Instruments. Promptly after the furnishing thereof,
copies of any financial statement, report or notice furnished to or by any
Person pursuant to the terms of any preferred stock designation, indenture, loan
or credit or other similar agreement, other than this Agreement and not
otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 8.01.

(j) Lists of Purchasers. Concurrently with the delivery of any Reserve Report to
the Administrative Agent pursuant to Section 8.12, a list of all Persons
purchasing Hydrocarbons from the Borrower or any Subsidiary in respect of the
Oil and Gas Properties expected to account for 80% of the revenues for the sale
of Hydrocarbons produced from the Oil and Gas Properties in the three month
period immediately preceding the effective date of the most recent Reserve
Report.

 

81

--------------------------------------------------------------------------------

(k) Notice of Sales of Oil and Gas Properties. Prior to entering into any
legally binding agreement to sell, transfer, assign or otherwise dispose of any
Oil or Gas Properties (as defined in subsections (a), (b), (c), (d) and (e) of
the definition thereof (other than, with respect to clause (e), oil that would
not otherwise be included but for the fact that it has been stored in tanks in
the ordinary course of business for a short period of time pending collection
and sale) or any Equity Interests in any Subsidiary in accordance
with Section 9.11, prior written notice of such disposition, the price thereof
and the anticipated date of closing and any other details thereof reasonably
requested by the Administrative Agent or any Lender.

(l) Notice of Casualty Events. Prompt written notice, and in any event within
three Business Days of the Parent’s OP LLC’s or the Borrower’s knowledge
thereof, of the occurrence of any Casualty Event or the commencement of any
action or proceeding that could reasonably be expected to result in a Casualty
Event.

(m) Information Regarding Borrower and Guarantors. Prompt written notice of (and
in any event at least twenty (20) days prior thereto) any change (i) in the
Borrower’s, any Guarantor’s or any DevCo’s corporate name or in any trade name
used to identify such Person in the conduct of its business or in the ownership
of its Properties, (ii) in the location of the Borrower’s, any Guarantor’s or
any DevCo’s chief executive office or principal place of business, (iii) in the
Borrower’s, any Guarantor’s or any DevCo’s identity or corporate structure or in
the jurisdiction in which such Person is incorporated or formed, (iv) in the
Borrower’s, any Guarantor’s or any DevCo’s jurisdiction of organization or such
Person’s organizational identification number in such jurisdiction of
organization, and (v) in the Borrower’s, any Guarantor’s or any DevCo’s federal
taxpayer identification number.

(n) Production Report and Lease Operating Statements. Within 60 days after the
end of each of the first three fiscal quarters for each calendar month during
the then current fiscal year to date, and within 90 days after the end of the
fiscal year, a report setting forth the volume of production and sales
attributable to production (and the prices at which such sales were made and the
revenues derived from such sales) for each such calendar month from the Oil and
Gas Properties.

(o) Notice of Certain Changes. Promptly, but in no event within five
(5) Business Days after the execution thereof, copies of any amendment,
modification or supplement to the certificate or articles of incorporation,
by-laws or any other organic document of the Parent, OP LLC, the Borrower, any
Subsidiary or any DevCo.

(p) Notice of Swap Agreement Modifications. Prompt written notice of any
amendment to or other modification of any Swap Agreement or the terms thereof
since the delivery of the last certificate pursuant to Section 8.01(e)
(including a summary of the terms of such amendment or modification and the net
mark-to-market value therefor).

 

82

--------------------------------------------------------------------------------

(q) Other Requested Information. Promptly following any request therefor, such
other information regarding the operations, business affairs and financial
condition of the Parent, OP LLC, the Borrower or any Subsidiary (including,
without limitation, any Plan and any reports or other information required to be
filed with respect thereto under the Code or under ERISA), or compliance with
the terms of this Agreement or any other Loan Document, as the Administrative
Agent or any Lender may reasonably request.

(r) Issuance of Senior Notes and Permitted Refinancing Debt. In the event the
Parent decides to issue Senior Notes (including any Convertible Notes) or any
Permitted Refinancing Debt as contemplated by Section 9.02(j), three
(3) Business Days prior written notice of such offering therefor, the amount
thereof and the anticipated date of closing and a copy of the preliminary
offering memorandum (if any) and the final offering memorandum (if any) and any
other material documents relating to such offering of Senior Notes or such
Permitted Refinancing Debt and whether such issuance of Debt is intended to
Redeem any Senior Notes.

(s) Regulatory Notices. Promptly, but in any event within five (5) Business Days
after receipt thereof by any DevCo, a copy of any form of notice, summons,
citation, proceeding or order received from the FERC asserting jurisdiction over
any material portion of the Gathering Systems.

Section 8.02 Notices of Material Events. The Parent, OP LLC and/or the Borrower
will furnish to the Administrative Agent and each Lender prompt written notice
of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of, or the threat in writing of, any action,
suit, proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against or affecting the Parent, OP LLC, the Borrower or
any Affiliate thereof or any DevCo not previously disclosed in writing to the
Lenders or any material adverse development in any action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed to the
Lenders) that, in either case could reasonably be expected to result in
liability in excess of $2,500,000, not fully covered by insurance, subject to
normal deductibles; and

(c) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 8.03 Existence; Conduct of Business. The Parent, OP LLC and the Borrower
will, and will cause each Subsidiary and DevCo to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business and maintain, if necessary, its qualification to
do business in each other jurisdiction in which its Oil and Gas Properties (or
in the case of the DevCos, their Midstream Properties) are located or the
ownership of its Properties requires such qualification, except where the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 9.11.

 

83

--------------------------------------------------------------------------------

Section 8.04 Payment of Obligations. The Parent, OP LLC and the Borrower will,
and will cause each Subsidiary and each DevCo to, pay its obligations, including
Tax liabilities of the Parent, OP LLC, the Borrower, each Subsidiary and each
DevCo before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Parent, OP LLC, the Borrower, such Subsidiary
or such DevCo has set aside on its books adequate reserves with respect thereto
in accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect or
result in the seizure or levy of any material Property of the Parent, OP LLC,
the Borrower, any Subsidiary or any DevCo.

Section 8.05 Performance of Obligations under Loan Documents. The Parent, OP LLC
and the Borrower will pay the Notes according to the reading, tenor and effect
thereof, and the Parent, OP LLC and the Borrower will, and will cause each
Subsidiary and each DevCo to, do and perform every act and discharge all of the
obligations to be performed and discharged by them under the Loan Documents,
including, without limitation, this Agreement, at the time or times and in the
manner specified.

Section 8.06 Operation and Maintenance of Properties. The Borrower, at its own
expense, will, and will cause each Subsidiary to:

(a) operate its Oil and Gas Properties and other material Properties or cause
such Oil and Gas Properties and other material Properties to be operated in a
careful and efficient manner in accordance with the practices of the industry
and in compliance with all applicable contracts and agreements and in compliance
with all Governmental Requirements, including, without limitation, applicable
proration requirements and Environmental Laws, and all applicable laws, rules
and regulations of every other Governmental Authority from time to time
constituted to regulate the development and operation of its Oil and Gas
Properties and the production and sale of Hydrocarbons and other minerals
therefrom, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.

(b) keep and maintain all Property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted preserve,
maintain and keep in good repair, working order and efficiency (ordinary wear
and tear excepted) all of its material Oil and Gas Properties and other material
Properties, including, without limitation, all equipment, machinery and
facilities.

(c) promptly pay and discharge, or make reasonable and customary efforts to
cause to be paid and discharged, all delay rentals, royalties, expenses and
indebtedness accruing under the leases or other agreements affecting or
pertaining to its Oil and Gas Properties and will do all other things necessary
to keep unimpaired their rights with respect thereto and prevent any forfeiture
thereof or default thereunder, except, in each case, where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

84

--------------------------------------------------------------------------------

(d) promptly perform or make reasonable and customary efforts to cause to be
performed, in accordance with industry standards, the obligations required by
each and all of the assignments, deeds, leases, sub-leases, contracts and
agreements affecting its interests in its Oil and Gas Properties and other
material Properties, except, in each case, where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

(e) operate its Oil and Gas Properties and other material Properties or cause or
make reasonable and customary efforts to cause such Oil and Gas Properties and
other material Properties to be operated in accordance with the practices of the
industry and in material compliance with all applicable contracts and agreements
and in compliance in all material respects with all Governmental Requirements.

(f) to the extent the Borrower is not the operator of any Property, the Borrower
shall use commercially reasonable efforts to cause the operator to comply with
this Section 8.06.

Section 8.07 Insurance. The Parent, OP LLC and the Borrower will, and will cause
each of their respective Subsidiaries and each DevCo to, maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations. The loss
payable clauses or provisions in said insurance policy or policies insuring any
of the collateral for the Loans shall be endorsed in favor of and made payable
to the Administrative Agent as its interests may appear and such policies shall
name the Administrative Agent and the Lenders as “additional insureds” and/or
“lender loss payees” and provide that the insurer will endeavor to give at least
30 days prior notice of any cancellation to the Administrative Agent. With
respect to each portion of the real Property (other than pipelines) of any
Credit Party or any DevCo on which any Building is located, the Borrower will,
and will cause each other Credit Party and DevCo to, obtain flood insurance in
such total amount as the applicable Flood Insurance Regulations may require, if
at any time such “Building” is located on any such real Property in a special
flood hazard area, and otherwise comply with Flood Insurance Regulations.

Section 8.08 Books and Records; Inspection Rights. The Parent, OP LLC and the
Borrower will, and will cause each Subsidiary and DevCo to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Parent, OP LLC and the Borrower will, and will cause each Subsidiary and DevCo
to, permit any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice, to visit and inspect its Properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.

Section 8.09 Compliance with Laws. The Parent, OP LLC and the Borrower will, and
will cause each Subsidiary and DevCo to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
Property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

85

--------------------------------------------------------------------------------

Section 8.10 Environmental Matters.

(a) The Parent, OP LLC and the Borrower shall at their sole expense: (i) comply,
and shall cause its Properties and operations and each Subsidiary and each DevCo
and each Subsidiary’s and each DevCo’s Properties and operations to comply, with
all applicable Environmental Laws, the breach of which could be reasonably
expected to have a Material Adverse Effect; (ii) not dispose of or otherwise
release, and shall cause each Subsidiary and DevCo not to dispose of or
otherwise release, any oil, oil and gas waste, hazardous substance, or solid
waste on, under, about or from any of the Borrower’s or its Subsidiaries’ or the
DevCos’ Properties or any other Property to the extent caused by the Borrower’s
or any of its Subsidiaries’ or any DevCo’s operations except in compliance with
applicable Environmental Laws, the disposal or release of which could reasonably
be expected to have a Material Adverse Effect; (iii) timely obtain or file, and
shall cause each Subsidiary to timely obtain or file, all notices, permits,
licenses, exemptions, approvals, registrations or other authorizations, if any,
required under applicable Environmental Laws to be obtained or filed in
connection with the operation or use of the Borrower’s or the Subsidiaries’
Properties, which failure to obtain or file could reasonably be expected to have
a Material Adverse Effect; (iv) promptly commence and diligently prosecute to
completion, and shall cause each Subsidiary and DevCo to promptly commence and
diligently prosecute to completion, any assessment, evaluation, investigation,
monitoring, containment, cleanup, removal, repair, restoration, remediation or
other remedial obligations (collectively, the “Remedial Work”) in the event any
Remedial Work is required or reasonably necessary under applicable Environmental
Laws and industry practice because of or in connection with the actual or
suspected past, present or future disposal or other release of any oil, oil and
gas waste, hazardous substance or solid waste on, under, about or from any of
the Borrower’s or the Subsidiaries’ or the DevCos’ Properties, which failure to
commence and diligently prosecute to completion could reasonably be expected to
have a Material Adverse Effect; and (v) establish and implement, and shall cause
each Subsidiary and DevCo to establish and implement, such policies of
environmental audit and compliance as may be necessary to determine and assure
that the Borrower’s and the Subsidiaries’ and the DevCos’ obligations under
this Section 8.10(a) are timely and fully satisfied, which failure to establish
and implement could reasonably be expected to have a Material Adverse Effect.

(b) The Parent, OP LLC and the Borrower will promptly, but in no event later
than five days after the Borrower’s knowledge of the occurrence of a triggering
event, notify the Administrative Agent and the Lenders in writing of any
threatened action, investigation or inquiry by any Governmental Authority or any
threatened demand or lawsuit by any landowner or other third party against the
Borrower or the Subsidiaries or the DevCos or their respective Properties of
which the Borrower has knowledge in connection with any Environmental Laws
(excluding routine testing and corrective action) if the Borrower reasonably
anticipates that such action will result in liability (whether individually or
in the aggregate) in excess of $2,500,000, not fully covered by insurance,
subject to normal deductibles.

(c) The Parent, OP LLC and the Borrower will, and will cause each Subsidiary to,
provide environmental audits and tests in accordance with American Society of
Testing Materials standards upon reasonable request by the Administrative Agent
and the Lenders and no more than once per year in the absence of any Event of
Default (or as otherwise required to be obtained by the Administrative Agent or
the Lenders by any Governmental Authority), in connection with any future
acquisitions of Oil and Gas Properties or other Properties.

 

86

--------------------------------------------------------------------------------

Section 8.11 Further Assurances.

(a) The Parent, OP LLC and the Borrower at their sole expense will, and will
cause each Subsidiary and DevCo to, promptly execute and deliver to the
Administrative Agent all such other documents, agreements and instruments
reasonably requested by the Administrative Agent to comply with, cure any
defects or accomplish the conditions precedent, covenants and agreements of the
Parent, OP LLC, the Borrower, any Subsidiary or any DevCo, as the case may be,
in the Loan Documents, including the Notes, or to further evidence and more
fully describe the collateral intended as security for the Indebtedness, or to
correct any omissions in this Agreement or the Security Instruments, or to state
more fully the obligations secured therein, or to perfect, protect or preserve
any Liens created pursuant to this Agreement or any of the Security Instruments
or the priority thereof, or to make any recordings, file any notices or obtain
any consents, all as may be reasonably necessary or appropriate, in the sole
discretion of the Administrative Agent, in connection therewith.

(b) The Parent, OP LLC and the Borrower hereby authorizes the Administrative
Agent to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
the Borrower or any other Guarantor or any DevCo where permitted by law. A
carbon, photographic or other reproduction of the Security Instruments or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. The Parent, OP LLC
and the Borrower acknowledge and agree that any such financing statement may
describe the collateral as “all assets” of the applicable Credit Party or
applicable DevCo or words of similar effect as may be required by the
Administrative Agent

Section 8.12 Reserve Reports.

(a) On or before March 1st and September 1st of each year, commencing
September 1, 2013, the Borrower shall furnish to the Administrative Agent and
the Lenders a Reserve Report evaluating the Oil and Gas Properties of the
Borrower and its Subsidiaries as of the immediately preceding January 1 and
July 1. The Reserve Report as of January 1 of each year shall be comprised of
(i) a report prepared by one or more Approved Petroleum Engineers with regards
to not less than 80% of the total value of the Oil and Gas Properties of the
Borrower and its Subsidiaries and (ii) a report on the remainder of the Oil and
Gas Properties of the Borrower and its Subsidiaries prepared by or under the
supervision of the chief engineer of the Borrower who shall certify that such
portion of such Reserve Report (x) is true and correct in all material respects,
and (y) has been prepared in accordance with the procedures used to prepare the
portion of such Reserve Report that was prepared by one or more Approved
Petroleum Engineers. The July 1 Reserve Report of each year shall be prepared by
or under the supervision of the chief engineer of the Borrower who shall certify
such Reserve Report (x) to be true and accurate in all material respects and
(y) to have been prepared in accordance with the procedures used in the
immediately preceding January 1 Reserve Report. For purposes of
this Section 8.12(a), with respect to any Reserve Report (or portion thereof)

 

87

--------------------------------------------------------------------------------

prepared by or under the supervision of the chief engineer of the Borrower, it
is understood that projections concerning volumes attributable to the Oil and
Gas Properties and production and cost estimates contained in each Reserve
Report are necessarily based upon professional opinions, estimates and
projections and that none of the Parent, OP LLC, the Borrower, the Subsidiaries
or such Responsible Officer warrants that such opinions, estimates and
projections will ultimately prove to have been accurate.

