Exhibit 10.1

EXECUTION VERSION

$75,000,000

1.5 LIEN TERM LOAN CREDIT AGREEMENT

W&T OFFSHORE, INC.,

as the Borrower

and

CORTLAND CAPITAL MARKET SERVICES LLC

as Administrative Agent and 1.5 Lien Collateral Agent

and

VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS FROM TIME TO TIME

PARTIES HERETO,

as Lenders

September 7, 2016

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TABLE OF CONTENTS

 

          Page  

ARTICLE I - Definitions and References

     5   

Section 1.1

  

Defined Terms

     5   

Section 1.2

  

Exhibits and Schedules; Additional Definitions

     51   

Section 1.3

  

Amendment of Defined Instruments

     51   

Section 1.4

  

References and Titles

     51   

Section 1.5

  

Calculations and Determinations

     51   

ARTICLE II - The Loans

     52   

Section 2.1

  

Commitments to Make Loans

     52   

Section 2.2

  

Requests for New Loans

     52   

Section 2.3

  

Use of Proceeds

     53   

Section 2.4

  

Optional Prepayments

     53   

Section 2.5

  

Mandatory Prepayments

     55   

Section 2.6

  

Offers to Purchase

     55   

Section 2.7

  

Maturity Date

     57   

Section 2.8

  

Interest

     57   

Section 2.9

  

Register; Notes

     57   

Section 2.10

  

Fees

     58   

ARTICLE III - Payments to Lenders

     58   

Section 3.1

  

General Procedures

     58   

Section 3.2

  

Capital Reimbursement

     59   

Section 3.3

  

Taxes

     60   

Section 3.4

  

Change of Applicable Lending Office

     64   

Section 3.5

  

Replacement of Lenders

     64   

Section 3.6

  

Participants

     64   

ARTICLE IV - Conditions Precedent to Lending

     65   

Section 4.1

  

Closing Date

     65   

ARTICLE V - Representations and Warranties

     68   

Section 5.1

  

No Default

     68   

Section 5.2

  

Organization and Good Standing

     68   

Section 5.3

  

Authorization

     68   

Section 5.4

  

No Conflicts or Consents

     68   

Section 5.5

  

Enforceable Obligations

     69   

Section 5.6

  

Initial Financial Statements

     69   

Section 5.7

  

Other Obligations and Restrictions

     69   

Section 5.8

  

Full Disclosure

     69   

 

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Section 5.9

  

Litigation

     69   

Section 5.10

  

Labor Disputes and Acts of God

     70   

Section 5.11

  

ERISA Plans and Liabilities

     70   

Section 5.12

  

Environmental Matters

     70   

Section 5.13

  

Names and Places of Business and State of Incorporation or Formation

     70   

Section 5.14

  

Borrower’s Subsidiaries

     71   

Section 5.15

  

Title to Properties; Licenses

     71   

Section 5.16

  

Government Regulation

     71   

Section 5.17

  

Solvency

     71   

Section 5.18

  

Taxes

     71   

Section 5.19

  

Restriction on Liens

     71   

Section 5.20

  

Hedging Transactions

     72   

Section 5.21

  

Maintenance of Properties

     72   

Section 5.22

  

Compliance with Laws and Agreements

     72   

Section 5.23

  

Anti-Corruption Laws and Sanctions

     72   

Section 5.24

  

Compliance of Laws

     73   

ARTICLE VI - Covenants

     74   

Section 6.1

  

Reports

     74   

Section 6.2

  

Compliance Certificate

     74   

Section 6.3

  

Taxes

     75   

Section 6.4

  

Stay, Extension of Usury Laws

     75   

Section 6.5

  

Corporate Existence

     75   

Section 6.6

  

Insurance

     75   

Section 6.7

  

Restricted Payments

     76   

Section 6.8

  

Dividend and Other Payment Restrictions Affecting Subsidiaries

     80   

Section 6.9

  

Incurrence of Indebtedness and Issuance of Preferred Stock

     82   

Section 6.10

  

Asset Sales

     86   

Section 6.11

  

Transactions with Affiliates

     88   

Section 6.12

  

Liens

     90   

Section 6.13

  

Designation of Restricted and Unrestricted Subsidiaries

     90   

Section 6.14

  

Additional Guarantees and Collateral

     91   

Section 6.15

  

Depositary Banks.

     93   

ARTICLE VII - SUCCESSORS

     93   

Section 7.1

  

Merger, Consolidation, or Sale of Assets

     93   

Section 7.2

  

Successor Corporation Substituted

     94   

ARTICLE VIII - DEFAULTS AND REMEDIES

     95   

Section 8.1

  

Events of Default

     95   

Section 8.2

  

Waiver of Past Defaults

     98   

Section 8.3

  

Control by Majority

     98   

Section 8.4

  

Priorities

     98   

Section 8.5

  

Credit Bid.

     99   

 

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ARTICLE IX - Administrative Agent

     99   

Section 9.1

  

Appointment and Authority of the Administrative Agent

     99   

Section 9.2

  

Exculpation, Administrative Agent’s Reliance, Etc.

     100   

Section 9.3

  

Credit Decisions

     101   

Section 9.4

  

Indemnification

     102   

Section 9.5

  

Rights as Lender

     102   

Section 9.6

  

Sharing of Set-Offs and Other Payments

     103   

Section 9.7

  

Investments

     103   

Section 9.8

  

Benefit of Article IX

     103   

Section 9.9

  

Resignation

     104   

Section 9.10

  

Delegation of Duties

     104   

Section 9.11

  

Administrative Agent May File Proofs of Claim

     104   

ARTICLE X - Miscellaneous

     105   

Section 10.1

  

Waivers and Amendments; Acknowledgments

     105   

Section 10.2

  

Survival of Agreements; Cumulative Nature

     109   

Section 10.3

  

Notices

     109   

Section 10.4

  

Payment of Expenses; Indemnity

     110   

Section 10.5

  

Joint and Several Liability; Parties in Interest

     111   

Section 10.6

  

Assignments

     111   

Section 10.7

  

Confidentiality

     115   

Section 10.8

  

Governing Law; Submission to Process

     116   

Section 10.9

  

Limitation on Interest

     116   

Section 10.10

  

Termination

     117   

Section 10.11

  

Severability

     117   

Section 10.12

  

Counterparts; Electronic Execution of Assignments

     117   

Section 10.13

  

Waiver of Jury Trial, Punitive Damages, etc.

     118   

Section 10.14

  

Release of Collateral; Collateral Matters

     118   

Section 10.15

  

Release of Guarantee

     119   

Section 10.16

  

USA Patriot Act Notice

     120   

Section 10.17

  

Posting of Approved Electronic Communications

     120   

Section 10.18

  

OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS; ETC

     122   

Section 10.19

  

Post-Closing Obligations

     123   

Section 10.20

  

Additional Indebtedness

     123   

Section 10.21

  

Set off.

     124   

Section 10.22

  

Acknowledgment and Consent to Bail-In of EEA Financial Institution.

     124   

SCHEDULES

 

Schedule 1

   —   

Form of Disclosure Schedule

Schedule 2

   —   

Security Schedule

Schedule 3

   —   

Notice Schedule

 

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Schedule 4

   —   

Mortgaged Properties

Schedule 5

   —   

Commitments

Schedule 6

   —   

Existing Affiliate Transactions

EXHIBITS

     

Exhibit A

   —    Form of Note

Exhibit B

   —    Borrowing Notice

Exhibit C

   —    Assignment and Acceptance

Exhibit D-1

   —    Form of U.S. Tax Compliance Certificate (Foreign Lenders That Are Not
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit D-2

   —    Form of U.S. Tax Compliance Certificate (For Foreign Participants That
Are Not Partnerships for U.S. Federal Income Tax Purposes)

Exhibit D-3

   —    Form of U.S. Tax Compliance Certificate (For Foreign Participants That
Are Partnerships for U.S. Federal Income Tax Purposes)

Exhibit D-4

   —    Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit E

   —    Form of Solvency Certificate

Exhibit F

   —    Form of Second Lien Intercreditor Agreement

Exhibit G

   —    Form of Senior Lien Intercreditor Agreement

 

-iv-

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Reference is made to the Intercreditor Agreement, dated as of September 7, 2016,
between TORONTO DOMINION (TEXAS), LLC, as Priority Lien Agent (as defined
therein), CORTLAND CAPITAL MARKET SERVICES LLC, as 1.5 Lien Agent (as defined
therein) (the “Intercreditor Agreement”). Each Person that is secured hereunder,
by accepting the benefits of the security provided hereby, (i) consents (or is
deemed to consent) to the subordination of Liens provided for in the
Intercreditor Agreement, (ii) agrees (or is deemed to agree) that it will be
bound by, and will take no actions contrary to, the provisions of the
Intercreditor Agreement, (iii) authorizes (or is deemed to authorize) the 1.5
Lien Agent on behalf of such Person to enter into, and perform under, the
Intercreditor Agreement and (iv) acknowledges (or is deemed to acknowledge) that
a copy of the Intercreditor Agreement was delivered, or made available, to such
Person.

Notwithstanding any other provision contained herein, this Agreement, the Liens
created hereby and the rights, remedies, duties and obligations provided for
herein are subject in all respects to the provisions of the Intercreditor
Agreement and, to the extent provided therein, the applicable Security Documents
(as defined in the Intercreditor Agreement). In the event of any conflict or
inconsistency between the provisions of this Agreement and the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall control.

THIS 1.5 LIEN TERM LOAN CREDIT AGREEMENT (this “Agreement”) is made as of
September 7, 2016, by and among W&T Offshore, Inc. (herein called the
“Borrower”), a Texas corporation and successor-by-reincorporation to W&T
Offshore, Inc., a Nevada corporation, the various financial institutions and
other persons from time to time parties hereto, as lenders (collectively, the
“Lenders”) and Cortland Capital Market Services LLC as agent for the Lenders
(herein called the “Administrative Agent” and the “1.5 Lien Collateral Agent”).

W I T N E S S E T H:

WHEREAS, subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the term loan facilities
provided for herein;

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

ARTICLE I - Definitions and References

Section 1.1 Defined Terms. As used in this Agreement, each of the following
terms has the meaning given it in this Section 1.1 or in the sections and
subsections referred to below:

“1.5 Lien” means a Lien granted by the Borrower or any other Restricted Person
in favor of the Administrative Agent pursuant to any Secured Debt Document at
any time, upon any property of the Borrower or any Restricted Person to secure
the Obligations.

“1.5 Lien Collateral Agent” means Cortland Capital Market Services LLC, as the
1.5 Lien Collateral Agent hereunder, and its successors in such capacity.

“1.5 Lien Debt” means Indebtedness of the Borrower and the Guarantors hereunder.

 

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“Acquired Debt” means, with respect to any specified Person (i) Indebtedness of
any other Person existing at the time such other Person is merged with or into
or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Restricted Subsidiary of, such
specified Person, but excluding Indebtedness which is extinguished, retired or
repaid in connection with such Person merging with or becoming a Subsidiary of
such specified Person; and (2) Indebtedness secured by a Lien encumbering any
asset acquired by such specified Person.

“Additional Assets” means:

(1) any assets that are not classified as current assets under GAAP and that are
used or useful in the Oil and Gas Business, other than Indebtedness or Capital
Stock;

(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a
result of the acquisition of such Capital Stock by the Borrower or any of its
Restricted Subsidiaries; or

(3) Capital Stock constituting a minority interest in any Person that at such
time is a Restricted Subsidiary;

provided, however that any such Restricted Subsidiary described in clause (2) or
(3) is primarily engaged in the Oil and Gas Business.

“Adjusted Consolidated Net Tangible Assets” means (without duplication), as of
the date of determination:

(1) the sum of:

(a) discounted future net revenue from proved crude oil and natural gas reserves
of the Borrower and its Restricted Subsidiaries calculated in accordance with
SEC guidelines before any state or federal income taxes, as estimated in a
Reserve Report prepared as of the end of the fiscal year ending at least 91 days
prior to the date of determination (or as of June 30 ending at least 45 days
prior to the date of determination, if the Borrower elects to prepare a mid-year
Reserve Report), as increased by, as of the date of determination, the
discounted future net revenue of:

(i) estimated proved crude oil and natural gas reserves of the Borrower and its
Restricted Subsidiaries attributable to acquisitions consummated since the date
of such Reserve Report, and

(ii) estimated crude oil and natural gas reserves of the Borrower and its
Restricted Subsidiaries attributable to extensions, discoveries and other
additions and upward determinations of estimates of proved crude oil and natural
gas reserves (including previously estimated development costs incurred during
the period and the accretion of discount since the prior period end) due to
exploration, development or

 

6

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exploitation, production or other activities which reserves were not reflected
in such Reserve Report which would, in accordance with standard industry
practice, result in such determinations, in each case calculated in accordance
with SEC guidelines (including utilizing the prices under SEC guidelines
applicable to a Reserve Report as of its date),

and decreased by, as of the date of determination, the discounted future net
revenue attributable to:

(iii) estimated proved crude oil and natural gas reserves of the Borrower and
its Restricted Subsidiaries reflected in such Reserve Report produced or
disposed of since the date of such Reserve Report, and

(iv) reductions in the estimated oil and natural gas reserves of the Borrower
and its Restricted Subsidiaries reflected in such Reserve Report since the date
of such Reserve Report attributable to downward determinations of estimates of
proved crude oil and natural gas reserves due to exploration, development or
exploitation, production or other activities conducted or otherwise occurring
since the date of such Reserve Report which would, in accordance with standard
industry practice, result in such determinations, in each case calculated in
accordance with SEC guidelines (including utilizing the prices under SEC
guidelines applicable to a Reserve Report as of its date);

provided, however that, in the case of each of the determinations made pursuant
to clauses (i) through (iv), such increases and decreases shall be estimated by
the Borrower’s engineers;

(b) the capitalized costs that are attributable to crude oil and natural gas
properties of the Borrower and its Restricted Subsidiaries to which no proved
crude oil and natural gas reserves are attributable, based on the Borrower’s
books and records as of a date no earlier than the date of the Borrower’s latest
available annual or quarterly financial statements;

(c) the Net Working Capital (excluding, to the extent included in the
determination of discounted future net revenues under clause (1)(a) above, any
adjustments made pursuant to FASB ASC Topic 410-20 as of a date no earlier than
the date of the Borrower’s latest available annual or quarterly financial
statements; and

(d) the greater of (i) the net book value as of a date no earlier than the date
of the Borrower’s latest available annual or quarterly financial statements and
(ii) the appraised value, as estimated by independent appraisers, of other
tangible assets of the Borrower and its Restricted Subsidiaries as of a date no
earlier than the date of the Borrower’s latest available annual or quarterly
financial statements; provided, however that the Borrower shall not be required
to obtain such an appraisal of such assets if no such appraisal has been
performed); minus

 

7

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(2) the sum of:

(a) Minority Interests;

(b) any net natural gas balancing liabilities of the Borrower and its Restricted
Subsidiaries reflected in the Borrower’s latest audited financial statements;

(c) to the extent included in clause (1)(a) above, the discounted future net
revenue, calculated in accordance with SEC guidelines (including utilizing the
same prices in the Borrower’s Reserve Report used for this definition),
attributable to reserves subject to participation interests, overriding royalty
interests or other interests of third parties, pursuant to participation,
partnership, vendor financing or other agreements then in effect, or which
otherwise are required to be delivered to third parties;

(d) to the extent included in clause (1)(a) above, the discounted future net
revenue calculated in accordance with SEC guidelines (including utilizing the
same prices in the Borrower’s Reserve Report used for this definition),
attributable to reserves that are required to be delivered to third parties to
fully satisfy the obligations of the Borrower and its Restricted Subsidiaries
with respect to Volumetric Production Payments on the schedules specified with
respect thereto; and

(e) the discounted future net revenue, calculated in accordance with SEC
guidelines, attributable to reserves subject to Dollar-Denominated Production
Payments that, based on the estimates of production included in determining the
discounted future net revenue specified in the immediately preceding
clause (1)(a) (utilizing the same prices utilized in the Borrower’s Reserve
Report used for this definition), would be necessary to satisfy fully the
obligations of the Borrower and its Restricted Subsidiaries with respect to
Dollar-Denominated Production Payments on the schedules specified with respect
thereto.

If the Borrower changes its method of accounting from the full cost method to
the successful efforts method or a similar method of accounting, “Adjusted
Consolidated Net Tangible Assets” will continue to be calculated as if the
Borrower were still using the full cost method of accounting.

“Administrative Agent” means Cortland Capital Market Services LLC, as the
Administrative Agent hereunder, and its successors in such capacity.

“Administrative Agent Fee Letter” means that certain fee letter dated as of
September 7, 2016 by and between the Administrative Agent and the 1.5 Lien
Collateral Agent and the Borrower.

 

8

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“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however that notwithstanding
anything herein to the contrary the Backstop Lender shall not be considered an
Affiliate of the Borrower or its Restricted Subsidiaries for purposes of this
Agreement. For purposes of this definition, “control,” as used with respect to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise. For
purposes of this definition, the terms “controlling,” “controlled by” and “under
common control with” have correlative meanings.

“Affiliate Transaction” is defined in Section 6.11.

“Affiliated Lender” means, at any time, any Lender that is an Affiliate of the
Borrower (other than the Borrower, any Guarantor or any Subsidiary of the
Borrower) at such time.

“Agreement” means this Credit 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.

“Anti-Terrorism Laws” means any laws, regulations or orders of any governmental
authority of the United States, the United Nations, United Kingdom or the
European Union relating to terrorism financing or money laundering, including,
but not limited to, the International Emergency Economic Powers Act (50 U.S.C. §
1701 et seq.), the Trading With the Enemy Act (50 U.S.C. § 5 et seq.), the
International Security Development and Cooperation Act (22 U.S.C. § 2349aa-9 et
seq.), the Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (the “Executive Order”), the Bank Secrecy Act, as amended by
Title III of the USA Patriot Act, and any rules or regulations promulgated
pursuant to or under the authority of any of the foregoing.

“Applicable Premium” means, with respect to a Loan at any prepayment date, the
excess of (1) the present value at such time of (a) the prepayment price of such
Loan as of September 7, 2017 (without regard to accrued and unpaid interest)
plus (b) all required interest payments due on such Loan through September 7,
2017 (excluding accrued and unpaid interest to the prepayment date), computed
using a discount rate equal to the Treasury Rate plus 50 basis points, over
(2) the principal amount of such Loan.

“Approved Fund” means any Person (other than a natural Person) that (a) is
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business,
and (b) is administered or managed by a Lender, an Affiliate of a Lender or a
Person or an Affiliate of a Person that administers or manages a Lender.

“Asset Sale” means:

(1) the sale, lease, conveyance or other disposition of any assets (including by
way of a Production Payment and Reserve Sale or a sale and leaseback
transaction);

 

9

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provided, however that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Borrower and its Restricted
Subsidiaries taken as a whole will be governed by Sections 2.6(b) and 7.1 and
not by the provisions of Section 6.10; and

(2) the issuance of Equity Interests in any of the Borrower’s Restricted
Subsidiaries or the sale of Equity Interests held by the Borrower or any of its
Subsidiaries in any of its other Subsidiaries.

Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:

(1) any single transaction or series of related transactions that involves
assets having a Fair Market Value of less than $15.0 million;

(2) a transfer of assets between or among the Borrower and its Restricted
Subsidiaries;

(3) an issuance of Equity Interests by a Restricted Subsidiary of the Borrower
to the Borrower or to a Restricted Subsidiary of the Borrower;

(4) the disposition of products, services, inventory or accounts receivable in
the ordinary course of business and any sale or other disposition of damaged,
worn-out or obsolete assets in the ordinary course of business;

(5) the sale or other disposition of cash or Cash Equivalents;

(6) a Restricted Payment that does not violate Section 6.7;

(7) Permitted Investments made with assets not constituting Collateral;

(8) a disposition of Hydrocarbons or mineral products inventory in the ordinary
course of business;

(9) the sale or other disposition (whether or not in the ordinary course of
business) of crude oil and natural gas properties or direct or indirect
interests in real property; provided, however that at the time of such sale or
disposition such properties do not have associated with them any proved
reserves;

(10) the farm-out, lease or sublease of developed or undeveloped crude oil or
natural gas properties owned or held by the Borrower or such Restricted
Subsidiary in exchange for crude oil and natural gas properties owned or held by
another Person;

(11) any trade or exchange by the Borrower or any Restricted Subsidiaries of oil
and gas properties or other properties or assets for oil and gas properties or
other properties or assets owned or held by another Person; provided, however
that the fair market value of the properties or assets traded or exchanged by
the Borrower or such Restricted Subsidiary (together with any cash) is
reasonably equivalent to the fair market

 

10

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value of the properties or assets (together with any cash) to be received by the
Borrower or such Restricted Subsidiary; provided, further that any net cash
received must be applied in accordance with the provisions described in
Section 6.10;

(12) the creation or perfection of a Lien (but not, except to the extent
contemplated in clause (13) below, the sale or other disposition of the
properties or assets subject to such Lien);

(13) the creation or perfection of a Permitted Lien and the exercise by any
Person in whose favor a Permitted Lien is granted of any of its rights in
respect of that Permitted Lien;

(14) the licensing or sublicensing of intellectual property, including, without
limitation, licenses for seismic data, in the ordinary course of business and
which do not materially interfere with the business of the Borrower and its
Restricted Subsidiaries; and

(15) a surrender or waiver of contract rights or the settlement, release or
surrender of contract, tort or other claims of any kind

“Asset Sale Offer” is defined in Section 2.6(a).

“Asset Sale Offer Notice” is defined in Section 2.6(a).

“Assignment and Acceptance” means each Assignment and Acceptance, substantially
in the form of Exhibit C attached hereto or in another form acceptable to the
Administrative Agent.

“Attributable Debt” in respect of a sale and leaseback transaction means, at the
time of determination, the present value of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP.

“Authorized Officer” means, as to any Person, its President, its Chief Executive
Officer, its Chief Financial Officer, its Chief Accounting Officer, its General
Counsel, its Chief Operations Officer, its Chief Technical Officer, its
Treasurer, or any other officer specified as such to the Administrative Agent in
writing by any of the aforementioned officers of such Person or by resolution
from the board of directors or similar governing body of such Person.

“Backstop Lender” means Franklin Advisers, Inc. and its managed funds and
accounts and Affiliates thereof.

“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.

 

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“Banking Services” means each and any of the following bank services provided to
the Borrower or any Guarantor by any holder of Priority Lien Debt or any
Affiliate thereof: (a) commercial credit cards, (b) stored value cards and
(c) Treasury Management Arrangements (including controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate
depository network services).

“Banking Services Obligations” means any and all obligations of the Borrower or
any Guarantor, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.).

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3)
of the Exchange Act), 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 “Beneficial Ownership”,
“Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

“Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation or
any committee thereof duly authorized to act on behalf of such board;

(2) with respect to a partnership, the Board of Directors of the general partner
of the partnership;

(3) with respect to a limited liability company, the managing member or members
or any controlling committee of managing members thereof; and

(4) with respect to any other Person, the board or committee of such Person
serving a similar function.

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

“Borrower” means W&T Offshore, Inc., a Texas corporation, and its permitted
assigns and successors.

 

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“Borrowing” means a borrowing of Loans pursuant to Section 2.2.

“Borrowing Notice” means a written confirmation substantially in the form of
Exhibit B made by an Authorized Officer of the Borrower or such other form
approved by the Administrative Agent which meets the requirements of
Section 2.2.

“Building” has the meaning assigned to such term in the applicable Flood
Insurance Regulation; provided, however that, in no event shall the term
“Building” include platforms and other structures located in state or federal
waters offshore of the United States or other areas that are not subject to
Flood Insurance Regulation.

“Business Day” means a day, other than a Saturday or Sunday or United States
federal holiday, on which commercial banks are open for business with the public
in New York, New York.

“Calculation Date” has the meaning given to it within the definition of “Fixed
Charge Coverage Ratio”.

“Capital Lease Obligation” means, at the time any determination is to be made,
the amount of the liability in respect of a capital lease that would at that
time be required to be capitalized on a balance sheet prepared in accordance
with GAAP, and the Stated Maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be prepaid by the lessee without payment of a penalty.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;

(3) in the case of a partnership or limited liability company, partnership
interests (whether general or limited) or membership interests; and

(4) 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 Equivalents” means:

(1) United States dollars;

(2) 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;

 

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(3) marketable general obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition thereof, having a credit rating of “A”
or better from either S&P or Moody’s;

(4) certificates of deposit, demand deposit accounts and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers’ acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or
better;

(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2), (3) and (4) above
entered into with any financial institution meeting the qualifications specified
in clause (4) above;

(6) commercial paper having one of the two highest ratings obtainable from
Moody’s or S&P and, in each case, maturing within nine months after the date of
acquisition; and

(7) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (6) of this
definition.

“CFC” means a “controlled foreign corporation” as defined in Section 957 of the
Code.

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

(1) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties and
assets of the Borrower and its Subsidiaries taken as a whole to any “person” (as
that term is used in Section 13(d) of the Exchange Act) other than the
Principals or a Related Party of the Principals;

(2) the adoption of a plan relating to the liquidation or dissolution of the
Borrower;

(3) the consummation of any transaction (including, without limitation, any
merger or consolidation), the result of which is that any “person” (as defined
above), other than the Principals or a Related Party of the Principals 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; or

(4) the first day on which the Continuing Directors cease to constitute a
majority of the Board of Directors of the Borrower.

“Change of Control Offer” is defined in Section 2.6(b).

 

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“Change of Control Payment” is defined in Section 2.6(b).

“Change of Control Payment Date” is defined in Section 2.6(b).

“Closing Date” means the date on which the conditions specified in Section 4.1
are satisfied (or waived in accordance with Section 10.1), which occurred on
September 7, 2016.

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

“Collateral” means all property of any kind which is subject to a Lien in favor
of Lenders (or in favor of the 1.5 Lien Collateral Agent for the benefit of
Lenders) or which, under the terms of any Security Document, is purported to be
subject to such a Lien, subject, however, to Section 10.14.

“Collateral Disposition” means any sale, transfer or other disposition (whether
voluntary or involuntary) to the extent involving assets or other rights or
property that constitute Collateral. The sale or issuance of Equity Interests in
a Guarantor such that it thereafter is no longer a Guarantor shall be deemed to
be a Collateral Disposition of the Collateral owned by such Guarantor.

“Commitment” means, for each Lender party to this Agreement on the Closing Date,
the amount set forth opposite such Lender’s name on Schedule 5 directly below
the column entitled “Commitment”, as the same may be from time to time be
(x) reduced or terminated pursuant to the terms herein or (y) adjusted as a
result of assignments to or from Lender pursuant hereto.

“Communications” is defined in Section 10.17(a).

“Consolidated” refers to the consolidation of any Person, in accordance with
GAAP, with its properly consolidated subsidiaries. References herein to a
Person’s Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.

“Consolidated Cash Flow” means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus, without
duplication:

(1) an amount equal to any extraordinary loss plus any net loss realized by such
Person or any of its Restricted Subsidiaries in connection with an Asset Sale
(together with any related provision for taxes and any related non-recurring
charges relating to any premium or penalty paid, write-off of deferred financing
costs or other financial recapitalization charges in connection with redeeming
or retiring any Indebtedness prior to its Stated Maturity), to the extent such
losses were deducted in computing such Consolidated Net Income; plus

(2) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus

 

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(3) the Fixed Charges of such Person and its Restricted Subsidiaries for such
period, to the extent that such Fixed Charges were deducted in computing such
Consolidated Net Income; plus

(4) depreciation, depletion, amortization (including amortization of intangibles
but excluding amortization of prepaid cash expenses that were paid in a prior
period), impairment and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, depletion, amortization, impairment
and other non-cash expenses were deducted in computing such Consolidated Net
Income; minus

(5) non-cash items increasing such Consolidated Net Income for such period,
other than items that were accrued in the ordinary course of business; minus

(6) to the extent included in determining Consolidated Net Income, the sum of
(a) the amount of deferred revenues that are amortized during such period and
are attributable to reserves that are subject to Volumetric Production Payments
and (b) amounts recorded in accordance with GAAP as repayments of principal and
interest pursuant to Dollar-Denominated Production Payments,

in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation, depletion and amortization and other non-cash
charges and expenses of, a Restricted Subsidiary of the Borrower shall be added
to Consolidated Net Income to compute Consolidated Cash Flow of the Borrower
only to the extent (and in the same proportion) that the Net Income of such
Restricted Subsidiary was included in calculating the Consolidated Net Income of
such Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Borrower by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.

