Exhibit 10.1

Execution Version

 

 

 

THIRD AMENDED AND RESTATED

CREDIT AGREEMENT

dated as of February 28, 2019

among

MONTAGE RESOURCES CORPORATION

(f/k/a Eclipse Resources Corporation),

as Borrower,

BANK OF MONTREAL,

as Administrative Agent,

and

The Lenders Party Hereto

 

 

BMO CAPITAL MARKETS CORP.,

CAPITAL ONE, NATIONAL ASSOCIATION

AND

KEYBANK NATIONAL ASSOCIATION,

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

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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      30  

Section 1.04

  Terms Generally; Rules of Construction      30  

Section 1.05

  Accounting Terms and Determinations; GAAP      30  

Section 1.06

  Divisions      30   ARTICLE II

 

THE CREDITS

 

Section 2.01

  Commitments      31  

Section 2.02

  Loans and Borrowings      31  

Section 2.03

  Requests for Borrowings      32  

Section 2.04

  Interest Elections      33  

Section 2.05

  Funding of Borrowings      34  

Section 2.06

  Termination, Reduction and Optional Increase of Aggregate Maximum Credit
Amounts      35  

Section 2.07

  Borrowing Base      37  

Section 2.08

  Letters of Credit      40  

Section 2.09

  Defaulting Lenders      45   ARTICLE III

 

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

 

Section 3.01

  Repayment of Loans      47  

Section 3.02

  Interest      47  

Section 3.03

  Alternate Rate of Interest      48  

Section 3.04

  Prepayments      49  

Section 3.05

  Fees      51   ARTICLE IV

 

PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS

 

Section 4.01

  Payments Generally; Pro Rata Treatment; Sharing of Set-offs      52  

Section 4.02

  Presumption of Payment by the Borrower      53  

Section 4.03

  Disposition of Proceeds      53   ARTICLE V

 

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

 

Section 5.01

  Increased Costs      54  

Section 5.02

  Break Funding Payments      55  

Section 5.03

  Taxes      55  

Section 5.04

  Mitigation Obligations; Replacement of Lenders      59  

Section 5.05

  Illegality      60   ARTICLE VI

 

CONDITIONS PRECEDENT

 

Section 6.01

  Effective Date      60  

Section 6.02

  Each Credit Event      62  

 

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ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

 

Section 7.01

  Organization; Powers      63  

Section 7.02

  Authority; Enforceability      63  

Section 7.03

  Approvals; No Conflicts      63  

Section 7.04

  Financial Condition; No Material Adverse Change      64  

Section 7.05

  Litigation      65  

Section 7.06

  Environmental Matters      65  

Section 7.07

  Compliance with the Laws and Agreements; No Defaults      66  

Section 7.08

  Investment Company Act      66  

Section 7.09

  Taxes      66  

Section 7.10

  ERISA      66  

Section 7.11

  Disclosure; No Material Misstatements      67  

Section 7.12

  Insurance      67  

Section 7.13

  Restriction on Liens      68  

Section 7.14

  Subsidiaries      68  

Section 7.15

  Location of Business and Offices      68  

Section 7.16

  Properties; Titles, Etc      68  

Section 7.17

  Maintenance of Properties      69  

Section 7.18

  Gas Imbalances, Prepayments      69  

Section 7.19

  Marketing of Production      70  

Section 7.20

  Swap Agreements and Eligible Contract Participant      70  

Section 7.21

  Use of Loans and Letters of Credit      70  

Section 7.22

  Solvency      70  

Section 7.23

  Anti-Corruption Laws and Sanctions      70   ARTICLE VIII

 

AFFIRMATIVE COVENANTS

 

Section 8.01

  Financial Statements; Other Information      71  

Section 8.02

  Notices of Material Events      74  

Section 8.03

  Existence; Conduct of Business      74  

Section 8.04

  Payment of Obligations      74  

Section 8.05

  Performance of Obligations under Loan Documents      75  

Section 8.06

  Operation and Maintenance of Properties      75  

Section 8.07

  Insurance      75  

Section 8.08

  Books and Records; Inspection Rights      76  

Section 8.09

  Compliance with Laws      76  

Section 8.10

  Environmental Matters      76  

Section 8.11

  Further Assurances      77  

Section 8.12

  Reserve Reports      77  

Section 8.13

  Title Information      79  

Section 8.14

  Collateral and Guaranty Agreements      79  

Section 8.15

  ERISA      81  

Section 8.16

  Unrestricted Subsidiaries      81  

Section 8.17

  Post-Closing Obligations      81  

 

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ARTICLE IX

 

NEGATIVE COVENANTS

 

Section 9.01

  Financial Covenants      82  

Section 9.02

  Debt      82  

Section 9.03

  Liens      83  

Section 9.04

  Dividends and Distributions; Redemptions of Permitted Unsecured Debt      84  

Section 9.05

  Investments, Loans and Advances      84  

Section 9.06

  Nature of Business; No International Operations      86  

Section 9.07

  Limitation on Leases      86  

Section 9.08

  Proceeds of Loans and Letters of Credit      86  

Section 9.09

  ERISA Compliance      87  

Section 9.10

  Sale or Discount of Receivables      87  

Section 9.11

  Mergers, Etc      87  

Section 9.12

  Sale of Properties and Termination of Swap Agreements      88  

Section 9.13

  Environmental Matters      90  

Section 9.14

  Transactions with Affiliates      90  

Section 9.15

  Subsidiaries      90  

Section 9.16

  Negative Pledge Agreements; Dividend Restrictions      90  

Section 9.17

  Gas Imbalances, Take-or-Pay or Other Prepayments      91  

Section 9.18

  Swap Agreements      91  

Section 9.19

  Marketing Activities      93  

Section 9.20

  Designation and Conversion of Restricted and Unrestricted Subsidiaries      93
 

Section 9.21

  Permitted Unsecured Debt Documents      94   ARTICLE X

 

EVENTS OF DEFAULT; REMEDIES

 

Section 10.01

  Events of Default      94  

Section 10.02

  Remedies      96   ARTICLE XI

 

THE ADMINISTRATIVE AGENT

 

Section 11.01

  Appointment; Powers      97  

Section 11.02

  Duties and Obligations of Administrative Agent      98  

Section 11.03

  Action by Administrative Agent      98  

Section 11.04

  Reliance by Administrative Agent      99  

Section 11.05

  Subagents      99  

Section 11.06

  Resignation of Administrative Agent      99  

Section 11.07

  Administrative Agent as Lender      100  

Section 11.08

  No Reliance      100  

Section 11.09

  Administrative Agent May File Proofs of Claim      100  

Section 11.10

  Authority of Administrative Agent to Release Collateral and Liens      101  

Section 11.11

  Agents      101   ARTICLE XII

 

MISCELLANEOUS

 

Section 12.01

  Notices      101  

Section 12.02

  Waivers; Amendments      102  

Section 12.03

  Expenses, Indemnity; Damage Waiver      103  

Section 12.04

  Successors and Assigns      106  

Section 12.05

  Survival; Revival; Reinstatement      109  

Section 12.06

  Counterparts; Integration; Effectiveness      109  

Section 12.07

  Severability      110  

Section 12.08

  Right of Setoff      110  

Section 12.09

  GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS      110  

 

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Section 12.10

  Headings      111  

Section 12.11

  Confidentiality      111  

Section 12.12

  Interest Rate Limitation      112  

Section 12.13

  EXCULPATION PROVISIONS      113  

Section 12.14

  Collateral Matters; Swap Agreements      114  

Section 12.15

  No Third Party Beneficiaries      114  

Section 12.16

  USA Patriot Act Notice      114  

Section 12.17

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      115
  Annexes, Exhibits and Schedules

 

Annex I

  List of Maximum Credit Amounts   

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

  Security Instruments   

Exhibit F

  Form of Third Amended and Restated Guarantee and Collateral Agreement   

Exhibit G

  Form of Assignment and Assumption   

Exhibit H-1

  Form of U.S. Tax Compliance Certificate (Foreign Lenders; not partnerships)   

Exhibit H-2

  Form of U.S. Tax Compliance Certificate (Foreign Participants; not
partnerships)   

Exhibit H-3

  Form of U.S. Tax Compliance Certificate (Foreign Participants; partnerships)
  

Exhibit H-4

  Form of U.S. Tax Compliance Certificate (Foreign Lenders; partnerships)   

Exhibit I

  Form of Maximum Credit Amount Increase Certificate   

Exhibit J

  Form of Additional Lender Certificate   

Schedule 1.01

  Existing Letters of Credit   

Schedule 7.05

  Litigation   

Schedule 7.06

  Environmental Matters   

Schedule 7.14

  Subsidiaries   

Schedule 7.18

  Gas Imbalances   

Schedule 7.19

  Marketing Contracts   

Schedule 7.20

  Swap Agreements   

Schedule 9.02

  Existing Debt   

Schedule 9.03

  Existing Liens   

Schedule 9.05

  Investments   

Schedule 9.14

  Affiliate Transactions   

Schedule 9.18

  Approved Counterparties and Swap Agreements   

 

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THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 28, 2019,
is among: MONTAGE RESOURCES CORPORATION (f/k/a Eclipse Resources Corporation), a
Delaware corporation (the “Borrower”), each of the Persons from time to time a
lender party hereto and BANK OF MONTREAL (in its individual capacity, “BMO”), 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. Reference is made to that certain Second Amended and Restated Credit
Agreement dated as of June 11, 2015 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time prior to the date hereof,
the “Existing Credit Agreement”), among the Borrower, the lenders party thereto
(the “Existing Lenders”) and BMO, as administrative agent for the Existing
Lenders.

B. The Borrower desires to amend and restate the Existing Credit Agreement, and
the parties hereto have agreed to amend and restate the Existing Credit
Agreement as provided in this Agreement, which Agreement shall become effective
upon the satisfaction of the conditions precedent set forth in Section 6.01
hereof.

C. 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 that on the Effective Date (as defined below), the Existing
Credit Agreement shall be amended and restated 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:

“2015 Indenture” means that certain Indenture, dated as of July 6, 2015, among
the Borrower, the guarantors party thereto and Deutsche Bank Trust Company
Americas, as trustee.

“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.

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

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

“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 Agent” has the meaning assigned to such term in the introductory
paragraph hereof.

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

“Affected Loans” has the meaning assigned to 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. With respect
to the Borrower, Affiliates shall include, but shall not be limited to, the
Permitted Investors, but shall exclude any operating portfolio company of any
Permitted Investor.

“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 or Section 10.02(a).

“Agreement” means this Third Amended and Restated Credit Agreement, as the same
may be amended, restated, amended and restated, supplemented, or otherwise
modified 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% 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 1.0%, provided that for the purpose of
this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO
Rate (rounded upwards, if necessary, to the next 1/100 of 1%) at approximately
11:00 a.m., London time, on such day (or the immediately preceding Business Day
if such day is not a day on which banks are open for dealings in dollar deposits
in the London interbank market). 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. If the Alternate Base Rate is being used as an alternate rate of
interest pursuant to Section 3.03, then the Alternate Base Rate shall be the
greater of clauses (a) and (b) above and shall be determined without reference
to clause (c) above. For the avoidance of doubt, if the Alternate Base Rate as
so determined would be less than zero, such rate shall be deemed zero for
purposes of this Agreement.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Subsidiaries from time to
time concerning or relating to bribery or corruption.

“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 Borrowing Base Utilization Grid below based
upon the Borrowing Base Utilization Percentage then in effect:

 

Borrowing Base Utilization Grid

 

Borrowing Base Utilization Percentage

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

Eurodollar Loans

     1.750%        2.000%        2.250%        2.500%        2.750%  

ABR Loans

     0.750%        1.000%        1.250%        1.500%        1.750%  

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 that if at any time the
Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then the
“Applicable Margin” means the rate per annum set forth on the grid when the
Borrowing Base Utilization Percentage is at its highest level until such Reserve
Report is delivered.

 

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“Applicable Percentage” means, with respect to any Lender, the percentage of the
Aggregate Maximum Credit Amounts represented by such Lender’s Maximum Credit
Amount. Each Lender’s Applicable Percentage as of the date of this Agreement is
set forth on Annex I.

“Approved Counterparty” means (a) any Lender or any Affiliate of a Lender,
(b) any other Person whose long term senior unsecured debt rating is A-/A3 by
S&P or Moody’s (or their equivalent) or higher at the time of entry into the
applicable Swap Agreement (or whose obligations are guaranteed by another Person
who satisfies the foregoing thresholds), (c) any Person listed on Schedule 9.18
and (d) any other Person approved by the Majority Lenders in their sole
discretion.

“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) Software Integrated
Solutions Division of Schlumberger Technology Corporation and (d) any other
independent petroleum engineers selected by the Borrower and reasonably
acceptable to the Administrative Agent.

“Arrangers” means BMO Capital Markets Corp., Capital One, National Association
and KeyBank National Association, in their respective capacities as the joint
lead arrangers and joint bookrunners 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 G 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 is then
providing or, pursuant to an agreement then in effect, is obligated to provide,
Bank Products to the Borrower, any Guarantor or any other Restricted Subsidiary.

 

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“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Securities Exchange Act of 1934, as amended, except that in
calculating the beneficial ownership of any particular “person” (as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended),
such “person” will be deemed to have beneficial ownership of all securities that
such “person” has the right to acquire by conversion or exercise of other
securities, whether such right is currently exercisable or is exercisable only
after the passage of time. The terms “Beneficially Owns” and “Beneficially
Owned” have a corresponding meaning.

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Blue Ridge” means Blue Ridge Mountain Resources, Inc., a Delaware corporation.

“BMO” has the meaning assigned to such term in the introductory paragraph
hereof.

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

“Borrower” has the meaning assigned to such term in the introductory paragraph
hereof.

“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).

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

“Borrowing Base Increase Requisite Lenders” means, (a) if there are less than
three Lenders at such time, all Lenders, and (b) if there are three or more
Lenders at such time, (i) at any time while no Loans or LC Exposure is
outstanding, Lenders having more than ninety-five percent (95%) of the Aggregate
Maximum Credit Amounts; and (ii) at any time while any Loans or LC Exposure is
outstanding, Lenders holding more than ninety-five percent (95%) 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)).

“Borrowing Base 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 Borrowing Base in effect on such day.

“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
banks are open for dealings in dollar deposits in the London interbank market.

 

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“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 other than any Operating Lease.

“Capital Stock” means (a) in the case of a corporation, corporate stock, (b) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (c) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership interests, and
(d) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person, but excluding from all of the foregoing any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.

“Cash Collateralize” means, to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of one or more of the Issuing Banks or the
Lenders, as collateral for the LC Exposure or obligations of the Lenders to fund
participations in respect of Letters of Credit, as applicable, cash or deposit
account balances or, if the Administrative Agent and each applicable Issuing
Bank shall agree in their sole discretion, other credit support, in each case
pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent and each applicable Issuing Bank. “Cash Collateral” shall
have a meaning correlative to the foregoing and shall include the proceeds and
other credit support of such cash collateral.

“Casualty Event” means any loss, casualty or other 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 Restricted
Subsidiaries having a fair market value in excess of the Threshold Amount.

“Change in Control” means (a) the consummation of any transaction (including,
without limitation, any merger or consolidation), the result of which is that
any Person (including any “person” (as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended)) other than one or more
Permitted Investors, becomes the Beneficial Owner, directly or indirectly, of
more than 35% of the Voting Stock of the Borrower, measured by voting power
rather than number of shares, (b) without duplication, a “change in control” or
“change of control” (or similar event) as defined in the 2015 Indenture, but
only to the extent the occurrence of any such event gives rise to an obligation
of the Borrower or any other Credit Party to redeem, repay, or repurchase, or
otherwise offer to redeem, repay or repurchase, all or any portion of the
Permitted 2015 Bond Debt or (c) without duplication, a “change in control” or
“change of control” (or similar event) as defined in any Permitted Unsecured
Debt Document, but only to the extent the occurrence of any such event gives
rise to an obligation of the Borrower or any other Credit Party to redeem,
repay, or repurchase, or otherwise offer to redeem, repay or repurchase, all or
any portion of such Permitted Unsecured Debt.

Notwithstanding the preceding, but subject to the terms and provisions of this
Agreement including, without limitation, Section 8.01(j) and Section 9.11, (a)
any merger or consolidation of the Borrower with or into an Affiliate, where the
Borrower is the surviving entity following such merger or consolidation, solely
for the purpose of reorganizing the Borrower in another jurisdiction or (b) a
conversion of the Borrower or any Restricted Subsidiary from a limited
partnership, corporation, limited liability company or other form of entity to a
limited liability company, corporation, limited partnership or other form of
entity or an exchange of all of the outstanding Equity Interests in one form of
entity for

 

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Equity Interests in another form of entity shall, in each case, not constitute a
Change in Control, so long as following such merger, consolidation, conversion
or exchange the “persons” (as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) who Beneficially Owned the Equity
Interests of the Borrower immediately prior to such transactions continue to
Beneficially Own in the aggregate more than 35% of the Voting Stock of such
entity, or continue to Beneficially Own sufficient Equity Interests in such
entity to elect a majority of its directors, managers, trustees or other persons
serving in a similar capacity for such entity or its general partner, as
applicable, and, in either case no other “person” Beneficially Owns more than
35% of the Voting Stock of such entity or its general partner, as applicable.

“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 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, 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, are deemed
to have gone into effect and to have been adopted after the date of this
Agreement.

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

“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 or Section 10.02(a) and
(b) modified from time to time pursuant to assignments by or to such Lender
pursuant to Section 12.04(a). The amount representing each Lender’s Commitment
shall at any time be the lesser of (i) such Lender’s Maximum Credit Amount and
(ii) such Lender’s Applicable Percentage of the then effective Borrowing Base.

“Commitment Fee Rate” means the rate per annum set forth in the first column and
last row of the Borrowing Base Utilization Grid 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, and any
regulations promulgated thereunder.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income or profits (however denominated) or that are franchise
Taxes or branch profits Taxes.

“Consolidated Cash Balance” means, at any time, the aggregate amount of (a) cash
and (b) Investments described in Section 9.05(c), (d), (e), (f), (g), and (h),
in each case held by the Borrower and its Restricted Subsidiaries and excluding
(i) Cash Collateral that is Cash Collateralizing obligations under Section 2.08
or Section 2.09 and (ii) any outstanding checks and electronic funds transfers.

 

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“Consolidated Net Income” means with respect to the Borrower and the
Consolidated Restricted Subsidiaries, for any period, the aggregate of the net
income (or loss) of the Borrower and the Consolidated Restricted Subsidiaries
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
(or loss) (to the extent otherwise included therein) the following: (a) the net
income (or loss) of any Person in which the Borrower or any Consolidated
Restricted Subsidiary has an interest (which interest does not cause the net
income of such other Person to be consolidated with the net income of the
Borrower and the Consolidated Restricted Subsidiaries in accordance with GAAP),
except to the extent of the amount of dividends or distributions actually paid
in cash during such period by such other Person to the Borrower or to a
Consolidated Restricted Subsidiary, as the case may be; (b) the net income (but
not loss) during such period of any Consolidated Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar distributions or
transfers or loans by that Consolidated Restricted Subsidiary 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 Restricted
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 gains or losses during such period; (e) any
gains or losses attributable to writeups or writedowns of assets; (f) deferred
or non-cash taxes; (g) any non-cash gains or losses under ASC 815; and (h) until
the period in which such hedged future activity occurs, the costs or proceeds of
purchasing or selling options which are used to hedge future activity.

“Consolidated Restricted Subsidiaries” means any Restricted Subsidiaries that
are Consolidated Subsidiaries.

“Consolidated Subsidiaries” means each Subsidiary of the Borrower (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
Borrower in accordance with GAAP.

“Consolidated Total Funded Debt” means, with respect to the Borrower and the
Consolidated Restricted Subsidiaries, 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 reimbursement obligations of such Person in respect of drawn letters of
credit, surety or other bonds and similar instruments; (c) all accounts payable
of such Person and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services from time
to time incurred (other than such accounts payable, expenses, liabilities or
other obligations that are incurred in the ordinary course of business and which
(i) are not greater than ninety (90) days delinquent or (ii) are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP); (d) all obligations under Capital Leases;
(e) all obligations under Synthetic Leases; (f) all Consolidated Total Funded
Debt (as defined in the other clauses of this definition, and not limited to the
Consolidated Total Funded Debt of the Borrower and the Consolidated Restricted
Subsidiaries) of others secured by (or for which the holder of such Consolidated
Total Funded Debt has an existing right, contingent or otherwise, to be secured
by) a Lien on any Property of such Person, whether or not such Consolidated
Total Funded Debt is assumed by such Person (but, if such Consolidated Total
Funded Debt has not been assumed by such Person, limited to the lesser of
(i) the amount of such Consolidated Total Funded Debt and (ii) the fair market
value of the Property of such Person securing such Consolidated Total Funded
Debt); and (g) Disqualified Capital Stock. The Consolidated Total Funded Debt of
the Borrower and the Consolidated Restricted Subsidiaries 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.

“Consolidated Total Funded Net Debt” means, as of any date of determination, the
Consolidated Total Funded Debt minus (a) if there are no Loans outstanding under
this Agreement on such date, the Consolidated Cash Balance on such date or
(b) if there are Loans outstanding under this Agreement on such date, the lesser
of (i) the Consolidated Cash Balance on such date and (ii) $50,000,000.

 

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“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.
“Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means a deposit account control agreement or similar
agreement in form and substance reasonably satisfactory to the Administrative
Agent, executed by the applicable Credit Party, the Administrative Agent and the
relevant financial institution party thereto.

“Credit Parties” means, collectively, the Borrower and each Guarantor, and
“Credit Party” means any one of the foregoing.

“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
reimbursement obligations of such Person in respect of letters of credit, surety
or other bonds and similar instruments; (c) all accounts payable of such Person
and all accrued expenses, liabilities or other obligations of such Person to pay
the deferred purchase price of Property or services from time to time incurred
(other than such accounts payable, expenses, liabilities or other obligations
that are incurred in the ordinary course of business and which (i) are not
greater than ninety (90) days delinquent or (ii) are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP); (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 (but, if such Debt has not been assumed by such Person, limited to the
lesser of (i) the amount of such Debt and (ii) the fair market value of the
Property of such Person securing such Debt); (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 and, to the
extent entered into as a means of providing credit support for the obligations
of others and not primarily to enable such Person to acquire any such Property,
all obligations or undertakings of such Person 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; (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.

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

 

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“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.

“Defaulting Lender” means, subject to Section 2.09(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s good faith determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in such writing)
has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing
Bank, or any other Lender any other amount required to be paid by it hereunder
(including in respect of its participation in Letters of Credit) within two
Business Days of the date when due, (b) has notified the Borrower, the
Administrative Agent or any Issuing Bank in writing that it does not intend to
comply with its funding obligations hereunder, or has made a public statement to
that effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s good faith determination that a condition precedent to funding
(which condition precedent, together with any applicable default, shall be
specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three Business Days after written request by
the Administrative Agent or the Borrower, to confirm in writing to the
Administrative Agent and the Borrower that it will comply with its prospective
funding obligations hereunder (provided that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon receipt of such written
confirmation by the Administrative Agent and the Borrower), or (d) has, or has a
direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the Federal Deposit Insurance Corporation or any
other state or federal regulatory authority acting in such a capacity or
(iii) has become the subject of a Bail-In Action; provided that a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority, so long as such ownership interest 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)
to reject, repudiate, disavow or disaffirm any contracts or agreements made by
such Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed
to be a Defaulting Lender (subject to Section 2.09(b)) upon delivery of written
notice of such determination to the Borrower, each Issuing Bank, and each Lender
(or if an earlier date, as of the date of such determination by the
Administrative Agent), delivery of such written notice not to be unreasonably
withheld or delayed by the Administrative Agent.

“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 at the option of the holder of such Equity Interest) 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 91 days 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.

“Dissenting Lender” has the meaning assigned to such term in
Section 2.07(c)(iv).

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

 

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

“EBITDAX” means, for any period, the sum of (a) Consolidated Net Income for such
period plus (b) the following expenses or charges to the extent deducted from
Consolidated Net Income in such period: (i) net interest, income, gross receipts
or franchise taxes, depreciation, depletion, amortization, exploration expenses,
other noncash losses or charges, non-cash losses from dispositions of assets,
extraordinary or non-recurring expenses, and an amount not to exceed 5% of
EBITDAX for such period (calculated prior to giving effect to such addback) for
transaction expenses, fees or charges reasonably incurred in connection with a
merger (other than the Merger), acquisitions or dispositions occurring during
such period (whether or not such mergers, acquisitions or dispositions are
ultimately consummated), (ii) transaction expenses, fees or charges reasonably
incurred in connection with the Merger and (iii) expenses and fees incurred in
connection with this Agreement and the other Loan Documents, minus (c) the
following income or gains to the extent included in Consolidated Net Income in
such period: all noncash income and gains from dispositions of assets; provided,
that, only for purposes of determining compliance with the financial covenants
set forth in Section 9.01, if, since the beginning of the period ending on the
date for which EBITDAX is determined, the Borrower or any Consolidated
Restricted Subsidiary shall have made any acquisition or disposition, EBITDAX
shall be calculated giving pro forma effect thereto as if the acquisition or
disposition had occurred on the first day of such period, and such calculation
shall be determined in good faith by a Financial Officer of the Borrower and
such calculation shall be reasonably acceptable to the Administrative Agent (and
the Borrower will provide to the Administrative Agent such supporting
information as Administrative Agent may reasonably request), without giving
effect to any anticipated or proposed change in operations, revenues, expenses
or other items or adjustments included in the computation of EBITDAX. For the
purposes of determining EBITDAX for the fiscal quarters of the Borrower ending
March 31, 2019, June 30, 2019 and September 30, 2019, EBITDAX shall be deemed to
equal (A) EBITDAX attributable to the Borrower and its Consolidated Restricted
Subsidiaries (including Blue Ridge and its subsidiaries) for the one-quarter
period ending March 31, 2019, as if the Merger had been consummated on
January 1, 2019, multiplied by 4, (B) EBITDAX attributable to the Borrower and
its Consolidated Restricted Subsidiaries (including Blue Ridge and its
subsidiaries) for the two-quarter period ending June 30, 2019, as if the Merger
had been consummated on January 1, 2019, multiplied by 2 and (C) EBITDAX
attributable to the Borrower and its Consolidated Restricted Subsidiaries
(including Blue Ridge and its subsidiaries) for the three-quarter period ending
September 30, 2019, as if the Merger been consummated on January 1, 2019,
multiplied by 4/3, respectively.

“EEA Financial Institution” means (a) any institution 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
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).

 

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“Election Notice” has the meaning assigned to such term in Section 3.04(c)(ii).

“Engineering Reports” has the meaning assigned to 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 Materials, in effect in any and all jurisdictions in which the
Borrower or any Subsidiary is conducting, or at any time has conducted,
business, or where any Property of the Borrower or any Subsidiary are located,
including, 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.

“Environmental Permit” means any permit, registration, license, notice,
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.

“ERISA Event” means (a) a “reportable event” described in section 4043 of ERISA
with respect to a Plan, other than a reportable event as to which the provisions
of thirty (30) days’ notice to the PBGC is expressly waived under applicable
regulations, (b) the failure of the Borrower, a Subsidiary or any ERISA
Affiliate to make by its due date a required installment payment under
Section 430(j) of the Code with respect to any Plan or any failure by any Plan
to satisfy the minimum funding standards (within the meaning of Section 412 of
the Code or Section 302 of ERISA) applicable to such Plan, whether or not
waived; (c) a determination that any Plan is, or is expected to be, in “at risk”
status (within the meaning of Section 430 of the Code or Section 303 of ERISA),
(d) a determination that any Multiemployer Plan is, or is expected to be,
insolvent (within the meaning of Section 4245 of ERISA), in reorganization
(within the meaning of Section 4241 of ERISA), or in “endangered” or “critical”
status (within the meaning of Section 432 of the Code or Section 305 of ERISA),
(e) the failure by the Borrower, a Subsidiary or any ERISA Affiliate to make any
required contribution to a Multiemployer Plan pursuant to Sections 431 or 432 of
the Code, (f) the withdrawal or partial withdrawal of the Borrower, a Subsidiary
or any ERISA Affiliate from a Plan during a plan year in which it was a
“substantial employer” as defined in section 4001(a)(2) of ERISA, (g) the filing
of a notice of intent to terminate a Plan or the treatment of a Plan amendment
as a termination under section 4041 of ERISA, (h) the institution of proceedings
to terminate a Plan by the PBGC, (i) receipt of a notice of withdrawal liability
pursuant to Section 4202 of ERISA or (j) any other event or condition which
might constitute grounds under section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.

 

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“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 to 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) landlord’s liens, operators’, vendors’,
carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’,
materialmen’s, construction or other like Liens, in each case, arising in the
ordinary course of business or incident to the exploration, development,
operation and maintenance of Oil and Gas Properties each of which is in respect
of obligations that are not delinquent by more than 90 days or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (d) contractual Liens which arise
in the ordinary course of business under operating agreements, joint venture
agreements, exploration agreements, oil and gas partnership agreements, oil and
gas leases, farm-in or farm-out agreements, division orders, contracts for the
sale, transportation, gathering or exchange of oil and natural gas, unitization
and pooling declarations and agreements, area of mutual interest agreements,
overriding royalty agreements, carried interests, reversionary interests,
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, consents or agreements, and other
agreements which are usual and customary in the oil and gas business and are for
claims which are not delinquent by more than 90 days 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 the Property
covered by such Lien for the purposes for which such Property is held by the
Borrower or any Restricted Subsidiary or materially impair the value of such
Property subject thereto; (e) Liens arising solely by virtue of any statutory or
common law provision or otherwise arising in the ordinary course of business
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 the Borrower or any of its Restricted
Subsidiaries to provide collateral to secure owed Debt to the depository
institution; (f) easements, restrictions, servitudes, permits, surface leases,
conditions, covenants, exceptions or reservations in any Property of the
Borrower or any Restricted Subsidiary 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 interfere with the operations or the use of such Property for the
purposes of which such Property is held by the Borrower or any Restricted
Subsidiary or materially impair the value of such Property subject thereto;
(g) Liens on cash or securities pledged to

 

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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; (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; (i) Liens arising from Uniform Commercial Code
financing statement filings made as a precautionary measure regarding operating
leases entered into by the Borrower or any Restricted Subsidiary in the ordinary
course of business covering the Property under such lease; and (j) routine
preferential rights to purchase and provisions requiring a third party’s consent
prior to assignment and similar restraints on alienation, in each case, granted
pursuant to an oil and gas operating agreement or lease and arising in the
ordinary course of business or incident to the exploration, development,
operation and maintenance of Oil and Gas Properties; provided such right,
requirement or restraint does not materially impair the value of such Oil and
Gas Properties; 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 Secured Obligations.

“Excluded Swap Obligation” means, with respect to any Credit Party individually
determined on a Credit Party by Credit Party basis, any Swap Obligation if, and
solely to the extent that, all or a portion of the guarantee of such Credit
Party of, or the grant by such Credit Party of a security interest to secure,
such Swap Obligation (or any guarantee 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 (a) such Credit Party’s failure for any reason to
constitute an “eligible contract participant” as defined in the Commodity
Exchange Act or (b) in the case of any such Secured Obligation in respect of any
Swap Agreement subject to a clearing requirement pursuant to Section 2(h) of the
Commodity Exchange Act, because such Credit Party is a “financial entity” as
defined in Section 2(h)(7)(C)(1) of the Commodity Exchange Act, in either case
at the time such guarantee or grant of a security interest becomes effective
with respect to such Swap Obligation. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income or profits (however
denominated), franchise Taxes, and branch profits Taxes, in each case,
(i) imposed as a result of such Recipient being organized under the laws of, or
having its principal office or, in the case of any Lender, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in a Loan or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan or Commitment (other than pursuant to an
assignment request by the Borrower under Section 5.04(b) or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 5.03, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Recipient’s failure to comply with, or to deliver any forms
or certifications described in, Section 5.03(f), and (d) any U.S. federal
withholding Taxes imposed under FATCA.

 

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“Existing Credit Agreement” has the meaning assigned to such term in the
recitals hereto.

“Existing Lenders” has the meaning assigned to such term in the recitals hereto.

“Existing Letter of Credit” means each letter of credit issued (or deemed
issued) under the Existing Credit Agreement identified on Schedule 1.01 hereto
that is outstanding on the Effective Date and each renewal of such letter of
credit, each of which shall be deemed, on and after the Effective Date, to have
been issued hereunder.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (and any amended or successor versions thereof that are substantially
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)(1) of the Code, and any
intergovernmental agreements entered into in connection with the implementation
of such Sections of the Code (together with any laws, legislation, rules or
regulations implementing such agreements).

“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. Notwithstanding anything else provided
herein or otherwise, if the Federal Funds Effective Rate shall be less than
zero, such rate shall be deemed to be zero for all purposes of this Agreement.

“Financial Officer” means, for any Person, 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
Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a).

“Flood Insurance Regulations” means (a) 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 not a U.S. Person.

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

“Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to any Issuing Bank, such Defaulting Lender’s Applicable Percentage of
the outstanding LC Exposure with respect to Letters of Credit issued by such
Issuing Bank other than LC Exposure as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof.

 

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“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; provided, however, with respect to the calculation of
financial ratios and other financial tests, “GAAP” means generally accepted
accounting principles as in effect on the date of this Agreement, applied in a
manner consistent with that used in preparing the Financial Statements.

“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.

“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, rules of common law, authorization or other
directive or requirement, whether now or hereinafter in effect, of any
Governmental Authority.

“Guarantee and Collateral Agreement” means an agreement executed and delivered
by the Guarantors in substantially the form of Exhibit F (or supplement thereto,
as applicable).

“Guarantors” means (a) Eclipse Resources I, LP, a Delaware limited partnership,
(b) Eclipse Resources-Ohio, LLC, a Delaware limited liability company,
(c) Buckeye Minerals & Royalties, LLC, a Delaware limited liability company,
(d) Eclipse Resources Operating, LLC, a Delaware limited liability company,
(e) Eclipse Resources Midstream, LP, a Delaware limited partnership, (f) Eclipse
Resources Marketing, LP, a Delaware limited partnership, (g) Eclipse GP, LLC, a
Delaware limited liability company, (h) Eclipse Resources-PA, LP, a Delaware
limited partnership, (i) Blue Ridge Mountain Resources, Inc., a Delaware
corporation, (j) Bakken Hunter, LLC, a Delaware limited liability company,
(k) Triad Hunter, LLC, a Delaware limited liability company, (l) Hunter Real
Estate, LLC, a Delaware limited liability company, (m) Viking International
Resources Co., Inc., a Delaware corporation, and (n) each other Subsidiary that
guarantees the Secured Obligations pursuant to Section 8.14(b); provided that
any such Person so constituting a Guarantor will cease to constitute a Guarantor
if and when it is released from the Guarantee and Collateral Agreement in
accordance with and to the extent permitted under the Loan Documents.

“Hazardous Material” means any substance regulated or as to which liability
might arise under any applicable Environmental Law including: (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 or amount of interest, as the case may be, 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 Secured Obligations 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, gas or mineral leases, or other liquid or
gaseous hydrocarbon leases, mineral fee interests, overriding royalty and
royalty interests, net profit interests, production payment interests and other
interests payable out of Hydrocarbon production, including any reserved or
residual interests of whatever nature.

 

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“Hydrocarbons” means crude oil, natural gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons (including coalbed methane), natural gas liquids, plant products,
sulphur, other gases and all products refined or separated therefrom.

“Immaterial Subsidiary” means any Restricted Subsidiary that has assets having
an aggregate book value, as of the end of the fiscal year most recently ended
(or if such Subsidiary was acquired or created subsequent to the end of such
fiscal year, as of the later of such date of acquisition or creation), not
exceeding $2,000,000; provided that in no event may an Immaterial Subsidiary own
any Proved Reserves evaluated in the Reserve Report used in the most recent
determination of the Borrowing Base.

“Immaterial Title Deficiencies” means defects or deficiencies in title which do
not diminish by more than five percent (5.0%) the aggregate value of the Proved
Reserves of the Borrower and its Restricted Subsidiaries evaluated in the
Reserve Report used in the most recent determination of the Borrowing Base.

“Increase Portion” means, with respect to any Dissenting Lender, when a Proposed
Borrowing Base has been approved by the Borrowing Base Increase Requisite
Lenders but not by all of the Lenders, the amount that such Dissenting Lender’s
Applicable Percentage (before giving effect to any reallocation described in
Section 2.07(c)(iv)) of the Proposed Borrowing Base exceeds such Dissenting
Lender’s Applicable Percentage (before giving effect to any reallocation
described in Section 2.07(c)(iv)) of the highest Borrowing Base such Dissenting
Lender approved in accordance with the terms hereof.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any
Credit Party under any Loan Document and (b) to the extent not described in the
preceding clause (a), Other Taxes.

“Initial Reserve Report” means, collectively, (a) the report prepared internally
by the Borrower with respect to certain Oil and Gas Properties of the Borrower
and its Restricted Subsidiaries as of June 30, 2018 and (b) the report prepared
internally by Blue Ridge with respect to certain Oil & Gas Properties of Blue
Ridge and its subsidiaries as of June 30, 2018.

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

“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.

“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, 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

 

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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 to 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,
assumption of Debt of, purchase or other acquisition of any other Debt 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 (i) any such advance, loan or extension of credit
having a term not exceeding ninety (90) days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business)
and (ii) deposits made to commercial banks or similar Persons, or to customers,
in each case 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.

“Issuing Bank” means (a) BMO, (b) KeyBank, National Association and (c) Capital
One, National Association in their respective capacity as an issuer of Letters
of Credit hereunder, and their respective successors in such capacity as
provided in Section 2.08(i) and (b) any one or more additional issuing banks
designated by the Borrower pursuant to Section 2.08(i); provided that each
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by their respective Affiliates, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate; provided, further, that (i) solely as between the Borrower
and the applicable Issuing Bank, the Borrower shall deal exclusively with the
applicable Issuing Bank for all purposes of requests, repayments, payments,
extensions, assignments and all other actions and requirements with respect
hereto and otherwise with respect to related, requested or required notices,
consents, waivers, amendments and all other actions required or deemed required
by such Affiliate, (ii) any such arrangement shall not relieve the applicable
Issuing Bank from performing any of its obligations under any Loan Document on
the terms and subject to the conditions provided therein, and (iii) the use of
any such Affiliate shall not result in the imposition of any incremental
Indemnified Taxes. Use herein of the phrase of “the Issuing Bank” or words of
similar import mean each Issuing Bank, as applicable, if, at the relevant time
of reference, there exist more than one Issuing Bank.

“LC Commitment” at any time means $75,000,000; provided that no Issuing Bank
shall be obligated to issue Letters of Credit in an aggregate face amount in
excess of $25,000,000 (or such greater amount as is agreed to in writing by such
Issuing Bank) outstanding at any time.

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

 

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“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. Subject to Section 2.09, 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 lender party hereto pursuant hereto and 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) other than, in each case, any such
Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement,
which shall include the Existing Letters of Credit.

“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 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. Notwithstanding anything else provided herein or otherwise, if
the LIBO Rate shall be less than zero, such rate shall be deemed to be zero for
all purposes of this Agreement.

“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 payable out of Oil and Gas
Properties. The term “Lien” shall include easements, restrictions, servitudes,
permits or reservations. For the purposes of this Agreement, the Borrower and
its Restricted Subsidiaries 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.

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

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

 

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“Majority Lenders” means, (i) 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 (ii) 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 businesses, operations, Property or financial
condition of the Borrower and the Restricted Subsidiaries taken as a whole,
(b) the ability of the Credit Parties, taken as a whole, to perform their
obligations under the Loan Documents, (c) the validity or enforceability of any
Loan Document or (d) the rights and remedies of the Administrative Agent, the
Issuing Bank or any Lender under any Loan Document.

“Material Indebtedness” means Debt (other than the Loans, Letters of Credit and
any other Debt arising under, or governed by, any Loan Document), or payment
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Restricted Subsidiaries in an aggregate principal amount
exceeding the Threshold Amount. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Borrower or any
Restricted Subsidiary in respect of any Swap Agreement at any time shall be the
Swap Termination Value.

“Maturity Date” means the earlier to occur of (a) February 28, 2024 and (b) in
the event that the Permitted 2015 Bond Debt in an aggregate principal amount
exceeding $50,000,000 remains outstanding on the date that is 180 days prior to
its stated maturity date (the “Permitted Unsecured Debt Springing Maturity
Date”), the Permitted Unsecured Debt Springing 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) or Section 10.02(a), (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(a).

“Maximum Credit Amount Increase Certificate” has the meaning assigned to such
term in Section 2.06(c)(ii)(D).

“Merger” means the transactions contemplated by, and consummated in accordance
with, the Merger Agreement, pursuant to which Merger Sub will merge with and
into Blue Ridge, with Blue Ridge surviving the Merger as a Wholly-Owned
Subsidiary of the Borrower.

“Merger Agreement” means that certain Agreement and Plan of Merger, by and among
the Borrower, Merger Sub and Blue Ridge, dated as of August 25, 2018, as may be
amended, restated, supplemented or otherwise modified from time to time in a
manner that is not materially adverse to the interests of the Lenders (in their
capacities as such) without the Administrative Agent’s prior written consent
(such consent not to be unreasonably withheld, delayed or conditioned).

“Merger Sub” means Everest Merger Sub Inc., a Delaware corporation.

 

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“Minimum Collateral Amount” means, at any time, with respect to Cash Collateral
consisting of cash or deposit account balances, an amount equal to 100% of the
Fronting Exposure of all Issuing Banks with respect to Letters of Credit issued
and outstanding at such time.

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

“Mortgaged Property” means 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.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which Borrower or an ERISA Affiliate has, or at any time during the
three preceding calendar years had, an obligation to contribute.