(b) In the event of an Interim Redetermination, the Borrower shall furnish to
the Administrative Agent and the Lenders a Reserve Report prepared by or under
the supervision of the chief engineer of the Borrower who shall certify such
Reserve Report to be true and accurate in all material respects, it being
understood that projections concerning volumes attributable to the Oil and Gas
Properties and production and cost estimates contained in each Reserve Report
are necessarily based upon professional opinions, estimates and projections and
that none of the Parent, OP LLC, the Borrower, the Subsidiaries or such
Responsible Officer warrants that such opinions, estimates and projections will
ultimately prove to have been accurate, and to have been prepared in accordance
with the procedures used in the immediately preceding January 1 Reserve Report.
For any Interim Redetermination requested by the Administrative Agent or the
Borrower pursuant to Section 2.07(b), the Borrower shall provide such Reserve
Report with an “as of” date as required by the Administrative Agent as soon as
possible, but in any event no later than thirty (30) days following the receipt
of such request.

(c) No later than (x) March 15 in the case of the Reserve Report required to be
delivered on or prior to March 1, (y) September 15 in the case of the Reserve
Report required to be delivered on or prior to September 1 and (z) fifteen days
after any Reserve Report delivered pursuant to Section 8.12(b), the Borrower
shall provide to the Administrative Agent and the Lenders a certificate from a
Responsible Officer certifying that: (i) the information contained in the
Reserve Report and any other information delivered in connection therewith is
true and correct in all material respects, it being understood that projections
concerning volumes attributable to the Oil and Gas Properties and production and
cost estimates contained in each Reserve Report are necessarily based upon
professional opinions, estimates and projections and that none the Parent, OP
LLC, the Borrower, the Subsidiaries or such Responsible Officer warrants that
such opinions, estimates and projections will ultimately prove to have been
accurate, (ii) the Borrower or the Subsidiaries owns good and defensible title
to the Oil and Gas Properties evaluated in such Reserve Report and such
Properties are free of all Liens except for Liens permitted by Section 9.03,
(iii) except as set forth on an exhibit to the certificate, on a net basis there
are no gas imbalances, take or pay or other prepayments in excess of the volume
specified in Section 7.18 with respect to its Oil and Gas Properties evaluated
in such Reserve Report which would require the Borrower or any Subsidiary to
deliver Hydrocarbons either generally or produced from such Oil and Gas
Properties at some future time without then or thereafter receiving full payment
therefor, (iv) none of their Oil and Gas Properties (as defined in subsections
(a), (b), (c), (d) and (e) of the definition thereof) have been sold since the
date of the last Borrowing Base determination except as set forth on an exhibit
to the certificate, which certificate shall list all of its Oil and Gas
Properties (as defined in subsections (a), (b), (c), (d) and (e) of the
definition thereof) sold and in such detail as reasonably required by the
Administrative Agent; provided that, this clause (iv) shall not apply to the
sale of oil that would not otherwise be included in such

 

88

--------------------------------------------------------------------------------

certificate but for the fact that it has been stored in tanks in the ordinary
course of business for a short period of time pending collection and sale,
(v) attached to the certificate is a list of all marketing agreements entered
into subsequent to the later of the date hereof or the most recently delivered
Reserve Report which the Borrower could reasonably be expected to have been
obligated to list on Schedule 7.19 had such agreement been in effect on the date
hereof and (vi) attached thereto is a schedule of the Oil and Gas Properties
evaluated by such Reserve Report that are Mortgaged Properties and demonstrating
the percentage of the total proved value of such Mortgaged Properties represent
in compliance with Section 8.14(a).

Section 8.13 Title Information.

(a) On or before the delivery to the Administrative Agent and the Lenders of
each Reserve Report required by Section 8.12(a), the Borrower will deliver title
information in form and substance reasonably acceptable to the Administrative
Agent covering enough of the Oil and Gas Properties evaluated by such Reserve
Report that were not included in the immediately preceding Reserve Report, so
that the Administrative Agent shall have received together with title
information previously delivered to the Administrative Agent, reasonably
satisfactory title information on at least 80% of the total value of the Oil and
Gas Properties evaluated by such Reserve Report.

(b) If the Borrower has provided title information for additional Properties
under Section 8.13(a), the Borrower shall, within 60 days of notice from the
Administrative Agent that title defects or exceptions exist with respect to such
additional Properties, either (i) cure any such title defects or exceptions
(including defects or exceptions as to priority) which are not permitted
by Section 9.03 raised by such information, (ii) substitute acceptable Mortgaged
Properties with no title defects or exceptions except for Excepted Liens (other
than Excepted Liens described in clauses (e), (g) and (h) of such definition)
having an equivalent value or (iii) deliver title information in form and
substance reasonably acceptable to the Administrative Agent so that the
Administrative Agent shall have received, together with title information
previously delivered to the Administrative Agent, reasonably satisfactory title
information on at least 80% of the value of the Oil and Gas Properties evaluated
by such Reserve Report.

(c) If the Borrower is unable to cure any title defect requested by the
Administrative Agent or the Lenders to be cured within the 60-day period or the
Borrower does not comply with the requirements to provide reasonably acceptable
title information covering 80% of the value of the Oil and Gas Properties
evaluated in the most recent Reserve Report, such default shall not be a
Default, but instead the Administrative Agent and/or the Required Lenders shall
have the right to exercise the following remedy in their sole discretion from
time to time, and any failure to so exercise this remedy at any time shall not
be a waiver as to future exercise of the remedy by the Administrative Agent or
the Lenders. To the extent that the Administrative Agent or the Required Lenders
are not reasonably satisfied with title to any Mortgaged Property after the
60-day period has elapsed, such unacceptable Mortgaged Property shall not count
towards the 80% requirement, and the Administrative Agent may send a notice to
the Borrower and the Lenders that the then outstanding Borrowing Base shall be
reduced by an amount as determined by the Required Lenders to cause the Borrower
to be in compliance with the requirement to provide reasonably acceptable title
information on 80% of the value of the Oil and Gas Properties. This new
Borrowing Base shall become effective immediately after receipt of such notice.

 

89

--------------------------------------------------------------------------------

Section 8.14 Additional Collateral; Additional Guarantors.

(a) In connection with each redetermination of the Borrowing Base, the Borrower
shall review the Reserve Report and the list of current Mortgaged Properties (as
described in Section 8.12(c)(vi)) to ascertain whether the Mortgaged Properties
represent at least 90% of the total value of the Oil and Gas Properties
evaluated in the most recently completed Reserve Report after giving effect to
exploration and production activities, acquisitions, dispositions and
production. In the event that the Mortgaged Properties do not represent at least
90% of such total value, then the Borrower shall, and shall cause the
Subsidiaries to, grant, within thirty (30) days of delivery of the certificate
required under Section 8.12(c), to the Administrative Agent as security for the
Indebtedness a first-priority Lien interest (provided that Excepted Liens of the
type described in clauses (a) to (d) and (f) of the definition thereof may
exist, but subject to the provisos at the end of such definition) on additional
Oil and Gas Properties of the Credit Parties not already subject to a Lien of
the Security Instruments such that after giving effect thereto, the Mortgaged
Properties will represent at least 90% of such total value; provided that
notwithstanding the foregoing, until the date that is thirty (30) days following
the Fifth Amendment Effective Date (or such later date as the Administrative
Agent may agree in its sole discretion), the Mortgaged Properties shall only
need to represent 80% of the total value of the Oil and Gas Properties evaluated
in the most recently completed Reserve Report. All such Liens will be created
and perfected by and in accordance with the provisions of deeds of trust,
security agreements and financing statements or other Security Instruments, all
in form and substance reasonably satisfactory to the Administrative Agent and in
sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes. In order to comply with the foregoing, if
any Subsidiary places a Lien on its Oil and Gas Properties and such Subsidiary
is not a Guarantor, then it shall become a Guarantor and comply
with Section 8.14(b).

(b) The Parent, OP LLC and the Borrower shall promptly cause each Material
Subsidiary, and any other Domestic Subsidiary that guarantees any Debt of any
other Credit Party, to guarantee the Indebtedness pursuant to the Guaranty and
Security Agreement. In connection with any such guaranty, the Parent, OP LLC and
the Borrower shall (A) cause such Domestic Subsidiary to execute and deliver the
Guaranty and Security Agreement or a supplement thereto, as applicable,
(B) cause the Credit Party that owns Equity Interests in such Domestic
Subsidiary to pledge all of the Equity Interests of such new Domestic Subsidiary
owned by such Credit Party pursuant to the Guaranty and Security Agreement
(including, without limitation, delivery (if applicable) of original
certificates evidencing the Equity Interests of such Domestic Subsidiary,
together with an appropriate undated stock powers for each certificate duly
executed in blank by the registered owner thereof) and (C) execute and deliver
such other additional closing documents, certificates and legal opinions as
shall reasonably be requested by the Administrative Agent.

 

90

--------------------------------------------------------------------------------

(c) In the event that the Borrower or any Material Subsidiary becomes the owner
of a Foreign Subsidiary which has total assets in excess of $1,000,000, then the
Borrower shall promptly, or shall cause such Material Subsidiary to promptly,
pledge 65% of all the Equity Interests of such Foreign Subsidiary (including,
without limitation, delivery of original stock certificates evidencing such
Equity Interests of such Foreign Subsidiary, together with appropriate stock
powers for each certificate duly executed in blank by the registered owner
thereof) and execute and deliver such other additional closing documents,
certificates and legal opinions as shall reasonably be requested by the
Administrative Agent.

(d) If any Event of Default shall occur and be continuing, then the Parent, OP
LLC and the Borrower shall, and shall cause each Domestic Subsidiary of either
thereof to, within ten (10) Business Days after notice by Administrative Agent,
grant to the Administrative Agent as security for the Indebtedness a
first-priority Lien interest (provided that Excepted Liens of the type described
in clauses (a) to (d) and (f) of the definition thereof may exist, but subject
to the provisos at the end of such definition) on all of their Oil and Gas
Properties not already subject to a Lien of the Security Instruments such that
after giving effect thereto, the Mortgaged Properties will represent
substantially all of the Oil and Gas Properties of the Borrower and the Domestic
Subsidiaries. All such Liens will be created and perfected by and in accordance
with the provisions of deeds of trust, security agreements and financing
statements or other Security Instruments, all in form and substance reasonably
satisfactory to the Administrative Agent and in sufficiently executed (and
acknowledged where necessary or appropriate) counterparts for recording
purposes.

(e) Notwithstanding any provision in any of the Loan Documents to the contrary
(except for the DevCo Mortgages), in no event is any Building (as defined in the
applicable Flood Insurance Regulations) or Manufactured (Mobile) Home (as
defined in the applicable Flood Insurance Regulations) owned by any Credit Party
included in the Mortgaged Property and no Building or Manufactured (Mobile) Home
shall be encumbered by any Security Instrument; provided, that (i) the
applicable Credit Party’s interests in all lands and Hydrocarbons situated under
any such Building or Manufactured (Mobile) Home shall be included in the
Mortgaged Property and shall be encumbered by the Security Instruments and
(ii) the Parent, OP LLC and the Borrower shall not, and shall not permit any of
their respective Subsidiaries to, permit to exist any Lien on any Building or
Manufactured (Mobile) Home except Excepted Liens. For the avoidance of doubt,
the exclusion contained in this Section 8.14(e) shall not apply to the DevCo
Mortgages.

(f) The Parent, OP LLC and the Borrower shall promptly cause each DevCo to
guarantee the Indebtedness pursuant to the DevCo Guaranty. In connection with
any such guaranty, the Parent, OP LLC and the Borrower shall (i) cause such
DevCo to execute and deliver a DevCo Mortgage, (ii) cause the Credit Party that
owns Equity Interests in such DevCo to pledge all of the Equity Interests of
such DevCo pursuant to the Guaranty and Security Agreement (including, without
limitation, delivery (if applicable) of original certificates evidencing the
Equity Interests of such DevCo, together with an appropriate undated stock
powers for each certificate duly executed in blank by the registered owner
thereof) and (iii) execute and deliver such other additional closing documents,
certificates and legal opinions as shall reasonably be requested by the
Administrative Agent. The Parent, OP LLC and the Borrower shall, and shall cause
each DevCo to, in connection with but reasonably prior to its delivery of
additional Security Instruments pursuant to this Section 8.14(f), provide to the
Administrative Agent the applicable Flood Deliverables with respect to any real
property that will be subject to such additional Security Instruments.

 

91

--------------------------------------------------------------------------------

(g) Within thirty (30) days (or such longer period not to exceed ninety
(90) days as the Administrative Agent may agree in its sole discretion)
after each semi-annual period ending on June 30 or December 31, beginning with
the period beginning on the date hereof and ending on December 31, 2017, the
Parent, OP LLC and the Borrower shall cause the DevCos to provide to the
Administrative Agent, without duplication, copies of all recorded Deeds and/or
Rights of Way with respect to its Midstream Properties that have been received
or otherwise acquired by any DevCo during such period, and to execute and
deliver mortgages or other applicable Security Instruments on such Midstream
Properties, Deeds and/or Rights of Way in favor of the Administrative Agent, in
each case in form and substance satisfactory to the Administrative Agent. In
connection with the foregoing, to the extent reasonably requested by the
Administrative Agent, the Borrower shall deliver, or shall cause to be
delivered, (x) title and extended coverage insurance covering real property
subject to the additional Security Instruments in an amount equal to the
purchase price of such interest in real property (or such other amount as shall
be reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor’s certificate, (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Security Instruments, each of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent and (z) legal
opinions, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.

Section 8.15 ERISA Compliance. The Parent, OP LLC and the Borrower will promptly
furnish and will cause their respective Subsidiaries and any ERISA Affiliate to
promptly furnish to the Administrative Agent (a) promptly after the filing
thereof with the United States Secretary of Labor or the Internal Revenue
Service, copies of each annual and other report with respect to each Plan or any
trust created thereunder, and (b) immediately upon becoming aware of the
occurrence of any “prohibited transaction,” as described in section 406 of ERISA
or in section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by the President or the principal Financial
Officer, the Parent, the Subsidiary or the ERISA Affiliate, as the case may be,
specifying the nature thereof, what action the Borrower, the Parent, OP LLC, the
Subsidiary or the ERISA Affiliate is taking or proposes to take with respect
thereto, and, when known, any action taken or proposed by the Internal Revenue
Service or the Department of Labor with respect thereto.

Section 8.16 DevCo Properties. The Parent, OP LLC and the Borrower will cause
each DevCo to:

(a) operate its Midstream Properties and other material Properties or cause such
Midstream and other material Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance with
all Governmental Requirements, including, without limitation, applicable
proration requirements and Environmental Laws, and all applicable laws, rules
and regulations of every other Governmental Authority, except, in each case,
where the failure to comply could not reasonably be expected to have a Material
Adverse Effect.

(b) keep and maintain all Property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted, and preserve,
maintain and keep in good repair, working order and efficiency (ordinary wear
and tear excepted) all of its material Midstream Properties and other material
Properties, including, without limitation, all equipment, machinery and
facilities, except where failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

92

--------------------------------------------------------------------------------

(c) promptly perform or make reasonable and customary efforts to cause to be
performed, in accordance with industry standards, the obligations required by
each and all of the assignments, deeds, leases, sub-leases, contracts and
agreements affecting its interests in its Midstream Properties and other
material Properties, except, in each case, where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

(d) maintain or cause the maintenance of the interests and rights (i) which are
necessary to maintain the Rights of Way for the Gathering Systems and to
maintain the other Midstream Properties, and (ii) which individually or in the
aggregate, could, if not maintained, reasonably be expected to have a Material
Adverse Effect.

(e) subject to Excepted Liens, maintain the Gathering Systems within the
confines of the Rights of Way without material encroachment upon any adjoining
property and maintain the Processing Plants within the boundaries of the Deeds
and without material encroachment upon any adjoining property.

(f) maintain such rights of ingress and egress necessary to permit the DevCos to
inspect, operate, repair, and maintain the Gathering Systems and the other
Midstream Properties to the extent that failure to maintain such rights,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect and provided that the DevCos may hire third parties to
perform these functions.

(g) maintain all material agreements, licenses, permits, and other rights
required for any of the foregoing described in this Section 8.16 in full force
and effect in accordance with their terms, timely make any payments due
thereunder, and prevent any default thereunder which could result in a
termination or loss thereof, except any such failure to pay or default that
could not reasonably, individually or in the aggregate, be expected to cause a
Material Adverse Effect.