“Consolidated Net Income” means, with respect to any specified Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, however that:

(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or similar distributions
paid in cash to the specified Person or a Restricted Subsidiary of the Person;

(2) the Net Income of any Restricted Subsidiary will be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any

 

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prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, partners or
members;

(3) the cumulative effect of a change in accounting principles will be excluded;

(4) income resulting from transfers of assets (other than cash) between such
Person or any of its Restricted Subsidiaries, on the one hand, and an
Unrestricted Subsidiary, on the other hand, will be excluded;

(5) any non-cash compensation charge arising from any grant of stock, stock
options or other equity based awards will be excluded;

(6) any asset impairment writedowns or any asset writeups on oil and gas
properties under GAAP or SEC guidelines will be excluded;

(7) any unrealized non-cash gains or losses or charges in respect of hedge or
non-hedge derivatives (including those resulting from the application of FASB
ASC Topic 815) will be excluded; and

(8) to the extent deducted in the calculation of Net Income, any non-cash write
off of deferred debt issuance costs.

“Consolidated Net Worth” means, with respect to any specified Person as of any
date, the sum of:

(1) the consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries as of such date; plus

(2) the respective amounts reported on such Person’s balance sheet as of such
date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock.

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Borrower who:

(1) was a member of such Board of Directors on the Closing Date; or

(2) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election.

 

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“Control Agreement” means an agreement in form and substance reasonably
satisfactory to the 1.5 Lien Collateral Agent which provides for the 1.5 Lien
Collateral Agent to have “control” (as defined in Section 8-106 of the UCC, as
such term relates to investment property (other than certificated securities or
commodity contracts) or as used in Section 9-106 of the UCC, as such term
relates to commodity contracts, or as used in Section 9-104(a) of the UCC, as
such term relates to deposit accounts).

“Control Party” is defined in Section 6.15.

“Credit Facilities” means, with respect to the Borrower or any of its Restricted
Subsidiaries, one or more current or future debt facilities, indentures or
commercial paper facilities with banks, investment banks, insurance companies,
trust companies, mutual funds, other lenders, investors or any of the foregoing
providing for revolving credit loans, term loans, notes, debt securities,
guarantees, receivables financing (including through the sale of receivables to
such lenders, or to special purpose entities formed to borrow from (or sell such
receivables to) such lenders against such receivables), letters of credit,
bankers’ acceptances, or other borrowings, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced (in each case, without
limitation as to amount), in whole or in part, from time to time and any
agreements and related documents governing Indebtedness or other Liabilities
incurred to refinance amounts then outstanding or permitted to be outstanding,
(whether upon or after termination or otherwise) (including by means of sales of
debt securities to investors) in whole or in part from time to time.

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

“Disclosure Schedule” means Schedule 1 hereto.

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms
of any security into which it is convertible, or for which it is exchangeable,
in each case at the option of the holder of the Capital Stock), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Loans mature; provided, however that only
the portion of Capital Stock which so matures or is mandatorily redeemable, or
is so redeemable at the option of the holder thereof prior to such date, will be
deemed to be Disqualified Stock. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require the Borrower to
repurchase such Capital Stock upon the occurrence of a change of control or an
asset sale will not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Borrower may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 6.7 hereof. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Agreement will be the maximum
amount that the Borrower and its Restricted Subsidiaries may become obligated to
pay upon the maturity of, or pursuant to any mandatory redemption provisions of,
such Disqualified Stock, exclusive of accrued dividends.

 

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“Dollar-Denominated Production Payments” means production payment obligations
recorded as liabilities in accordance with GAAP, together with all undertakings
and obligations in connection therewith.

“Domestic Subsidiary” means any Restricted Subsidiary of the Borrower (1) that
was formed under the laws of the United States or any state of the United States
or the District of Columbia or (2) that Guarantees Indebtedness of the Borrower
or of a Guarantor in excess of a Minimum Amount.

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

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

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

“Electronic Platform” is defined in Section 10.17(b).

“Eligible Transferee” means a Person which either (a) is a Lender or an
Affiliate of Lender or an Approved Fund or (b) is consented to as an Eligible
Transferee by the Administrative Agent, which consent will not be unreasonably
withheld.

“Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, obligations, liabilities, losses, proceedings, decrees,
judgments, penalties, fees, fines, demand letters, orders, directives, claims
(including claims for contribution or claims involving liability in tort,
strict, absolute or otherwise), Liens, notices of noncompliance or violation, or
claims for legal fees or costs of investigations or proceedings, relating to any
Environmental Law or arising from the actual or alleged presence or Release of
any Hazardous Material, including, without limitation, enforcement, mitigation,
cleanup, removal, response, remedial or other actions or damages or
contribution, indemnification, cost recovery, compensation or injunctive or
declaratory relief pursuant to any Environmental Law.

“Environmental Laws” means all applicable Laws relating to pollution or the
regulation or protection of human health or safety (to the extent such health or
safety relate to exposure to Hazardous Materials), natural resources or the
environment (including ambient air, surface water, ground water, land, natural
resources or wetlands), including those relating to any release of hazardous
materials, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, management, generation, recycling
or handling of, or exposure to, Hazardous Materials. Without limitation,
Environmental Laws include the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986; the Resource Conservation and

 

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Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980 and the Hazardous and Solid Waste
Amendments of 1984; the Toxic Substances Control Act, 15 U.S.C.; the Federal
Water Pollution Control Act; the Hazardous Materials Transportation Act; the
Clean Air Act; the Safe Drinking Water Act; the Federal Insecticide, Fungicide
and Rodenticide Act, the Endangered Species Act and The Oil Pollution Act, each
as amended and their state and local counterparts or equivalents.

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

“Equity Offering” means any public or private sale of Capital Stock (other than
Disqualified Stock) by the Borrower after the Closing Date.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute of similar import, together with
all rules and regulations promulgated with respect thereto.

“ERISA Affiliate” means the Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control that, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code of 1986, as amended.

“ERISA Plan” means any employee pension benefit plan subject to Title IV of
ERISA Section 412 of the Code or Section 302 of ERISA maintained by any ERISA
Affiliate with respect to which any Restricted Person has a fixed or contingent
liability (other than a “multiemployer plan” as that term is defined in
Section 4001 of ERISA).

“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.

“Event of Default” is defined in Section 8.1.

“Excess Proceeds” is defined in Section 6.10.

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

“Exchange Offer” means the Offer to Exchange any and all outstanding 8.500%
Senior Notes due 2019 (CUSIP No. 92922P AC0 / ISIN US92922PAC05) and
Solicitation of Consents to Proposed Amendments to the Related Indenture date
July 25, 2016, as amended by the Exchange Offer Amendment dated August 16, 2016,
as further amended, modified or extended from time to time.

“Excluded Account” means (i) each deposit account in which all or substantially
all of the deposits consist of amounts utilized to fund payroll, employee
benefit or tax obligations of the Borrower and its Subsidiaries, (ii) “zero
balance” accounts, (iii) escrow accounts for amounts constituting purchase price
deposits held in escrow pursuant to a binding and enforceable purchase and sale
agreement with a third party containing customary provisions regarding the
payment and refunding of such deposits, (iv) escrow accounts, trust accounts or
fiduciary accounts and (v) cash collateral accounts permitted under Section 6.12
of this Agreement.

 

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“Excluded Assets” means (i) cash, certificates of deposit, deposit accounts,
money market accounts or other such liquid assets to the extent that such cash,
certificates of deposit, deposit accounts, money market accounts or other such
liquid assets are on deposit or maintained with the Priority Lien Collateral
Agent or any other holder of Priority Lien Obligations to cash collateralize
letters of credit constituting Priority Lien Obligations rather than generally
to the holders of the Priority Lien Obligations or to the Priority Lien
Collateral Agent for the benefit of the holders of Priority Lien Obligations as
a whole, (ii) any governmental approval, license or permit that by its terms or
by operation of law or regulation would be void, voidable, terminable or
revocable if mortgaged, pledged or assigned under the terms of the Loan
Documents; provided, however that such assets will constitute Excluded Assets
only (x) so long as the mortgage, pledge or assignment would be void, voidable,
terminable or revocable and (y) if excluded from the Collateral securing the
Priority Lien Obligations, (iii) Equity Interests in excess of 65% of the voting
Equity Interests in Subsidiaries that are (a) FSHCOs or (b) Foreign Subsidiaries
that are CFCs or are disregarded entities that own Equity Interests in CFCs, and
(iv) other property or assets of the Borrower or any Guarantor that are not
required to be subject to a Lien securing the Priority Lien Obligations pursuant
to the Priority Lien Documents as of the Closing Date, except to the extent that
such property or assets are subject to a Priority Lien generally in favor of all
holders of Priority Lien Obligations.

“Excluded Subsidiary” means (i) a Domestic Subsidiary that is owned directly or
indirectly by a CFC or (ii) a FSHCO.

“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 the Recipient’s net income
(however denominated), franchise Taxes imposed on the Recipient, and branch
profits Taxes imposed on the Recipient, in each case, (i) by the United States
of America (or any political subdivision thereof) or by the jurisdiction (or any
political subdivision thereof) under the laws of which such Recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, or (ii) by any other
jurisdiction as a result of a present or former connection between the Recipient
and the jurisdiction imposing such Tax (other than a connection arising solely
from such recipient having executed, delivered, become a party to, performed its
obligations under or received payments under, received or perfected a security
interest under, or enforced, any Loan Document), (b) in the case of a Foreign
Lender, any withholding Tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (other
than pursuant to an assignment request by the Borrower under Section 3.5) or
designates a new lending office, except, in each case, to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts or indemnification from the Borrower with respect to such withholding
Taxes pursuant to Section 3.3(a) or (c), (c) Taxes attributable to a Recipient’s
failure to comply with Section 3.3(e), (h), or (j), as applicable, (d) any
United States backup withholding Tax and (e) any Taxes imposed under FATCA.

 

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“Existing Indebtedness” means Indebtedness of the Borrower and its Subsidiaries
(other than Indebtedness under the Existing RCF Agreement, the Existing Second
Lien Credit Agreement, the New Second Lien Notes, the New Junior Lien Notes or
intercompany Indebtedness) in existence as of the Closing Date, until such
amounts are repaid.

“Existing Notes” means the Borrower’s existing 8.500% senior notes due 2019.

“Existing RCF Agreement” means that certain credit agreement, dated as of
November 8, 2013, as amended as of the Closing Date, by and among the Borrower,
as borrower, Toronto Dominion (Texas) LLC, as the administrative agent, and the
lenders from time to time party thereto, including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith and any Permitted Replacement thereof.

“Existing RCF Agreement Agent” means, at any time, the Person serving at such
time as the “Agent” or “Administrative Agent” under the Existing RCF Agreement
or any other representative then most recently designated in accordance with the
applicable provisions of the Existing RCF Agreement, together with its
successors in such capacity.

“Existing Second Lien Collateral Trustee” means, at any time, the Person serving
at such time as “Collateral Trustee” under the Existing Second Lien Credit
Agreement or any other representative then most recently designated in
accordance with the applicable provisions of the Existing Second Lien Credit
Agreement, together with its successors in such capacity.

“Existing Second Lien Credit Agreement” means the Term Loan Credit Agreement,
dated as of May 11, 2015, by and among the Borrower, Morgan Stanley Senior
Funding, Inc. as administrative agent and collateral trustee, the lenders party
thereto from time to time and Morgan Stanley Senior Funding, Inc., TD Securities
(USA) LLC, Wells Fargo Securities, LLC, Natixis, New York Branch, The Bank of
Nova Scotia, Citigroup Global Markets Inc., and Goldman Sachs Bank USA as joint
lead arrangers and joint bookrunners, including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and, in each case, as amended, restated, modified, renewed, refunded,
replaced (whether upon or after termination or otherwise), supplemented or
refinanced in whole or in part from time to time.

“Existing Unsecured Indenture” means the Indenture, dated as of June 10, 2011,
by and among the Borrower, the Guarantors and Wilmington Trust, National
Association (as successor trustee to Wells Fargo Bank, National Association).

“Fair Market Value” means the value that would be paid by a willing buyer to an
unaffiliated willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the Board of Directors of the
Borrower (unless the value is less than $10.0 million, in which case it may be
determined by an officer of the Borrower), which determination will be
conclusive for all purposes under this Agreement.

“FATCA” means Sections 1471 through 1474 of the Code (and any amended or
successor sections thereto), any present or future regulations or official
interpretations thereof, any agreements entered into pursuant to
Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in
connection with the implementation of such Sections of the Code and any fiscal
or regulatory legislation, rules or practices adopted pursuant to such
intergovernmental agreement.

 

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“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of one percent) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided,
however that (a) if the day for which such rate is to be determined is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate quoted to the
Administrative Agent on such day on such transactions as determined by the
Administrative Agent in good faith.

“Flood Insurance Regulations” is defined in Section 10.14.

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, guarantee, repayment, repurchase, redemption, defeasance or other
discharge of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the applicable four-quarter reference period.

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

(1) (i) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers, consolidations or otherwise
(including acquisitions of assets used or useful in the Oil and Gas Business),
or any Person or any of its Restricted Subsidiaries acquired by the specified
Person or any of its Restricted Subsidiaries, and including any related
financing transactions and including increases in ownership of Restricted
Subsidiaries, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date, shall be deemed to
have occurred on the first day of the four-quarter reference period and (ii) the
Consolidated Cash Flow for such reference period will be calculated giving pro
forma effect to any expense and cost reductions that have occurred or, in the
reasonable judgment of the chief financial officer of the Borrower, are
reasonably expected to occur in the next 12 months (regardless of whether those
operating improvements or cost savings could then be reflected in pro forma
financial statements prepared in accordance with Regulation S-X under the
Securities Act or any other regulation or policy of the SEC related thereto);
provided that the aggregate amount to be included in calculating the

 

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Consolidated Cash Flow pursuant to subsection (ii) in this clause (1) shall not
exceed 10% of Consolidated Cash Flow (determined before giving effect to
subsection (ii) of this clause (1)) for such period);

(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses (and ownership
interests therein) disposed of prior to the Calculation Date, will be excluded;

(3) the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date;

(4) any Person that is a Restricted Subsidiary on the Calculation Date will be
deemed to have been a Restricted Subsidiary at all times during such
four-quarter period;

(5) any Person that is not a Restricted Subsidiary on the Calculation Date will
be deemed not to have been a Restricted Subsidiary at any time during such
four-quarter period; and

(6) if any Indebtedness bears a floating rate of interest, the interest expense
on such Indebtedness will be calculated as if the rate in effect on the
Calculation Date had been the applicable rate for the entire period (taking into
account any Hedging Obligation applicable to such Indebtedness if such Hedging
Obligation has a remaining term as at the Calculation Date in excess
of 12 months).

“Fixed Charges” means, with respect to any specified Person for any period, the
sum, without duplication, of:

(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (excluding any interest
attributable to Dollar-Denominated Production Payments but including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings) and net of the effect of all
payments made or received pursuant to Hedging Obligations in respect of interest
rates; plus

(2) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus

(3) any interest on Indebtedness of another Person that is guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries, whether or not such Guarantee
or Lien is called upon; plus

(4) all dividends, whether paid or accrued and whether or not in cash, on any
series of preferred stock of such Person or any of its Restricted Subsidiaries,
other than dividends on Equity Interests payable solely in Equity Interests of
the Borrower (other than Disqualified Stock) or to the Borrower or a Restricted
Subsidiary of the Borrower.

 

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“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.

“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.

“FSHCO” means any Domestic Subsidiary (including a disregarded entity for
U.S. federal income tax purposes) that has no material assets (held directly or
through Subsidiaries) other than (i) Equity Interests of one or more CFCs or
(ii) Equity Interests of one or more CFCs and indebtedness of one or more CFCs.

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Agreement.

“Guarantee” means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to maintain financial
statement conditions or otherwise), or entered into for purposes of assuring in
any other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part).

“Guarantors” means:

(1) each Subsidiary of the Borrower that provided a Guarantee of the Obligations
on the Closing Date; and

(2) any other Restricted Subsidiary of the Borrower that becomes a Guarantor in
accordance with Section 6.14,

and their respective successors and assigns, in each case, until the Guarantee
of such Person has been released in accordance with the provisions of this
Agreement.

“Hazardous Materials” means (a) any petroleum or petroleum product (including
crude oil or fraction thereof), explosive, radioactive material, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, lead and radon gas;
(b) any chemical, material, gas substance waste which is defined as or included
in the definition of “hazardous substance”, “hazardous waste”, “hazardous
material”, “extremely hazardous substance”, “hazardous

 

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chemical”, “toxic substance”, “toxic chemical”, “contaminant” or “pollutant” or
words of similar import under any Environmental Law; and (c) any other chemical,
material, gas substance or waste, exposure to which, or the presence, use,
generation, treatment, Release, transport or storage of which is prohibited,
limited or regulated under any Environmental Law.

“Hedging Contract” means (a) any agreement providing for options, swaps, floors,
caps, collars, forward sales or forward purchases involving interest rates,
commodities or commodity prices, equities, currencies, bonds, or indexes based
on any of the foregoing, (b) any option, futures or forward contract traded on
an exchange, and (c) any other hedging contract, derivative agreement or other
similar agreement or arrangement.

“Hedging Obligations” means, with respect to any specified Person, the
obligations of such Person under:

(1) interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements entered into with one or more financial institutions and other
arrangements or agreements designed to protect the Person entering into the
agreement against fluctuations in interest rates with respect to Indebtedness
incurred;

(2) foreign exchange contracts and currency protection agreements entered into
with one or more financial institutions and designed to protect the Person
entering into the agreement against fluctuations in currency exchange rates with
respect to Indebtedness incurred;

(3) any commodity futures contract, commodity option or other similar agreement
or arrangement designed to protect against fluctuations in the price of
commodities used, produced, processed or sold by that Person or any of its
Restricted Subsidiaries at the time; and

(4) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates, commodity prices or currency exchange rates.

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

“Hydrocarbons” means crude oil, natural gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all constituents, elements or compounds thereof and products
refined or processed therefrom.

“Increased Costs” is defined in Section 3.6.

“Indebtedness” means, with respect to any specified Person, any indebtedness of
such Person (excluding accrued expenses and trade payables), whether or not
contingent:

(1) in respect of borrowed money;

 

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(2) evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof);

(3) in respect of banker’s acceptances;

(4) representing Capital Lease Obligations or Attributable Debt in respect of
sale and leaseback transactions;

(5) representing the balance deferred and unpaid of the purchase price of any
property due more than nine months after such property is acquired; and

(6) representing any Hedging Obligations,

if, and to the extent that, any of the items described in clauses (1), (2),
(4) and (5) above would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP.

In addition, the term “Indebtedness” includes (1) all Indebtedness described in
the preceding paragraph of another Person secured by a Lien on any asset of the
specified Person, whether or not such Indebtedness is assumed by the specified
Person; provided, however, that the amount of such Indebtedness will be the
lesser of (a) the Fair Market Value of such asset at such date of determination
and (b) the amount of such Indebtedness of such other Person, and (2) to the
extent not otherwise included, the Guarantee by the specified Person of any
Indebtedness described in the preceding paragraph of any other Person
(including, with respect to any Production Payment, any warranties or guarantees
of production or payment by such Person with respect to such Production Payment,
but excluding other contractual obligations of such Person with respect to such
Production Payment). Notwithstanding any other provision of this definition,
neither Dollar-Denominated Production Payments nor Volumetric Production
Payments shall be deemed to be Indebtedness.

In addition, “Indebtedness” of any Person shall include Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of such Person if:

(1) such Indebtedness is the obligation of a Joint Venture that is not a
Restricted Subsidiary;

(2) such Person or a Restricted Subsidiary of such Person is a general partner
of the Joint Venture (a “General Partner”); and

(3) there is recourse, by contract or operation of law, with respect to the
payment of such Indebtedness to property or assets by such Person or a
Restricted Subsidiary of such Person;

and then such Indebtedness shall be included in an amount not to exceed:

(a) the lesser of (i) the net assets of the General Partner and (ii) the amount
of such obligations to the extent that there is recourse, by contract or
operation of law, to the property or assets of such Person or a Restricted
Subsidiary of such Person; or

(b) if less than the amount determined pursuant to clause (a) immediately above,
the actual amount of such Indebtedness that is recourse to such Person or a
Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a
writing and is for a determinable amount and the related interest expense shall
be included in Fixed Charges to the extent actually paid by such Person or its
Restricted Subsidiaries.

 

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“Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.

“Initial Financial Statements” means the audited consolidated financial
statements of the Borrower for the fiscal year ended December 31, 2015, and the
unaudited interim consolidated financial statements of the Borrower for the
three months ended March 31, 2016 and the six months ended June 30, 2016.

“Intercreditor Agreements” means the Senior Lien Intercreditor Agreement and the
Second Lien Intercreditor Agreement.

“Investments” means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations) advances or capital
contributions (excluding endorsements of negotiable instruments and documents in
the ordinary course of business, and commission, travel and similar advances to
officers, employees and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with
GAAP. If the Borrower or any Restricted Subsidiary of the Borrower sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Borrower such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Borrower,
the Borrower will be deemed to have made an Investment on the date of any such
sale or disposition equal to the Fair Market Value of the Borrower’s Investments
in such Restricted Subsidiary that were not sold or disposed of in an amount
determined as provided in Section 6.7(c). The acquisition by the Borrower or any
Subsidiary of the Borrower of a Person that holds an Investment in a third
Person will be deemed to be an Investment by the Borrower or such Subsidiary in
such third Person in an amount equal to the Fair Market Value of the Investments
held by the acquired Person in such third Person in an amount determined as
provided in Section 6.7(c). Except as otherwise provided in this Agreement, the
amount of an Investment will be determined at the time the Investment is made
and without giving effect to subsequent changes in value.

“Investment Grade Securities” means:

(1) securities issued or directly and fully guaranteed or insured by the
U.S. government or any agency or instrumentality thereof (other than Cash
Equivalents) and in each case with maturities not exceeding two years from the
date of acquisition;

 

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(2) investments in any fund that invests exclusively in investments of the type
described in clause (1) which fund may also hold immaterial amounts of cash
pending investment and/or distribution; and

(3) corresponding instruments in countries other than the United States
customarily utilized for high quality investments and in each case with
maturities not exceeding two years from the date of acquisition.

“Joint Venture” means any Person that is not a direct or indirect Subsidiary of
the Borrower in which the Borrower or any of its Restricted Subsidiaries
directly or indirectly makes any Investment.

“Junior Lien” means a Lien, junior to the Priority Liens, the 1.5 Liens and the
Second Liens, as provided in the Second Lien Intercreditor Agreement, granted by
the Borrower or any Guarantor in favor of the Junior Lien Collateral Agent, at
any time, upon any property of the Borrower or any Guarantor to secure Junior
Lien Obligations.

“Junior Lien Collateral Agent” means the New Junior Lien Notes Collateral
Trustee (or such Person designated by the New Junior Lien Notes Collateral
Trustee), or if the New Junior Lien Notes Collateral Trustee ceases to exist,
the collateral trustee or other representative of lenders or holders of Junior
Lien Obligations designated pursuant to the terms of the Junior Lien Documents
and the Second Lien Intercreditor Agreement.

“Junior Lien Debt” means:

(1) Indebtedness of the Borrower and the Guarantors under the New Junior Lien
Notes that is subject to the Second Lien Intercreditor Agreement and permitted
to be incurred and secured under each applicable Secured Debt Document, and

(2) any other Indebtedness (other than intercompany Indebtedness owing to the
Borrower or its Subsidiaries) of the Borrower or any Guarantor that is secured
by substantially the same assets as the New Junior Lien Notes by a Junior Lien
that was permitted to be incurred and so secured under each applicable Secured
Debt Document; provided, however that, in the case of any Indebtedness referred
to in this definition:

(a) on or before the date on which such Indebtedness is incurred by the Borrower
or any Guarantor, such Indebtedness is designated by the Borrower, in an
officers’ certificate delivered to the Junior Lien Collateral Agent and
collateral trustee as “Junior Lien Debt” for the purposes of the Secured Debt
Documents; provided, however that if such Series of Secured Debt is designated
“Junior Lien Debt,” it cannot also be designated as Priority Lien Debt, 1.5 Lien
Debt or Second Lien Debt (or any combination of the four);

(b) the collateral agent or other representative with respect to such
Indebtedness, the Priority Lien Collateral Agent, the 1.5 Lien Collateral Agent,
the Second Lien Collateral Agent, the Junior Lien Collateral Agent, the
collateral trustee, the Borrower and each applicable Guarantor have duly
executed and delivered the Second Lien Intercreditor Agreement (or a joinder to
the Second

 

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Lien Intercreditor Agreement or a new Second Lien Intercreditor Agreement
substantially similar to the Second Lien Intercreditor Agreement, as in effect
on the date of this Agreement, and in a form reasonably acceptable to each of
the parties thereto); and

(c) all other requirements set forth in the Second Lien Intercreditor Agreement
as to the confirmation, grant or perfection of the Junior Lien Collateral
Agent’s Liens to secure such Indebtedness or Liabilities in respect thereof are
satisfied.

“Junior Lien Documents” means, collectively, the New Junior Lien Indenture, the
New Junior Lien Notes and any other Credit Facility pursuant to which any Junior
Lien Debt is incurred and the documents pursuant to which Junior Lien
Obligations are granted.

“Junior Lien Obligations” means Junior Lien Debt and all other Liabilities in
respect of Junior Lien Debt, in each case, that are secured by the Junior Liens.

“Law” means any statute, law, regulation, ordinance, rule, treaty, judgment,
order, decree, permit, concession, franchise, license, agreement or other
governmental restriction of the United States or any state or political
subdivision or regulatory agency thereof or of any foreign country or any
department, province or other political subdivision thereof, including, without
limitation, Environmental Laws.

“Lender Parties” means the Administrative Agent, the Lenders and their
successors, transferees and permitted assigns; and “Lender Party” means any of
them.

“Lenders” is defined in the preamble hereto.

“Lending Office” means, with respect to any Lender, the office, branch, or
agency through which it funds its Loans.

“Liabilities” means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of any financing statement under the UCC (or equivalent statutes)
of any jurisdiction.

“Loan” is defined in Section 2.1.

“Loan Documents” means this Agreement, the Notes, the Administrative Agent Fee
Letter, any Guarantee of the Obligations, the Security Documents and all other
agreements, amendments, supplements or other modifications, certificates,
documents, instruments and

 

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writings at any time delivered in connection herewith or therewith (exclusive of
term sheets, commitment letters, correspondence and similar documents used in
the negotiation hereof, but inclusive of any fee letters between any Restricted
Person and the Administrative Agent).

“Loan Parties” means the Borrower and the Guarantors.

“Material Adverse Change” means a material adverse change in, or material
adverse effect on (a) the business, operations, property or condition (financial
or otherwise) of the Borrower and its Restricted Subsidiaries taken as a whole,
(b) the ability of the Borrower or any Restricted Subsidiary to perform any of
its obligations under the Loan Documents to which it is a party or (c) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of or benefits available to the Administrative Agent or the Lenders
thereunder.

“Maturity Date” means November 15, 2019; provided, however that, if the Existing
Notes are not refinanced in whole prior to February 28, 2019 with indebtedness
maturing at least 91 days after November 15, 2019, the Maturity Date shall be
February 28, 2019.

“Minimum Amount” means $5.0 million.

“Minority Interest” means the percentage interest represented by any Capital
Stock of a Restricted Subsidiary of the Borrower that is not owned by the
Borrower or a Restricted Subsidiary of the Borrower.