“Net Proceeds” means the aggregate cash proceeds received by a Credit Party in
respect of any sale, lease, conveyance, disposition or other transfer (for
purposes of this definition, any such action, a “transfer”) of Property
(including any cash subsequently received upon the sale or other disposition or
collection of any non-cash consideration received in any sale, but only as and
when so received), or Casualty Event, net of (without duplication) (a) the
direct costs and expenses relating to such transfer of Property or any Casualty
Event (including legal, accounting, investment banking and brokers’ fees, sales
commissions and other reasonable costs and expenses incurred in preparing such
Property for transfer paid to unaffiliated third parties or, in compliance with
Section 9.14, paid to any of its Affiliates), (b) taxes paid, accrued or
reserved as payable as a result thereof (after taking into account any available
tax credits or deductions and any tax sharing arrangements), (c) amounts paid
(other than the Secured Obligations) which are secured by a Lien upon any of the
Properties being transferred and which must be repaid as a result of such sale,
(d) any reserve for adjustment in respect of the sales price of such Property
established in accordance with GAAP, (e) distributions and payments required to
be made to any minority interest holders in Subsidiaries as a result of such
Property transfer, (f) cash payments made to satisfy obligations resulting from
early termination of Swap Agreements in connection, or as a result of, any such
transfer, and (g) until released, any portion of the purchase price for the
transfer of such Property which is placed in escrow pursuant to the terms of
such transfer and for which no Credit Party has access thereto or control
thereof.

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

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

“Non-Recourse Debt” means any Debt of any Unrestricted Subsidiary, in each case
in respect of which the holder or holders thereof (a) shall have recourse only
to, and shall have the right to require the obligations of such Unrestricted
Subsidiary to be performed, satisfied, and paid only out of, the Property of
such Unrestricted Subsidiary and/or one or more of its subsidiaries (but only to
the extent that such subsidiaries are Unrestricted Subsidiaries), and/or any
other Person (other than the Borrower and/or any Restricted Subsidiary), any/or
any other Person limited solely to Equity Interests of such Unrestricted
Subsidiary owned by such Person, and (b) shall have no direct or indirect
recourse (including by way of guaranty, support or indemnity) to the Borrower or
any Restricted Subsidiary or to any of the Property of the Borrower or any
Restricted Subsidiary (other than, in each case, the Equity Interests of such
Unrestricted Subsidiary owned by the Borrower or any Restricted Subsidiary),
whether for principal, interest, fees, expenses or otherwise.

 

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“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.

“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 Wells, 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. Unless otherwise
expressly provided herein, all references in this Agreement to “Oil and Gas
Properties” refer to Oil and Gas Properties owned by the Borrower and its
Restricted Subsidiaries.

“Operating Lease” means (a) an operating lease under GAAP and (b) any lease
(whether or not in existence on the Effective Date) that would have been
considered an operating lease under the provisions of GAAP as in effect as of
December 31, 2017 (and not as a capital lease) regardless of any change in GAAP
(whether or not such change in GAAP is contemplated as of the date hereof)
following December 31, 2017 that would otherwise require such lease to be
re-characterized (on a prospective or retroactive basis or otherwise) as a
capital lease.

“Optional Scheduled Redetermination Date” means each January 1 and July 1, in
each case, that the Borrower designates as an Optional Scheduled Redetermination
Date pursuant to Section 2.07(b).

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.04).

 

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“Paid In Full In Cash” means (a) the payment in full in cash of all principal,
interest (including interest accruing during the pendency of an insolvency or
liquidation proceeding, regardless of whether allowed or allowable in such
insolvency or liquidation proceeding) and premium, if any, on all Loans
outstanding under this Agreement, (b) the payment in full in cash or posting of
cash collateral in respect of all other obligations or amounts that are
outstanding under this Agreement (other than any contingent indemnification or
other reimbursement obligation for which no claim has been made), including the
posting of the cash collateral for outstanding Letters of Credit as required by
the terms of this Agreement, (c) the expiration or termination of all
Commitments, (d) payment in full in cash of all amounts due and owing (or
posting of acceptable collateral in respect of all such obligations) under each
Bank Products Agreement giving rise to Secured Obligations, and (e) payment in
full in cash of all amounts due and owing (or posting of acceptable collateral
in respect of all such obligations) under, or the novation or termination of,
each Swap Agreement giving rise to any Secured Obligations.

“Participant” has the meaning assigned to such term in Section 12.04(c)(i).

“Participant Register” has the meaning assigned to such term in
Section 12.04(c)(i).

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Permitted 2015 Bond Debt” means Debt of the Borrower resulting from the
issuance by the Borrower of senior unsecured notes in an aggregate outstanding
principal amount not to exceed $550,000,000 governed by the 2015 Indenture.

“Permitted 2015 Bond Documents” means, collectively, the 2015 Indenture, the
purchase agreement providing for the issuance of the notes thereunder, the
senior unsecured notes issued from time to time thereunder, all guarantees of
any such notes, the registration rights agreements from time to time entered
into in connection with such notes, and all other agreements, documents or
instruments executed and delivered by the Borrower or any Subsidiary in
connection with, or pursuant to, the 2015 Indenture or issuance of the Permitted
2015 Bond Debt.

“Permitted Investors” means, collectively, EnCap Energy Capital Fund VIII, L.P.,
EnCap Energy Capital Fund VIII Co-Investors, L.P., EnCap Energy Capital Fund IX,
L.P., and their controlling owner, EnCap Investments, L.P..

“Permitted Refinancing Debt” means, with respect to any Debt (the “Refinanced
Debt”), Debt which represents an extension, refinancing, or renewal of such
Refinanced Debt; provided that, (a) the principal amount of such Refinanced Debt
is not increased (other than by the costs, fees, and expenses and by accrued and
unpaid interest and premium paid in connection with any such extension,
refinancing or renewal), (b) the interest rate, fees, fund discounts and
prepayment premiums of such Refinanced Debt are not increased above the
prevailing market amount of such rate of interest, fee, fund discount or
prepayment premium at the time of such extension, refinancing or renewal, (c) no
Credit Party that is not obligated pursuant to the terms of the Refinanced Debt
with respect to repayment of such Refinanced Debt is required to become
obligated with respect thereto pursuant to the terms of such Permitted
Refinancing Debt (exclusive of additional terms proposed pursuant to such
extension, refinancing or renewal), (d) such extension, refinancing or renewal
does not result in a shortening of the average weighted maturity of the
Refinanced Debt and such extension, refinancing or renewal does not result in
any principal amount owing in respect of the Permitted Refinancing Debt becoming
due earlier than the date that is 365 days following the Maturity Date, and
(e) the terms of any such extension, refinancing, or renewal are not otherwise
materially less favorable to the obligors thereunder, taken as a whole, than the
original terms of such Refinanced Debt.

 

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“Permitted Unsecured Debt” means:

(a) the Permitted 2015 Bond Debt;

(b) Debt (whether issued under a loan agreement, indenture or other agreement)
issued or incurred by the Borrower from time to time (including guarantees
thereof by its Subsidiaries), that complies with all of the following
requirements:

(i) no scheduled payment of principal, scheduled mandatory redemption or
scheduled sinking fund payment of such Debt is due on or before the date that is
180 days after the Maturity Date in effect on each date on which such Debt is
issued or incurred (in this definition defined as a “Date of Issuance”);

(ii) the financial covenants are no more restrictive with respect to the Credit
Parties than the financial covenants under this Agreement and all of the
covenants and events of default governing such Debt are not, taken as a whole,
materially more restrictive with respect to the Credit Parties than the
covenants and Events of Default under this Agreement;

(iii) on each Date of Issuance and immediately after giving effect to the
incurrence of such Debt and any concurrent repayment of Debt, the Borrower is in
compliance on a pro forma basis with Section 9.01 of this Agreement, calculated
for the most recent Fiscal Quarter for which the financial statements described
in Sections 8.01(a) or (b) are available to the Lenders;

(iv) no Default or Event of Default exists on the Date of Issuance or
immediately will occur as a result of the issuance of the notes evidencing such
Debt;

(v) such Debt is not secured by any Lien on any property of a Credit Party;

(vi) such Debt is not guaranteed by any Person which is not a Guarantor of all
of the Secured Obligations (excluding any Excluded Swap Obligations with respect
to such Guarantor); and

(vii) the Borrower shall have delivered to the Administrative Agent a
certificate in reasonable detail reflecting compliance with the foregoing
requirements; or

(c) any Permitted Refinancing Debt of any of the foregoing.

“Permitted Unsecured Debt Documents” means, collectively, (a) the Permitted 2015
Bond Documents and (b) with respect to Permitted Unsecured Debt other than the
Permitted 2015 Bond Debt, any indenture, purchase agreement or other agreement
providing for the issuance of such Permitted Unsecured Debt, any unsecured notes
issued from time to time thereunder, all guarantees of any such notes, the
registration rights agreements from time to time entered into in connection with
such notes, and all other agreements, documents or instruments executed and
delivered by the Borrower or any Subsidiary in connection with, or pursuant to,
the issuance of such Permitted Unsecured Debt.

“Permitted Unsecured Debt Springing Maturity Date” has the meaning assigned to
such term in the definition of “Maturity Date”.

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

 

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“Plan” means an employee pension benefit plan as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan) that is subject to the provisions of
Title IV of ERISA or Sections 412 and 430 of the Code or Section 302 of ERISA
and in respect of which Borrower or any ERISA Affiliate is (or, if the Plan were
terminated, would under Section 4062 or Section 4069 of ERISA be deemed to be)
an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by BMO as its prime rate in effect at its principal office in New York
City; 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.

“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).

“Proved Developed Producing Reserves” means “proved developed producing oil and
gas reserves” as such term is defined by the SEC in its standards and
guidelines.

“Proved Reserves” means collectively, “proved oil and gas reserves,” “proved
developed producing oil and gas reserves,” “proved developed non-producing oil
and gas reserves” (consisting of proved developed shut-in oil and gas reserves
and proved developed behind pipe oil and gas reserves), and “proved undeveloped
oil and gas reserves,” as such terms are defined by the SEC in its standards and
guidelines.

“Proved Undeveloped Reserves” means “proved undeveloped oil and gas reserves,”
as such term is defined by the SEC in its standards and guidelines.

“Purchase Money Indebtedness” means Debt incurred in the ordinary course of the
Borrower’s or a Restricted Subsidiary’s business (a) consisting of the deferred
purchase price of property, plant and equipment, conditional sale obligations,
obligations under any title retention agreement and other obligations incurred
in connection with the acquisition, construction or improvement of such asset,
in each case where the amount of such Debt does not exceed the greater of
(i) the cost of the asset being financed and (ii) the fair market value of such
asset, and (b) incurred to finance such acquisition, construction or improvement
by any Credit Party of such asset; provided however that such Debt is incurred
within 180 days after such acquisition or the completion of such construction or
improvement.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit
Party that has total assets exceeding $10,000,000 at the time the relevant
Guarantee and Collateral Agreement or the grant of the relevant Lien becomes
effective or such other Person as constitutes an “eligible contract participant”
under the Commodity Exchange Act or any regulations promulgated thereunder.

“Recipient” means (a) the Administrative Agent, (b) any Lender, (c) any Issuing
Bank, or (d) any other recipient of any payment to be made under any Loan
Document.

 

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“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.

“Register” has the meaning assigned to 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 to such term in Section 8.10(a).

“Required Lenders” means (i) at any time while no Loans or LC Exposure is
outstanding, Lenders holding at least sixty-six and two-thirds percent (66-2/3%)
of the Aggregate Maximum Credit Amounts, and (ii) 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, in each
case, 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.

“Reserve Report” means a report, in form and substance reasonably satisfactory
to the Administrative Agent, setting forth, as of the dates set forth in
Section 8.12(a) (or such other date in the event of an Interim Redetermination)
the Proved Reserves attributable to the Oil and Gas Properties of the Borrower
and the Restricted 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 pricing
assumptions consistent with SEC reporting requirements at the time.

“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 in his or her capacity as such.

“Restricted Payment” means any dividend, return of capital or other distribution
(whether in cash, securities or other Property) with respect to any Equity
Interests in the Borrower or any of its Restricted Subsidiaries, 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 Restricted Subsidiaries or any option, warrant or other
right to acquire any such Equity Interests in the Borrower or any of its
Restricted Subsidiaries.

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

 

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“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, a division of S&P Global, Inc. and any successor
thereto that is a nationally recognized rating agency.

“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State, (b) any Person operating, organized or resident in a Sanctioned Country,
or (c) any Person owned or controlled by any such Person or Persons described in
the foregoing clauses (a) or (b).

“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State.

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

“Scheduled Redetermination Date” means (a) April 1, 2019 and each April 1 and
October 1 thereafter, based upon a Reserve Report prepared as of the immediately
preceding January 1 and July 1, respectively, and (b) each Optional Scheduled
Redetermination Date (or, in the case of both of the foregoing clauses (a) and
(b), such date promptly thereafter as reasonably practicable).

“Scheduled Redetermination Effective 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.

“Secured Obligations” means any and all amounts owing or to be owing by the
Borrower, any Guarantor or any other Restricted Subsidiary (whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including any renewals,
extensions or rearrangements thereof): (a) to the Administrative Agent, any
Arranger, the Issuing Bank or any Lender under any Loan Document, including,
without limitation, all interest on any of the Loans (including any interest
that accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of any Credit Party (or
could accrue but for the operation of applicable bankruptcy or insolvency laws),
whether or not such interest is allowed or allowable as a claim in any such
case, proceeding or other action); (b) to any Secured Swap Provider under any
Swap Agreement including any Swap Agreement in existence prior to the date
hereof, but excluding any additional transactions or confirmations entered into
(i) after such Secured Swap Provider ceases to be a Lender or an Affiliate of a
Lender or (ii) after assignment by a Secured Swap Provider to another Secured
Swap Provider that is not a Lender or an Affiliate of a Lender; (c) to any Bank
Products Provider in respect of Bank Products, but excluding any additional
transactions or confirmations entered into (i) after such Bank Products Provider
ceases to be a Lender or an Affiliate of a Lender or (ii) after assignment by a
Bank Products Provider to another Bank Products Provider that is not a Lender or
an Affiliate of a Lender; provided that solely with respect to any Guarantor
that is not an “eligible contract participant” under the Commodity Exchange Act,
Excluded Swap Obligations of such Guarantor shall in any event be excluded from
“Secured Obligations” owing by such Guarantor.

 

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

“Secured Swap Provider” means any (a) Person that is a Lender or Affiliate of a
Lender and is a party to a Swap Agreement with the Borrower or any of its
Restricted Subsidiaries that entered into such Swap Agreement before or while
such Person was a Lender or an Affiliate of a Lender, whether or not such Person
at any time ceases to be a Lender or an Affiliate of a Lender, as the case may
be, or (b) assignee of any Person described in clause (a) above so long as such
assignee is a Lender or an Affiliate of a Lender.

“Security Instruments” means the Guarantee and Collateral Agreement, any Control
Agreement and any and all other mortgages, deeds of trust and other agreements,
instruments, consents or certificates now or hereafter executed and delivered by
the Borrower or any other Person (other than Swap Agreements with the Lenders or
any Affiliate of a Lender or participation or similar agreements between any
Lender and any other lender or creditor with respect to any Secured Obligation
pursuant to this Agreement) in connection with, or as security for the payment
or performance of the Secured Obligations.

“Sequel Joint Venture” means, that certain drilling joint venture among the
Borrower and/or one or more of the other Credit Parties and Sequel Energy Group,
LLC and/or an affiliate thereof with respect to the development of certain Oil
and Gas Properties located within Harrison, Guernsey, Belmont, Jefferson and
Monroe Counties, Ohio.

“Specified Period” means, for any date of determination, the period beginning on
such date and ending on the twenty-four (24) month anniversary thereof.

“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.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
other Person the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other Person of which Equity Interests representing more than 50% of the equity
or more than 50% of the ordinary voting power (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)
or, in the case of a partnership, any general partnership interests are, as of
such date, owned, controlled or held.

“Subsidiary” means any subsidiary of the Borrower.

 

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“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 (a) 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 Restricted
Subsidiaries shall be a Swap Agreement and (b) no purchase or sale agreement for
the physical delivery of Hydrocarbons entered into in the ordinary course of
business shall be a Swap Agreement unless such agreement (i) is a futures
contract that is quoted or traded on a national board of exchange or (ii) has a
term of longer than 90 days and requires a party to pay a fixed price for the
Hydrocarbons to be delivered.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act.

“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.

“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 United States 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.

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

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

“Threshold Amount” means, at any time, the greater of (a) five percent (5%) of
the Borrowing Base in effect at such time and (b) $25,000,000.

“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.

“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, if any, and other Properties pursuant to the
Security

 

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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 Secured Obligations and the other obligations under the Guarantee and
Collateral 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, if any, and
other Properties pursuant to the Security Instruments.

“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.

“UCC” means the Uniform Commercial Code of the State of New York or of any other
state the laws of which are required to be applied in connection with the
perfection of Liens on any Collateral (as defined in the Guarantee and
Collateral Agreement) securing the Secured Obligations.

“Unrestricted Subsidiary” means any Subsidiary of the Borrower designated as
such on Schedule 7.14 or which the Borrower has designated in writing to the
Administrative Agent to be an Unrestricted Subsidiary pursuant to Section 9.20.

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

“USA Patriot Act” has the meaning set forth in Section 12.16.

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

“Voting Stock” of any specified Person as of any date means the Capital Stock of
such Person entitling the holders thereof (whether at all times or only so long
as no senior class of Capital Stock has voting power by reason of any
contingency) to vote in the election of, or to designate, members of the board
of directors of such Person.

“Wells” means (a) a well drilled for the purpose of producing Hydrocarbons or
disposing of fluids produced in connection with the production of Hydrocarbons,
associated with the Borrower’s or any Restricted Subsidiary’s interest in any
oil and gas lease or lands pooled therewith and (b) any water production or
disposal well, injection well or other wells located on or allocable to the
Hydrocarbon Interests or lands pooled therewith, whether producing, shut-in,
abandoned or temporarily abandoned.

“Wholly-Owned Subsidiary” means any Restricted 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.

“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.

 

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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” as used in this Agreement 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”. The word “or” is not
exclusive. 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.

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 the Borrower’s independent
certified public accountants concur and which are disclosed to the
Administrative Agent on the next 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. 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, all Unrestricted Subsidiaries and their subsidiaries
(including 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 Unrestricted Subsidiary or any of its
subsidiaries to the Borrower or any Restricted Subsidiary, which shall be deemed
to be income to the Borrower or such Restricted Subsidiary when actually
received by it.

Section 1.06 Divisions. For all purposes under the Loan Documents, in connection
with any division or plan of division under Delaware law (or any comparable
event under a different jurisdiction’s laws): (a) if any asset, right,
obligation or liability of any Person becomes the asset, right, obligation or
liability of a different Person, then it shall be deemed to have been
transferred from the original Person to the subsequent Person, and (b) if any
new Person comes into existence, such new Person shall be deemed to have been
organized on the first date of its existence by the holders of its Equity
Interests at such time.

 

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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 $250,000 and not less than
$500,000. At the time that each ABR Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $100,000 and not less
than $200,000; 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.

(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 Additional Lender
that becomes a Lender party hereto in connection with an increase in the
Aggregate Maximum Credit 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. 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. Failure to make any such recordation 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.

 

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(e) Loans and Borrowings under the Existing Credit Agreement. On the Effective
Date (or as soon as practicable with respect to (iii)):

(i) the Borrower shall pay all accrued and unpaid commitment fees, undrawn
facility fees, break funding fees under Section 5.02 (solely with respect to any
Existing Lender that will not be a Lender) and all other fees that are
outstanding under the Existing Credit Agreement for the account of each “Lender”
under the Existing Credit Agreement;

(ii) each “ABR Loan” and “Eurodollar Loan” outstanding under the Existing Credit
Agreement shall be deemed to be an ABR Loan or Eurodollar Loan, as applicable,
under this Agreement;

(iii) any note executed and delivered by the Borrower under the Existing Credit
Agreement shall be deemed to be automatically cancelled and of no further force
or effect, and the Administrative Agent shall use reasonable efforts to cause
all Existing Lenders to deliver to the Borrower, as soon as practicable after
the Effective Date, all such notes marked “canceled” or otherwise similarly
defaced;

(iv) any Existing Letters of Credit shall be deemed issued under this Agreement;
and

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

It is the intent of the parties hereto that this Agreement not constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement or evidence repayment of any such obligations and liabilities and that
this Agreement, from and after the Effective Date, amend and restate in its
entirety the Existing Credit Agreement and re-evidence the obligations of the
Borrower outstanding thereunder and that any Loan Document and/or Liens securing
the Secured Obligations (as defined in the Existing Credit Agreement) shall
continue in full force and effect to secure the Secured Obligations hereunder.

Section 2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (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 12:00 noon, 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 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 Borrower. Each such
telephonic 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;

 

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(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”;

(v) the amount of the then effective Borrowing Base, the Aggregate Maximum
Credit 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 by the Borrower that the amount of the
requested Borrowing shall not cause the total Revolving Credit Exposures to
exceed the total Commitments.

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 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 Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or facsimile 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 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);

 

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(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 the 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.

(a) Funding by the 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 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.

(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 without duplication, such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to

 

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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 and without regard to Section 5.02, the interest rate applicable to the
Adjusted LIBO Rate for an Interest Period of one month. If such Lender remits to
the Administrative Agent its share of the Borrowing, then such amount shall
constitute such Lender’s Loan included in such Borrowing.

Section 2.06 Termination, Reduction and Optional Increase of Aggregate Maximum
Credit 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 or the Borrowing Base 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 Maximum 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 and (B) the Borrower shall
not terminate or reduce the Aggregate Maximum Credit Amounts if, (1) 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 or (2) the Aggregate Maximum Credit Amount would be less than
$1,000,000 (unless, with respect to this clause (2), the Aggregate Maximum
Credit Amounts are reduced to $0.00).

(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 (3) 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; provided
that a notice of termination of the Aggregate Maximum Credit Amounts delivered
by the Borrower may state that such notice is conditioned upon the satisfaction
of one or more conditions precedent, in which case such notice may be revoked by
the Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. 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.

(c) Optional Increase in Aggregate Maximum Credit Amounts.

(i) Subject to the conditions set forth in Section 2.06(c)(ii), the Borrower may
increase the Aggregate Maximum Credit Amounts then in effect by increasing the
Maximum Credit Amount of a Lender or, with the written consent of the
Administrative Agent and each Issuing Bank (such consent not to be unreasonably
withheld or delayed), by causing a Person 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 the Borrower.

 

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

(A) such increase shall not be less than $25,000,000 unless the Administrative
Agent otherwise consents (such consent not to be unreasonably withheld, delayed
or conditioned), and all such increases pursuant to this Section 2.06 shall not
exceed $250,000,000 in the aggregate;

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

(C) no Lender’s Maximum Credit Amount may be increased without the consent of
such Lender;

(D) if the Borrower elects to increase the Aggregate Maximum Credit Amounts by
increasing the Maximum Credit Amount of an existing Lender, the Borrower and
such Lender shall execute and deliver to the Administrative Agent a certificate
substantially in the form of Exhibit I (a “Maximum Credit Amount Increase
Certificate”);

(E) if the Borrower elects to increase the Aggregate Maximum Credit 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 J (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; and

(F) the Borrower shall deliver or cause to be delivered any customary legal
opinions or other documents (including, without limitation, a resolution duly
adopted by the board of directors (or equivalent body) of each Credit Party
authorizing such increase in the Aggregate Maximum Credit Amounts) in connection
with such increase in the Aggregate Maximum Credit Amounts to the extent
reasonably requested by the Administrative Agent.

(iii) Subject to acceptance and recording thereof pursuant to
Section 2.06(c)(iv), from and after the effective date specified in the Maximum
Credit Amount 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 Maximum
Credit 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 Maximum Credit Amounts.

(iv) Upon its receipt of a duly completed Maximum Credit Amount 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 written consent of the Administrative Agent and each Issuing
Bank referred to in Section 2.06(c)(i), the processing and recording fee
referred to

 

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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
Maximum Credit Amount 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 Maximum Credit 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 Maximum Credit Amounts pursuant to this
Section 2.06(c), Annex I to this Agreement shall be automatically amended to
reflect any changes in the Lenders’ Maximum Credit Amounts and any resulting
changes in the Lenders’ Applicable Percentages.

Section 2.07 Borrowing Base.

(a) Initial Borrowing Base. On the Effective Date, the Borrowing Base shall be
$375,000,000. Notwithstanding the foregoing, the Borrowing Base may be subject
to further adjustments in between Scheduled Redeterminations from time to time
pursuant to Section 8.13(c) and Section 9.12.

(b) Scheduled and Interim Redeterminations. The Borrowing Base shall be
redetermined in accordance with this Section 2.07 (a “Scheduled
Redetermination”), and, subject to Section 2.07(d), such redetermined Borrowing
Base shall become effective and applicable to the Borrower, the Administrative
Agent, the Issuing Bank and the Lenders on each Scheduled Redetermination
Effective Date. The Borrower may elect for any January 1 or July 1 of any
calendar year to be an Optional Scheduled Redetermination Date by designating in
writing to the Administrative Agent such date as an Optional Scheduled
Redetermination Date (which designation must be made no later than the date on
which the Scheduled Redetermination scheduled for the immediately preceding
April 1 and October 1, as applicable, becomes effective. In addition, the
Borrower may, by notifying the Administrative Agent thereof, and the
Administrative Agent may, or, at the direction of the Required Lenders, shall,
by notifying the Borrower thereof, one time between two successive Scheduled
Redetermination Effective Dates that are not Optional Scheduled Redetermination
Dates, each elect to cause the Borrowing Base to be redetermined between
Scheduled Redeterminations (an “Interim Redetermination”) in accordance with
this Section 2.07.

(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 Required Lenders (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 good faith, 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 Borrower’s 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 the
Proposed Borrowing Base exceed the Aggregate Maximum Credit Amounts;

 

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

(iii) Any Proposed Borrowing Base that would increase the Borrowing Base then in
effect must be approved by the Borrowing Base Increase Requisite Lenders as
provided in this Section 2.07(c)(iii) (and after giving effect to any
reallocation described in Section 2.07(c)(iv)); and any Proposed Borrowing Base
that would decrease or maintain the Borrowing Base then in effect must be
approved or be deemed to have 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 twenty (20) days thereafter to agree with the
Proposed Borrowing Base or disagree with the Proposed Borrowing Base by
proposing an alternate Borrowing Base. At the end of such twenty (20) 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 20-day period, the Borrowing
Base Increase Requisite Lenders, in the case of a Proposed Borrowing Base that
would increase the Borrowing Base then in effect, or the Required Lenders, in
the case of a Proposed Borrowing Base that would decrease or maintain the
Borrowing Base then in effect, have approved or, in the case of a decrease or
reaffirmation, 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 20-day period, the
Borrowing Base Increase Requisite Lenders or the Required Lenders, as
applicable, have not approved or, in the case of a decrease or reaffirmation,
deemed to have approved, as aforesaid, then the Administrative Agent shall poll
the Lenders to ascertain the highest Borrowing Base then acceptable to (x) in
the case of a decrease or reaffirmation, a number of the Lenders sufficient to
constitute the Required Lenders and (y) in the case of an increase, the
Borrowing Base Increase Requisite Lenders, and such amount shall become the new
Borrowing Base, effective on the date specified in Section 2.07(d).

(iv) If any Proposed Borrowing Base that would increase the Borrowing Base then
in effect has been approved by the Borrowing Base Increase Requisite Lenders,
and a Lender has timely communicated its disapproval of such Proposed Borrowing
Base (each, a “Dissenting Lender”), then the Borrower may, at its sole expense
and effort, upon notice to the applicable Dissenting Lender and the
Administrative Agent, (A) replace one or more Dissenting Lenders in accordance
with the terms of Section 5.04(b) with Lenders that approve such Proposed
Borrowing Base, (B) if the Borrower can identify non-Dissenting Lenders or, with
the consent of the Administrative Agent and each Issuing Bank (such consent not
to be unreasonably withheld or delayed), other Persons that are not Lenders at
such time that, in either case, agree to do so in their sole discretion, elect
for all (but not less than all) of each such Dissenting Lender’s Increase
Portion to be reallocated among such non-Dissenting Lenders and such other
Persons in a manner, and subject to documentation and terms, in each case
reasonably acceptable to the Borrower, such non-Dissenting Lenders, such other
Persons and the Administrative Agent, and Annex I hereto shall be automatically
amended to reflect all of the foregoing, or (C) elect to proceed with a
combination of replacing one or more Dissenting Lenders as set forth in the
preceding clause (A) and reallocating non-replaced Dissenting Lenders’ Increase
Portions. Notwithstanding anything to the contrary contained in this Agreement,
if the actions contemplated by the foregoing clauses (A), (B) and (C) are not
effectuated for any reason and any Dissenting Lender has not either been
replaced or had its entire Increase Portion reallocated in accordance with the
foregoing, then the Proposed Borrowing Base shall be deemed not to be approved
by the Borrowing Base Increase Requisite Lenders.

 

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(v) Within three (3) Business Days of its receipt of a Proposed Borrowing Base
Notice, the Borrower may provide written notice to the Administrative Agent and
the Lenders that specifies for the period from the effective date of the
Proposed Borrowing Base until the next succeeding Scheduled Redetermination, the
Borrowing Base will be a lesser amount than the amount set forth in such
Proposed Borrowing Base Notice, whereupon such specified lesser amount will
become the new Proposed Borrowing Base, but such three (3) Business Day time
period (whether or not the Borrower provides written notice of a lesser amount)
shall not increase or be deemed to increase the 20-day period set forth in
Section 2.07(c)(iii), and any proposed lesser amount by the Borrower pursuant to
this Section 2.07(c)(v) shall not reset such 20-day period or be deemed to
commence a new 20-day period. The Borrower’s notice under this
Section 2.07(c)(v) shall be irrevocable, but without prejudice to its rights to
effect Interim Redeterminations.

(d) Effectiveness of a Redetermined Borrowing Base. After a redetermined
Borrowing Base is approved or is deemed to have been approved by the Borrowing
Base Increase Requisite Lenders or the Required Lenders, as applicable, pursuant
to Section 2.07(c)(iii) and Section 2.07(c)(iv), 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 Administrative
Agent, 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 applicable Scheduled Redetermination Date 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 notice; and

(ii) in the case of an Interim Redetermination, on the Business Day next
succeeding delivery of such notice.

Such amount shall then become the Borrowing Base until the next Scheduled
Redetermination Effective Date, the next Interim Redetermination Date or the
next adjustment to the Borrowing Base under Section 8.13(c), 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) Automatic Reduction of the Borrowing Base in connection with the issuance of
Permitted Unsecured Debt. Notwithstanding anything to the contrary contained
herein, if the Borrower issues any Permitted Unsecured Debt on or after the date
hereof (excluding any Permitted Refinancing Debt in respect of the Permitted
2015 Bond Debt), on each Date of Issuance (as defined in the definition of
Permitted Unsecured Debt) the Borrowing Base then in effect shall be reduced
automatically by an amount equal to the product of 0.25 and the stated principal
amount of the Permitted Unsecured Debt so issued (it being understood that any
Permitted Refinancing Debt in respect of the Permitted 2015 Bond Debt shall not
result in such automatic reduction). The Borrowing Base as so reduced shall
become the new Borrowing Base immediately upon such Date of Issuance and shall
remain in effect until the next date as of which the Borrowing Base is
redetermined pursuant to this Agreement. For purposes of this Section 2.07(e),
if any such Permitted Unsecured 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.

 

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(f) Reduction of Borrowing Base Upon Sale of Properties and Termination of Swap
Agreements. In connection with any sale or other disposition of Property or
termination or monetization of any Swap Agreement pursuant to Section 9.12(d),
the Borrowing Base shall be reduced, as and when applicable, in accordance with
the provisions of Section 9.12(d)(iv) and shall remain in effect until the next
date as of which the Borrowing Base is redetermined pursuant to this Agreement.
The Administrative Agent shall promptly notify the Borrower and the Lenders of
any such reduction of the Borrowing Base and the effective date thereof.

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 (or the
amendment, renewal or extension of outstanding Letters of Credit) for its own
account or for the account of any of its Restricted Subsidiaries, and Issuing
Bank shall issue, amend, renew or extend such Letters of Credit, in each case in
a form reasonably acceptable to the Administrative Agent and the applicable
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 (i) a Borrowing Base Deficiency
exists at such time or, if after giving effect thereto, would exist or (ii) if
after giving effect thereto, the LC Exposure exceeds the LC Commitment. Without
limiting the foregoing and without affecting the limitations contained herein,
it is understood and agreed that the Borrower may from time to time request that
an Issuing Bank issue Letters of Credit in excess of its individual LC
Commitment in effect at the time of such request, and each Issuing Bank agrees
to consider any such request in good faith. Any Letter of Credit so issued by an
Issuing Bank in excess of its individual LC Commitment then in effect shall
nonetheless constitute a Letter of Credit for all purposes of the Credit
Agreement, and shall not affect the LC Commitment of any other Issuing Bank,
subject to the aggregate LC Commitment. Any Issuing Bank that issues a Letter of
Credit in excess of its individual LC Commitment then in effect shall promptly
notify the Administrative Agent of such issuance.

(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 facsimile (or transmit by electronic communication, if arrangements for doing
so have been approved by the applicable Issuing Bank) to the applicable Issuing
Bank and the Administrative Agent (not less than three (3) 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

 

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(vi) specifying the amount of the then effective Borrowing Base and the
Aggregate Maximum Credit Amounts 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).

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 12:00 noon, 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 on the
Business Day immediately following the day that the Borrower receives such
notice; 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 the Lenders

 

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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 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 facsimile) 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 and has
not received reimbursement thereof by 12:00 noon, New York City time, on the day
that it has given the Borrower notice thereof on or before 10:00 a.m., New York
City time, then, until the Borrower shall have reimbursed the Issuing Bank for
such LC Disbursement (either with its own funds or a Borrowing under

 

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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; Designation of Additional Issuing Banks.

(i) 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, (A) 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 (B) 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.

(ii) From time to time, the Borrower may by notice to the Administrative Agent
designate as additional Issuing Banks one or more Lenders that agree to serve in
such capacity as provided below. The acceptance by a Lender of any appointment
as an Issuing Bank hereunder shall be evidenced by a joinder agreement (an
“Issuing Bank Agreement”), which shall be in a form reasonably satisfactory to
such Lender, the Borrower and the Administrative Agent, shall set forth the
agreement of such Lender to become an Issuing Bank hereunder and shall be
executed by such Lender, the Borrower and the Administrative Agent and, from and
after the effective date of such Issuing Bank Agreement, (A) such Lender shall
have all the rights and obligations of an Issuing Bank under this Agreement and
the other Loan Documents and (B) references herein and in the other Loan
Documents to the term “Issuing Bank” shall be deemed to include such Lender in
its capacity as an Issuing Bank. Notwithstanding anything to the contrary
contained herein, in no event may there be more than three (3) Issuing Banks at
any one time under this Agreement.

(j) Cash Collateralization. If (i) any Event of Default shall occur and be
continuing and the Borrower receives written notice from the Administrative
Agent or the Majority Lenders demanding the deposit of Cash Collateral pursuant
to this Section 2.08(j), (ii) the LC Exposure exceeds the LC Commitment at any
time as a result of a reduction in the Borrowing Base or (iii) 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), 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, in the case
of the LC Exposure exceeding the LC Commitment, the amount of such excess, and
in the case of a payment required by Section 3.04(c), the amount of such excess
as provided in Section 3.04(c), 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 Borrower or any Guarantor 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

 

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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 Restricted 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 of the Borrower’s and the Guarantor’s
obligations under this Agreement and the other Loan Documents and, other than as
set forth herein, so long as any such obligations remain outstanding, 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 of the Administrative Agent and with the written consent of the Borrower,
but 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), then such amount (to the extent not
applied as aforesaid) shall cease to be Cash Collateral and shall be returned to
the Borrower within three Business Days after all Events of Default have been
cured or waived and the Administrative Agent shall no longer shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account (except to the extent otherwise provided by the Loan
Documents). If the Borrower is required to provide an amount of Cash Collateral
pursuant to subclause (j)(ii) of this Section, then such amount (to the extent
not applied as aforesaid) shall cease to be Cash Collateral and shall be
returned to the Borrower within three Business Days after the LC Exposure no
longer exceeds the LC Commitment as a result of a reduction in the Borrowing
Base and the Administrative Agent shall no longer shall have exclusive dominion
and control, including the exclusive right of withdrawal, over such account
(except to the extent otherwise provided by the Loan Documents).

(k) Cash Collateralization of Fronting Exposure. At any time that there shall
exist a Defaulting Lender, within one Business Day following the written request
of the Administrative Agent or any Issuing Bank (with a copy to the
Administrative Agent) the Borrower shall Cash Collateralize the Issuing Banks’
Fronting Exposure with respect to such Defaulting Lender (determined after
giving effect to Section 2.09(a)(iv) and any Cash Collateral provided by such
Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

(i) Grant of Security Interest. The Borrower, and to the extent provided by any
Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative
Agent, for the benefit of the Issuing Banks, and agrees to maintain, a first
priority security interest in all such Cash Collateral as security for the
Defaulting Lenders’ obligation to fund participations in respect of LC Exposure,
to be applied pursuant to clause (b) below. If at any time the Administrative
Agent determines in good faith

 

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that Cash Collateral is subject to any right or claim of any Person other than
the Administrative Agent and the Issuing Banks as herein provided, or that the
total amount of such Cash Collateral is less than the Minimum Collateral Amount,
the Borrower will, promptly upon demand by the Administrative Agent, pay or
provide to the Administrative Agent additional Cash Collateral in an amount
sufficient to eliminate such deficiency (after giving effect to any Cash
Collateral provided by the Defaulting Lender).

(ii) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 2.08(k) or Section 2.09
in respect of Letters of Credit shall be applied to the satisfaction of the
Defaulting Lender’s obligation to fund participations in respect of LC Exposure
(including, as to Cash Collateral provided by a Defaulting Lender, any interest
accrued on such obligation) for which the Cash Collateral was so provided, prior
to any other application of such property as may otherwise be provided for
herein.

(iii) Termination of Requirement. Cash Collateral (or the appropriate portion
thereof) provided to reduce any Issuing Bank’s Fronting Exposure shall no longer
be required to be held as Cash Collateral pursuant to this Section 2.08(k)
following (i) the elimination of the applicable Fronting Exposure (including by
the termination of Defaulting Lender status of the applicable Lender), or
(ii) the determination by the Administrative Agent and each Issuing Bank that
there exists excess Cash Collateral; provided that, subject to Section 2.09 the
Person providing Cash Collateral and each Issuing Bank may agree that Cash
Collateral shall be held to support future anticipated Fronting Exposure or
other obligations; provided further that to the extent that such Cash Collateral
was provided by the Borrower, such amount shall cease to be Cash Collateral and
shall be returned to the Borrower within three Business Days after such Cash
Collateral shall no longer be required to be held pursuant to this
Section 2.08(k) and the Administrative Agent shall no longer shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account (except to the extent otherwise provided by the Loan
Documents).

Section 2.09 Defaulting Lenders.

(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement or
any Loan Document shall be restricted as set forth in the definition of
Borrowing Base Increase Requisite Lenders, Majority Lenders, or Required
Lenders, as applicable.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article X or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 12.08 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to any Issuing Bank hereunder; third, to Cash
Collateralize the Issuing Banks’ Fronting Exposure with respect to such
Defaulting Lender in accordance with Section 2.08(k); fourth, as the Borrower
may request (so long as no Default or Event of Default then exists), to the
funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect

 

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to Loans under this Agreement and (y) Cash Collateralize the Issuing Banks’
future Fronting Exposure with respect to such Defaulting Lender with respect to
future Letters of Credit issued under this Agreement, in accordance with
Section 2.08(k); sixth, to the payment of any amounts owing to the Lenders or
the Issuing Banks as a result of any judgment of a court of competent
jurisdiction obtained by any Lender or the Issuing Banks against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; seventh, so long as no Default or Event of Default exists, to
the payment of any amounts owing to the Borrower or any of its Subsidiaries as a
result of any judgment of a court of competent jurisdiction obtained by the
Borrower or any of its Subsidiaries against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement; and
eighth, to such Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided that if (x) such payment is a payment of the
principal amount of any Loans or LC Disbursements in respect of which such
Defaulting Lender has not fully funded its appropriate share, and (y) such Loans
were made or the related Letters of Credit were issued at a time when the
conditions set forth in Section 6.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and LC Disbursements owed to, all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such
time as all Loans and funded and unfunded participations in LC Exposure are held
by the Lenders pro rata in accordance with the Commitments without giving effect
to Section 2.09(a)(iv). Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.09(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees.

(A) A Defaulting Lender shall not be entitled to receive any commitment fee or
any fee in respect of participations in Letters of Credit pursuant to
Section 3.05(b), in each case, for any period during which that Lender is a
Defaulting Lender (and the Borrower shall not be required to pay any such fee
that otherwise would have been required to have been paid to that Defaulting
Lender); provided, however, that a Defaulting Lender shall be entitled to
receive fees in respect of participations in Letters of Credit pursuant to
Section 3.05(b) for any period during which that Lender is a Defaulting Lender
only to the extent allocable to its Applicable Percentage of the stated amount
of Letters of Credit for which it has provided Cash Collateral pursuant to
Section 2.08(k).

(B) The Borrower shall (1) pay to each Non-Defaulting Lender that portion of any
fee otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in Letters of Credit that has been reallocated to such
Non-Defaulting Lender pursuant to clause (iv) below, (2) pay to each Issuing
Bank, as applicable, the amount of any fee otherwise payable to such Defaulting
Lender to the extent allocable to such Issuing Bank’s Fronting Exposure to such
Defaulting Lender, and (3) not be required to pay any other amount in respect of
any fee payable pursuant to this clause (iii).