(h) to the extent any DevCo is not the operator of any Property, such DevCo
shall use commercially reasonable efforts to cause the operator to comply with
this Section 8.16, but failure of the operator to so comply will not constitute
a Default or Event of Default hereunder.

Section 8.17 Marketing Activities. The Parent, OP LLC and the Borrower will not,
and will not permit any Subsidiaries to, engage in marketing activities for any
Hydrocarbons or enter into any contracts related thereto other than
(a) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to
be produced from their proved Oil and Gas Properties during the period of such
contract, (b) contracts for the sale of Hydrocarbons scheduled or reasonably
estimated to be produced from proved Oil and Gas Properties of third parties
during the period of such contract associated with the Oil and Gas Properties of
the Borrower and the Subsidiaries that the Borrower or one of the Subsidiaries
has the right to market pursuant to joint operating agreements, unitization
agreements or other similar contracts that are usual and customary in the

 

93

--------------------------------------------------------------------------------

oil and gas business and (c) other contracts for the purchase and/or sale of
Hydrocarbons of third parties (i) which have generally offsetting provisions
(i.e., corresponding pricing mechanics, delivery dates and points and volumes)
such that no “position” is taken and (ii) for which appropriate credit support
has been taken to alleviate the material credit risks of the counterparty
thereto.

Section 8.18 Commodity Exchange Act Keepwell Provisions. Each of the Parent, OP
LLC and the Borrower, to the extent that it is a Qualified ECP Guarantor, hereby
guarantees the payment and performance of all Indebtedness of each Credit Party
(other than itself) and absolutely, unconditionally and irrevocably undertakes
to provide such funds or other support as may be needed from time to time by
each Credit Party (other than itself) in order for such Credit Party to honor
its obligations under the Guaranty and Security Agreement including obligations
with respect to Swap Agreements (provided, however, that the Parent, OP LLC and
the Borrower, to the extent each is a Qualified ECP Guarantor, shall only be
liable under this Section 8.18 for the maximum amount of such liability that can
be hereby incurred (a) without rendering its obligations under
this Section 8.18, or otherwise under this Agreement or any Loan Document, as it
relates to such other Credit Parties, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount and
(b) without rendering such Credit Party liable for amounts to creditors, other
than the Secured Parties, that such Credit Party would not otherwise have made
available to such creditors if this Section 8.18 was not in effect). The
obligations of the Parent, OP LLC and the Borrower, to the extent each is a
Qualified ECP Guarantor, under this Section 8.18 shall remain in full force and
effect until all Indebtedness is paid in full to the Lenders, the Administrative
Agent and all other Secured Parties, and all of the Lenders’ Commitments are
terminated. Each of the Parent, OP LLC and the Borrower that is a Qualified ECP
Guarantor intends that this Section 8.18 constitute, and this Section 8.18 shall
be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II)
of the Commodity Exchange Act.

Section 8.19 DevCo Guaranty. Each of the Parent, OP LLC and the Borrower shall
cause each DevCo to comply with the covenants contained in the DevCo Guaranty.

Section 8.20 Ownership of DevCo Equity Interests. The Parent, OP LLC and the
Borrower (a) shall cause 100% of the Equity Interests in each DevCo to be owned
collectively (i) directly by OMS and (ii) directly or indirectly by OMP and
(b) shall not permit any other Person to own any Equity Interest in any DevCo.

Section 8.21 Ownership of General Partner Equity Interests. The Parent, OP LLC
and the Borrower (a) shall cause 100% of the Equity Interests in the General
Partner (other than the Class B Units) to be owned directly or indirectly by the
Parent and (b) shall not permit any other Person to own any Equity Interest in
the General Partner (other than the Class B Units).

 

94

--------------------------------------------------------------------------------

ARTICLE IX

Negative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, each of the Parent, OP LLC and the Borrower covenants and agrees
with the Lenders that:

Section 9.01 Financial Covenants.

(a) Ratio of EBITDAX to Interest Expense. The Parent, OP LLC and the Borrower
will not, as of the last day of any fiscal quarter, permit the ratio of
(i) EBITDAX for the four fiscal quarter period ending on such date to
(ii) Interest Expense for the four fiscal quarter period ending on such date to
be less than 2.5 to 1.0.

(b) Current Ratio. The Parent, OP LLC and the Borrower will not permit, as of
the last day of any fiscal quarter, the ratio of (i) consolidated current assets
(including the unused amount of the total Commitments, but excluding non-cash
assets under ASC 815) of the Parent and the Consolidated Subsidiaries to
(ii) consolidated current liabilities (excluding non-cash obligations under ASC
815 and current maturities under this Agreement) of the Parent and the
Consolidated Subsidiaries to be less than 1.0 to 1.0.

(c) Ratio of Total Debt to EBITDAX. The Parent, OP LLC and the Borrower will
not, as of the last day of any fiscal quarter commencing with the first full
fiscal quarter ending after the Trigger Date, permit the ratio of Total Debt as
of such time to Annualized EBITDAX to be greater than (i) 4.25 to 1.0 for the
first two full fiscal quarters ending after the Trigger Date and (ii) 4.00 to
1.00 for each fiscal quarter thereafter.

Section 9.02 Debt. The Parent, OP LLC, the Borrower will not, and will not
permit any of their respective Subsidiaries to, incur, create, assume or suffer
to exist any Debt, except:

(a) the Notes or other Indebtedness arising under the Loan Documents or any
guaranty of or suretyship arrangement for the Notes or other Indebtedness
arising under the Loan Documents.

(b) Debt of the Borrower and the Subsidiaries existing on the date hereof that
is reflected in the Financial Statements.

(c) accounts payable and accrued expenses, liabilities or other obligations to
pay the deferred purchase price of Property or services, from time to time
incurred in the ordinary course of business which are not greater than sixty
(60) days past the date of invoice or delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP.

(d) Debt under Capital Leases not to exceed $10,000,000.

(e) Debt associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of the Oil and Gas Properties.

(f) intercompany Debt between the Parent, OP LLC, the Borrower and any
Subsidiary or between Subsidiaries to the extent permitted by Section 9.05(g);
provided that (i) such Debt is not held, assigned, transferred, negotiated or
pledged to any Person other than

 

95

--------------------------------------------------------------------------------

the Parent, OP LLC, the Borrower or one of its Wholly-Owned Subsidiaries,
(ii) any such Debt owed by the Parent, OP LLC, the Borrower or a Guarantor shall
be subordinated to the Indebtedness on terms set forth in the Guaranty and
Security Agreement and (iii) any such Debt shall not have any scheduled
amortization prior to August 5, 2018.

(g) endorsements of negotiable instruments for collection in the ordinary course
of business.

(h) other Debt (excluding Debt of Foreign Subsidiaries) not to exceed
$10,000,000 in the aggregate at any one time outstanding.

(i) Debt of Foreign Subsidiaries to non-Affiliated Persons that is not secured
by liens on any property of, not guaranteed by and not other otherwise of
recourse to the Borrower or any Guarantor.

(j) unsecured Senior Notes of the Parent and any guarantees thereof and any
unsecured Permitted Refinancing Debt and any guarantees thereof; provided that
(i) the Borrower shall have complied with Section 8.01(r), (ii) at the time of
incurring such Senior Notes or Permitted Refinancing Debt (A) no Default has
occurred and is then continuing and (B) no Default would result from the
incurrence of such Senior Notes or Permitted Refinancing Debt, as applicable,
after giving effect on a pro forma basis to the incurrence of such Senior Notes
or Permitted Refinancing Debt (and any concurrent repayment of Debt with the
proceeds of such incurrence, if any), (iii) on the same day as the incurrence of
such Debt (or in the case of Permitted Refinancing Debt, on the Reduction Date),
the Borrowing Base shall be adjusted to the extent required by Section 2.07(e)
and prepayment is made to the extent required by Section 3.04(c)(iv) and no
Borrowing Base Deficiency would then exist after giving effect to such
adjustment and prepayment, (iv) such Senior Notes or Permitted Refinancing Debt,
as applicable, do not have any scheduled principal amortization prior to the
date which is one year after the Maturity Date, (v) such Senior Notes or
Permitted Refinancing Debt does not mature sooner than the date which is one
year after the Maturity Date, (vi) such Senior Notes or Permitted Refinancing
Debt and any guarantees thereof are on terms, taken as a whole, at least as
favorable to the Borrower and the Guarantors as market terms for issuers of
similar size and credit quality given the then prevailing market conditions as
determined by the Administrative Agent and (vii) such Senior Notes or Permitted
Refinancing Debt do not have any mandatory prepayment or redemption provisions
(other than customary change of control or asset sale tender offer provisions)
which would require a mandatory prepayment or redemption in priority to the
Indebtedness; provided that if such Senior Notes are issued to finance all or a
portion of a direct or indirect acquisition of Oil and Gas Properties, such
Senior Notes may contain mandatory prepayment or redemption provisions providing
for the repayment or redemption of such Senior Notes in the event that such
acquisition is not consummated by a certain date in an amount not to exceed the
principal amount of such Senior Notes and any accrued interest thereon through
the prepayment or redemption date.

Section 9.03 Liens. The Parent, OP LLC and the Borrower will not, and will not
permit any of their respective Subsidiaries to, create, incur, assume or permit
to exist any Lien on any of its Properties (now owned or hereafter acquired),
except:

 

96

--------------------------------------------------------------------------------

(a) Liens securing the payment of any Indebtedness.

(b) Excepted Liens.

(c) Liens securing Capital Leases permitted by Section 9.02(d) but only on the
Property under lease.

(d) Liens securing intercompany Debt under Section 9.02(f), provided that such
Liens are subordinated on terms satisfactory to the Administrative Agent and the
Required Lenders.

(e) Liens on Property not constituting collateral for the Indebtedness and not
otherwise permitted by the foregoing clauses of this Section 9.03; provided that
the aggregate principal or face amount of all Debt secured under
this Section 9.03(e) shall not exceed $2,500,000 at any time.

Section 9.04 Dividends, Distributions and Redemptions; Repayment of Senior Notes
and Amendment to Terms of Senior Notes.

(a) Restricted Payments. The Parent, OP LLC and the Borrower will not, and will
not permit any of their respective Subsidiaries to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, return any capital
or make any distribution of its Property to its Equity Interest holders, except
(i) the Parent and OP LLC may declare and pay dividends with respect to its
Equity Interests payable solely in additional shares of its Equity Interests
(other than Disqualified Capital Stock), (ii) Subsidiaries (other than the
General Partner) of the Parent may declare and pay dividends ratably with
respect to their Equity Interests, (iii) the Parent and OP LLC may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Borrower and its
Subsidiaries, (iv) the Parent, OP LLC and the Borrower may make payments to
former employees in connection with the termination of such former employee’s
employment in an aggregate amount not to exceed $250,000 in any calendar year
for the purpose of repurchasing Equity Interests in any member of the Parent, OP
LLC or the Borrower, as applicable, issued to such former employee pursuant to
stock option plans or other benefit plans for management or employees of the
Borrower and its Subsidiaries, (v) the Parent may pay the purchase price for any
Permitted Bond Hedge Transaction(s), (vi) the Parent may pay cash and/or deliver
common stock upon the settlement, termination or redemption of any Permitted
Warrant Transaction(s), (vii) the Parent may pay cash and/or deliver common
stock in satisfaction of the Parent’s obligations in respect of the Convertible
Notes whether upon conversion of such securities, upon the occurrence of a
change of control (or similar event, however so defined by the terms of such
securities) or other customary mandatory prepayment or redemption event
permitted by Section 9.02(j)(vii), upon repurchase of such securities pursuant
to a Redemption thereof otherwise permitted by this Agreement or at maturity of
such securities, (viii) the General Partner may declare and make Restricted
Payments to any other Credit Party and (ix) so long has no Default, Event of
Default or Borrowing Base Deficency has occurred and is continuting, the General
Partner may declare and make Restricted Payments in cash ratably with respect to
all of its Equity Interests (inclusive of the Class A Units (as defined in the
General Partners LLC Agreement) and the Class B Units).

 

97

--------------------------------------------------------------------------------

(b) Repayment of Senior Notes, Permitted Refinancing Debt and Convertible Notes;
Amendment to Terms of Senior Notes, Permitted Refinancing Debt and Convertible
Notes. The Parent, OP LLC and the Borrower will not, and will not permit any of
their respective Subsidiaries to, prior to the date that is ninety-one (91) days
after the Maturity Date: (i) call, make or offer to make any optional or
voluntary Redemption of or otherwise optionally or voluntarily Redeem (whether
in whole or in part) the Senior Notes, Permitted Refinancing Debt or the
Convertible Notes; provided that (A) the Parent may Redeem the Senior Notes,
Permitted Refinancing Debt or Convertible Notes in one or more transactions in
an aggregate amount not to exceed the net cash proceeds of any sale of Equity
Interests (other than Disqualified Capital Stock) of the Parent to the extent
that (x) such Redemption is consummated within 180 days of the consummation of
such sale of Equity Interest (or, with respect to any Equity Interests sold
pursuant to that certain Underwriting Agreement dated as of January 28, 2016,
between the Parent and Citigroup Global Markets Inc., within 270 days of such
sale) and (y) after giving pro forma effect to such Redemption, no Default,
Event of Default or Borrowing Base Deficiency shall have occurred and be
continuing, (B) the Parent may Redeem the Senior Notes, Permitted Refinancing
Debt or Convertible Notes in one more transactions to the extent that (x) the
Specified Redemption Test is satisfied at the time of such Redemption, (y) the
amount paid in respect of any Senior Note, Permitted Refinancing Debt or
Convertible Note does not exceed 60% of the stated principal amount of such
Senior Note and (z) the aggregate cash consideration paid by the Parent in
respect of all Redemptions of Senior Notes, Permitted Refinancing Debt or
Convertible Note pursuant to this Section 9.04(b)(i)(B) shall not exceed
$175,000,000, (C) the Parent may Redeem the Senior Notes or Permitted
Refinancing Debt with the proceeds of any Permitted Refinancing Debt
substantially concurrently with the incurrence of such Permitted Refinancing
Debt, provided that in the case of Permitted Refinancing Debt incurred pursuant
to a Qualified Convertible Notes Offering, such Redemption must be consummated
within ninety days of the incurrence of such Permitted Refinancing Debt, and
(D) the Parent may Redeem the 2019 Notes with the proceeds received by the
Credit Parties from the Midstream MLP Contribution provided that (x) such
Redemption must occur within one hundred eighty (180) days after the
consummation of the Midstream MLP IPO and (y) after giving pro forma effect to
such Redemption, no Default, Event of Default or Borrowing Base Deficiency shall
have occurred and be continuing, or (ii) amend, modify, waive or otherwise
change, consent or agree to any amendment, modification, waiver or other change
to, any of the terms of the Senior Notes or the Senior Notes Indenture or the
terms of any Permitted Refinancing Debt and the agreements governing any
Permitted Refinancing Debt or the terms of the Convertible Notes or the
Convertible Notes Indenture if (A) the effect thereof would be to shorten its
maturity or average life or increase the amount of any payment of principal
thereof or increase the rate or shorten any period for payment of interest
thereon or (B) such action requires the payment of a consent fee (howsoever
described), provided that the foregoing shall not prohibit the execution of
supplemental indentures associated with the incurrence of additional Senior
Notes or Permitted Refinancing Debt to the extent permitted by Section 9.02(j)
or the execution of supplemental indentures to add guarantors if required by the
terms of any Senior Notes Indenture, any Convertible Notes Indenture or any
agreement governing any Permitted Refinancing Debt provided such Person complies
with Section 8.14(b) or (C) with respect to Senior Notes,

 

98

--------------------------------------------------------------------------------

Convertible Notes or Permitted Refinancing Debt that are subordinated to the
Indebtedness or any other Debt, designate any Debt (other than obligations of
the Borrower and the Subsidiaries pursuant to the Loan Documents) as “Specified
Senior Indebtedness” or “Specified Guarantor Senior Indebtedness” or give any
such other Debt any other similar designation for the purposes of any Senior
Notes Indenture, Convertible Notes Indenture or any agreement governing any
Permitted Refinancing Debt that are subordinated to the Indebtedness or any
other Debt.

Section 9.05 Investments, Loans and Advances. The Parent, OP LLC and the
Borrower will not, and will not permit any of their respective Subsidiaries to,
make or permit to remain outstanding any Investments in or to any Person, except
that the foregoing restriction shall not apply to:

(a) Investments made prior to the Effective Date reflected in the Financial
Statements or which are disclosed to the Lenders in Schedule 9.05.