“Mobile Home” has the meaning assigned to the term “Manufactured Home” and
“Mobile Home” in the applicable Flood Insurance Regulation; provided, however
that, in no event shall the term “Mobile Home” include platforms and other
structures located in state or federal waters offshore of the United States or
other areas that are not subject to Flood Insurance Regulation.

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating
agency business thereof.

“Mortgaged Properties” means all property listed on Schedule 4 and all other
property of any Restricted Person as to which a mortgage lien, deed of trust
lien or similar lien shall be granted by such Restricted Person in favor of the
Administrative Agent and/or a trustee pursuant to a deed of trust, mortgage or
other similar instrument in form and substance reasonably satisfactory to the
Administrative Agent in order to secure the Obligations, subject, however, to
Section 10.14(b).

“Mortgages” means all mortgages, deeds of trust and similar documents,
instruments and agreements (and all amendments, modifications and supplements
thereof) creating, evidencing, perfecting or otherwise establishing the Liens on
the Mortgaged Properties and other related assets to secure payment of the
Obligations or any part thereof.

 

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“Net Income” means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:

(1) any gain (or loss), together with any related provision for taxes on such
gain (but not loss), realized in connection with:

 

  (a) any Asset Sale; or

 

  (b) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and

(2) any extraordinary or nonrecurring gain (or loss), together with any related
provision for taxes on such extraordinary or nonrecurring gain (or loss).

“Net Proceeds” means the aggregate cash proceeds received by the Borrower or any
of its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of:

(1) all legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses incurred, and all federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any available tax credits or
deductions and any tax sharing agreements), as a consequence of such Asset Sale;

(2) all payments made on any Indebtedness (other than any Secured Debt,
including any revolving credit Indebtedness) which is secured by any assets
subject to such Asset Sale, in accordance with the terms of any Lien upon such
assets, or which must by its terms or by applicable law be repaid out of the
proceeds from such Asset Sale;

(3) all distributions and other payments required to be made to holders of
Minority Interests in Subsidiaries or joint ventures as a result of such Asset
Sale; and

(4) the deduction of appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, or held in escrow, in either case for
adjustment in respect of the sale price or for any liabilities associated with
the assets disposed of in such Asset Sale and retained by the Borrower or any
Restricted Subsidiary after such Asset Sale.

“Net Working Capital” means (a) all current assets of the Borrower and its
Restricted Subsidiaries except current assets from commodity price risk
management activities arising in the ordinary course of business, less (b) all
current liabilities of the Borrower and its Restricted Subsidiaries, except
current liabilities included in Indebtedness and any current liabilities from
commodity price risk management activities arising in the ordinary course of
business, in each case as set forth in the consolidated financial statements of
the Borrower prepared in accordance with GAAP (excluding any adjustments made
pursuant to FASB ASC Topic 815).

 

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“New Junior Lien Notes” means the Borrower’s 8.50%/10.00% Third Lien PIK Toggle
Notes due 2021 issued pursuant to the New Junior Lien Notes Indenture, as
amended, restated, refinanced, supplemented, modified or replaced.

“New Junior Lien Notes Collateral Trustee” means Wilmington Trust, N.A.

“New Junior Lien Notes Indenture” means the indenture dated as of the date
hereof for the New Junior Lien Notes, as amended, restated, refinanced,
supplemented, modified or replaced.

“New Second Lien Notes” means the Borrower’s 9.00%/10.75% Second Lien PIK Toggle
Notes due 2020 issued pursuant to the New Second Lien Notes Indenture, as
amended, restated, refinanced, supplemented, modified or replaced.

“New Second Lien Notes Indenture” means the indenture dated as of the date
hereof for the New Second Lien Notes, as amended, restated, refinanced,
supplemented, modified or replaced.

“Non-Consenting Lender” is defined in Section 10.1(h).

“Non-Recourse Debt” means Indebtedness:

(1) as to which neither the Borrower nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable as a guarantor or otherwise, or (c) constitutes the lender; and

(2) no default with respect to which (including any rights that the holders of
the Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness of the Borrower or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its Stated Maturity.

“Note” means a promissory note of the Borrower payable to any Lender, in the
form of Exhibit A hereto (as such promissory note may be amended or otherwise
modified from time to time), evidencing the aggregate Indebtedness of the
Borrower to such Lender resulting from outstanding Loans, and also means all
other promissory notes accepted from time to time in substitution therefor or
renewal thereof.

“NYMEX Pricing” means, as of any date of determination with respect to any month
(i) for crude oil, the closing settlement price for the Light, Sweet Crude Oil
futures contract for such month, and (ii) for natural gas, the closing
settlement price for the Henry Hub Natural Gas futures contract for such month,
in each case as published by New York Mercantile Exchange (NYMEX) on its website
currently located at www.cmegroup.com, or any successor thereto (as such price
may be corrected or revised from time to time by the NYMEX in accordance with
its rules and regulations).

 

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“Obligations” means all Liabilities from time to time owing by any Restricted
Person to any Lender Party under or pursuant to any of the Loan Documents,
including, without limitation, all amounts in respect of any principal, premium,
interest, penalties, fees, expenses, indemnifications, reimbursements, damages
and other liabilities (including any interest, fees, premium and expenses
accruing subsequent to the filing of a petition in bankruptcy, reorganization or
similar proceeding at the rate provided for in this Agreement, whether or not
such interest, fees or expenses is an allowed claim under any such proceeding or
under applicable state, federal or foreign law), and guarantees of the foregoing
amounts.

“Obligation” means any part of the Obligations.

“Officer’s Certificate” means a certificate signed on behalf of the Borrower by
an Authorized Officer of the Borrower.

“Oil and Gas Business” means:

(1) the acquisition, exploration, exploitation, development, production,
operation and disposition of interests in crude oil, natural gas and other
Hydrocarbon properties;

(2) the gathering, marketing, treating, processing (but not refining), storage,
distribution, selling and transporting of any production from such interests or
properties;

(3) any business relating to exploration for or development, production,
exploitation, treatment, processing (but not refining), storage, transportation
or marketing of oil, gas and other minerals and products produced in association
therewith; and

(4) any activity that is ancillary or complementary to or necessary or
appropriate for the activities described in clauses (1) through (3) of this
definition.

“Oil and Gas Properties” means Hydrocarbon Interests; the properties now or
hereafter pooled or unitized with Hydrocarbon Interests; 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; all operating agreements,
contracts and other 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; all hydrocarbons in and under and
which may be produced and saved or attributable to the Hydrocarbon Interests,
including all oil in tanks, the lands covered thereby and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; all tenements, hereditaments, appurtenances and
properties in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests; and 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 or other personal property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, injection wells or

 

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other wells (including those used for either environmental sampling or remedial
purposes), 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.

“Other Taxes” means any and all present or future stamp, court or documentary
Taxes and any other excise, intangible, recording, filing, property or similar
Taxes, charges or levies arising from any payment made hereunder or from the
execution, delivery, registration or enforcement of, or otherwise with respect
to, any Loan Document, except any such Taxes imposed with respect to an
assignment (other than an assignment made pursuant to Section 3.5) as a result
of a present or former connection between the Recipient and the jurisdiction
imposing such Tax (other than a connection arising solely from such Recipient
having executed, delivered, become a party to, performed its obligations under
or received payments under, received or perfected a security interest under, or
enforced, any Loan Document).

“Participant Register” is defined in Section 10.6(a).

“Patriot Act” is defined in Section 10.16.

“Payment Date” means (a) the last Business Day of each March, June, September
and December (commencing with December 2016) and (b) any day on which past due
interest or principal is owed under the Loans and is unpaid. If the terms of any
Loan Document provide that payments of interest or principal on the Loans shall
be deferred from one Payment Date to another day, such other day shall also be a
Payment Date.

“Payment Office” means, with respect to the Administrative Agent, the office,
branch or account through which it administers this Agreement and to which
payments shall be made hereunder, as designated in writing from time to time by
the Administrative Agent.

“Percentage Share” means, at any time and with respect to any Lender, the
percentage obtained by dividing (a) the Commitment (or, after the making of the
Loans on the Closing Date, aggregate principal amount of the outstanding Loans)
of such Lender, by (b) the aggregate Commitments (or, after the making of the
Loans on the Closing Date, aggregate principal amount of the outstanding Loans)
of all Lenders.

“Permitted Acquisition Indebtedness” means Indebtedness or Disqualified Stock of
the Borrower or any of the Borrower’s Restricted Subsidiaries to the extent such
Indebtedness or Disqualified Stock was Indebtedness or Disqualified Stock of:

(1) a Subsidiary prior to the date on which such Subsidiary became a Restricted
Subsidiary; or

(2) a Person that was merged, consolidated or amalgamated into the Borrower or a
Restricted Subsidiary;

 

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provided, however that on the date such Subsidiary became a Restricted
Subsidiary or the date such Person was merged, consolidated and amalgamated into
the Borrower or a Restricted Subsidiary, as applicable, after giving pro forma
effect thereto:

(a) the Restricted Subsidiary or the Borrower, as applicable, would be permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 6.9(a);

(b) the Fixed Charge Coverage Ratio for the Restricted Subsidiary or the
Borrower, as applicable, would be greater than the Fixed Charge Coverage Ratio
for such Restricted Subsidiary or the Borrower immediately prior to such
transaction; or

(c) the Consolidated Net Worth of the Restricted Subsidiary or the Borrower, as
applicable, would be greater than the Consolidated Net Worth of such Restricted
Subsidiary or the Borrower immediately prior to such transaction.

“Permitted Business Investments” means Investments made in the ordinary course
of, and of a nature that is or shall have become customary in, the Oil and Gas
Business, including through agreements, transactions, interests or arrangements
that permit one to share risk or costs, comply with regulatory requirements
regarding local ownership or satisfy other objectives customarily achieved
through the conduct of the Oil and Gas Business jointly with third parties,
including without limitation:

(1) direct or indirect ownership of crude oil, natural gas, other related
Hydrocarbon and mineral properties or any interest therein or gathering,
transportation, processing, storage or related systems or ancillary real
property interests; and

(2) Investments in the form of, pursuant to or in accordance with operating
agreements, working interests, royalty interests, mineral leases, processing
agreements, farm-in agreements, farm-out agreements, contracts for the sale,
transportation or exchange of oil, natural gas, other Hydrocarbons and minerals,
production sharing agreements, participation agreements, development agreements,
area of mutual interest agreements, unitization agreements, pooling agreements,
joint bidding agreements, service contracts, joint venture agreements,
partnership agreements (whether general or limited), subscription agreements,
stock purchase agreements, stockholder agreements and other similar or customary
agreements (including for limited liability companies) with third parties,
transactions, properties, interests or arrangements and Investments and
expenditures in connection therewith or pursuant thereto.

“Permitted Conforming Priority Lien Debt” is defined in Section 6.9.

“Permitted Debt” is defined in Section 6.9.

“Permitted Investments” means

(1) any Investment in the Borrower or in a Restricted Subsidiary of the
Borrower;

 

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(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Borrower or any Restricted Subsidiary of the Borrower
in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary of the Borrower; or

(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Borrower or a Restricted Subsidiary of the Borrower;

(4) any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with
Section 6.10;

(5) any acquisition of assets or Capital Stock solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the Borrower;

(6) any Investments received in compromise or resolution of (A) obligations of
trade creditors or customers that were incurred in the ordinary course of
business of the Borrower or any of its Restricted Subsidiaries, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer; or (B) litigation,
arbitration or other disputes with Persons who are not Affiliates;

(7) Investments represented by Hedging Obligations;

(8) loans or advances to employees in the ordinary course of business made for
bona fide business purposes not to exceed $5.0 million in the aggregate at any
time outstanding;

(9) receivables owing to the Borrower or any Restricted Subsidiary created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms
may include such concessionary trade terms as the Borrower or any such
Restricted Subsidiary deems reasonable under the circumstances;

(10) surety and performance bonds and workers’ compensation, utility, lease,
tax, performance and similar deposits and prepaid expenses in the ordinary
course of business;

(11) Guarantees of Indebtedness permitted under Section 6.9;

(12) Guarantees by the Borrower or any of its Restricted Subsidiaries of
operating leases (other than Capital Lease Obligations) or of other obligations
that do not constitute Indebtedness, in each case entered into by any Restricted
Subsidiary in the ordinary course of business;

 

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(13) Investments of a Restricted Subsidiary acquired after the Closing Date or
of any entity merged into the Borrower or merged into or consolidated or
amalgamated with a Restricted Subsidiary in accordance with Section 7.1 to the
extent that such Investments were not made in contemplation of or in connection
with such acquisition, merger or consolidation and were in existence on the date
of such acquisition, merger or consolidation;

(14) Permitted Business Investments;

(15) Investments received as a result of a foreclosure by the Borrower or any of
its Restricted Subsidiaries with respect to any secured Investment in default;

(16) Investments in any units of any oil and gas royalty trust; and

(17) other Investments in any Person (other than any Unrestricted Subsidiary)
having an aggregate Fair Market Value (measured on the date each such Investment
was made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (17) that are
at the time outstanding not to exceed the greater of (i) $15.0 million and (ii)
1% of Adjusted Consolidated Net Tangible Assets.

“Permitted Liens” means:

(1) Liens securing the Priority Lien Debt, the Second Lien Debt or the Junior
Lien Debt incurred under clause (1) of the definition of “Permitted Debt”;

(2) Liens securing the Loans incurred on the Closing Date and the Liabilities of
the Borrower and the Guarantors arising under the Loan Documents;

(3) Liens in favor of the Borrower or the Guarantors;

(4) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with the Borrower or any Subsidiary of the
Borrower; provided, however that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Borrower or
the Subsidiary;

(5) Liens on property (including Capital Stock) existing at the time of
acquisition of the property by the Borrower or any Subsidiary of the Borrower;
provided, however that such Liens were in existence prior to such acquisition
and not incurred in contemplation of such acquisition;

(6) Liens (other than for borrowed money) existing on the Closing Date (other
than Liens described in another clause of this definition);

(7) Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided, however that
any reserve or other appropriate provision as is required in conformity with
GAAP has been made therefor;

 

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(8) Liens arising from survey exceptions, easements or reservations of, or
rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or other restrictions
as to the use of real property that were not incurred in connection with
Indebtedness and that do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person;

(9) Liens arising from leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the Borrower and
its Restricted Subsidiaries, taken as a whole;

(10) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or the like Liens arising by contract or statute in the ordinary
course of business and with respect to amounts which are not yet delinquent or
are being contested in good faith by appropriate proceedings;

(11) Liens arising from pledges or deposits made in the ordinary course of
business (A) in connection with leases, tenders, bids, statutory obligations,
surety or appeal bonds, government contracts, performance bonds and similar
obligations, or (B) in connection with workers’ compensation, unemployment
insurance and other social security legislation;

(12) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Borrower or its Restricted
Subsidiaries relating to such property or assets;

(13) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payments of customs duties in connection with the importation of
goods;

(14) any attachment or judgment Lien that does not constitute an Event of
Default;

(15) Liens to secure any Permitted Refinancing Indebtedness permitted to be
incurred under this Agreement; provided, however, that

(a) the new Lien shall be limited to all or part of the same property and assets
that secured or, under the written agreements pursuant to which the original
Lien arose, could secure the original Lien (plus improvements and accessions to,
such property or proceeds or distributions thereof); and

(b) the Indebtedness secured by the new Lien is not increased to any amount
greater than the sum of (x) the outstanding principal amount, or, if greater,
committed amount, of the Permitted Refinancing Indebtedness and (y) an amount
necessary to pay any fees and expenses, including premiums, related to such
renewal, refunding, refinancing, replacement, defeasance or discharge;

 

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(16) Liens for the purpose of securing the payment of all or a part of the
purchase price of, or Capital Lease Obligations with respect to, or the repair,
improvement or construction cost of, assets or property acquired or repaired,
improved or constructed in the ordinary course of business; provided, however
that:

(a) the aggregate principal amount of Indebtedness secured by such Liens is
otherwise permitted to be incurred under this Agreement and does not exceed the
cost of the assets or property so acquired or repaired, improved or constructed
plus fees and expenses in connection therewith; and

(b) such Liens are created within 180 days of repair, improvement, construction
or acquisition of such assets or property and do not encumber any other assets
or property of the Borrower or any of its Restricted Subsidiaries other than
such assets or property and assets affixed or appurtenant thereto (including
improvements);

(17) Liens arising solely by virtue of any statutory or common law provisions
relating to banker’s Liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained or deposited with a depositary
institution; provided, however that:

(a) such deposit account is not a dedicated cash collateral account and is not
subject to restrictions against access by the Borrower in excess of those set
forth by regulations promulgated by the Federal Reserve Board; and

(b) such deposit account is not intended by the Borrower or any Restricted
Subsidiary to provide collateral to the depositary institution;

(18) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Borrower and its Restricted
Subsidiaries in the ordinary course of business;

(19) Liens in respect of Production Payments and Reserve Sales;

(20) Liens on pipelines and pipeline facilities that arise by operation of law;

(21) Liens arising from farmout, carried working interest, joint operating,
unitization, royalty, sales and similar agreements relating to the exploration
or development of, or production from, oil and gas properties entered into in
the ordinary course of business;

(22) Liens reserved in oil and gas mineral leases for bonus or rental payments
and for compliance with the terms of such leases;

(23) Liens arising under this Agreement in favor of the Administrative Agent for
its own benefit and similar Liens in favor of other trustees, agents and
representatives arising under instruments governing Indebtedness permitted to be
incurred under this Agreement, provided, however, that such Liens are solely for
the benefit of the trustees, agents or representatives in their capacities as
such and not for the benefit of the holders of the Indebtedness;

 

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(24) Liens securing Hedging Obligations of the Borrower and its Restricted
Subsidiaries incurred under clause (8) of the definition of “Permitted Debt”;

(25) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary
or any Joint Venture owned by the Borrower or any of its Restricted Subsidiary
to the extent securing Non-Recourse Debt of such Unrestricted Subsidiary or
Joint Venture;

(26) Liens upon specific items of inventory, receivables or other goods or
proceeds of the Borrower or any of its Restricted Subsidiaries securing such
Person’s obligations in respect of bankers’ acceptances or receivables
securitizations issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory, receivables or other goods
or proceeds and permitted by Section 6.9;

(27) Liens securing Indebtedness of the Borrower or any Guarantor to the extent
such Indebtedness constitutes Junior Lien Debt; provided that after giving
effect to such incurrence, the ratio of (x) Adjusted Consolidated Net Tangible
Assets (solely for purposes of this clause (27) references to the SEC guidelines
in the definition of Adjusted Consolidated Net Tangible Assets shall instead
refer to the Strip Price (after giving effect to (i) commodity derivatives
contracts in effect as of the date of determination and (ii) current estimates
of costs determined in good faith by the Borrower in light of prevailing market
conditions) but otherwise in accordance with SEC guidelines) to (y) the
aggregate principal amount of Secured Debt, together with any Permitted
Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease
or refund such Secured Debt, (with the full amount of availability under Credit
Facilities being deemed to have been incurred on the date of determination and
with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Borrower and its Subsidiaries thereunder)
that is then outstanding, determined after giving effect to such incurrence, is
at least 1.1 to 1.0; and

(28) Liens of the Borrower or any Subsidiary of the Borrower with respect to
Indebtedness (other than with respect to Priority Lien Debt or 1.5 Lien Debt)
that does not exceed in principal amount the greater of (a) $25.0 million at any
one time outstanding and (b) 1.0% of the Adjusted Consolidated Net Tangible
Assets determined as of the date of the incurrence of such Indebtedness after
giving pro forma effect to such incurrence and the application of proceeds
therefrom.

“Permitted Refinancing Indebtedness” means any Indebtedness of the Borrower or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to renew, refund, refinance, replace, defease or discharge
other Indebtedness of the Borrower or any of its Restricted Subsidiaries (other
than intercompany Indebtedness); provided, however that:

(1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if

 

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applicable) of the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged (plus all accrued interest on the Indebtedness and the
amount of all fees and expenses, including premiums, incurred in connection
therewith);

(2) (a) if the final maturity date of the Indebtedness being extended, renewed,
refunded, refinanced, replaced, defeased or discharged is earlier than the final
repayment date of the Loans, the Permitted Refinancing Indebtedness has a final
maturity date no earlier than the final maturity date of the Indebtedness being
extended, renewed, refunded, discharged, refinanced, replaced or defeased, or

(b) if the final maturity date of the Indebtedness being extended, renewed,
refunded, refinanced, replaced, defeased or discharged is later than the final
repayment date of the Loans, the Permitted Refinancing Indebtedness has a final
maturity date at least 91 days later than the final repayment date of the Loans;

(3) if the Indebtedness being extended, renewed, refunded, refinanced, replaced,
defeased or discharged is subordinated in right of payment to the Loans, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the
Loans on terms at least as favorable to the Lenders as those contained in the
documentation governing the Indebtedness being extended, renewed, refunded,
refinanced, replaced, defeased or discharged; and

(4) such Indebtedness is incurred either by the Borrower or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended, renewed,
refunded, refinanced, replaced, defeased or discharged; provided, however, that
a Restricted Subsidiary that is also a Guarantor may guarantee Permitted
Refinancing Indebtedness incurred by the Borrower, whether or not such
Restricted Subsidiary was an obligor or guarantor of the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged.

“Permitted Replacement” means, with respect to the Existing RCF Agreement, a
reserved based credit facility which (a) shall refinance or replace the Existing
RCF Agreement in full and with respect to which, on the date of such replacement
or refinancing, lenders holding at least 50.1% of the commitments and loans
thereunder are (i) commercial bank lenders, (ii) investments banks or (iii)
Affiliates of Persons described in clauses (i) and (ii), which, in each case,
regularly participate in reserve based credit facilities and (b) would otherwise
constitute Permitted Refinancing Indebtedness hereunder.

“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

“Principals” means (a) Tracy W. Krohn, his spouse, Laurie P. Krohn, and their
immediate family and descendants by blood or adoption and (b) the Backstop
Lender.

 

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“Priority Lien” means a Lien granted by the Borrower or any Guarantor in favor
of the Priority Lien Collateral Agent, at any time, upon any property of the
Borrower or any Guarantor to secure Priority Lien Obligations.

“Priority Lien Collateral Agent” means the Existing RCF Agreement Agent (or
other Person designated by the Existing RCF Agreement Agent), or if the Existing
RCF Agreement ceases to exist, the collateral agent or other representative of
lenders or holders of Priority Lien Obligations designated pursuant to the terms
of the Priority Lien Documents and the Intercreditor Agreements.

“Priority Lien Debt” means Indebtedness of the Borrower and the Guarantors under
the Existing RCF Agreement (including letters of credit (with outstanding
letters of credit being deemed to have a principal amount equal to the stated
amount thereof) and reimbursement obligations with respect thereto) that is
subject to the Intercreditor Agreements and permitted to be incurred and secured
under each applicable Secured Debt Document.

“Priority Lien Documents” means the Existing RCF Agreement and the documents
pursuant to which Priority Lien Obligations are granted.

“Priority Lien Obligations” means the Priority Lien Debt and all other
Liabilities in respect of Priority Lien Debt, Hedging Obligations and Banking
Services Obligations, in each case, that are secured by the Priority Liens.

“Production Payments” means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.

“Production Payments and Reserve Sales” means the grant or transfer by the
Borrower or a Restricted Subsidiary of the Borrower to any Person of a royalty,
overriding royalty, net profits interest, Production Payment or other interest
in oil and gas properties, reserves or the right to receive all or a portion of
the production or the proceeds from the sale of production attributable to such
properties, including any such grants or transfers pursuant to incentive
compensation programs on terms that are reasonably customary in the oil and gas
business for geologists, geophysicists and other providers of technical services
to the Borrower or a Subsidiary of the Borrower.

“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 Change” is defined in Section 10.1(h).

“Proved Reserves” means “Proved Reserves” as defined in the Definitions for Oil
and Gas Reserves (the “Reserve Definitions”) promulgated by the Society of
Petroleum Engineers (or any generally recognized successor) as in effect at the
time in question.

“Public Lender” is defined in Section 10.17(b).

 

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“Rating Agencies” means Moody’s and S&P; provided, however that if Moody’s or
S&P shall cease to rate the Loans for reasons outside the control of the
Borrower, another security rating agency selected by the Borrower that is
nationally recognized in the United States may be substituted therefore (a
“Substitute Rating Agency”).

“Recipient” means the Administrative Agent, any Lender, or any other recipient
of any payment to be made by or on account of any obligation of the Borrower
hereunder or under any other Loan Document.

“Register” is defined in Section 2.9(a).

“Related Party” means any trust, corporation, partnership, limited liability
company or other entity, of which one or more of the Principals or other Related
Parties collectively Beneficially Own more than 50% of such entity.

“Release” means the release, deposit, disposal or leakage of any Hazardous
Material at, into, upon or under any land, water or air or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, leakage, seepage, dumping, pumping, pouring,
escaping, emptying or placement.

“Required Lenders” shall mean, at any time, Lenders the sum of whose outstanding
Loans at such time represents at least a majority (at least 50.01%) of the sum
of all outstanding Loans of the Lenders.

“Reserve Report” means one or more an engineering reports dated as of the
December 31st immediately prior to the determination date or, if the Borrower
elects to create and designate a mid-year report or reports as a “Reserve
Report” under this Agreement, the June 30th immediately prior to the
determination date (provided that if the Reserve Report as of the December 31st
immediately prior to the determination date is not available and the date of
determination is on or prior to the following March 31st, the Reserve Report
shall be as of the prior December 31st (or if the Borrower so elects or elected
to prepare and designate a mid-year reserve report as a “Reserve Report”, the
prior June 30th)), in each case concerning all Oil and Gas Properties and
interests owned by the Borrower and the Restricted Subsidiaries which are
located in or offshore of the United States and which have attributable to them
proved oil or gas reserves, which shall be prepared by Netherland Sewell and
Associates, Inc., or other nationally recognized independent petroleum engineers
chosen by the Borrower and, in the event such other independent petroleum
engineers are not nationally recognized (in the Borrower’s reasonable
discretion), such other independent petroleum engineers shall be reasonably
acceptable to the Administrative Agent. This report shall be reasonably
satisfactory to the Administrative Agent, shall take into account any
“over-produced” status under gas balancing arrangements, and shall contain
information and analysis comparable in scope to that contained in the reserve
report of the Borrower prepared by Netherland Sewell and Associates, Inc., dated
February 2, 2016. This report shall in each case be in the form delivered in
accordance with the requirements of the Existing RCF Agreement, or if there is
no Existing RCF Agreement requiring delivery of a Reserve Report, in form
substantially consistent as determined in good faith by the Borrower with the
form of Reserve Report required under the Existing RCF Agreement as in effect on
the Closing Date.

 

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“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Payment” is defined in Section 6.7.

“Restricted Person” means any of the Borrower and each Restricted Subsidiary of
the Borrower.

“Restricted Subsidiary” of a Person means any Subsidiary of such Person that is
not an Unrestricted Subsidiary.

“RSA” means the Support Agreement, dated as of July 11, 2016, by and among each
of the holders listed on the signature pages thereto and the Borrower.

“S&P” means Standard & Poor’s Ratings Group (a division of McGraw-Hill, Inc.)
and any successor thereto that is a nationally-recognized rating agency.

“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) 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, or (b) the
United Nations Security Council, the European Union, any European Union member
state or Her Majesty’s Treasury of the United Kingdom.

“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,
the Crimea region, Cuba, Iran, North Korea, Sudan and Syria).

“Sanctioned Person” means, at any time, any Person that is (a) listed on any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, or by the United Nations Security Council, the European Union or any
European Union member, (b) located, organized or resident in a Sanctioned
Country or (c) directly or indirectly owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b).

“SEC” means the Securities and Exchange Commission.

“Second Lien” means a Lien granted by the Borrower or any Guarantor in favor of
the Second Lien Collateral Agent, at any time, upon any property of the Borrower
or any Guarantor to secure Second Lien Obligations.