(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in 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 that (x) the conditions set forth in Section 6.02 are
satisfied at the time of such reallocation (and, if requested by the
Administrative Agent, the Borrower shall represent and warrant that such
conditions are satisfied at such time), and (y) such reallocation does not cause
the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed
such Non-Defaulting Lender’s Commitment. No reallocation hereunder shall
constitute a waiver or release of any claim of any party hereunder against a
Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such
Non-Defaulting Lender’s increased exposure following such reallocation.

 

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(v) Cash Collateral. If the reallocation described in clause (iv) above cannot,
or can only partially, be effected, the Borrower shall, without prejudice to any
right or remedy available to it hereunder or under law, Cash Collateralize the
Issuing Banks’ Fronting Exposure in accordance with the procedures set forth in
Section 2.08(k).

(b) Required Actions After No Longer Being a Defaulting Lender. If the Borrower,
the Administrative Agent and each 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 2.09(a)(iv)), whereupon such Lender will cease to be a
Defaulting Lender; provided that no adjustments will 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 a Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.

(c) Issuing Banks. So long as any Lender is a Defaulting Lender, no Issuing Bank
shall be required to issue, extend, renew or increase any Letter of Credit
unless it is satisfied that it will have no Fronting Exposure after giving
effect thereto.

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 on
the principal balance thereof from time to time outstanding 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 on the principal balance thereof from time to time outstanding 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. Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower or any
Guarantor hereunder or under any other Loan Document is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
from time to time 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.

 

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(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.

Section 3.03 Alternate Rate of Interest.

(a) If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:

(i) 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 (including because, at the
applicable time of determination, the LIBO Rate is not available or published at
such time on a current basis) for such Interest Period; or

(ii) 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 facsimile 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 (and the Administrative
Agent agrees to promptly provide such notice to the Borrower and the Lenders),
(i) any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing with such
Interest Period shall be ineffective, and (ii) if any Borrowing Request requests
a Eurodollar Borrowing with such Interest Period, such Borrowing shall be made
either for another Interest Period (subject to application of this Section 3.03
thereto) or as an ABR Borrowing or at an alternate rate of interest determined
by the Majority Lenders as their cost of funds.

(b) If at any time the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that (i) the circumstances set forth
in clause (a)(i) have arisen and such circumstances are unlikely to be temporary
or (ii) the circumstances set forth in clause (a)(i) have not arisen but either
(A) the supervisor for the administrator of the LIBO Rate has made a public
statement that the administrator of the LIBO Rate is insolvent (and there is no
successor administrator that will

 

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continue publication of the LIBO Rate), (B) the administrator of the LIBO Rate
has made a public statement identifying a specific date after which the LIBO
Rate will permanently or indefinitely cease to be published by it (and there is
no successor administrator that will continue publication of the LIBO Rate), (C)
the supervisor for the administrator of the LIBO Rate has made a public
statement identifying a specific date after which the LIBO Rate will permanently
or indefinitely cease to be published by such administrator and any successor
administrator or (D) the supervisor for the administrator of the LIBO Rate or a
Governmental Authority having jurisdiction over the Administrative Agent has
made a public statement identifying a specific date after which the LIBO Rate
may no longer be used for determining interest rates for loans, then the
Administrative Agent and the Borrower shall promptly and in good faith endeavor
to establish an alternate rate of interest to the LIBO Rate that gives due
consideration to the then prevailing market convention for determining a rate of
interest for syndicated loans to similarly situated borrowers in the United
States at such time, and shall enter into an amendment to this Agreement to
reflect such alternate rate of interest and such other related changes to this
Agreement as may be applicable (but for the avoidance of doubt, such related
changes shall not include a reduction of the Applicable Margin); provided that,
if such alternate rate of interest as so determined would be less than zero,
such rate shall be deemed to be zero for the purposes of this Agreement.
Promptly upon the establishment of any such alternate rate, the Administrative
Agent shall deliver notice of such amendment to the Lenders and, notwithstanding
anything to the contrary in Section 12.02(b), such amendment shall become
effective without any further action or consent of any other party to this
Agreement so long as the Administrative Agent shall not have received, within
five Business Days of the date of such notice, a written notice from the
Majority Lenders stating that such Majority Lenders object to such amendment.
Until an alternate rate of interest shall be determined in accordance with this
clause (b) (but, in the case of the circumstances described in clause (ii) of
the first sentence of this Section 3.03(b), only to the extent the LIBO Rate for
such Interest Period is not available or published at such time on a current
basis), or until the Administrative Agent shall notify the Borrower that the
circumstances resulting in the need to determine an alternate rate of interest
no longer exist (and the Administrative Agent agrees to promptly give such
notice to the Borrower) (x) 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 (y) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing. For the avoidance of doubt, the LIBO Rate shall apply to any existing
Eurodollar Loans until the expiration of the Interest Period in respect thereof.

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 (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, on 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; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.06(b), then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.06(b). 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.

 

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(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), 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).

(ii) Upon any redetermination of or adjustment to the amount of the Borrowing
Base in accordance with Section 2.07 (other than pursuant to Section 2.07(e)
Section 2.07(f)) or Section 8.13(c), if there exists a Borrowing Base
Deficiency, then the Borrower shall within ten (10) Business Days following
receipt of the New Borrowing Base Notice in accordance with Section 2.07(d) or
the date the adjustment occurs, provide written notice (the “Election Notice”)
to the Administrative Agent stating the action which the Borrower proposes to
take to eliminate such Borrowing Base Deficiency, and the Borrower shall
thereafter, at its option, either

(A) within thirty (30) days following its delivery of the Election Notice, by
instruments reasonably satisfactory in form and substance to the Administrative
Agent, provide the Administrative Agent with additional security consisting of
Oil and Gas Properties with value and quality satisfactory to the Administrative
Agent and the Required Lenders in their sole discretion to eliminate such
Borrowing Base Deficiency,

(B) within thirty (30) days following its delivery of the Election Notice,
prepay the Borrowings in an amount sufficient to eliminate such Borrowing Base
Deficiency and, if any Borrowing Base Deficiency 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 necessary to eliminate such remaining Borrowing
Base Deficiency to be held as Cash Collateral as provided in Section 2.08(j),

(C) elect to prepay (and thereafter pay) the principal amount necessary to
eliminate such Borrowing Base Deficiency in not more than three (3) equal
monthly installments plus accrued interest thereon with the first such monthly
payment being due within thirty (30) days following its delivery of the Election
Notice (and, if any Borrowing Base Deficiency 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 necessary to eliminate such remaining Borrowing
Base Deficiency to be held as Cash Collateral as provided in Section 2.08(j)),
or

(D) by any combination of prepayment and additional security as provided in the
preceding clauses (A), (B) or (C), eliminate such Borrowing Base Deficiency;
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.

 

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(iii) Upon any adjustments to the Borrowing Base pursuant to Sections 2.07(e)
and/or 2.07(f), if there is a Borrowing Base Deficiency, then the Borrower shall
(A) prepay any Borrowings or (B) Cash Collateralize any LC Exposure as provided
in Section 2.08(j), in an aggregate amount equal to such Borrowing Base
Deficiency. The Borrower shall be obligated to make such prepayment and/or
deposit of Cash Collateral within one Business Day of the date it receives
(i) proceeds of such issuance of Permitted Unsecured Debt or (ii) confirmation
of the amount of any reduction of the Borrowing Base pursuant to
Section 2.07(f), as applicable; 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) Promptly following any sale, lease, conveyance, disposition or other
transfer by any Credit Party of any of its Proved Reserves, without duplication,
or any termination or other monetization by any Credit Party of any Swap
Agreement in respect of commodities, other than as permitted by Section 9.12,
and immediately after giving effect thereto there exists a Borrowing Base
Deficiency, then the Borrower shall, within thirty (30) days following such
occurrence, eliminate such Borrowing Base Deficiency from the Net Proceeds of
such sale, lease, conveyance, disposition, transfer, termination or
monetization. Nothing in this paragraph is intended to permit any Credit Party
to sell Property other than pursuant to Section 9.12, and any such non-permitted
sale will constitute a breach of this Agreement.

(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.

(d) No Premium or Penalty. Prepayments permitted or required under this
Section 3.04 shall be without premium, penalty or other expense, except as
required under Section 5.02 and Section 12.03.

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 the date of this
Agreement and 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 (and if applicable) 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).

(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, (ii) to the Issuing Bank a fronting fee,

 

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which shall accrue at the rate of 0.35% 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, provided that in no event
shall such fee be less than $500 during any quarter, 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 (and if applicable) 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 in writing between the Borrower and the Administrative
Agent.

(d) Defaulting Lender Fees. Subject to Section 2.09, 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.

(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. 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.

 

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(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); provided further that in the event that
any Defaulting Lender shall exercise any such right of setoff, counterclaim or
other similar right (x) all amounts so set off shall be paid over immediately to
the Administrative Agent for further application in accordance with the
provisions of Section 4.03 and, pending such payment, shall be segregated by
such Defaulting Lender from its other funds and deemed held in trust for the
benefit of the Administrative Agent, any Issuing Bank, and the Lenders, and
(y) the Defaulting Lender shall provide promptly to the Administrative Agent a
statement describing in reasonable detail the Secured Obligations owing to such
Defaulting Lender as to which it exercised such right of setoff. 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.

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 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

 

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Instruments further provide in general for the application of such proceeds to
the satisfaction of the Secured Obligations and other obligations described
therein and secured thereby. Notwithstanding the assignment contained in such
Security Instruments or any other Loan Document, until the occurrence of an
Event of Default (and then, only during the continuance thereof), (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 and used by the Borrower
and its Restricted 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 Restricted Subsidiaries.

ARTICLE V

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

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);

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) 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; provided, however, no Lender or Issuing
Bank shall claim, or be entitled to claim, from the Borrower the payment of any
amount referred to in this Section 5.01(b) if it is not generally claiming
similar compensation from other similar customers in similar circumstances.

 

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(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 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, (d) an increase in the Aggregate Maximum
Credit Amounts pursuant to Section 2.06(c) on a day other than the last day of
the Interest Period in respect of outstanding Eurodollar Borrowings or (e) 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 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 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 any Credit Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Credit Party shall be increased as necessary so that after
such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

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(b) Payment of Other Taxes by the Borrower. The Credit Parties shall pay to the
relevant Governmental Authority in accordance with applicable law, or at the
option of the Administrative Agent timely reimburse it for the payment of, any
Other Taxes.

(c) Indemnification by the Borrower. The Credit Parties shall jointly and
severally indemnify each Recipient, within 10 days after the Borrower’s receipt
of written demand therefor and certificate hereinafter provided for, for the
full amount of any Indemnified Taxes (including Indemnified Taxes imposed or
asserted on or attributable to amounts payable under this Section 5.03) payable
or paid by such Recipient or required to be withheld or deducted from a payment
to such Recipient and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate of the Administrative Agent, a Lender or the Issuing Bank as to
the amount 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 the
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 Taxes by a
Credit Party to a Governmental Authority pursuant to this Section 5.03, 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
Borrower and the Administrative Agent, at the time or times prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
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 Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or

 

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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 submission of such documentation (other
than such documentation set forth in Section 5.03(f)(ii)(A), (ii)(B) and (ii)(D)
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,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative 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 Borrower or the Administrative Agent), executed
originals of IRS Form W-9 (or any successor form) 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 Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter at the time or times upon the reasonable request of the Borrower or
the Administrative 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
W-8BEN-E (or any successor form), 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 W-8BEN-E (or any successor form), 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 (or any successor form);

(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 H-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 W-8BEN-E (or any
successor form), as applicable; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY (or any successor form), accompanied by IRS Form
W-8ECI (or any successor form), IRS Form W-8BEN (or any successor form), IRS
Form W-8BEN-E (or any successor form), a U.S. Tax Compliance Certificate
substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9 (or any
successor form), 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 H-4 on behalf of
each such direct and indirect partner;

 

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(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter at the time or times prescribed by applicable law or upon the
reasonable request of the Borrower or the Administrative 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 Borrower or the Administrative Agent to determine
the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail 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 Borrower and the Administrative Agent, at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative 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 Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their respective 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 clause (D), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

(iii) On or before the date that BMO (and any successor or replacement
Administrative Agent) becomes the Administrative Agent hereunder, it shall
deliver to the Borrower two duly executed originals of either (A) IRS Form W-9
(or any successor form) or (B) a U.S. branch withholding certificate on IRS Form
W-8IMY (or any successor form) evidencing its agreement with the Borrower to be
treated as a U.S. Person (with respect to amounts received on account of any
Lender) and IRS Form W-8ECI (or any successor form) (with respect to amounts
received on its own account), with the effect that, in any case, the Borrower
will be entitled to make payments hereunder to the Administrative Agent without
withholding or deduction on account of U.S. federal withholding Tax.

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 Borrower and the Administrative
Agent in writing of its legal inability to do so.

(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5.03 (including by
the payment of additional amounts pursuant to this Section 5.03), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 5.03 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this Section 5.03(g)
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) in the event that such indemnified party is required to
repay

 

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such refund to such Governmental Authority. Notwithstanding anything to the
contrary in this Section 5.03(g), in no event will the indemnified party be
required to pay any amount to an indemnifying party pursuant to this
Section 5.03(g) the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund had not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid. This
Section 5.03(g) shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

(h) Defined Terms. For purposes of this Section 5.03, the term “Lender” includes
any Issuing Bank and the term “applicable law” includes FATCA.

Section 5.04 Mitigation Obligations; Replacement of Lenders.

(a) Designation of Different Lending Office. If (i) any Lender requests
compensation under Section 5.01, (ii) 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, or (iii) any Lender gives a notice pursuant
to Section 5.05, 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
(1) would eliminate or reduce amounts payable pursuant to Section 5.01 or
Section 5.03, as the case may be, in the future, or eliminate the need for the
notice pursuant to Section 5.05, as applicable, and (2) 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 (i) any Lender (A) requests compensation under
Section 5.01 or gives a notice pursuant to Section 5.05, and in each case does
not designate a different lending office or make an assignment as contemplated
in Section 5.04(a), or (B) is unable to provide or maintain Eurodollar Loans as
set forth in Section 3.03, (ii) 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, (iii) any Lender becomes a Defaulting Lender
hereunder, or (iv) if any Lender is a Dissenting 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 or delayed, (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.

 

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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 effectuate this
Agreement and to make Loans hereunder, 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 Arrangers and the Lenders shall have received
all fees and amounts agreed in writing and due and payable to each of them on or
prior to the Effective Date, and, to the extent invoiced at least two Business
Days prior to the Effective Date, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

(b) The Administrative Agent shall have received a certificate of the Secretary
or an Assistant Secretary of the Borrower and each Guarantor setting forth
(i) resolutions of its board of directors (or comparable governing body) with
respect to the authorization of 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 Borrower
or such Guarantor (y) who are authorized to sign the Loan Documents to which 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 bylaws (or comparable
organizational documents for any Credit Parties that are not corporations) of
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 Borrower and each Guarantor, in each case, in their respective jurisdiction
of organization and in any other jurisdiction in which they own material
Property.

(d) 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.

 

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(e) The Administrative Agent shall have received duly executed Notes payable to
each Lender requesting a Note in a principal amount equal to its Maximum Credit
Amount dated as of the date hereof.

(f) Subject to Section 8.17, 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 described on
Exhibit E, including mortgages or amendments to existing mortgages such that the
Administrative Agent shall be satisfied that such Security Instruments create
first priority, perfected Liens (subject only to Excepted Liens identified in
clauses (a) to (d), (f), (i) and (j) of the definition thereof, but subject to
the provisos at the end of such definition) on at least 85% of the total value
of the Proved Reserves of the Borrower and its Restricted Subsidiaries evaluated
in the Initial Reserve Report.

(g) Subject to Section 8.17, the Administrative Agent shall have received title
information as the Administrative Agent may require satisfactory to the
Administrative Agent setting forth the status of title to at least 85% of the
value of the Proved Reserves of the Borrower and its Restricted Subsidiaries
evaluated in the Initial Reserve Report.

(h) The Administrative Agent shall have received the Initial Reserve Report
accompanied by a certificate covering the matters described in Section 8.12(c).

(i) The Administrative Agent shall have received an opinion of Baker Botts LLP,
special counsel to the Borrower, in form and substance reasonably acceptable to
the Administrative Agent.

(j) The Administrative Agent shall have received, and satisfactorily completed
its review of, all due diligence information regarding the Credit Parties as it
shall have requested including, without limitation, information regarding
litigation, tax matters, accounting matters, insurance matters, labor matters,
pension liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership, contingent liabilities and other
legal matters of the Borrower and its Subsidiaries.

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

(l) The Administrative Agent shall have received the financial statements
referred to in Section 7.04(a).

(m) The Administrative Agent shall have received appropriate UCC search
certificates reflecting no prior Liens encumbering the Properties of the
Borrower and its Restricted Subsidiaries (other than those being assigned,
continued or released on or prior to the Effective Date or Liens permitted by
Section 9.03) for each jurisdiction reasonably requested by the Administrative
Agent.

(n) (i) To the extent requested at least two Business Days prior to the
Effective Date, the Administrative Agent shall have received from the Credit
Parties, to the extent requested by the Lenders or the Administrative Agent, all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including the USA Patriot Act and (ii) to the extent the Borrower qualifies as a
“legal entity customer” under the Beneficial Ownership Regulation, at least five
days prior to the Effective Date, any Lender that has requested, in a written
notice to the Borrower at least 10 days prior to the Effective Date, a
Beneficial Ownership Certification in relation to the Borrower shall have
received such Beneficial Ownership Certification.

 

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(o) The Administrative Agent shall have received a certificate of a Responsible
Officer of the Borrower certifying that attached thereto is (i) a copy of the
certificate of merger with respect to the Merger filed with the Secretary of
State of the State of Delaware and (ii) an executed copy of the Merger
Agreement, together with all schedules, annexes and exhibits thereto, certified
as complete and correct by a Responsible Officer of the Borrower. The Merger
shall have been (or, substantially concurrently with the Effective Date, shall
be) consummated in all material respects in accordance with the terms of the
Merger Agreement. The Merger Agreement shall not have been amended or modified
in any respect, or any provision or condition therein waived, or any consent
granted thereunder, by any Credit Party, if such amendment, modification, waiver
or consent would be material and adverse to the interests of the Lenders (in
their capacities as such) without the Administrative Agent’s prior written
consent (such consent not to be unreasonably withheld, delayed or conditioned).

(p) The Administrative Agent shall have received such other documents as the
Administrative Agent may reasonably request at least two (2) Business Days prior
to the Effective Date.

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 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 Restricted Subsidiaries shall be in
form and substance reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the obligations of the Lenders to make Loans and of the Issuing Banks
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 May 31, 2019 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).

Section 6.02 Each Credit Event. Other than with respect to any deemed Loan or
Letter of credit as set forth in Section 2.02(e), 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) 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 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 that (i) 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 in all material respects as of
such specified earlier date and (ii) to the extent that any such representation
and warranty is qualified by materiality, such representation and warranty (as
so qualified) shall continue to be true and correct in all respects.

 

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(c) 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.

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 Borrower on the date thereof as to the
matters specified in Section 6.02(a) and (b).

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that:

Section 7.01 Organization; Powers. Each of the Borrower and the Restricted
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite corporate or
equivalent power and authority, and has 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
Borrower’s and each Guarantor’s corporate or equivalent powers and have been
duly authorized by all necessary corporate or equivalent and, if required,
stockholder action (including, without limitation, any action required to be
taken by any class of directors of 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 Borrower and each Guarantor is a
party has been duly executed and delivered by the Borrower and such Guarantor
and constitutes a legal, valid and binding obligation of the Borrower and such
Guarantor, 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.

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 Borrower or any
other Person) to be obtained or made by the Borrower or any Guarantor, nor is
any such consent, approval, registration, filing or other action necessary for
the validity or enforceability of any Loan Document against the Borrower or any
Guarantor, as the case may be, or the consummation of the transactions by the
Borrower or any Guarantor 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 and
(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, (b) will not violate any law or regulation applicable to,
or the charter, bylaws or other organizational documents of, the Borrower or any
Restricted Subsidiary or any order of any Governmental Authority applicable to
the Borrower or any Restricted Subsidiary, (c) will not result in a breach of,
or default under, any indenture, financing agreement or other material
instrument binding upon the Borrower or any Restricted Subsidiary or any of
their Proved Reserves or other material Properties (including, without
limitation, any Permitted Unsecured Debt Document), or give rise to a right
thereunder to require any payment to be made by the Borrower or such Restricted
Subsidiary and (d) will not result in the creation or imposition of any Lien on
any Property of the Borrower or any Restricted Subsidiary (other than the Liens
created by the Loan Documents).

 

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Section 7.04 Financial Condition; No Material Adverse Change.

(a) The Borrower has heretofore furnished to the Lenders (i) its audited balance
sheet and related statements of income or operations, stockholders equity and
cash flows as of and for the fiscal year ended December 31, 2017, reported on by
Grant Thornton LLP (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 financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries as of such date and for such period in accordance with
GAAP consistently applied, (ii) the audited consolidated financial statements of
Blue Ridge and its consolidated subsidiaries for the fiscal year ended
December 31, 2017 reported on by BDO USA, LLP (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 financial statements present fairly
in all material respects the financial condition and results of operations of
Blue Ridge and its consolidated subsidiaries as of such date and for such period
in accordance with GAAP consistently applied, (iii) the unaudited consolidated
quarterly financial statements of each of the Borrower and its Consolidated
Subsidiaries, and Blue Ridge and its consolidated subsidiaries for the fiscal
quarter ended September 30, 2018, (iv) the unaudited pro forma financial
statements of combined operations of the Borrower and its Consolidated
Subsidiaries and Blue Ridge and its consolidated subsidiaries for the fiscal
year ended December 31, 2017, as if the Merger had been consummated on
January 1, 2017, (v) the unaudited pro forma statement of combined operations of
the Borrower and its Consolidated Subsidiaries and Blue Ridge and its
consolidated subsidiaries for the six months ended September 30, 2018, as if the
Merger had been consummated on January 1, 2017 and (vi) the unaudited pro forma
condensed combined balance sheet of the Borrower and its Consolidated
Subsidiaries and Blue Ridge and its consolidated subsidiaries as of September 30
2018, as if the Merger had been consummated on September 30, 2018. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
Consolidated Subsidiaries (or Blue Ridge and its consolidated subsidiaries, as
the case may be) as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments, reclassifications and the absence of
footnotes in the case of the unaudited quarterly financial statements.

(b) Since December 31, 2017, there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect. No event, development or circumstance that has had or could
reasonably be expected to have a Material Adverse Effect is disclosed in the
Borrower’s consolidated audited balance sheet and related statements of income
or operations, stockholders equity and cash flows for the fiscal year ended
December 31, 2017. No event, development or circumstance that has had or could
reasonably be expected to have a Material Adverse Effect is disclosed in the
unaudited pro forma financial statements of combined operations of the Borrower
and its Consolidated Subsidiaries and Blue Ridge and its consolidated
subsidiaries for the fiscal year ended December 31, 2017, as if the Merger had
been consummated on January 1, 2017.

(c) On the date hereof, neither the Borrower nor any Restricted Subsidiary has
any material Debt (including Disqualified Capital Stock) or 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, except as referred to or reflected or
provided for in the Financial Statements.

 

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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 pending against or, to the knowledge of the Borrower, threatened in
writing against the Borrower or any Restricted Subsidiary (i) not fully covered
by insurance (except for normal deductibles), which if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect, or (ii) that challenge the validity or enforceability
of any Loan Document or any provisions thereof 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:

(a) the Borrower and its Subsidiaries 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 its Subsidiaries have obtained all Environmental Permits
required for their respective operations as currently conducted and each of
their Properties, with all such Environmental Permits being currently in full
force and effect, and none of the Borrower or its Subsidiaries 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 written claims or 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, to the Borrower’s knowledge, threatened against the Borrower or any
Subsidiary or any of their respective Properties or as a result of any
operations at such Properties;

(d) none of the Properties of the Borrower or any Subsidiary contain or have
contained any: (i) underground storage tanks; (ii) asbestos-containing
materials; (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 the Borrower’s or any Subsidiary’s Properties except in
compliance with Environmental Laws, there are no investigations, remediations,
abatements, removals, or monitorings of Hazardous Materials required under
applicable Environmental Laws at such Properties and, to the knowledge of the
Borrower, none of such Properties are adversely affected by any Release or
threatened Release of a Hazardous Material originating or emanating from any
other real property;

(f) neither the Borrower nor any Subsidiary 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 any Subsidiary’s
Properties;

 

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(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 its Subsidiaries’ Properties that could reasonably be
expected to form the basis for a claim for damages or compensation; and

(h) the Borrower and its Subsidiaries have made available to the Lenders
complete and correct copies of all environmental site assessment reports,
investigations, studies, analyses, and material 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’ possession or control and or operations thereon.

Section 7.07 Compliance with the Laws and Agreements; No Defaults.

(a) Each of the Borrower and each Subsidiary is in compliance with all
Governmental Requirements applicable to it or its Proved Reserves and other
material Property and all agreements and other instruments binding upon it or
such Property, and possesses all licenses, permits, franchises, exemptions,
approvals and other governmental authorizations necessary for the ownership of
such 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) Neither the Borrower nor any Restricted Subsidiary 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 Borrower or a Restricted Subsidiary 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 Restricted Subsidiary or any of their Properties is bound.

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

Section 7.08 Investment Company Act. Neither the Borrower nor any Restricted
Subsidiary is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

Section 7.09 Taxes. Each of the Borrower and its Restricted Subsidiaries has
timely (taking into account any applicable extensions available and permitted
under applicable law) filed or caused to be filed all Tax returns and reports
required to have been filed by it 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 Borrower or such
Restricted Subsidiary, 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 Borrower and its Restricted
Subsidiaries in respect of Taxes and other governmental charges are, in the
reasonable opinion of the Borrower, adequate. No Tax Lien (other than an
Excepted Lien) has been filed with respect to the Properties of the Borrower and
the Restricted Subsidiaries and, to the knowledge of the Borrower, no written
claim is being asserted by any Governmental Authority with respect to any
material unpaid Tax that could give rise to any such Tax Lien.

Section 7.10 ERISA.

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

 

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

(c) Except as would not reasonably be expected to result in a Material Adverse
Effect, no ERISA Event has occurred or is reasonably expected to occur.

(d) Except as would not reasonably be expected to result in a Material Adverse
Effect, no act, omission or transaction has occurred which could result in
imposition on the Borrower, any Subsidiary or any ERISA Affiliate (whether
directly or indirectly) of (i) either a civil penalty assessed pursuant to
subsections (c), (i), (l) or (m) 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.

(e) Full payment when due has been made of all amounts which the Borrower, its
Subsidiaries 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.

Section 7.11 Disclosure; No Material Misstatements.

(a) The Borrower has disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Restricted Subsidiaries is subject, and all other matters known to it,
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 information furnished by or on behalf of the Borrower or
any Restricted Subsidiary 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 Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time. 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 of the Borrower
and its Restricted Subsidiaries and production and cost estimates contained in
each Reserve Report are necessarily based upon professional opinions, estimates
and projections and that the Borrower and its Restricted Subsidiaries do not
warrant that such opinions, estimates and projections will ultimately prove to
have been accurate.

(b) As of the Effective Date, to the best knowledge of the Borrower, the
information included in the Beneficial Ownership Certification, if any, provided
on or prior to the Effective Date to any Lender in connection with this
Agreement is true and correct in all respects.

Section 7.12 Insurance. The Borrower has, and has caused all of its Restricted
Subsidiaries 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 Borrower and its Restricted
Subsidiaries. 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 loss payee with respect to Property loss
insurance.

 

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Section 7.13 Restriction on Liens. Neither the Borrower nor any of its
Restricted Subsidiaries is a party to any material agreement or arrangement
(other than agreements creating Liens permitted by Section 9.03(d)), 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 (other than any such
Properties excluded from collateral herefor under the provisions of any Loan
Document) to secure the Secured Obligations 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 Restricted
Subsidiary on such schedule is a Wholly-Owned Subsidiary. Schedule 7.14
identifies each Subsidiary as either a Restricted Subsidiary or an Unrestricted
Subsidiary.

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 Montage Resources
Corporation; and the organizational identification number of the Borrower in its
jurisdiction of organization is 5482186 (or, in each case, as set forth in a
notice delivered to the Administrative Agent pursuant to Section 8.01(j) 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(j) and
Section 12.01(c)). Each Restricted 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(j)).

Section 7.16 Properties; Titles, Etc.

(a) Subject to Immaterial Title Deficiencies, each of the Borrower and the
Restricted Subsidiaries has good and defensible title to the Oil and Gas
Properties evaluated in the most recently delivered Reserve Report (except to
the extent sold or transferred in a transaction not prohibited pursuant to this
Agreement after the date of such Reserve Report) and good title to all its
personal Properties, in each case, free and clear of all Liens except Liens
permitted by Section 9.03. After giving full effect to Immaterial Title
Deficiencies and Excepted Liens, the Borrower or the Restricted 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, and the ownership of such Properties shall not in any material respect
obligate the Borrower or such Restricted 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 Restricted
Subsidiary’s net revenue interest in such Property.

(b) All material leases and agreements necessary for the conduct of the business
of the Borrower and its Restricted 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 its Restricted Subsidiaries including, without limitation, all
easements and rights of way, include all rights and Properties necessary to
permit the Borrower and its Restricted Subsidiaries to conduct their business in
all material respects in the same manner as its business has been conducted
prior to the date hereof.

 

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(d) All of the Properties of the Borrower and its Restricted Subsidiaries which
are reasonably necessary for the operation of their businesses are in good
working condition, ordinary wear and tear excepted, and are maintained in
accordance with prudent business standards for companies engaged in the business
of oil and gas exploration and production.

(e) The Borrower and each Restricted 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
Restricted 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 its Restricted 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.

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 its
Restricted 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 its
Restricted Subsidiaries. Specifically in connection with the foregoing, except
for those as could not be reasonably expected to have a Material Adverse Effect,
(i) no Oil and Gas Property of the Borrower or any Restricted 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
(ii) none of the producing Wells comprising a part of the Oil and Gas Properties
(or Properties unitized therewith) of the Borrower or any Restricted 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
the Oil and Gas Properties (or in the case of Wells located on Properties
unitized therewith, such unitized Properties) of the Borrower or such Restricted
Subsidiary. All pipelines, Wells, gas processing plants, platforms and other
material improvements, fixtures and equipment owned or controlled by the
Borrower or any of its Restricted 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 Restricted Subsidiaries, in a manner consistent with the
Borrower’s or its Restricted 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 its Restricted Subsidiaries to deliver
Hydrocarbons produced from their Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor exceeding one-half
bcf of gas (on an mcf equivalent basis) in the aggregate.

 

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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 its Restricted 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 its Restricted 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.

Section 7.20 Swap Agreements and Eligible Contract Participant. 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(d), sets forth, a true and
complete list of all Swap Agreements of the Borrower and each Restricted
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), all credit support
agreements (other than the Security Instruments) relating thereto (including any
margin required or supplied thereunder) and the counterparty to each such
agreement. The Borrower is a Qualified ECP Guarantor.

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, for acquisitions of Oil and Gas Properties permitted
hereunder, to consummate the Merger in accordance with the terms of the Merger
Agreement and for general corporate, partnership or equivalent purpose,
including to refinance Debt of the Borrower under the Existing Credit Agreement.
The Borrower and its Restricted Subsidiaries 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.

Section 7.22 Solvency. Immediately 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 and the
Guarantors on a consolidated basis will exceed the aggregate Debt of the
Borrower and the Guarantors on a consolidated basis, as the Debt becomes
absolute and matures, (b) the Borrower and the Guarantors, taken as a whole,
will not have incurred or intended to incur, and will not believe that they will
incur, Debt beyond their ability to pay such Debt (after taking into account the
timing and amounts of cash to be received by the Borrower and the Guarantors and
the amounts to be payable on or in respect of their 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) the Borrower and the Guarantors, taken as a whole, will not have
(and will have no reason to believe that they will have thereafter) unreasonably
small capital for the conduct of the business in which they are engaged as such
business is conducted as of the Effective Date and is proposed to be conducted
after the Effective Date.

Section 7.23 Anti-Corruption Laws and Sanctions. The Borrower and its
Subsidiaries have implemented and maintain in effect policies and procedures
designed to ensure compliance by the Borrower, its Subsidiaries and their
respective directors, officers, employees and agents (in their capacity as agent
for the Borrower or its Subsidiaries) with Anti-Corruption Laws and applicable
Sanctions, and the Borrower, its Subsidiaries and their respective officers and
directors and to the knowledge of the

 

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Borrower its employees and agents (in their capacity as agent for the Borrower
or its Subsidiaries), are in compliance with Anti-Corruption Laws and applicable
Sanctions in all material respects. None of (a) the Borrower, any Subsidiary,
any of their respective directors, officers or employees, or (b) to the
knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will
act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit,
use of proceeds or other transaction contemplated by this Agreement will violate
any Anti-Corruption Law or applicable Sanctions.

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, the Borrower covenants and agrees with the Lenders that:

Section 8.01 Financial Statements; Other Information. The Borrower will furnish
to the Administrative Agent and each Lender:

(a) Annual Financial Statements. As soon as available, but in any event not
later than ninety (90) days after the end of each fiscal year of the Borrower
commencing with the fiscal year ending December 31, 2018 (or shorter period if
as provided for by applicable law), audited consolidated balance sheet and
related statements of income or operations, stockholders’ 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 Grant Thornton
LLP or other 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 Borrower and its
Consolidated Subsidiaries as of such fiscal year end on a consolidated basis in
accordance with GAAP, applied on a basis consistent with the Financial
Statements except for changes in which the Borrower’s independent public
accountants concur and which are disclosed to the Administrative Agent
concurrently with the delivery of the financial statements required to be
delivered pursuant to this Section 8.01(a).

(b) Quarterly Financial Statements. As soon as available, but in any event not
later than sixty (60) days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower commencing with the fiscal quarter
ending March 31, 2019 (or shorter period if as provided for by applicable law),
its consolidated balance sheet and related statements of operations,
stockholders’ 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 Borrower and
its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
applied on a basis consistent with the Financial Statements except for changes
in which the Borrower’s independent public accountants concur and which are
disclosed to the Administrative Agent on the next date on which financial
statements are required to be delivered pursuant to this Section 8.01(b),
subject to normal year-end audit adjustments, reclassifications and the absence
of footnotes.

 

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(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 exists and, if a Default exists,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations of the
then-applicable financial ratios set forth in Section 9.01 and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of (A) until the audited financial statements referred to in
Section 8.01(a) are initially delivered pursuant to such Section, the Financial
Statements, and (B) with respect to audited financial statements delivered after
the date hereof pursuant to Section 8.01(a), the most recently prepared audited
financial statements delivered pursuant to Section 8.01(a) and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate.

(d) Certificate of Financial Officer—Swap Agreements. Concurrently with the
delivery of each Reserve Report hereunder, a certificate of a Financial Officer,
in form and substance reasonably satisfactory to the Administrative Agent,
setting forth as of a recent date a true and complete list of all Swap
Agreements of the Borrower and each Restricted Subsidiary which are in effect on
such date, the material terms thereof (including the type, term, effective date,
termination date and notional amounts or volumes), 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 and, if the Borrower has elected to be governed by the percentage
limitations set forth in clause (C) of Section 9.18(a)(i) for any part of the
Specified Period, projections of production of crude oil, natural gas and
natural gas liquids from the Borrower’s and its Restricted Subsidiaries’ Oil and
Gas Properties, calculated separately, by a Financial Officer of the Borrower
for each month during the Specified Period.

(e) 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 customarily obtained from, and provided by, insurers or their
agents for these purposes, and, if reasonably requested by the Administrative
Agent or any Lender, all copies of the applicable policies.

(f) Other Accounting Reports. Promptly upon receipt thereof, a copy of each
other report or letter submitted to the Borrower or any of its Restricted
Subsidiaries by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Borrower or any such
Restricted Subsidiary which results in, or could reasonably be expected to
result in, a Material Adverse Effect, and a copy of any response by the Borrower
or any such Restricted Subsidiary, or the board of directors (or comparable
governing body) of the Borrower or any such Restricted Subsidiary, to such
letter or report.

(g) Notices Under Material Instruments. Promptly after the furnishing thereof,
copies of any financial statement, report or notice furnished to or by the
Borrower or any Restricted Subsidiary pursuant to the terms of any preferred
stock designation, indenture (other than the 2015 Indenture), loan or credit or
other similar agreement to which any of them is a party, other than any Loan
Document and not otherwise required to be furnished to the Lenders pursuant to
any other provision of this Section 8.01.

(h) Notice of Sales of Oil and Gas Properties. In the event the Borrower or any
Restricted Subsidiary intends to sell, transfer, assign or otherwise dispose of
any Proved Reserves or any Equity Interests in any Restricted Subsidiary in
accordance with Section 9.12, reasonable prior written notice (and in any event
not less than five Business Days’ prior notice or such shorter period of time as
determined by the Administrative Agent in its sole discretion) of such
disposition, the price thereof and the anticipated date of closing and any other
details thereof requested by the Administrative Agent or any Lender.

 

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(i) Notice of Casualty Events. Prompt written notice, and in any event within
three Business Days, after the occurrence of any Casualty Event or the
commencement of any action or proceeding of which the Borrower has knowledge and
that could reasonably be expected to result in a Casualty Event.

(j) Information Regarding the Borrower and Guarantors. Prompt written notice
(and in any event within thirty (30) days prior thereto or such shorter period
as agreed by the Administrative Agent and the Borrower which permits the
Administrative Agent to take timely any applicable required steps or action) of
any change (i) in the Borrower or any Guarantor’s corporate name, (ii) in the
location of the Borrower or any Guarantor’s chief executive office or principal
place of business, (iii) in the Borrower or any Guarantor’s identity or
corporate structure or in the jurisdiction in which such Person is incorporated
or formed, (iv) in the Borrower or any Guarantor’s jurisdiction of organization
or such Person’s organizational identification number in such jurisdiction of
organization, and (v) in the Borrower or any Guarantor’s federal taxpayer
identification number.

(k) Notices of Certain Changes. Promptly, but in any event within five
(5) Business Days after the execution thereof, copies of any amendment,
modification or supplement to the certificate or articles of incorporation,
bylaws, certificate or articles of organization, regulations, any preferred
stock designation or any other governance document of the Borrower or any
Guarantor.

(l) Certificate of Financial Officer—Consolidating Information. If, at any time,
the Borrower has designated as an Unrestricted Subsidiary any of its
Subsidiaries that is not an Immaterial Subsidiary (or that, taken together with
all other Unrestricted Subsidiaries), then 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 the
financial condition and results of such Unrestricted Subsidiaries of the
Borrower in such form as would be presentable to the auditors of the Borrower.

(m) Permitted Unsecured Debt. Promptly, but in any event within five
(5) Business Days after (i) such delivery, copies of any financial report (other
than any reports that are substantially similar to those required by this
Agreement) or notice required to be delivered to any holder of Permitted
Unsecured Debt, pursuant to the Permitted Unsecured Debt Documents, which report
or notice has not been delivered to the Lenders hereunder or (ii) receipt by the
Borrower, copies of any notice of default or notice requiring repurchase, in
whole or in part, of any notes issued under any Permitted Unsecured Debt
Document, sent by any holder of Permitted Unsecured Debt pursuant to the terms
of any Permitted Unsecured Debt Document.

(n) 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 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.

(o) Other Requested Information. Promptly following any request therefor,
(i) such other information regarding the operations, business affairs and
financial condition of 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 and (ii) information and documentation
reasonably requested by the Administrative Agent or any Lender necessary to
comply with applicable “know your customer” and anti-money laundering rules and
regulations, including the USA Patriot Act and the Beneficial Ownership
Regulation.

 

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Documents required to be delivered pursuant to Section 8.01 may be delivered
electronically and, if so delivered, shall be deemed to have been delivered on
the date (i) on which such materials are publicly available as posted by or at
the Borrower’s direction on the Electronic Data Gathering, Analysis and
Retrieval system (EDGAR) or any successor system; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether the Borrower’s website or any other commercial, third-party website or
whether made available by the Administrative Agent); provided, that the Borrower
shall notify the Administrative Agent (by telecopier or electronic mail) of the
posting of any such documents. Each Lender shall be solely responsible for
timely accessing posted documents.

Section 8.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt (and in any event within five
(5) Business Days after the Borrower’s knowledge of the occurrence thereof)
written notice of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of any action, suit, proceeding, investigation or
arbitration by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Restricted Subsidiary 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, if adversely determined, could reasonably be
expected to result in liability in excess of the Threshold Amount, not fully
covered by insurance, subject to normal deductibles;

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

(d) any change in the information provided in the Beneficial Ownership
Certification delivered to such Lender that would result in a change to the list
of beneficial owners identified in such certification.

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 Borrower will, and will cause
each Restricted Subsidiary 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
the businesses of each of the Borrower and the Restricted Subsidiaries and
maintain, if necessary, its qualification to do business in each other
jurisdiction in which its Oil and Gas 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, dissolution or other transaction permitted under Section 9.11 or
Section 9.12.

Section 8.04 Payment of Obligations. The Borrower will, and will cause each
Restricted Subsidiary to, pay its obligations, including Tax liabilities of the
Borrower and all of its Restricted Subsidiaries, 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 and the Borrower or
such Restricted Subsidiary has set aside on its books adequate reserves with
respect thereto 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 or
result in the seizure or levy of any material Property of the Borrower or any
Restricted Subsidiary.