(b) accounts receivable arising in the ordinary course of business.

(c) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of creation thereof.

(d) commercial paper maturing within one year from the date of creation thereof
rated in the highest grade by S&P or Moody’s.

(e) deposits maturing within one year from the date of creation thereof with,
including certificates of deposit issued by, any Lender or any office located in
the United States of any other bank or trust company which is organized under
the laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000 (as of the date of such bank
or trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time,
by S&P or Moody’s, respectively or, in the case of any Foreign Subsidiary, a
bank organized in a jurisdiction in which the Foreign Subsidiary conducts
operations having assets in excess of $500,000,000 (or its equivalent in another
currency).

(f) deposits in money market funds investing exclusively in Investments
described in Section 9.05(c), Section 9.05(d) or Section 9.05(e).

(g) Investments (i) made by any Credit Party in or to any other Credit Party,
(ii) made by the Borrower or any Subsidiary in or to OP International, provided
that the aggregate of all Investments made by the Borrower and the Guarantors in
or to OP International shall not exceed $10,000,000 at any time, and (iii) made
by the Borrower or any Domestic Subsidiary in or to any Foreign Subsidiary in an
aggregate amount at any one time outstanding not to exceed $50,000,000; provided
that, with respect to this clause (iii), no such Investment shall be made unless
(A) both prior to and after giving effect to such Investment no Default or Event
of Default exists and (B) after giving effect to such Investment the Borrowing
Base then in effect exceeds the total Revolving Credit Exposures by at least an
amount equal to ten percent (10%) of the then current Borrowing Base less cash
then maintained by the Borrower.

 

99

--------------------------------------------------------------------------------

(h) subject to the limits in Section 9.06, Investments (including, without
limitation, capital contributions) in general or limited partnerships or other
types of entities (each a “venture”) entered into by the Borrower or a
Subsidiary with others in the ordinary course of business; provided that (i) any
such venture is engaged exclusively in oil and gas exploration, development,
production, processing and related activities, including transportation,
(ii) the interest in such venture is acquired in the ordinary course of business
and on fair and reasonable terms and (iii) such venture interests acquired and
capital contributions made (valued as of the date such interest was acquired or
the contribution made) do not exceed, in the aggregate at any time outstanding
an amount equal to $10,000,000.

(i) subject to the limits in Section 9.06, Investments in direct ownership
interests in additional Oil and Gas Properties and gas gathering systems related
thereto or related to farm-out, farm-in, participation agreements, joint
operating, joint venture or area of mutual interest agreements, gathering
systems, pipelines or other similar arrangements which are usual and customary
in the oil and gas exploration and production business located within the
geographic boundaries of the United States of America.

(j) loans or advances to employees, officers or directors in the ordinary course
of business of the Borrower or any Subsidiary, in each case only as permitted by
applicable law, including Section 402 of the Sarbanes Oxley Act of 2002, but in
any event not to exceed $500,000 in the aggregate at any time.

(k) Investments in stock, obligations or securities received in settlement of
debts arising from Investments permitted under this Section 9.05 owing to the
Borrower or any Subsidiary as a result of a bankruptcy or other insolvency
proceeding of the obligor in respect of such debts or upon the enforcement of
any Lien in favor of the Borrower or any of its Subsidiaries; provided that the
Borrower shall give the Administrative Agent prompt written notice in the event
that the aggregate amount of all Investments held at any one time under
this Section 9.05(k) exceeds $1,000,000.

(l) other Investments not to exceed $10,000,000 in the aggregate at any time.

(m) guarantees of Debt permitted by Section 9.02(a) or (j).

(n) Investments made by the Credit Parties in any DevCo (other than any
Investment in the form of the purchase of Equity Interests in such DevCo from
OMP or one of its subsidiaries); provided that for any Investment in any DevCo
made after the Ninth Amendment Effective Date (i) no Default, Event of Default
or Borrowing Base Deficiency exists or results therefrom, (ii) such Investments
shall be made solely for the purposes of funding Capital Expenditures of such
DevCo which expenditures the Borrower reasonably expects to be made within
ninety (90) days following the date of such Investment, and (iii) the amount of
any such Investment shall not exceed, at the time made, the product of (A) the
DevCo Ownership Percentage with respect to such DevCo as of the date of such
Investment multiplied by (B) the total amount of such Capital Expenditures
described in the foregoing clause (ii).

 

100

--------------------------------------------------------------------------------

(o) Investments made by the Credit Parties in OMP and its subsidiaries in an
aggregate amount not to exceed $50,000,000 at any time; provided that (i) the
Borrower shall be in pro forma compliance with the covenants contained in
Section 9.01 after giving effect to any such Investment and (ii) after giving
pro forma effect to such Investment, no Default or Event of Default shall have
occurred and be continuing and the current total Revolving Credit Exposures
shall not exceed 85% of the total Commitments (i.e., the least of (x) the
Aggregate Maximum Credit Amounts, (y) the then effective Borrowing Base and
(z) the Aggregate Elected Commitment Amounts) at such time.

(p) Investments in OMP, its subsidiaries or any DevCo made by the Credit Parties
pursuant to any Drop Down Disposition permitted by Section 9.12(f).

(q) to the extent constituting an Investment, Swap Agreements permitted under
Section 9.18 and guarantees thereof.

Section 9.06 Nature of Business; International Operations. The Parent, OP LLC
and the Borrower will not, and will not permit any of their respective
Subsidiaries to, allow any material change to be made in the character of its
business as an independent oil and gas exploration and production company. From
and after the date hereof, the Borrower and the Domestic Subsidiaries will not
acquire or make any other expenditure (whether such expenditure is capital,
operating or otherwise) in or related to, any Oil and Gas Properties not located
within the geographical boundaries of the United States.

Section 9.07 Proceeds of Notes. The Borrower will not permit the proceeds of the
Notes to be used for any purpose other than those permitted by Section 7.21.
Neither the Borrower nor any Person acting on behalf of the Borrower has taken
or will take any action which might cause any of the Loan Documents to violate
Regulations T, U or X or any other regulation of the Board or to violate
Section 7 of the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect. If requested by the Administrative Agent, the Borrower will furnish to
the Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 or such other form referred to
in Regulation U, Regulation T or Regulation X of the Board, as the case may be.

Section 9.08 Limitation on Leases. The Parent, OP LLC and the Borrower will not,
and will not permit any of their respective Subsidiaries to, create, incur,
assume or suffer to exist any obligation for the payment of rent or hire of
Property of any kind whatsoever (real or personal but excluding Capital Leases,
leases of corporate and field office space utilized by the Borrower and its
Subsidiaries in the ordinary course of business and leases of Hydrocarbon
Interests), under leases or lease agreements which would cause the aggregate
amount of all payments made by the Borrower and the Subsidiaries pursuant to all
such leases or lease agreements, including, without limitation, any residual
payments at the end of any lease, to exceed $4,000,000 in any period of twelve
consecutive calendar months during the life of such leases.

 

101

--------------------------------------------------------------------------------

Section 9.09 ERISA Compliance. The Parent, OP LLC and the Borrower will not, and
will not permit any of their respective Subsidiaries to, at any time:

(a) engage in, or permit any ERISA Affiliate to engage in, any transaction in
connection with which the Borrower, a Subsidiary or any ERISA Affiliate could be
subjected to either a material civil penalty assessed pursuant to
subsections (c), (i), (l) or (m) of section 502 of ERISA or a material tax
imposed by Chapter 43 of Subtitle D of the Code.

(b) fail to make, or permit any ERISA Affiliate to fail to make, full payment
when due of all material amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, the Borrower, a Subsidiary or any
ERISA Affiliate is required to pay as contributions thereto.

(c) permit to exist, or allow any ERISA Affiliate to permit to exist, any
accumulated funding deficiency within the meaning of section 302 of ERISA or
section 412 of the Code, whether or not waived, with respect to any Plan.

(d) contribute to or assume an obligation to contribute to, or permit any ERISA
Affiliate to contribute to or assume an obligation to contribute to, (i) any
employee welfare benefit plan, as defined in section 3(1) of ERISA, including,
without limitation, any such plan maintained to provide benefits to former
employees of such entities, that may not be terminated by such entities in their
sole discretion at any time without any material liability or (ii) any employee
pension benefit plan, as defined in section 3(2) of ERISA, that is subject to
Title IV of ERISA, section 302 of ERISA or section 412 of the Code.

Section 9.10 Sale or Discount of Receivables. Except for receivables obtained by
the Borrower or any Subsidiary out of the ordinary course of business or the
settlement of joint interest billing accounts in the ordinary course of business
or discounts granted to settle collection of accounts receivable or the sale of
defaulted accounts arising in the ordinary course of business in connection with
the compromise or collection thereof and not in connection with any financing
transaction, the Parent, OP LLC and the Borrower will not, and will not permit
any of their respective Subsidiaries to, discount or sell (with or without
recourse) any of its notes receivable or accounts receivable.

Section 9.11 Mergers, Etc. The Parent, OP LLC and the Borrower will not, and
will not permit any of their respective Subsidiaries to, merge into or with or
consolidate with any other Person, or sell, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its Property to any other Person, except that (a) any Wholly-Owned
Domestic Subsidiary may merge with any other Wholly-Owned Domestic Subsidiary,
(b) the Parent, OP LLC and/or Borrower may merge with any Wholly-Owned Domestic
Subsidiary so long as the Parent, OP LLC and/or Borrower is the survivor,
(c) any Foreign Subsidiary may merge with any other Foreign Subsidiary; provided
that if one of such Foreign Subsidiaries is a Wholly-Owned Subsidiary, the
survivor shall be a Wholly-Owned Subsidiary, and (d) OP International may merge
with and into any Credit Party so long as such Credit Party is the survivor.

 

102

--------------------------------------------------------------------------------

Section 9.12 Sale of Properties and Liquidation of Swap Agreements. The Parent,
OP LLC and the Borrower will not, and will not permit any of their respective
Subsidiaries to, sell, assign, farm-out, convey or otherwise transfer any
Property or to Liquidate any Swap Agreement in respect of commodities except for
(a) the sale of Hydrocarbons in the ordinary course of business; (b) farmouts in
the ordinary course of business of undeveloped acreage or undrilled depths and
assignments in connection with such farmouts; (c) the sale or transfer of
equipment that is no longer necessary for the business of the Borrower or such
Subsidiary or is replaced by equipment of at least comparable value and use;
(d) the sale or other disposition (including Casualty Events) of any Oil and Gas
Property or any interest therein or any Subsidiary owning Oil and Gas Properties
and the Liquidation of any Swap Agreement in respect of commodities; provided
that (i) 100% of the consideration or settlement proceeds received in respect of
such sale or other disposition or the Liquidation of any Swap Agreement in
respect of commodities shall be cash, (ii) the consideration or settlement
proceeds received in respect of such sale or other disposition or the
Liquidation of any Swap Agreement in respect of commodities shall be equal to or
greater than the fair market value of the Oil and Gas Property, interest therein
or Subsidiary subject of such sale or other disposition, or Swap Agreement
subject of such Liquidation (as reasonably determined by a Responsible Officer
of the Borrower or by the appropriate governing body of the Parent and/or the
Borrower, as applicable, and, if requested by the Administrative Agent, the
Borrower shall deliver a certificate of a Responsible Officer of the Borrower
certifying to that effect), (iii) if such sale or other disposition of Oil and
Gas Property or Subsidiary owning Oil and Gas Properties included in the most
recently delivered Reserve Report and Swap Agreements Liquidated pursuant to
this clause (d), when aggregated with any sale or other disposition pursuant to
clauses (f) and (g), during any period between two successive Scheduled
Redetermination Dates has a fair market value or settlement value, as
applicable, in excess of five percent (5%) of the then effective Borrowing Base,
individually or in the aggregate, the Borrowing Base shall be reduced, effective
immediately upon such sale, disposition or Liquidation, by an amount equal to
the Borrowing Base Value of such Properties sold or disposed of and Swap
Agreements in respect of Commodities Liquidated; provided further that if a
Borrowing Base Deficiency would result from such reduction in the Borrowing
Base, the Borrower shall prepay the Borrowings, prior to or contemporaneously
with the consummation of such sale, disposition and/or Liquidation, to the
extent that such prepayment would have required pursuant to Section 3.04(c)(iii)
after giving effect to such reduction in the Borrowing Base and (iv) if any such
sale or other disposition is of a Subsidiary owning Oil and Gas Properties, such
sale or other disposition shall include all the Equity Interests of such
Subsidiary; (e) the Midstream MLP Contribution, provided that (i) the Credit
Parties shall receive cash consideration in respect of the Midstream MLP
Contribution of at least $113,000,000, (ii) after giving effect to the Midstream
MLP Contribution, the Parent shall have directly or indirectly (x) sole
ownership of the Equity Interests in the General Partner other than the Class B
Units, (y) ownership of at least 50% of the limited partnership units of the
Midstream MLP, (z) ownership of at least 60% of the Equity Interests in
Beartooth and 90% of the Equity Interests in Bobcat and (iii) each DevCo shall
have executed a DevCo Guaranty and a DevCo Mortgage encumbering its Midstream
Properties, (f) Drop Down Dispositions after the Ninth Amendment Effective Date
to the extent (i) at the time of such Drop Down Disposition, no Default, Event
of Default or Borrowing Base Deficiency shall exist or would result from such
Drop Down Disposition, (ii) after giving pro forma effect to such Drop Down
Disposition, the Borrower shall be in compliance with the financial covenants
contained in Section 9.01, (iii)

 

103

--------------------------------------------------------------------------------

after giving effect to the Drop Down Disposition, the amount of the undrawn
Commitments shall represent at least 10% of the aggregate Commitments at such
time, (iv) the consideration for such Drop Down Disposition shall be fair to the
Credit Parties (as reasonably determined by the board of directors (or
comparable governing body) of the Parent and, if requested by the Administrative
Agent, the Borrower shall deliver a certificate of a Responsible Officer of the
Borrower certifying to that effect), (v) the consideration received by the
Credit Parties shall consist of cash, cash equivalents and/or Equity Interests
in the Midstream MLP, (vi) if the consideration received in respect of any such
Drop Down Disposition pursuant to this clause (f) during any period between two
successive Scheduled Redetermination Dates, when aggregated with any sales or
other dispositions during such period pursuant to clauses (d) and (g) of this
section or this clause (f), is in excess of five percent (5%) of the then
effective Borrowing Base, individually or in the aggregate, the Administrative
Agent or the Required Lenders may elect in their sole discretion reduce the
Borrowing Base in connection with such sale or disposition; provided further
that if a Borrowing Base Deficiency would result from such any reduction in the
Borrowing Base pursuant to this Section 9.12(f), the Borrower shall prepay the
Borrowings, prior to or contemporaneously with the consummation of such sale,
disposition and/or Liquidation, to the extent that such prepayment would have
required pursuant to Section 3.04(c)(iii) after giving effect to such reduction
in the Borrowing Base, (g) sales or other dispositions of the common limited
partnership interests in the Midstream MLP to the extent at the time of such
sale or disposition (i) no Default, Event of Default or Borrowing Base
Deficiency shall exist or would result from such sale or disposition, (ii) after
giving pro forma effect to such sale or disposition, the Borrower shall be in
compliance with the financial covenants contained in Section 9.01, (iii) the
consideration received by the Credit Parties shall only consist of cash, and
(iv) if the consideration received in respect of any such sales or other
dispositions of the common limited partnership interests in the Midstream MLP
pursuant to this clause (g) during any period between two successive Scheduled
Redetermination Dates, when aggregated with any sales or other dispositions
during such period pursuant to clauses (d) and (f) of this section or this
clause (g), is in excess of five percent (5%) of the then effective Borrowing
Base, individually or in the aggregate, the Administrative Agent or the Required
Lenders may elect in their sole discretion reduce the Borrowing Base in
connection with such sale or disposition; provided further that if a Borrowing
Base Deficiency would result from such any reduction in the Borrowing Base
pursuant to this Section 9.12(g), the Borrower shall prepay the Borrowings,
prior to or contemporaneously with the consummation of such sale, disposition
and/or Liquidation, to the extent that such prepayment would have required
pursuant to Section 3.04(c)(iii) after giving effect to such reduction in the
Borrowing Base and (h) sales and other dispositions of Properties not regulated
by Section 9.12(a) to (g) having a fair market value not to exceed $2,500,000
during any 12-month period.