“Second Lien Collateral Agent” means the Existing Second Lien Collateral Trustee
(or other Person designated by the Existing Second Lien Agent), or if the
Existing Second Lien Collateral Trustee ceases to exist, the collateral trustee
or other representative of lenders or holders of Second Lien Obligations
designated pursuant to the terms of the Second Lien Documents and the Second
Lien Intercreditor Agreement.

 

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“Second Lien Debt” means:

(1) Indebtedness of the Borrower and the Guarantors under the Existing Second
Lien Credit Agreement that is subject to the Second Lien Intercreditor Agreement
and permitted to be incurred and secured under each applicable Secured Debt
Document;

(2) Indebtedness of the Borrower and the Guarantors under the New Second Lien
Notes that is subject to the Second Lien Intercreditor Agreement and permitted
to be incurred and secured under each applicable Secured Debt Document; and

(3) additional Indebtedness of the Borrower and the Guarantors under any other
Credit Facility that is secured by substantially the same assets as the Existing
Second Lien Credit Agreement and the New Second Lien Notes by a Second Priority
Lien that was permitted to be incurred and so secured under each applicable
Secured Debt Document; provided, however that, in the case of any Indebtedness
referred to in this clause (3), that:

(a) on or before the date on which such Indebtedness is incurred by the Borrower
and the Guarantors, such Indebtedness is designated by the Borrower, in an
Officer’s Certificate delivered to the Second Lien Collateral Agent and the
collateral trustee, as “Second Lien Debt” for the purposes of the Secured Debt
Documents; provided, however that if such Series of Secured Debt is designated
as “Second Lien Debt,” it cannot also be designated as Priority Lien Debt, 1.5
Lien Debt or Junior Lien Debt (or any combination of the four);

(b) the collateral agent or other representative with respect to such
Indebtedness, the Priority Lien Collateral Agent, the 1.5 Lien Collateral Agent,
the Junior Lien Collateral Agent, the Second Lien Collateral Agent, the
collateral trustee, the Borrower and each applicable Guarantor have duly
executed and delivered the Second Lien Intercreditor Agreement (or a joinder to
the Second Lien Intercreditor Agreement or a new Second Lien Intercreditor
Agreement substantially similar to the Second Lien Intercreditor Agreement, as
in effect on the date of the indenture, and in a form reasonably acceptable to
each of the parties thereto); and

(c) all other requirements set forth in the Second Lien Intercreditor Agreement
as to the confirmation, grant or perfection of the Second Lien Collateral
Agent’s Liens to secure such Indebtedness or Liabilities in respect thereof are
satisfied;

provided, however that all such Indebtedness is pari passu in right of payment,
it being understood that there may be different tranches of Second Lien Debt
with different maturities and amortization profiles, but the principal amount of
Indebtedness under all such tranches must in all other respects be pari passu in
right of payment. Any such Indebtedness that is not consistent with the
foregoing requirement for pari passu treatment in right of payment with the term
loans under Existing Second Lien Credit Agreement and the New Second Lien Notes
shall not constitute Second Lien Debt.

 

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“Second Lien Documents” means the Existing Second Lien Credit Agreement, the New
Second Lien Indenture, the New Second Lien Notes and any other Credit Facility
pursuant to which any Second Lien Debt is incurred and the documents pursuant to
which Second Lien Obligations are granted.

“Second Lien Intercreditor Agreement” means that certain Intercreditor
Agreement, dated as of May 11, 2015, by and among the Existing RCF Agent, as the
original priority lien agent, the Administrative Agent as a New Representative,
Morgan Stanley Senior Funding, Inc., as the original second lien collateral
trustee, Wilmington Trust, N.A. as a New Representative (as amended, restated or
modified in accordance with the terms hereof and thereof, or replaced, whether
upon or after termination or otherwise) and Wilmington Trust, N.A. as the Third
Lien Collateral Trustee, substantially in the form of Exhibit F hereto.

“Second Lien Obligations” means the Second Lien Debt and all other Liabilities
in respect of Second Lien Debt, in each case, that are secured by the Second
Liens.

“Second Lien Representative” means (1) the Second Lien Collateral Agent, (2)
Wilmington Trust, N.A. as the trustee for the New Second Lien Notes or (3) in
the case of any other Series of Second Lien Debt, the trustee, agent or
representative of the holders of such Series of Second Lien Debt who maintains
the transfer register for such Series of Second Lien Debt and is appointed as a
representative of the Second Lien Debt (for purposes related to the
administration of the Security Documents) pursuant to the credit agreement or
other agreement governing such Series of Second Lien Debt.

“Secured Debt” means Priority Lien Debt, the Obligations, Second Lien Debt and
Junior Lien Debt.

“Secured Debt Documents” means the Priority Lien Documents, the Loan Documents,
the Second Lien Documents and the Junior Lien Documents.

“Security Documents” means the Intercreditor Agreements and all security
agreements, pledge agreements, collateral assignments, mortgages, deeds of
trust, collateral agency agreements, control agreements or other grants or
transfers for security executed and delivered by the Borrower or any Guarantor
creating (or purporting to create) a 1.5 Lien upon Collateral in favor of the
1.5 Lien Collateral Agent, in each case, as amended, modified, renewed, restated
or replaced, in whole or in part, from time to time.

“Security Schedule” means Schedule 2 may be amended or otherwise modified with
the consent of the Administrative Agent.

“Security Termination” shall mean the payment in full in cash of all Obligations
(other than contingent indemnification obligations) and the termination of all
Commitments.

“Senior Lien Intercreditor Agreement” means that certain Intercreditor
Agreement, dated as of the date hereof, between the Existing RCF Agent, as the
original priority lien agent, and the 1.5 Lien Collateral Agent, as the original
1.5 lien agent (as amended, restated or modified in accordance with the terms
hereof and thereof, or replaced, whether upon or after termination or otherwise)
substantially in the form of Exhibit G hereto.

 

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“Series of Junior Lien Debt” means, severally, the Indebtedness outstanding
under the New Junior Lien Notes and any other Credit Facility that constitutes
Junior Lien Debt.

“Series of Second Lien Debt” means, severally, the Indebtedness outstanding
under the Existing Second Lien Credit Agreement, the New Second Lien Notes and
any other Credit Facility that constitutes Second Lien Debt.

“Series of Secured Debt” means the Priority Lien Debt, the Obligations, each
Series of Second Lien Debt and each Series of Junior Lien Debt.

“Significant Subsidiary” means any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the Closing
Date.

“Solvent” means that (i) the sum of the debt (including contingent liabilities)
of the Loan Parties, on a consolidated basis, does not exceed the fair value or
the present fair saleable value (in each case, on a going-concern basis) of the
assets of the Loan Parties, on a consolidated basis; (ii) the Loan Parties, on a
consolidated basis, are able to pay their debts, on a consolidated basis, as
they become due generally in the ordinary course of business, (iii) the capital
of the Loan Parties, on a consolidated basis, is not unreasonably small in
relation to the business of the Loan Parties, on a consolidated basis, in
existence or otherwise contemplated as of the date hereof; and (iv) the Loan
Parties, on a consolidated basis, do not intend to incur, or believe that they
will incur, debts (including current obligations and contingent liabilities)
beyond their ability to pay such debts as they mature in the ordinary course of
business. For purposes hereof, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

“Stated Maturity” means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

“Strip Price” shall mean, at any time, (a) for the remainder of the then-current
calendar year, the average NYMEX Pricing for the remaining months in such
calendar year, (b) for each of the succeeding three complete calendar years, the
average NYMEX Pricing for the twelve months in each such calendar year, and (c)
for the succeeding fourth complete calendar year and each calendar year
thereafter, the average NYMEX pricing for the twelve months in such fourth
calendar year.

“Subordinated Obligation” means any Indebtedness of the Borrower (whether
outstanding on the Closing Date or thereafter incurred) which is subordinate or
junior in right of payment to the Loans pursuant to a written agreement or any
Indebtedness of a Guarantor (whether outstanding on the Closing Date or
thereafter incurred) which is subordinate or junior in right of payment to its
guaranty of the Obligations pursuant to a written agreement, as the case may be.

 

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“Subsidiary” means, with respect to any specified Person:

(1) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency and after giving effect to any voting
agreement or stockholders’ agreement that effectively transfers voting power) to
vote in the election of directors, managers or trustees of the corporation,
association or other business entity is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof).

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

“Termination Event” means (a) the occurrence with respect to any ERISA Plan of a
reportable event described in Section 4043(c) of ERISA other than a reportable
event not subject to the provision for 30-day notice to the Pension Benefit
Guaranty Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate from an
ERISA Plan during a plan year in which it was a “substantial employer” as
defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent
to terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate any ERISA Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA, or (e) the withdrawal or partial withdrawal by any ERISA
Affiliate from a “multiemployer plan” as that term is defined in Section 4001 of
ERISA, or (f) 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 ERISA Plan.

“Transaction” shall mean, collectively, (i) the consummation of the Exchange
Offer (ii) the entering into of the Loan Documents on the Closing Date and the
incurrence of the Loans on such date, and (iii) the payment of all fees and
expenses in connection with the foregoing.

“Treasury Management Arrangement” means any agreement or other arrangement
governing the provision of treasury or cash management services, including
deposit accounts, overdraft, credit or debit card, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled
disbursement, lockbox, account reconciliation and reporting and trade finance
services and other cash management services.

“Treasury Rate” means, with respect to the Loans as of any prepayment date, the
yield to maturity at the time of computation of United States Treasury
securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15

 

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(519) that has become publicly available at least two Business Days prior to the
prepayment date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data) most nearly equal to the
period from the prepayment date to September 7, 2017; provided, however, that if
the period from the prepayment date to September 7, 2017 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the prepayment date to the final maturity
of the Loans is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used. The Borrower will (a) calculate the Treasury Rate on the second
Business Day preceding the applicable prepayment date and (b) on or prior to
such prepayment date file with the Administrative Agent an Officer’s Certificate
setting forth the Applicable Premium and the Treasury Rate and showing the
calculation of each in reasonable detail.

“Tribunal” means, in the case of all parties hereto, any government, any
arbitration panel, any court or any governmental department, commission, board,
bureau, agency or instrumentality of the United States of America or any state,
province, commonwealth, nation, territory, possession, county, parish, town,
township, village or municipality, whether now or hereafter constituted and/or
existing, and, solely in the case of Lender Parties, any foreign governmental
and supervisory authorities and central banks, whether now or hereafter
constituted and/or existing.

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as the same
may from time to time be in effect in the State of New York or the
Uniform Commercial Code (or similar code or statute) of another jurisdiction, to
the extent it may be required to apply to any item or items of Collateral.

“Unrestricted Subsidiary” means any Subsidiary of the Borrower that is
designated by the Board of Directors of the Borrower as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) except as permitted by Section 6.11 hereof, is not party to any agreement,
contract, arrangement or understanding with the Borrower or any Restricted
Subsidiary of the Borrower unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Borrower or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Borrower;

(3) is a Person with respect to which neither the Borrower nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe
for additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Borrower or any of its Restricted
Subsidiaries.

 

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“Volumetric Production Payments” means production payment obligations recorded
as deferred revenue in accordance with GAAP, together with all related
undertakings and obligations.

“Voting Stock” of any specified Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote (without regard to the
occurrence of any contingency) in the election of the Board of Directors of such
Person.

“Withholding Agent” means the Borrower and the Administrative Agent.

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

Section 1.2 Exhibits and Schedules; Additional Definitions. All Exhibits and
Schedules attached to this Agreement are a part hereof for all
purposes. Reference is hereby made to the Security Schedule for the meaning of
certain terms defined therein and used but not defined herein, which definitions
are incorporated herein by reference.

Section 1.3 Amendment of Defined Instruments. Unless the context otherwise
requires or unless otherwise provided in the relevant defined term or unless
otherwise provided herein the terms defined in this Agreement which refer to a
particular agreement, instrument or document also refer to and include all
renewals, extensions, modifications, amendments and restatements of such
agreement, instrument or document in accordance with the Loan Documents;
provided, however that nothing contained in this section shall be construed to
authorize any such renewal, extension, modification, amendment or restatement.

Section 1.4 References and Titles. All references in this Agreement to Exhibits,
Schedules, articles, sections, subsections and other subdivisions refer to the
Exhibits, Schedules, articles, sections, subsections and other subdivisions of
this Agreement unless expressly provided otherwise. Titles appearing at the
beginning of any subdivisions are for convenience only and do not constitute any
part of such subdivisions and shall be disregarded in construing the language
contained in such subdivisions. The words “this Agreement”, “this instrument”,
“herein”, “hereof”, “hereby”, “hereunder” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited. The phrases “this section” and “this subsection” and similar phrases
refer only to the sections or subsections hereof in which such phrases
occur. The word “or” is not exclusive, and the word “including” (in its various
forms) means “including without limitation”. Pronouns in masculine, feminine and
neuter genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires. All references to any Person shall be construed
to include such Person’s successors and assigns, provided such successors and
assigns are permitted by the Loan Documents.

Section 1.5 Calculations and Determinations. All calculations of interest under
the Loan Documents shall be made on the basis of actual days elapsed (including
the first day but excluding the last) and a year of 365 or 366 days, as
appropriate. Each determination by a Lender Party of amounts to be paid under
any of Sections 3.2 or 3.3 or any other matters which are to be determined
hereunder by a Lender Party shall, in the absence of manifest error, be
conclusive and binding. Unless otherwise expressly provided herein or unless
Required Lenders otherwise consent all financial statements and reports
furnished to any Lender Party hereunder shall be prepared and all financial
computations and determinations pursuant hereto shall be made in accordance with
GAAP.

 

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ARTICLE II - The Loans

Section 2.1 Commitments to Make Loans. Subject to the terms and conditions
hereof, each Lender that has a Commitment severally agrees to make a term loan
or term loans to the Borrower (each a “Loan” and collectively, the “Loans”),
which Loans (i) shall be incurred pursuant to a single drawing on the Closing
Date and (ii) shall be denominated in U.S. dollars. Once repaid, Loans incurred
hereunder may not be re-borrowed.

Section 2.2 Requests for New Loans. The Borrower shall give the Administrative
Agent at the Payment Office prior to 12:00 p.m. (New York City time) at least
three Business Day’s prior written notice of the Loans to be incurred hereunder
on the Closing Date. Such notice (a “Borrowing Notice”) shall be irrevocable and
shall be in writing in the form of Exhibit B, appropriately completed to
specify: (i) the aggregate principal amount of the Loans to be incurred pursuant
to such Borrowing, (ii) the date of such Borrowing (which shall be a Business
Day), and (iii) the wire instructions for the Borrower account to which the Loan
funds should be sent.

Upon receipt of the Borrowing Notice, the Administrative Agent shall give each
Lender prompt notice of the terms thereof. Each Borrowing Notice shall be
irrevocable and binding on the Borrower. If all conditions precedent to such
Loans have been met, each Lender will on the date requested promptly remit to
the Administrative Agent at the Payment Office, for receipt no later than 12:00
p.m. (New York City time) on such date, the amount of such Lender’s Loan in
immediately available funds, and upon receipt of all such requested funds,
unless to its actual knowledge any conditions precedent to such Loans have been
neither met nor waived as provided herein, the Administrative Agent shall
promptly make such Loans available to the Borrower. Unless the Administrative
Agent shall have received prompt notice from a Lender that such Lender will not
make available to the Administrative Agent such Lender’s Loan, the
Administrative Agent may in its discretion assume that such Lender has made such
Loan available to the Administrative Agent in accordance with this section and
the Administrative Agent may if it chooses, in reliance upon such assumption,
make such Loan available to the Borrower. If and to the extent such Lender shall
not so make its new Loan available to the Administrative Agent, such Lender and
the Borrower severally agree to pay or repay to the Administrative Agent within
three days after demand the amount of such Loan together with interest thereon,
for each day from the date such amount was made available to the Borrower until
the date such amount is paid or repaid to the Administrative Agent, with
interest at (i) the Federal Funds Rate, if such Lender is making such payment
and (ii) the interest rate applicable to the Loans at such time, if the Borrower
is making such repayment. If neither such Lender nor

 

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the Borrower pay or repay to the Administrative Agent such amount within such
three-day period, the Administrative Agent shall in addition to such amount be
entitled to recover from such Lender and from Borrower, on demand, interest
thereon at the interest rate set forth in Section 2.8(b), calculated from the
date such amount was made available to the Borrower. The failure of any Lender
to make any Loan to be made by it hereunder shall not relieve any other Lender
of its obligation hereunder, if any, to make its Loan, but no Lender shall be
responsible for the failure of any other Lender to make any new Loan to be made
by such other Lender.

Section 2.3 Use of Proceeds. The Borrower shall use the proceeds of all Loans to
(i) refinance a portion of the Indebtedness under the Existing RCF Agreement,
(ii) finance its working capital and general corporate purposes and (iii) pay
fees and expenses related to this Agreement and the Transactions and the closing
of the Transactions. In no event shall the funds from any Loan be used directly
or indirectly by any Person (a) for personal, family, household or agricultural
purposes or (b) for the purpose, whether immediate, incidental or ultimate, of
purchasing, acquiring or carrying any “margin stock” or any “margin securities”
(as such terms are defined respectively in Regulation T, U and X promulgated by
the Board of Governors) or to extend credit to others directly or indirectly for
the purpose of purchasing or carrying any such margin stock or margin
securities, in each case in violation of Regulation T, U or X or (c) for the
acquisition of any Person unless such acquisition has been approved by the board
of directors, management committee or partners, as the case may be of such
Person. The Borrower represents and warrants that the Borrower is not engaged
principally, or as one of the Borrower’s important activities, in the business
of extending credit to others for the purpose of purchasing or carrying such
margin stock or margin securities.

Section 2.4 Optional Prepayments.

(a) At any time prior to September 7, 2017, the Borrower may prepay all or a
part of the Loans, upon not less than three Business Days’ prior written notice
to the Administrative Agent, at a prepayment price equal to 100% of the
principal amount of Loans prepaid plus the Applicable Premium as of, and accrued
and unpaid interest, if any, to, but not including the date of prepayment,
subject to the rights of Lenders on the relevant record date to receive interest
due on an interest payment date that is on or prior to the prepayment date.

(b) On or after September 7, 2017, the Borrower may prepay all or a part of the
Loans upon not less than three Business Days’ prior written notice to the
Administrative Agent, at the prepayment prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest on the Loans
prepaid to, but not including, the applicable prepayment date, if prepaid during
the twelve-month period beginning on September 7 of the years indicated below:

 

Year

   Percentage  

2017

     105.50 % 

2018

     102.75 % 

2019 and thereafter

     100.00 % 

(c) Any prepayment pursuant to this Section 2.4 shall be made pursuant to the
provisions of Sections 3.1 through 3.6 hereof. Any notice given pursuant to this
Section 2.4 may state that such notice is conditioned upon the effectiveness of
other transactions, in which case,

 

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such notice may be revoked or the date of repayment postponed by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied.

(d) (i) If the Loans are accelerated or otherwise become due prior to their
stated maturity date, in each case, as a result of an Event of Default
(including, but not limited to, upon the occurrence of a bankruptcy or
insolvency event (including the acceleration of claims by operation of law)) on
or after September 7, 2017, the amount of principal of, accrued and unpaid
interest and premium on the Loans that becomes due and payable shall equal the
prepayment premium applicable with respect to an optional prepayment of the
Loans, in effect on the date of such acceleration as if such acceleration were
an optional prepayment of the Loans accelerated. If the Loans are accelerated or
otherwise become due prior to their stated maturity date, in each case, as a
result of an Event of Default (including, but not limited to, upon the
occurrence of a bankruptcy or insolvency event (including the acceleration of
claims by operation of law)) prior to September 7, 2017, the amount of principal
of, and premium on, the Loans that becomes due and payable shall equal 100% of
the principal amount of the Loans redeemed plus the Applicable Premium in effect
on the date of such acceleration, as if such acceleration were an optional
prepayment of the Loans accelerated. Without limiting the generality of the
foregoing, it is understood and agreed that if the Loans are accelerated or
otherwise become due prior to their maturity date, in each case, in respect of
any Event of Default (including, but not limited to, upon the occurrence of a
bankruptcy or insolvency event (including the acceleration of claims by
operation of law)), the premium applicable with respect to an optional
prepayment of the Loans (which, for all purposes of the paragraphs under “Events
of Default,” shall be understood to include the applicable prepayment premium)
will also be due and payable as though the Loans were optionally redeemed and
shall constitute part of the Obligations, in view of the impracticability and
extreme difficulty of ascertaining actual damages and by mutual agreement of the
parties as to a reasonable calculation of each Lender’s lost profits as a result
thereof. Any premium payable above shall be presumed to be the liquidated
damages sustained by each Lender as the result of the prepayment and the Loan
Parties agree that it is reasonable under the circumstances currently existing.
The premium shall also be payable in the event the Loans (and/or the Indenture)
are satisfied or released by foreclosure (whether by power of judicial
proceeding), deed in lieu of foreclosure or by any other means. THE LOAN PARTIES
EXPRESSLY WAIVE (TO THE FULLEST EXTENT THEY MAY LAWFULLY DO SO) THE PROVISIONS
OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE
COLLECTION OF THE FOREGOING PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION.
The Loan Parties expressly agree (to the fullest extent they may lawfully do so)
that: (A) the premium is reasonable and is the product of an arm’s length
transaction between sophisticated business people, ably represented by counsel;
(B) the premium shall be payable notwithstanding the then prevailing market
rates at the time payment is made; (C) there has been a course of conduct
between the Lenders and the Loan Parties giving specific consideration in this
transaction for such agreement to pay the premium; and (D) the Loan Parties
shall be estopped hereafter from claiming differently than as agreed to in this
paragraph. The Loan Parties expressly acknowledge that their agreement to pay
the premium to the Lenders as herein described is a material inducement to the
Lenders to make the Loans.

 

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Section 2.5 Mandatory Prepayments. The Borrower is not required to make
mandatory prepayment or sinking fund payments with respect to the Loans.

Section 2.6 Offers to Purchase.

(a) In the event that, pursuant to Section 6.10 hereof, the Borrower is required
to commence an Asset Sale Offer, it will comply with the following procedures
specified below (collectively, an “Asset Sale Offer”): (A) the Borrower shall
deliver a written notice (each, an “Asset Sale Offer Notice”) to the
Administrative Agent (for distribution to the Lenders) irrevocably and
unconditionally offering to repay the Loans with the then applicable Excess
Proceeds, which notice shall set forth (i) the date of the proposed consummation
of such Asset Sale Offer (which shall be no later than the fifth Business Day
following delivery of the respective Asset Sale Offer Notice), (ii) the last
Business Day on which such Asset Sale Offer may be accepted or declined (which
shall in no event be later than the date occurring three Business Days after the
date of delivery of such Asset Sale Offer Notice) and (iii) the aggregate
principal amount of the Loans subject to such Asset Sale Offer and (B) the
Borrower shall repay Loans of those Lenders that have accepted the Borrower’s
respective Asset Sale Offer, with such repayment of Loans to be applied in
accordance with the requirements of Section 3.1. In order to reject such Asset
Sale Offer, the Lenders must provide written notice to the Administrative Agent
no later than one (1) Business Day prior to the proposed Asset Sale date; any
Lender that does not so reject within that time frame shall be deemed to have
accepted the Asset Sale Offer. Notwithstanding the foregoing provisions of this
Section 2.6(a), the Borrower and its Subsidiaries, the Administrative Agent and
the Lenders hereby agree that nothing in this Agreement shall be understood to
mean or suggest that the Loans subject to an Asset Sale Offer constitute
“securities” for purposes of either the Securities Act or the Securities
Exchange Act.

(b) Upon the occurrence of a Change of Control, each Lender will have the right
to require the Borrower to make an offer (a “Change of Control Offer”) to repay
all or any part (equal to $1,000 or an integral multiple of $1,000) of that
Lender’s Loans at a repayment price in cash equal to 101% of the aggregate
principal amount of Loans repaid plus accrued and unpaid interest, if any, on
the Loans repaid to the date of repayment (the “Change of Control Payment”).

(i) Within thirty days following any Change of Control, the Borrower will
provide a written notice to the Administrative Agent that will be posted or
otherwise distributed to the Lenders describing the transaction or transactions
that constitute the Change of Control and stating:

(A) that a Change of Control Offer is being made pursuant to this Section 2.6(b)
and that all Loans offered for repayment prior to the expiration of the Change
of Control Offer will be accepted for repayment;

(B) the repayment price and the repayment date, which shall be no earlier than
30 days and no later than 60 days from the date such notice is delivered (the
“Change of Control Payment Date”);

(C) that any Loans not repaid will continue to accrue interest; and

 

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(D) that, unless the Borrower defaults in the payment of the Change of Control
Payment, all Loans repaid pursuant to the Change of Control Offer will cease to
accrue interest after the Change of Control Payment Date; and

(E) that Lenders will be entitled to withdraw their election if the
Administrative Agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the Lender,
the principal amount of Loans offered for repayment, and a statement that such
Lender is withdrawing his election to have its Loans repaid; and

(ii) Promptly following the expiration of the Change of Control Offer, the
Borrower will, to the extent lawful, repay all Loans or portions thereof elected
to be repaid pursuant to the Change of Control Offer in accordance with
Section 3.1.

(iii) Notwithstanding anything to the contrary in this Section 2.6(b), the
Borrower will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at
the time and otherwise in compliance with the requirements set forth in this
Section 2.6(b) applicable to a Change of Control Offer made by the Borrower and
repays all Loans properly submitted for repayment and not withdrawn under the
Change of Control Offer, or (2) notice of prepayment has been given pursuant to
Section 3.1 unless and until there is a default in payment of the applicable
prepayment price.

(iv) A Change of Control Offer may be made in advance of a Change of Control,
and conditioned upon the occurrence of such Change of Control, if a definitive
agreement is in place for the Change of Control at the time of making the Change
of Control Offer.

(v) In the event that holders of not less than 90% of the aggregate principal
amount of the outstanding Loans accept a Change of Control Offer and the
Borrower (or the third party making the Change of Control Offer as described
above) repays all of the Loans held by such Lenders, the Borrower will have the
right, upon not less than three Business Days prior notice, given not more
than 30 days following the repayment pursuant to the Change of Control Offer
described above, to prepay all of the Loans that remain outstanding following
such repayment at a repayment price equal to the Change of Control Payment plus,
to the extent not included in the Change of Control Payment, accrued and unpaid
interest on the Loans that remain outstanding, to, but not including, the date
of prepayment.

(vi) Notwithstanding the foregoing provisions of this Section 2.6(b), the
Borrower and its Subsidiaries, the Administrative Agent and the Lenders

 

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hereby agree that nothing in this Agreement shall be understood to mean or
suggest that the Loans subject to a Change of Control Offer constitute
“securities” for purposes of either the Securities Act or the Securities
Exchange Act.

Section 2.7 Maturity Date. The Borrower shall repay in full in cash the unpaid
principal amount of all Loans on the Maturity Date, or such earlier date as may
be required in accordance with the terms hereof. The Borrower shall deliver a
notice to the Administrative Agent on or prior to February 14, 2019 indicating
whether the Maturity Date shall be on February 28, 2019 or November 15, 2019.

Section 2.8 Interest. (a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Loan from the date of Borrowing thereof until
the maturity thereof (whether by acceleration or otherwise) at a rate per annum
equal to 11.0%.

(b) The Borrower will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
2% per annum in excess of the then applicable interest rate on the Loans to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful. Interest that accrues under this Section 2.8(b) shall be payable on
demand.

(c) Accrued (and theretofore unpaid) interest shall be payable (x) quarterly in
arrears on each Payment Date, (y) on the date of any repayment or prepayment in
full of all outstanding Loans, and (z) at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.

Section 2.9 Register; Notes. The Register shall be maintained on the following
terms.