 

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Section 8.05 Performance of Obligations under Loan Documents. The Borrower will
pay the Notes according to the reading, tenor and effect thereof, and the
Borrower will, and will cause each Restricted Subsidiary 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 will, and
will cause each Restricted 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 so operate and comply
could not reasonably be expected to have a Material Adverse Effect;

(b) maintain and keep in good working order (ordinary wear and tear excepted)
all of its Proved Reserves and other Properties material to the conduct of its
business, including, without limitation, all of such 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 that are material to
the conduct of its business and affecting or pertaining to its Proved Reserves
and will do all other things necessary to keep unimpaired their rights with
respect thereto and prevent any forfeiture thereof or default thereunder;

(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 Proved Reserves and other Properties
that are material to the conduct of its business; and

(e) to the extent the Borrower is not the operator of any Hydrocarbon Interests
in which it owns an interest, the Borrower shall use commercially reasonable
efforts to cause the operator to attempt to comply with this Section 8.06 in
respect to such Hydrocarbon Interests to the extent that the Borrower has
knowledge that such operator is not doing so in all material respects.

Section 8.07 Insurance. The Borrower will, and will cause each Restricted
Subsidiary to, maintain, with financially sound and reputable insurance
companies, insurance (a) 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 and (b) in accordance with all
Governmental Requirements. 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 provide that the insurer will endeavor
to give at least thirty (30) days prior notice of any cancellation to the
Administrative Agent.

 

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Section 8.08 Books and Records; Inspection Rights. The Borrower will, and will
cause each Restricted Subsidiary 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, in each case, to the extent required
in accordance with GAAP. The Borrower will, and will cause each Restricted
Subsidiary 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
(provided that if the Administrative Agent, any Lender or their respective
representatives conduct more than one (1) such inspection during any
twelve-month period, any expenses incurred by the Administrative Agent, such
Lender or their respective representatives for such inspections (other than the
first such inspection during such period by such Person) shall be borne by such
Person if an Event of Default does not then exist), and in each case, except for
such records and affairs that are subject to contractual confidentiality
restrictions or attorney-client privilege.

Section 8.09 Compliance with Laws. The Borrower will, and will cause each
Subsidiary 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. The Borrower will maintain in
effect and enforce policies and procedures designed to ensure compliance by the
Borrower, its Subsidiaries and their respective directors, officers, employees
and agents (in their capacity as agent for the Borrower or its Subsidiaries)
with Anti-Corruption Laws and applicable Sanctions.

Section 8.10 Environmental Matters.

(a) The Borrower shall at its sole expense: (i) comply, and shall cause its
Properties and operations and each Subsidiary and each Subsidiary’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
Release or threaten to Release, and shall cause each Subsidiary not to Release
or threaten to Release, any Hazardous Material on, under, about or from any of
the Borrower’s or its Subsidiaries’ Properties or any other property offsite the
Property to the extent caused by the Borrower’s or any of its Subsidiaries’
operations except in compliance with applicable Environmental Laws, the Release
or threatened 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 Environmental Permits, if any, required under
applicable Environmental Laws to be obtained or filed in connection with the
operation or use of the Borrower’s or its 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 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
under applicable Environmental Laws because of or in connection with the actual
or suspected past, present or future Release or threatened Release of any
Hazardous Material on, under, about or from any of the Borrower’s or its
Subsidiaries’ Properties, which failure to commence and diligently prosecute to
completion could reasonably be expected to have a Material Adverse Effect;
(v) conduct, and cause its Subsidiaries to conduct, their respective operations
and businesses in a manner that will not expose any Property or Person to
Hazardous Materials that could reasonably be expected to form the basis for a
claim for damages or compensation, which claim for damages or compensation could
reasonably be expected to result in a Material Adverse Effect; and
(vi) establish and implement, and shall cause each Subsidiary to establish and
implement, such procedures as may be necessary to continuously determine and
assure that the Borrower’s and its Subsidiaries’ 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.

 

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(b) The Borrower will promptly, but in no event later than five (5) Business
Days after the Borrower obtains knowledge thereof, notify the Administrative
Agent and the Lenders in writing of any written, threatened action,
investigation or inquiry by any Governmental Authority or any written,
threatened demand or lawsuit by any Person against the Borrower or its
Subsidiaries or their Properties of which the Borrower has knowledge in
connection with any Environmental Laws if the Borrower could reasonably
anticipate that such action will result in liability (whether individually or in
the aggregate) in excess of the Threshold Amount, not fully covered by
insurance, subject to normal deductibles.

(c) The Borrower will, and will cause each Subsidiary to, provide environmental
assessments, audits and tests in accordance with the most current version of the
American Society of Testing Materials standards upon the 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.

Section 8.11 Further Assurances.

(a) The Borrower will, and will cause each Restricted Subsidiary 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 Borrower or any Restricted Subsidiary, 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 Secured Obligations,
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 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 Mortgaged Property without the signature of the Borrower or any
other Guarantor where permitted by law. A carbon, photographic or other
reproduction of the Security Instruments or any financing statement covering the
Mortgaged Property or any part thereof shall be sufficient as a financing
statement where permitted by law. The Borrower acknowledges and agrees that any
such financing statement may describe the collateral as “all assets” of the
applicable Credit Party 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, the Borrower shall
furnish to the Administrative Agent and the Lenders a Reserve Report evaluating
the Oil and Gas Properties constituting Proved Reserves of the Borrower and its
Restricted Subsidiaries as of the immediately preceding January 1st and July 1st
that the Borrower desires to have included in the calculation of the Borrowing
Base. In addition, on or before any December 1st or June 1st, as applicable,
immediately preceding any Optional Scheduled Redetermination Date, the Borrower
shall furnish to the Administrative Agent and the Lenders a Reserve Report
evaluating the Oil and Gas Properties that constitute Proved Reserves of the
Borrower and its Restricted Subsidiaries with an “as of” date that is three
months prior to the applicable Optional Scheduled Redetermination Date (or
otherwise reasonably

 

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acceptable to the Administrative Agent) that the Borrower desires to have
included in the calculation of the Borrowing Base. The Reserve Report as of
January 1 of each year shall be prepared by one or more Approved Petroleum
Engineers, and each other Reserve Report required hereunder shall be 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 and to have
been prepared in accordance with the procedures used in the immediately
preceding January 1 Reserve Report.

(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 or its Subsidiaries who
shall certify such Reserve Report to be true and accurate in all material
respects 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 forty-five (45) days following the receipt of such request.

(c) With the delivery of each Reserve Report, the Borrower shall provide to the
Administrative Agent and the Lenders (i) a certificate from a Responsible
Officer certifying that in all material respects: (A) the information contained
in the Reserve Report and any other information delivered in connection
therewith is true and correct and is based on information prepared in good faith
based on assumptions believed to be reasonable at the time, (B) subject to
Immaterial Title Deficiencies, the Borrower or its Restricted Subsidiaries owns
good and defensible title to the Proved Reserves of the Borrower and its
Restricted Subsidiaries evaluated in such Reserve Report and such Properties are
free of all Liens except for Excepted Liens and Liens securing the Secured
Obligations, (C) 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
Restricted 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, (D) none of their Oil and Gas Properties
constituting Proved Reserves 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 such Oil and Gas Properties sold and in such
detail as reasonably required by the Administrative Agent, (E) 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 (F) 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 value of the Oil and Gas Properties evaluated in such Reserve Report that
the value of such Mortgaged Properties represent in compliance with
Section 8.14(a), and (ii) a report setting forth, for each calendar month during
the then current fiscal year to date, 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 Proved
Reserves of the Borrower and its Restricted Subsidiaries, and setting forth the
related ad valorem, severance and production taxes and lease operating expenses
attributable thereto and incurred for each such calendar month. In addition, the
Borrower shall provide to the Administrative Agent a report referred to in the
foregoing clause (ii) upon the reasonable request of the Administrative Agent,
provided that the Administrative Agent may not request such a report more than
two times in any 12-month period.

 

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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), commencing with the Reserve
Report required to be delivered on or prior to March 1, 2019, subject to
Section 8.17, the Borrower will deliver title information in form and substance
reasonably requested by the Administrative Agent pursuant to generally accepted
exploration and production industry considerations, and 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, satisfactory title information on at least 85% of the
value of the Proved Reserves of the Borrower and its Restricted Subsidiaries
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 after 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 aggregate equivalent value or (iii) deliver title information in form
and substance reasonably requested by the Administrative Agent so that the
Administrative Agent shall have received, together with title information
previously delivered to the Administrative Agent, satisfactory title information
on at least 85% of the value of the Proved Reserves of the Borrower and its
Restricted Subsidiaries 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 acceptable title
information covering 85% of the value of the Proved Reserves of the Borrower and
its Restricted Subsidiaries evaluated in the most recent Reserve Report, such
default shall not be a Default, but instead the Administrative Agent and/or the
Majority 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: such unacceptable Mortgaged Property shall
not count towards the 85% 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 acceptable title
information on 85% of the value of the Proved Reserves of the Borrower and its
Restricted Subsidiaries. This new Borrowing Base shall become effective
immediately after receipt of such notice.

Section 8.14 Collateral and Guaranty Agreements.

(a) In connection with each redetermination of the Borrowing Base, commencing
with the first redetermination occurring after the expiration of the time period
set forth in Section 8.17, the Borrower shall review the Reserve Report and the
list of current Mortgaged Properties (as described in Section 8.12(c)) to
ascertain whether the Mortgaged Properties represent at least 85% of the total
value of the Proved Reserves of the Borrower and its Restricted Subsidiaries, as
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
such percentage of the total value of Proved Reserves as set forth in the
foregoing sentence, then the Borrower shall, or shall cause one or more of its
Restricted 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 Secured Obligations a first-priority Lien (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 which
constitute Proved Reserves not already subject to a Lien of the Security
Instruments such that after giving effect thereto, the Mortgaged Properties will
represent at least 85% of the total value of the Proved Reserves of the Borrower
and its Restricted Subsidiaries in accordance with the first sentence of this
Section 8.14(a).

 

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(b) In the event that (i) the Borrower creates or acquires any Domestic
Subsidiary that is not an Immaterial Subsidiary (or any Domestic Subsidiary that
is currently an Immaterial Subsidiary ceases to be an Immaterial Subsidiary for
any reason) or (ii) any Domestic Subsidiary incurs or guarantees any Debt
(including, without limitation, any Permitted Unsecured Debt), the Borrower
shall promptly cause such Restricted Subsidiary to execute and deliver the
Guarantee and Collateral Agreement (or a supplement thereto, as applicable)
pursuant to which such Domestic Subsidiary shall guarantee the Secured
Obligations. In connection with any such guaranty, the Credit Party that owns
the Equity Interests in any such new Domestic Subsidiary shall execute and
deliver a Guarantee and Collateral Agreement (or a supplement thereto, as
applicable) pursuant to which such Credit Party will pledge all of its Equity
Interests in such new Domestic Subsidiary to secure the Secured Obligations. In
connection with the foregoing, the Credit Parties shall (i) deliver original
stock certificates, if any, evidencing the Equity Interests of such new Domestic
Subsidiary, together with an appropriate undated stock powers for each
certificate duly executed in blank by the registered owner thereof and
(ii) execute and deliver such other additional closing documents, certificates
and legal opinions as shall reasonably be requested by the Administrative Agent.

(c) Notwithstanding any provision in any of the Loan Documents to the contrary,
no 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 (A) the applicable Credit Party’s interests in all
lands and Hydrocarbons situated under any such Building or Manufactured (Mobile)
Home shall, to the extent otherwise required hereunder, be included in the
Mortgaged Property and shall, to the extent otherwise required hereunder, be
encumbered by the Security Instruments and (B) the Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, permit to exist any Lien on
any Building or Manufactured (Mobile) Home except Excepted Liens or Liens of a
similar nature.

(d) All Liens required to be created by Section 8.14(a) 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 Restricted Subsidiary grants a Lien on its Oil and Gas Properties pursuant
to Section 8.14(a) and such Restricted Subsidiary is not a Guarantor, then it
shall become a Guarantor and comply with Section 8.14(b).

(e) The Borrower hereby guarantees the payment of all Secured Obligations of
each Credit Party (other than the Borrower) and absolutely, unconditionally and
irrevocably undertakes to provide such funds or other support as may be needed
from time to time to each Credit Party (other than the Borrower) in order for
such Credit Party to honor its obligations under its respective Guarantee and
Collateral Agreement and other Security Instruments including obligations with
respect to Swap Agreements (provided, however, that the Borrower shall only be
liable under this Section 8.14(e) for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this
Section 8.14(e), 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).
The obligations of the Borrower under this Section 8.14(e) shall remain in full
force and effect until the Secured Obligations are Paid In Full In Cash. The
Borrower intends that this Section 8.14(e) constitute, and this Section 8.14(e)
shall be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each Credit Party (other than the Borrower) for all purposes of
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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Section 8.15 ERISA. The Borrower will promptly furnish and will cause the
Subsidiaries and any ERISA Affiliate to promptly furnish to the Administrative
Agent (a) promptly following any request therefor, copies of each annual and
other report with respect to each Plan or any trust created thereunder filed
with the United Stated Department of Labor or the Internal Revenue Service,
(b) promptly upon becoming aware of the occurrence of any non-exempt “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 which can
reasonably be expected to result in material liability, a written notice signed
by the President or the principal Financial Officer, the Subsidiary or the ERISA
Affiliate, as the case may be, specifying the nature thereof, what action the
Borrower, 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 and
(c) promptly upon the closing of a transaction under which the Borrower, any of
the Subsidiaries or an ERISA Affiliate acquires, or assumes an obligation to
contribute to, or permit any ERISA Affiliate to contribute to or assume an
obligation to contribute to, (x) 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 (y) 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, a written notice signed by the President or
the principal Financial Officer, the Subsidiary or the ERISA Affiliate, as the
case may be, specifying the nature of such transaction and details thereof as
may be reasonably requested by the Administrative Agent.

Section 8.16 Unrestricted Subsidiaries. The Borrower:

(a) will cause the management, business and affairs of each of the Borrower and
its Restricted Subsidiaries to be conducted in such a manner (including, without
limitation, by keeping separate books of account, furnishing separate financial
statements of Unrestricted Subsidiaries to creditors and potential creditors
thereof and by not permitting Properties of the Borrower and its respective
Restricted Subsidiaries to be commingled) so that each Unrestricted Subsidiary
that is a corporation will be treated as a corporate entity separate and
distinct from the Borrower and the Restricted Subsidiaries;

(b) will not, and will not permit any of the Restricted Subsidiaries to, incur,
assume, guarantee or be or become liable for any Debt of any of the Unrestricted
Subsidiaries;

(c) will not permit any Unrestricted Subsidiary to hold any Equity Interest in,
or any Debt of, the Borrower or any Restricted Subsidiary; and

(d) will not permit any Unrestricted Subsidiary to have any Debt other than
Non-Recourse Debt.

Section 8.17 Post-Closing Obligations. As soon as commercially reasonable
following the Effective Date but in no event later than 90 days following the
Effective Date (or such later date as may be agreed by the Administrative Agent
in its sole discretion), the Credit Parties shall (a) deliver title information
with respect to the Oil and Gas Properties acquired by the Borrower or any
Restricted Subsidiary in connection with the Merger and then owned, at the time
of such delivery, by Blue Ridge or any of its subsidiaries, in each case to the
extent necessary to satisfy Section 8.13 (without giving effect to the
requirements in Section 8.13 regarding timing of delivery), (b) grant to the
Administrative Agent as security for the Secured Obligations a first-priority
Lien (provided that Excepted Liens of the type

 

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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 which constitute Proved Reserves not already
subject to a Lien of the Security Instruments such that after giving effect
thereto, the Mortgaged Properties will represent at least such percentage of the
total value of Proved Reserves of the Borrower and its Restricted Subsidiaries
in accordance with the first sentence of Section 8.14(a), (c) in connection with
the satisfaction of the Borrower’s obligation in the immediately foregoing
clause (b), deliver a customary opinion of local counsel in each applicable
jurisdiction to be agreed by the Borrower and the Administrative Agent and
(d) in connection with the satisfaction of the Borrower’s obligation in
Section 6.01(f), deliver a customary opinion of local counsel in each applicable
jurisdiction to be agreed by the Borrower and the Administrative Agent.

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, the Borrower covenants and agrees with the Lenders that:

Section 9.01 Financial Covenants.

(a) Ratio of Consolidated Total Funded Net Debt to EBITDAX. The Borrower will
not, as of the last day of any fiscal quarter, commencing with the quarter
ending March 31, 2019, permit its ratio of Consolidated Total Funded Net Debt as
of such day to EBITDAX for the four fiscal quarters ending on the last day of
the fiscal quarter immediately preceding the date of determination for which
financial statements are available to be greater than 4.00 to 1.00.

(b) Current Ratio. The Borrower will not permit, as of the last day of any
fiscal quarter ending on or after March 31, 2019, its ratio of (i) (A)
consolidated current assets (excluding non-cash assets under ASC 815) plus
(without duplication) (B) the unused amount of the total Commitments (but only
to the extent that the Borrower is permitted to borrow such amount under the
terms of this Agreement, including, without limitation, Section 6.02) to
(ii) consolidated current liabilities (excluding non-cash obligations under ASC
815 and current maturities under this Agreement) to be less than 1.00 to 1.00.

Section 9.02 Debt. The Borrower will not, and will not permit any Restricted
Subsidiary to, incur, create, assume or suffer to exist any Debt, except:

(a) the Notes or other Secured Obligations arising under the Loan Documents or
any guaranty of or suretyship arrangement for the Notes or other Secured
Obligations arising under the Loan Documents;

(b) Debt of the Borrower and its Restricted Subsidiaries existing on the date
hereof that is reflected on Schedule 9.02 and any Permitted Refinancing Debt
thereof;

(c) contingent obligations as a non-operator under oil and gas operating
agreements and contingent obligations under gas sale contracts for make-up
volumes on sales of gas, in each case incurred in the ordinary course of
business;

 

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(d) (i) Debt under Capital Leases or that constitutes Purchase Money
Indebtedness; provided that such Debt shall not to exceed $15,000,000 in
aggregate principal amount at any one time outstanding and (ii) any Permitted
Refinancing Debt thereof;

(e) (i) Debt incurred to finance the acquisition, construction or improvement of
the Borrower’s corporate headquarters office building; provided that such Debt
shall not to exceed $10,000,000 in aggregate principal amount at any one time
outstanding and (ii) any Permitted Refinancing Debt thereof;

(f) Debt associated with bonds, letters of credit, surety or similar obligations
incurred in the ordinary course of business in connection with the operation of
the Oil and Gas Properties;

(g) intercompany Debt between the Borrower and any Restricted Subsidiary or
between Restricted Subsidiaries to the extent permitted by Section 9.05;
provided that such Debt is not held, assigned, transferred, negotiated or
pledged to any Person other than the Borrower or one of its Wholly-Owned
Restricted Subsidiaries, and, provided further, that any such Debt owed by
either the Borrower or a Guarantor shall be subordinated to the Secured
Obligations on terms set forth in the Guarantee and Collateral Agreement.

(h) endorsements of negotiable instruments for collection in the ordinary course
of business;

(i) Permitted 2015 Bond Debt and any Permitted Refinancing Debt thereof;

(j) Permitted Unsecured Debt issued after the Effective Date in an aggregate
outstanding principal amount not to exceed $200,000,000; and

(k) other Debt not to exceed the greater of (i) $20,000,000 and (ii) 5% of the
Borrowing Base in effect as of the date of incurrence in the aggregate at any
time outstanding.

Section 9.03 Liens. The Borrower will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or permit to exist any Lien on any of its
Properties (now owned or hereafter acquired), except:

(a) Liens securing the payment of any Secured Obligations;

(b) Excepted Liens;

(c) Liens securing Capital Leases and Purchase Money Indebtedness permitted by
Section 9.02(d) but only on the Property under lease or the Property purchased,
constructed or improved with such Purchase Money Indebtedness (including all
accessions and improvements thereto, all insurance therefor and all proceeds
thereof); and

(d) Liens securing Debt permitted by Section 9.02(e) but only on the Property
purchased, constructed or improved with such Debt (including all accessions and
improvements thereto, all insurance therefor and all proceeds thereof);

(e) Liens on Property of the Borrower and its Restricted Subsidiaries existing
on the date hereof that is reflected in Schedule 9.03;

 

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(f) Liens securing any Permitted Refinancing Debt incurred pursuant to
Section 9.02(b) to refinance Debt that was previously so secured, to the extent
(i) such Liens are otherwise not prohibited by Section 9.02(b) and (ii) any such
Permitted Refinancing Debt is not secured by any additional or different
Property or classes or types of Property (including all accessions and
improvements thereto, all insurance therefor and all proceeds thereof) not
securing the Refinanced Debt;

(g) Liens on the Capital Stock of any Unrestricted Subsidiary to the extent
securing Indebtedness of Unrestricted Subsidiaries; and

(h) other Liens securing obligations the outstanding principal amount of which
does not exceed the greater of (i) $20,000,000 and (ii) 5% of the Borrowing Base
in effect as of the date of incurrence in the aggregate at any time outstanding.

Notwithstanding the foregoing, none of the Liens permitted by this Section 9.03
(other than Liens securing the Secured Obligations and Excepted Liens) may
attach at any time to any Oil and Gas Property or any other Mortgaged Property.

Section 9.04 Dividends and Distributions; Redemptions of Permitted Unsecured
Debt.

(a) Restricted Payments. The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, except (i) the Borrower may declare and
pay Restricted Payments with respect to its Equity Interests payable solely in
additional shares of its Equity Interests (other than Disqualified Capital
Stock), (ii) Restricted Subsidiaries may declare and pay Restricted Payments
ratably with respect to their Equity Interests, (iii) the Borrower 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
Restricted Subsidiaries and (iv) other Restricted Payments, provided that (A) no
Default, Event of Default or Borrowing Base Deficiency then exists or would
result therefrom, (B) the Total Commitments Utilization Percentage is less than
80% immediately before and immediately after giving effect to such Restricted
Payment, and (C) either (x) the ratio of Consolidated Total Funded Net Debt as
of the date of (and after giving effect to) the making of such Restricted
Payment to EBITDAX for the four fiscal quarters ending on the last day of the
fiscal quarter immediately preceding the date of the making of such Restricted
Payment for which financial statements are available does not exceed 3.00 to
1.00 or (y) if the Borrower is not in such compliance, the aggregate amount of
all such Restricted Payments made since the Effective Date pursuant to this
clause (y) does not exceed the greater of (I) $25,000,000 and (II) 5% of the
Borrowing Base in effect as of the date of the making of such Restricted
Payment.

(b) Redemptions of Permitted Unsecured Debt. The Borrower will not, and will not
permit any Restricted Subsidiary to, prior to the date that is 365 days after
the Maturity Date, 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 Permitted Unsecured Debt; provided that the Borrower may
(i) refinance, in whole or in part, Permitted Unsecured Debt with Permitted
Refinancing Debt and (ii) so long as such Redemption occurs substantially
contemporaneously with (and in any event within 5 Business Days following) such
issuance of Equity Interests, Redeem, in whole or in part, Permitted Unsecured
Debt with the net cash proceeds of any issuance of Equity Interests by the
Borrower (other than Disqualified Capital Stock).

Section 9.05 Investments, Loans and Advances. The Borrower will not, and will
not permit any Restricted Subsidiary 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 as of the Effective Date which are disclosed to the Lenders in
Schedule 9.05;

 

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(b) accounts receivable arising in the ordinary course of business, or any
receivable or discount that the Borrower or any Restricted Subsidiary is
permitted to sell or make under Section 9.10;

(c) direct obligations of (or obligations guaranteed by) (i) the United States
or any state or commonwealth of the United States or (ii) any agency, political
subdivision, or public instrumentality of any of the foregoing which, at the
time of acquisition, having a debt rating of at least A- (or then equivalent
rating) from S&P or A3 (or then equivalent rating) from Moody’s, in each case
maturing within one year from the date of acquisition thereof;

(d) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality of the United States
government (provided, that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than one
year from the date of acquisition thereof;

(e) commercial paper maturing within one year from the date of acquisition
thereof having one of the two highest ratings obtainable by S&P or Moody’s;

(f) deposits, including certificates of deposit, demand deposits, eurodollar
time deposits, bankers acceptances and overnight bank deposits, maturing within
one year from the date of acquisition thereof with, including certificates of
deposit issued by (i) any Lender, (ii)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 (iii) any Cayman Islands or similar offshore
jurisdiction location of a bank or trust company referred to in clause (ii) (so
long as such deposits are maintained in an account that is under the “control”
(as defined in the UCC) of the Administrative Agent in accordance with the
Guarantee and Collateral Agreement);

(g) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (c), (d) and (f) above
entered into with any financial institution meeting the qualifications specified
in clause (f) above;

(h) deposits in money market funds investing at least 95% in Investments
described in clauses (c) through (g) above;

(i) Investments (i) made by the Borrower in or to any Guarantors, (ii) made by
Restricted Subsidiary in or to the Borrower or any other Guarantor or
(iii) among Restricted Subsidiaries that are not Credit Parties;

(j) Investments consisting of Swap Agreements to the extent permitted by
Section 9.18;

(k) Investments in Unrestricted Subsidiaries (i) existing on the Effective Date
and set forth on Schedule 7.14 and (ii) made after the Effective Date, provided
that, with respect to Investments made pursuant to this clause (ii), (A) no
Default, Event of Default or Borrowing Base Deficiency then exists or would
result therefrom, (B) either (x) the ratio of Consolidated Total Funded Net Debt
as of the

 

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date of (and after giving effect to) the making of such Investment to EBITDAX
for the four fiscal quarters ending on the last day of the fiscal quarter
immediately preceding the date of the making of such Investment for which
financial statements are available does not exceed 3.00 to 1.00 or (y) the
aggregate outstanding amount (i.e. the amount of such Investments (valued at the
time made) made pursuant to this clause (y) less the aggregate amount of cash
payments received after the Effective Date by the Borrower or its Restricted
Subsidiaries in respect of returns of capital associated with such Investments)
does not exceed the greater of (I) $25,000,000 and (II) five percent (5%) of the
Borrowing Base then in effect, and (C) the Total Commitments Utilization
Percentage is less than 80% immediately before and immediately after giving
effect to such Investment;

(l) loans or advances to employees of the Borrower or any Restricted Subsidiary
made in the ordinary course of business of the Borrower or such Restricted
Subsidiary in an aggregate principal amount not to exceed at any one time
outstanding the greater of (i) $500,000 and (ii) two and one half percent (2.5%)
of the Borrowing Base then in effect; and

(m) other Investments, provided that (i) no Default, Event of Default or
Borrowing Base Deficiency then exists or would result therefrom, (ii) either (A)
the ratio of Consolidated Total Funded Net Debt as of the date of (and after
giving effect to) the making of such Investment to EBITDAX for the four fiscal
quarters ending on the last day of the fiscal quarter immediately preceding the
date of the making of such Investment for which financial statements are
available does not exceed 3.00 to 1.00 or (B) the aggregate outstanding amount
(i.e. the amount of such Investments (valued at the time made) made pursuant to
this clause (B) less the aggregate amount of cash payments received after the
Effective Date by the Borrower or its Restricted Subsidiaries in respect of
returns of capital associated with such Investments) does not exceed the greater
of (I) $25,000,000 and (II) five percent (5%) of the Borrowing Base then in
effect and (iii) the Total Commitments Utilization Percentage is less than 80%
immediately before and immediately after giving effect to such Investment.

Section 9.06 Nature of Business; No International Operations. The Borrower will
not, and will not permit any Restricted Subsidiary to, allow any material change
to be made in the character of their businesses, taken as a whole, as an
independent oil and gas exploration and production company. From and after the
date hereof, the Borrower and its 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. The Borrower shall at all times
remain organized under the laws of the United States of America or any State
thereof or the District of Columbia.

Section 9.07 Limitation on Leases. The Borrower will not, and will not permit
any Restricted Subsidiary 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, compressor leases and leases of
Hydrocarbon Interests), under leases or lease agreements which would cause the
aggregate amount of all payments made by the Borrower and its Restricted
Subsidiaries pursuant to all such leases or lease agreements, including, without
limitation, any residual payments at the end of any lease, to exceed in any
period of twelve consecutive calendar months during the life of such leases the
lesser of (a) $20,000,000 and (b) five percent (5%) of the Borrowing Base then
in effect.

Section 9.08 Proceeds of Loans and Letters of Credit. The Borrower will not
permit the proceeds of the Loans or Letters of Credit 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 will take any action which could 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

 

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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. The Borrower will
not request any Borrowing or Letter of Credit, and the Borrower shall not use,
and shall procure that its Subsidiaries and its or their respective directors,
officers, employees and agents (in their capacity as agent for the Borrower or
its Subsidiaries) shall not use, the proceeds of any Borrowing or Letter of
Credit (a) in furtherance of an offer, payment, promise to pay, or authorization
of the payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, in violation of Sanctions or
(c) in any manner that would result in the material violation of any Sanctions
applicable to any party hereto.

Section 9.09 ERISA Compliance. The Borrower will not, and will not permit any
Subsidiary 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
reasonably be expected to 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; and

(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.

Section 9.10 Sale or Discount of Receivables. Except for receivables obtained by
the Borrower or any Restricted 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 Borrower will not, and will not permit any
Subsidiary to, discount or sell (with or without recourse) any of its notes
receivable or accounts receivable.

Section 9.11 Mergers, Etc. The Borrower will not, and will not permit any
Restricted Subsidiary to, merge into or with or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, 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 (whether now owned or hereafter acquired) or liquidate or dissolve (any
such transaction, a “consolidation”); provided that (a) any Restricted
Subsidiary may participate in a consolidation with the Borrower (provided that
the Borrower shall be the continuing or surviving entity), (b) any Restricted
Subsidiary may participate in a consolidation with another Restricted Subsidiary
(provided that if one of such Restricted Subsidiaries is a Wholly-Owned
Subsidiary, then the surviving Person shall be a Wholly-Owned Subsidiary), (c)
any consolidation consisting of the liquidation or dissolution of a Restricted
Subsidiary that does not own any Oil and Gas Properties or any other Mortgaged
Property if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and the Restricted
Subsidiaries, taken as a whole, and not materially disadvantageous to the
Lenders, and (d) any merger or consolidation of the Borrower with or into an
Affiliate solely for the purpose of reorganizing the Borrower in another
jurisdiction.

 

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Section 9.12 Sale of Properties and Termination of Swap Agreements. The Borrower
will not, and will not permit any Restricted Subsidiary to, sell, assign,
farm-out, convey or otherwise transfer any Property or any interests in any
Restricted Subsidiary or to terminate or otherwise monetize any Swap Agreement
in respect of commodities except for:

(a) the sale or other transfer of Hydrocarbons in the ordinary course of
business;

(b) farmouts, leases, subleases or assignments of undeveloped acreage (provided
that if any such undeveloped acreage has Proved Reserves associated with such
acreage, such transfer must comply with Section 9.12(d)), assignments in
connection with such farmouts, leases or subleases, deemed transfers of working
interests under any joint operating agreement as the result of electing (or
being deemed to have elected) not to participate in the drilling operations for
a new Well and assignments under pooling or unitization agreements or similar
contracts that are usual and customary in the oil and gas exploration and
production business;

(c) the sale, transfer of equipment (and related items of personal (but not
real) property) or other disposition that is obsolete or no longer necessary for
the business of the Borrower or such Restricted Subsidiary or is replaced by
equipment of at least comparable value and use;

(d) the sale or other disposition (excluding Casualty Events) of any Oil and Gas
Property that has Proved Reserves associated therewith, or any interest therein,
or any Restricted Subsidiary owning Proved Reserves, or the termination or
monetization of any Swap Agreement in respect of commodities; provided that

(i) no Event of Default exists or results from such sale or disposition of
Property or the termination or monetization of any Swap Agreement in respect of
commodities after giving effect, in each case, to the application of the
proceeds thereof to pay the Secured Obligations;

(ii) if any Borrowing Base Deficiency exists at the time of such sale or other
disposition, either (A) the cash consideration received in respect of such sale
or disposition shall be in an amount sufficient to eliminate any then existing
Borrowing Base Deficiency and applied, promptly upon receipt, to pay the Secured
Obligations until such time as no Borrowing Base Deficiency continues to exist
or (B) 100% of the consideration received in respect of such sale or other
disposition or termination (other than (1) the assumption of liabilities
relating to the Property sold or disposed of and (2) customary purchase price
adjustments) shall be cash and such cash shall be applied, promptly upon
receipt, to pay the Secured Obligations until such time as no Borrowing Base
Deficiency continues to exist;

(iii) the consideration received in respect of such sale or other disposition or
termination or monetization 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 Restricted Subsidiary subject of such sale or
other disposition, or Swap Agreement subject of such termination or monetization
(as reasonably determined by a Responsible Officer of the Borrower), and, if
requested by the Administrative Agent, the Borrower shall deliver a certificate
of such Responsible Officer of the Borrower certifying to that effect;

(iv) if the aggregate PV-9 value of Proved Reserves ((A) as reflected in the
most recently delivered Reserve Report and (B) net of the PV-9 value of Proved
Reserves received as consideration therefor, if any, based upon the pricing
assumptions consistent with those in the most recently delivered Reserve Report)
sold or disposed of and Swap Agreements terminated or monetized pursuant to this
clause (d) in any period between two successive Scheduled Redetermination
Effective Dates exceeds (A) with respect to dispositions of Proved Undeveloped
Reserves made in connection with the Sequel Joint Venture, five percent (5%) of
the PV-9 value of Proved Reserves (as reflected in the most recently delivered
Reserve Report) or (B) with respect to all other dispositions of Oil and Gas

 

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Properties constituting Proved Reserves, five percent (5%) of the Borrowing Base
then in effect, in each case calculated at the time of such disposition,
termination or monetization, as applicable, then the Borrowing Base shall be
reduced by the amount determined by the Required Lenders in good faith
consistent with their normal oil and gas lending criteria to be the value, if
any, of such Property attributable to the then-effective Borrowing Base and such
reduction shall be effective immediately upon written notice by the Required
Lenders to the Administrative Agent of their determination thereof; provided,
that, for the avoidance of doubt, any such determination or Borrowing Base
adjustment shall not be a condition to the Administrative Agent’s release of any
such Property from all Liens under Security Instruments; and

(v) if any such sale or other disposition is of a Restricted Subsidiary owning
Oil and Gas Properties, such sale or other disposition shall include all the
Equity Interests of such Restricted Subsidiary;

(e) transfer of Properties between or among the Borrower and the Restricted
Subsidiaries, provided that any Lien therein that secures any Secured
Obligations is reaffirmed and granted by the related transferee and no
intervening Lien in such Properties has been or is granted;

(f) any Restricted Payment that does not breach Section 9.04;

(g) the expiration or lapse of oil and gas leases, exploration tenement
licenses, and subleases or sublicenses of the Borrower or any Restricted
Subsidiaries in the ordinary course of business;

(h) the dilution or forfeiture of working interests of the Borrower or any
Restricted Subsidiaries pursuant to the operating agreements or other
instruments or agreements in the ordinary course of business;

(i) any Investments permitted by Section 9.05, provided that any Investment made
with Proved Reserves shall comply with Section 9.12(d);

(j) sales and other dispositions resulting from Casualty Events; provided that
if the aggregate value of such Oil and Gas Properties constituting Proved
Reserves sold or disposed of pursuant to this clause (j) in any period between
two successive Scheduled Redetermination Effective Dates exceeds five percent
(5%) of the Borrowing Base then in effect, then the Borrowing Base shall be
reduced, effective immediately upon such sale or disposition, by an amount equal
to the aggregate value assigned such Oil and Gas Properties constituting Proved
Reserves sold or disposed of pursuant to this clause (j);

(k) the sale or other transfer (whether or not in the ordinary course of
business) of Oil and Gas Properties; provided at the time of such sale or other
transfer such Oil and Gas Properties do not have associated with them any Proved
Reserves;

(l) the sale or other disposition of Properties (other than an Oil and Gas
Property that has Proved Reserves, or any interest therein, or any Restricted
Subsidiary owning Proved Reserves) not otherwise permitted pursuant to this
Section 9.12 having a fair market value not to exceed the greater of (i)
$3,750,000 and (ii) 1% of the Borrowing Base then in effect as of the date of
such sale or other disposition in the aggregate for all dispositions and sales
of Properties pursuant to this Section 9.12(l) for the term of this Agreement;
and

 

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(m) the sale or other disposition (i) of Properties pursuant to the Joint
Development Agreement dated April 11, 2018 by and between Triad Hunter, LLC and
Ohio Gasco LLC, or (ii) to one or more third parties of Oil and Gas Properties
constituting conventional properties of the Borrower and its Restricted
Subsidiaries for consideration equal to or greater than the fair market value
thereof (as reasonably determined by a Responsible Officer of the Borrower) and
in an aggregate amount for all such dispositions after the Effective Date not to
exceed $10,000,000.

Upon any sale or other disposition of any Property in compliance with this
Section 9.12, the Administrative Agent will, at the request and at the expense
of the Borrower, promptly release such Property from all Liens under the
Security Instruments.

Section 9.13 Environmental Matters. The Borrower will not, and will not permit
any Subsidiary 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 a Release or threatened Release of Hazardous Materials, exposure to any
Hazardous Materials, or 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, Release or threatened Release, exposure, or Remedial work could
reasonably be expected to have a Material Adverse Effect.

Section 9.14 Transactions with Affiliates. The Borrower will not, and will not
permit any Restricted Subsidiary 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, except (a) such transactions that
are otherwise permitted under this Agreement and upon fair and reasonable terms
no less favorable to the Borrower or applicable Restricted Subsidiary than the
Borrower or applicable Restricted Subsidiary would obtain in a comparable arm’s
length transaction with a Person not an Affiliate, (b) transactions between or
among the Borrower and the Guarantors which do not involve any other Affiliates
of the Borrower, (c) transactions described in Schedule 9.14, (d) any Restricted
Payment permitted by Section 9.04, (e) transactions for which a favorable
fairness opinion has been obtained and (f) transactions between or among
Restricted Subsidiaries that are not Credit Parties.

Section 9.15 Subsidiaries. The Borrower will not, and will not permit any
Restricted Subsidiary to, create or acquire any additional Subsidiary or
redesignate an Unrestricted Subsidiary as a Restricted Subsidiary unless the
Borrower gives written notice to the Administrative Agent of such creation or
acquisition and complies with Section 8.14(b). The Borrower shall not, and shall
not permit any Restricted Subsidiary to, sell, assign or otherwise dispose of
any Equity Interests in any Restricted Subsidiary to any Person other than the
Borrower or a Guarantor except in compliance with Section 9.12. Neither the
Borrower nor any Restricted Subsidiary shall have any Foreign Subsidiaries.

Section 9.16 Negative Pledge Agreements; Dividend Restrictions. The Borrower
will not, and will not permit any Restricted Subsidiary to, create, incur,
assume or permit to exist any contract, agreement or understanding (other than
(a) this Agreement, (b) the Security Instruments, (c) the agreements creating
Liens permitted by Section 9.03(d), (e), (f) and (g) and (d) Immaterial Title
Deficiencies) 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 Secured Parties to secure the Secured Obligations,
or any portion thereof, or restricts any Restricted 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,
provided, that the preceding restrictions will not apply to encumbrances or
restrictions arising under or by reason of (i) any restriction imposed pursuant
to an agreement entered into for the direct or indirect sale or disposition of
all or substantially all the Equity Interests or Property of any Subsidiary (or
the Property that is subject to such restriction) permitted by Section 9.12(d)
or Section 9.12(j) pending the closing of such sale or disposition,
(ii) customary restrictions and conditions contained in any (A) agreement
relating to any disposition of Property not prohibited hereunder, (B) customary
and usual leases, licenses and permits, (C) agreement in respect of

 

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Debt permitted by Section 9.02(d) (but only related to the property on which
such Liens are created), (D) joint venture agreements to the extent they relate
to distribution of Property of such joint venture, and (E) agreements entered
into in the ordinary course that restrict assignment of such agreement, and
(iii) restrictions imposed by applicable Law. In construing and applying the
definition of “Immaterial Title Deficiencies” for the purposes of this section,
contracts, agreements and understandings that prohibit or restrict Liens in
favor of the Administrative Agent or the Secured Parties will be considered
“title defects”.

Section 9.17 Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower will
not, and will not permit any Restricted Subsidiary to, allow gas imbalances,
take-or-pay or other prepayments with respect to the Oil and Gas Properties of
the Borrower or any Restricted Subsidiary that would require the Borrower or
such Restricted Subsidiary to deliver Hydrocarbons at some future time without
then or thereafter receiving full payment therefor to exceed one half bcf of gas
(on an mcf equivalent basis) in the aggregate.

Section 9.18 Swap Agreements.

(a) The Borrower will not, and will not permit any Restricted Subsidiary to,
enter into any Swap Agreements with any Person other than:

(i) Subject to clause (b) of this Section 9.18, Swap Agreements with an Approved
Counterparty in respect of commodities entered into not for speculative purposes
the notional volumes for which do not exceed, when aggregated with other
commodity Swap Agreements of the Credit Parties then in effect as of the date
such Swap Agreement is entered into, the greater of:

(A) for each month during the period during which such Swap Agreement is in
effect, 80% of the reasonably anticipated production of crude oil, natural gas
and natural gas liquids, calculated separately and, in each case, as such
production is projected from the Borrower’s and its Restricted Subsidiaries’ Oil
and Gas Properties constituting Proved Developed Producing Reserves as set forth
on the most recent Reserve Report delivered pursuant to the terms of this
Agreement;

(B) a percentage as set forth in the table below for each month during the
applicable time periods of the reasonably anticipated production of crude oil,
natural gas and natural gas liquids, calculated separately and, in each case, as
such production is projected from the Borrower’s and its Restricted
Subsidiaries’ Oil and Gas Properties constituting Proved Reserves as set forth
on the most recent Reserve Report delivered pursuant to the terms of this
Agreement:

 

Period (relative to the date such
Swap Agreement is
entered into)

   Percentage Limitation  

Months 1—12

     85 % 

Months 13—24

     80 % 

Months 25—36

     75 % 

Months 37—48

     70 % 

Months 49—60

     65 % 

; and

 

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(C) notwithstanding anything to the contrary contained in this Agreement, at the
Borrower’s election, for each month during the Specified Period, 80% of the
reasonably anticipated production of crude oil, natural gas and natural gas
liquids, calculated separately and, in each case, as such production is
projected by a Financial Officer of the Borrower from the Borrower’s and its
Restricted Subsidiaries’ Oil and Gas Properties and set forth in the most recent
certificate delivered pursuant to Section 8.01(d); provided, however, that no
such Swap Agreements permitted by any sub-clause of this clause (i) shall have a
tenor of greater than five (5) years. Further, it is understood that (1) the
Borrower and its Restricted Subsidiaries may enter into (a) Swap Agreements
relating to puts, floors, options or similar agreements and (b) basis
differential swaps on volumes already hedged pursuant to other Swap Agreements
and (2) Swap Agreements in respect of commodities which may, from time to time,
“hedge” the same volumes, but different elements of commodity risk thereof,
shall not be aggregated together when calculating the foregoing limitations on
notional volumes.