Section 9.13 Environmental Matters. The Parent, OP LLC and the Borrower will
not, and will not permit any of their respective Subsidiaries or DevCos to,
cause or permit any of its Property to be in violation of, or do anything or
permit anything to be done which will subject any such Property to any Remedial
Work under any Environmental Laws, assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and circumstances, if
any, pertaining to such Property where such violations or remedial obligations
could reasonably be expected to have a Material Adverse Effect.

 

104

--------------------------------------------------------------------------------

Section 9.14 Transactions with Affiliates. The Parent, OP LLC and the Borrower
will not, and will not permit any of their respective Subsidiaries to, enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property or the rendering of any service, with any Affiliate
(other than the Guarantors and Wholly-Owned Subsidiaries of the Borrower) unless
such transactions are otherwise permitted under this Agreement and are upon fair
and reasonable terms no less favorable to it than it would obtain in a
comparable arm’s length transaction with a Person not an Affiliate.

Section 9.15 Subsidiaries. The Parent, OP LLC and the Borrower will not, and
will not permit any of their respective Subsidiaries to, create or acquire any
additional Subsidiary unless the Borrower gives written notice to the
Administrative Agent of such creation or acquisition and complies
with Section 8.14(b), Section 8.14(c) and Section 8.14(d). The Borrower shall
not, and shall not permit any of its Subsidiaries to, sell, assign or otherwise
dispose of any Equity Interests in any Subsidiary except in compliance
with Section 9.12(d). The Credit Parties shall not sell, assign or otherwise
dispose of any Equity Interests in any DevCo except in compliance
with Section 9.12(e) and Section 9.12(f). The Parent and OP LLC shall not, and
shall not permit any of their respective Subsidiaries to, sell, assign or
otherwise dispose of any Equity Interests in the General Partner other than
issuances of Class B Units in the General Partner pursuant to the terms of the
General Partner LLC Agreement. The Parent, OP LLC shall not, and shall not
permit any of its Domestic Subsidiaries to, sell, assign or otherwise dispose of
any Equity Interests in any Domestic Subsidiary except in compliance
with Section 9.12(d). The Parent, OP LLC and the Borrower will not permit any
Equity Interests of any DevCo or the General Partner (other than the Class B
Units) to be directly owned by any Person other than the Parent or a Subsidiary
that is a Guarantor, and in the case of of the DevCos, the Midstream MLP and its
subsidiaries.

Section 9.16 Negative Pledge Agreements; Dividend Restrictions. The Parent, OP
LLC and the Borrower will not, and will not permit any of their respective
Subsidiaries or the DevCos to, create, incur, assume or suffer to exist any
contract, agreement or understanding (other than (a) this Agreement, the
Security Instruments or Capital Leases creating Liens permitted
by Section 9.03(c) and (d), (b) any leases or licenses or similar contracts as
they affect any Property or Lien subject to a lease or license, (c) any
restriction with respect to a Subsidiary imposed pursuant to an agreement
entered into for the direct or indirect sale or disposition of all or
substantially all the equity or Property of such Subsidiary (or the Property
that is subject to such restriction) pending the closing of such sale or
disposition, (d) customary provisions with respect to the distribution of
Property in joint venture agreements or (e) in the case of the DevCos,
agreements governing the OMP Credit Facility) which in any way prohibits or
restricts the granting, conveying, creation or imposition of any Lien on any of
its Property in favor of the Administrative Agent and the Lenders or restricts
any Subsidiary from paying dividends or making distributions to the Borrower or
any Guarantor, or which requires the consent of or notice to other Persons in
connection therewith.

Section 9.17 Gas Imbalances, Take-or-Pay or Other Prepayments. The Parent, OP
LLC and the Borrower will not, and will not permit any of their respective
Subsidiaries to, allow gas imbalances, take-or-pay or other prepayments with
respect to the Oil and Gas Properties of the Borrower or any Subsidiary that
would require the Borrower or such Subsidiary to deliver Hydrocarbons at some
future time without then or thereafter receiving full payment therefor to exceed
75,000 Mcf of gas (on an Mcf equivalent basis) in the aggregate.

 

105

--------------------------------------------------------------------------------

Section 9.18 Swap Agreements.

(a) The Parent, OP LLC and the Borrower will not, and will not permit any of
their respective Subsidiaries to, enter into any Swap Agreements with any Person
other than (i) Swap Agreements in respect of commodities (A) with an Approved
Counterparty and (B) the notional volumes for which (when aggregated with other
commodity Swap Agreements then in effect other than basis differential swaps on
volumes already hedged pursuant to other Swap Agreements) do not exceed, as of
the date such Swap Agreement is executed, (1) for the period from 1 to 12 months
after the date of execution of such Swap Agreement, 110% of the Current
Production for each month during the period during which such Swap Agreement is
in effect for each of crude oil and natural gas, calculated separately (but in
no event to exceed 100% of the forecasted production, as reasonably determined
by the Borrower, of each of crude oil and natural gas, calculated separately, of
the Borrower and its Subsidiaries for each such month), (2) for the period from
13 to 24 months after the date of execution of such Swap Agreement, 100% of the
Current Production for each month during the period during which such Swap
Agreement is in effect for each of crude oil and natural gas, calculated
separately, (3) for the period from 25 to 36 months after such date of
execution, 75% of the Current Production for each month during the period during
which such Swap Agreement is in effect for each of crude oil and natural gas,
calculated separately, and (4) for the period from 37 to 60 months after such
date of execution, 50% of the Current Production for each month during the
period during which such Swap Agreement is in effect for each of crude oil and
natural gas, calculated separately; provided, that the Borrower may purchase
puts and floors the notional volumes for which exceed the foregoing percentage
limitations (but which do not cause all notional volumes hedged to exceed 100%
of the Current Production for any period beyond the last day of the second
calendar year following the calendar year in which such puts and/or floors are
purchased), (ii) Swap Agreements in respect of interest rates with an Approved
Counterparty, as follows: (A) Swap Agreements effectively converting interest
rates from fixed to floating, the notional amounts of which (when aggregated
with all other Swap Agreements of the Borrower and its Subsidiaries then in
effect effectively converting interest rates from fixed to floating) do not
exceed 50% of the then outstanding principal amount of the Borrower’s Debt for
borrowed money which bears interest at a fixed rate and (B) Swap Agreements
effectively converting interest rates from floating to fixed, the notional
amounts of which (when aggregated with all other Swap Agreements of the Borrower
and its Subsidiaries then in effect effectively converting interest rates from
floating to fixed) do not exceed 75% of the then outstanding principal amount of
the Borrower’s Debt for borrowed money which bears interest at a floating rate,
(iii) any Permitted Bond Hedge Transaction(s), and (iv) any Permitted Warrant
Transaction. In no event shall any Swap Agreement contain any requirement for
the Borrower or any Subsidiary to post, during the term of this Agreement,
collateral or margin to secure their obligations under such Swap Agreement or to
cover market exposures and in no event shall (1) any Swap Agreements in respect
of interest rates have a term beyond 48 months from the date of execution
thereof or (2) any Swap Agreements in respect of commodities have a term beyond
60 months from the date of execution thereof.

 

106

--------------------------------------------------------------------------------

(b) Except as permitted by Section 9.12(d), the Parent, OP LLC and the Borrower
will not, and will not permit any of their respective Subsidiaries to Liquidate,
or create any off-setting positions in respect of any hedge position in respect
of commodities (whether evidenced by a floor, put or Swap Agreement), without
the prior written consent of the Majority Lenders.

Section 9.19 Covenants of Parent, OP LLC and General Partner. The Parent and OP
LLC covenant and agree with the Administrative Agent and the Lenders that
neither the Parent nor OP LLC shall own or lease any Oil and Gas Properties that
are included in the Borrowing Base nor be the operator under any operating
agreement governing operations thereon. The Parent and OP LLC covenant and agree
with the Administrative Agent and the Lenders that neither the Parent nor OP LLC
shall directly own any Equity Interest in any DevCo. The Parent and OP LLC
covenant and agree that the General Partner shall not (a) engage any operating
or business activities other than ownership of the general partner interests of
the Midstream MLP and other related and incidental activities related to the
ownership of such general partnership interests and (b) own any Property or
assets other than such general partnership interests and such rights or other
interests incidental to such ownership.

Section 9.20 Non-Qualified ECP Guarantors. The Parent, OP LLC and the Borrower
shall not permit any Credit Party that is not a Qualified ECP Guarantor to own,
at any time, any Oil and Gas Properties or any Equity Interests in any
Subsidiaries or any DevCo.

Section 9.21 Changes to Organizational Documents of General Partner. The Parent,
OP LLC and the Borrower shall not permit the General Partner to amend,
supplement or otherwise modify its certificate of formation, limited liability
company agreement or any other organic document of the General Partner in any
manner that would be adverse to the Lenders in any material respect; provided
that any amendment, supplement or other modification to the General Partner LLC
Agreement that (a) materially alters the definition of “Available Cash”
contained therein in a way that results in an increase in such “Available Cash”
or (b) grants any additional rights or power to the Class B Units shall, in each
case, be deemed to be adverse to Lenders in a material respect.

ARTICLE X

Events of Default; Remedies

Section 10.01 Events of Default. One or more of the following events shall
constitute an “Event of Default”:

(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof, by acceleration or otherwise.

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in Section 10.01(a)) payable
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days.

 

107

--------------------------------------------------------------------------------

(c) any representation or warranty made or deemed made by or on behalf of the
Parent, OP LLC, the Borrower, any Subsidiary or any DevCo in or in connection
with any Loan Document or any amendment or modification of any Loan Document or
waiver under such Loan Document, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, shall
prove to have been incorrect in any material respect when made or deemed made
(or, if already qualified by materiality, Material Adverse Effect or a similar
qualification, true and correct in all respects).

(d) the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo shall fail to
observe or perform any covenant, condition or agreement contained
in Section 8.01(i), Section 8.01(m), Section 8.02, Section 8.03, Section 8.14,
Section 8.19, Section 8.20 or Section 8.21 or in Article IX.

(e) the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo shall fail to
observe or perform any covenant, condition or agreement contained in this
Agreement (other than those specified in Section 10.01(a), Section 10.01(b)
or Section 10.01(d)) or any other Loan Document, and such failure shall continue
unremedied for a period of 30 days after the earlier to occur of (i) notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender) or (ii) a Responsible Officer of the
Borrower or such Subsidiary otherwise becoming aware of such default.

(f) the Borrower, any Guarantor or any DevCo shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable and
such failure continues beyond any applicable grace period.

(g) any event or condition (other than customary change of control or asset sale
tender offer provisions of the Senior Notes Indenture, the Convertible Notes
Indenture or any agreement governing any Permitted Refinancing Debt which would
require a mandatory prepayment or redemption of the Debt arising thereunder)
occurs that results in any Material Indebtedness becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the Redemption thereof or any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo to make
an offer in respect thereof and such event or condition continues beyond any
applicable grace period.

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo or its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Parent, OP LLC, the Borrower, any
Subsidiary or any DevCo or for a substantial part of its assets, and, in any
such case, such proceeding or petition shall continue undismissed for thirty
(30) days or an order or decree approving or ordering any of the foregoing shall
be entered.

 

108

--------------------------------------------------------------------------------

(i) the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in Section 10.01(h),
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Parent, OP LLC, Borrower,
any Subsidiary or any DevCo or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing; or
any member/s of the Parent (that owns greater than 10% of its membership
interests), OP LLC or the Borrower shall make any request or take any action for
the purpose of calling a meeting of the members of the Parent, OP LLC or the
Borrower to consider a resolution to dissolve and wind up the Parent’s, OP LLC’s
or the Borrower’s affairs.

(j) the Parent, OP LLC, the Borrower, any Subsidiary or any DevCo shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due.

(k) (i) one or more judgments for the payment of money in an aggregate amount in
excess of $2,000,000 (to the extent not covered by independent third party
insurance provided by insurers of the highest claims paying rating or financial
strength as to which the insurer does not dispute coverage and is not subject to
an insolvency proceeding) or (ii) any one or more non-monetary judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect, shall be rendered against the Parent, OP LLC, the
Borrower, any Subsidiary, and DevCo or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of the Parent, OP LLC,
the Borrower, any Subsidiary or any DevCo to enforce any such judgment.

(l) the Loan Documents after delivery thereof shall for any reason, except to
the extent permitted by the terms thereof or as otherwise acceptable to the
Administrative Agent in its sole discretion, cease to be in full force and
effect and valid, binding and enforceable in accordance with their terms against
the Borrower or a Guarantor or a DevCo party thereto, or in the case of the
Intercreditor Agreement, against any other party thereto, or shall be repudiated
by any of them, or cease to create a valid and perfected Lien of the priority
required thereby on any of the Collateral purported to be covered thereby,
except to the extent permitted by the terms of this Agreement, or the Parent, OP
LLC, the Borrower, any Subsidiary or any DevCo or any of their Affiliates shall
so state in writing.

(m) a Change in Control shall occur.

 

109

--------------------------------------------------------------------------------

Section 10.02 Remedies.

(a) In the case of an Event of Default other than one described
in Section 10.01(h), Section 10.01(i) or Section 10.01(j), at any time
thereafter during the continuance of such Event of Default, the Administrative
Agent may, and at the request of the Majority Lenders, shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Notes and the Loans then outstanding
to be due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower and the Guarantors accrued hereunder and under the
Notes and the other Loan Documents (including, without limitation, the payment
of cash collateral to secure the LC Exposure as provided in Section 2.08(j)),
shall become due and payable immediately, without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other notice of any
kind, all of which are hereby waived by the Borrower and each Guarantor; and in
case of an Event of Default described in Section 10.01(h), Section 10.01(i)
or Section 10.01(j), the Commitments shall automatically terminate and the Notes
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and the other obligations of the Borrower and the
Guarantors accrued hereunder and under the Notes and the other Loan Documents
(including, without limitation, the payment of cash collateral to secure the LC
Exposure as provided in Section 2.08(j)), shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower and each Guarantor.

(b) In the case of the occurrence of an Event of Default, the Administrative
Agent and the Lenders will have all other rights and remedies available at law
and equity, subject solely in the case of the DevCo Collateral, to the terms and
conditions of the Intercreditor Agreement.

(c) All proceeds realized from the liquidation or other disposition of
Collateral or otherwise received after maturity of the Notes, whether by
acceleration or otherwise, shall be applied:

(i) first, to payment or reimbursement of that portion of the Indebtedness
constituting fees, expenses and indemnities payable to the Administrative Agent
in its capacity as such;

(ii) second, pro rata to payment or reimbursement of that portion of the
Indebtedness constituting fees, expenses and indemnities payable to the Lenders;

(iii) third, pro rata to payment of accrued interest on the Loans;

(iv) fourth, pro rata to payment of (A) principal outstanding on the Loans,
(B) LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time and (C) Secured Swap Indebtedness owing to Secured Swap
Parties;

 

110

--------------------------------------------------------------------------------

(v) fifth, pro rata to any other Indebtedness owing to the Secured Parties and
to cash collateral to be held by the Administrative Agent to secure the
remaining LC Exposure; and

(vi) sixth, any excess, after all of the Indebtedness shall have been
indefeasibly paid in full in cash, shall be paid to the Borrower or as otherwise
required by any Governmental Requirement.

provided that, solely in the case of the DevCo Collateral, the proceeds from the
realization of any DevCo Collateral (other than Restricted Payments made by a
DevCo to the Borrower or a Subsidiary) shall be applied first in accordance with
the terms of the Intercreditor Agreement and shall then be applied in accordance
with the priorities set forth in this Section 10.02(c).

Notwithstanding the foregoing, amounts received from the Borrower or any
Guarantor that is not an “eligible contract participant” under the Commodity
Exchange Act or any regulations promulgated thereunder shall not be applied to
any Excluded Swap Obligations (it being understood, that in the event that any
amount is applied to Indebtedness other than Excluded Swap Obligations as a
result of this this clause, the Administrative Agent shall make such adjustments
as it determines are appropriate to distributions pursuant to clause fourth
above from amounts received from “eligible contract participants” under the
Commodity Exchange Act or any regulations promulgated thereunder to ensure, as
nearly as possible, that the proportional aggregate recoveries with respect to
Indebtedness described in clause fourth above by the holders of any Excluded
Swap Obligations are the same as the proportional aggregate recoveries with
respect to other Indebtedness pursuant to clause fourth above).