(a) The Borrower hereby designates the Administrative Agent to serve as the
Borrower’s agent, solely for the purpose of this clause, to maintain a register
(the “Register”) on which the Administrative Agent will record each Lender’s
name and address, Commitments, the Loans made by each Lender and each repayment
in respect of the principal amount (and stated interest) of the Loans, annexed
to which the Administrative Agent shall retain a copy of each Assignment and
Acceptance delivered to the Administrative Agent pursuant to Section 10.6.
Failure to make any recordation, or any error in such recordation, shall not
affect any Restricted Person’s Obligations. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan is registered as the owner thereof for the purposes of all Loan Documents,
notwithstanding notice or any provision herein to the contrary. Any assignment
or transfer of a Commitment or the Loans made pursuant hereto (including an
assignment or transfer to an Affiliated Lender) shall be registered in the
Register only upon delivery to the Administrative Agent of an Assignment and
Acceptance that has been executed by the requisite parties pursuant to
Section 10.6. No assignment or transfer of a Lender’s Commitment or Loans shall
be effective unless such assignment or transfer shall have been recorded in the
Register by the Administrative Agent as provided in this Section 2.9. This
Section 2.9 shall be construed so that all Loans are at all times maintained in
“registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2)
of the Code and any related Treasury regulations (or any other relevant or
successor provisions of the Code or such Treasury regulations).

 

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(b) The Borrower agrees that, upon the request of any Lender, the Borrower will
execute and deliver to such Lender a Note evidencing the Loans made by, and
payable to, such Lender in a maximum principal amount equal to such Lender’s
Loans. The Borrower hereby irrevocably authorizes each Lender to make (or cause
to be made) appropriate notations on the grid attached to such Lender’s Note (or
on any continuation of such grid), which notations, if made, shall evidence,
inter alia, the date of, the outstanding principal amount of, and the interest
rate applicable to the Loans evidenced thereby. Such notations shall, to the
extent not inconsistent with notations made by the Administrative Agent in the
Register, be conclusive and binding on each Restricted Person absent manifest
error; provided, however that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of any Restricted
Person.

(c) Interest on each Note shall accrue and be due and payable as provided herein
and therein, (subject to the applicability of Section 2.8(b) and limited by the
provisions of Section 10.9).

Section 2.10 Fees.

(a) In addition to all other amounts due to the Administrative Agent under the
Loan Documents, the Borrower will pay fees to the Administrative Agent as
described in the Administrative Agent Fee Letter.

(b) In the event that any cash fee is paid by the Borrower or Guarantors to the
lenders under the Existing RCF Agreement in connection with any waiver or cure
of any event of default under the Existing RCF Agreement or any other Priority
Lien Document (as such term is defined thereunder) (any such fee, a “Waiver
Fee”), the Borrower shall, within two Business Days of payment of such fee to
the lenders under the Existing RCF Agreement (the date of payment of such Waiver
Fee, the “Fee Payment Date”), pay to the Administrative Agent for the pro rata
account of each Lender a cash fee equal to (i) (x) the Waiver Fee divided by (y)
the then effective Borrowing Base (as defined in the Existing RCF Agreement as
in effect on the Fee Payment Date) multiplied by (ii) the aggregate outstanding
principal amount of Loans on the Fee Payment Date. Any payment made under this
Section 2.10(b) shall be made pursuant to the provisions of Sections 3.1 through
3.6 hereof.

ARTICLE III - Payments to Lenders

Section 3.1 General Procedures. Unless otherwise expressly provided in a Loan
Document, the Borrower will make each payment which it owes under the Loan
Documents to the Administrative Agent at its Payment Office (in accordance with
the then effective wire instructions provided by the Administrative Agent to the
Borrower) for the account of the Lender Party to whom such payment is owed. Each
such payment must be received by the Administrative Agent not later than 12:00
noon, New York City time, on the date such payment becomes due and payable, in
lawful money of the United States of America, without set-off, deduction (except
for any deduction for Taxes as described in Section 3.3(a)) or

 

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counterclaim, and in immediately available funds. Any payment received by the
Administrative Agent after such time may, in Administrative Agent’s discretion,
be deemed to have been made on the next following Business Day. Should any such
payment become due and payable on a day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal or past due interest, interest shall accrue
and be payable thereon for the period of such extension as provided in the Loan
Document under which such payment is due. Each payment under a Loan Document
shall be due and payable at the place provided therein and, if no specific place
of payment is provided, shall be due and payable at the Payment Office or as
otherwise directed by the Administrative Agent. The Administrative Agent shall
promptly remit in same day funds to each Lender Party its share, if any, of such
payments received by the Administrative Agent for the account of such Lender
Party. The Administrative Agent may, subject to the Intercreditor Agreements,
and upon direction of the Required Lenders shall, apply all amounts received
pursuant to any exercise of remedies under the Loan Documents (including from
proceeds of collateral securing the Obligations) or under applicable law upon
receipt thereof to the Obligations as follows:

(a) first, for the payment of all fees and expenses of the Administrative Agent
and its counsel which are then due until such amounts are paid in full (and, to
the extent such amounts received are proceeds from the foreclosure or other sale
of real property, for the payment of all fees and expenses of the trustee, if
applicable);

(b) then for the payment of all other Obligations which are then due (and if
such money is insufficient to pay all such Obligations, first to any
reimbursements due the Administrative Agent under Section 10.4 until such
amounts are paid in full, second to the payment of all interest on the Loans
then due on a pro rata basis until such amounts are paid in full, third to the
payment of all principal on the Loans on a pro rata basis until such amounts are
paid in full, and fourth to the payment of all other Obligations then due in
proportion to the amounts thereof, or as Lender Parties shall otherwise agree)
until such amounts are paid in full;

(c) then for the prepayment of any other Obligations, if any until such amounts
are paid in full; and

(d) last, to the Borrower or any other Person as directed by a court of
competent jurisdiction.

All payments applied to principal or interest on any Loan shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with
Sections 2.4 and 2.5. All distributions of amounts described in any of
subsections (b), (c) or (d) above shall be made by the Administrative Agent pro
rata to each Lender Party then owed Obligations described in such subsection (or
subclause thereof) in proportion to all amounts owed to all Lender Parties which
are described in such subsection (or subclause thereof).

Section 3.2 Capital Reimbursement. If either (a) the introduction or
implementation of or the compliance with or any change in or in the
interpretation of any Law, or (b) the introduction or implementation of or the
compliance with any request, directive or guideline from any central bank or
other governmental authority (whether or not having the force

 

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of Law) affects or would affect the amount of capital or liquidity required or
expected to be maintained by any Lender Party (or any assignee of such Lender
Party) or any corporation controlling any Lender Party (or its assignee), then,
upon demand by such Lender Party, the Borrower will pay to the Administrative
Agent for the benefit of such Lender Party, from time to time as specified by
such Lender Party, such additional amount or amounts which such Lender Party
shall reasonably determine to be appropriate to compensate such Lender Party or
any corporation controlling such Lender Party in light of such circumstances, to
the extent that such Lender Party reasonably determines that the amount of any
such capital would be increased or the rate of return on any such capital would
be reduced by or in whole or in part based on the existence of the face amount
of such Lender Party’s Loans or commitments under this Agreement; provided,
however that notwithstanding anything herein to the contrary, (i) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules,
guidelines or directives thereunder or issued in connection therewith and (ii)
all requests, rules, guidelines or directives promulgated by any Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a change in law, regardless of the date enacted, adopted or issued.

Section 3.3 Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any Taxes
except as required by applicable law. If any applicable law requires the
deduction or withholding of any Taxes from such payments, then (i) in the case
of Indemnified Taxes or Other Taxes, the sum payable shall be increased as
necessary so that after making all required deductions of Indemnified Taxes or
Other Taxes (including deductions of Indemnified Taxes or Other Taxes applicable
to additional sums payable under this Section 3.3(a)), the Administrative Agent
or Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, and (ii) the applicable Withholding
Agent shall make all deductions required by applicable law and shall pay the
full amount deducted to the relevant governmental authority in accordance with
applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
governmental authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent and each Lender within
10 days after written demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes paid by the Administrative Agent or such Lender, as the
case may be, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant governmental authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

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

(e) 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 (with a copy to 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. In addition, any Lender, if 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 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 3.3(e)(i)(A),
Section 3.3(h) and Section 3.3.(i) 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.

Without limiting the generality of the foregoing, (i) a Foreign Lender, that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement or any
other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate. Without limiting the generality of the
foregoing:

(A) each Foreign Lender shall deliver to the Borrower and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the 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 IRS
Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding tax pursuant to the “interest” article of such tax treaty and (y)
with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN or IRS Form W-8BEN-E 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;

 

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

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 871(h) or Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit D-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 881(c)(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 copies of IRS Form W-8BEN or IRS Form W-8BEN-E;
or

(4) to the extent a Foreign Lender is not the beneficial owner, executed copies
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS
Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of
Exhibit D-2 or Exhibit D-3, IRS Form W-9, and/or other certification documents
from each beneficial owner, as applicable; provided, however 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 D-4 on behalf of each such direct and indirect partner.

(B) each 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 upon the reasonable request of the Borrower or the Administrative
Agent), executed copies 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.

(f) If the Administrative Agent or a Lender determines, in its reasonable
discretion, that it has received a refund of any Indemnified Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Section 3.3, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this
Section 3.3 with respect to the Indemnified Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the relevant
governmental authority with respect to such refund); provided, however that the
Borrower, upon the request of the Administrative Agent or such Lender agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges

 

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imposed by the relevant governmental authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such governmental authority. Notwithstanding anything to
the contrary in this paragraph (f), in no event will the Lender or the
Administrative Agent be required to pay any amount to the Borrower pursuant to
this paragraph (f) the payment of which would place such Lender or the
Administrative Agent in a less favorable net after-Tax position than such person
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 paragraph shall not be construed to require the
Administrative Agent or any Lender to make available its Tax returns (or any
other information relating to its Taxes that it deems confidential) to the
Borrower or any other Person.

(g) Each Lender agrees to indemnify and hold harmless the Borrower or the
Administrative Agent, as applicable, from any United States taxes, penalties,
interest and other reasonable expenses incurred or payable by (i) the Borrower
or the Administrative Agent as a result of such Lender’s failure to submit any
form or certificate that it is required to provide pursuant to this Section 3.3,
(ii) the Borrower or the Administrative Agent as a result of their reliance on
any such form or certificate which such Lender has provided to them pursuant to
this Section 3.3, or (iii) the Borrower or the Administrative Agent as a result
of a failure by the Lender to maintain a Participant Register pursuant to
Section 10.6(a).

(h) 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 obligations under FATCA and 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 (h), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

(i) U.S. Lenders. 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 copies
of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding Tax.

(j) Administrative Agent Documentation. On or before effective time of this
Agreement, Cortland Capital Market Services LLC shall (and any successor or
replacement Administrative Agent shall, on or before the date on which it
becomes the Administrative Agent hereunder), deliver to the Borrower two duly
executed copies of either (i) IRS Form W-9, or (ii) IRS Form W-8ECI (with
respect to any payments to be received on its own behalf) and IRS Form W-8IMY
(for all other payments), establishing that the Borrower can make payments to
the Administrative Agent without deduction or withholding of any Taxes imposed
by the United States, including Taxes imposed under FATCA.

 

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Section 3.4 Change of Applicable Lending Office. Each Lender Party agrees that,
upon the occurrence of any event giving rise to the operation of any of
Sections 3.2 or 3.3 with respect to such Lender Party, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Lender Party) to designate another Lending Office; provided, however
that such designation is made on such terms that such Lender Party and its
Lending Office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
any such section. Nothing in this section shall affect or postpone any of the
obligations of the Borrower or the rights of any Lender Party provided in any of
Sections 3.2 or 3.3.

Section 3.5 Replacement of Lenders. If any Lender Party seeks reimbursement for
increased costs under any of Sections 3.2 or 3.3, or if any Lender Party becomes
a Non-Consenting Lender pursuant to Section 10.1, then within ninety days
thereafter and provided no Event of Default then exists, the Borrower shall have
the right (unless such Lender Party withdraws its request for additional
compensation) to replace such Lender Party or Non-Consenting Lender by requiring
such Lender Party or Non-Consenting Lender to assign its Loans, Notes and its
Commitments hereunder to an Eligible Transferee reasonably acceptable to the
Administrative Agent and to the Borrower; provided, however that: (i) all
Obligations of the Borrower owing to such Lender Party or Non-Consenting Lender
being replaced (including such increased costs, but excluding principal and
accrued interest on the Notes being assigned) shall be paid in full to such
Lender Party or Non-Consenting Lender concurrently with such assignment, and
(ii) the replacement Eligible Transferee shall purchase the Loans, Notes and
Commitments being assigned by paying to such Lender Party or Non-Consenting
Lender a price equal to the principal amount thereof, plus accrued and unpaid
interest thereon. In connection with any such assignment the Borrower, the
Administrative Agent, such Lender Party or Non-Consenting Lender and the
replacement Eligible Transferee shall otherwise comply with Section 10.6.
Notwithstanding the foregoing rights of the Borrower under this section,
however, the Borrower may not replace any Lender Party which seeks reimbursement
for increased costs under any of Sections 3.2 or 3.3, unless the Borrower is at
the same time replacing all Lender Parties which are then seeking such
compensation. In connection with any such replacement of a Lender Party or
Non-Consenting Lender, the Borrower shall pay all outstanding and unpaid costs
and expenses due to such Lender Party or Non-Consenting Lender hereunder.

Section 3.6 Participants. If a Lender has assigned a participation in its Loans
or commitment hereunder to another Person in accordance with Section 10.6, any
amount otherwise payable by the Borrower to such Lender under Section 3.3 (in
this section called “Increased Costs”), shall include that portion of the
Increased Costs determined by such Lender to be allocable to the amount of any
interest or participation transferred by such Lender in such Lender’s Loan or
commitments under this Agreement; provided, however that, for the avoidance of
doubt, the amount of the Increased Costs shall not exceed the amount that would
be due if such Lender had not assigned any participation.

 

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ARTICLE IV - Conditions Precedent to Lending

Section 4.1 Closing Date. The obligations of the Lenders to make Loans hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 10.1):

(a) The Administrative Agent and the Lenders (or their respective counsel) shall
have received:

(A) This Agreement and any other Loan Documents that the Restricted Persons are
to execute in connection herewith, in each case in form and substance reasonably
satisfactory to the Backstop Lender and Administrative Agent (as applicable).

(B) For each Lender requesting a Note, a Note payable to such Lender or its
registered assigns.

(C) Executed copies of each Security Document listed on the Security Schedule,
in each case in form and substance reasonably satisfactory to the Backstop
Lender, together with,

(1) subject to the Senior Lien Intercreditor Agreement, certificates
representing the Capital Stock pledged pursuant to the Security Documents,
accompanied by undated stock powers executed in blank, or evidence that such
certificates and related stock powers were delivered to the Priority Lien
Collateral Agent;

(2) proper financing statements, duly prepared for filing under the
Uniform Commercial Code of all relevant jurisdictions of incorporation;

(3) completed lien searches, dated on or before the date hereof, listing all
effective financing statements filed in the jurisdictions referred to in
clause (2) above and any others reasonably requested by the Backstop Lender that
name any Loan Party as debtor, together with copies of such other financing
statements; and

(4) executed Mortgages, in each case in form and substance satisfactory to the
Backstop Lender, covering at least 80% of the value of the oil and gas
properties required to be pledged pursuant to the terms of the Credit Agreement
and the Loan Documents.

(D) The following certificates of the Loan Parties:

(1) An Officer’s Certificate of each Loan Party, which shall contain the names
and signatures of the officers of the respective Loan Party authorized to
execute Loan Documents to which it is a party and which shall certify to the
truth, correctness and completeness of the following, which shall be exhibits
attached thereto: (1) a copy of resolutions duly adopted by the Board of
Directors of such Loan Party and

 

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in full force and effect at the time this Agreement is entered into, authorizing
the execution of this Agreement and the other Loan Documents delivered or to be
delivered in connection herewith and the consummation of the transactions
contemplated herein and therein, (2) a copy of the charter documents of such
Loan Party and all amendments thereto, certified by the appropriate official of
such Loan Party’s state of organization, and (3) a copy of any bylaws of such
Loan Party; and

(2) A “Compliance Certificate” delivered by the Borrower, of even date with such
Loan, in which the officers signatory thereto certify to the satisfaction of the
conditions set out in Section 4.1.

(3) A perfection certificate in form and substance reasonably satisfactory to
the Administrative Agent and the Lenders dated as of the Closing Date.

(E) A certificate (or certificates) of the due formation, valid existence and
good standing of each Loan Party in its state of organization, issued by the
appropriate authorities of such jurisdiction.

(F) At least three Business Days prior to the Closing Date, a Borrowing Notice.

(G) A favorable opinion of Kirkland & Ellis LLP, special New York and Texas
counsel for the Loan Parties, in form and substance reasonably satisfactory to
the Administrative Agent and the Backstop Lender, as to customary matters,
including without limitation valid existence, due authorization, execution and
delivery, enforceability, compliance with applicable laws, non-contravention,
perfection, and investment company act matters.

(H) A favorable opinion of Jones Walker LLP addressed to the Lender Parties,
covering, without limitation, the enforceability of each Mortgage under the laws
of the jurisdiction in which the Mortgaged Property subject to such Mortgage is
located, the creation of valid mortgage Liens on such Mortgaged Property under
the laws of the jurisdiction in which the Mortgaged Property subject to such
Mortgage is located and other matters customarily addressed in legal opinions of
local counsel with respect to the Mortgages.

(I) Certificates or binders evidencing insurance for each of the Borrower and
its Restricted Subsidiaries in effect on the Closing Date in form and substance
reasonably satisfactory to the Administrative Agent and the Backstop Lender.

(J) A reasonably satisfactory completed Disclosure Schedule.

(K) A solvency certificate from the chief financial officer of the Borrower
substantially in the form of Exhibit E.

 

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(L) All documentation and other information required by regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including without limitation the Patriot Act, in each case to the
extent requested at least five Business Days prior to the Closing Date, which
shall include, for the avoidance of doubt, a duly completed IRS Form W-9.

(M) An executed amendment to the Existing RCF Agreement, substantially in
accordance with the terms set forth in Exhibit C to the RSA or, if not
substantially in accordance with such terms, otherwise in form and substance
reasonably satisfactory to the Borrower and the Backstop Lender (it being
understood that any changes that are not adverse to the Lenders (as determined
by the Backstop Lender in its reasonable discretion) shall be deemed
satisfactory).

(N) An executed amendment to the Existing Unsecured Indenture to allow for the
issuance of the New Second Lien Notes and the New Junior Lien Notes in form and
substance reasonably satisfactory to the Borrower and the Backstop Lender.

(b) The Senior Lien Intercreditor Agreement shall have been duly executed and
delivered by each party thereto, and shall be in full force and effect.

(c) Substantially simultaneously with the initial funding of the Loans on the
Closing Date, the Exchange Offer shall have been consummated in accordance with
the terms set forth in the RSA.

(d) The Administrative Agent and the Backstop Lender shall have received payment
of all agency and other fees required to be paid to any Lender Party pursuant to
any Loan Documents or any commitment or fee letters between or among the
Borrower and the Administrative Agent or the Backstop Lender heretofore entered
into and all fees and disbursements of their counsel then due such counsel.

(e) There shall be no litigation pending or, to the knowledge of any Borrower or
its Subsidiaries, threatened litigation, action, proceeding, investigation or
labor controversy which purports to affect the legality, validity or
enforceability of any Loan Document.

(f) All representations and warranties contained herein and in any Loan Document
shall be true and correct in all material respects as of the date of such Loan
(it being understood and agreed that (x) any such representation or warranty
that is qualified as to “materiality”, “Material Adverse Change” or similar
language shall be true and correct in all respects on such date and (y) any such
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects (or all
respects, as the case may be) only as of such specified date) as if such
representations and warranties had been made as of the date of such Loan.

(g) No Default or Event of Default shall have occurred and be continuing at the
date of such Loan or would result from the making of such proposed Loan and the
consummation of the Transactions under the Existing RCF Agreement, the Existing
Unsecured Indenture or the Existing Second Lien Credit Agreement.

 

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ARTICLE V - Representations and Warranties

To confirm each Lender Party’s understanding concerning Restricted Persons and
Restricted Persons’ businesses, properties and obligations and to induce each
Lender Party to enter into this Agreement and to extend credit hereunder, the
Borrower represents and warrants to each Lender Party that as of the Closing
Date:

Section 5.1 No Default. No Restricted Person is in default in the performance of
any of the covenants and agreements contained in any Loan Document. No event has
occurred and is continuing which constitutes a Default.

Section 5.2 Organization and Good Standing. Each Restricted Person is duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers and governmental approvals
required to carry out the transactions contemplated hereby. Each Restricted
Person is duly qualified, in good standing, and authorized to do business in all
other jurisdictions within the United States wherein the character of the
properties owned or held by it or the nature of the business transacted by it
makes such qualification necessary, except as would not cause a Material Adverse
Change. Each Restricted Person has taken all actions and procedures customarily
taken in order to enter, for the purpose of conducting business or owning
property, each jurisdiction outside the United States wherein the character of
the properties owned or held by it or the nature of the business transacted by
it makes such actions and procedures desirable, except as would not cause a
Material Adverse Change.

Section 5.3 Authorization. Each Loan Party has duly taken all action necessary
to authorize the execution and delivery by it of the Loan Documents to which it
is a party and to authorize the consummation of the transactions contemplated
thereby and the performance of its obligations thereunder. The Borrower is duly
authorized to borrow funds hereunder.

Section 5.4 No Conflicts or Consents. The execution and delivery by the various
Loan Parties of the Loan Documents to which each is a party, the performance by
each of its obligations under such Loan Documents and the consummation of the
transactions contemplated by the various Loan Documents, do not and will not
(a) conflict with any provision of (i) any Law, (ii) the organizational
documents of any Restricted Person, or (iii) any agreement, judgment, license,
order or permit applicable to or binding upon any Restricted Person other than,
in the case of (i) and (iii), such conflicts that could not reasonably be
expected to cause a Material Adverse Change, (b) result in the acceleration of
any Indebtedness owed by any Restricted Person, or (c) result in or require the
creation of any Lien upon any assets or properties of any Restricted Person
except as expressly contemplated in the Loan Documents. Except for those which
have already been obtained or as expressly contemplated in the Loan Documents,
no consent, approval, authorization or order of, and no notice to or filing
with, any Tribunal or third party is required in connection with the execution,
delivery or performance by any Restricted Person of any Loan Document or to
consummate any transactions contemplated by the Loan Documents.

 

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Section 5.5 Enforceable Obligations. This Agreement is, and the other Loan
Documents when duly executed and delivered will be, legal, valid and binding
obligations of each Restricted Person which is a party hereto or thereto,
enforceable in accordance with their terms except as such enforcement may be
limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors’ rights.

Section 5.6 Initial Financial Statements. The Initial Financial Statements
fairly present in all material respects the Borrower’s Consolidated financial
position at the respective dates thereof and the Consolidated results of the
Borrower’s operations and the Borrower’s Consolidated cash flows for the
respective periods thereof. Since the date of the Initial Financial Statements
no Material Adverse Change has occurred, except as reflected in the Disclosure
Schedule. All Initial Financial Statements were prepared in accordance with
GAAP.

Section 5.7 Other Obligations and Restrictions. No Restricted Person has any
outstanding Liabilities of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which is, in the
aggregate, material to the Borrower or material with respect to the Borrower’s
Consolidated financial condition and not shown in the Initial Financial
Statements or disclosed in the Disclosure Schedule. Except as shown in the
Initial Financial Statements or disclosed in the Disclosure Schedule, no
Restricted Person is subject to or restricted by any franchise, contract, deed,
charter restriction, or other instrument or restriction which could reasonably
be expected to cause a Material Adverse Change.

Section 5.8 Full Disclosure. No certificate, statement or other written
information delivered herewith or heretofore by any Restricted Person to any
Lender Party in connection with the negotiation of this Agreement or in
connection with any transaction contemplated hereby, when taken as a whole
together with the Borrower’s filings with the SEC contains any untrue statement
of a material fact or omits to state any material fact known to any Restricted
Person (other than industry-wide risks normally associated with the types of
businesses conducted by Restricted Persons) necessary to make the statements
contained herein or therein not misleading in any material respect as of the
date made or deemed made. There is no fact known to any Restricted Person (other
than industry-wide risks normally associated with the types of businesses
conducted by Restricted Persons) that has not been disclosed to the
Administrative Agent in writing which could reasonably be expected to cause a
Material Adverse Change.

Section 5.9 Litigation. Except as disclosed in the Initial Financial Statements
or in the Disclosure Schedule or in the Borrower’s filings with the
SEC: (a) there are no actions, suits or legal, equitable, arbitrative or
administrative proceedings pending, or to the knowledge of any Restricted Person
threatened, against any Restricted Person before any Tribunal which could
reasonably be expected to cause a Material Adverse Change after taking into
account insurance proceeds or other recoveries from third parties actually
received, and (b) there are no outstanding judgments, injunctions, writs,
rulings or orders by any such Tribunal against any Restricted Person or any
Restricted Person’s stockholders, partners, directors or officers which could
reasonably be expected to cause a Material Adverse Change after taking into
account insurance proceeds or other recoveries from third parties actually
received.

 

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Section 5.10 Labor Disputes and Acts of God. Except as disclosed in the
Disclosure Schedule, neither the business nor the properties of any Restricted
Person has been affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance), which
could reasonably be expected to cause a Material Adverse Change.

Section 5.11 ERISA Plans and Liabilities. Except as disclosed in the Initial
Financial Statements or in the Disclosure Schedule, no Termination Event has
occurred with respect to any ERISA Plan and all ERISA Affiliates are in
compliance with ERISA except for any non-compliance that would not reasonably be
expected to cause a Material Adverse Change. No ERISA Affiliate is required to
contribute to, or has any other absolute or contingent liability in respect of,
any “multiemployer plan,” as defined in Section 4001 of ERISA, which could
reasonably be expected to cause a Material Adverse Change. Except as set forth
in the Disclosure Schedule: (i) no “waived funding deficiency” (as defined in
Section 412(c)(3) of the Internal Revenue Code of 1986, as amended) exists with
respect to any ERISA Plan, and (ii) the current value of each ERISA Plan’s
benefits does not exceed the current value of such ERISA Plan’s assets available
for the payment of such benefits by more than $2.0 million.

Section 5.12 Environmental Matters. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule or in the Borrower’s filings with the
SEC, or that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Change: (a) Restricted Persons are conducting
their businesses in compliance with all Environmental Laws, and have and are in
compliance with all material licenses and permits required under any such
Environmental Laws; (b) none of the Restricted Persons has received express
notice that any of their operations or properties is the subject of a pending
Environmental Claim and to the best of the Borrower’s knowledge no Environmental
Claims have been threatened; (c) no Restricted Person (and to the best knowledge
of the Borrower, no other Person) has filed any notice under any Environmental
Law that any Restricted Person improperly Released, or improperly stored or
disposed, of any Hazardous Materials or that any Hazardous Materials have been
improperly Released, or are improperly stored or disposed of, upon any real
property of any Restricted Person which alleged improper matter referenced in
such notice has not been fully resolved consistent with Environmental Laws;
(d) no Restricted Person has transported or arranged for the transportation of
any Hazardous Material to any location which to the knowledge of the Borrower is
listed on the National Priorities List (“Superfund List”) under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or listed on any analogous state Superfund List; and (e) no Restricted
Person otherwise has any known contingent liability under any Environmental Laws
or as a result of a Release of any Hazardous Materials.

Section 5.13 Names and Places of Business and State of Incorporation or
Formation. No Restricted Person has, during the preceding five years, had, been
known by, or used any other trade or fictitious name, except as disclosed in the
Disclosure Schedule. Except as otherwise indicated in the Disclosure Schedule,
the chief executive office and principal place of business of each Restricted
Person are (and for the preceding five years have been) located at the address
of the Borrower set out in Section 10.3. Except as indicated in the Disclosure
Schedule, no Restricted Person has any other office or place of business. The
Disclosure Schedule identifies the true and correct states of incorporation or
formation of each Restricted Person.