(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 Restricted Subsidiaries then in effect
effectively converting interest rates from fixed to floating) do not exceed 50%
of the then outstanding principal amount of the Credit Parties’ Debt for
borrowed money which bears interest at a fixed rate, and which Swap Agreements
shall not, in any case, have a tenor beyond the maturity date of such Debt, 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 Restricted Subsidiaries then in effect
effectively converting interest rates from floating to fixed) do not exceed 75%
of the then outstanding principal amount of the Credit Parties’ Debt for
borrowed money which bears interest at a floating rate, and which Swap
Agreements shall not, in any case, have a tenor beyond the maturity date of such
Debt.

(iii) Swap Agreements set forth on Schedule 9.18.

(b) If, after the end of any calendar quarter the Borrower determines that the
aggregate volume of all Swap Agreements in respect of commodities for which
settlement payments were calculated in such calendar quarter (other than puts,
floors or basis differential swaps on volumes hedged pursuant to other Swap
Agreements) exceeded 100% of actual production of Hydrocarbons in such calendar
quarter, then the Borrower (i) shall promptly notify the Administrative Agent of
such determination and (ii) shall, within 30 days of such determination,
terminate (only to the extent such terminations are permitted pursuant to
Section 9.12), create off-setting positions, allocate volumes to other
production for which the Borrower or its Restricted Subsidiaries is marketing,
or otherwise unwind or monetize (only to the extent such unwinds or
monetizations are permitted pursuant to Section 9.12) existing Swap Agreements
such that, at such time, future hedging volumes will not exceed 100% of
reasonably anticipated projected production for the then-current and any
succeeding calendar quarters.

(c) In no event shall any Swap Agreement contain any requirement, agreement or
covenant for the Borrower or any Restricted Subsidiary to post collateral or
margin to secure their obligations under such Swap Agreement (other than
pursuant to the Security Instruments or as set forth on Schedule 7.20).

 

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(d) The Borrower will not, and will not permit any Restricted Subsidiary to,
terminate or monetize any Swap Agreement in respect of commodities without the
prior written consent of the Required Lenders except to the extent such
terminations are permitted pursuant to Section 9.12; provided that for purposes
of this Section 9.18(d), a Swap Agreement (a “Replaced Swap Agreement”) shall
not be deemed to have been terminated or monetized if, upon its termination, it
is replaced, without cash payments to any Credit Party in connection therewith,
in a substantially contemporaneous transaction, with one or more Swap Agreements
that cover all of the notional volumes hedged pursuant to such Replaced Swap
Agreement on pricing and other economic terms at least as favorable to the
Credit Parties as those contained in such replaced Swap Agreement.

(e) For purposes of entering into or maintaining Swap Agreement trades or
transactions under Section 9.18(a)(i) and Section 9.18(b), respectively,
forecasts of reasonably anticipated production from the Borrower’s and its
Restricted Subsidiaries’ Proved Reserves and Proved Developed Producing Reserves
as set forth on the most recent Reserve Report delivered pursuant to the terms
of this Agreement, or projections of production from the Borrower’s and its
Restricted Subsidiaries’ Oil and Gas Properties made by a Financial Officer of
the Borrower, as applicable, shall be revised to account for any increase or
decrease therein anticipated because of information obtained by the Borrower or
any of its Restricted Subsidiaries subsequent to the publication of such Reserve
Report or projections, as applicable, including the Borrower’s or any of its
Restricted Subsidiaries’ internal forecasts of production decline rates for
existing Wells and additions to or deletions from anticipated future production
from new Wells and completed acquisitions coming on stream or failing to come on
stream.

Section 9.19 Marketing Activities. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, engage in marketing activities for any
Hydrocarbons or enter into any contracts related thereto other than
(a) contracts in the ordinary course of business and not for speculative
purposes for the sale of Hydrocarbons scheduled or reasonably estimated to be
produced from their 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 Reserves of third parties during the period of such
contract associated with the Oil and Gas Properties of the Borrower and its
Restricted Subsidiaries that the Borrower or one of its Restricted Subsidiaries
has the right to market pursuant to joint operating agreements, unitization
agreements or other similar contracts that are usual and customary in the 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 9.20 Designation and Conversion of Restricted and Unrestricted
Subsidiaries.

(a) Unless designated as an Unrestricted Subsidiary on Schedule 7.14 as of the
date hereof or thereafter, assuming compliance with Section 9.20(b), any Person
that becomes a Subsidiary of the Borrower or any of its Restricted Subsidiaries
shall be classified as a Restricted Subsidiary.

(b) The Borrower may designate by written notification thereof to the
Administrative Agent, any Restricted Subsidiary, including a newly formed or
newly acquired Subsidiary, as an Unrestricted Subsidiary if (i) prior, and after
giving effect, to such designation, neither a Default nor a Borrowing Base
Deficiency would exist and (ii) the Subsidiary to be so designated is (or
substantially simultaneously with the designation hereunder will be) designated
to be an Unrestricted Subsidiary under the Permitted Unsecured Debt Documents,
and (iii) such designation is deemed to be an Investment in an Unrestricted
Subsidiary in an amount equal to the fair market value as of the date of such
designation of the Borrower’s direct and indirect ownership interest in such
Subsidiary and such Investment would be permitted to be made at the time of such
designation under Section 9.05(k). Except as provided in this Section 9.20(b),
no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.

 

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(c) The Borrower may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary if after giving effect to such designation, (i) the representations
and warranties of the Borrower and its Restricted Subsidiaries contained in each
of the Loan Documents are true and correct in all material respects on and as of
such date as if made on and as of the date of such redesignation, except that
(A) to the extent any such representations and warranties are expressly limited
to an earlier date, such representations and warranties shall continue to be
true and correct in all material respects as of such specified earlier date and
(B) to the extent that any such representation and warranty is qualified by
materiality, such representation and warranty (as so qualified) shall continue
to be true and correct in all respects, (ii) no Default would exist and
(iii) the Borrower otherwise complies with the requirements of Section 8.14,
Section 8.16 and Section 9.15. Any such designation shall be treated as a cash
dividend in an amount equal to the lesser of the fair market value of the
Borrower’s direct and indirect ownership interest in such Subsidiary or the
amount of the Borrower’s cash investment previously made for purposes of the
limitation on Investments under Section 9.05(i). Any Subsidiary of an
Unrestricted Subsidiary shall also be deemed to be an Unrestricted Subsidiary.

Section 9.21 Permitted Unsecured Debt Documents. The Borrower will not, and will
not permit any other Credit Party to amend, modify, waive or otherwise change,
or consent or agree to any amendment, modification, waiver of, or other change
to, any provision of any Permitted Unsecured Debt Document if the effect of such
amendment, modification, waiver or other change (a) causes such Permitted
Unsecured Debt to no longer constitute Permitted Unsecured Debt or (b) shortens
the maturity of such Permitted Unsecured Debt so that any scheduled payment of
principal, scheduled mandatory redemption or scheduled sinking fund payment of
such Permitted Unsecured Debt is due on or before the date that is 180 days
after the Maturity Date in effect on the date of such amendment, modification,
waiver or other change; provided that the Borrower may (i) amend any Permitted
Unsecured Debt Document to add additional guarantors thereto to the extent not
prohibited by this Agreement and (ii) refinance Permitted Unsecured Debt with
Permitted Refinancing Debt.

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 five (5) Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Restricted Subsidiary 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 by or on behalf of the Borrower or any Restricted Subsidiary 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, to the extent that any such representation
and warranty is qualified by materiality, such representation and warranty (as
so qualified) shall prove to have been incorrect in any respect when made or
deemed made);

 

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(d) the Borrower or any Restricted Subsidiary shall fail to observe or perform
any covenant, condition or agreement contained in Section 8.01(j), Section 8.02
(other than clause (d) of such Section), Section 8.03, Section 8.14,
Section 8.15, Section 8.17 or in Article IX;

(e) the Borrower or any Restricted Subsidiary 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 thirty (30) days after a Financial Officer of the Borrower becomes aware of
the occurrence thereof; provided that to the extent any information is not
provided within the time periods specified in such covenant, condition or
agreement and, prior to the Administrative Agent or any Lender taking any action
permitted to be taken pursuant to Section 10.02 during the continuance of such
Event of Default, such information is subsequently provided, the Borrower will
be deemed to have satisfied its obligations with respect thereto at such time
and any Default with respect thereto shall be deemed to have been cured;

(f) the Borrower or any Restricted Subsidiary shall fail to make any payment
(whether of principal or interest and after giving effect to any applicable
grace period) in respect of any Material Indebtedness, when and as the same
shall become due and payable;

(g) any event or condition 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 requires the Borrower or any Restricted Subsidiary to make
an offer in respect thereof other than (i) pursuant to customary asset sale or
change of control provisions related to transactions or (ii) resulting from a
voluntary notice of prepayment delivered to the holders of such Material
Indebtedness;

(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 Borrower or any Guarantor that is not an Immaterial Subsidiary 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 Borrower or any Guarantor that is not an
Immaterial Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for sixty (60) days
or an order or decree approving or ordering any of the foregoing shall be
entered;

(i) the Borrower or any Guarantor that is not an Immaterial Subsidiary 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 Borrower or any Guarantor
that is not an Immaterial Subsidiary 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;

 

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(j) the Borrower or any Guarantor that is not an Immaterial Subsidiary 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 the Threshold Amount (to the extent not covered by independent third
party insurance provided by insurers of commercially acceptable 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
Borrower, any Restricted Subsidiary or any combination thereof and, in each of
the preceding instances, the same shall remain undischarged for a period of
thirty (30) consecutive days during which execution shall not be effectively
stayed or bonded, or any action shall be legally taken by a judgment creditor to
attach or levy upon any assets of the Borrower or any Guarantor that is not an
Immaterial Subsidiary to enforce any such judgment which action has not been
stayed or bonded;

(l) the Loan Documents after delivery thereof shall for any reason, except to
the extent permitted by the terms thereof, cease to be in full force and effect
and valid, binding and enforceable in accordance with their terms against the
Borrower or a Guarantor that is not an Immaterial Subsidiary 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 Borrower or any Guarantor that is not an Immaterial Subsidiary or any of
their Affiliates shall so state in writing;

(m) a Change in Control shall occur; or

(n) an ERISA Event shall have occurred that, when taken together with all other
ERISA Events that have occurred and are continuing, would reasonably be expected
to result in a Material Adverse Effect.

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 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 (without
duplication) 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 (without duplication) 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, 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.

 

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(b) During the continuance of an Event of Default, the Administrative Agent and
the Lenders will have all other rights and remedies available at law and equity.

(c) Except as otherwise provided in Section 2.09(a)(ii), 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 Secured
Obligations constituting fees, expenses and indemnities payable to the
Administrative Agent in its capacity as such pursuant to any Loan Document;

(ii) second, pro rata to payment or reimbursement of that portion of the Secured
Obligations constituting fees, expenses and indemnities payable to the Lenders
pursuant to any Loan Document;

(iii) third, pro rata to payment of accrued interest on the Loans;

(iv) fourth, pro rata to payment of principal outstanding on the Loans, LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time, and Secured Obligations referred to in Clause (b) of the
definition of Secured Obligations owing to Secured Swap Providers;

(v) fifth, pro rata to any other Secured Obligations;

(vi) sixth, to serve as Cash Collateral, if then required, to be held by the
Administrative Agent to secure the remaining LC Exposure; and

(vii) seventh, any excess shall be paid to the Borrower or as otherwise required
by any Governmental Requirement.

Notwithstanding the foregoing, amounts received from the Borrower or any
Guarantor that is not an “eligible contract participant” under the Commodity
Exchange Act shall not be applied to any Excluded Swap Obligations (it being
understood, that in the event that any amount is applied to Secured Obligations
other than Excluded Swap Obligations as a result of 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
to ensure, as nearly as possible, that the proportional aggregate recoveries
with respect to Secured Obligations 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 Secured Obligations pursuant to
clause fourth above).

ARTICLE XI

THE ADMINISTRATIVE AGENT

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.

 

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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 Borrower or
any of its Subsidiaries 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
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
Borrower and its Subsidiaries or any other obligor or guarantor, or (vii) any
failure by 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 (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 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)

 

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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 personal liability or which is contrary to this
Agreement, the other Loan Documents or applicable law. If a Default has occurred
and is continuing, no Agent shall have any obligation to perform any act in
respect thereof. The Administrative Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Majority
Lenders or the Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 12.02), and
otherwise the Administrative Agent shall not 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
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. Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become 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

 

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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 Administrative
Agent.

Section 11.07 Administrative Agent as Lender. The Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and the Administrative Agent and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative 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 Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower or any of its
Subsidiaries of this Agreement, the other 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. Except for notices, reports and other documents
and information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, neither the Administrative Agent nor the
Arrangers 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 the Administrative Agent, such Arranger or any of their
Affiliates. In this regard, each Lender acknowledges that Simpson Thacher &
Bartlett LLP 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, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

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

 

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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 Secured
Obligations 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, and to release any Person from its respective Security
Instruments, in each case that is permitted to be sold or released (including,
without limitation, due to any Restricted Subsidiary being designated as an
Unrestricted Subsidiary in accordance with the terms of this Agreement), as the
case may be, 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
(whether regarding Liens, Persons or otherwise), termination statements,
assignments or other documents reasonably requested by the Borrower in
connection with any sale or other disposition of Property or release of Person,
to the extent such sale, other disposition or release is permitted by the terms
of Section 9.12 or is otherwise authorized by the terms of the Loan Documents.

Section 11.11 Agents. No Agent other than the Administrative Agent shall have
any duties, responsibilities or liabilities under this Agreement and the other
Loan Documents other than their duties, responsibilities and liabilities in
their capacity as a Lender hereunder.

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, as follows:

 

  (i)

if to the Borrower, to it at:

2121 Old Gatesburg Rd., Suite 110

State College, Pennsylvania 16803

Attention of Chief Financial Officer

Fax: 408-393-4565

 

  (ii)

If to the Administrative Agent or Issuing Bank, to it at:

700 Louisiana Street, Suite 2100

Houston, Texas 77002

Attention: Kevin Utsey

Tel: 713-546-9720

Fax: 713-223-4007

and

 

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(iii) if to any other Lender, to it at its address (or facsimile number) set
forth in its Administrative Questionnaire or if the Administrative Questionnaire
is not made available to the Borrower, then, with respect to those sent or
delivered by the Borrower, in care of the Administrative Agent.

(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 facsimile 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 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 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, each
Restricted Subsidiary a party thereto and the Majority Lenders or by the
Borrower, each Restricted Subsidiary a party thereto and the Administrative
Agent with the consent of the Majority Lenders; provided that no such agreement
shall (i) increase the Maximum Credit Amount of any Lender without the written
consent of such Lender, (ii) increase the Borrowing Base without the written
consent of the Borrowing Base Increase Requisite Lenders, decrease or maintain
the Borrowing Base without the consent of the Required Lenders, or otherwise
modify Section 2.07 in any manner without the consent of each Lender (other than
any Defaulting Lender); provided that a Scheduled Redetermination may be
postponed by the Required Lenders, (iii) reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any

 

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fees payable hereunder, or reduce any other Secured Obligations 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 Secured Obligations 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 6.01,
Section 8.14, Section 10.02(c) or Section 12.14 or change the definition of the
terms “Domestic Subsidiary”, “Foreign Subsidiary”, or “Subsidiary”, without the
written consent of each Lender (other than any Defaulting Lender), (vii) release
any Guarantor (except as set forth in the Guarantee and Collateral Agreement),
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(a) to less
than 80%, 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”, “Required Lenders”, “Borrowing Base Increase
Requisite Lenders” or any other provision hereof specifying the number or
percentage of the 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 (other than any Defaulting 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, (A) 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, (B) the Borrower and the
Administrative Agent may amend this Agreement or any other Loan Document without
the consent of the Lenders in order to correct, amend or cure any ambiguity,
inconsistency or defect or correct any typographical error or other manifest
error in any Loan Document, and (C) the Administrative Agent and the Borrower
(or other applicable Credit Party) may enter into any amendment, modification or
waiver of this Agreement or any other Loan Document or enter into any agreement
or instrument to effect the granting, perfection, protection, expansion or
enhancement of any security interest in any Mortgaged Property or Property to
become Mortgaged Property to secure the Secured Obligations for the benefit of
the Lenders or as required by any Governmental Requirement to give effect to,
protect or otherwise enhance the rights or benefits of any Lender under the Loan
Documents without the consent of any Lender. Notwithstanding this Section 12.02,
only the consent of the Administrative Agent and the Borrower shall be required
to amend this Agreement to reflect an alternate rate of interest as to which the
Majority Lenders shall not have objected in accordance with Section 3.03.

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 one counsel for the Administrative
Agent and its Affiliates (and as required by a firm of local counsel in each
appropriate jurisdiction and in the case of an actual or potential conflict of
interest, one additional firm of counsel to the affected Lenders) and to the
extent necessary as determined by the Administrative Agent, other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental invasive and non-invasive assessments and audits and surveys and
appraisals, in each case, 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

 

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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 out-of-pocket costs, expenses, Taxes, assessments and
other charges incurred by any Agent or any Lender, including the costs, expenses
and other charges of counsel for the Administrative Agent and the Lenders, 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, (iv) all out-of-pocket expenses incurred by any Agent, the
Issuing Bank or any Lender, including the 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.

(b) THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, EACH 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 DEFEND AND
HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
PENALTIES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE 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, THE
PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF
THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE
OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY
LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT,
(iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR
COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS
OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION
THEREWITH, (iv) 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, (v) ANY OTHER ASPECT OF THE
LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS
SUBSIDIARIES BY THE BORROWER AND ITS SUBSIDIARIES, (vii) ANY ASSERTION THAT THE
LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE
SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR
ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES OR OPERATIONS, INCLUDING, THE
PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT,
DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF HAZARDOUS MATERIALS ON OR AT
ANY OF THEIR PROPERTIES, (ix) THE BREACH OR NON-

 

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COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE
BORROWER OR ANY SUBSIDIARY 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, (xi) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR
TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY 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, (xii) ANY ENVIRONMENTAL
LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR
(xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH
THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION,
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, 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 (A) 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, (B) ARISE SOLELY BY REASON
OF A CLAIM (y) BY ONE OR MORE INDEMNITEES AGAINST ONE OR MORE OTHER INDEMNITEES
OR (z) BY AN OWNER OF EQUITY INTEREST OF AN INDEMNITEE AGAINST ONE OR MORE OTHER
INDEMNITEES, SO LONG AS, IN EITHER CASE, SUCH CLAIM IS NOT PROXIMATELY CAUSED BY
A BREACH OF, OR DEFAULT UNDER, A LOAN DOCUMENT BY OR WITH RESPECT TO A CREDIT
PARTY, OR (C) IS INCURRED BY ANY DEFAULTING LENDER TO THE EXTENT DIRECTLY
ARISING FROM THE CONDUCT, ACTS, OR OMISSIONS OF SUCH DEFAULTING LENDER THAT WERE
THE CAUSE OF SUCH LENDER’S BECOMING A DEFAULTING LENDER; PROVIDED, HOWEVER, THAT
NOTHING HEREIN SHALL BE DEEMED TO LIMIT ANY CREDIT PARTY’S PAYMENT OBLIGATIONS
UNDER ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AS A
RESULT OF SUCH LENDER’S BECOMING A DEFAULTING LENDER. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, NO DEFAULTING LENDER WILL BE REIMBURSED FOR, INDEMNIFIED
AGAINST, OR HELD HARMLESS FROM, COSTS AND EXPENSES ARISING FROM THE REPLACEMENT
OF SUCH DEFAULTING LENDER. THIS SECTION 12.03(b) SHALL NOT APPLY WITH RESPECT TO
TAXES OTHER THAN ANY TAXES THAT REPRESENT LOSSES, CLAIMS, DAMAGES, PENALTIES,
LIABILITIES AND RELATED EXPENSES ARISING FROM ANY NON-TAX CLAIM.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent, any Arranger or the Issuing Bank under
Section 12.03(a) or (b), each Lender severally agrees to pay to such
Administrative Agent, 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 Administrative Agent, Arranger or the Issuing Bank in its capacity
as such.

 

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(d) To the extent permitted by applicable law, no Indemnitee or Credit Party
shall assert, and each hereby waives, any claim against any other Indemnitee or
Credit Party, as the case may be, 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 within ten
(10) Business Days following the Borrower’s receipt of each related statement or
invoice, each in reasonable and customary detail.

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
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;

 

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(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;

(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 (which is not reimbursable from the Borrower
except as herein expressly provided);

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and

(E) in no event may any Lender assign all or a portion of its rights and
obligations under this Agreement to the Borrower, any Affiliate of the Borrower
or any natural person.

(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 solely for this purpose as an 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 of, and principal amount
(and stated interest) 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 shall 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 required by this 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 (other than the Borrower, any Affiliate of the Borrower or any natural
person) (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

 

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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
and (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. 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 (subject
to the requirements and limitations therein, including the requirements under
Section 5.03(f) (it being understood that the documentation required under
Section 5.03(f) shall be delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 12.04(b); provided that such Participant agrees to be
subject to the provisions of Section 5.04 as it is was a Lender and had accepted
it interest by an 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, except to
the extent such entitlement to a greater payment results from a Change in Law
that occurs after the Participant acquired the applicable participation or the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.

(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, 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.

 

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Section 12.05 Survival; Revival; Reinstatement.

(a) All covenants, agreements, representations and warranties made by 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 reasonably and in good faith 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. Whenever the
principal of and all interest on the Loans and all fees or other amounts payable
under this Agreement have been paid in full, all Letters of Credit have been
terminated (or arrangements satisfactory to the Issuing Bank have been made for
any continuing Letters of Credit), and all Commitments have expired or
terminated, the Administrative Agent will, at the request and at the expense of
the Borrower, confirm the termination of the Loan Documents to the Borrower and
release or terminate (in recordable form, where appropriate) all Liens,
assignments, security interests and financing statements under the Loan
Documents, provided that 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 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 Secured Obligations 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 Secured Obligations 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 Borrower shall take such action as may be
reasonably requested by the Administrative Agent and the Lenders to effect such
reinstatement.

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 facsimile or other electronic
transmission (e.g. .pdf) shall be effective as delivery of a manually executed
counterpart of this Agreement.

 

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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 Borrower or any
Restricted Subsidiary against any of and all the obligations of the Borrower or
any Restricted Subsidiary 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.

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.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS MAY 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, IN EITHER CASE LOCATED IN NEW
YORK COUNTY, 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 NON-EXCLUSIVE 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.

 

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(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 DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR 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
Banks and the Lenders agrees (for itself and each of its Related Parties) 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 having jurisdiction over it, (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 Secured Swap Provider (or its
advisors), (g) with the consent of the Borrower or (h) 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 Borrower. For the purposes of this Section 12.11, “Information” means all
information received from the Borrower or any Restricted Subsidiary relating to
the Borrower or any Restricted Subsidiary 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 Borrower or
a Restricted Subsidiary; provided that, in the case of information received from
the Borrower or any Restricted Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section 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

 

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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. 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.

Section 12.12 Interest Rate Limitation. It is the intention of the parties
hereto that each Lender and Issuing Bank shall conform strictly to usury laws
applicable to it. Accordingly, if the transactions contemplated hereby would be
usurious as to any Lender or Issuing Bank under laws applicable to it (including
the laws of the United States of America and the State of New York or any other
jurisdiction whose laws may be mandatorily applicable to such Lender or Issuing
Bank 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 or
any other Secured Obligations, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender or
Issuing Bank that is contracted for, taken, reserved, charged or received by
such Lender or Issuing Bank under any of the Loan Documents or agreements or
otherwise in connection with the Notes or other Secured Obligations 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 or Issuing Bank on the principal amount of the Secured
Obligations (or, to the extent that the principal amount of the Secured
Obligations shall have been or would thereby be paid in full, refunded by such
Lender or Issuing Bank to the Borrower); and (ii) in the event that the maturity
of the Notes or other portion of the Secured Obligations is accelerated (in
whole or part) 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 or Issuing Bank 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 or Issuing Bank as of the date of such acceleration
or prepayment and, if theretofore paid, shall be credited by such Lender or
Issuing Bank on the principal amount of the Secured Obligations (or, to the
extent that the principal amount of the Secured Obligations shall have been or
would thereby be paid in full, refunded by such Lender or Issuing Bank to the
Borrower). All sums paid or agreed to be paid to any Lender or Issuing Bank for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Lender or Issuing Bank, be amortized,
prorated, allocated and spread throughout the stated term of the Loans evidenced
by the Notes or other Secured Obligations until payment in full so that the rate
or amount of interest on account of any Loans or such Secured Obligations
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 or Issuing Bank on any date shall be computed at the Highest Lawful Rate
applicable to such Lender or Issuing Bank 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 or Issuing Bank would be less than the
amount of interest payable to such Lender or Issuing Bank computed at the
Highest Lawful Rate applicable to such Lender or Issuing Bank, then the amount
of interest payable to such Lender or Issuing Bank in respect of such subsequent
interest computation period

 

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shall continue to be computed at the Highest Lawful Rate applicable to such
Lender or Issuing Bank until the total amount of interest payable to such Lender
or Issuing Bank shall equal the total amount of interest which would have been
payable to such Lender or Issuing Bank if the total amount of interest had been
computed without giving effect to this Section 12.12.

Section 12.13 EXCULPATION PROVISIONS.

(a) 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.”

(b) THE BORROWER HEREBY ACKNOWLEDGES THAT (I) THE EXTENSIONS OF CREDIT PROVIDED
FOR HEREUNDER AND ANY RELATED ARRANGING OR OTHER SERVICES IN CONNECTION
THEREWITH (INCLUDING IN CONNECTION WITH ANY AMENDMENT, WAIVER OR OTHER
MODIFICATION HEREOF OR OF ANY OTHER LOAN DOCUMENT) ARE AN ARM’S-LENGTH
COMMERCIAL TRANSACTION BETWEEN THE BORROWER AND THE OTHER CREDIT PARTIES, ON THE
ONE HAND, AND THE ADMINISTRATIVE AGENT THE LENDERS AND ANY ISSUING BANK, ON THE
OTHER HAND, AND THE BORROWER AND THE OTHER CREDIT PARTIES ARE CAPABLE OF
EVALUATING AND UNDERSTANDING AND UNDERSTAND AND ACCEPT THE TERMS, RISKS AND
CONDITIONS OF THE TRANSACTIONS CONTEMPLATED HEREBY AND BY THE OTHER LOAN
DOCUMENTS (INCLUDING ANY AMENDMENT, WAIVER OR OTHER MODIFICATION HEREOF OR
THEREOF); (II) IN CONNECTION WITH THE PROCESS LEADING TO SUCH TRANSACTION, EACH
OF THE ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUING BANKS IS AND HAS BEEN
ACTING SOLELY AS A PRINCIPAL AND IS NOT THE FINANCIAL ADVISOR, AGENT OR
FIDUCIARY FOR ANY OF THE BORROWER, ANY OTHER CREDIT PARTY OR ANY OF THEIR
RESPECTIVE AFFILIATES, EQUITY HOLDERS, CREDITORS OR EMPLOYEES OR ANY OTHER
PERSON; (III) NEITHER THE ADMINISTRATIVE AGENT, ANY OTHER AGENT, ANY ARRANGER,
ANY LENDER NOR ANY ISSUING BANK HAS ASSUMED OR WILL ASSUME AN ADVISORY, AGENCY
OR FIDUCIARY RESPONSIBILITY IN FAVOR OF THE BORROWER OR ANY OTHER CREDIT PARTY
WITH RESPECT TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE PROCESS
LEADING THERETO, INCLUDING WITH RESPECT TO ANY AMENDMENT, WAIVER OR OTHER
MODIFICATION HEREOF OR OF ANY OTHER LOAN DOCUMENT (IRRESPECTIVE OF WHETHER THE
ADMINISTRATIVE AGENT, ANY OTHER AGENT, ANY ARRANGER, ANY LENDER OR ANY ISSUING
BANK HAS ADVISED OR IS CURRENTLY ADVISING ANY OF THE BORROWER, THE

 

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OTHER CREDIT PARTIES OR THEIR RESPECTIVE AFFILIATES ON OTHER MATTERS) AND NONE
OF THE ADMINISTRATIVE AGENT, ANY OTHER AGENT, ANY ARRANGER, ANY LENDER OR ANY
ISSUING BANK HAS ANY OBLIGATION TO ANY OF THE BORROWER, THE OTHER CREDIT PARTIES
OR THEIR RESPECTIVE AFFILIATES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED
HEREBY, IN EACH CASE, EXCEPT THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN AND IN
THE OTHER LOAN DOCUMENTS; (IV) THE BORROWER, THE OTHER CREDIT PARTIES AND THEIR
RESPECTIVE AFFILIATES WILL NOT ASSERT ANY CLAIM BASED ON ALLEGED BREACH OF
FIDUCIARY DUTY; (V) THE ADMINISTRATIVE AGENT AND ITS AFFILIATES, EACH LENDER AND
ITS AFFILIATES AND EACH ISSUING BANK AND ITS AFFILIATES MAY BE ENGAGED IN A
BROAD RANGE OF TRANSACTIONS THAT INVOLVE INTERESTS THAT DIFFER FROM THOSE OF THE
BORROWER, THE OTHER CREDIT PARTIES AND THEIR RESPECTIVE AFFILIATES, AND NONE OF
THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY ISSUING BANK HAS ANY OBLIGATION TO
DISCLOSE ANY OF SUCH INTERESTS BY VIRTUE OF ANY ADVISORY, AGENCY OR FIDUCIARY
RELATIONSHIP; AND (VI) NEITHER THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY
ISSUING BANK HAS PROVIDED AND NONE WILL PROVIDE ANY LEGAL, ACCOUNTING,
REGULATORY OR TAX ADVICE WITH RESPECT TO ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY (INCLUDING ANY AMENDMENT, WAIVER OR OTHER MODIFICATION HEREOF OR OF ANY
OTHER LOAN DOCUMENT) AND THE BORROWER HAS CONSULTED ITS OWN LEGAL, ACCOUNTING,
REGULATORY AND TAX ADVISORS TO THE EXTENT IT HAS DEEMED APPROPRIATE. THE
BORROWER HEREBY WAIVES AND RELEASES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
CLAIMS THAT IT MAY HAVE AGAINST THE ADMINISTRATIVE AGENT WITH RESPECT TO ANY
BREACH OR ALLEGED BREACH OF AGENCY OR FIDUCIARY DUTY.

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 Secured Obligations shall also extend to and be available to the
Secured Swap Providers with respect to any Swap Agreement including any Swap
Agreement in existence prior to the date hereof, but excluding any additional
transactions or confirmations entered into (a) after such Secured Swap Provider
ceases to be a Lender or an Affiliate of a Lender or (b) after assignment by a
Secured Swap Provider to another Secured Swap Provider that is not a Lender or
an Affiliate of a Lender.    No Lender or any Affiliate of a Lender shall have
any voting or consent rights under any Loan Document as a result of the
existence of obligations owed to it under any such Swap Agreements.

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 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 “USA Patriot Act”), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the USA Patriot Act.

 

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Section 12.17 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 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:

(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 entity,
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.

[SIGNATURES BEGIN NEXT PAGE]

 

115

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The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.

 

BORROWER:    

MONTAGE RESOURCES CORPORATION, a

Delaware corporation

 

    By:  

/s/ Michael L. Hodges

    Name:   Michael L. Hodges     Title:   Executive Vice President and Chief
Financial Officer

Signature Page

Third Amended and Restated Credit Agreement

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

BANK OF MONTREAL, as Administrative Agent and an Issuing Bank

By: 

 

/s/ Kevin Utsey

Name:  

Kevin Utsey

Title:  

Director

Signature Page

Third Amended and Restated Credit Agreement

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

BMO HARRIS FINANCING, INC., as Lender

By:

 

/s/ Kevin Utsey

Name:   

Kevin Utsey

Title:  

Director

Signature Page

Third Amended and Restated Credit Agreement

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

KEYBANK NATIONAL ASSOCIATION, as an Issuing Bank and a Lender

By:   

/s/ George E. McKean

Name:    George E. McKean Title:    Senior Vice President

Signature Page

Third Amended and Restated Credit Agreement

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

CAPITAL ONE, NATIONAL ASSOCIATION,
as an Issuing Bank and a Lender

By:   

/s/ Christopher Kuna

Name:    Christopher Kuna Title:    Director

Signature Page

Third Amended and Restated Credit Agreement

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

BARCLAYS BANK PLC, as a Lender

By:   

/s/ Sydney G Dennis

Name:   Sydney G Dennis Title:   Director

 

Signature Page

Third Amended and Restated Credit Agreement

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

ROYAL BANK OF CANADA, as a Lender

By:   

/s/ Kristan Spivey

Name:   Kristan Spivey Title:   Authorized Signatory

Signature Page

Third Amended and Restated Credit Agreement

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

CIT BANK, N.A., as a Lender

By:   

/s/ John Feeley

Name:   John Feeley Title:   Director

Signature Page

Third Amended and Restated Credit Agreement

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

CITIBANK, N.A., as a Lender

By:  

/s/ Jeff Ard

Name:   Jeff Ard Title:   Vice President

Signature Page

Third Amended and Restated Credit Agreement

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

BRANCH BANKING & TRUST COMPANY, as
a Lender

By:   

/s/ Robert Kret

Name:   Robert Kret Title:   VP

Signature Page

Third Amended and Restated Credit Agreement

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

EAST WEST BANK, as a Lender

By:  

/s/ Laura A. Nelson

Name:   Laura A. Nelson Title:   Assistant Vice President

Signature Page

Third Amended and Restated Credit Agreement

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

HUNTINGTON NATIONAL BANK, as a Lender

By:   

/s/ Margaret Niekrash

Name:   Margaret Niekrash Title:   Senior Vice President

Signature Page

Third Amended and Restated Credit Agreement

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

WELLS FARGO BANK, N.A., as a Lender

By:   

/s/ Edward Markham

Name:   Edward Markham Title:   Director

Signature Page

Third Amended and Restated Credit Agreement

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

GOLDMAN SACHS BANK USA, as a Lender

By:   

/s/ Ryan Durkin

Name:   Ryan Durkin Title:   Authorized Signatory

Signature Page

Third Amended and Restated Credit Agreement

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

BP ENERGY CORPORATION, as a Lender

By:   

/s/ Timothy Yee

Name:   Timothy Yee Title:   Attorney-in-Fact

Signature Page

Third Amended and Restated Credit Agreement

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

ANNEX I

LIST OF COMMITMENTS

Applicable Percentages and Aggregate Maximum Credit Amounts

 

Name of Lender

   Applicable
Percentage     Applicable
Percentage of
Borrowing Base      Maximum Credit
Amount  

BMO Harris Financing, Inc.

     11.866666667 %    $ 44,500,000.00      $ 118,666,666.67  

KeyBank, National Association

     11.333333333 %    $ 42,500,000.00      $ 113,333,333.33  

Capital One, National Association

     11.333333333 %    $ 42,500,000.00      $ 113,333,333.33  

Barclays Bank PLC

     9.333333333 %    $ 35,000,000.00      $ 93,333,333.33  

Royal Bank of Canada

     9.333333333 %    $ 35,000,000.00      $ 93,333,333.33  

CIT Bank, N.A.

     9.333333333 %    $ 35,000,000.00      $ 93,333,333.33  

Citibank, N.A.

     9.333333333 %    $ 35,000,000.00      $ 93,333,333.33  

Branch Banking & Trust Company

     6.666666667 %    $ 25,000,000.00      $ 66,666,666.67  

East West Bank

     6.666666667 %    $ 25,000,000.00      $ 66,666,666.67  

Huntington National Bank

     6.666666667 %    $ 25,000,000.00      $ 66,666,666.67  

Wells Fargo Bank, N.A.

     6.666666667 %    $ 25,000,000.00      $ 66,666,666.67  

Goldman Sachs Bank USA

     1.333333333 %    $ 5,000,000.00      $ 13,333,333.33  

BP Energy Corporation

     0.133333333 %    $ 500,000.00      $ 1,333,333.33  

TOTAL

     100.000000000 %    $ 375,000,000.00      $ 1,000,000,000.00  

 

Annex I -1

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

EXHIBIT A

FORM OF NOTE

[                    ], 20[    ]

FOR VALUE RECEIVED, Montage Resources Corporation (f/k/a Eclipse Resources
Corporation), a Delaware corporation (the “Borrower”), hereby promises to pay to
[    ] (the “Lender”), at the principal office of Bank of Montreal (the
“Administrative Agent”), or at such other place as from time to time may be
designated by the holder of this Note, the principal sum equal to the amount of
such Lender’s Maximum Credit Amount, or, if greater or less, the aggregate
unpaid principal amount of the Loans made by the Lender to the Borrower pursuant
to the terms of the Credit Agreement (as hereinafter defined), together with
interest on the unpaid principal balance thereof, at the rates per annum and on
the dates provided in the Credit Agreement, in lawful money of the United States
of America and in immediately available funds.

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 a schedule attached
hereto or on any separate record maintained by the Lender. Failure to make any
such recordation 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 Third Amended and Restated
Credit Agreement dated as of February 28, 2019 among the Borrower, the
Administrative Agent, and the other agents and lenders signatory thereto
(including the Lender), and evidences Loans made by the Lender thereunder (such
Credit Agreement as the same may be amended, restated, amended and restated,
supplemented or otherwise modified 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 secured by and 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.

[Signature page follows.]

 

Exhibit A - 1

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

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

MONTAGE RESOURCES CORPORATION, a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

Exhibit A - 2

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

EXHIBIT B

FORM OF BORROWING REQUEST

[                    ], 20[     ]

Montage Resources Corporation (f/k/a Eclipse Resources Corporation), a Delaware
corporation (the “Borrower”), pursuant to Section 2.03 of the Third Amended and
Restated Credit Agreement dated as of February 28, 2019 (together with all
amendments, restatements, amendments and restatements, supplements or other
modifications thereto, the “Credit Agreement”) among the Borrower, Bank of
Montreal, 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
requests a Borrowing as follows:

(i) Aggregate amount of the requested Borrowing is $[                     ];

(ii) Date of such Borrowing is [                     ], 20[     ];1

(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 [                     ]];2

(v) Amount of Borrowing Base in effect on the date hereof is
$[                     ] and the Aggregate Maximum Credit Amounts in effect on
the date hereof is $[                     ];

(vi) Total Revolving Credit Exposures on the date hereof (i.e., outstanding
principal amount of Loans and total LC Exposure prior to giving effect to the
requested Borrowing) is $[                     ]; and

(vii) Pro forma total Revolving Credit Exposures (giving effect to the requested
Borrowing) is $[                    ]; and

(viii) 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:

[                                         ]

[                                         ]

[                                         ]

[                                         ]

[Signature page follows.]

 

 

1 

Such date shall be a Business Day.

2 

Such Interest Period must be contemplated by the definition of the term
“Interest Period”.

 

Exhibit B - 1

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

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, 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.

 

MONTAGE RESOURCES CORPORATION, a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

Exhibit B - 2

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

EXHIBIT C

FORM OF INTEREST ELECTION REQUEST

[                    ], 20[    ]

Montage Resources Corporation (f/k/a Eclipse Resources Corporation), a Delaware
corporation (the “Borrower”), pursuant to Section 2.04 of the Third Amended and
Restated Credit Agreement dated as of February 28, 2019 (together with all
amendments, restatements, amendments and restatements, supplements or other
modifications thereto, the “Credit Agreement”) among the Borrower, Bank of
Montreal, 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
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 date3 of the election made pursuant to this Interest
Election Request is [                     ], 20[    ];[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 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, 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.

 

MONTAGE RESOURCES CORPORATION, a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

3 

Such date shall be a Business Day.

 

Exhibit C - 1

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

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

The undersigned hereby certifies that he/she is the [                    ] of
Montage Resources Corporation (f/k/a Eclipse Resources Corporation), a Delaware
corporation (the “Borrower”), and that as such he/she is authorized to execute
this certificate on behalf of the Borrower. With reference to the Third Amended
and Restated Credit Agreement dated as of February 28, 2019 (together with all
amendments, restatements, amendments and restatements, supplements or other
modifications thereto being the “Credit Agreement”) among the Borrower, Bank of
Montreal, as Administrative Agent, 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 Credit Agreement unless
otherwise specified):

(a)    There exists no Default or Event of Default as of [as applicable—last day
of fiscal quarter/last day of fiscal year] [or if a Default or Event of Default
then exists specify Default or Event of Default and describe action taken or
proposed to be taken].

(b)    Attached hereto are the detailed computations necessary to determine
whether the Borrower is in compliance with Section 9.01 of the Credit Agreement
as of the end of the [fiscal quarter][fiscal year] ending
[                         ].

(c)    There has been no change in GAAP or in the applications thereof since
[date of applicable financial statement] [or if any such change occurred,
specify the effect of such change on the financial statements accompanied
hereby].