ARTICLE XI

The Agents

Section 11.01 Appointment; Powers. Each of the Lenders and the Issuing Bank
hereby irrevocably appoints the Administrative Agent as its agent and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto.

Section 11.02 Duties and Obligations of Administrative Agent. The Administrative
Agent shall not have any duties or obligations except those expressly set forth
in the Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing (the use
of the term “agent” herein and in the other Loan Documents with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law;
rather, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties), (b) the Administrative Agent shall have no duty to take
any discretionary action or exercise any discretionary powers, except as
provided in Section 11.03, and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Parent, OP
LLC, the Borrower or any of its Subsidiaries

 

111

--------------------------------------------------------------------------------

or any DevCo that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Parent, OP LLC, the Borrower or a Lender, and shall not be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, (v) the satisfaction of any condition set forth in Article VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent or as to those conditions precedent
expressly required to be to the Administrative Agent’s satisfaction, (vi) the
existence, value, perfection or priority of any collateral security or the
financial or other condition of the Parent, OP LLC, the Borrower and its
Subsidiaries or any DevCo or any other obligor or guarantor, or (vii) any
failure by the Parent, OP LLC, the Borrower or any other Person (other than
itself) to perform any of its obligations hereunder or under any other Loan
Document or the performance or observance of any covenants, agreements or other
terms or conditions set forth herein or therein. For purposes of determining
compliance with the conditions specified in Article VI, 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 a Lender unless the Administrative Agent shall
have received written notice from such Lender prior to the proposed closing date
specifying its objection thereto.

Section 11.03 Action by Administrative Agent. The Administrative Agent shall
have no duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Majority Lenders, Required Lenders or the
Lenders, as applicable, (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 12.02) and in
all cases the Administrative Agent shall be fully justified in failing or
refusing to act hereunder or under any other Loan Documents unless it shall
(a) receive written instructions from the Majority Lenders, Required Lenders or
the Lenders, as applicable, (or such other number or percentage of the Lenders
as shall be necessary under the circumstances as provided in Section 12.02)
specifying the action to be taken and (b) be indemnified to its satisfaction by
the Lenders against any and all liability and expenses which may be incurred by
it by reason of taking or continuing to take any such action. The instructions
as aforesaid and any action taken or failure to act pursuant thereto by the
Administrative Agent shall be binding on all of the Lenders. If a Default has
occurred and is continuing, then the Administrative Agent shall take such action
with respect to such Default as shall be directed by the requisite Lenders in
the written instructions (with indemnities) described in this Section 11.03,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the Lenders. In no
event, however, shall the Administrative Agent be required to take any action
which exposes the Administrative Agent to

 

112

--------------------------------------------------------------------------------

personal liability or which is contrary to this Agreement, the Loan Documents or
applicable law. No Agent shall be liable for any action taken or not taken by it
with the consent or at the request of the Majority Lenders, Required Lenders or
the Lenders, as applicable, (or such other number or percentage of the Lenders
as shall be necessary under the circumstances as provided in Section 12.02), and
otherwise no Agent shall be liable for any action taken or not taken by it
hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own
gross negligence or willful misconduct.

Section 11.04 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon and each of the
Parent, OP LLC, the Borrower, the Lenders and the Issuing Bank hereby waives the
right to dispute the Administrative Agent’s record of such statement, except in
the case of gross negligence or willful misconduct by the Administrative Agent.
The Administrative Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts. The Administrative Agent
may deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
permitted hereunder shall have been filed with the Administrative Agent.

Section 11.05 Subagents. The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of the preceding Sections of this Article XI shall apply to any such sub-agent
and to the Related Parties of the Administrative Agent and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

Section 11.06 Resignation of Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided in
this Section 11.06, the Administrative Agent may resign at any time by notifying
the Lenders, the Issuing Bank and the Borrower, and the Administrative Agent may
be removed at any time by the Required Lenders if the Administrative Agent, in
its capacity as a Lender, is a Defaulting Lender at such time. Upon any such
resignation or removal, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation or removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become

 

113

--------------------------------------------------------------------------------

vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the Administrative Agent’s resignation hereunder, the provisions of this
Article XI and Section 12.03 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.

Section 11.07 Agents as Lenders. Each bank serving as an Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Parent, OP LLC, the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent hereunder.

Section 11.08 No Reliance. Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent, any other Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and each
other Loan Document to which it is a party. Each Lender also acknowledges that
it will, independently and without reliance upon the Administrative Agent, any
other Agent or any other Lender and based on such documents and information as
it shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement, any other
Loan Document, any related agreement or any document furnished hereunder or
thereunder. The Agents shall not be required to keep themselves informed as to
the performance or observance by the Borrower or any of its Subsidiaries or any
DevCo of this Agreement, the Loan Documents or any other document referred to or
provided for herein or to inspect the Properties or books of the Borrower or its
Subsidiaries or the DevCos. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent or the Arranger shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Affiliates) which may come into the possession of such Agent or any of
its Affiliates. In this regard, each Lender acknowledges that Vinson &
Elkins L.L.P. is acting in this transaction as special counsel to the
Administrative Agent only, except to the extent otherwise expressly stated in
any legal opinion or any Loan Document. Each other party hereto will consult
with its own legal counsel to the extent that it deems necessary in connection
with the Loan Documents and the matters contemplated therein.

Section 11.09 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any of its Subsidiaries or any DevCo, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

114

--------------------------------------------------------------------------------

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Indebtedness that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 12.03) allowed in such judicial proceeding;
and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 12.03.

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

Section 11.10 Authority of Administrative Agent to Release Collateral and Liens.
Each Lender and the Issuing Bank hereby authorizes the Administrative Agent to
release any Collateral or Guarantor or DevCo that is permitted to be sold or
released pursuant to the terms of the Loan Documents. Each Lender and the
Issuing Bank hereby authorizes the Administrative Agent to execute and deliver
to the Borrower, at the Borrower’s sole cost and expense, any and all releases
of Liens, termination statements, assignments or other documents reasonably
requested by the Borrower in connection with any sale or other disposition of
Property or release of a Guarantor or of a DevCo to the extent such sale or
other disposition or release of Guarantor or of a DevCo is permitted by the
terms of Section 9.12 or is otherwise authorized by the terms of the Loan
Documents.

Section 11.11 The Arranger. The Arranger shall have no duties, responsibilities
or liabilities under this Agreement.

Section 11.12 Intercreditor Agreement. The Lenders hereby authorize the
Administrative Agent to enter into any such Intercreditor Agreement with respect
to the Permitted OMP Credit Facility Liens. Each Lender (by receiving the
benefits thereunder and of the Collateral pledged pursuant to the Security
Instruments) agrees that the terms of the Intercreditor Agreement shall be
binding on such Lender and its successors and assigns, as if it were a party
thereto.

 

115

--------------------------------------------------------------------------------

ARTICLE XII

Miscellaneous

Section 12.01 Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone (and subject to Section 12.01(b)), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile or e-mail, as follows:

(i) if to the Borrower or the Parent, OP LLC, to it at 1001 Fannin, Suite 1500,
Houston, Texas 77002, Attention of Michael Lou (Facsimile No. (713) 574-1759,
e-mail address: mlou@oasispetroleum.com);

(ii) if to the Administrative Agent, to it at 1000 Louisiana, Suite 900,
Houston, Texas, 77002; Attention of Ed Pak (Facsimile No. (713) 651-8101, e-mail
address: Edward.Pak@wellsfargo.com), with a copy to WLS Charlotte Agency
Services (Facsimile No. (704) 590-2782, email address:
Donna.Verwold@wellsfargo.com), 1525 W. WT Harris Blvd., Charlotte, NC 28262;

(iii) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II, Article III, Article IV and Article V unless otherwise
agreed by the Administrative Agent and the applicable Lender. The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

(c) Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

Section 12.02 Waivers; Amendments.

(a) No failure on the part of the Administrative Agent, any other Agent, the
Issuing Bank or any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege, or any abandonment or
discontinuance of steps to enforce such right, power or privilege, under any of
the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under any of the Loan
Documents preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies of the Administrative
Agent, any other Agent, the Issuing Bank and the Lenders hereunder and under the
other Loan Documents

 

116

--------------------------------------------------------------------------------

are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by Section 12.02(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any other Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

(b) Neither this Agreement nor any provision hereof nor any other Security
Instrument nor any provision thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Majority Lenders or by the Borrower and the Administrative Agent with
the consent of the Majority Lenders; provided that no such agreement shall
(i) increase the Maximum Credit Amount or Elected Commitment of any Lender
without the written consent of such Lender, (ii) increase the Borrowing Base
without the written consent of the Requisite Increase Lenders, decrease or
maintain the Borrowing Base without the consent of the Required Lenders, or
modify Section 2.07 in any manner that results in an increase in the Borrowing
Base without the consent of each Lender, (iii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, or reduce any other Indebtedness hereunder or under
any other Loan Document, without the written consent of each Lender affected
thereby, (iv) postpone the scheduled date of payment or prepayment of the
principal amount of any Loan or LC Disbursement, or any interest thereon, or any
fees payable hereunder, or any other Indebtedness hereunder or under any other
Loan Document, or reduce the amount of, waive or excuse any such payment, or
postpone or extend the Termination Date without the written consent of each
Lender affected thereby, (v) change Section 4.01(b) or Section 4.01(c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (vi) waive or
amend Section 3.04(c), Section 6.01, Section 8.14, Section 10.02(c)
or Section 12.14 or change the definition of the terms “Domestic Subsidiary”,
“Foreign Subsidiary”, “Material Subsidiary”, “Subsidiary” or “Applicable
Percentage”, without the written consent of each Lender (other than any
Defaulting Lender), (vii) release any Guarantor (except as set forth in the
Guaranty and Security Agreement or as provided for in Section 11.10), release
all or substantially all of the collateral (other than as provided
in Section 11.10), or reduce the percentage set forth in Section 8.14, without
the written consent of each Lender (other than any Defaulting Lender), or
(viii) change any of the provisions of this Section 12.02(b) or the definitions
of “Majority Lenders”, “Requisite Increase Lenders”, “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to waive, amend or modify any rights hereunder or under any other Loan Documents
or make any determination or grant any consent hereunder or any other Loan
Documents, without the written consent of each Lender; provided, further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent, any other Agent or the Issuing Bank hereunder or under
any other Loan Document without the prior written consent of the Administrative
Agent, such other Agent or the Issuing Bank, as the case may be. Notwithstanding
the foregoing, any supplement to Schedule 7.14 (Subsidiaries) shall be effective
simply by delivering to the Administrative Agent a supplemental schedule clearly
marked as such and, upon receipt, the Administrative Agent will promptly deliver
a copy thereof to the Lenders.

 

117

--------------------------------------------------------------------------------

Section 12.03 Expenses, Indemnity; Damage Waiver.

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental audits and surveys and appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Administrative Agent as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all costs, expenses, Taxes, assessments and
other charges incurred by any Agent or any Lender in connection with any filing,
registration, recording or perfection of any security interest contemplated by
this Agreement or any Security Instrument or any other document referred to
therein, (iii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, and (iv) all
out-of-pocket expenses incurred by any Agent, the Issuing Bank or any Lender,
including the reasonable fees, charges and disbursements of any counsel for any
Agent, the Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement or any other Loan
Document, including its rights under this Section 12.03, or in connection with
the Loans made or Letters of Credit issued hereunder, including, without
limitation, all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit,
except in the case of out-of-pocket expenses described in this clause (iv) to
the extent that Section 12.03 (b) expressly provides that the Borrower shall not
indemnify such party for such out-of-pocket expenses.

(b) THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER, THE ISSUING BANK AND
EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH
PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS
FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES,
INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE,
INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION
WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY (OTHER THAN EXPENSES IN CONNECTION WITH THE EXECUTION AND DELIVERY OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS DATED OF EVEN DATE HEREWITH, WHICH
EXPENSES SHALL ONLY BE PAID BY THE BORROWER TO THE EXTENT PROVIDED IN
SECTION 12.03(a)), (ii) THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO
ANY OTHER

 

118

--------------------------------------------------------------------------------

LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (iii) THE FAILURE OF THE BORROWER OR ANY SUBSIDIARY OR ANY DEVCO TO
COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH
ANY GOVERNMENTAL REQUIREMENT, (iv) ANY INACCURACY OF ANY REPRESENTATION OR ANY
BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY GUARANTOR OR ANY DEVCO
SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR
CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (v) ANY LOAN OR LETTER OF
CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION,
(A) ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER
OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT
STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A
DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE,
NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN
CONNECTION THEREWITH, (vi) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vii) THE
OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES AND THE DEVCOS
BY THE BORROWER AND ITS SUBSIDIARIES AND THE DEVCOS, (viii) ANY ASSERTION THAT
THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE
SECURITY INSTRUMENTS, (ix) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR
ANY SUBSIDIARY OR ANY DEVCO OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT
LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE,
TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS
WASTES, SOLID WASTES OR HAZARDOUS MATERIALS ON ANY OF THEIR PROPERTIES, (x) THE
BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY OR ANY DEVCO WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY OR ANY DEVCO,
(xi) THE PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OR ANY DEVCO OF ANY OF
THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY,
(xii) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION,
THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR
DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS MATERIALS ON OR
AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY OR
ANY DEVCO OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON
OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS
SUBSIDIARIES OR ANY DEVCO, (xiii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY
TO THE BORROWER OR ANY OF ITS SUBSIDIARIES OR ANY DEVCO, (xiv) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS,
OR (xv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION,

 

119

--------------------------------------------------------------------------------

INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A
PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, INCLUDING ITS OWN ORDINARY NEGLIGENCE, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE; PROVIDED THAT THE BORROWER
SHALL NOT INDEMNIFY ANY INDEMNITEE FOR (I) ANY FINANCIAL LIABILITIES OF A LENDER
TO THE PARENT, OP LLC, THE BORROWER OR ANY SUBSIDIARY PURSUANT TO AND IN
ACCORDANCE WITH THE TERMS OF A SWAP AGREEMENT, (ii) CLAIMS AMONG LENDERS OR
BETWEEN LENDERS AND THEIR RELATED PARTIES TO THE EXTENT NOT RELATED TO A BREACH
OF AN OBLIGATION OF THE PARENT, OP LLC, THE BORROWER OR ANY SUBSIDIARY AND
(iii) LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES THAT ARE
DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE
JUDGMENT TO BE A DIRECT RESULT OF A MATERIAL BREACH OF THIS AGREEMENT BY SUCH
INDEMNITEE.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to any Agent, the Arranger or the Issuing Bank under Section 12.03(a)
or (b), each Lender severally agrees to pay to such Agent, the Arranger or the
Issuing Bank, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent, the Arranger or the
Issuing Bank in its capacity as such.

(d) To the extent permitted by applicable law, the Parent, OP LLC and the
Borrower shall not assert, and hereby waive, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the Transactions, any
Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section 12.03 shall be payable not later than 10
days after written demand therefor.

 

120

--------------------------------------------------------------------------------

Section 12.04 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section 12.04. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b) (i) Subject to the conditions set forth in Section 12.04(b)(ii), any Lender
may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:

(A) the Borrower, provided that no consent of the Borrower shall be required if
such assignment is to a Lender, an Affiliate of a Lender, an Approved Fund, or,
if an Event of Default has occurred and is continuing, is to any other assignee;
and

(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment to an assignee that is a Lender or an
Affiliate of a Lender immediately prior to giving effect to such assignment.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

 

121

--------------------------------------------------------------------------------

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500;

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire;

(E) no such assignment shall be made to a natural person (or a holding company,
investment vehicle or trust for, or owned and operated for the primary benefit
of, a natural Person) or an Industry Competitor, the Borrower or any of the
Borrower’s Affiliates or Subsidiaries; and

(F) in no event may any Lender assign all or a portion of its rights and
obligations under this Agreement to the Borrower or any Affiliate of the
Borrower.

(iii) Subject to Section 12.04(b)(iv) and the acceptance and recording thereof,
from and after the effective date specified in each Assignment and Assumption
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits
of Section 5.01, Section 5.02, Section 5.03 and Section 12.03). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this Section 12.04 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 12.04(c).