 

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Section 5.14 Borrower’s Subsidiaries. The Borrower does not presently have any
Subsidiary or own any stock in any other corporation or association, except
those listed in the Disclosure Schedule (which shall identify whether or not a
Subsidiary is a Guarantor). Neither the Borrower nor any Restricted Person is a
member of any general or limited partnership, joint venture or association of
any type whatsoever except (a) those listed in the Disclosure Schedule, and
(b) associations, joint ventures or other relationships whose businesses are
limited to the exploration, development and operation of oil, gas or mineral
properties and interests owned directly by the parties in such associations,
joint ventures or relationships. The Borrower owns, directly or indirectly, the
equity interest in each of its Subsidiaries which is indicated in the Disclosure
Schedule. All Subsidiaries of the Borrower as of the Closing Date of this
Agreement are identified in the Disclosure Schedule.

Section 5.15 Title to Properties; Licenses. Each Restricted Person has good and
defensible title to all of its material properties and assets, free and clear of
all Liens other than Permitted Liens and of all material impediments to the use
of such properties and assets in such Restricted Person’s business, except that
no representation or warranty is made with respect to any oil, gas or mineral
property or interest to which no proved oil or gas reserves are properly
attributed. Each Restricted Person possesses all licenses, permits, franchises,
patents, copyrights, trademarks and trade names, and other intellectual property
(or otherwise possesses the right to use such intellectual property without
violation of the rights of any other Person) which are necessary to carry out
its business as presently conducted and as presently proposed to be conducted
hereafter, and no Restricted Person is in violation in any material respect of
the terms under which it possesses such intellectual property or the right to
use such intellectual property.

Section 5.16 Government Regulation. Neither the Borrower nor any Guarantor is
subject to regulation under the Investment Company Act of 1940 (as any of the
preceding acts have been amended).

Section 5.17 Solvency. Upon the execution of the Loan Documents by the Loan
Parties and the consummation of the transactions contemplated hereby and the
making of each Loan, each of the Borrower and the Restricted Persons on a
consolidated basis will be Solvent.

Section 5.18 Taxes. The Borrower and each of its Subsidiaries has filed all tax
returns and reports required by law to have been filed by it and has paid all
taxes due and owing and has paid all taxes shown to be due on any assessment
received to the extent that such taxes have become due and payable (except any
such taxes that are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books), except where the failure to file any such returns
or reports or to pay any such taxes could not reasonably be expected to cause a
Material Adverse Change.

Section 5.19 Restriction on Liens. Except as could not reasonably be expected to
result in a Material Adverse Change, neither the Borrower nor any of its
Subsidiaries is a party to any material agreement or arrangement or subject to
any order, judgment, writ or decree, that either restricts or purports to
restrict its ability to grant Liens to the Administrative Agent and the Lenders
on or in respect of their properties to secure the Obligations and the Loan
Documents.

 

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Section 5.20 Hedging Transactions. Item 5.20 of the Disclosure Schedule sets
forth, a true and complete list of all Hedging Contracts (including commodity
price swap agreements, forward agreements or contracts of sale which provide for
prepayment for deferred shipment or delivery of oil, gas or other commodities)
of the Borrower and each Restricted Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net mark to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied) and the
counterparty to each such agreement.

Section 5.21 Maintenance of Properties. Except for such acts or failures to act
as could not be reasonably expected to result in a Material Adverse Change, the
Oil and Gas Properties (and properties unitized therewith) have been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all applicable laws and all rules, regulations and orders of all duly
constituted authorities having jurisdiction 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; specifically in this connection, except for those as
could not be reasonably expected to result in a Material Adverse Change, none of
the wells comprising a part of the Oil and Gas Properties (or properties
unitized therewith) owned by the Borrower or any of the Subsidiaries is deviated
from the vertical more than the maximum permitted by applicable laws,
regulations, rules and orders, and such wells are, in fact, bottomed under and
are producing from, and the well bores are wholly within, the Oil and Gas
Properties (or in the case of wells located on properties unitized therewith,
such unitized properties) owned by the Borrower or any of the Subsidiaries.

Section 5.22 Compliance with Laws and Agreements. Except as could not reasonably
be expected to result in a Material Adverse Change, each of the Borrower and its
Restricted Subsidiaries is in compliance with all laws, regulations and orders
of any governmental authority (except for Environmental Laws covered under
Section 5.12) applicable to it or its property and all material obligations it
is required to perform under the terms of each indenture, mortgage, deed of
trust, security agreement, lease, franchise, agreement, contract or other
instrument or obligation to which it is a party or by which it or any of its
properties is bound, in all material respects.

Section 5.23 Anti-Corruption Laws and Sanctions.

(a) The Borrower represents that neither the Borrower nor any of its
Subsidiaries nor any director or officer, nor, to the Borrower’s knowledge, any
employee, agent, affiliate or representative of the Borrower or any of its
Subsidiaries, (i) is a Sanctioned Person, or is owned or controlled by or acting
on behalf of a Person that is a Sanctioned Person that would result in a
violation of Sanctions or (ii) is located, organized or resident in a county or
territory that is, or whose government is, subject to Sanctions or is a
Sanctioned Country.

 

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(b) The Borrower represents that it will not, directly or indirectly, use the
proceeds of the Loans, or lend, contribute or otherwise make available such
proceeds to any Person:

(A) to fund or facilitate any activities or business of or with any Sanctioned
Person or in any Sanctioned Country; or

(B) in any other manner that will result in a violation of Sanctions or any
Anti-Corruption Laws by any Person (including any Person participating in the
Loans, whether as underwriter, advisor, investor or otherwise) or in any Person
becoming a Sanctioned Person.

(c) Neither the Borrower nor any of its Subsidiaries, nor any director or
officer, nor, to the Borrower’s knowledge, any employee, agent, affiliate or
representative of the Borrower or of any of its Subsidiaries, has taken any
action in furtherance of an offer, payment, promise to pay, or authorization or
approval of the payment or giving of money, property, gifts or anything else of
value, directly or indirectly, to any “government official” (including any
officer or employee of a government or government-owned or controlled entity or
of a public international organization, or any person acting in an official
capacity for or on behalf of any of the foregoing, or any political party or
party official or candidate for political office) to influence official action
or secure an improper advantage; and the Borrower and its Subsidiaries and
Affiliates have conducted their businesses in compliance with Anti-Corruption
Laws.

(d) The operations of the Borrower and its Subsidiaries are and have been
conducted at all times in material compliance with all applicable Anti-Terrorism
Laws and Sanctions, and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Borrower
or any of its Subsidiaries with respect to the Anti-Terrorism Laws or Sanctions
is pending or, to the best knowledge of the Borrower, threatened.

(e) No Borrowing, use of proceeds or other transaction contemplated by this
Agreement will violate any Anti-Corruption Law, any Anti-Terrorism Law or
applicable Sanctions.

Section 5.24 Compliance of Laws. 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
with Anti-Corruption Laws, Anti-Terrorism Laws and applicable Sanctions.

 

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ARTICLE VI - Covenants

To conform with the terms and conditions under which each Lender Party is
willing to have credit outstanding to the Borrower, and to induce each Lender
Party to enter into this Agreement and extend credit hereunder, the Borrower
warrants, covenants and agrees to the following (and the Borrower agrees to
cause all of its Restricted Subsidiaries to comply with the following) until
Security Termination, unless Required Lenders have previously agreed otherwise:

Section 6.1 Reports.

(a) So long as any Loans are outstanding, the Borrower will file with the SEC
for public availability, within 30 days of the time periods specified in the
SEC’s rules and regulations (unless the SEC will not accept such a filing, in
which case the Borrower will furnish to the Administrative Agent, within the
time periods specified in the SEC’s rules and regulations):

(i) all quarterly and annual reports that would be required to be filed with the
SEC on Forms 10-Q and 10-K if the Borrower were required to file such reports;
and

(ii) all current reports that would be required to be filed with the SEC on
Form 8-K if the Borrower were required to file such reports.

(b) All such reports will be prepared in all material respects in accordance
with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K will include an audit report on the Borrower’s consolidated
financial statements by a nationally recognized firm of independent
accountants. The Borrower will conduct a conference call for Lenders and any
prospective assignee or participant to discuss the information furnished
pursuant to the previous paragraph no later than three business days after
furnishing any information pursuant to Section 6.1(a)(i).

(c) If, at any time, the Borrower is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Borrower will nevertheless
continue filing the reports specified in the preceding paragraphs of this
covenant with the SEC within the time periods specified above unless the SEC
will not accept such a filing. The Borrower will not take any action for the
purpose of causing the SEC not to accept any such filings. If, notwithstanding
the foregoing, the SEC will not accept the Borrower’s filings for any reason,
the Borrower will post the reports referred to in the preceding paragraphs on
its website within 30 days of the time periods that would apply if the Borrower
were required to file those reports with the SEC.

(d) If the Borrower has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then, to the extent material as determined by the Board of
Directors of the Borrower in good faith, the quarterly and annual financial
information required by the preceding paragraphs will include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in Management’s Discussion and Analysis of Financial
Condition and Results of Operations, of the financial condition and results of
operations of the Borrower and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Borrower.

Section 6.2 Compliance Certificate.

(a) The Borrower shall deliver to the Administrative Agent, within 90 days after
the end of each fiscal year, an Officer’s Certificate stating that a review of
the activities of the Borrower and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Authorized Officer with
a view to determining whether the Borrower has kept, observed, performed and
fulfilled its obligations under the Loan Documents, and further stating, as to
each such Authorized Officer signing such certificate, that to the best of his

 

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or her knowledge the Borrower has kept, observed, performed and fulfilled each
and every covenant contained in the Loan Documents and is not in default in the
performance or observance of any of the terms, provisions and conditions of the
Loan Documents (or, if a Default or Event of Default has occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Borrower is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Loans is prohibited or if such event has occurred, a
description of the event and what action the Borrower is taking or proposes to
take with respect thereto.

(b) So long as any of the Loans are outstanding, the Borrower will deliver to
the Administrative Agent, within five days of any Authorized Officer becoming
aware of any Default or Event of Default, an Officer’s Certificate specifying
such Default or Event of Default and what action the Borrower is taking or
proposes to take with respect thereto.

Section 6.3 Taxes. The Borrower will pay, and will cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Lenders.

Section 6.4 Stay, Extension of Usury Laws. Each Loan Party covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Agreement;
and the Borrower and each of the Guarantors (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Administrative Agent, but will
suffer and permit the execution of every such power as though no such law has
been enacted.

Section 6.5 Corporate Existence. Subject to Article VII hereof, so long as any
of the Loans shall remain outstanding, the Borrower will at all times do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.

Section 6.6 Insurance.

(a) The Borrower and the Guarantors shall:

(i) keep their properties insured at all times by financially sound and
reputable insurers;

(ii) maintain such other insurance, to such extent and against such risks (and
with such deductibles, retentions and exclusions), including fire and other
risks insured against by extended coverage and coverage for acts of terrorism,
as is customary with companies in the same or similar businesses operating in
the same or similar locations, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in, about
or in connection with the use of any properties owned, occupied or controlled by
them; and

(iii) maintain such other insurance as may be required by law.

 

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(b) Upon the request of the 1.5 Lien Collateral Agent, the Borrower and the
Guarantors will furnish to the 1.5 Lien Collateral Agent information as to their
property and liability insurance carriers. From and after the Closing Date, the
Borrower will use its reasonable efforts to cause the holders of the Obligations
to be named as additional insureds on all general liability insurance policies
of the Borrower and the Guarantors, and the 1.5 Lien Collateral Agent to be
named as loss payee on all property and casualty insurance policies of the
Borrower and the Guarantors that insure the Collateral.

Section 6.7 Restricted Payments.

(a) The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on
account of the Borrower’s or any of its Restricted Subsidiaries’ Equity
Interests (including, without limitation, any dividend payment or distribution
made by the Borrower or any of its Restricted Subsidiaries in connection with
any merger or consolidation involving the Borrower or any of its Restricted
Subsidiaries) or to the direct or indirect holders of the Borrower’s or any of
its Restricted Subsidiaries’ Equity Interests in their capacity as such (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Borrower and other than dividends or distributions
payable to the Borrower or a Restricted Subsidiary of the Borrower);

(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, any such purchase, redemption, acquisition or retirement
made in connection with any merger or consolidation involving the Borrower) any
Equity Interests of the Borrower or any direct or indirect parent of the
Borrower;

(3) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value prior to the Stated Maturity thereof, any
Subordinated Obligation, Second Lien Obligations, Junior Lien Obligations or the
Existing Notes; or

(4) make any Restricted Investment (all such payments and other actions set
forth in clauses (1) through (4) above being collectively referred to as
“Restricted Payments”),

unless, at the time of and after giving effect to such Restricted Payment:

(i) no Default or Event of Default has occurred and is continuing or would occur
as a consequence of such Restricted Payment;

 

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(ii) the Borrower would, at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 6.9(a) hereof; and

(iii) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Borrower and its Restricted Subsidiaries since
the Closing Date (excluding Restricted Payments permitted by clauses (2), (3),
(4), (5), (6), (7), (9), (10) or (13) of paragraph (b) of this Section 6.7), is
equal to or less than the sum, without duplication of the following:

(A) 50% of the Consolidated Net Income of the Borrower for the period (taken as
one accounting period) from September 7, 2016 to the end of the Borrower’s most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (but in any event not less than
zero dollars); plus

(B) 100% of the aggregate net cash proceeds and 100% of the Fair Market Value of
securities or other property other than cash received that is used or useful in
the Oil and Gas Business by the Borrower since the Closing Date from the sale of
Equity Interests of the Borrower (other than Disqualified Stock and any Equity
Interests issued in connection with the Exchange Offer) or as a contribution to
the Borrower’s common equity capital or from the sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities
of the Borrower that have been converted or exchanged for such Equity Interests
(other than Equity Interests (or Disqualified Stock or debt securities) (i) sold
to a Subsidiary of the Borrower or to an employee stock ownership plan, option
plan or similar trust to the extent such sale to an employee stock ownership
plan, option plan or similar trust is financed by loans from or guaranteed the
Borrower or any of its Restricted Subsidiaries unless such loans have been
repaid with cash on or prior to the date of determination or (ii) issued in
connection with the Exchange Offer); plus

(C) the amount equal to the net reduction in Restricted Investments made by the
Borrower or any of its Restricted Subsidiaries in any Person since the Closing
Date resulting from:

(i) repurchases or redemptions of such Restricted Investments by such Person or
proceeds realized upon the sale of such Restricted Investment to a purchaser
other than the Borrower or a Subsidiary of the Borrower; or

(ii) the redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary
(valued in each case at the Fair Market Value of the Borrower’s Investment in
such Unrestricted Subsidiary at the time of redesignation) not to exceed the
amount of Investments previously made by the Borrower or any Restricted
Subsidiary of the Borrower in such Unrestricted Subsidiary,

 

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which amount in each case under this clause (C) was included in the calculation
of the amount of Restricted Payments; provided, however, that no amount will be
included under this clause (C) to the extent it is already included in
Consolidated Net Income; plus

(D) 50% of any dividends received by the Borrower or a Restricted Subsidiary of
the Borrower that is a Guarantor after the Closing Date from an Unrestricted
Subsidiary of the Borrower, to the extent that such dividends were not otherwise
included in the Consolidated Net Income of the Borrower for such period.

(b) The provisions of this Section 6.7 hereof will not prohibit:

(1) the payment of any dividend within 90 days after the date of declaration of
the dividend or the consummation of any irrevocable redemption within 60 days
after the date of giving of the redemption notice, as the case may be, if at the
date of declaration or notice, the dividend or redemption payment would have
complied with the provisions of this Agreement;

(2) the making of any Restricted Payment since the Closing Date in exchange for,
or out of the net cash proceeds of the substantially concurrent sale (other than
to a Subsidiary of the Borrower) of, Equity Interests of the Borrower (other
than Disqualified Stock and other than Equity Interests issued or sold to an
employee stock ownership plan, option plan or similar trust to the extent such
sale to an employee stock ownership plan, option plan or similar trust is
financed by loans from or guaranteed by the Borrower or any of its Restricted
Subsidiaries unless such loans have been repaid with cash on or prior to the
date of determination) or from the substantially concurrent contribution of
common equity capital to the Borrower; provided, however that the amount of any
such net cash proceeds that are utilized for any such Restricted Payment will be
excluded from clause (a)(iii)(B) of this Section 6.7 hereof;

(3) the repurchase, redemption, defeasance or other acquisition or retirement
for value since the Closing Date of Subordinated Obligations, Second Lien
Obligations, Junior Lien Obligations or Existing Notes in exchange for, or with
the net cash proceeds from a substantially concurrent incurrence of, Permitted
Refinancing Indebtedness;

(4) the payment since the Closing Date of any dividend (or, in the case of any
partnership or limited liability company, any similar distribution) by a
Restricted Subsidiary of the Borrower to the holders of its Equity Interests on
a pro rata basis;

(5) so long as no Default has occurred and is continuing or would be caused
thereby, the repurchase, redemption or other acquisition or retirement for value
since the Closing Date of any Equity Interests of the Borrower or any Restricted
Subsidiary of the Borrower held by any of the Borrower’s (or any of its
Restricted Subsidiaries’) current or former directors or employees pursuant to
any director or employee equity subscription agreement, stock option agreement
or restricted stock agreement; provided, however that

 

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the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests may not exceed $5.0 million in any twelve-month period (with
unused amounts in any 12-month period being permitted to be carried over into
succeeding 12-month periods); provided, further, that the amounts in
any 12-month period may be increased by an amount not to exceed (A) the cash
proceeds received by the Borrower or any of its Restricted Subsidiaries from the
sale of the Borrower’s Equity Interests (other than Disqualified Stock) to any
such directors or employees that occurs after the Closing Date (provided that
the amount of such cash proceeds utilized for any such repurchase, retirement or
other acquisition or retirement will be excluded from clause (a)(iii)(B) of this
Section 6.7 hereof) plus (B) the cash proceeds of key man life insurance
policies received by the Borrower and its Restricted Subsidiaries after the
Closing Date;

(6) so long as no Default has occurred and is continuing or would be caused
thereby, the repurchase, redemption or other acquisition or retirement for value
since the Closing Date of any Equity Interests of the Borrower or any Restricted
Subsidiary of the Borrower held by any of the Borrower’s (or any of its
Restricted Subsidiaries’) current or former directors or employees in connection
with the exercise or vesting of any equity compensation (including, without
limitation, stock options, restricted stock and phantom stock) or made in order
to satisfy the Borrower’s or such Restricted Subsidiary’s tax withholding
obligation with respect to such exercise or vesting;

(7) so long as no Default has occurred and is continuing or would be caused
thereby, repurchases of Subordinated Obligations, Second Lien Obligations,
Junior Lien Obligations or Existing Notes at a purchase price not greater than
(i) 101% of the principal amount of such Subordinated Obligations, Second Lien
Obligations, Junior Lien Obligations or Existing Notes in the event of a Change
of Control or (ii) 100% of the principal amount of such Subordinated
Obligations, Second Lien Obligations, Junior Lien Obligations or Existing Notes
in the event of an Asset Sale, in each case plus accrued and unpaid interest, in
connection with any change of control offer or asset sale offer required by the
terms of such Subordinated Obligations, Second Lien Obligations, Junior Lien
Obligations or Existing Notes, but only if:

(a) in the case of a Change of Control, the Borrower has first complied with and
fully satisfied its obligations under Section 2.6(b) (including without
limitation the repayment of all Loans in connection therewith); or

(b) in the case of an Asset Sale, the Borrower has complied with and fully
satisfied its obligations in accordance with Section 6.10 (including without
limitation the repayment of all Loans in connection therewith);

(8) the repurchase, redemption or other acquisition or retirement for value of
Capital Stock of the Borrower representing fractional shares of such Capital
Stock in connection with a merger, consolidation or other combination involving
the Borrower or any other transaction permitted by this Agreement;

 

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(9) Restricted Payments of the type referred to in clauses (1) or (2) of the
first paragraph of Section 6.7(a) in an amount up to $5.0 million for each
twelve-month period following the Closing Date, with any unused portion of such
amount in any such period to be carried forward to succeeding twelve-month
periods;

(10) other Restricted Payments in an aggregate amount not to exceed
$15.0 million since the Closing Date;

(11) the declaration and payment of regularly scheduled or accrued dividends to
holders of any class or series of Disqualified Stock of the Borrower or any
Restricted Subsidiary of the Borrower issued on or after the Closing Date in
accordance with the Fixed Charge Coverage Ratio test described in Section 6.9
hereof;

(12) so long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, repurchases and repayments of the Existing Notes in an
amount not to exceed $35.0 million; provided, however that such repurchases are
made at a discount to par of not less than 65%; and

(13) so long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the repurchase, redemption, defeasance or other
acquisition or retirement for value of Second Lien Obligations, Junior Lien
Obligations, Subordinated Obligations or Existing Notes on the Stated Maturity
thereof.

(c) The amount of all Restricted Payments (other than cash) will be the Fair
Market Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Borrower or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair
Market Value of any assets or securities that are required to be valued by this
Section 6.7 will be evidenced by an Officer’s Certificate delivered to the
Administrative Agent within five Business Days of the making of the Restricted
Payment, together with a copy of any related resolution of the Board of
Directors of the Borrower. Such Officer’s Certificate shall state that the
Restricted Payment is permitted by this Section 6.7. For purposes of determining
compliance with this Section 6.7, in the event that a Restricted Payment meets
the criteria of more than one of the exceptions described in (1) through
(13) above or is entitled to be made pursuant to the first paragraph of this
Section 6.7, the Borrower shall, in its sole discretion, classify such
Restricted Payment in any manner that complies with this Section 6.7.

Section 6.8 Dividend and Other Payment Restrictions Affecting Subsidiaries

(a) The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

(1) pay dividends or make any other distributions on its Capital Stock to the
Borrower or any of its Restricted Subsidiaries, or pay any indebtedness owed to
the Borrower or any of its Restricted Subsidiaries;

 

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(2) make loans or advances to the Borrower or any of its Restricted
Subsidiaries; or

(3) sell, lease or transfer any of its properties or assets to the Borrower or
any of its Restricted Subsidiaries.

(b) The restrictions in this Section 6.8 hereof will not apply to encumbrances
or restrictions existing under or by reason of:

(1) agreements governing Existing Indebtedness and Credit Facilities as in
effect on the Closing Date and any amendments, restatements, modifications,
renewals, supplements, increases, refundings, replacements or refinancings of
those agreements; provided, however that the amendments, restatements,
modifications, renewals, supplements, increases, refundings, replacements or
refinancings are not materially more restrictive, taken as a whole, with respect
to such dividend and other payment encumbrances or restrictions than those
contained in those agreements on the Closing Date;

(2) this Agreement and the other Loan Documents;

(3) applicable law, rule, regulation, order, approval, permit or similar
restriction;

(4) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Borrower or any of its Restricted Subsidiaries as in effect at the time
of such acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired; provided, however that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Agreement to be incurred;

(5) customary non-assignment provisions in contracts, leases and licenses
(including, without limitation, licenses of intellectual property) entered into
in the ordinary course of business;

(6) purchase money obligations for property (including Capital Stock) acquired
in the ordinary course of business, Capital Lease Obligations and mortgage
financings that impose restrictions on the property purchased or leased of the
nature described in clause (a)(3) of Section 6.8 hereof;

(7) any agreement for the sale or other disposition of assets, including without
limitation an agreement for the sale or other disposition of the Capital Stock
or assets of a Restricted Subsidiary that restricts distributions by the
applicable Restricted Subsidiary pending the sale or other disposition;

(8) Liens permitted to be incurred under the provisions of Section 6.12 hereof
that limit the right of the debtor to dispose of the assets subject to such
Liens;

 

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(9) provisions limiting the disposition or distribution of assets or property in
joint venture agreements, asset sale agreements, sale-leaseback agreements,
stock sale agreements and other similar agreements entered into (a) in the
ordinary course of business consistent with past practice or (b) with the
approval of the Borrower’s Board of Directors, which limitations are applicable
only to the assets or property that are the subject of such agreements;

(10) other Indebtedness of the Borrower or any of its Restricted Subsidiaries
permitted to be incurred pursuant to an agreement entered into subsequent to the
Closing Date in accordance with Section 6.9; provided, however that the
provisions of such agreement relating to such dividend and other payment
encumbrances or restrictions taken as a whole are not materially more
restrictive, as determined by the Board of Directors or the Borrower in good
faith, than those provisions contained in the agreements governing Existing
Indebtedness and the Existing RCF Agreement, in each case as in effect on the
Closing Date;

(11) the issuance of preferred stock by a Restricted Subsidiary or the payment
of dividends thereon in accordance with Section 6.9 and the terms thereof;
provided, however that issuance of such preferred stock was made in accordance
and the terms of such preferred stock do not expressly restrict the ability of a
Restricted Subsidiary to pay dividends or make any other distributions on its
Capital Stock (other than requirements to pay dividends or liquidation
preferences on such preferred stock prior to paying any dividends or making any
other distributions on such other Capital Stock);

(12) supermajority voting requirements existing under corporate charters,
bylaws, stockholders’ agreements and similar documents and agreements;

(13) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest;

(14) encumbrances or restrictions contained in Hedging Obligations permitted
from time to time under this Agreement; and

(15) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business.

Section 6.9 Incurrence of Indebtedness and Issuance of Preferred Stock.

(a) The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, “incur”) any Indebtedness (including Acquired
Debt), and the Borrower will not issue any Disqualified Stock and will not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Borrower and the Restricted Subsidiaries may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or
preferred stock of a Restricted Subsidiary, if the Fixed Charge Coverage Ratio
for the Borrower’s most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock or
preferred

 

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stock of a Restricted Subsidiary is issued, as the case may be, would have been
at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the Disqualified Stock or preferred stock of a Restricted
Subsidiary had been issued, as the case may be, at the beginning of such
four-quarter period.