[(d) Attached hereto are exhibits setting forth consolidating spreadsheets that
show the financial condition and results of Unrestricted Subsidiaries of the
Borrower that are not Immaterial Subsidiaries in such form as would be
presentable to the auditors of the Borrower.]4

[Signature page follows.]

 

4 

Applicable if the Borrower has designated as an Unrestricted Subsidiary any of
its Subsidiaries that is not an Immaterial Subsidiary. Certification must be
made by a Financial Officer.

 

Exhibit D - 1

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EXECUTED AND DELIVERED this [                    ] day of
[                    ].

 

MONTAGE RESOURCES CORPORATION, a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

Exhibit D - 2

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EXHIBIT E

SECURITY INSTRUMENTS

 

1.

Third Amended and Restated Guarantee and Collateral Agreement.

 

2.

Third Amendment and Supplement to Fourth Amended and Restated Open-End Mortgage,
Assignment of As-Extracted Collateral, Security Agreement, Fixture Filing and
Financing Statement and Continuation Statement.

 

3.

UCC-1 financing statements in respect of the foregoing.

 

4.

Control Agreements, limited to solely: (a) that certain Amended and Restated
Blocked Account Agreement, dated as of August 5, 2015, by and among
Manufacturers and Traders Trust Company, the Borrower and the Administrative
Agent, (b) that certain Blocked Account Agreement, dated as of August 5, 2015,
by and among Manufacturers and Traders Trust Company, Eclipse Resources
Marketing, LP and the Administrative Agent, (c) that certain Amended and
Restated Blocked Account Agreement, dated as of August 5, 2015, by and among
Manufacturers and Traders Trust Company, Eclipse Resources I, LP and the
Administrative Agent and (d) that certain Deposit Account and Sweep Investment
Control Agreement by and among Wells Fargo Bank, National Association, the
Guarantors party thereto and the Administrative Agent.

 

Exhibit E - 1

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EXHIBIT F

FORM OF THIRD AMENDED AND RESTATED

GUARANTY AND COLLATERAL AGREEMENT

[Attached]

 

Exhibit F - 1

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

Execution Version

 

 

THIRD AMENDED AND RESTATED

GUARANTEE AND COLLATERAL AGREEMENT

made by

each of the Grantors (as defined herein)

in favor of

BANK OF MONTREAL,

as Administrative Agent

Dated as of February 28, 2019

 

 

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TABLE OF CONTENTS

 

            Page   ARTICLE I DEFINITIONS      2  

Section 1.01

     Definitions      2  

Section 1.02

     Other Definitional Provisions; References      3   ARTICLE II GUARANTEE   
  4  

Section 2.01

     Guarantee      4  

Section 2.02

     Payments      4   ARTICLE III GRANT OF SECURITY INTEREST      4  

Section 3.01

     Grant of Security Interest      4  

Section 3.02

     Transfer of Pledged Securities      6  

Section 3.03

     Grantors Remain Liable under Accounts, Chattel Paper and Payment
Intangibles      6  

Section 3.04

     Pledged Securities      7   ARTICLE IV ACKNOWLEDGMENTS, WAIVERS AND
CONSENTS      7  

Section 4.01

     Acknowledgments, Waivers and Consents      7  

Section 4.02

     No Subrogation, Contribution or Reimbursement      9   ARTICLE V
REPRESENTATIONS AND WARRANTIES      9  

Section 5.01

     Representations in Credit Agreement      10  

Section 5.02

     Benefit to the Guarantor      10  

Section 5.03

     No Other Liens      10  

Section 5.04

     Perfected First Priority Liens      10  

Section 5.05

     Legal Name, Organizational Status, Chief Executive Office      10  

Section 5.06

     Prior Names and Addresses      11  

Section 5.07

     Pledged Securities      11  

Section 5.08

     Goods      11  

Section 5.09

     Instruments and Chattel Paper      11  

Section 5.10

     Truth of Information; Accounts      11  

Section 5.11

     Governmental Obligors      11   ARTICLE VI COVENANTS      11  

Section 6.01

     Covenants in Credit Agreement      11  

Section 6.02

     Maintenance of Perfected Security Interest; Further Documentation      12  

Section 6.03

     Further Identification of Collateral      13  

Section 6.04

     Changes in Locations, Name, etc      13  

Section 6.05

     Compliance with Contractual Obligations      13  

Section 6.06

     Pledged Securities      13  

Section 6.07

     Limitations on Modifications, Waivers, Extensions of Agreements Giving Rise
to Accounts      14  

Section 6.08

     Analysis of Accounts, Etc      15  

Section 6.09

     Instruments and Tangible Chattel Paper      15  

Section 6.10

     Commercial Tort Claims      15  

Section 6.11

     Keepwell      16   ARTICLE VII REMEDIAL PROVISIONS      16  

Section 7.01

     Pledged Securities      16  

Section 7.02

     Collections on Accounts, Etc      17  

 

i

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Section 7.03

     Proceeds      17  

Section 7.04

     New York UCC and Other Remedies      18  

Section 7.05

     Private Sales of Pledged Securities      19  

Section 7.06

     Waiver; Deficiency      19  

Section 7.07

     Non-Judicial Enforcement      19   ARTICLE VIII THE ADMINISTRATIVE AGENT   
  19  

Section 8.01

     Administrative Agent’s Appointment as Attorney-in-Fact, Etc      19  

Section 8.02

     Duty of Administrative Agent      21  

Section 8.03

     Execution of Financing Statements      21  

Section 8.04

     Authority of Administrative Agent      22   ARTICLE IX SUBORDINATION OF
INDEBTEDNESS      22  

Section 9.01

     Subordination of All Grantor Claims      22  

Section 9.02

     Claims in Bankruptcy      22  

Section 9.03

     Payments Held in Trust      22  

Section 9.04

     Liens Subordinate      23  

Section 9.05

     Notation of Records      23   ARTICLE X MISCELLANEOUS      23  

Section 10.01

     Waiver      23  

Section 10.02

     Notices      23  

Section 10.03

     Payment of Expenses, Indemnities, Etc      23  

Section 10.04

     Amendments in Writing      24  

Section 10.05

     Successors and Assigns      24  

Section 10.06

     Invalidity      24  

Section 10.07

     Counterparts      24  

Section 10.08

     Survival      24  

Section 10.09

     Captions      25  

Section 10.10

     No Oral Agreements      25  

Section 10.11

     Governing Law; Submission to Jurisdiction      25  

Section 10.12

     Acknowledgments      25  

Section 10.13

     Additional Grantors      26  

Section 10.14

     Set-Off      26  

Section 10.15

     Releases      26  

Section 10.16

     Reinstatement      27  

Section 10.17

     Acceptance      27  

Section 10.18

     Amendment and Restatement      27  

 

ii

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Schedules and Annexes

 

Schedule 1    Notice Addresses of Guarantors Schedule 2    Description of
Pledged Securities Schedule 3    Filings and Other Actions Required to Perfect
Security Interests Schedule 4    Legal Name, Location of Jurisdiction of
Organization, Organizational Identification Number, Taxpayor Identification
Number and Chief Executive Office Schedule 5    Prior Names, Prior Chief
Executive Office, Location of Tangible Assets Annex I    Acknowledgment and
Consent Annex II    Form of Assumption Agreement

 

iii

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This THIRD AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of
February 28, 2019, is made by MONTAGE RESOURCES CORPORATION (f/k/a Eclipse
Resources Corporation), a Delaware corporation (the “Borrower”), and each of the
other signatories hereto other than the Administrative Agent (the Borrower and
each of the other signatories hereto other than the Administrative Agent,
together with any other Subsidiary of the Borrower that becomes a party hereto
from time to time after the date hereof, and until it is released from this
Agreement in accordance with and to the extent permitted under the Loan
Documents, the “Grantors”), in favor of BANK OF MONTREAL, as administrative
agent (in such capacity, together with its successors in such capacity, the
“Administrative Agent”), for the banks and other financial institutions (the
“Lenders”) from time to time parties to the Third Amended and Restated Credit
Agreement dated as of February 28, 2019 (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the Lenders and the Administrative Agent.

R E C I T A L S:

A.    Reference is made to that certain Second Amended and Restated Credit
Agreement dated as of June 11, 2015 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time prior to the date hereof,
the “Existing Credit Agreement”), among the Borrower, the Existing Lenders and
BMO, as administrative agent for the Existing Lenders.

B.    In connection with the Existing Credit Agreement, the Grantors executed
that certain Second Amended and Restated Guarantee and Collateral Agreement in
favor BMO, as administrative agent for the Existing Lenders, dated as of July 6,
2015 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time prior to the date hereof, the “Existing Guarantee and
Collateral Agreement”).

C.    Pursuant to the Credit Agreement, the Lenders have severally agreed to
amend and restate the Existing Credit Agreement and to make extensions of credit
to the Borrower upon the terms and subject to the conditions set forth in the
Credit Agreement.

D.    The Borrower and/or certain of the Borrower’s Restricted Subsidiaries and
certain Secured Swap Providers have or may enter into certain Swap Agreements.

E.    The Borrower and/or certain of the Borrower’s Restricted Subsidiaries and
certain Bank Products Providers have or may enter into certain agreements
regarding Bank Products.

F.    The Borrower is a member of an affiliated group of companies that includes
each other Grantor.

G.    The Borrower and the other Grantors are engaged in related businesses, and
each Grantor will derive substantial direct and indirect benefit from the
execution of this Agreement and the making of the extensions of credit under the
Credit Agreement and from the Swap Agreements and Bank Products.

H.    It is a condition precedent to the amendment and restatement of the
Existing Credit Agreement and to the obligation of the Lenders to make their
respective loans and extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the benefit of the Secured Parties.

I.    In consideration of the premises and to induce the Administrative Agent
and the Lenders to amend and restate the Existing Credit Agreement and to enter
into the Credit Agreement and to induce the Lenders to make their respective
loans to and extensions of credit on behalf of the Borrower thereunder

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

and to enter into or provide Swap Agreement and Bank Products, each Grantor
hereby agrees with the Administrative Agent, for the ratable benefit of the
Secured Parties, to amend and restate the Existing Guarantee and Collateral
Agreement as follows:

ARTICLE I

DEFINITIONS

Section 1.01    Definitions.

(a)    As used in this Agreement, each term defined herein shall have the
meaning indicated herein. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms as well as all uncapitalized terms
which are defined in the New York UCC (whether or not capitalized or
uncapitalized in the same manner therein) on the date hereof are used herein as
so defined: Accounts, Chattel Paper, Commercial Tort Claims, Commodity Accounts,
Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Fixtures,
General Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of- Credit Rights, Payment Intangibles, Proceeds, Securities Accounts,
Supporting Obligations, and Tangible Chattel Paper.

(b) The following terms shall have the following meanings:

“Account Debtor” shall mean a Person (other than any Grantor) obligated on an
Account, Chattel Paper, or General Intangible.

“Agreement” shall mean this Third Amended and Restated Guarantee and Collateral
Agreement, as the same may be amended, restated, amended and restated
supplemented or otherwise modified from time to time.

“Collateral” shall have the meaning assigned such term in Section 3.01.

“Excluded Accounts” means (a) each Deposit Account all or substantially all of
the deposits in which consist of amounts utilized to fund payroll, employee
benefit or tax obligations of the Borrower and its Subsidiaries, (b) each
Deposit Account for which the deposits of third parties are maintained,
(c) escrow or fiduciary Deposit Accounts, (d) “zero balance” Deposit Accounts
and (e) each Deposit Account for which the average daily balance in any calendar
month does not exceed $500,000; provided that the average daily balance in any
calendar month for all such Deposit Accounts excluded pursuant to this clause
(e) shall not exceed $2,000,000 in the aggregate.

“Guarantors” shall mean, collectively, each Grantor other than the Borrower.

“Issuers” shall mean, collectively, each Grantor or other Restricted Subsidiary
of the Borrower that is an issuer of a Pledged Security.

“New York UCC” shall mean the Uniform Commercial Code, as it may be amended,
from time to time in effect in the State of New York.

“Paid In Full In Cash” shall mean (a) the payment in full in cash of all
principal, interest (including interest accruing during the pendency of an
insolvency or liquidation proceeding, regardless of whether allowed or allowable
in such insolvency or liquidation proceeding) and premium, if any, on all Loans
outstanding under the Credit Agreement, (b) the payment in full in cash or
posting of cash collateral in respect of all other obligations or amounts that
are outstanding under the Credit Agreement (other than any

 

2

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contingent indemnification or reimbursement obligation for which no claim has
been made), including the posting of the cash collateral for outstanding Letters
of Credit as required by the terms of the Credit Agreement, (c) the expiration
or termination of all Commitments under the Credit Agreement, (d) payment in
full in cash of all amounts due and owing (or posting of acceptable collateral
in respect of all such obligations) under each Bank Products Agreement giving
rise to Secured Obligations, and (e) payment in full in cash of all amounts due
and owing (or posting of acceptable collateral in respect of all such
obligations) under, or the novation or termination of, each Swap Agreement
giving rise to any Secured Obligations.

“Pledged Securities” shall mean: (a) all Equity Interests now owned or hereafter
acquired by any Grantor, including, without limitation, the Equity Interests
described or referred to in Schedule 2; and (b) (i) the certificates or
instruments, if any, representing such Equity Interests, (ii) all dividends
(cash, stock or otherwise), cash, instruments, rights to subscribe, purchase or
sell and all other rights and property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such Equity
Interests, (iii) all replacements, additions to and substitutions for any of the
property referred to in this definition, including, without limitation, claims
against third parties, (iv) the proceeds, interest, profits and other income of
or on any of the property referred to in this definition and (v) all books and
records relating to any of the property referred to in this definition.

“Post-Default Rate” shall mean the rate per annum provided for in
Section 3.02(c) of the Credit Agreement, but in no event to exceed the Highest
Lawful Rate.

“Qualified Keepwell Provider” shall mean, in respect of any Swap Obligation,
each Grantor that, at the time the relevant guarantee (or grant of the relevant
security interest, as applicable) becomes effective with respect to such Swap
Obligation, has total assets exceeding $10,000,000 or 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” with respect to such Swap Obligation at such
time by entering into a keepwell pursuant to Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

“Secured Agreement” shall mean any agreement giving rise to a Secured
Obligation.

“Securities Act” shall mean the Securities Act of 1933, as amended.

Section 1.02 Other Definitional Provisions; References. The meanings given to
terms defined herein shall be equally applicable to both the singular and plural
forms of such terms. The gender of all words shall include the masculine,
feminine, and neuter, as appropriate. The words “herein,” “hereof,” “hereunder”
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit, schedule or annex shall be deemed to refer to the applicable
exhibit, schedule or annex attached hereto unless otherwise stated herein. Where
the context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the
relevant part thereof. The use of the phrase “subject to” or words of like
import as used in connection with Excepted Liens or otherwise and the permitted
existence of any Liens permitted by Section 9.03 of the Credit Agreement or any
other Liens shall not be interpreted to expressly or impliedly subordinate any
Liens granted in favor of the Administrative Agent and the other Secured Parties
as there is no intention to subordinate the Liens granted in favor of the
Administrative Agent and the other Secured Parties. 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.

 

3

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ARTICLE II

GUARANTEE

Section 2.01    Guarantee.

(a)    Each of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Secured Parties and each of their respective successors and permitted
assigns, the prompt and complete payment and performance by the Borrower and the
Guarantors when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations. This is a guarantee of payment and
performance when due and not of collection and the liability of each Guarantor
is primary and not secondary.

(b)    Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors.

(c)    Each Guarantor agrees that the Secured Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Article II or affecting the
rights and remedies of the Administrative Agent or any Secured Party hereunder.

(d)    Each Guarantor agrees that if the maturity of any of the Secured
Obligations is accelerated by bankruptcy or otherwise, such maturity shall also
be deemed accelerated for the purpose of this guarantee without demand or notice
to such Guarantor. The guarantee contained in this Article II shall remain in
full force and effect until the Secured Obligations are Paid In Full In Cash.

(e)    No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any other Secured Party from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment (other than any payment made by
such Guarantor in respect of the Secured Obligations or any payment received or
collected from such Guarantor in respect of the Secured Obligations), remain
liable for the Secured Obligations up to the maximum liability of such Guarantor
hereunder until the Secured Obligations are Paid In Full In Cash.

Section 2.02 Payments. Each Guarantor hereby agrees and guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in dollars that constitute immediately available funds at the
principal office of the Administrative Agent specified pursuant to the Credit
Agreement.

ARTICLE III

GRANT OF SECURITY INTEREST

Section 3.01 Grant of Security Interest. Each Grantor hereby pledges, assigns
and transfers to the Administrative Agent, and grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a security interest in
all of the following property now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest and whether now existing or hereafter
coming into existence (collectively, the “Collateral”), as

 

4

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collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the Secured
Obligations:

 

  (1)

all Accounts;

 

  (2)

all Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel Paper);

 

  (3)

all Commercial Tort Claims;

 

  (4)

all Deposit Accounts, all Commodity Accounts and all Securities Accounts;

 

  (5)

all Documents;

 

  (6)

all General Intangibles (including, without limitation, rights in and under any
Swap Agreements);

 

  (7)

all Goods (including, without limitation, all Inventory and all Equipment);

 

  (8)

all Instruments;

 

  (9)

all Investment Property;

 

  (10)

all Letter-of-Credit Rights (whether or not the letter of credit is evidenced by
a writing);

 

  (11)

all Pledged Securities;

 

  (12)

all Supporting Obligations;

 

  (13)

all books and records pertaining to the Collateral;

(14)    to the extent not otherwise included, any other property insofar as it
consists of personal property of any kind or character defined in and subject to
the New York UCC; and

(15)    to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security, income, royalties and
other payments now or hereafter due and payable with respect to, and guarantees
and supporting obligations relating to, any and all of the Collateral and, to
the extent not otherwise included, all payments of insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral, all other claims, including all cash,
guarantees and other Supporting Obligations given with respect to any of the
foregoing.

Notwithstanding the foregoing, in no event shall the Collateral include, and no
Grantor shall be deemed to have granted a security interest in, any of such
Grantor’s rights or interests in or under: (a) any permit, lease, license,
contract or other agreement to which such Grantor is a party and any property of
such Grantor subject to a purchase money Lien, Capital Lease or similar
arrangement permitted under the Credit Agreement and, in each case, such
Grantor’s rights and interests therein, to the extent that the grant of a
security interest thereon (i) shall constitute or result in a breach of, a
default under, an invalidation of, a termination of, or the unenforceability of
any right of such Grantor under, such permit, lease, license, contract or other
agreement or the agreement governing such purchase money Lien, Capital Lease or
similar arrangement, or (ii) requires the consent of, or creates a right of
termination in favor of, any Person (other than such Grantor) with respect to
such permit, lease, license, contract or other agreement or such agreement
governing such purchase money Lien, Capital Lease or similar arrangement,
provided, however, that the

 

5

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Collateral shall include (and such security interest shall attach) immediately
at such time as the contractual or legal provisions referred to above shall no
longer be applicable and to the extent severable, and shall attach immediately
to any portion of such permit, lease, license, contract or other agreement or
such property subject to a purchase money Lien, Capital Lease or similar
arrangement, as applicable, not subject to the provisions specified in clauses
(i) and (ii) above, (b) any motor vehicles or other certificated equipment,
rolling stock or Excluded Account of a type described in clauses (a) through (c)
of the definition thereof (for so long as it is an Excluded Account), (c) any
(i) voting Equity Interests of any Subsidiary that is not a Domestic Subsidiary
whose Equity Interests are owned directly by the Borrower or a Domestic
Subsidiary in excess of 65% of the total outstanding amount of any class of
voting Equity Interests of such Subsidiary and (ii) Equity Interests of any
Subsidiary that is not a Domestic Subsidiary whose Equity Interests are not
owned directly by the Borrower or a Domestic Subsidiary, (d) any other property
of any Credit Party and such Credit Party’s rights and interests therein, to the
extent that, and only for so long as, the grant of a security interest hereunder
thereon is prohibited by, or a violation of, applicable law or (e) any Equity
Interests of any Unrestricted Subsidiary; provided that the exclusions referred
to in clauses (a) and (d) shall not apply to the extent that such laws, rules,
regulations, agreements, terms or provisions referred to therein (A) would be
rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
New York UCC or the Uniform Commercial Code of any relevant jurisdiction or any
other applicable law (including any debtor relief law or principle of equity) or
(B) have been waived or consent to the creation hereunder of a security interest
in such property has otherwise been obtained; provided, further that the
exclusions referred to in clause (a) shall not include any proceeds (as defined
in the New York UCC or the Uniform Commercial Code of any relevant jurisdiction)
of such permit, lease, license, contract or other agreement or property, unless
any assets constituting such proceeds are themselves subject to the exclusions
set forth in any of clauses (a) through (d) above. For the avoidance of doubt,
insurance proceeds payable to the Borrower or any of its Subsidiaries shall be
received by any of them, as applicable, to the extent they constitute
Collateral, and may be reinvested (by means of replacements, acquisition,
repair, improvement, construction or development) in assets (including Equity
Interests of a Person) in accordance with the terms of the Credit Agreement.

Section 3.02 Transfer of Pledged Securities. All certificates and instruments
representing or evidencing the Pledged Securities shall be delivered to and held
pursuant hereto by the Administrative Agent or a Person designated by the
Administrative Agent and, in the case of an instrument or certificate in
registered form, shall be duly indorsed to the Administrative Agent or in blank
by an effective indorsement (whether on the certificate or instrument or on a
separate writing), and accompanied by any required transfer tax stamps to effect
the pledge of the Pledged Securities to the Administrative Agent.
Notwithstanding the preceding sentence, all Pledged Securities must be delivered
or transferred in such manner, and each Grantor shall take all such further
action as may be requested by the Administrative Agent, as to permit the
Administrative Agent to be a “protected purchaser” to the extent of its security
interest as provided in Section 8-303 of the New York UCC (if the Administrative
Agent otherwise qualifies as a protected purchaser).

Section 3.03 Grantors Remain Liable under Accounts, Chattel Paper and Payment
Intangibles. Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts, Chattel Paper and Payment Intangibles
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise to each such Account, Chattel Paper or Payment Intangible. Neither
the Administrative Agent nor any other Secured Party shall have any obligation
or liability under any Account, Chattel Paper or Payment Intangible (or any
agreement giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Administrative Agent or any such other Secured Party of any
payment relating to such Account, Chattel Paper or Payment Intangible, pursuant
hereto, nor shall the Administrative Agent or any other Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Account, Chattel Paper or Payment Intangible (or any
agreement giving rise thereto), to make any

 

6

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payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Account, Chattel Paper or Payment Intangible (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

Section 3.04 Pledged Securities. The granting of the foregoing security interest
does not make the Administrative Agent or any Secured Party a successor to
Grantor as a partner or member in any Issuer that is a partnership, limited
partnership or limited liability company, as applicable, and neither the
Administrative Agent, any Secured Party, nor any of their respective successors
or assigns hereunder shall be deemed to have become a partner or member in any
Issuer, as applicable, by accepting this Agreement or exercising any right
granted herein unless and until such time, if any, when any such Person
expressly becomes a partner or member in any Issuer, as applicable, and complies
with any applicable transfer provisions set forth in the charter or
organizational documents relating to an applicable Pledged Security after a
foreclosure thereon.

ARTICLE IV

ACKNOWLEDGMENTS, WAIVERS AND CONSENTS

Section 4.01    Acknowledgments, Waivers and Consents.

(a)    Each Grantor acknowledges and agrees that the obligations undertaken by
it under this Agreement involve the guarantee of, and the provision of
collateral security for, the Secured Obligations, which obligations consist, in
part, of the obligations of Persons other than such Grantor and that such
Grantor’s guarantee and provision of collateral security for the Secured
Obligations are absolute, irrevocable and unconditional under any and all
circumstances, except as expressly provided herein or in any other Loan
Document. In full recognition and furtherance of the foregoing, each Grantor
understands and agrees, to the fullest extent permitted under applicable law and
except as may otherwise be expressly and specifically provided in the Loan
Documents, that each Grantor shall remain obligated hereunder (including,
without limitation, with respect to the guarantee made by such Grantor hereby
and the collateral security provided by such Grantor herein) and the
enforceability and effectiveness of this Agreement and the liability of such
Grantor, and the rights, remedies, powers and privileges of the Administrative
Agent and the other Secured Parties under this Agreement and the other Loan
Documents shall not be affected, limited, reduced, discharged or terminated in
any way:

(i)    notwithstanding that, without any reservation of rights against any
Grantor and without notice to or further assent by any Grantor, (A) any demand
for payment of any of the Secured Obligations made by the Administrative Agent
or any other Secured Party may be rescinded by the Administrative Agent or such
other Secured Party and any of the Secured Obligations continued; (B) the
Secured Obligations, the liability of any other Person upon or for any part
thereof or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by, or any indulgence or forbearance in respect thereof granted by, the
Administrative Agent or any other Secured Party; (C) the Secured Agreements and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders, the Majority Lenders or all
Lenders, as the case may be) may deem advisable from time to time; (D) any
Grantor or any other Person may from time to time accept or enter into new or
additional agreements, security documents, guarantees or other instruments in
addition to, in exchange for or relative to, any Secured Agreement, all or any
part of the Secured Obligations or any Collateral now or in the future serving
as security for the Secured Obligations; (E) any collateral security, guarantee
or right of offset at any time held by the Administrative Agent or any other
Secured Party for the payment of the Secured Obligations may be sold, exchanged,
waived, surrendered or released; and (F) any other event shall occur which
constitutes a defense or release of sureties generally; and

 

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(ii)    without regard to, and each Grantor hereby expressly waives to the
fullest extent permitted by law any defense now or in the future arising by
reason of, (A) the illegality, invalidity or unenforceability of the Credit
Agreement, any other Secured Agreement, any of the Secured Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
other Secured Party, (B) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by any Grantor or any other Person against the Administrative Agent or
any other Secured Party, (C) the insolvency, bankruptcy arrangement,
reorganization, adjustment, composition, liquidation, disability, dissolution or
lack of power of any Grantor or any other Person at any time liable for the
payment of all or part of the Secured Obligations or the failure of the
Administrative Agent or any other Secured Party to file or enforce a claim in
bankruptcy or other proceeding with respect to any Person; or any sale, lease or
transfer of any or all of the assets of the any Grantor, or any changes in the
shareholders of any Grantor; (D) the fact that any Collateral or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Secured Obligations shall not be properly perfected or created,
or shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by each of the Grantors that it is not entering into this
Agreement in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectability or value of any of the Collateral for the Secured
Obligations; (E) any failure of the Administrative Agent or any other Secured
Party to marshal assets in favor of any Grantor or any other Person, to exhaust
any collateral for all or any part of the Secured Obligations, to pursue or
exhaust any right, remedy, power or privilege it may have against any Grantor or
any other Person or to take any action whatsoever to mitigate or reduce any
Grantor’s liability under this Agreement or any other Secured Agreement; (F) any
law which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety’s or guarantor’s obligation in proportion to
the principal obligation; (G) the possibility that the Secured Obligations may
at any time and from time to time exceed the aggregate liability of such Grantor
under this Agreement; or (H) any other circumstance or act whatsoever, including
any act or omission of the type described in Section 4.01(a)(i) (with or without
notice to or knowledge of any Grantor), which constitutes, or might be construed
to constitute, an equitable or legal discharge or defense of the Borrower for
the Secured Obligations, or of such Grantor under the guarantee contained in
Article II or with respect to the collateral security provided by such Grantor
herein, or which might be available to a surety or guarantor, in bankruptcy or
in any other instance.

(b)    Each Grantor hereby waives to the extent permitted by law: (i) except as
expressly provided otherwise in any Loan Document, all notices to such Grantor,
or to any other Person, including but not limited to, notices of the acceptance
of this Agreement, the guarantee contained in Article II or the provision of
collateral security provided herein, or the creation, renewal, extension,
modification, accrual of any Secured Obligations, or notice of or proof of
reliance by the Administrative Agent or any other Secured Party upon the
guarantee contained in Article II or upon the collateral security provided
herein, or of default in the payment or performance of any of the Secured
Obligations owed to the Administrative Agent or any other Secured Party and
enforcement of any right or remedy with respect thereto; or notice of any other
matters relating thereto; the Secured Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in Article
II and the collateral security provided herein and no notice of creation of the
Secured Obligations or any extension of credit already or hereafter contracted
by or extended to the Borrower need be given to any Grantor; and all dealings
between the Borrower and any of the Grantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in Article II and on the collateral security provided in
this Agreement; (ii) diligence and demand of payment,

 

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presentment, protest, dishonor and notice of dishonor; (iii) any statute of
limitations affecting any Grantor’s liability hereunder or the enforcement
thereof; (iv) all rights of revocation with respect to the Secured Obligations,
the guarantee contained in Article II and the provision of collateral security
herein; and (v) all principles or provisions of law which conflict with the
terms of this Agreement and which can, as a matter of law, be waived.

(c)    When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Grantor, the Administrative Agent or any other
Secured Party may, but shall be under no obligation to, join or make a similar
demand on or otherwise pursue or exhaust such rights and remedies as it may have
against the Borrower, any other Grantor or any other Person or against any
collateral security or guarantee for the Secured Obligations or any right of
offset with respect thereto, and any failure by the Administrative Agent or any
other Secured Party to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Borrower, any other Grantor or any
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower, any Grantor
or any other Person or any such collateral security, guarantee or right of
offset, shall not relieve any Grantor of any obligation or liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agent or any other
Secured Party against any Grantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings. Other than as
set forth herein or in any applicable Secured Agreement, neither the
Administrative Agent nor any other Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Secured Obligations or for the guarantee contained in Article II or any
property subject thereto.

Section 4.02 No Subrogation, Contribution or Reimbursement. Notwithstanding any
payment made by any Grantor hereunder or any set-off or application of funds of
any Grantor by the Administrative Agent or any other Secured Party, no Grantor
shall be entitled to be subrogated to any of the rights of the Administrative
Agent or any other Secured Party against the Borrower or any other Grantor or
any collateral security or guarantee or right of offset held by the
Administrative Agent or any other Secured Party for the payment of the Secured
Obligations, nor shall any Grantor seek or be entitled to seek any indemnity,
exoneration, participation, contribution or reimbursement from the Borrower or
any other Grantor in respect of payments made by such Grantor hereunder, and
each Grantor hereby expressly waives, releases, and agrees not to exercise any
and all such rights of subrogation, reimbursement, indemnity and contribution,
in each case, until all Secured Obligations are Paid In Full In Cash. Each
Grantor further agrees that to the extent that such waiver and release set forth
herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement, indemnity and contribution
such Grantor may have against the Borrower, any other Grantor or against any
collateral or security or guarantee or right of offset held by the
Administrative Agent or any other Secured Party shall be junior and subordinate
to any rights the Administrative Agent and the other Secured Parties may have
against the Borrower and such Grantor and to all right, title and interest the
Administrative Agent and the other Secured Parties may have in any collateral or
security or guarantee or right of offset. The Administrative Agent, for the
benefit of the Secured Parties, may use, sell or dispose of any item of
Collateral or security as it sees fit without regard to any subrogation rights
any Grantor may have, and upon any disposition or sale, any rights of
subrogation any Grantor may have shall terminate.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the other Secured Parties to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder and to induce the Secured
Parties to enter into other Secured Agreements, each Grantor hereby

 

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represents and warrants to the Administrative Agent and each other Secured
Party, as such representation and warranty relates to such Grantor, that:

Section 5.01 Representations in Credit Agreement. In the case of each Guarantor,
the representations and warranties set forth in Article VII of the Credit
Agreement as they relate to such Guarantor (in its capacity as a Subsidiary of
the Borrower) or to the Loan Documents to which such Guarantor is a party are
true and correct in all material respects (except that (i) to the extent any
such representations and warranties are expressly limited to an earlier date,
such representations and warranties are true and correct in all material
respects as of such specified earlier date and (ii) to the extent that any such
representation and warranty is qualified by materiality, such representation and
warranty (as so qualified) is true and correct in all respects), provided that
each reference in each such representation and warranty to the Borrower’s
knowledge shall, for the purposes of this Section 5.01, be deemed to be a
reference to such Guarantor’s knowledge and, with respect to any representation
or warranty made on a consolidated or taken as a whole basis, such
representation or warranty is true and correct in all material respects on such
consolidated or taken as a whole basis.

Section 5.02 Benefit to the Guarantor. The Borrower is a member of an affiliated
group of companies that includes each Guarantor, and the Borrower and the
Guarantors are engaged in related businesses. Each Guarantor is a Subsidiary of
the Borrower and, after taking into account all rights of contribution of each
Grantor against other Grantors, if any, under this Agreement, at law, in equity
or otherwise, its guaranty and surety obligations pursuant to this Agreement
reasonably may be expected to benefit, directly or indirectly, it; and it has
determined that this Agreement is necessary and convenient to the conduct,
promotion and attainment of the business of such Guarantor and the Borrower.

Section 5.03     No Other Liens. No financing statement or other public notice
with respect to all or any part of the Collateral in which such Grantor has a
right is on file or of record in any public office, except such as have been
filed in favor of the Administrative Agent, or in favor of the Administrative
Agent (as defined in the Existing Credit Agreement), for the ratable benefit of
the Secured Parties, pursuant to this Agreement, the Security Instruments or as
are filed to secure Liens permitted by Section 9.03 of the Credit Agreement.

Section 5.04 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and, if required, duly executed form, except to the extent otherwise
set forth on said Schedule) will constitute valid perfected security interests
in all of the Collateral in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, as collateral security for such Grantor’s
obligations, enforceable in accordance with the terms hereof, to the extent such
security interest in such Collateral can be perfected by (i) the filing of a
financing statement under the Uniform Commercial Code of any jurisdiction,
(ii) the possession of such Collateral under applicable laws of the United
States or of any state thereof or (iii) execution and delivery by the applicable
Grantor, the applicable depositary institution and the Administrative Agent of a
Control Agreement granting control to the Administrative Agent over such
Collateral that is a Deposit Account (other than any Excluded Account), against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and (b)    are prior to all other Liens on the
Collateral, except for Liens permitted by Section 9.03 of the Credit Agreement.

Section 5.05 Legal Name, Organizational Status, Chief Executive Office. On the
date hereof, the correct legal name of such Grantor, such Grantor’s jurisdiction
of organization, organizational number, taxpayor identification number and the
location of such Grantor’s chief executive office or sole place of business are
specified on Schedule 4.

 

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Section 5.06 Prior Names and Addresses. Schedule 5 correctly sets forth (a) all
names and trade names that such Grantor has used in the last five years and
(b) the chief executive office of such Grantor over the last five years (if
different from that which is set forth in Section 5.05 above).

Section 5.07 Pledged Securities. The shares (or such other interests) of Pledged
Securities pledged by such Grantor hereunder constitute all the issued and
outstanding shares (or such other interests) of all classes of the capital stock
or other Equity Interests of each Issuer owned by such Grantor, and all such
shares (or such other interests) of the Pledged Securities have been duly and
validly issued and are fully paid and nonassessable (other than Pledged
Securities consisting of limited liability company interests or partnership
interests, which cannot be fully paid and are nonassessable); and such Grantor
is the record and beneficial owner of, and has good title to, the Pledged
Securities pledged by it hereunder, free of any and all Liens except Excepted
Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement. Except as set forth on Schedule 2,
no Pledged Securities are certificated or is a security under Section 8-103 of
the New York UCC as of the date hereof.

Section 5.08    Goods. No portion of the Collateral constituting Goods with a
value in excess of $500,000 is in the possession of a bailee that has issued a
negotiable or non-negotiable document covering such Collateral.

Section 5.09 Instruments and Chattel Paper. Such Grantor has delivered to the
Administrative Agent all Collateral constituting Instruments and Chattel Paper
which the Administrative Agent has requested such Grantor to deliver to it. No
Collateral constituting Chattel Paper or Instruments contains any statement
therein to the effect that such Collateral has been assigned to an identified
party other than the Administrative Agent, and the grant of a security interest
in such Collateral in favor of the Administrative Agent hereunder does not
violate the rights of any other Person as a secured party.

Section 5.10 Truth of Information; Accounts. All information with respect to the
Collateral set forth in any schedule, certificate or other writing at any time
heretofore or hereafter furnished by such Grantor to the Administrative Agent or
any other Secured Party, and all other written information heretofore or
hereafter furnished by such Grantor to the Administrative Agent or any other
Secured Party is and will be true and correct in all material respects as of the
date furnished. Until the Borrower notifies, in writing, the Administrative
Agent otherwise, the place where each Grantor keeps its records concerning the
Accounts, Chattel Paper and Payment Intangibles is set forth on Schedule 4.

Section 5.11 Governmental Obligors. None of the Account Debtors on such
Grantor’s Accounts, Chattel Paper or Payment Intangibles is a Governmental
Authority.

ARTICLE VI

COVENANTS

Each Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that, as it relates to such Grantor, from and after the date of
this Agreement until the Secured Obligations shall have been Paid In Full In
Cash:

Section 6.01 Covenants in Credit Agreement. In the case of each Guarantor, such
Guarantor shall take, or shall refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, by it
under the Loan Documents so that no Default or Event of Default is caused by its
failure to take such action or to refrain from taking such action by such
Guarantor or any of its Subsidiaries.

 

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Section 6.02    Maintenance of Perfected Security Interest; Further
Documentation.

(a)    Such Grantor shall maintain the security interest created by it under
this Agreement as a perfected security interest having at least the priority
described in Section 5.04 (to the extent such perfection is required by this
Agreement) and shall defend such security interest against the claims and
demands of all Persons whomsoever except for Liens permitted by Section 9.03 of
the Credit Agreement.

(b)    At any time and from time to time, upon the request of the Administrative
Agent or any other Secured Party, and at the sole expense of such Grantor, such
Grantor will promptly and duly give, execute, deliver, indorse, file or record
any and all financing statements, continuation statements, amendments, notices
(including, without limitation, notifications to financial institutions and any
other Person), contracts, agreements, assignments, certificates, stock powers or
other instruments, obtain any and all governmental approvals and consents and
take or cause to be taken any and all steps or acts that may be necessary or
advisable or as the Administrative Agent may reasonably request to create,
perfect, establish the priority described in Section 5.04 of, or to preserve the
validity, perfection or priority of, the Liens granted by this Agreement or to
enable the Administrative Agent or any other Secured Party to enforce its
rights, remedies, powers and privileges under this Agreement with respect to
such Liens or to otherwise obtain or preserve the full benefits of this
Agreement and the rights, powers and privileges herein granted.

 

  (c)

Without limiting the obligations of the Grantors under Section 6.02(b):

(i)    upon the request of the Administrative Agent or any other Secured Party
(which request, in the case of Collateral constituting Deposit Accounts, the
Administrative Agent agrees to make promptly upon receipt of the notice referred
to in Section 6.02(c)(i)(A) from the applicable Grantor), such Grantor shall
take or cause to be taken all actions (other than any actions required to be
taken by the Administrative Agent or any Lender) requested by the Administrative
Agent to cause the Administrative Agent to:

(A)    have “control” (within the meaning of Sections 8-106, 9-104, 9- 105,
9-106, and 9-107 of the New York UCC) over any Collateral constituting
(1) Deposit Accounts (other than any Excluded Account for so long as it is an
Excluded Account) and (2) Electronic Chattel Paper, Investment Property
(including the Pledged Securities), or Letter-of-Credit Rights, in each case in
this Section 6.02(c)(i)(A)(2), with a value in excess of $500,000, including in
either case in this Section 6.02(c)(i)(A), without limitation, by executing and
delivering any agreements, in form and substance satisfactory to the
Administrative Agent, with depository banks, securities intermediaries, issuers
or other Persons in order to establish “control”, and each Grantor shall
promptly notify the Administrative Agent and the other Secured Parties of such
Grantor’s acquisition of any such Collateral; provided that, (x) any such
agreement shall provide that the depository bank or securities intermediary (or
any Person acting in a similar capacity) shall comply with instructions
originated by the Administrative Agent after the occurrence of an Event of
Default with respect to the disposition of funds without further consent of such
Grantor and (y) so long as no Event of Default has occurred that is continuing,
the Administrative Agent will not exercise its rights and remedies under any
such agreement, and

 

  (B)

be a “protected purchaser” (as defined in Section 8-303 of the New York UCC);

(ii)    with respect to Collateral other than certificated securities and goods
covered by a document in the possession of a Person other than such Grantor or
the Administrative Agent, such Grantor shall use commercially reasonable efforts
to obtain written acknowledgment that such Person holds possession for the
Administrative Agent’s benefit; and

 

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(iii) with respect to any Collateral constituting Goods with a value in excess
of $500,000 that are in the possession of a bailee, such Grantor shall provide
prompt notice to the Administrative Agent and the other Secured Parties of any
such Collateral then in the possession of such bailee, and such Grantor shall
take or cause to be taken all commercially reasonable actions (other than any
actions required to be taken by the Administrative Agent or any other Secured
Party) necessary or requested by the Administrative Agent to cause the
Administrative Agent to have a perfected security interest in such Collateral
under applicable law.

(d)    This Section 6.02 and the obligations imposed on each Grantor by this
Section 6.02 shall be interpreted as broadly as possible in favor of the
Administrative Agent and the other Secured Parties in order to effectuate the
purpose and intent of this Agreement.

Section 6.03    Further Identification of Collateral. Such Grantor will furnish
to the Administrative Agent and the Lenders from time to time, at such Grantor’s
sole cost and expense, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.