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Maximum Credit Amount and Elected
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive (absent manifest error), and the
Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower,
the Issuing Bank and any Lender, at any reasonable time and from time to time
upon reasonable prior notice. In connection with any changes to the Register, if
necessary, the Administrative Agent will reflect the revisions on Annex I and
forward a copy of such revised Annex I to the Borrower, the Issuing Bank and
each Lender.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in Section 12.04(b) and any written
consent to such assignment

 

122

--------------------------------------------------------------------------------

required by Section 12.04(b), the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this Section 12.04(b).

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative
Agent or the Issuing Bank, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (A) such Lender’s obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(C) the Borrower, the Administrative Agent, the Issuing Bank 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
(D) no such participation may be sold to a natural Person or an Industry
Competitor. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the proviso
to Section 12.02 that affects such Participant. In addition such agreement must
provide that the Participant be bound by the provisions of Section 12.03.
Subject to Section 12.04(c)(ii), the Borrower agrees that each Participant shall
be entitled to the benefits of Section 5.01, Section 5.02 and Section 5.03 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 12.04(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 12.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 4.01(c)
as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is
in registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

(ii) A Participant shall not be entitled to receive any greater payment
under Section 5.01 or Section 5.03 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent. A

 

123

--------------------------------------------------------------------------------

Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 5.03 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 5.03(e) as though it were a
Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank or other central banking authority, and
this Section 12.04(d) shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(e) Notwithstanding any other provisions of this Section 12.04, no transfer or
assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrower and the Guarantors to file a registration statement
with the SEC or to qualify the Loans under the “Blue Sky” laws of any state.

Section 12.05 Survival; Revival; Reinstatement.

(a) All covenants, agreements, representations and warranties made by Parent and
the Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, any other Agent, the Issuing Bank or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions
of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and Article XI
shall survive and remain in full force and effect for a period of 180 days
following the Maturity Date, regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement, any other Loan Document or any provision hereof or thereof.

(b) To the extent that any payments on the Indebtedness or proceeds of any
Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Indebtedness so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Administrative Agent’s and the Lenders’ Liens, security interests, rights,
powers and remedies under this Agreement and each Loan Document shall continue
in full force and effect. In such event, each Loan Document shall be
automatically reinstated and the Parent, OP LLC and the Borrower shall take such
action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement.

 

124

--------------------------------------------------------------------------------

Section 12.06 Counterparts; Integration; Effectiveness.

(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.

(b) This Agreement, the other Loan Documents and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

(c) Except as provided in Section 6.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

Section 12.07 Severability. Any provision of this Agreement or any other Loan
Document held to be invalid, illegal or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations (of whatsoever kind, including,
without limitations obligations under Swap Agreements) at any time owing by such
Lender or Affiliate to or for the credit or the account of the Parent, OP LLC,
the Borrower or any Subsidiary or any DevCo against any of and all the
obligations of the Parent, OP LLC, the Borrower or any Subsidiary or any DevCo
owed to such Lender now or hereafter existing under this Agreement or any other
Loan Document, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations may be unmatured. The rights of each Lender under this Section 12.08
are in addition to other rights and remedies (including other rights of setoff)
which such Lender or its Affiliates may have.

 

125

--------------------------------------------------------------------------------

Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT
UNITED STATES FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE,
RESERVE OR TAKE INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH
LENDER IS LOCATED.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT
PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT
PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT
OTHERWISE HAVING JURISDICTION.

(c) EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANOTHER PARTY IN ANY OTHER JURISDICTION.

(d) EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL

 

126

--------------------------------------------------------------------------------

DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; PROVIDED THAT
NOTHING CONTAINED IN THIS SECTION 12.09(d)(ii) SHALL LIMIT THE BORROWER’S
INDEMNIFICATION OBLIGATIONS TO THE EXTENT SET FORTH IN SECTION 12.03 TO THE
EXTENT SUCH SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARE INCLUDED
IN ANY THIRD PARTY CLAIM IN CONNECTION WITH WHICH SUCH INDEMNITEE IS OTHERWISE
ENTITLED TO INDEMNIFICATION HEREUNDER; (iii) CERTIFIES THAT NO PARTY HERETO NOR
ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.

Section 12.10 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 12.11 Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party to this Agreement or any other Loan Document, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section 12.11, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any Swap Agreement relating to the Parent, OP LLC or the Borrower
and its obligations, (g) with the consent of the Borrower, (h) to any nationally
recognized rating agency that requires access to information about a Lender’s
investment portfolio in connection with ratings issued with respect to such
Lender or to any collector of market data or (i) to the extent such Information
(i) becomes publicly available other than as a result of a breach of
this Section 12.11 or (ii) becomes available to the Administrative Agent, the
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Parent, OP LLC or the Borrower. For the purposes of this Section 12.11,
“Information” means all information received from the Parent, OP LLC, the
Borrower, any Subsidiary or any DevCo relating to the Parent, OP LLC, the
Borrower, any Subsidiary or any DevCo and their businesses, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Parent, OP LLC,
the Borrower, a Subsidiary or a DevCo; provided that, in the case of information
received from the Parent, OP LLC, the

 

127

--------------------------------------------------------------------------------

Borrower, any Subsidiary or any DevCo after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section 12.11
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, “Information” shall not
include, and the Borrower, the Borrower’s Subsidiaries, the Administrative
Agent, each Lender and the respective Affiliates of each of the foregoing (and
the respective partners, directors, officers, employees, agents, advisors and
other representatives of the aforementioned Persons), and any other party, may
disclose to any and all Persons, without limitation of any kind (a) any
information with respect to the United States federal and state income tax
treatment of the transactions contemplated hereby and any facts that may be
relevant to understanding the United States federal or state income tax
treatment of such transactions (“tax structure”), which facts shall not include
for this purpose the names of the parties or any other person named herein, or
information that would permit identification of the parties or such other
persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or tax structure, and
(b) all materials of any kind (including opinions or other tax analyses) that
are provided to the Borrower, the Administrative Agent or such Lender relating
to such tax treatment or tax structure.

Section 12.12 Interest Rate Limitation. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Notes, it is agreed as follows: (a) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrower); and (b) in the event that the maturity of the Notes is accelerated by
reason of an election of the holder thereof resulting from any Event of Default
under this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to any Lender may never include more than the maximum amount allowed
by such applicable law, and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically by such Lender as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by such Lender to the Borrower). All sums paid
or agreed to be paid to any Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Lender,
be amortized, prorated, allocated and spread throughout the stated term of the
Loans evidenced by the Notes until payment in full so that the rate or amount of
interest on account of any Loans

 

128

--------------------------------------------------------------------------------

hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to any
Lender on any date shall be computed at the Highest Lawful Rate applicable to
such Lender pursuant to this Section 12.12 and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to such
Lender would be less than the amount of interest payable to such Lender computed
at the Highest Lawful Rate applicable to such Lender, then the amount of
interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.12. To the extent that Chapter 303 of the Texas
Finance Code is relevant for the purpose of determining the Highest Lawful Rate
applicable to a Lender, such Lender elects to determine the applicable rate
ceiling under such Chapter by the weekly ceiling from time to time in effect.
Chapter 346 of the Texas Finance Code does not apply to the Borrower’s
obligations hereunder.

Section 12.13 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT
AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS
AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL
COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS
ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT
IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF
THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH
LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE
VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE
OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

Section 12.14 Collateral Matters; Swap Agreements. The benefit of the Security
Instruments and of the provisions of this Agreement relating to any Collateral
securing the Indebtedness shall also extend to and be available to Secured Swap
Parties on a pro rata basis (but subject to the terms of the Loan Documents,
including, without limitation, provisions thereof relating to the application
and priority of payments to the Persons entitled thereto) in respect of any
obligations of the a Parent, the Borrower or any of its Subsidiaries which arise
under Secured Swap Agreements. No Secured Swap Party shall have any voting
rights under any Loan Document as a result of the existence of obligations owed
to it under any such Swap Agreements.

 

129

--------------------------------------------------------------------------------

Section 12.15 No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and the Issuing Bank
to issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Borrower, and no other Person (including, without limitation, any
Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or
materialsman) shall have any rights, claims, remedies or privileges hereunder or
under any other Loan Document against the Administrative Agent, any other Agent,
the Issuing Bank or any Lender for any reason whatsoever. There are no third
party beneficiaries.

Section 12.16 USA Patriot Act Notice. Each Lender hereby notifies the Parent, OP
LLC and the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies the Parent,
OP LLC and the Borrower, which information includes the name, tax identification
and address of the Parent, OP LLC and the Borrower and other information that
will allow such Lender to identify the Parent, OP LLC and the Borrower in
accordance with the Act.

Section 12.17 True-Up Loans. Upon the effectiveness of this Agreement, (a) each
Lender who holds Loans in an aggregate amount less than its Applicable
Percentage (after giving effect to this amendment and restatement) of all Loans
shall advance new Loans which shall be disbursed to the Administrative Agent and
used to repay Loans outstanding to each Lender who holds Loans in an aggregate
amount greater than its Applicable Percentage of all Loans, (b) each Lender’s
participation in each Letter of Credit shall be automatically adjusted to equal
its Applicable Percentage (after giving effect to this amendment and
restatement), and (c) such other adjustments shall be made as the Administrative
Agent shall specify so that each Lender’s Credit Exposure equals its Applicable
Percentage (after giving effect to this amendment and restatement) of the total
Credit Exposures of all of the Lenders. The loans and/or adjustments described
in this paragraph are referred to herein as the “True-Up Loans”.

Section 12.18 Restatement; Existing Credit Agreement. The parties hereto agree
that this Agreement is a restatement of, and an extension of and amendment to,
the Existing Credit Agreement. This Agreement does not in any way constitute a
novation of the Existing Credit Agreement, but is an amendment and restatement
of same.

Section 12.19 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the Write-Down and Conversion Powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

 

130

--------------------------------------------------------------------------------

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

Section 12.20 No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each of the Parent, OP LLC and the Borrower acknowledges and agrees,
and acknowledges its Subsidiaries’ understanding, that: (a) (i) no fiduciary,
advisory or agency relationship between the Parent, OP LLC, the Borrower and
their respective Subsidiaries and the Administrative Agent or any Lender is
intended to be or has been created in respect of the transactions contemplated
hereby or by the other Loan Documents, irrespective of whether the
Administrative Agent or any Lender has advised or is advising the Parent, the
Borrower or any Subsidiary on other matters; (ii) the arranging and other
services regarding this Agreement provided by the Administrative Agent and the
Lenders are arm’s-length commercial transactions between the Parent, the
Borrower and their Subsidiaries, on the one hand, and the Administrative Agent
and the Lenders, on the other hand; (iii) each of the Parent OP LLC and the
Borrower has consulted its own legal, accounting, regulatory and tax advisors to
the extent that it has deemed appropriate; and (iv) each of the Parent, OP LLC
and the Borrower is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; and (b) (i) the Administrative Agent and the Lenders each
is and has been acting solely as a principal and, except as expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary for the Parent, OP LLC, the Borrower or any of
their Subsidiaries, or any other Person; (ii) neither the Administrative Agent
nor the Lenders has any obligation to the Parent, OP LLC, the Borrower or any of
their Subsidiaries with respect to the transactions contemplated hereby except
those obligations expressly set forth herein and in the other Loan Documents;
and (iii) the Administrative Agent and the Lenders and their respective
Affiliates may be engaged, for their own accounts or the accounts of customers,
in a broad range of transactions that involve interests that differ from those
of the Parent, OP LLC, the Borrower and their Subsidiaries, and neither the
Administrative Agent nor the Lenders has any obligation to disclose any of such
interests to the Parent, OP LLC, the Borrower or their respective Subsidiaries.
To the fullest extent permitted by Governmental Requirement, each of the Parent,
OP LLC and the Borrower hereby waives and releases any claims that it may have
against the Administrative Agent and the Lenders with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

[Remainder of page intentionally left blank; signature pages follow]

 

 

131

--------------------------------------------------------------------------------

ANNEX I

LIST OF MAXIMUM CREDIT AMOUNTS

AND ELECTED COMMITMENTS

Aggregate Maximum Credit Amounts and

Aggregate Elected Commitment Amounts

 

Name of Lender

   Applicable
Percentage     Maximum
Credit Amount      Elected Commitment  

Wells Fargo Bank, N.A.

     11.147540984 %    $ 278,688,524.52      $ 128,196,721.29  

Citibank, N.A.

     9.836065574 %    $ 245,901,639.31      $ 113,114,754.10  

JPMorgan Chase Bank, N.A.

     9.836065574 %    $ 245,901,639.31      $ 113,114,754.10  

Royal Bank of Canada

     8.852459016 %    $ 221,311,475.41      $ 101,803,278.69  

Capital One, National Association

     5.573770492 %    $ 139,344,262.31      $ 64,098,360.66  

Compass Bank

     5.573770492 %    $ 139,344,262.31      $ 64,098,360.66  

Canadian Imperial Bank Of Commerce, New York Branch

     5.573770492 %    $ 139,344,262.31      $ 64,098,360.66  

Deutsche Bank AG New York Branch

     5.573770492 %    $ 139,344,262.31      $ 64,098,360.66  

ING Capital LLC

     5.573770492 %    $ 139,344,262.31      $ 64,098,360.66  

Citizens Bank, N.A.

     5.573770492 %    $ 139,344,262.31      $ 64,098,360.66  

U.S. Bank National Association

     5.573770492 %    $ 139,344,262.31      $ 64,098,360.66  

Amegy Bank National Association

     3.278688525 %    $ 81,967,213.12      $ 37,704,918.03  

BOKF, National Association DBA Bank of Texas

     3.278688525 %    $ 81,967,213.12      $ 37,704,918.03  

Branch Banking and Trust Company

     3.278688525 %    $ 81,967,213.12      $ 37,704,918.03  

Comerica Bank

     3.278688525 %    $ 81,967,213.12      $ 37,704,918.03  

Credit Suisse AG, Cayman Islands Branch

     3.278688525 %    $ 81,967,213.12      $ 37,704,918.03  

Regions Bank

     3.278688525 %    $ 81,967,213.12      $ 37,704,918.03  

Iberiabank

     1.639344262 %    $ 40,983,606.56      $ 18,852,459.02  

TOTAL

     100.00 %    $ 2,500,000,000.00      $ 1,150,000,000.00  

 

Annex I - 1

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF NOTE

 

$[    ],000,000.00   [    ], 201    

FOR VALUE RECEIVED, Oasis Petroleum North America LLC, a Delaware limited
liability company (the “Borrower”) hereby promises to pay [                ]
(the “Lender”), at the principal office of Wells Fargo Bank, N.A., as
administrative agent (the “Administrative Agent”), the principal sum of
[                ] Dollars ($[                ]) (or such lesser amount as shall
equal the aggregate unpaid principal amount of the Loans made by the Lender to
the Borrower under the Credit Agreement, as hereinafter defined), in lawful
money of the United States of America and in immediately available funds, on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of such Loan until
such Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.

The date, amount, Type, interest rate, Interest Period and maturity of each Loan
made by the Lender to the Borrower, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, may be endorsed by the Lender on the schedules
attached hereto or any continuation thereof or on any separate record maintained
by the Lender. Failure to make any such notation or to attach a schedule shall
not affect any Lender’s or the Borrower’s rights or obligations in respect of
such Loans or affect the validity of such transfer by any Lender of this Note.

This Note is one of the Notes referred to in the Second Amended and Restated
Credit Agreement dated as of April 5, 2013 among the Borrower, the
Administrative Agent, the other Credit Parties party thereto and the other
agents and lenders signatory thereto (including the Lender), and evidences Loans
made by the Lender thereunder (such Second Amended and Restated Credit Agreement
as the same may be amended, supplemented or restated from time to time, the
“Credit Agreement”). Capitalized terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.