(b) The provisions of Section 6.9(a) hereof will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, “Permitted Debt”):

(1) the incurrence by the Borrower and any Restricted Subsidiary of Indebtedness
(including letters of credit) under Credit Facilities in an aggregate principal
amount at any one time outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum potential liability
of the Borrower and its Restricted Subsidiaries thereunder) not to exceed the
greater of (a) $800.0 million and (b) an amount equal to the sum of (A)
$600.0 million plus (B) 10% of Adjusted Consolidated Net Tangible Assets
determined as of the date of the incurrence of such Indebtedness after giving
pro forma effect to such incurrence and the application of the proceeds
therefrom; provided, however, that any Priority Lien Debt incurred under this
clause (1) shall (i) be in an aggregate principal amount not to exceed $150.0
million or such greater amount permitted by the then applicable borrowing base
in the Existing RCF Agreement (which shall be defined in a manner substantially
similar to the definition of “Borrowing Base” in the Existing RCF Agreement on
the date hereof) and (ii) shall be incurred under the Existing RCF Agreement
(the Priority Lien Debt described in this proviso, the “Permitted Conforming
Priority Lien Debt”); provided, further, the Borrower and its Restricted
Subsidiaries shall be permitted to incur Permitted Conforming Priority Lien Debt
notwithstanding that the Borrower and its Restricted Subsidiaries otherwise
would not be permitted to incur any other additional Indebtedness under this
clause (b)(1) at the time of incurrence;

(2) the incurrence by the Borrower and its Restricted Subsidiaries of the
Existing Indebtedness;

(3) the incurrence by the Loan Parties of Indebtedness pursuant to this
Agreement and other Loan Documents;

(4) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of financing
all or any part of the purchase price or cost of design, construction,
installation or improvement of property, plant or equipment used in the business
of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal
amount, including all Permitted Refinancing Indebtedness incurred to renew,
refund, refinance, replace, defease or discharge any Indebtedness incurred
pursuant to this clause (4), not to exceed $50.0 million at any time
outstanding;

(5) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are

 

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used to renew, refund, refinance, replace, defease or discharge any Indebtedness
(other than intercompany Indebtedness) that was permitted by this Agreement to
be incurred under Section 6.9(a) hereof or clauses (2), (3), (4) or (11) of this
Section 6.9(b) or this clause (5);

(6) the incurrence by the Borrower or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Borrower and any of its
Restricted Subsidiaries; provided, however, that:

(A) if the Borrower or any Guarantor is the obligor on such Indebtedness and the
payee is not the Borrower or a Guarantor, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all Obligations; and

(B) (i) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than the Borrower or a
Restricted Subsidiary of the Borrower and (ii) any sale or other transfer of any
such Indebtedness to a Person that is not either the Borrower or a Restricted
Subsidiary of the Borrower will be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Borrower or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause (6);

(7) the issuance by any of the Borrower’s Restricted Subsidiaries to the
Borrower or to any of its Restricted Subsidiaries of shares of preferred stock;
provided, however, that:

(A) any subsequent issuance or transfer of Equity Interests that results in any
such preferred stock being held by a Person other than the Borrower or a
Restricted Subsidiary of the Borrower; and

(B) any sale or other transfer of any such preferred stock to a Person that is
not either the Borrower or a Restricted Subsidiary of the Borrower,

will be deemed, in each case, to constitute an issuance of such preferred stock
by such Restricted Subsidiary that was not permitted by this clause (7);

(8) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Hedging Obligations in the ordinary course of business and not for speculative
purposes;

(9) the incurrence by the Borrower or any of its Restricted Subsidiaries of
obligations relating to net gas balancing positions arising in the ordinary
course of business and consistent with past practice;

(10) the Guarantee by the Borrower or any of the Guarantors of Indebtedness of
the Borrower or a Restricted Subsidiary of the Borrower that was permitted to be
incurred by another provision of this Section 6.9; provided, however that if the

 

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Indebtedness being guaranteed is subordinated to or pari passu with the Loans,
then the Guarantee shall be subordinated or pari passu, as applicable, to the
same extent as the Indebtedness guaranteed;

(11) Permitted Acquisition Indebtedness;

(12) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently drawn against insufficient
funds, so long as such Indebtedness is covered within five Business Days;

(13) Indebtedness consisting of the financing of insurance premiums in customary
amounts consistent with the operations and business of the Borrower and its
Restricted Subsidiaries;

(14) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness arising from agreements of the Borrower or any of its Restricted
Subsidiaries providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or Capital Stock of a Subsidiary; provided,
however that the maximum aggregate liability in respect of all such Indebtedness
shall at no time exceed the gross proceeds actually received by the Borrower and
its Restricted Subsidiaries in connection with such disposition;

(15) the incurrence by the Borrower or any of its Restricted Subsidiaries of
Indebtedness in respect of bid, performance, surety and similar bonds issued for
the account of the Borrower and any of its Restricted Subsidiaries in the
ordinary course of business, including guarantees and obligations of the
Borrower or any of its Restricted Subsidiaries with respect to letters of credit
supporting such obligations (in each case, other than an obligation for money
borrowed); and

(16) the incurrence by the Borrower or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding not to exceed $50.0 million.

(c) The Borrower will not incur, and will not permit any Guarantor to incur, any
Indebtedness (including Permitted Debt) that is contractually subordinated in
right of payment to any other Indebtedness of the Borrower or such Guarantor
unless such Indebtedness is also contractually subordinated in right of payment
to the Obligations on substantially identical terms; provided, however, that no
Indebtedness shall be deemed to be contractually subordinated in right of
payment to any other Indebtedness solely by virtue of being unsecured or by
virtue of being secured on a first or junior Lien basis.

(d) For purposes of determining compliance with this Section 6.9, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (16) above or is
entitled to be incurred pursuant to Section 6.9(a) hereof, the Borrower will be
permitted to classify such item of Indebtedness on the date of its incurrence in
any manner that complies with this Section 6.9; provided, however

 

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that any Indebtedness under the Existing RCF Agreement, the Existing Second Lien
Credit Agreement, the New Second Lien Notes and the New Junior Lien Notes on the
Closing Date shall be considered incurred under clause (1) of the definition of
Permitted Debt and may not be later reclassified. The accrual of interest, the
accretion or amortization of original issue discount, the payment of interest on
any Indebtedness in the form of additional Indebtedness with the same terms, and
the payment of dividends on Disqualified Stock in the form of additional shares
of the same class of Disqualified Stock will not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Stock for purposes of this
Section 6.9; provided, however, in each such case, that the amount thereof is
included in Fixed Charges of the Borrower as accrued. Notwithstanding any other
provision of this Section 6.9, the maximum amount of Indebtedness that the
Borrower or any Restricted Subsidiary may incur pursuant to this Section 6.9
shall not be deemed to be exceeded solely as a result of fluctuations in
exchange rates or currency values.

(e) The amount of any Indebtedness outstanding as of any date will be:

(i) the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount;

(ii) the principal amount of the Indebtedness, in the case of any other
Indebtedness; and

(iii) in respect of Indebtedness of another Person secured by a Lien on the
assets of the specified Person, the lesser of:

(A) the Fair Market Value of such asset at such date of determination; and

(B) the amount of the Indebtedness of the other Person.

Section 6.10 Asset Sales.

(a) The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

(i) the Borrower (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the Fair Market
Value of the Equity Interests or other assets issued or sold or otherwise
disposed of; and

(ii) (a) at least 75% of the consideration received in the Asset Sale by the
Borrower or such Restricted Subsidiary is in the form of cash or (b) the Fair
Market Value of all forms of consideration other than cash received for all
Asset Sales since the Closing Date does not exceed in the aggregate 10% of the
Adjusted Consolidated Net Tangible Assets of the Borrower at the time each
determination is made. For purposes of this provision, each of the following
shall be deemed to be cash:

(A) any liabilities, as shown on the Borrower’s most recent consolidated balance
sheet, of the Borrower or any Restricted Subsidiary (other than contingent
liabilities and Subordinated Obligations) that are assumed by the transferee of
any such assets pursuant to a customary novation agreement that releases the
Borrower or such Restricted Subsidiary from further liability;

 

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(B) any securities, notes or other obligations received by the Borrower or any
such Restricted Subsidiary from such transferee that are converted by the
Borrower or such Restricted Subsidiary into cash within 180 days after the date
of the Asset Sale, to the extent of the cash received in that conversion;

(C) any stock or assets of the kind referred to in clause (ii) or (iii) of the
next paragraph of this Section 6.10; and

(D) accounts receivable of a business retained by the Borrower or any Restricted
Subsidiary, as the case may be, following the sale of such business; provided,
however that such accounts receivable are not (i) past due more than 90 days and
(ii) do not have a payment date greater than 120 days from the date of the
invoice creating such accounts receivable.

(b) Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
or, if the Borrower has entered into a binding commitment or commitments with
respect to the actions described in clause (ii) or (iii) below, within 540 days
after the receipt of any Net Proceeds from an Asset Sale, the Borrower (or the
applicable Restricted Subsidiary, as the case may be) may apply such Net
Proceeds:

(i) if such Asset Sale is a Collateral Disposition, (A) to repay, prepay, redeem
or repurchase (I) Priority Lien Debt and permanently reduce the corresponding
commitments with respect thereto and (II) the Obligations, (B) to invest in
Additional Assets that shall constitute Collateral, (C) to make capital
expenditures in respect of the Borrower’s or its Restricted Subsidiaries’ Oil
and Gas Business in assets constituting Collateral or (D) any combination of the
foregoing; and

(ii) if such Asset Sale is not a Collateral Disposition, (A) to repay, prepay,
redeem or repurchase (I) Priority Lien Debt and permanently reduce the
corresponding commitments with respect thereto and (II) the Obligations, (B) to
invest in Additional Assets, (C) to make capital expenditures in respect of the
Borrower’s or its Restricted Subsidiaries’ Oil and Gas Business, or (D) any
combination of the foregoing.

Pending the application of any Net Proceeds in the manner provided above, the
Borrower or any Restricted Subsidiary may invest the Net Proceeds in any manner
that is not prohibited by this Agreement.

 

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(c) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 6.10(b) will constitute “Excess Proceeds”. Within five days
after the date that the aggregate amount of Excess Proceeds exceeds
$20.0 million, the Borrower will make an Asset Sale Offer to all Lenders. The
offer price in any Asset Sale Offer will be equal to 100% of the principal
amount plus accrued and unpaid interest to, but excluding, the date of purchase
or repayment, and will be payable in cash. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Borrower may use those Excess Proceeds
for any purpose not otherwise prohibited by this Agreement. If the aggregate
principal amount of Loans tendered into such Asset Sale Offer exceeds the amount
of Excess Proceeds allocated for the repayment of Loans pursuant to the Asset
Sale Offer, the Administrative Agent shall repay the Loans on a pro rata
basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
will be reset at zero.

Section 6.11 Transactions with Affiliates.

(a) The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Borrower (each an “Affiliate Transaction”), unless:

(i) the Affiliate Transaction is on terms that are no less favorable to the
Borrower or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Borrower or such Restricted
Subsidiary with an unrelated Person; and

(ii) the Borrower delivers to the Administrative Agent:

(A) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $20.0 million, an
Officer’s Certificate certifying that such Affiliate Transaction complies with
this Section 6.11;

(B) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $40.0 million, a
resolution of the Board of Directors of the Borrower set forth in an Officer’s
Certificate certifying that such Affiliate Transaction complies with this
Section 6.11 and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Board of Directors of the Borrower; or

(C) as an alternative to clause (A) or (B) above, at the Borrower’s option, with
respect to any transaction in which the Borrower or any of its Restricted
Subsidiaries, as the case may be, deliver to the Administrative Agent a letter
from an accounting, appraisal or investment banking firm of national standing
stating that such transaction is fair to the Borrower or such Restricted
Subsidiary from a financial point of view or that such transaction meets the
requirements of Section 6.11(a).

 

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(b) The following items will not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of Section 6.11(a) hereof:

(i) any employment agreement or arrangement, stock option or stock ownership
plan, employee benefit plan, officer or director indemnification agreement,
restricted stock agreement, severance agreement or other compensation plan or
arrangement entered into by the Borrower or any of its Restricted Subsidiaries
in the ordinary course of business and payments, awards, grants or issuances of
securities pursuant thereto, including, without limitation, pursuant to the
Borrower’s long-term incentive compensation plan, as amended;

(ii) transactions between or among the Borrower and/or its Restricted
Subsidiaries;

(iii) transactions with a Person (other than an Unrestricted Subsidiary of the
Borrower) that is an Affiliate of the Borrower solely because the Borrower owns,
directly or through a Restricted Subsidiary, an Equity Interest in, or controls,
such Person;

(iv) reasonable fees and expenses and compensation paid to, and indemnity or
insurance provided on behalf of, officers, directors or employees of the
Borrower or any Restricted Subsidiaries as determined in good faith by the Board
of Directors;

(v) any issuance of Equity Interests (other than Disqualified Stock) of the
Borrower to, or receipt by the Borrower of a capital contribution from,
Affiliates (or a Person that becomes an Affiliate) of the Borrower;

(vi) Restricted Payments (other than Investments in Unrestricted Subsidiaries)
that do not violate Section 6.7 hereof;

(vii) transactions between the Borrower or any Restricted Subsidiaries and any
Person, a director of which is also a director of the Borrower or any direct or
indirect parent company of the Borrower and such director is the sole cause for
such Person to be deemed an Affiliate of the Borrower or any Restricted
Subsidiaries; provided, however, that such director abstains from voting as
director of the Borrower or such direct or indirect parent company, as the case
may be, on any matter involving such other Person;

(viii) loans or advances to employees in the ordinary course of business or
consistent with past practice not to exceed $5.0 million in the aggregate at any
one time outstanding;

 

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(ix) advances to or reimbursements of employees for moving, entertainment and
travel expenses, drawing accounts and similar expenditures in the ordinary
course of business;

(x) the performance of obligations of the Borrower or any of its Restricted
Subsidiaries under the terms of any written agreement to which the Borrower or
any of its Restricted Subsidiaries is a party on the Closing Date and which is
disclosed on Schedule 6 hereto, as these agreements may be amended, modified or
supplemented from time to time; provided, however that any future amendment,
modification or supplement entered into after the Closing Date will be permitted
to the extent that its terms do not materially and adversely affect the rights
of any Lenders (as determined in good faith by the Board of Directors of the
Borrower) as compared to the terms of the agreements in effect on the Closing
Date; and

(xi) pledges of Equity Interests of the Borrower’s Unrestricted Subsidiaries for
the benefit of lenders of the Borrower’s Unrestricted Subsidiaries.

Section 6.12 Liens. The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (other than Permitted Liens) upon any of its property
or assets (whether now owned or hereafter acquired), securing any Indebtedness
of the Borrower or any Guarantor.

Section 6.13 Designation of Restricted and Unrestricted Subsidiaries. The Board
of Directors of the Borrower may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by the Borrower and its
Restricted Subsidiaries in the Subsidiary designated as an Unrestricted
Subsidiary will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Restricted Payments under
Section 6.7 hereof or under one or more clauses of the definition of Permitted
Investments, as determined by the Borrower. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.

Any designation of a Subsidiary of the Borrower as an Unrestricted Subsidiary
will be evidenced to the Administrative Agent by filing with the Administrative
Agent a certified copy of a resolution of the Board of Directors giving effect
to such designation and an Officer’s Certificate certifying that such
designation complied with the preceding conditions of this Section 6.13 and was
permitted by Section 6.7 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements of this Section 6.13 as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Agreement and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Borrower as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 6.9 hereof, the Borrower will be in
default of such covenant. The Board of Directors of the Borrower may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however that such designation will be

 

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deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Borrower of any outstanding Indebtedness of such Unrestricted Subsidiary and
such designation will only be permitted if (1) such Indebtedness is permitted
under Section 6.9 hereof, calculated on a pro forma basis as if such designation
had occurred at the beginning of the four-quarter reference period and (2) no
Default or Event of Default would be in existence immediately following such
designation.

Section 6.14 Additional Guarantees and Collateral.

(a) If, after the Closing Date, any Domestic Subsidiary (other than an Excluded
Subsidiary) that is not already a Guarantor has Indebtedness outstanding in
excess of a Minimum Amount or guarantees any other Indebtedness of the Borrower
or of a Guarantor in excess of a Minimum Amount, then such Domestic Subsidiary
will (i) deliver an absolute and unconditional guaranty of the timely repayment
of the Obligations and the due and punctual performance of the obligations of
the Borrower hereunder, which guaranty shall be reasonably satisfactory to the
Administrative Agent and (ii) execute and deliver an amendment, supplement or
other instrument in respect of the other Loan Documents reasonably satisfactory
to the Administrative Agent necessary to cause such Domestic Subsidiary to
become a grantor thereunder and take all action required thereunder to perfect
the Liens created thereunder, as well as to execute and deliver to the trustee
joinders to the Intercreditor Agreements, in each case within 90 days of the
date on which it guaranteed such Indebtedness.

(b) The Borrower and each of the Guarantors shall do or cause to be done all
acts and things that may be required, or that the 1.5 Lien Collateral Agent from
time to time may reasonably request, to assure and confirm that the 1.5 Lien
Collateral Agent holds, for the benefit of the holders of the Obligations, duly
created and enforceable and perfected Liens upon the Collateral (including any
acquired Property or other Property required by any Security Document to become
Collateral after the Closing Date), in each case, as contemplated by, and with
the Lien priority required under, the Loan Documents, and in connection with any
merger, consolidation or sale of assets of the Borrower or any Guarantor, the
property and assets of the Person which is consolidated or merged with or into
the Borrower or any Guarantor, to the extent that they are property or assets of
the types which would constitute Collateral under the Loan Documents, shall be
treated as after-acquired property and the Borrower or such Guarantor shall take
such action as may be reasonably necessary to cause such property and assets to
be made subject to the 1.5 Liens, in the manner and to the extent required under
the Loan Documents.

(c) Upon the reasonable request of the 1.5 Lien Collateral Agent at any time and
from time to time, the Borrower and each of the Guarantors shall promptly
execute, acknowledge and deliver such Security Documents, instruments,
certificates, financing statements, notices and other documents, and take such
other actions as shall be reasonably required, or that the 1.5 Lien Collateral
Agent may reasonably request, to create, perfect, protect, assure or enforce the
Liens and benefits intended to be conferred, in each case as contemplated by the
Security Documents for the benefit of the holders of Obligations.

(d) In addition to the Collateral, from and after the Closing Date, if the
Borrower or any Guarantor acquires any Property that constitutes collateral for
the Priority Lien Debt, the Second Lien Debt or Junior Lien Debt, if and to the
extent that any Priority Lien Document,

 

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Second Lien Document or Junior Lien Document, as applicable, requires any
supplemental security document for such collateral or other actions to achieve a
perfected Lien on such collateral, the Borrower shall, or shall cause the
applicable Guarantor to, promptly (but not in any event no later than the date
that is 20 Business Days after which such supplemental security documents are
executed and delivered (or other action taken) under such Priority Lien
Documents, Second Lien Documents or Junior Lien Documents, as applicable), to
the extent permitted by applicable law, execute and deliver to the 1.5 Lien
Collateral Agent appropriate Security Documents (or amendments thereto) in such
form as shall be necessary to grant the 1.5 Lien Collateral Agent a valid and
enforceable perfected Lien on such Collateral or take such other actions in
favor of the 1.5 Lien Collateral Agent as shall be reasonably necessary to grant
a valid and enforceable perfected Lien on such Collateral to the 1.5 Lien
Collateral Agent, for the benefit of the Lenders, subject to the terms of this
Agreement, the Intercreditor Agreements and the other Loan
Documents. Additionally, subject to this Agreement, the Intercreditor Agreements
and the other Loan Documents, if the Borrower or any Guarantor creates any
additional Lien upon any Property that would constitute Collateral, or takes any
additional actions to perfect any existing Lien on Collateral, in each case for
the benefit of the holders of the Priority Lien Debt, the holders of the Second
Lien Debt or the holders of Junior Lien Debt, after the Closing Date, the
Borrower or such Guarantor, as applicable, must, to the extent permitted by
applicable law, within 20 Business Days after such Lien is granted or other
action taken, grant a valid and enforceable perfected Lien upon such property or
asset, or take such additional perfection actions, as applicable, for the
benefit of the Lenders and obtain all related deliverables as those delivered to
the Priority Lien Collateral Agent, the Second Lien Representative or Junior
Lien Collateral Agent, as applicable, in each case as security for the
Obligations. Notwithstanding the foregoing, to the extent that any Lien on any
Collateral is perfected by the possession or control of such Collateral or of
any account in which such Collateral is held, and if such Collateral or any such
account is in fact in the possession or under the control of the Priority Lien
Collateral Agent, or of agents or bailees of the Priority Lien Collateral Agent,
the perfection actions and related deliverables described in this
Section 6.14(d) shall not be required.

(e) The Borrower will deliver to the Administrative Agent, semi-annually on or
before March 1 and September 1 in each calendar year, beginning March 1, 2017,
an Officer’s Certificate certifying that, as of the date of such certificate,
the Collateral includes Oil and Gas Properties that include not less than 90%
(or such greater amount as may be required by the Existing RCF Agreement in
effect at such time) of the total discounted present value of Proved Reserves
attributable the Oil and Gas Properties of the Borrower and its Restricted
Subsidiaries, as evaluated in the most recent Reserve Report, after giving
effect to exploration and production activities, acquisitions, dispositions and
production since the date of such Reserve Report (the “minimum mortgage
requirement”), together with (i) such executed Mortgages or amendments or
supplements to prior Mortgages naming the 1.5 Lien Collateral Agent, as
mortgagee or beneficiary, as may be necessary to cause the minimum mortgage
requirement to be satisfied, (ii) reasonably satisfactory evidence of the
completion of all recordings and filings of such Mortgages, amendments or
supplements in the proper recorders’ offices or appropriate public records (and
payment of any taxes or fees in connection therewith) and (iii) local counsel
opinion or opinions (each, subject to customary assumptions and qualifications)
to the effect that the 1.5 Lien Collateral Agent has a valid and perfected Lien
with respect to the real property that is subject to the applicable Mortgage;
provided, however that (x) to the extent corresponding

 

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mortgages securing the Priority Lien Obligations are being delivered and (y)
Mortgages have previously been recorded in the public records of the county or
counties applicable to such additional Mortgages or amendments or supplements to
prior Mortgages, no such opinion shall be required unless a corresponding
opinion will be delivered to the Priority Lien Collateral Agent. The certificate
required by this Section 6.14(e) shall include a schedule tied to the latest
Reserve Report identifying those properties treated in the Reserve Report which
are Collateral from those properties treated in the Reserve Report which are not
Collateral.

(f) Notwithstanding anything herein or in the Loan Documents to the contrary,
neither the Borrower nor any Guarantor will be required to grant a security
interest in, and the Collateral shall not include, any Excluded Asset.

Section 6.15 Depositary Banks. From and after the date hereof, the Borrower
shall and shall cause each Restricted Person to maintain all of its operating
accounts, Deposit Accounts and Securities Accounts (as those terms are defined
in the Uniform Commercial Code) with the Priority Lien Collateral Agent or a
lender under the Priority Lien Documents, or if Priority Lien Obligations or
commitments in respect thereof are no longer outstanding, with a depositary bank
otherwise satisfactory to the Administrative Agent (each such party, a “Control
Party”), and shall cause such operating accounts, Deposit Accounts and
Securities Accounts at all times to be subject of a Control Agreement; provided,
however, in the event the depositary bank ceases to be a Control Party, the
Borrower shall, and shall cause each Restricted Persons to close any such
operating account, Deposit Account or Securities Account within forty-five (45)
days of the date such Person ceases to be a Control Party. After the date
hereof, the Borrower shall not and shall not permit any Restricted Person to
open any operating account or other Deposit Account or Securities Account unless
concurrently with the opening of such account the Borrower or such Restricted
Person, as applicable, shall have delivered to the 1.5 Lien Collateral Agent a
duly executed Control Agreement in respect of such account; provided, however,
in the event the Borrower or any Restricted Person acquires a Deposit Account or
Securities Account pursuant to an acquisition, the Borrower and each Restricted
Person shall have forty-five (45) days from the date of such acquisition to (i)
close any such acquired Deposit Account or Securities Account in the event such
account is not held with a Control Party or (ii) subject any such acquired
Deposit Account or Securities Account to a Control Agreement. The requirements
of this Section 6.15 shall not apply to Excluded Accounts. Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the 1.5
Lien Collateral Agent shall not direct disbursements from such Deposit Accounts
or Securities Accounts or prohibit the Borrower from making disbursements from
such Deposit Accounts or Securities Accounts unless an Event of Default has
occurred and is continuing.

ARTICLE VII - SUCCESSORS

Section 7.1 Merger, Consolidation, or Sale of Assets. The Borrower shall not,
directly or indirectly: (i) consolidate or merge with or into another Person
(whether or not the Borrower is the surviving corporation); or (2) sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties and assets, in one or more related transactions, to another Person,
unless:

(a) either:

(i) the Borrower is the surviving corporation; or

(ii) the Person formed by or surviving any such consolidation or merger (if
other than the Borrower) or to which such sale, assignment, transfer, conveyance
or other disposition has been made is a corporation, limited liability company
or limited partnership organized or existing under the laws of the United
States, any state of the United States or the District of Columbia;

 

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(b) the Person formed by or surviving any such consolidation or merger (if other
than the Borrower) or the Person to which such sale, assignment, transfer,
conveyance or other disposition has been made assumes all the obligations of the
Borrower under this Agreement and the other Loan Documents and pursuant to
agreements reasonably satisfactory to the Administrative Agent.

(c) immediately after such transaction or transactions, no Default or Event of
Default exists;

(d) the Borrower or the Person formed by or surviving any such consolidation or
merger (if other than the Borrower), or to which such sale, assignment,
transfer, conveyance or other disposition has been made, would, on the date of
such transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period, (a) be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 6.9(a) hereof or (b) have a Fixed Charge Coverage Ratio not less than
the Fixed Charge Coverage Ratio of the Borrower immediately prior to such
transaction; and

(e) any Collateral owned by or transferred to the Person formed by or surviving
any such consolidation or merger (if other than the Borrower) or the Person to
which such sale, assignment, transfer, conveyance or other disposition has been
made continues to constitute Collateral under the Loan Documents, subject to the
1.5 Liens, except as permitted by this Agreement or the other Loan Documents.

For purposes of this Section 7.1, the sale, lease, conveyance, assignment,
transfer, or other disposition of all or substantially all of the properties and
assets of one or more Subsidiaries of the Borrower, which properties and assets,
if held by the Borrower instead of such Subsidiaries, would constitute all or
substantially all of the properties and assets of the Borrower on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Borrower.

Notwithstanding the restrictions described in clause (d) of this Section 7.1,
any Restricted Subsidiary may consolidate with, merge into or transfer all or
part of its properties and assets to the Borrower, the Borrower may merge into a
Restricted Subsidiary for the purpose of reincorporating the Borrower in another
jurisdiction, and any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to another Restricted
Subsidiary.

Section 7.2 Successor Corporation Substituted. Upon any consolidation or merger,
or any sale, assignment, transfer, lease, conveyance or other disposition of all
or

 

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substantially all of the properties and assets of the Borrower in a transaction
that is subject to, and that complies with the provisions of, Section 7.1
hereof, the successor Person formed by such consolidation or into or with which
the Borrower is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition, the provisions of
this Agreement referring to the “Borrower” shall refer instead to the successor
Person and not to the Borrower), and may exercise every right and power of the
Borrower under the Loan Documents with the same effect as if such successor
Person had been named as the Borrower herein; provided, however that, in the
case of a lease of all or substantially all of its properties and assets, the
Borrower will not be released from the obligation to pay the Obligations.

ARTICLE VIII - DEFAULTS AND REMEDIES

Section 8.1 Events of Default. Each of the following events constitutes an Event
of Default under this Agreement:

(a) default for 30 days in the payment when due of interest or fees on the
Loans;

(b) default in the payment when due (at maturity or otherwise) of the principal
of, or premium, if any, on, the Loans;

(c) failure by the Borrower or any of its Restricted Subsidiaries to comply with
the provisions of Sections 2.6, 6.10 or 7.1 hereof;

(d) failure by the Borrower or any of its Restricted Subsidiaries for 30 days
after notice to the Borrower by the Administrative Agent or the Lenders holding
at least 25% in aggregate principal amount of the Loans then outstanding voting
as a single class to comply with any of the other agreements in this Agreement;

(e) any event of default under and as defined under the Existing RCF Agreement
that continues unwaived or uncured for 30 days;

(f) default under any mortgage, indenture or instrument under which there may be
issued, or by which there may be secured or evidenced, any Indebtedness for
money borrowed by the Borrower or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Borrower or any of its Restricted
Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created
after the Closing Date, if that default:

(i) is caused by a failure to pay principal of, or interest or premium, if any,
on, such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a “Payment Default”); or

(ii) results in the acceleration of such Indebtedness prior to its express
maturity,

and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment

 

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Default or the maturity of which has been so accelerated, aggregates $20.0
million or more; provided, however that if any such default is cured or waived
or any such acceleration rescinded, or such Indebtedness is repaid, within a
period of 15 Business Days from the continuation of such default beyond the
applicable grace period, if any, or the occurrence of such acceleration, as the
case may be, such Event of Default and any consequential acceleration of the
Loans shall be automatically rescinded, so long as such rescission does not
conflict with any judgment or decree;

(g) failure by the Borrower or any of its Restricted Subsidiaries to pay final
judgments entered by a court or courts of competent jurisdiction aggregating in
excess of $20.0 million (net of any amount with respect to which a reputable and
solvent insurance company has acknowledged liability in writing), which
judgments are not paid, discharged, stayed or fully bonded for a period
of 60 days (or, if later, the date when payment is due pursuant to such
judgment);

(h) the Borrower or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Borrower that, taken
together, would constitute a Significant Subsidiary pursuant to or within the
meaning of Bankruptcy Law:

(i) commences a voluntary case,

(ii) consents to the entry of an order for relief against it in an involuntary
case,

(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,

(iv) makes a general assignment for the benefit of its creditors, or

(v) generally is not paying its debts as they become due;

(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(i) is for relief against the Borrower or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries of the
Borrower that, taken together, would constitute a Significant Subsidiary in an
involuntary case;

(ii) appoints a custodian of the Borrower or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries of the
Borrower that, taken together, would constitute a Significant Subsidiary or for
all or substantially all of the property of the Borrower or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Borrower that, taken together, would constitute a
Significant Subsidiary; or

(iii) orders the liquidation of the Borrower or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Borrower that, taken together, would constitute a
Significant Subsidiary;

 

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and the order or decree remains unstayed and in effect for 30 consecutive days;

(j) the occurrence of any of the following:

(i) except as permitted by the Loan Documents, any security document
establishing the 1.5 Liens ceases for any reason to be enforceable; provided,
however that it will not be an Event of Default under this clause (j)(i) if the
sole result of the failure of one or more Security Documents to be fully
enforceable is that any 1.5 Lien purported to be granted under such Security
Documents on Collateral, individually or in the aggregate, having a fair market
value of not more than $15.0 million, ceases to be an enforceable; provided
further that if such failure is susceptible to cure, no Event of Default shall
arise with respect thereto until 45 days after any officer of the Borrower or
any Restricted Subsidiary becomes aware of such failure, which failure has not
been cured during such time period;

(ii) except as permitted by the Loan Documents, any 1.5 Lien purported to be
granted under any Security Document on Collateral, individually or in the
aggregate, having a fair market value in excess of $15.0 million, ceases to be
an enforceable and perfected 1.5 Lien, subject only to Permitted Liens and the
terms of the Intercreditor Agreements; provided, however that if such failure is
susceptible to cure, no Event of Default shall arise with respect thereto until
45 days after any officer of the Borrower or any Restricted Subsidiary becomes
aware of such failure, which failure has not been cured during such time period;

(iii) the Borrower or any Guarantor, or any Person acting on behalf of any of
them, denies or disaffirms, in writing, any obligation of the Borrower or any
Guarantor set forth in or arising under any Security Document establishing the
1.5 Liens; and

(iv) except as permitted by any Loan Document, (i) any Guarantee of the
Obligations is held in any judicial proceeding to be unenforceable or invalid or
ceases for any reason to be in full force and effect, or (ii) any Guarantor, or
any Person acting on behalf of any Guarantor, denies or disaffirms its
obligations under such Guarantee.