Section 6.04 Changes in Locations, Name, etc. Such Grantor recognizes that
financing statements pertaining to the Collateral have been or may be filed
where such Grantor maintains any Collateral or is organized. Without limitation
of any other covenant herein, such Grantor will not cause or permit any change
to be made (a) in its company name or in any trade name used to identify such
Grantor in the conduct of its business or in the ownership of its Properties,
(b) in the location of its chief executive office or principal place of
business, (c) in its identity or corporate structure or in the jurisdiction in
which such Grantor is incorporated, formed or otherwise organized, or (d) in its
organizational identification number in such jurisdiction of organization,
unless such Grantor shall have first (i) notified the Administrative Agent of
such change at least thirty (30) days prior to the effective date of such change
(or such shorter period as agreed by the Administrative Agent and the Borrower
which permits the Administrative Agent to take timely any applicable required
steps or action), and (ii) taken all action reasonably requested by the
Administrative Agent for the purpose of maintaining the perfection and priority
of the Administrative Agent’s security interests under this Agreement. In any
notice furnished pursuant to this Section 6.04, such Grantor will expressly
state in a conspicuous manner that the notice is required by this Agreement and
contains facts that may require additional filings of financing statements or
other notices for the purposes of continuing perfection of the Administrative
Agent’s security interest in the Collateral.

Section 6.05     Compliance with Contractual Obligations. Such Grantor will
perform and comply in all material respects with all its contractual obligations
relating to the Collateral (including, without limitation, with respect to the
goods or services, the sale or lease or rendition of which gave rise or will
give rise to each Account).

Section 6.06    Pledged Securities.

(a)    If such Grantor shall become entitled to receive or shall receive any
stock certificate or other instrument (including, without limitation, any
certificate or instrument representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate or instrument issued in connection with any reorganization), option
or rights in respect of the capital stock or other Equity Interests of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares (or such other interests) of the Pledged Securities, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent, hold the same in trust for the Administrative Agent
and deliver the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power or other equivalent instrument of
transfer acceptable to the Administrative Agent covering

 

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such certificate or instrument duly executed in blank by such Grantor and with,
if the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Secured Obligations.

(b)    Without the prior written consent of the Administrative Agent, such
Grantor will not (i) unless otherwise permitted hereby, vote to enable, or take
any other action to permit, any Issuer to issue any stock or other Equity
Interests of any nature or to issue any other securities or interests
convertible into or granting the right to purchase or exchange for any stock or
other Equity Interests of any nature of any Issuer, (ii) sell, assign, transfer,
exchange or otherwise dispose of, or grant any option with respect to, the
Pledged Securities or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or permit to
exist any Lien except for Excepted Liens or option in favor of, or any claim of
any Person with respect to, any of the Pledged Securities or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Pledged Securities or Proceeds thereof.

(c)    In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 6.06(a) with
respect to the Pledged Securities issued by it and (iii) the terms of
Section 7.01(c) and Section 7.05 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 7.01(c) or
Section 7.05 with respect to the Pledged Securities issued by it. Each Grantor
will use commercially reasonable efforts to have each non-Grantor Issuer execute
and deliver an Acknowledgment and Consent substantially in the form of Annex I.
In addition, each Grantor which is also either an Issuer or an owner of any
Pledged Securities consents to the grant by each other Grantor of the security
interest hereunder in favor of the Administrative Agent and to the transfer of
any Pledged Securities to the Administrative Agent or its nominee following the
occurrence and during the continuation of an Event of Default and to the
substitution of the Administrative Agent or its nominee as a partner, member or
shareholder of the Issuer of the related Pledged Securities.

(d)    Such Grantor shall furnish to the Administrative Agent such stock powers
and other equivalent instruments of transfer as may be required by the
Administrative Agent to assure the transferability of and the perfection of the
security interest in the Pledged Securities when and as often as may be
reasonably requested by the Administrative Agent.

(e)    The Pledged Securities will at all times constitute not less than 100% of
the capital stock or other Equity Interests of the Issuer thereof owned by any
Grantor. Each Grantor will not permit any Issuer of any of the Pledged
Securities to issue any new shares (or other interests) of any class of capital
stock or other Equity Interests of such Issuer without the prior written consent
of the Administrative Agent unless immediately upon issuance the same are
pledged and, if applicable, delivered to Administrative Agent pursuant to the
terms hereof to the extent necessary to give Administrative Agent a first
priority security interest after such issue in at least the same percentage of
such Issuer’s outstanding shares or other interests as Grantor had before such
issue.

Section 6.07 Limitations on Modifications, Waivers, Extensions of Agreements
Giving Rise to Accounts. Such Grantor will not (a) amend, modify, terminate or
waive any provision of any Chattel Paper, Instrument or any agreement giving
rise to an Account or Payment Intangible with a value in excess of $500,000 in
any manner which could reasonably be expected to materially adversely affect the
value of such Chattel Paper, Instrument, Payment Intangible or Account as
Collateral, or (b) fail to exercise promptly and diligently each and every
material right which it may have under any Chattel Paper, Instrument and

 

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each agreement giving rise to an Account or Payment Intangible with a value in
excess of $500,000 (other than any right of termination). Such Grantor shall
deliver to the Administrative Agent a copy of each material demand, notice or
document received by it relating in any way to any Chattel Paper, Instrument or
any agreement giving rise to an Account or Payment Intangible with a value in
excess of $500,000.

Section 6.08 Analysis of Accounts, Etc. Upon reasonable prior notice, the
Administrative Agent shall have the right from time to time to make test
verifications of the Accounts, Chattel Paper and Payment Intangibles in any
manner and through any medium that it reasonably considers advisable, and each
Grantor, at such Grantor’s sole cost and expense, shall furnish all such
assistance and information as the Administrative Agent may reasonably require in
connection therewith (provided that if the Administrative Agent or its
representatives conduct more than one (1) such inspection during any twelve-
month period, any expenses incurred by the Administrative Agent or its
representatives for such inspections (other than the first such inspection
during such period by such Person) shall be borne by such Person if an Event of
Default does not then exist). At any time and from time to time, upon the
Administrative Agent’s request and at the expense of each Grantor, such Grantor
shall furnish to the Administrative Agent reports showing reconciliations, aging
and test verifications of, and trial balances for, the Accounts, Chattel Paper
and Payment Intangibles, and such original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Accounts,
Chattel Paper and Payment Intangibles, including, without limitation, original
orders, invoices and shipping receipts as the Administrative Agent may
reasonably request.

Section 6.09 Instruments and Tangible Chattel Paper. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any
Instrument or Tangible Chattel Paper with a value in excess of $500,000, such
Grantor will promptly notify the Administrative Agent and, if requested by the
Administrative Agent, deliver such Instrument or Tangible Chattel Paper to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement.

Section 6.10 Commercial Tort Claims. If such Grantor shall at any time hold or
acquire a Commercial Tort Claim that satisfies the requirements of the following
sentence, such Grantor shall, within thirty (30) days after such Commercial Tort
Claim satisfies such requirements, notify the Administrative Agent in a writing
signed by such Grantor containing a brief description thereof, and granting to
the Administrative Agent in such writing (for the benefit of the Secured
Parties) a security interest therein and in the Proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
satisfactory to the Administrative Agent for purposes only of perfecting its
security interest therein. The provisions of the preceding sentence shall apply
only to a Commercial Tort Claim that satisfies the following requirements:
(a) the monetary value claimed by or payable to the relevant Grantor in
connection with such Commercial Tort Claim shall exceed $500,000, and (b) either
(i) such Grantor shall have filed a law suit or counterclaim or otherwise
commenced legal proceedings (including, without limitation, arbitration
proceedings) against the Person against whom such Commercial Tort Claim is made,
or (ii) such Grantor and the Person against whom such Commercial Tort Claim is
asserted shall have entered into a settlement agreement with respect to such
Commercial Tort Claim. In addition, to the extent that the existence of any
Commercial Tort Claim held or acquired by any Grantor is disclosed by such
Grantor in any public filing with the Securities Exchange Commission or any
successor thereto or analogous Governmental Authority, or to the extent that the
existence of any such Commercial Tort Claim is disclosed in any press release
issued by any Grantor, then, upon the request of the Administrative Agent, the
relevant Grantor shall, within thirty (30) days after such request is made,
transmit to the Administrative Agent a writing signed by such Grantor containing
a brief description of such Commercial Tort Claim and granting to the
Administrative Agent in such writing (for the benefit of the Secured Parties) a
security interest therein and in the Proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
the Administrative Agent for the purposes only of perfecting its security
interest therein.

 

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Section 6.11 Keepwell. Each Qualified Keepwell Provider hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Grantor
to honor all of its obligations under this Agreement in respect of Swap
Obligations (provided, however, that each Qualified Keepwell Provider shall only
be liable under this Section 6.11 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this
Section 6.11, or otherwise under this Agreement, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified Keepwell Provider under this
Section 6.11 shall remain in full force and effect until the Secured Obligations
are Paid In Full In Cash. Each Qualified Keepwell Provider intends that this
Section 6.11 constitute, and this Section 6.11 shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Grantor
for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

ARTICLE VII

REMEDIAL PROVISIONS

Section 7.01    Pledged Securities.

(a)    Unless an Event of Default exists and the Administrative Agent shall have
given notice to the relevant Grantor of the Administrative Agent’s intent to
exercise its corresponding rights pursuant to Section 7.01(b), each Grantor
shall be permitted to receive all cash dividends paid in respect of the Pledged
Securities paid in the normal course of business of the relevant Issuer, to the
extent permitted in the Credit Agreement, and to exercise all voting, corporate
and other rights with respect to the Pledged Securities.

(b)    If an Event of Default exists, then at any time in the Administrative
Agent’s discretion without notice (except as herein otherwise expressly
provided), (i) the Administrative Agent shall have the right to receive any and
all cash dividends, payments or other Proceeds paid in respect of the Pledged
Securities and make application thereof to the Secured Obligations in accordance
with Section 10.02 of the Credit Agreement, and (ii) any or all of the Pledged
Securities shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise
(A) all voting, corporate and other rights pertaining to such Pledged Securities
at any meeting of shareholders (or other equivalent body) of the relevant Issuer
or Issuers or otherwise and (B) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the organizational structure of any Issuer, or upon
the exercise by any Grantor or the Administrative Agent of any right, privilege
or option pertaining to such Pledged Securities, and in connection therewith,
the right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it and as
otherwise set forth herein, but the Administrative Agent shall have no duty to
any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

(c)    Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Securities pledged by such Grantor hereunder (and each Issuer party hereto
hereby agrees) to (i) comply with any instruction received by it from the
Administrative Agent in writing that (A) states that an Event of Default

 

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exists and (B) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Grantor, and each Grantor
agrees that each Issuer shall be fully protected in so complying, and
(ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Pledged Securities directly to the Administrative
Agent.

(d)    If during the existence of an Event of Default the Issuer of any Pledged
Securities is the subject of bankruptcy, insolvency, receivership, custodianship
or other proceedings under the supervision of any Governmental Authority, then
all rights of the Grantor in respect thereof to exercise the voting and other
consensual rights which such Grantor would otherwise be entitled to exercise
with respect to the Pledged Securities issued by such Issuer shall cease, and
all such rights shall thereupon become vested in the Administrative Agent who
shall thereupon have the sole right to exercise such voting and other consensual
rights, but the Administrative Agent shall have no duty to exercise any such
voting or other consensual rights and shall not be responsible for any failure
to do so or delay in so doing.

Section 7.02 Collections on Accounts, Etc. The Administrative Agent hereby
authorizes each Grantor to collect upon the Accounts, Instruments, Chattel Paper
and Payment Intangibles subject to the Administrative Agent’s Lien, and the
Administrative Agent may curtail or terminate said authority at any time during
the existence of an Event of Default. Upon the request of the Administrative
Agent at any time during the existence of an Event of Default, each Grantor
shall notify the Account Debtors that the applicable Accounts, Chattel Paper and
Payment Intangibles have been assigned to the Administrative Agent for the
ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent. During the existence of a
Default or Event of Default, the Administrative Agent may in its own name or in
the name of others communicate with the Account Debtors to verify with them to
its satisfaction the existence, amount and terms of any Accounts, Chattel Paper
or Payment Intangibles.

Section 7.03     Proceeds. If required by the Administrative Agent at any time
during the existence of an Event of Default, any payments of Accounts,
Instruments, Chattel Paper and Payment Intangibles, when collected or received
by each Grantor, and any other cash or non-cash Proceeds received by each
Grantor upon the sale or other disposition of any Collateral, shall be forthwith
(and, in any event, within two Business Days) deposited by such Grantor in the
exact form received, duly indorsed by such Grantor to the Administrative Agent
if required, in a special collateral account maintained by the Administrative
Agent, subject to withdrawal by the Administrative Agent for the ratable benefit
of the Secured Parties only, as hereinafter provided, and, until so turned over,
shall be held by such Grantor in trust for the Administrative Agent for the
ratable benefit of the Secured Parties, segregated from other funds of any such
Grantor. Each deposit of any such Proceeds shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit. All Proceeds (including, without limitation, Proceeds
constituting collections of Accounts, Chattel Paper, Instruments) while held by
the Administrative Agent (or by any Grantor in trust for the Administrative
Agent for the ratable benefit of the Secured Parties) shall continue to be
collateral security for all of the Secured Obligations and shall not constitute
payment thereof until applied as hereinafter provided. At such intervals as may
be agreed upon by each Grantor and the Administrative Agent, or, if an Event of
Default exists, at any time at the Administrative Agent’s election, the
Administrative Agent shall apply all or any part of the funds on deposit in said
special collateral account on account of the Secured Obligations in such order
as the Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as collateral
security for the Secured Obligations shall be paid over from time to time by the
Administrative Agent to each Grantor or to whomsoever may be lawfully entitled
to receive the same.

 

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Section 7.04    New York UCC and Other Remedies.

(a)    If an Event of Default exists, the Administrative Agent, on behalf of the
Secured Parties, may exercise in its discretion, in addition to all other
rights, remedies, powers and privileges granted to them in this Agreement, any
other Secured Agreement, all rights, remedies, powers and privileges of a
secured party under the New York UCC (whether the New York UCC is in effect in
the jurisdiction where such rights, remedies, powers or privileges are asserted)
or any other applicable law or otherwise available at law or equity. Without
limiting the generality of the foregoing, the Administrative Agent (or its
agent), without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
the Administrative Agent or any other Secured Party or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent or any other Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. If an Event of Default
exists, each Grantor further agrees, at the Administrative Agent’s request, to
assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere. Any such sale or transfer by the Administrative
Agent either to itself or to any other Person shall be absolutely free from any
claim of right by Grantor, including any equity or right of redemption, stay or
appraisal which Grantor has or may have under any rule of law, regulation or
statute now existing or hereafter adopted. Upon any such sale or transfer, the
Administrative Agent shall have the right to deliver, assign and transfer to the
purchaser or transferee thereof the Collateral so sold or transferred. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 7.04, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the other Secured Parties hereunder,
including, without limitation, reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Secured Obligations, in accordance with
Section 10.02 of the Credit Agreement, and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-615 of the New York
UCC, need the Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any other Secured Party arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.

(b)    In the event that the Administrative Agent elects not to sell the
Collateral, the Administrative Agent retains its rights to dispose of or utilize
the Collateral or any part or parts thereof in any manner authorized or
permitted by law or in equity, and to apply the proceeds of the same towards
payment of the Secured Obligations. Each and every method of disposition of the
Collateral described in this Agreement shall constitute disposition in a
commercially reasonable manner. The Administrative Agent may appoint any Person
as agent to perform any act or acts necessary or incident to any sale or
transfer of the Collateral.

 

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Section 7.05 Private Sales of Pledged Securities. Each Grantor recognizes that
the Administrative Agent may be unable to effect a public sale of any or all the
Pledged Securities, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Securities for the period of time necessary
to permit the Issuer thereof to register such securities for public sale under
the Securities Act, or under applicable state securities laws, even if such
Issuer would agree to do so. Each Grantor agrees to use its commercially
reasonable efforts to do or cause to be done all such other acts as may
reasonably be necessary to make such sale or sales of all or any portion of the
Pledged Securities pursuant to this Section 7.05 valid and binding and in
compliance with any and all other applicable Governmental Requirements. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 7.05 will cause irreparable injury to the Administrative Agent and the
other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 7.05 shall
be specifically enforceable against such Grantor, and, to the maximum extent
permitted by applicable law, such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants.

Section 7.06 Waiver; Deficiency. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under the New York UCC or any
other applicable law. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Secured Obligations and the fees and disbursements of any attorneys
employed by the Administrative Agent or any other Secured Party to collect such
deficiency.

Section 7.07 Non-Judicial Enforcement. The Administrative Agent may enforce its
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law, each Grantor expressly waives any and all legal rights
which might otherwise require the Administrative Agent to enforce its rights by
judicial process.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

Section 8.01    Administrative Agent’s Appointment as Attorney-in-Fact, Etc.

(a)    Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in- fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all reasonably appropriate action and to execute
any and all documents and instruments which may be reasonably necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Administrative
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:

(i)    Pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement and pay all or any part of the premiums therefor and the
costs thereof;

 

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(ii)    execute, in connection with any sale provided for in Section 7.04 or
Section 7.05, any endorsements, assignments or other instruments of conveyance
or transfer with respect to the Collateral; and

(iii)    (A) direct any party liable for any payment under any of the Collateral
to make payment of any and all moneys due or to become due thereunder directly
to the Administrative Agent or as the Administrative Agent shall direct;
(B) take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account, Instrument, General Intangible, Chattel Paper or Payment Intangible or
with respect to any other Collateral, and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Account, Instrument or General Intangible or with
respect to any other Collateral whenever payable; (C) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral; (D) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (E) receive, change the address for delivery, open and
dispose of mail addressed to any Grantor, and to execute, assign and indorse
negotiable and other instruments for the payment of money, documents of title or
other evidences of payment, shipment or storage for any form of Collateral on
behalf of and in the name of any Grantor; (F) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (G) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral;
(H) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; and (I) to the extent permitted, and in the manner
required, by the New York UCC generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the other Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.

Anything in this Section 8.01(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not, and will not permit any of its
officers or agents to, exercise any rights under the power of attorney provided
for in this Section 8.01(a) unless an Event of Default exists.

(b)    If any Grantor fails to perform or comply with any of its agreements
contained herein within the applicable grace periods, the Administrative Agent,
at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.

(c)    The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 8.01, together with interest on
the unpaid portion thereof at the Post- Default Rate from the date of payment by
the Administrative Agent to the date reimbursed by the relevant Grantor, shall
be payable jointly and severally by such Grantor to the Administrative Agent on
demand.

(d)    Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue and in compliance hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.

 

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Section 8.02     Duty of Administrative Agent. The Administrative Agent’s sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9- 207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account and shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which comparable secured parties accord comparable collateral. Neither the
Administrative Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the other Secured Parties hereunder
are solely to protect the Administrative Agent’s and the other Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any other Secured Party to exercise any such powers. The
Administrative Agent and the other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents
(collectively, the “Indemnitees”) shall be responsible to any Grantor for any
act or failure to act hereunder, NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, 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 OR
RESTATEMENT (THIRD) 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 EXCULPATION 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. To the fullest extent permitted by applicable law, the
Administrative Agent shall be under no duty whatsoever to make or give any
presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Secured
Obligations, or to take any steps necessary to preserve any rights against any
Grantor or other Person or ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not it has or is deemed to have knowledge of such
matters. Each Grantor, to the extent permitted by applicable law, waives any
right of marshaling in respect of any and all Collateral, and waives any right
to require the Administrative Agent or any other Secured Party to proceed
against any Grantor or other Person, exhaust any Collateral or enforce any other
remedy which the Administrative Agent or any other Secured Party now has or may
hereafter have against each Grantor, any Grantor or other Person.

Section 8.03 Execution of Financing Statements. Pursuant to the New York UCC and
any other applicable law, each Grantor authorizes the Administrative Agent, its
counsel or its representative, at any time and from time to time, to file or
record financing statements, continuation statements, amendments thereto and
other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent reasonably determines appropriate to perfect
or maintain the perfection of the security interests of the Administrative Agent
under this Agreement. Additionally, each Grantor authorizes the Administrative
Agent, its counsel or its representative, at any time and from time to time, to
file or record such financing statements that describe the collateral covered
thereby as “all assets of the Grantor”, “all personal property of the Grantor”
or words of similar effect. A photographic or other reproduction of this
Agreement shall be sufficient as a

financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction. In no event shall the above
authorizations be deemed to be obligations.

 

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Section 8.04 Authority of Administrative Agent. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the other
Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.

ARTICLE IX

SUBORDINATION OF INDEBTEDNESS

Section 9.01 Subordination of All Grantor Claims. As used herein, the term
“Grantor Claims” shall mean all debts and obligations of any Grantor to any
other Grantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the debtor thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by. During the existence of an Event of Default, no Grantor shall
receive or collect, directly or indirectly, from any obligor in respect thereof
any amount upon the Grantor Claims.

Section 9.02 Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief or other insolvency proceedings
involving any Grantor, the Administrative Agent on behalf of the Secured Parties
shall have the right to prove their claim in any proceeding, so as to establish
their rights hereunder and receive directly from the receiver, trustee or other
court custodian, dividends and payments which would otherwise be payable upon
Grantor Claims. Each Grantor hereby assigns such dividends and payments to the
Administrative Agent for the benefit of the Secured Parties for application
against the Secured Obligations as provided under Section 10.02 of the Credit
Agreement. Should any Agent or Secured Party receive, for application upon the
Secured Obligations, any such dividend or payment which is otherwise payable to
any Grantor, and which, as between such Grantor, shall constitute a credit upon
the Grantor Claims, then upon Payment in Full In Cash of the Secured
Obligations, the intended recipient shall become subrogated to the rights of the
Administrative Agent and the other Secured Parties to the extent that such
payments to the Administrative Agent and the other Secured Parties on the
Grantor Claims have contributed toward the liquidation of the Secured
Obligations, and such subrogation shall be with respect to that proportion of
the Secured Obligations which would have been unpaid if the Administrative Agent
and the other Secured Parties had not received dividends or payments upon the
Grantor Claims.

Section 9.03 Payments Held in Trust. In the event that notwithstanding
Section 9.01 and Section 9.02, any Grantor should receive any funds, payments,
claims or distributions which is prohibited by such Sections, then it agrees:
(a) to hold in trust for the Administrative Agent an amount equal to the amount
of all funds, payments, claims or distributions so received, and (b) that it
shall have absolutely no dominion over the amount of such funds, payments,
claims or distributions except to pay them promptly to the Administrative Agent,
for the benefit of the Secured Parties; and each Grantor covenants promptly to
pay the same to the Administrative Agent.

 

22

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Section 9.04 Liens Subordinate. Each Grantor agrees that, until the Secured
Obligations are Paid In Full In Cash, any Liens granted by a Grantor to secure
payment of the Grantor Claims shall be and remain inferior and subordinate to
any Liens securing payment of the Secured Obligations, regardless of whether
such encumbrances in favor of such Grantor, the Administrative Agent or any
other Secured Party presently exist or are hereafter created or attach. Without
the prior written consent of the Administrative Agent, no Grantor, during the
period in which any of the Secured Obligations are outstanding or the
Commitments are outstanding, shall (a) exercise or enforce any creditor’s right
it may have against any debtor in respect of the Grantor Claims, or
(b) foreclose, repossess, sequester or otherwise take steps or institute any
action or proceeding (judicial or otherwise, including without limitation the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any Lien held by it.

Section 9.05 Notation of Records. Upon the request of the Administrative Agent,
all promissory notes and all accounts receivable ledgers or other evidence of
the Grantor Claims accepted by or held by any Grantor shall contain a specific
written notice thereon that the indebtedness evidenced thereby is subordinated
under the terms of this Agreement.

ARTICLE X

MISCELLANEOUS

Section 10.01 Waiver. No failure on the part of the Administrative Agent or any
other Secured Party to exercise and no delay in exercising, and no course of
dealing with respect to, any right, remedy, 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, remedy, power or privilege. The rights, remedies, powers and
privileges provided herein are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law. The exercise by the
Administrative Agent of any one or more of the rights, powers and remedies
herein shall not be construed as a waiver of any other rights, powers and
remedies, including, without limitation, any rights of set-off.

Section 10.02 Notices. All notices and other communications provided for herein
shall be given in the manner and subject to the terms of Section 12.01 of the
Credit Agreement; provided that any such notice, request or demand to or upon
any Guarantor shall be addressed to such Guarantor at its notice address set
forth on Schedule 1.

Section 10.03    Payment of Expenses, Indemnities, Etc.

(a)    Each Grantor, jointly and severally, agrees to pay or promptly reimburse
the Administrative Agent and each other Secured Party for all advances, charges,
costs and expenses (including, without limitation, all costs and expenses of
holding, preparing for sale and selling, collecting or otherwise realizing upon
the Collateral and all attorneys’ fees, legal expenses and court costs) incurred
by any Secured Party in connection with the exercise of its respective rights
and remedies hereunder, including, without limitation, any advances, charges,
costs and expenses that may be incurred in any effort to enforce any of the
provisions of this Agreement or any obligation of any Grantor in respect of the
Collateral or in connection with (i) the preservation of the Lien of, or the
rights of the Administrative Agent or any other Secured Party under this
Agreement, (ii) any actual or attempted sale, lease, disposition, exchange,
collection, compromise, settlement or other realization in respect of, or care
of, the Collateral, including all such costs and expenses incurred in any
bankruptcy, reorganization, workout or other similar proceeding, or
(iii) collecting against such Grantor under the guarantee contained in Article
II or otherwise enforcing or preserving any rights under this Agreement and the
other Loan Documents to which such Grantor is a party.

 

23

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(b)    EACH GRANTOR, JOINTLY AND SEVERALLY, AGREES TO INDEMNIFY, PAY, AND TO
HOLD THE ADMINISTRATIVE AGENT AND THE OTHER SECURED PARTIES HARMLESS FROM, ANY
AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, COURT COSTS AND ATTORNEYS’ FEES, ANY
AND ALL LIABILITIES WITH RESPECT TO, OR RESULTING FROM ANY DELAY IN PAYING, ANY
AND ALL STAMP, EXCISE, SALES OR OTHER TAXES WHICH MAY BE PAYABLE OR DETERMINED
TO BE PAYABLE WITH RESPECT TO ANY OF THE COLLATERAL OR IN CONNECTION WITH ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT) INCURRED BECAUSE OF, INCIDENT
TO, OR WITH RESPECT TO, THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, ANY
EXERCISE OF RIGHTS OR REMEDIES IN CONNECTION THEREWITH) OR THE EXECUTION,
DELIVERY, ENFORCEMENT, PERFORMANCE AND ADMINISTRATION OF THIS AGREEMENT, IN EACH
CASE, TO THE EXTENT THE BORROWER WOULD BE REQUIRED TO DO SO PURSUANT TO SECTION
12.03 OF THE CREDIT AGREEMENT. ALL AMOUNTS FOR WHICH ANY GRANTOR IS LIABLE
PURSUANT TO THIS SECTION 10.03 SHALL BE DUE AND PAYABLE BY SUCH GRANTOR TO THE
SECURED PARTIES UPON DEMAND.

Section 10.04 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 12.04 of the Credit Agreement.

Section 10.05 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the other Secured Parties and their successors and
permitted assigns; provided that except as set forth in Section 9.11 of the
Credit Agreement or Section 9.12 of the Credit Agreement, no Grantor may assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and the Lenders.

Section 10.06 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any of the Loan Documents to which a Grantor
is a party shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or such other Loan Document and the
remaining provisions hereof shall remain in full force and effect and shall be
liberally construed to carry out the provisions and intent hereof; provided, if
any one or more of the provisions contained in this Agreement shall be
determined or held to be invalid or unenforceable because such provision is
overly broad as to duration, geographic scope, activity or subject, such
provision shall be deemed amended by limiting and reducing it to the extent
necessary to make such provision valid and enforceable.

Section 10.07 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy or other electronic means (such as a PDF) shall be
effective as delivery of a manually executed counterpart of this Agreement.

Section 10.08 Survival. The obligations of the parties under Section 10.03 shall
survive notwithstanding the Secured Obligations having been Paid In Full In
Cash.

 

24

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Section 10.09 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.

Section 10.10 No Oral Agreements. The Loan Documents (other than the Letters of
Credit) embody the entire agreement and understanding between the parties and
supersede all other agreements and understandings between such parties relating
to the subject matter hereof and thereof. THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. In the event of a conflict
between the terms and conditions of this Agreement and the terms and conditions
of the Credit Agreement, the terms and conditions of the Credit Agreement shall
control.

Section 10.11    Governing Law; Submission to Jurisdiction.

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

(b)    SECTION 12.09 OF THE CREDIT AGREEMENT IS HEREBY INCORPORATED HEREIN BY
REFERENCE AND SHALL APPLY TO THIS AGREEMENT MUTATIS MUTANDIS.

Section 10.12    Acknowledgments.

(a)    Each Grantor hereby acknowledges that:

(i)    it has been advised by counsel in the negotiation, execution and delivery
of this Agreement and the other Loan Documents to which it is a party;

(ii)    neither the Administrative Agent nor any other Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and the other Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

(iii)    no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Lenders.

(b)    Each of the parties hereto specifically agrees that it has a duty to read
this Agreement and the Security Instruments and agrees that it is charged with
notice and knowledge of the terms of this Agreement and the Security
Instruments; 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 Security Instruments; and has received the advice of its attorney in
entering into this Agreement and the Security Instruments; and that it
recognizes that certain of the terms of this Agreement and the Security
Instruments 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 Security Instruments on the basis that the party had no notice or knowledge
of such provision or that the provision is not “conspicuous.”

 

25

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(c)    Each Grantor warrants and agrees that each of the waivers and consents
set forth in this Agreement are made voluntarily and unconditionally after
consultation with independent legal counsel and with full knowledge of their
significance and consequences, with the understanding that events giving rise to
any defense or right waived may diminish, destroy or otherwise adversely affect
rights which such Grantor otherwise may have against the Borrower, any other
Grantor, the Secured Parties or any other Person or against any collateral. If,
notwithstanding the intent of the parties that the terms of this Agreement shall
control in any and all circumstances, any such waivers or consents are
determined to be unenforceable under applicable law, such waivers and consents
shall be effective to the maximum extent permitted by law.

Section 10.13     Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 8.14 of the
Credit Agreement and is not a signatory hereto shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex II hereto.

Section 10.14 Set-Off. If an Event of Default shall have occurred and be
continuing, each Secured Party 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 Secured Party to or
for the credit or the account of any Grantor against any of and all the
obligations of such Grantor owed to such Secured Party now or hereafter existing
under this Agreement or any other Loan Document, irrespective of whether or not
such Secured Party shall have made any demand under this Agreement or any other
Loan Document and although such obligations may be unmatured. The rights of each
Secured Party under this Section 10.14 are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may have.

Section 10.15    Releases.

(a)    Release Upon Payment In Full In Cash. The grant of a security interest
hereunder and all of rights, powers and remedies in connection herewith shall
remain in full force and effect until all Secured Obligations are Paid In Full
In Cash, unless sooner released as provided by Section 11.10 of the Credit
Agreement and as further provided in Section 10.15(b) below. If all Secured
Obligations shall be Paid In Full In Cash, this Agreement shall be of no further
force or effect and the Administrative Agent, at the written request and expense
of the Borrower, will promptly reassign, transfer and deliver the Collateral to
the Grantors and execute and deliver all releases or other documents reasonably
requested to release the Liens created hereby.

(b)    Further Assurances. If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall promptly execute and deliver to such Grantor all releases or
other documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral and the capital stock or other Equity
Interests of such Grantor. At the request and sole expense of the Borrower, a
Grantor shall be released from its obligations hereunder in the event that all
the capital stock or other Equity Interests of such Grantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement; provided that the Borrower shall have delivered to the Administrative
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Grantor and the terms of
the sale or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.

 

26

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(c)    Retention in Satisfaction. Except as may be expressly applicable pursuant
to Section 9-620 of the New York UCC, no action taken or omission to act by the
Administrative Agent or the other Secured Parties hereunder, including, without
limitation, any exercise of voting or consensual rights or any other action
taken or inaction, shall be deemed to constitute a retention of the Collateral
in satisfaction of the Secured Obligations or otherwise to be in full
satisfaction of the Secured Obligations, and the Secured Obligations shall
remain in full force and effect, until the Administrative Agent and the other
Secured Parties shall have applied payments (including, without limitation,
collections from Collateral) towards the Secured Obligations in the full amount
then outstanding or until such subsequent time as is provided in
Section 10.15(a).

Section 10.16 Reinstatement. The obligations of each Grantor under this
Agreement (including, without limitation, with respect to the guarantee
contained in Article II and the provision of collateral herein) shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Grantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Grantor or any substantial part of its property, or otherwise,
all as though such payments had not been made. To the extent that any payments
on the Secured Obligations 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 Secured
Obligations so satisfied shall be revived and continue as if such payment or
proceeds had not been received and the Administrative Agent’s and the other
Secured Parties’ Liens, security interests, rights, powers and remedies under
this Agreement and each Security Instrument shall continue in full force and
effect. In such event, each Security Instrument shall be automatically
reinstated and each Grantor shall take such action as may be reasonably
requested by the Administrative Agent and the other Secured Parties to effect
such reinstatement.

Section 10.17 Acceptance. Each Grantor hereby expressly waives notice of
acceptance of this Agreement, acceptance on the part of the Administrative Agent
and the other Secured Parties being conclusively presumed by their request for
this Agreement and delivery of the same to the Administrative Agent.

Section 10.18 Amendment and Restatement. This Agreement amends and restates and
is given in substitution for, but not in satisfaction of, the Existing Guarantee
and Collateral Agreement; provided that nothing contained in this Agreement
shall limit or affect the liens and security interests heretofore granted,
pledged and/or assigned to the Administrative Agent in the collateral under and
as described in the Existing Guarantee and Collateral Agreement (the “Original
Collateral”). Each Grantor party to the Existing Guarantee and Collateral
Agreement acknowledges and agrees that (a) the Liens in such Original Collateral
are carried forward and shall continue in full force and effect to secure the
Secured Obligations and (b) none of the Liens in such Original Collateral are
released or impaired and shall be in addition to and cumulative of the liens,
assignments and security interests of this Agreement.

[Signature pages follow.]

 

27

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IN WITNESS WHEREOF, each of the undersigned has caused this Third Amended and
Restated Guarantee and Collateral Agreement to be duly executed and delivered as
of the date first above written.

 

BORROWER:                    MONTAGE RESOURCES CORPORATION

    By:  

 

    Name:  

 

    Title:  

 

GUARANTORS:     ECLIPSE RESOURCES I, LP     ECLIPSE GP, LLC     ECLIPSE
RESOURCES–OHIO, LLC     ECLIPSE RESOURCES OPERATING, LLC     BUCKEYE MINERALS &
ROYALTIES, LLC     ECLIPSE RESOURCES MIDSTREAM, LP     ECLIPSE RESOURCES
MARKETING, LP                        ECLIPSE RESOURCES–PA, LP     BLUE RIDGE
MOUNTAIN RESOURCES, INC.     BAKKEN HUNTER, LLC     TRIAD HUNTER, LLC     HUNTER
REAL ESTATE, LLC     VIKING INTERNATIONAL RESOURCES CO., INC.

    By:  

 

    Name:  

 

    Title:  

 

 

Signature Page

Third Amended and Restated Guarantee and Collateral Agreement

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

  

Acknowledged and Agreed to as

of the date hereof by:

ADMINISTRATIVE AGENT:   

BANK OF MONTREAL, as Administrative

Agent

   By:  

             

   Name:  

 

   Title:  

 

Signature Page

Third Amended and Restated Guarantee and Collateral Agreement

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SCHEDULE 1

NOTICE ADDRESSES OF GUARANTORS

 

1.

Eclipse GP, LLC, a Delaware limited liability company

2.

Eclipse Resources-Ohio, LLC, a Delaware limited liability company

3.

Buckeye Minerals & Royalties, LLC, a Delaware limited liability company

4.

Eclipse Resources Operating, LLC, a Delaware limited liability company

5.

Eclipse Resources Midstream, LP, a Delaware limited partnership

6.

Eclipse Resources Marketing, LP, a Delaware limited partnership

7.

Eclipse Resources I, LP, a Delaware limited partnership

8.

Eclipse Resources-PA, LP, a Delaware limited partnership

9.

Blue Ridge Mountain Resources, Inc., a Delaware corporation

10.

Bakken Hunter, LLC, a Delaware limited liability company

11.

Triad Hunter, LLC, a Delaware limited liability company

12.

Hunter Real Estate, LLC, a Delaware limited liability company

13.

Viking International Resources Co., Inc., a Delaware corporation

Attn: Chief Financial Officer

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Facsimile: (469) 444-1649

 

Schedule 1 - 1

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SCHEDULE 2

DESCRIPTION OF PLEDGED SECURITIES

Pledged Securities:

 

Owner

  

Issuer

  

Class of Stock or other

Equity Interest

  

No. of
Shares

  

Certificated or

Uncertificated

Montage Resources Corporation

   Eclipse GP, LLC    Membership Interests    100%    N/A

Montage Resources Corporation

   Eclipse Resources I, LP    Limited Partner Partnership Interests    100%   
N/A

Eclipse GP, LLC

   Eclipse Resources I, LP    General Partner Partnership Interests    100%   
N/A

Eclipse Resources I, LP

   Eclipse Resources- Ohio, LLC    Membership Interests    100%    N/A

Eclipse Resources I, LP

   Buckeye Minerals & Royalties, LLC    Membership Interests    100%    N/A

Eclipse Resources I, LP

   Eclipse Resources Operating, LLC    Membership Interests    100%    N/A

Montage Resources Corporation

   Eclipse Resources Midstream, LP    Limited Partner Partnership Interests   
100%    N/A

Eclipse GP, LLC

   Eclipse Resources Midstream, LP    General Partner Partnership Interests   
100%    N/A

Montage Resources Corporation

   Eclipse Resources Marketing, LP    Limited Partner Partnership Interests   
100%    N/A

Eclipse GP, LLC

   Eclipse Resources Marketing, LP    General Partner Partnership Interests   
100%    N/A

Eclipse GP, LLC

   Eclipse Resources-PA, LP    General Partner Partnership Interests    100%   
N/A

Montage Resources Corporation

   Eclipse Resources-PA, LP    Membership Interests    100%    N/A

Eclipse GP, LLC

   Sundance Exploration, LP    General Partner Partnership Interests    100%   
N/A

Montage Resources Corporation

   Sundance Exploration, LP    Membership Interests    100%    N/A

Triad Hunter, LLC

   Alpha Hunter Drilling, LLC    Membership Interest    100%    N/A

Blue Ridge Mountain Resources, Inc.

   Bakken Hunter, LLC    Membership Interest    100%    N/A

 

Schedule 2 - 1

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Owner

  

Issuer

  

Class of Stock or other

Equity Interest

  

No. of
Shares

  

Certificated or

Uncertificated

Montage Resources Corporation

   Blue Ridge Mountain Resources, Inc.    Stockholder    1,000 Common Stock   
Uncertificated

Triad Hunter, LLC

   Hunter Real Estate, LLC    Membership Interest    100%    N/A

Blue Ridge Mountain Resources, Inc.

   Magnum Hunter Resources GP, LLC    Membership Interest    100%    N/A

Blue Ridge Mountain Resources, Inc.

   Magnum Hunter Resources, LP    Limited Partner Partnership Interests    98%
   N/A

Blue Ridge Mountain Resources, Inc.

   Magnum Hunter Services, LLC    Membership Interest    100%    N/A

Blue Ridge Mountain Resources, Inc.

   NGAS Hunter, LLC    Membership Interest    100%    N/A

Blue Ridge Mountain Resources, Inc.

   Shale Hunter, LLC    Membership Interest    100%    N/A

Triad Hunter, LLC

   Triad Holdings, LLC    Membership Interest    100%    N/A

Blue Ridge Mountain Resources, Inc.

   Triad Hunter, LLC    Membership Interest    100%    N/A

Triad Hunter, LLC

   Viking International Resources Co., Inc.    Stockholder    3,000 Class A
Common Stock    Certificate 01          80,099 Class B Common Stock   
Certificate 01

Viking International Resources Co., Inc.

   VIRCO Pipeline of Ohio, LLC    Membership Interest    100%    N/A

Viking International Resources Co., Inc.

   VIRCO Pipeline of West Virginia, LLC    Membership Interest    100%    N/A

 

Schedule 2 - 2

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SCHEDULE 3

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

Uniform Commercial Code Filings

Filing of UCC-1 or UCC-3 financing statements, as applicable, with respect to
the Collateral listing each of the Grantors as debtor and the Administrative
Agent as secured party with the appropriate filing office.

Delivery to Administrative Agent of Pledged Securities

Certificate No. 01, representing 3,000 shares of Class A Common Stock of Viking
International Resources Co., Inc.

Certificate No. 01, representing 80,099 shares of Class B Common Stock of Viking
International Resources Co., Inc.

Deposit Account Control Agreement

Execution and delivery of that certain Deposit Account and Sweep Investment
Control Agreement by and among Wells Fargo Bank, National Association, the
Grantors party thereto, and the Administrative Agent which shall be executed and
delivered within thirty (30) days following the date of this Agreement.

That certain (i) Blocked Account Agreement, entered into as of August 5, 2015,
by and among Manufacturers and Traders Trust Company, Eclipse Resources
Marketing, LP, and Bank of Montreal, (ii) Blocked Account Agreement, entered
into as of August 5, 2015, by and among Manufacturers and Traders Trust Company,
Eclipse Resources I, LP, and Bank of Montreal, and (iii) Blocked Account
Agreement, entered into as of August 5, 2015, by and among Manufacturers and
Traders Trust Company, Eclipse Resources Corporation, and Bank of Montreal.