This Note is issued pursuant to, and is subject to the terms and conditions set
forth in, the Credit Agreement and is entitled to the benefits provided for in
the Credit Agreement and the other Loan Documents. The Credit Agreement provides
for the acceleration of the maturity of this Note upon the occurrence of certain
events, for prepayments of Loans upon the terms and conditions specified therein
and other provisions relevant to this Note.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

OASIS PETROLEUM NORTH AMERICA LLC By:  

 

Name:  

 

Title:  

 

 

Exhibit A - 1

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF BORROWING REQUEST

[                ], 201[ ]

Oasis Petroleum North America LLC, a Delaware limited liability company (the
“Borrower”), pursuant to Section 2.03 of the Second Amended and Restated Credit
Agreement dated as of April 5, 2013 (together with all amendments, restatements,
supplements or other modifications thereto, the “Credit Agreement”) among the
Borrower, Oasis Petroleum Inc., a Delaware corporation (the “Parent”), Oasis
Petroleum LLC, a Delaware limited liability company (“OP LLC”), Wells Fargo
Bank, N.A., as Administrative Agent and the other agents and lenders (the
“Lenders”) which are or become parties thereto (unless otherwise defined herein,
each capitalized term used herein is defined in the Credit Agreement), hereby
request a Borrowing as follows:

(i) Aggregate amount of the requested Borrowing is $[                ];

(ii) Date of such Borrowing is [                ], 201[                ];

(iii) Requested Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing];

(iv) In the case of a Eurodollar Borrowing, the initial Interest Period
applicable thereto is [                ];

(v) Amount of Borrowing Base in effect on the date hereof is
$[                ];

(vi) Amount of the Aggregate Elected Commitment Amounts on the date hereof is
$[                ];

(vii) Total Revolving Credit Exposures on the date hereof (i.e., outstanding
principal amount of Loans and total LC Exposure) is $[                ]; and

(viii) Pro forma total Revolving Credit Exposures (giving effect to the
requested Borrowing) is $[                ];

(ix) At the time of and immediately after giving effect to the requested
Borrowing, the Borrower together with the other Credit Parties shall not have
any cash or cash equivalents (other than cash collateral) in excess of
$100,000,000 in the aggregate (other than (i) any cash set aside to pay royalty
obligations of the Credit Parties then due and owing to unaffiliated third
parties and for which the Credit Parties have issued checks or have initiated
wires or ACH transfers (or will issue checks or initiate wires or ACH transfers
within 24 hours of such time) in order to pay, (ii) any cash set aside to pay in
the ordinary course of business amounts (other than royalty obligations) of the
Credit Parties then due and owing to unaffiliated third parties and for which
the Credit Parties have issued checks or have initiated wires or ACH transfers
in order to pay and (iii) any cash of the Credit Parties constituting purchase
price deposits held in escrow by an unaffiliated third party pursuant to a
binding and enforceable purchase and sale agreement with an unaffiliated third
party containing customary provisions regarding the payment and refunding of
such deposits;) and

 

Exhibit B - 1

--------------------------------------------------------------------------------

(x) Location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05 of the
Credit Agreement, is as follows:

[                                              ]

[                                              ]

[                                              ]

[                                              ]

[                                              ]

 

Exhibit B - 2

--------------------------------------------------------------------------------

The undersigned certifies that he/she is the [                ] of the Borrower,
and that as such he/she is authorized to execute this certificate on behalf of
the Borrower. The undersigned further certifies (only in his/her capacity as an
officer and not individually), represents and warrants on behalf of the Borrower
that the Borrower is entitled to receive the requested Borrowing under the terms
and conditions of the Credit Agreement.

 

OASIS PETROLEUM NORTH AMERICA LLC

By:  

 

Name:  

 

Title:  

 

 

Exhibit B - 3

--------------------------------------------------------------------------------

EXHIBIT C

FORM OF INTEREST ELECTION REQUEST

[                ] [    ], 201[    ]

Oasis Petroleum North America LLC, a Delaware limited liability company (the
“Borrower”), pursuant to Section 2.04 of the Second Amended and Restated Credit
Agreement dated as of April 5, 2013 (together with all amendments, restatements,
supplements or other modifications thereto, the “Credit Agreement”) among the
Borrower, Wells Fargo Bank, N.A., as Administrative Agent, the other Credit
Parties party thereto and the other agents and lenders (the “Lenders”) which are
or become parties thereto (unless otherwise defined herein, each capitalized
term used herein is defined in the Credit Agreement), hereby makes an Interest
Election Request as follows:

(i) The Borrowing to which this Interest Election Request applies, and if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information specified pursuant to (iii) and (iv) below shall be specified
for each resulting Borrowing) is [                ];

(ii) The effective date of the election made pursuant to this Interest Election
Request is [                ], 201[    ];[and]

(iii) The resulting Borrowing is to be [an ABR Borrowing] [a Eurodollar
Borrowing][; and]

(iv) [[If the resulting Borrowing is a Eurodollar Borrowing] The Interest Period
applicable to the resulting Borrowing after giving effect to such election is
[                ].]

The undersigned certifies (only in his capacity as an officer and not
individually) that he/she is the [                ] of the Borrower, and that as
such he/she is authorized to execute this certificate on behalf of the Borrower.
The undersigned further certifies (only in his/her capacity as an officer and
not individually), represents and warrants on behalf of the Borrower that the
Borrower is entitled to receive the requested continuation or conversion under
the terms and conditions of the Credit Agreement.

 

OASIS PETROLEUM NORTH AMERICA LLC

By:  

 

Name:  

 

Title:  

 

 

Exhibit C - 1

--------------------------------------------------------------------------------

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

The undersigned hereby certifies (only in his/her capacity as an officer and not
individually) that he/she is the [                ] of Oasis Petroleum Inc., a
Delaware corporation (the “Parent”), the [                ] of Oasis Petroleum
LLC, a Delaware limited liability company (“OP LLC”) and the [                ]
of Oasis Petroleum North America LLC, a Delaware limited liability company (the
“Borrower”) and that as such he/she is authorized to execute this certificate on
behalf of the Parent, OP LLC and the Borrower, respectively. With reference to
the Second Amended and Restated Credit Agreement dated as of April 5, 2013
(together with all amendments, restatements, supplements or other modifications
thereto being the “Agreement”) among the Parent, the Borrower, Wells Fargo Bank,
N.A., as Administrative Agent, the other Credit Parties party thereto and the
other agents and lenders (the “Lenders”) which are or become a party thereto,
and such Lenders, the undersigned represents and warrants as follows (each
capitalized term used herein having the same meaning given to it in the
Agreement unless otherwise specified):

(a) The representations and warranties of the Parent, OP LLC and the Borrower
contained in Article VII of the Agreement and in the Loan Documents and
otherwise made in writing by or on behalf of the Parent and the Borrower
pursuant to the Agreement and the Loan Documents were true and correct when
made, and are repeated at and as of the time of delivery hereof and are true and
correct in all material respects (or, if already qualified by materiality,
Material Adverse Effect or a similar qualification, true and correct in all
respects) at and as of the time of delivery hereof, except to the extent such
representations and warranties are expressly limited to an earlier date or the
Majority Lenders have expressly consented in writing to the contrary.

(b) The Parent and the Borrower have performed and complied with all agreements
and conditions contained in the Agreement and in the Loan Documents required to
be performed or complied with by it prior to or at the time of delivery hereof
[or specify default and describe].

(c) Since December 31, 2012, no change has occurred, either in any case or in
the aggregate, in the condition, financial or otherwise, of the Parent, OP LLC,
the Borrower or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect [or specify event].

(d) There exists no Default or Event of Default [or specify Default and
describe].

(e) Attached hereto are the detailed computations necessary to determine whether
the Borrower is in compliance with Section 9.01 as of the end of the [fiscal
quarter][fiscal year] ending [                ].

 

Exhibit D - 1

--------------------------------------------------------------------------------

EXECUTED AND DELIVERED this [                ] day of [                ].

 

OASIS PETROLEUM INC.

By:  

 

Name:  

 

Title:  

 

OASIS PETROLEUM LLC

By:  

 

Name:  

 

Title:  

 

OASIS PETROLEUM NORTH AMERICA LLC

By:  

 

Name:  

 

Title:  

 

 

Exhibit D - 2

--------------------------------------------------------------------------------

EXHIBIT E-1

SECURITY INSTRUMENTS

 

1) Second Amended and Restated Guaranty and Security Agreement dated as of
April 5, 2013 among the Borrower, and OP LLC, the Parent and the other
Guarantors as Grantors, and the Administrative Agent.

 

2) Financing Statements in respect of item 1.

 

3) Second Amended and Restated Mortgage-Collateral Real Estate Mortgage, Deed of
Trust, Assignment of As-Extracted Collateral, Security Agreement and Financing
Statement from the Borrower to Brian Malone, as Trustee, for the benefit of the
Administrative Agent and the other Secured Parties, dated April 5, 2013 (Montana
and North Dakota).

 

Exhibit E-1 - 1

--------------------------------------------------------------------------------

EXHIBIT E-2

FORM OF

SECOND AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

[attached]

 

Exhibit E-3 - 1

--------------------------------------------------------------------------------

EXHIBIT F

FORM OF

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit and guarantees included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.      Assignor:

  

 

  

2.      Assignee:

  

 

      [and is an Affiliate/Approved Fund of [identify Lender]1]

3.      Borrower:

   Oasis Petroleum North America LLC

4.      Administrative Agent:

   Wells Fargo Bank, N.A., as the administrative agent under the Credit
Agreement

 

 

1  Select as applicable.

 

Exhibit F - 1

--------------------------------------------------------------------------------

5.      Credit Agreement:

   The Second Amended and Restated Credit Agreement dated as of April 5, 2013
among Oasis Petroleum North America LLC, the Lenders parties thereto, Wells
Fargo Bank, N.A., as Administrative Agent the other Credit Parties party
thereto, and the other agents parties thereto. 6. Assigned Interest:   

 

Commitment

Assigned

  

Aggregate Amount of
Commitment/Loans

for all Lenders

  

Amount of

Commitment/Loans

Assigned

  

Percentage Assigned

of

Commitment/Loans2

   $    $    %    $    $    %    $    $    %

 

7.      Effective Date:

   ___________ __, 201_ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR]

By:  

 

Name:  

 

Title:  

 

ASSIGNEE [NAME OF ASSIGNEE]

By:  

 

Name:  

 

Title:  

 

 

2  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

Exhibit F - 2

--------------------------------------------------------------------------------

Consented to and Accepted:

WELLS FARGO BANK, N.A.,

        as Administrative Agent

By:  

 

Name:  

 

Title:  

 

By:  

 

Name:  

 

Title:  

 

Consented to: OASIS PETROLEUM NORTH AMERICA LLC

By:  

 

Name:  

 

Title:  

 

 

Exhibit F - 3

--------------------------------------------------------------------------------

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 8.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor 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 the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

 

Exhibit F - 4

--------------------------------------------------------------------------------

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Texas.

 

Exhibit F - 5

--------------------------------------------------------------------------------

EXHIBIT G

FORM OF

ELECTED COMMITMENT INCREASE CERTIFICATE

[                ], 20[    ]

 

To: Wells Fargo Bank, N.A.,

   as Administrative Agent

The Borrower, the Administrative Agent, the other Credit Parties party thereto
and certain Lenders and other agents have heretofore entered into a Second
Amended and Restated Credit Agreement, dated as of April 5, 2013 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”). Capitalized terms not otherwise defined herein shall have the
meaning given to such terms in the Credit Agreement.

This Elected Commitment Increase Certificate is being delivered pursuant
to Section 2.06(c) of the Credit Agreement.

Please be advised that the undersigned Lender has agreed (a) to increase its
Elected Commitment under the Credit Agreement effective [                ],
20[    ] from $[                ] to $[                ] and (b) that it shall
continue to be a party in all respects to the Credit Agreement and the other
Loan Documents.

 

Very truly yours,

OASIS PETROLEUM NORTH AMERICA LLC,

a Delaware limited liability company

By:  

 

Name:  

 

Title:  

 

 

Exhibit G - 1

--------------------------------------------------------------------------------

Accepted and Agreed:

WELLS FARGO BANK, N.A.,

    as Administrative Agent

By:  

 

Name:  

 

Title:  

 

Accepted and Agreed: [Name of Increasing Lender]

By:  

 

Name:  

 

Title:  

 

 

Exhibit G - 2

--------------------------------------------------------------------------------

EXHIBIT H

FORM OF

ADDITIONAL LENDER CERTIFICATE

[                ], 20[    ]

 

To: Wells Fargo Bank, N.A.,

as Administrative Agent

The Borrower, the Administrative Agent, the other Credit Parties party thereto
and certain Lenders and other agents have heretofore entered into a Second
Amended and Restated Credit Agreement, dated as of April 5, 2013 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”). Capitalized terms not otherwise defined herein shall have the
meaning given to such terms in the Credit Agreement.

This Additional Lender Certificate is being delivered pursuant
to Section 2.06(c) of the Credit Agreement.

Please be advised that the undersigned Additional Lender has agreed (a) to
become a Lender under the Credit Agreement effective [                ],
20[                ] with a Maximum Aggregate Credit Amount of
$[                ] and an Elected Commitment of $[                ] and
(b) that it shall be a party in all respects to the Credit Agreement and the
other Loan Documents.

This Additional Lender Certificate is being delivered to the Administrative
Agent together with (i) if the Additional Lender is a Foreign Lender, any
documentation required to be delivered by such Additional Lender pursuant
to Section 5.03(e) of the Credit Agreement, duly completed and executed by the
Additional Lender, and (ii) an Administrative Questionnaire in the form supplied
by the Administrative Agent, duly completed by the Additional Lender. The
[Borrower/Additional Lender] shall pay the fee payable to the Administrative
Agent pursuant to Section 2.06(c)(ii)(G) of the Credit Agreement.

 

Very truly yours,

OASIS PETROLEUM NORTH AMERICA LLC,

a Delaware limited liability company

By:  

 

Name:  

 

Title:  

 

 

Exhibit H - 1

--------------------------------------------------------------------------------

Accepted and Agreed: WELLS FARGO BANK, N.A., as Administrative Agent By:  

 

Name:  

 

Title:  

 

Accepted and Agreed: [Name of Increasing Lender] By:  

 

Name:  

 

Title:  

 

 

Exhibit H - 2

--------------------------------------------------------------------------------

EXHIBIT I-1

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOREIGN LENDERS; NOT PARTNERSHIPS)

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement
dated as of April 5, 2013 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Oasis Petroleum North America LLC,
a Delaware limited liability company, as Borrower, Wells Fargo Bank, N.A., as
Administrative Agent, the other Credit Parties party thereto, the financial
institutions from time to time party thereto as Lenders, and the other Agents
party thereto.

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN (or IRS Form
W-8BEN-E, as applicable). By executing this certificate, the undersigned agrees
that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform the Borrower and the Administrative Agent,
and (2) the undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:  

 

Name:  

 

Title:  

 

Date:                , 20[    ]

 

 

Exhibit I-1 - 1

--------------------------------------------------------------------------------

EXHIBIT I-2

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOREIGN PARTICIPANTS; NOT PARTNERSHIPS)

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement
dated as of April 5, 2013 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Oasis Petroleum North America LLC,
a Delaware limited liability company, as Borrower, Wells Fargo Bank, N.A., as
Administrative Agent, the other Credit Parties party thereto, the financial
institutions from time to time party thereto as Lenders, and the other Agents
party thereto.

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN (or IRS Form W-8BEN-E, as applicable).
By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender in writing, and (2) the undersigned shall have at all
times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:  

 

Name:  

 

Title:  

 

Date:                , 20[    ]

 

Exhibit I-2 - 1

--------------------------------------------------------------------------------

EXHIBIT I-3

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOREIGN PARTICIPANTS; PARTNERSHIPS)

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement
dated as of April 5, 2013 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Oasis Petroleum North America LLC,
a Delaware limited liability company, as Borrower, Wells Fargo Bank, N.A., as
Administrative Agent, the other Credit Parties party thereto, the financial
institutions from time to time party thereto as Lenders, and the other Agents
party thereto.

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN (or IRS
Form W-8BEN-E, as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS
Form W-8BEN (or IRS Form W-8BEN-E, as applicable) from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT] By:  

 

Name:  

 

Title:  

 

Date:                , 20[    ]

 

Exhibit I-3 - 1

--------------------------------------------------------------------------------

EXHIBIT I-4

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(FOREIGN LENDERS; PARTNERSHIPS)

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Second Amended and Restated Credit Agreement
dated as of April 5, 2013 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Oasis Petroleum North America LLC,
a Delaware limited liability company, as Borrower, Wells Fargo Bank, N.A., as
Administrative Agent, the other Credit Parties party thereto, the financial
institutions from time to time party thereto as Lenders, and the other Agents
party thereto.

Pursuant to the provisions of Section 5.03 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN (or IRS Form W-8BEN-E, as applicable) or (ii) an IRS Form W-8IMY
accompanied by an IRS Form W-8BEN (or IRS Form W-8BEN-E, as applicable) from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:  

 

Name:  

 

Title:  

 

Date:                , 20[    ]

 

 

Exhibit I-4 - 1