 

Schedule 3 - 1

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SCHEDULE 4

CORRECT LEGAL NAME, LOCATION OF JURISDICTION OF ORGANIZATION,

ORGANIZATIONAL IDENTIFICATION NUMBER, TAXPAYOR IDENTIFICATION

NUMBER AND CHIEF EXECUTIVE OFFICE

 

Entity

   Organizational
Identification Number    Taxpayer
Identification Number   

Chief Executive Office

Montage Resources Corporation, a Delaware corporation    5482186    27-4681664
  

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Eclipse Resources I, LP, a Delaware limited partnership    4929500    27-4681664
  

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Eclipse GP, LLC, a Delaware limited liability company    4929497    None   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Eclipse Resources-Ohio, LLC, a Delaware limited liability company    5547529   
30-0788206   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Buckeye Minerals & Royalties, LLC, a Delaware limited liability company   
5409381    35-2486831   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Eclipse Resources Operating, LLC, a Delaware limited liability company   
4908919    27-419961   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Eclipse Resources Midstream, LP, a Delaware limited partnership    5669909   
32-0456128   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Eclipse Resources Marketing, LP, a Delaware limited partnership    5669913   
38-3952306   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Eclipse Resources-PA, LP, a Delaware limited partnership    6576382   
37-1871325   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Blue Ridge Mountain Resources, Inc., a Delaware corporation    2758331   
86-0879278   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Bakken Hunter, LLC, a Delaware limited liability company    4877001   
27-3553862   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Hunter Real Estate, LLC, a Delaware limited liability company    4776468   
27-1658073   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Triad Hunter, LLC, a Delaware limited liability company    4743815    27-1355830
  

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

Viking International Resources Co., Inc. a Delaware corporation    21559398   
31-1240097   

122 W. John Carpenter Freeway Suite 300

Irving, Texas 75039

 

Schedule 4 - 1

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SCHEDULE 5

PRIOR NAMES AND PRIOR CHIEF EXECUTIVE OFFICE

 

Entity

  

Prior Names

  

Prior Chief Executive Office

Eclipse Resources I, LP, a Delaware limited partnership    N/A   

301 Science Park Road, Suite 308, State College, PA 16803; and

 

912 South Atherton Street, State College, PA 16801

 

2121 Old Gatesburg Rd. Suite 110 State College, Pennsylvania 16803

Eclipse Resources-Ohio, LLC, a Delaware limited liability company   

The Oxford Oil Company, an Ohio Corporation;

 

The Oxford Oil Company, LLC, an Ohio limited liability company; and

 

Eclipse Resources-Ohio, LLC, an Ohio limited liability company

  

4900 Boggs Road, Zanesville, Ohio 43702

 

2121 Old Gatesburg Rd. Suite 110 State College, Pennsylvania 16803

 

2121 Old Gatesburg Rd. Suite 110 State College, Pennsylvania 16803

Eclipse Resources Operating, LLC, a Delaware limited liability company    N/A   

301 Science Park Road, Suite 308, College Park, PA 16803; and

 

912 South Atheron Street, State College, PA 16801

 

2121 Old Gatesburg Rd. Suite 110 State College, Pennsylvania 16803

Montage Resources Corporation, a Delaware corporation    Eclipse Resources
Corporation, a Delaware corporation    2121 Old Gatesburg Rd. Suite 110 State
College, Pennsylvania 16803 Eclipse GP, LLC, a Delaware limited liability
company    N/A    2121 Old Gatesburg Rd. Suite 110 State College, Pennsylvania
16803 Buckeye Minerals & Royalties, LLC, a Delaware limited liability company   
N/A    2121 Old Gatesburg Rd. Suite 110 State College, Pennsylvania 16803
Eclipse Resources Midstream, LP, a Delaware limited partnership    N/A    2121
Old Gatesburg Rd. Suite 110 State College, Pennsylvania 16803 Eclipse Resources
Marketing, LP, a Delaware limited partnership    N/A    2121 Old Gatesburg Rd.
Suite 110 State College, Pennsylvania 16803 Eclipse Resources-PA, LP, a Delaware
limited partnership    N/A    2121 Old Gatesburg Rd. Suite 110 State College,
Pennsylvania 16803 Blue Ridge Mountain Resources, Inc., a Delaware corporation
   Magnum Hunter Resources Corporation, a Delaware corporation   

909 Lake Carolyn Parkway, Suite 600

Irving, Texas 75309

 

1046 Texan Trail

Grapevine, Texas 76051

     

777 Post Oak Blvd., Suite 650

Houston, Texas 77056

 

Schedule 5 - 1

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

Entity

  

Prior Names

  

Prior Chief Executive Office

Bakken Hunter, LLC, a Delaware limited liability company    N/A   

909 Lake Carolyn Parkway, Suite 600

Irving, Texas 75309

 

1046 Texan Trail

Grapevine, Texas 76051

 

777 Post Oak Blvd., Suite 650

Houston, Texas 77056

Hunter Real Estate, LLC, a Delaware limited liability company    N/A   

909 Lake Carolyn Parkway, Suite 600

Irving, Texas 75309

 

1046 Texan Trail

Grapevine, Texas 76051

 

777 Post Oak Blvd., Suite 650

Houston, Texas 77056

Triad Hunter, LLC, a Delaware limited liability company    N/A   

909 Lake Carolyn Parkway, Suite 600

Irving, Texas 75309

 

1046 Texan Trail

Grapevine, Texas 76051

 

777 Post Oak Blvd., Suite 650

Houston, Texas 77056

Viking International Resources Co., Inc. a Delaware corporation    N/A   

909 Lake Carolyn Parkway, Suite 600

Irving, Texas 75309

 

1046 Texan Trail

Grapevine, Texas 76051

 

777 Post Oak Blvd., Suite 650

Houston, Texas 77056

 

Schedule 5 - 2

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

Annex I

ACKNOWLEDGMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Third Amended and
Restated Guarantee and Collateral Agreement dated as of February 28, 2019 (the
“Agreement”), made by the Grantors parties thereto for the benefit of Bank of
Montreal, as Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:

1. The undersigned will be bound by the terms of the Agreement and will comply
with such terms insofar as such terms are applicable to the undersigned.

2. The undersigned will notify the Administrative Agent promptly in writing of
the events described in Section 6.06(a) of the Agreement.

3. The terms of Sections 7.01(c) and 7.05 of the Agreement shall apply to the
undersigned, mutatis mutandis, with respect to all actions that may be required
of it pursuant to Sections 7.01(c) or 7.05 of the Agreement.

 

[NAME OF ISSUER] By:     Name:     Title:    

 

Address for Notices:                  Fax:    

 

 

*

This consent is necessary only with respect to any Issuer which is not also a
Grantor. This consent may be modified or eliminated with respect to any Issuer
that is not controlled by a Grantor.

 

Annex I - 1

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

Annex II

ASSUMPTION AGREEMENT

ASSUMPTION AGREEMENT, dated as of                     , 20    , made by
                                        , a                             (the
“Additional Grantor”), in favor of Bank of Montreal, as administrative agent (in
such capacity, the “Administrative Agent”) for the banks and other financial
institutions (the “Lenders”) parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.

W I T N E S S E T H:

WHEREAS, Montage Resources Corporation (f/k/a Eclipse Resources Corporation), a
Delaware corporation (the “Borrower”), the Lenders and the Administrative Agent,
have entered into a Third Amended and Restated Credit Agreement, dated as of
February 28, 2019 (as amended, restated, amended and restated supplemented or
otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Subsidiaries have entered into the Third Amended and Restated Guarantee and
Collateral Agreement, dated as of February 28, 2019 (as amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the
“Guarantee and Collateral Agreement”) in favor of the Administrative Agent for
the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party
to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 10.13 of
the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee
and Collateral Agreement as a Grantor thereunder with the same force and effect
as if originally named therein as a Grantor and, without limiting the generality
of the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder and expressly grants to the Administrative Agent, for the
benefit of the Secured Parties (as defined in the Guarantee and Collateral
Agreement), a security interest in all Collateral owned by such Additional
Grantor to secure all of such Additional Grantor’s obligations and liabilities
thereunder. The information set forth in Annex II-A hereto is hereby added to
the information set forth in Schedules 1 through 5 to the Guarantee and
Collateral Agreement. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Article V of the
Guarantee and Collateral Agreement, as such representation and warranty relates
to the Additional Grantor, is true and correct on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such date.

2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Annex II-1

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

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

 

[ADDITIONAL GRANTOR]

By:  

 

Name:  

 

Title:  

 

 

Annex II-2

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

EXHIBIT G

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]5] 3.    Borrower:
   Montage Resources Corporation (f/k/a Eclipse Resources Corporation) 4.   
Administrative Agent:    Bank of Montreal, as the administrative agent under the
Credit Agreement 5.    Credit Agreement:    The Third Amended and Restated
Credit Agreement dated as of February 28, 2019 among Montage Resources
Corporation (f/k/a Eclipse Resources Corporation), the Lenders parties thereto,
Bank of Montreal, as Administrative Agent, and the other agents parties thereto
6.    Assigned Interest:   

 

Aggregate Maximum Credit

Amounts

   Maximum Credit
Amount Assigned    Percentage Assigned of
Aggregate Maximum
Credit Amounts6

$            

   $                         %

$            

   $             %

$            

   $             %

 

5 

Select as applicable.

6 

Set forth, to at least 9 decimals, as a percentage of the Aggregate Maximum
Credit Amounts of all Lenders.

 

Exhibit G - 1

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

Effective Date: [                    ], 20[    ] [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

[Signature pages follow]

 

Exhibit G - 2

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

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:  

 

 

Exhibit G - 3

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

[Consented to and]7 Accepted:

BANK OF MONTREAL, as Administrative Agent

 

By:  

 

Name:  

 

Title:  

 

    [Consented to:]8 [NAME OF RELEVANT PARTY] By:  

 

Name:  

 

Title:  

 

 

7 

To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

8 

To be added only if the consent of the Borrower and/or other parties (e.g.
Issuing Bank) is required by the terms of the Credit Agreement.

 

Exhibit G - 4

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

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 is
sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the Person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) 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 deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest, (vi) it has, independently and without reliance
upon the Administrative 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 Assignment and Assumption and to purchase the
Assigned Interest, and (vii) 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.

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

 

Exhibit G - 5

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

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 facsimile or other electronic
transmission (e.g. .pdf) 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
New York.

 

Exhibit G - 6

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

EXHIBIT H-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 Third Amended and Restated Credit Agreement
dated as of February 28, 2019 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Montage Resources Corporation (f/k/a Eclipse Resources Corporation), as
Borrower, Bank of Montreal, as Administrative Agent, 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. By executing this certificate, the undersigned agrees that (1) if the
information provided in 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:  

 

 

Exhibit H-1 - 1

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

EXHIBIT H-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 Third Amended and Restated Credit Agreement
dated as of February 28, 2019 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Montage Resources Corporation (f/k/a Eclipse Resources Corporation), as
Borrower, Bank of Montreal, as Administrative Agent, 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. By executing
this certificate, the undersigned agrees that (1) if the information provided in
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:  

 

 

Exhibit H-2 - 1

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

EXHIBIT H-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 Third Amended and Restated Credit Agreement
dated as of February 28, 2019 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Montage Resources Corporation (f/k/a Eclipse Resources Corporation), as
Borrower, Bank of Montreal, as Administrative Agent, 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 or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E 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 in 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:  

 

 

Exhibit H-3 - 1

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

EXHIBIT H-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 Third Amended and Restated Credit Agreement
dated as of February 28, 2019 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Montage Resources Corporation (f/k/a Eclipse Resources Corporation), as
Borrower, Bank of Montreal, as Administrative Agent, 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 or (ii) an IRS Form W- 8IMY accompanied by an
IRS Form W-8BEN or IRS Form W-8BEN-E 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 in 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:  

 

 

Exhibit H-4 - 1

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

EXHIBIT I

FORM OF MAXIMUM CREDIT AMOUNT INCREASE CERTIFICATE

[                    ], 20[    ]

 

To:

Bank of Montreal,

as Administrative Agent

The Borrower, the Administrative Agent and certain Lenders and other agents have
heretofore entered into a Third Amended and Restated Credit Agreement dated as
of February 28, 2019 (as amended, restated, amended and 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 Maximum Credit Amount Increase Certificate (this “Certificate”) is being
delivered pursuant to Section 2.06(c)(ii)(D) of the Credit Agreement.

Please be advised that the undersigned (the “Increasing Lender”) has agreed
(a) to increase its Maximum Credit Amount under the Credit Agreement effective
[                    ], 20[    ] (the “Effective Date”) from
$[                    ] to $[                    ]9 and (b) that the Increasing
Lender shall purchase a pro rata portion of the outstanding Loans (and
participation interests in Letters of Credit) of each of the other Lenders such
that each Lender shall hold its Applicable Percentage of the outstanding Loans
(and participation interests) after giving effect to the increase in the
Aggregate Maximum Credit Amounts effected by this Certificate.

Section 12.09 of the Credit Agreement shall apply to this Certificate mutatis
mutandis.

[Remainder of page intentionally left blank.]

 

 

9 

Such increase shall be in an amount that complies with Section 2.06(c)(ii)(A) of
the Credit Agreement.

 

Exhibit I - 1

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

Very truly yours, MONTAGE RESOURCES CORPORATION, a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

Accepted and Agreed: [GUARANTORS]

By:  

 

Name:  

 

Title:  

 

 

Exhibit I - 2

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

Accepted and Agreed:

 

BANK OF MONTREAL, as Administrative Agent By:  

 

Name:  

 

Title:  

 

    Accepted and Agreed: [Name of Increasing Lender] By:  

 

Name:  

 

Title:  

 

 

Exhibit I - 3

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

EXHIBIT J

FORM OF ADDITIONAL LENDER CERTIFICATE

[                    ], 20[    ]

 

To:

Bank of Montreal,

 

as Administrative Agent

The Borrower, the Administrative Agent and certain Lenders and other agents have
heretofore entered into a Third Amended and Restated Credit Agreement dated as
of February [    ], 2019 (as amended, restated, amended and 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 (this “Certificate”) is being delivered
pursuant to Section 2.06(c)(ii)(E) of the Credit Agreement.

Please be advised that the undersigned (the “Additional Lender”) has agreed
(a) to become a Lender under the Credit Agreement effective
[                    ], 20[    ] (the “Effective Date”) with a Maximum Credit
Amount of $[                    ]10, (b) that the Additional Lender shall be a
party to the Credit Agreement and have the rights and obligations of a Lender
under the Credit Agreement and the other Loan Documents and (c) that the
Additional Lender shall purchase a pro rata portion of the outstanding Loans
(and participation interests in Letters of Credit) of each of the other Lenders
such that each Lender shall hold its Applicable Percentage of the outstanding
Loans (and participation interests) after giving effect to the increase in the
Aggregate Maximum Credit Amounts effected by this Additional Lender Certificate.

This Additional Lender Certificate is being delivered to the Administrative
Agent together with an Administrative Questionnaire and a processing and
recordation fee of $3,500. The Borrower shall (a) 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 (b) pay any
applicable fees as may have been agreed to in writing between the Borrower, the
Additional Lender and/or the Administrative Agent.

Section 12.09 of the Credit Agreement shall apply to this Certificate mutatis
mutandis.

[Remainder of page intentionally left blank.]

 

10 

Such increase shall be in an amount that complies with Section 2.06(c)(ii)(A) of
the Credit Agreement.

 

Exhibit J - 1

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

Very truly yours, MONTAGE RESOURCES CORPORATION, a Delaware corporation

By:  

 

Name:  

 

Title:  

 

Accepted and Agreed:

 

[GUARANTORS]

By:  

 

Name:  

 

Title:  

 

 

Exhibit J - 2

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

Accepted and Agreed:

BANK OF MONTREAL, as Administrative Agent

 

By:  

 

Name:  

 

Title:  

 

Accepted and Agreed:

[Additional Lender]

 

By:  

 

Name:  

 

Title:  

 

 

Exhibit J - 3

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

SCHEDULE 1.01

EXISTING LETTERS OF CREDIT

 

1.

Bank of Montreal Irrevocable Standby Letter of Credit No. BMCH437518OS for
$26,937,000.00 in favor of Columbia Gas Transmission.

 

2.

Keybank National Association Irrevocable Standby Letter of Credit No. S325001
for $60,000.00 in favor of TETCO.

 

Schedule 1.01 - 1

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

SCHEDULE 7.05

LITIGATION

1.     Center for Biological Diversity, Heartwood, Ohio Environmental Council,
Sierra Club. v. U.S. Forest Service, et al. in the United States District Court
for the Southern District of Ohio Eastern Division (Case No.
2:17-cv-oo372-MHW-KAJ, filed May 02, 2017).

 

Schedule 7.05 - 1

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

SCHEDULE 7.06

ENVIRONMENTAL MATTERS

None.

 

Schedule 7.06 - 1

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

SCHEDULE 7.14

SUBSIDIARIES

 

Restricted Subsidiaries

  

Jurisdiction of
Organization

  

Organizational
Identification
Number

  

Principal Place of Business
and
Chief Executive Office

Eclipse Resources I, LP

   Delaware    4929500   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Eclipse GP, LLC

   Delaware    4929497   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Eclipse Resources-Ohio, LLC

   Delaware    5547529   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Buckeye Minerals & Royalties, LLC

   Delaware    5409381   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Eclipse Resources Operating, LLC

   Delaware    4908919   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Eclipse Resources Midstream, LP

   Delaware    5669909   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Eclipse Resources Marketing, LP

   Delaware    5669913   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Eclipse Resources-PA, LP

   Delaware    6576382   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Sundance Exploration, LP

   Delaware    6690373   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Blue Ridge Mountain Resources, Inc.

   Delaware    2758331   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Alpha Hunter Drilling, LLC

   Delaware    4776425   

125 Putnam St.

Marietta, Ohio 45750

Bakken Hunter, LLC

   Delaware    4877001   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Hunter Real Estate, LLC

   Delaware    4776468   

125 Putnam St.

Marietta, Ohio 45750

 

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Magnum Hunter Resources GP, LLC

   Delaware    4587811   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Magnum Hunter Resources, LP

   Delaware    4587813   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

 

Schedule 7.14 - 1

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

Magnum Hunter Services, LLC

   Delaware    5126444   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

NGAS Hunter, LLC

   Delaware    4876985   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

Shale Hunter, LLC

   Delaware    5305083   

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Triad Holdings, LLC

   Ohio    GL7764   

125 Putnam St.

Marietta, Ohio 45750

Triad Hunter, LLC

   Delaware    4743815   

125 Putnam St.

Marietta, Ohio 45750

 

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

Viking International Resources Co., Inc.

   Delaware    2159398   

125 Putnam St.

Marietta, Ohio 45750

 

122 W. John Carpenter Freeway

Suite 300

Irving, Texas 75039

VIRCO Pipeline of Ohio, LLC

   Ohio    2028128   

125 Putnam St.

Marietta, Ohio 45750

VIRCO Pipeline of West Virginia, LLC

   West Virginia    299110   

125 Putnam St.

Marietta, Ohio 45750

Unrestricted Subsidiaries

  

Jurisdiction of
Organization

  

Organizational
Identification
Number

  

Principal Place of Business
and

Chief Executive Office

Magnum Hunter Production, Inc.

   Kentucky    0193715   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

Daugherty Petroleum N.D. Ventures LLC

   Kentucky    0626769   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Gathering, LLC

   Kentucky    0602945   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

DPI Natural Gas Partners 2000-1, Ltd.

   Kentucky    0508353   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

DPI Natural Gas Partners 2000-1 Drilling Program

   Kentucky    N/A – General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

DPI Natural Gas Partners 2002-1, Ltd.

   Kentucky    0540459   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

DPI Natural Gas Partners 2002-1 Drilling Program

   Kentucky    N/A – General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

 

Schedule 7.14 - 2

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

DPI Natural Gas Partners 2003-1, Ltd.

   Kentucky    0553245   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

DPI Natural Gas Partners 2003-1, Ltd. Drilling Program    Kentucky   
N/A – General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

DPI Natural Gas Partners 2003-2, Ltd.

   Kentucky    0565413   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

DPI Natural Gas Partners 2003-2, Ltd. Drilling Program    Kentucky    N/A –
General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2004-1, Ltd.

   Kentucky    0577425   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2004-1, Ltd. Drilling Program

   Kentucky    N/A – General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2005-A, Ltd.

   Kentucky    0602941   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2005-A Drilling Program

   Kentucky    N/A – General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2005-C, Ltd.

   Kentucky    0615446   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2005-C Drilling Program

   Kentucky    N/A – General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2006–B, Ltd.

   Kentucky    0641545   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

NGAS Partners 2006-B Drilling Program

   Kentucky    N/A – General Partnership   

120 Prosperous Place

Suite 201

Lexington, Kentucky 40509

 

Schedule 7.14 - 3

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

SCHEDULE 7.18

GAS IMBALANCES

None.

 

Schedule 7.18 - 1

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

SCHEDULE 7.19

MARKETING CONTRACTS

None.

 

Schedule 7.19 - 1

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

SCHEDULE 7.20

SWAP AGREEMENTS

 

1.

ISDA 2002 Master Agreement dated as of January 10, 2014 between Eclipse
Resources I, L.P. and Bank of Montreal

2.

Schedule to ISDA 2002 Master Agreement dated as of January 10, 2014 between
Eclipse Resources I, L.P. and Bank of Montreal.

3.

ISDA 1992 Master Agreement dated as of April 4, 2014 between Eclipse Resources
I, L.P. and KeyBank, National Association.

4.

Schedule to ISDA 1992 Master Agreement dated as of April 4, 2014 between Eclipse
Resources I, L.P. and KeyBank, National Association.

5.

ISDA 2002 Master Agreement dated as of April 13, 2015 between Eclipse Resources
I, L.P. and Citibank, National Association.

6.

Schedule to ISDA 1992 Master Agreement dated as of April 13, 2015 between
Eclipse Resources I, L.P. and Citibank, National Association.

7.

ISDA 2002 Master Agreement dated as of April 10, 2015 between Eclipse Resources
I, L.P. and Morgan Stanley Capital Group, Inc.

8.

Schedule to ISDA 1992 Master Agreement dated as of April 10, 2015 between
Eclipse Resources I, L.P. and Morgan Stanley Capital Group, Inc.

9.

ISDA 2002 Master Agreement dated as of March 8, 2017 between Eclipse Resources
Corporation and BP Energy Company.

10.

Schedule to ISDA 2002 Master Agreement dated as of March 8, 2017 between Eclipse
Resources Corporation and BP Energy Company.

11.

ISDA 2002 Master Agreement dated as of March 10, 2017 between Eclipse Resources
Corporation and Capital One, National Association.

12.

Schedule to ISDA 2002 Master Agreement dated as of March 10, 2017 between
Eclipse Resources Corporation and Capital One, National Association.

13.

ISDA 2002 Master Agreement dated as of September 1, 2017 between Eclipse
Resources Corporation and Royal Bank of Canada.

14.

Schedule to ISDA 2002 Master Agreement dated as of September 1, 2017 between
Eclipse Resources Corporation and Royal Bank of Canada.

15.

ISDA 2002 Master Agreement dated as of December 17, 2015, as amended, between
Eclipse Resources Corporation and J. Aron & Company.

16.

Schedule to ISDA 2002 Master Agreement dated as of December 17, 2015 between
Eclipse Resources Corporation and J. Aron & Company.

17.

ISDA 1992 Master Agreement dated as of June 10, 2016 between Blue Ridge Mountain
Resources, Inc. (f/k/a Magnum Hunter Resources Corporation) and Shell Trading
Risk Management, LLC.

18.

Schedule to ISDA 1992 Master Agreement dated as of June 10, 2016 between Blue
Ridge Mountain Resources, Inc. (f/k/a Magnum Hunter Resources Corporation) and
Shell Trading Risk Management, LLC, as amended by the Amendment and Consent to
the ISDA Master Agreement dated as of January 28, 2019 between Blue Ridge
Mountain Resources, Inc. and Shell Trading Risk Management, LLC.

19.

ISDA 2002 Master Agreement dated as of July 20, 2016 between Blue Ridge Mountain
Resources, Inc. (f/k/a Magnum Hunter Resources Corporation) and NextEra Energy
Power Marketing, LLC.

20.

Schedule to ISDA 2002 Master Agreement dated as of July 20, 2016 between Blue
Ridge Mountain Resources, Inc. (f/k/a Magnum Hunter Resources Corporation) and
NextEra Energy Power Marketing, LLC, as amended by the Amendment and Consent to
the ISDA Master Agreement dated as of February 28, 2019 between Blue Ridge
Mountain Resources, Inc. and NextEra Energy Power Marketing, LLC.

 

Schedule 7.20 - 1

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

21.

ISDA 1992 Master Agreement dated as of June 15, 2017 between Blue Ridge Mountain
Resources, Inc. and EDF Trading North America, LLC.

22.

Schedule to ISDA 1992 Master Agreement dated as of June 15, 2017 between Blue
Ridge Mountain Resources, Inc. and EDF Trading North America, LLC, as amended by
the Amendment and Consent to the ISDA Master Agreement dated as of February 28,
2019 between Blue Ridge Mountain Resources, Inc. and EDF Trading North America,
LLC.

23.

ISDA 2002 Master Agreement dated as of January 6, 2017 between Blue Ridge
Mountain Resources, Inc. (f/k/a Magnum Hunter Resources Corporation) and BP
Energy Company, as novated by the Novation Agreement dated February 28, 2019
among Blue Ridge Mountain Resources, Inc., BP Energy Company and Eclipse
Resources Corporation.

24.

Amended and Restated Schedule to ISDA 2002 Master Agreement dated as of November
6, 2017 between Blue Ridge Mountain Resources, Inc. and BP Energy Company.

25.

ISDA 1992 Master Agreement dated as of June 28, 2016 between Blue Ridge Mountain
Resources, Inc. (f/k/a Magnum Hunter Resources Corporation) and Cargill,
Incorporated, as novated by that Four-Way Novation Agreement dated as of
February 28, 2019 among Cargill, Incorporated, Blue Ridge Mountain Resources,
Inc., KeyBank National Association and Eclipse Resources Corporation.

26.

Schedule to ISDA 1992 Master Agreement dated as of June 28, 2016 between Blue
Ridge Mountain Resources, Inc. (f/k/a Magnum Hunter Resources Corporation) and
Cargill, Incorporated, as amended by the Amendment to ISDA Master Agreement,
dated as of November 7, 2017.

(See attached for material terms of the Swap Agreements)

 

Schedule 7.20 - 2

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

Natural Gas Swaps:

 

Counterparty

   Entity    Transaction
Date   

Product

  

Reference

Number

   First Settlement
Month    Last Settlement
Month    Strike Price
($/Mmbtu)    Daily Quantity
(Mmbtu/d)

Morgan Stanley

   ECR    1/22/2018    SWAP - NYMEX    F19052779-1    04/01/2018       
03/31/2019      $ 2.9000        10,000

Morgan Stanley

   ECR    1/23/2018    SWAP - NYMEX    F19054904-1    04/01/2018       
03/31/2019      $ 2.9000        20,000

Goldman Sachs

   ECR    3/5/2018    SWAP - NYMEX    SDBB4QN3333FMZBXNK111    10/01/2018       
12/31/2019      $ 2.8000        30,000

Capital One

   ECR    3/2/2018    SWAP - NYMEX    4664-1    10/01/2018        12/31/2019   
  $ 2.8000        5,000

BMO

   ECR    3/8/2018    SWAP - NYMEX    1110787    01/01/2019        12/31/2019   
  $ 2.8000        20,000

Goldman Sachs

   ECR    3/23/2018    SWAP - NYMEX    SDBB4QN3333FPZG4TT111    01/01/2019     
  12/31/2019      $ 2.9225        30,000

Capital One

   ECR    3/5/2018    SWAP - NYMEX    4667-1    10/01/2018        12/31/2019   
  $ 2.8000        5,000

EDF

   BRMR       SWAP - NYMEX       04/01/2019        09/30/2019      $ 2.7900     
  15,000

Natural Gas Collars:

 

Counterparty

        Transaction
Date   

Product

  

Reference

Number

   First Settlement
Month    Last Settlement
Month    Strike Price
($/Mmbtu)    Daily Quantity
(Mmbtu/d)

Capital One

   ECR    11/5/2018    Put Purchased           10/1/2019        12/31/2019     
$ 2.650        30,000

Capital One

   ECR    11/5/2018    Ceiling Sold           10/1/2019        12/31/2019      $
2.950        30,000

BP

   BRMR       Put Purchased           1/1/2019        3/31/2019      $ 3.000   
    10,000

BP

   BRMR       Ceiling Sold           1/1/2019        3/31/2019      $ 3.500     
  10,000

Cargill

   BRMR       Put Purchased           1/1/2019        3/31/2019      $ 3.000   
    10,000

Cargill

   BRMR       Ceiling Sold           1/1/2019        3/31/2019      $ 3.500     
  10,000

NextEra

   BRMR       Put Purchased           4/1/2019        6/30/2019      $ 2.500   
    10,000

NextEra

   BRMR       Ceiling Sold           4/1/2019        6/30/2019      $ 2.780     
  10,000

NextEra

   BRMR       Put Purchased           4/1/2019        6/30/2019      $ 2.500   
    10,000

NextEra

   BRMR       Ceiling Sold           4/1/2019        6/30/2019      $ 2.790     
  10,000

NextEra

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    10,000

NextEra

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.840     
  10,000

EDF

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    10,000

EDF

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.850     
  10,000

NextEra

   BRMR       Put Purchased           4/1/2019        6/30/2019      $ 2.500   
    15,000

NextEra

   BRMR       Ceiling Sold           4/1/2019        6/30/2019      $ 2.780     
  15,000

NextEra

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    10,000

NextEra

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.870     
  10,000

NextEra

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    10,000

NextEra

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.850     
  10,000

NextEra

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    10,000

NextEra

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.900     
  10,000

Cargill

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    5,000

Cargill

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.860     
  5,000

EDF

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    5,000

EDF

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.860     
  5,000

Cargill

   BRMR       Put Purchased           1/1/2019        3/31/2019      $ 3.000   
    10,000

Cargill

   BRMR       Ceiling Sold           1/1/2019        3/31/2019      $ 3.510     
  10,000

EDF

   BRMR       Put Purchased           1/1/2019        3/31/2019      $ 3.000   
    20,000

EDF

   BRMR       Ceiling Sold           1/1/2019        3/31/2019      $ 3.550     
  20,000

NextEra

   BRMR       Put Purchased           4/1/2019        6/30/2019      $ 2.500   
    15,000

NextEra

   BRMR       Ceiling Sold           4/1/2019        6/30/2019      $ 2.860     
  15,000

NextEra

   BRMR       Put Purchased           7/1/2019        9/30/2019      $ 2.500   
    15,000

NextEra

   BRMR       Ceiling Sold           7/1/2019        9/30/2019      $ 2.910     
  15,000

EDF

   BRMR       Put Purchased           10/1/2019        12/31/2019      $ 2.600
       15,000

EDF

   BRMR       Ceiling Sold           10/1/2019        12/31/2019      $ 2.990   
    15,000

NextEra

   BRMR       Put Purchased           10/1/2019        12/31/2019      $ 2.600
       10,000

NextEra

   BRMR       Ceiling Sold           10/1/2019        12/31/2019      $ 2.990   
    10,000

EDF

   BRMR       Put Purchased           1/1/2020        3/31/2020      $ 2.700   
    10,000

EDF

   BRMR       Ceiling Sold           1/1/2020        3/31/2020      $ 3.160     
  10,000

EDF

   BRMR       Put Purchased           1/1/2020        3/31/2020      $ 2.700   
    10,000

EDF

   BRMR       Ceiling Sold           1/1/2020        3/31/2020      $ 3.150     
  10,000

EDF

   BRMR       Put Purchased           1/1/2020        3/31/2020      $ 2.750   
    10,000

EDF

   BRMR       Ceiling Sold           1/1/2020        3/31/2020      $ 3.140     
  10,000

NextEra

   BRMR       Put Purchased           10/1/2019        12/31/2019      $ 2.750
       10,000

NextEra

   BRMR       Ceiling Sold           10/1/2019        12/31/2019      $ 2.900   
    10,000

EDF

   BRMR       Put Purchased           4/1/2019        6/30/2019      $ 2.600   
    5,000

EDF

   BRMR       Ceiling Sold           4/1/2019        6/30/2019      $ 2.850     
  5,000

Cargill

   BRMR       Put Purchased           4/1/2020        6/30/2020      $ 2.500   
    15,000

Cargill

   BRMR       Ceiling Sold           4/1/2020        6/30/2020      $ 2.800     
  15,000

Three Way Collars

 

Counterparty

       

Transaction
Date

  

Product

  

Reference

Number

   First Settlement
Month    Last Settlement
Month    Strike Price
($/Mmbtu)    Daily Quantity
(Mmbtu/d)

NextEra

   BRMR       Put Purchased           01/01/2019        03/31/2019      $ 3.250
       10,000

NextEra

   BRMR       Put Sold           01/01/2019        03/31/2019      $ 2.750     
  10,000

NextEra

   BRMR       Ceiling Sold           01/01/2019        03/31/2019      $ 3.700
       10,000

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

Cargill

   BRMR       Put Purchased       01/01/2019    03/31/2019    $ 3.250       
10,000  

Cargill

   BRMR       Put Sold       01/01/2019    03/31/2019    $ 2.650        10,000  

Cargill

   BRMR       Ceiling Sold       01/01/2019    03/31/2019    $ 3.570       
10,000  

NextEra

   BRMR       Put Purchased       01/01/2019    03/31/2019    $ 3.000       
19,000  

NextEra

   BRMR       Put Sold       01/01/2019    03/31/2019    $ 2.500        19,000  

NextEra

   BRMR       Ceiling Sold       01/01/2019    03/31/2019    $ 3.460       
19,000  

BP

   BRMR       Put Purchased       01/01/2019    03/31/2019    $ 3.250       
10,000  

BP

   BRMR       Put Sold       01/01/2019    03/31/2019    $ 2.750        10,000  

BP

   BRMR       Ceiling Sold       01/01/2019    03/31/2019    $ 3.610       
10,000  

EDF

   BRMR       Put Purchased       01/01/2020    06/30/2020    $ 2.700       
10,000  

EDF

   BRMR       Put Sold       01/01/2020    06/30/2020    $ 2.250        10,000  

EDF

   BRMR       Ceiling Sold       01/01/2020    06/30/2020    $ 3.050       
10,000  

EDF

   BRMR       Put Purchased       01/01/2020    06/30/2020    $ 2.700       
10,000  

EDF

   BRMR       Put Sold       01/01/2020    06/30/2020    $ 2.250        10,000  

EDF

   BRMR       Ceiling Sold       01/01/2020    06/30/2020    $ 3.050       
10,000  

Natural Gas Options

 

Counterparty

        Transaction
Date    Product    Reference
Number    First Settlement
Month    Last Settlement
Month    Strike Price
($/Mmbtu)    Daily Quantity
(Mmbtu/d)

BMO

   ECR    9/14/2016    Call Sold    901787    01/01/2019    12/31/2019      $
4.750        10,000

Goldman Sachs

   ECR    5/10/2017    Put Sold    SDBB4QN3333B9HZHQX111    6/1/2017   
3/31/2019      $ 2.400        20,000

Goldman Sachs

   ECR    5/10/2017    Put Purchased    SDBB4QN3333B9HZHQX111    6/1/2017   
3/31/2019      $ 2.200        20,000

Goldman Sachs

   ECR    12/1/2017    Put Sold    SDBB4QN3333DFRK4LN111    1/1/2018   
3/31/2019      $ 2.500        20,000

Goldman Sachs

   ECR    3/8/2018    Call Sold       1/1/2019    3/31/2019      $ 3.500       
30,000

Goldman Sachs

   ECR    3/8/2018    Call Sold       4/1/2019    12/31/2019      $ 3.000       
30,000

Cargill

   BRMR       Call Sold       1/1/2019    3/31/2019      $ 3.500        15,000

 

*

Note: The Cargill swaps listed have been novated to KeyBanc.

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

Swaps:

 

Counterparty

  

Entity

  

Product

   First Settlement
Month    Last Settlement
Month    Strike Price
($/Gal)    Strike Price
($/Bbl)    Daily Quantity
(Gal/d)    Daily Quantity
(Bbl/d)

EDF

   BRMR    Propane    01/01/2019    03/31/2019      $ 0.71      $ 29.82       
33,600        800

NextEra

   BRMR    Propane    06/01/2018    03/31/2019      $ 0.82      $ 34.44       
12,600        300

BP

   BRMR    Propane    01/01/2019    12/31/2019      $ 0.95      $ 39.90       
14,700        350

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

Oil Swaps:

 

                             

Counterparty

  

Entity

   Transaction
Date   

Product

  

Reference
Number

   First Settlement
Month    Last Settlement
Month    Strike Price
($/Mmbtu)    Daily Quantity
(Bbl/d)

BMO

   ECR    1/24/2018    OIL - WTI    1089795    07/01/2018    03/31/2019      $
61.0000        1,000

BP

   ECR    2/21/2019    OIL - WTI    ECE19PS00001    07/01/2019    12/31/2019   
  $ 58.8000        1,000

Capital One

   ECR    2/21/2019    OIL - WTI    6869-1    01/01/2020    12/31/2020      $
58.2000        500

 

Oil Collars:

 

                             

Counterparty

  

Entity

   Transaction
Date   

Product

  

Reference
Number

   First Settlement
Month    Last Settlement
Month    Strike Price
($/Bbl)    Daily Quantity
(Bbl/d)

Capital One

   ECR    2/21/2019    Put Purchased    6863-1    07/01/2019    12/31/2019     
$ 50.000        1,000

Capital One

   ECR    2/21/2019    Ceiling Sold    6864-1    07/01/2019    12/31/2019      $
66.750        1,000

BP

   ECR    2/21/2019    Put Purchased    ECE19PS00001    01/01/2020    12/31/2020
     $ 50.000        500

BP

   ECR    2/21/2019    Ceiling Sold    ECE20PS00002    01/01/2020    12/31/2020
     $ 64.000        500

 

Three Way Collars

 

                             

Counterparty

  

Entity

   Transaction
Date   

Product

  

Reference
Number

   First Settlement
Month    Last Settlement
Month    Strike Price
($/Bbl)    Daily Quantity
(Bbl/d)

BP

   ECR    1/24/2018    Put Purchased    ECE19PO0002    01/01/2019    12/31/2019
     $ 55.000        1,000

BP

   ECR    1/24/2018    Put Sold    ECE19PO0001    01/01/2019    12/31/2019     
$ 45.000        1,000

BP

   ECR    1/24/2018    Ceiling Sold    ECE19PO0003    01/01/2019    12/31/2019
     $ 64.000        1,000

Key Banc

   ECR    2/5/2018    Put Purchased    335108    01/01/2019    12/31/2019      $
45.000        1,000

Key Banc

   ECR    2/5/2018    Put Sold    335109    01/01/2019    12/31/2019      $
35.000        1,000

Key Banc

   ECR    2/5/2018    Ceiling Sold    335110    01/01/2019    12/31/2019      $
57.120        1,000

BMO

   ECR    11/6/2018    Put Purchased    1248230    01/01/2020    06/30/2020     
$ 62.500        1,000

BMO

   ECR    11/6/2018    Put Sold    1248231    01/01/2020    06/30/2020      $
55.000        1,000

BMO

   ECR    11/6/2018    Ceiling Sold    1248232    01/01/2020    06/30/2020     
$ 74.000        1,000

BMO

   ECR    11/6/2018    Put Purchased    335108    01/01/2020    06/30/2020     
$ 62.500        1,000

BMO

   ECR    11/6/2018    Put Sold    335109    01/01/2020    06/30/2020      $
55.000        1,000

BMO

   ECR    11/6/2018    Ceiling Sold    335110    01/01/2020    06/30/2020      $
74.000        1,000

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

Swaps:

 

Counterparty

  

Entity

  

Product

  

First Settlement

Month

  

Last Settlement
Month

   Strike Price
($/MMbtu)    Daily Quantity
(MMbtu/d)

Goldman Sachs

   ECR   

IFERC - Appalachia Dom

   04/01/2019    10/31/2019      $ (0.520 )        12,500

Goldman Sachs

   ECR   

IFERC - Appalachia Dom

   04/01/2020    10/31/2020      $ (0.520 )        12,500

Morgan Stanley

   ECR   

IFERC - Appalachia Dom

   01/01/2020    12/31/2020      $ (0.590 )        20,000

BP

   BRMR   

IFERC - Appalachia Dom

   01/01/2019    12/31/2019      $ (0.500 )        17,500

BMO

   ECR   

IFERC - Appalachia Dom

   04/01/2019    03/31/2020      $ (0.385 )        10,000

Key Banc

   ECR   

IFERC - Appalachia Dom

   04/01/2019    03/31/2020      $ (0.390 )        10,000

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

SCHEDULE 9.02

EXISTING DEBT

 

1.

Bank of America, N.A. Irrevocable Standby Letter of Credit No. 3138214 for
$20,000,000 in favor of Rockies Express Pipeline LLC for the account of BP
Energy Company on behalf of Triad Hunter, LLC.

 

2.

Bank of America, N.A. Irrevocable Standby Letter of Credit No. 3138237 for
$1,300,000 in favor of Equitrans, LP for the account of BP Energy Company on
behalf of Triad Hunter, LLC.

 

Schedule 9.2 - 1

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

SCHEDULE 9.03

EXISTING LIENS

None.

 

Schedule 9.3 - 1

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

SCHEDULE 9.05

INVESTMENTS

 

1.

Investments in the Subsidiaries listed on Schedule 7.14 existing on the
Effective Date.

 

Schedule 9.05 - 1

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

SCHEDULE 9.14

AFFILIATE TRANSACTIONS

 

1.

Board Observation Agreement, dated as of August 25, 2018, by and among EnCap
Energy Capital Fund VIII, L.P., EnCap Energy Capital Fund VIII Co-Investors,
L.P., EnCap Energy Capital Fund IX, L.P. and Eclipse Resources Corporation.

 

Schedule 9.14 - 1

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

SCHEDULE 9.18

APPROVED COUNTERPARTIES AND SWAP AGREEMENTS

The swap agreements listed in clauses 17 through 26 on Schedule 7.20.

 

Schedule 9.18 - 1