(k) Upon the occurrence of an Event of Default described in clause (h) or (i) of
this Section with respect to Borrower, all of the Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or of
dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by

 

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Borrower and each Restricted Person who at any time ratifies or approves this
Agreement. During the continuance of any other Event of Default, with the
consent of Lenders holding at least 25% in aggregate principal amount of
outstanding Loans, the Administrative Agent at any time and from time to time
may and upon written instructions from Lenders holding at least 25% in aggregate
principal amount of the outstanding Loans, the Administrative Agent shall,
without notice to Borrower or any other Restricted Person, declare any or all of
the Obligations immediately due and payable, and all such Obligations shall
thereupon be immediately due and payable, without demand, presentment, notice of
demand or of dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration, or any other
notice or declaration of any kind, all of which are hereby expressly waived by
Borrower and each Restricted Person who at any time ratifies or approves this
Agreement.

The Lenders holding a majority in aggregate principal amount of the then
outstanding Loans by written notice to the Administrative Agent may, on behalf
of all of the Lenders, rescind an acceleration and its consequences, if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.

Section 8.2 Waiver of Past Defaults. The Required Lenders by notice to the
Administrative Agent may on behalf of all Lenders waive an existing Default or
Event of Default and its consequences hereunder, except a continuing Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on, the Loans. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Agreement; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.

Section 8.3 Control by Majority. The Required Lenders may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Administrative Agent or exercising any power conferred on the
Administrative Agent. However, the Administrative Agent may refuse to follow any
direction it or its counsel believes conflicts with law or this Agreement or any
other Loan Document or that the Administrative Agent or its counsel determines
may be unduly prejudicial to the rights of other Lenders or that may expose the
Administrative Agent to liability.

Section 8.4 Priorities. If the Administrative Agent collects any money pursuant
to this Article VIII, it shall pay out the money in the following order (subject
to the terms of the Intercreditor Agreements):

First: to the Administrative Agent, its agents and attorneys for amounts due
under Article IX or Section 10.4 hereof, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the Administrative
Agent and the costs and expenses of collection;

Second: to Lenders for amounts due and unpaid with respect to the Loans for
principal, premium, if any, and interest ratably, without preference or priority
of any kind, according to the amounts due and payable with respect to the Loans
for principal, premium, if any, and interest, respectively; and

Third: to the Borrower or to such party as a court of competent jurisdiction
shall direct.

 

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Section 8.5 Credit Bid.

(a) The Administrative Agent, on behalf of itself and the Lender Parties, shall
have the right, exercisable at the discretion of the Required Lenders, to credit
bid and purchase for the benefit of the Administrative Agent and the Lender
Parties all or any portion of Collateral at any sale thereof conducted by the
Administrative Agent under the provisions of the UCC, including pursuant to
Sections 9-610 or 9-620 of the UCC, at any sale thereof conducted under the
provisions of the Bankruptcy Code, including Section 363 thereof, or a sale
under a plan of reorganization, or at any other sale or foreclosure conducted by
the Administrative Agent (whether by judicial action or otherwise) in accordance
with applicable law. Such credit bid or purchase may be completed through one or
more acquisition vehicles formed by the Administrative Agent to make such credit
bid or purchase and, in connection therewith, the Administrative Agent is
authorized, on behalf of itself and the other Lender Parties, to adopt documents
providing for the governance of the acquisition vehicle or vehicles, and assign
the applicable Obligations to any such acquisition vehicle in exchange for
Equity Interests and/or debt issued by the applicable acquisition vehicle (which
shall be deemed to be held for the ratable account of the applicable Lender
Parties on the basis of the Obligations so assigned by each Lender Party);
provided, however that any actions by the Administrative Agent with respect to
such acquisition vehicle or vehicles, including any disposition of the assets or
Equity Interests thereof, shall be governed, directly or indirectly, by the vote
of the Required Lenders, irrespective of the termination of this Agreement and
without giving effect to the limitations on actions by the Required Lenders
contained in Section 10.1.

(b) Each Lender hereby agrees, on behalf of itself and each of its Affiliates
that is a Lender Party, that, except as otherwise provided in any Loan Document
or with the written consent of the Administrative Agent and the Required
Lenders, it will not take any enforcement action, accelerate obligations under
any of the Loan Documents, or exercise any right that it might otherwise have
under Applicable Law to credit bid at foreclosure sales, UCC sales or other
similar dispositions of Collateral.

ARTICLE IX - Administrative Agent

Section 9.1 Appointment and Authority of the Administrative Agent. Each Lender
Party hereby irrevocably authorizes the Administrative Agent, and the
Administrative Agent hereby undertakes, to receive payments of principal,
interest and other amounts due hereunder as specified herein and to take all
other actions and to exercise such powers under the Loan Documents as are
specifically delegated to the Administrative Agent by the terms hereof or
thereof, together with all other powers reasonably incidental thereto. The
relationship of the Administrative Agent to the other Lender Parties is only
that of one party acting as the Administrative Agent for Lenders, and nothing in
the Loan Documents shall be construed to constitute the Administrative Agent,
regardless of whether a Default or Event of Default has occurred and is
continuing, a trustee or other fiduciary for any Lender Party or Lender or of
any participation therein nor to impose on the Administrative Agent duties and
obligations other than those expressly provided for in the Loan Documents. The
provisions of this Article IX are solely for the benefit of the Administrative
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its Subsidiaries shall have rights as a third-party beneficiary of any of such
provisions. It is understood and agreed that the use of the term “agent” herein
or in any other Loan Documents (or any other similar term) 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.
Instead such term is used as a matter of market custom, and is intended to
create or reflect only an administrative relationship between contracting
parties. With respect to any matters not expressly provided for in the Loan
Documents and any matters which the Loan Documents place within the discretion
of the Administrative Agent, the Administrative Agent shall not be required to
exercise any discretion or take any action, and it may request instructions from
Lenders with respect to any such matter, in which case it shall be required to
act or to refrain from acting (and shall be fully protected and free from
liability in so acting or refraining from acting) upon the instructions of
Required Lenders (including itself); provided, however that the Administrative
Agent shall not be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable Law including for the avoidance of doubt any
action that may be in violation of the automatic stay under any bankruptcy or
insolvency law. The Administrative Agent shall not, except as expressly set
forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Affiliates that is communicated to or obtained by the
Person serving as the Administrative Agent or any of its Affiliates in any
capacity. Upon receipt by the Administrative Agent from the Borrower of any
communication calling for action on the part of Lenders or upon notice from any
other Lender Party to the Administrative Agent of any Default or Event of
Default, the Administrative Agent shall promptly notify each other Lender Party
thereof.

Section 9.2 Exculpation, Administrative Agent’s Reliance, Etc.. Neither the
Administrative Agent nor any of its directors, officers, agents, attorneys, or
employees shall be liable for any action taken or omitted to be taken by any of
them under or in connection with the Loan Documents, including their negligence
of any kind, except that each shall be liable for its own gross negligence or
willful misconduct (as determined in a final non-appealable judgment by a court
of competent jurisdiction). Without limiting the generality of the foregoing,
the Administrative Agent (a) may treat the payee of any Note as the holder
thereof until the Administrative Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed by such payee and
in form satisfactory to the Administrative Agent; (b) may consult with legal
counsel (including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
other Lender Party and shall not be responsible to any other Lender Party for
any statements, warranties or representations made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of the
Loan Documents on the part of any Restricted Person or to inspect the property
(including the books and records) of any Restricted Person; (e) shall not be
responsible to any other Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan Document or any
instrument or document furnished in connection therewith; (f) may rely upon the
representations and warranties of each Restricted Person and the Lender Parties
in exercising its powers hereunder; (g) shall incur no liability under or in
respect of the Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any telecopy) believed by it to be
genuine and signed or sent by the proper Person or Persons.

 

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The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith or (iii) the agreements or
other terms or conditions set forth herein or therein or the occurrence of any
Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, the satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until notice describing
such Default and labeled “Notice of Default” is given to the Administrative
Agent in writing by the Borrower or a Lender.

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

Section 9.3 Credit Decisions. Each Lender Party acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender Party or any of its Affiliates 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 the other Loan Documents. Each Lender
Party also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender Party or any of their Affiliates
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

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 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, the Administrative Agent shall have no duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrower (or any of its Affiliates) which
may come into the possession of such Administrative Agent or any of its
Affiliates. 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.

 

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Section 9.4 Indemnification. Each Lender agrees to indemnify and hold the
Administrative Agent harmless (to the extent not reimbursed by the Borrower
within ten (10) days after demand) from and against such Lender’s Percentage
Share of any and all liabilities, obligations, claims, losses, damages,
penalties, fines, actions, judgments, suits, settlements, costs, expenses or
disbursements (including reasonable fees of attorneys, accountants, experts and
advisors) of any kind or nature whatsoever (in this section collectively called
“liabilities and costs”) which to any extent (in whole or in part) may be
imposed on, incurred by, or asserted against the Administrative Agent growing
out of, resulting from or in any other way associated with any of the
Collateral, the Loan Documents and the transactions and events (including the
enforcement thereof) at any time associated therewith or contemplated therein
(including any Environmental Claims or violation or noncompliance with any
Environmental Laws by any Person or any liabilities or duties of any Person with
respect to the presence or Release of Hazardous Materials found in or released
into the environment). The Administrative Agent shall not be responsible for any
recitals or warranties herein or under any Loan Document, nor for the
effectiveness, enforceability, validity or due execution of any Loan Document,
nor for the creation, perfection or priority of any Liens purported to be
created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security.

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE ADMINISTRATIVE AGENT;

provided, however that no Lender shall be obligated under this section to
indemnify the Administrative Agent for that portion, if any, of any liabilities
and costs which is proximately caused by the Administrative Agent’s own
individual gross negligence or willful misconduct, as determined in a final
non-appealable judgment by a court of competent jurisdiction. Cumulative of the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for such Lender’s Percentage Share of any costs and expenses to be
paid to the Administrative Agent by the Borrower under Section 10.4(a) to the
extent that the Administrative Agent is not timely reimbursed for such expenses
by the Borrower as provided in such section. As used in this section the term
“Administrative Agent” shall refer not only to the Person designated as such in
Section 1.1 but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Person.

Section 9.5 Rights as Lender. If applicable, in its capacity as a Lender, the
Administrative Agent shall have the same rights, powers, and obligations as any
Lender and may exercise such rights and powers as though it were not the
Administrative Agent. The Administrative Agent and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, lend money to,
own securities of, act as financial advisor to, and generally engage in any kind
of business with any Restricted Person or their Affiliates, all as if it were
not the Administrative Agent hereunder and without any duty to account therefor
to any other Lender.

 

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Section 9.6 Sharing of Set-Offs and Other Payments. Each Lender Party agrees
that if it shall, whether through the exercise of rights under Security
Documents or rights of banker’s lien, set off, or counterclaim against the
Borrower or otherwise, obtain payment of a portion of the aggregate Obligations
owed to it which, taking into account all distributions made by the
Administrative Agent under Section 3.1, causes such Lender Party to have
received more than it would have received had such payment been received by the
Administrative Agent and distributed pursuant to Section 3.1, then (a) it shall
be deemed to have simultaneously purchased and shall be obligated to purchase
interests in the Obligations as necessary to cause all Lender Parties to share
all payments as provided for in Section 3.1, and (b) such other adjustments
shall be made from time to time as shall be equitable to ensure that the
Administrative Agent and all Lender Parties share all payments of Obligations as
provided in Section 3.1; provided, however, that nothing herein contained shall
in any way affect the right of any Lender Party to obtain payment (whether by
exercise of rights of banker’s lien, set-off or counterclaim or otherwise) of
indebtedness other than the Obligations. The Borrower expressly consents to the
foregoing arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by Law exercise any
and all rights of banker’s lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to Tribunal order to be paid on account of
the possession of such funds prior to such recovery.

Section 9.7 Investments. Whenever the Administrative Agent in good faith
determines that it is uncertain about how to distribute to Lender Parties any
funds which it has received, or whenever the Administrative Agent in good faith
determines that there is any dispute among Lender Parties about how such funds
should be distributed, the Administrative Agent may choose to defer distribution
of the funds which are the subject of such uncertainty or dispute. If the
Administrative Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if the Administrative Agent is otherwise required
to invest funds pending distribution to Lender Parties, the Administrative Agent
shall invest such funds pending distribution, and all interest on any such
investment shall be distributed upon the distribution of such investment and in
the same proportion and to the same Persons as such investment; provided,
however that the Administrative Agent shall not be liable to Lender Parties for
any loss on such investment except for its gross negligence or willful
misconduct, as determined in a final non-appealable judgment by a court of
competent jurisdiction. All moneys received by the Administrative Agent for
distribution to Lender Parties (other than to the Person who is the
Administrative Agent in its separate capacity as a Lender) shall be held by the
Administrative Agent pending such distribution solely as the Administrative
Agent for such Lender Parties, and the Administrative Agent shall have no
equitable title to any portion thereof.

Section 9.8 Benefit of Article IX. The provisions of this Article IX (other than
the following Section 9.9) are intended solely for the benefit of Lender Parties
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of the Administrative Agent (including the Priority Lien Agent (as such term is
defined in the Senior Lien Intercreditor Agreement) as its subagent (the “1.5
Sub-Agent”), and no Restricted Person shall be entitled to rely on any such
provision or assert any such provision in a claim or defense against any Lender
Party. Lender Parties may waive or amend such provisions as they desire without
any notice to or consent of the Borrower or any other Restricted Person.

Section 9.9 Resignation. The Administrative Agent may resign at any time by
giving written notice thereof to Lenders and the Borrower. Each such notice
shall set forth the date of such resignation. Required Lenders shall have the
right to appoint a successor Administrative Agent. A successor must be appointed
for any retiring Administrative Agent, and such Administrative Agent’s
resignation shall become effective when such successor accepts such
appointment. If, within thirty days after the date of the retiring
Administrative Agent’s resignation, no successor Administrative Agent has been
appointed and has accepted such appointment, then the retiring Administrative
Agent may appoint a successor Administrative Agent, which shall be a financial
institution organized under the Laws of the United States of America or of any
state thereof; provided, however, that, if the Administrative Agent shall notify
the Borrower and the Lenders that no successor Administrative Agent has accepted
such appointment, then such resignation shall become effective fifteen (15) days
following delivery of such notice and in accordance with such notice. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent or the effectiveness of a notice as described in
the preceding sentence, the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any retiring Administrative Agent’s resignation hereunder, the
provisions of this Article IX shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under the Loan Documents.

Section 9.10 Delegation of Duties. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more subagents appointed by the
Administrative Agent, including the 1.5 Sub-Agent as subagent for the
Administrative Agent as Priority Lien Agent under the Second Lien Intercreditor
Agreement. The Administrative Agent and any such subagent may perform any and
all of its duties and exercise its rights and powers by or through their
respective Affiliates. The provisions of this Article shall apply to any such
subagent, including the 1.5 Sub-Agent, and to the Affiliates of the
Administrative Agent and any such subagent, and each subagent, including the 1.5
Sub-Agent, shall have and be protected by all of the rights, immunities,
indemnities and other protections of this Article IX, including Sections 9.2 and
9.4, as if it were the Administrative Agent, and shall apply to their respective
activities in connection with syndication as well as activities as the
Administrative Agent. The Administrative Agent shall not be responsible for the
negligence or misconduct of any subagents except to the extent that a court of
competent jurisdiction determines in a final and nonappealable judgment that the
Administrative Agent acted with gross negligence or willful misconduct in the
selection of such subagents.

Section 9.11 Administrative Agent May File Proofs of Claim. In case of the
pendency of any proceeding under any bankruptcy or insolvency law or any other
judicial proceeding relative to the Borrower or any Subsidiary, the
Administrative Agent (irrespective of whether the principal of any Loan shall
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declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered (but
not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Article III, Section 10.4 and any other provisions
under the Loan Documents regarding indemnification by the Borrower or any of its
Subsidiaries) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders, to
pay to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under
Article III, Section 10.4 and any other provisions under the Loan Documents
regarding indemnification by the Borrower or any of its Subsidiaries.

ARTICLE X - Miscellaneous

Section 10.1 Waivers and Amendments; Acknowledgments.

(a) Amendment and Waiver Without Consent of the Lenders. The Borrower and the
Administrative Agent may amend this Agreement and the other Loan Documents
without notice to or consent of any Lender:

(i) to cure any ambiguity, defect or inconsistency;

(ii) to provide for the assumption of the Borrower’s or a Guarantor’s
Obligations in the case of a merger or consolidation or sale of all or
substantially all of the Borrower’s or such Guarantor’s properties and assets,
as applicable;

(iii) to make any change that would provide any additional rights or benefits to
the Lenders or that does not adversely affect the legal rights of any Lender
under this Agreement or other Loan Document;

(iv) to allow any Guarantor to execute a Guarantee of the Obligations or release
Guarantees pursuant to the terms of this Agreement;

 

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(v) to add any Collateral or to evidence the release of any Liens, in each case
as provided in this Agreement or the other Loan Documents, as applicable;

(vi) with respect to Security Documents establishing the 1.5 Liens, as provided
in the Intercreditor Agreements;

(vii) to make, complete or confirm any grant of Collateral permitted or required
by this Agreement or any of the Security Documents establishing the 1.5 Liens;
or

(viii) to evidence and provide for the acceptance under this Agreement and the
other Loan Documents of a successor Administrative Agent.

In addition, the Intercreditor Agreements may be amended in accordance with
their terms, including to add additional Indebtedness as Second Lien Debt or
Junior Lien Debt and add other parties (or any authorized agent thereof or
trustee therefor) holding such Indebtedness thereto and to establish that the
Liens on any Collateral securing such Indebtedness shall rank equally with the
Liens on such Collateral securing the other Priority Lien Debt, Second Lien Debt
or Junior Lien Debt, as applicable, then outstanding.

Each Lender hereunder (x) consents to the amendment of any Loan Document in the
manner and for the purposes set forth in this Section 10.1(a), (y) agrees that
it will be bound by and will take no actions contrary to the provisions of any
amendment to any Loan Document pursuant to Section 10.1(a) and (z) authorizes
and instructs the Administrative Agent to enter into any amendment to any Loan
Document pursuant to this Section 10.1(a) on behalf of such Lender.

(b) Amendment and Waiver With Consent of the Lenders. The Borrower and the
Administrative Agent may amend this Agreement and the other Loan Documents with
the written consent of the Required Lenders, and any past default or
noncompliance with any provisions may be waived with the consent of the Required
Lenders. Notwithstanding the foregoing, without the consent of each Lender of an
affected Loan, no amendment may:

(i) reduce the principal amount of such Loan whose Lenders must consent to an
amendment, supplement or waiver;

(ii) reduce the principal of or change the fixed maturity of any Loan or alter
the provisions with respect to the prepayment of such Loan set forth in
Section 2.4;

(iii) reduce the rate of or change the time for payment of interest, including
default interest, on any Loan;

(iv) waive a Default or Event of Default in the payment of principal of, or
interest or premium on, the Loans (except a rescission of acceleration of the
Obligations by the holders of a majority in aggregate principal amount of the
then outstanding Loans and a waiver of the payment default that resulted from
such acceleration);

 

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(v) make any Loan payable in money other than U.S. dollars;

(vi) make any change in the provisions of this Agreement relating to waivers of
past Defaults or the right of any Lender to receive payments of principal of, or
interest or premium on, or fees with respect to, such Lender’s Loans;

(vii) waive a prepayment premium with respect to any Loan arising under
Section 2.4;

(viii) release any Guarantor from any of its Guarantee of the Obligations,
except in accordance with the terms of this Agreement or the Loan Documents;

(ix) make any change in the preceding amendment and waiver provisions set forth
in this Section 10.1(b).

In addition, any amendment or supplement to, or waiver of, the provisions of
this Agreement or any Security Document that that has the effect of releasing
all or substantially all of the Collateral from the Liens securing the
Obligations will require the consent of holders of at least 66  2⁄3% in
aggregate principal amount of the Loans then outstanding.

(c) No Waiver. No failure or delay (whether by course of conduct or otherwise)
by any Lender Party in exercising any right, power or remedy which such Lender
Party may have under any of the Loan Documents shall operate as a waiver thereof
or of any other right, power or remedy, nor shall any single or partial exercise
by any Lender Party of any such right, power or remedy preclude any other or
further exercise thereof or of any other right, power or remedy. No waiver of
any provision of any Loan Document and no consent to any departure therefrom
shall ever be effective unless it is in writing and signed as provided in this
Section 10.1, and then such waiver or consent shall be effective only in the
specific instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on any Restricted Person shall
in any case of itself entitle any Restricted Person to any other or further
notice or demand in similar or other circumstances.

(d) Revocation and Effect of Consents. Until an amendment, supplement or waiver
becomes effective, a consent to it by a Lender is a continuing consent by such
Lender and any successor thereto. However, any such Lender or subsequent Lender
may revoke such consent if the Administrative Agent receives written notice of
such revocation before the date the applicable amendment, supplement or waiver
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Lender.

(e) Administrative Agent to Sign Amendments, etc. The Administrative Agent will
sign any amendment, supplement or waiver authorized pursuant to this
Section 10.1 if such amendment, supplement or waiver does not adversely affect
the rights, duties, liabilities or immunities of the Administrative Agent. The
Borrower may not sign an amendment,

 

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supplement or waiver until the Board of Directors of the Borrower approves
it. In executing any amendment, supplement or waiver, the Administrative Agent
will be entitled to receive and will be fully protected in relying upon an
Officer’s Certificate of the Borrower and an opinion of counsel to the Borrower
stating that the execution of such amendment, supplement or waiver is authorized
or permitted by this Agreement.

(f) Acknowledgment. Notwithstanding anything to the contrary herein, this
Section 10.1 shall be subject to the provisions of Section 10.6(c).

(g) Acknowledgments and Admissions. The Borrower hereby represents, warrants,
acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii) it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by the Administrative Agent or
any Lender Party, whether written, oral or implicit, other than as expressly set
out in this Agreement or in another Loan Document delivered on or after the date
hereof, (iii) there are no representations, warranties, covenants, undertakings
or agreements by any Lender Party as to the Loan Documents except as expressly
set out in this Agreement or in another Loan Document delivered on or after the
date hereof, (iv) no Lender Party has any fiduciary obligation toward the
Borrower with respect to any Loan Document or the transactions contemplated
thereby, (v) the relationship pursuant to the Loan Documents between the
Borrower and the other Restricted Persons, on one hand, and each Lender Party,
on the other hand, is and shall be solely that of debtor and creditor,
respectively, (vi) no partnership or joint venture exists with respect to the
Loan Documents between any Restricted Person and any Lender Party, (vii) The
Administrative Agent is not the Borrower’s Administrative Agent, but the
Administrative Agent for the Lender Parties in the capacity described in the
second sentence of Section 9.1, (viii) should an Event of Default or Default
occur or exist, each Lender Party will determine in its sole discretion and for
its own reasons what remedies and actions it will or will not exercise or take
at that time, (ix) without limiting any of the foregoing, the Borrower is not
relying upon any representation or covenant by any Lender Party, or any
representative thereof, and no such representation or covenant has been made,
that any Lender Party will, at the time of an Event of Default or Default, or at
any other time, waive, negotiate, discuss, or take or refrain from taking any
action permitted under the Loan Documents with respect to any such Event of
Default or Default or any other provision of the Loan Documents, and (x) all
Lender Parties have relied upon the truthfulness of the acknowledgments in this
section in deciding to execute and deliver this Agreement and to become
obligated hereunder.

(h) Replacement of Lenders. Notwithstanding the foregoing, in connection with
any proposed amendment, modification, waiver or termination (a “Proposed
Change”) requiring the consent of all Lenders, if the consent of Required
Lenders is obtained, but the consent of the other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained being
referred to as a “Non-Consenting Lender”), at the Borrower’s request, the
Administrative Agent, or one or more Eligible Transferees, shall have the right
(but not the obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon the Administrative Agent’s
request, sell and assign to the Administrative Agent or such Person, all of the
Loans and other Obligations of such Non-Consenting Lenders in accordance with
Section 3.5, such purchase and sale to be consummated

 

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pursuant to an executed Assignment and Acceptance (which Assignment and
Assumption shall become effective without the consent of the Non-Consenting
Lender if not promptly executed by the Non-Consenting Lender following request).

(i) Joint Acknowledgment. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

Section 10.2 Survival of Agreements; Cumulative Nature. All of Restricted
Persons’ various representations, warranties, covenants and agreements in the
Loan Documents shall survive the execution and delivery of this Agreement and
the other Loan Documents and the performance hereof and thereof, including the
making or granting of the Loans and the delivery of the Notes and the other Loan
Documents, and shall further survive until all of the Obligations are paid in
full to each Lender Party and all of Lender Parties’ obligations to the Borrower
are terminated. All statements and agreements contained in any certificate or
other instrument delivered by any Restricted Person to any Lender Party under
any Loan Document shall be deemed representations and warranties by the Borrower
or agreements and covenants of the Borrower under this Agreement. The
representations, warranties, indemnities, and covenants made by Restricted
Persons in the Loan Documents, and the rights, powers, and privileges granted to
Lender Parties in the Loan Documents, are cumulative, and, except for expressly
specified waivers and consents, no Loan Document shall be construed in the
context of another to diminish, nullify, or otherwise reduce the benefit to any
Lender Party of any such representation, warranty, indemnity, covenant, right,
power or privilege. In particular and without limitation, no exception set out
in this Agreement to any representation, warranty, indemnity, or covenant herein
contained shall apply to any similar representation, warranty, indemnity, or
covenant contained in any other Loan Document, and each such similar
representation, warranty, indemnity, or covenant shall be subject only to those
exceptions which are expressly made applicable to it by the terms of the various
Loan Documents.

Section 10.3 Notices. All notices, requests, consents, demands and other
communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document; provided,
however that the Administrative Agent may give telephonic notices to the other
Lender Parties, and shall be deemed sufficiently given or furnished if delivered
by personal delivery, by telecopy, by e-mail, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
the Borrower and Restricted Persons at the address of the Borrower specified on
the signature pages hereto and to each Lender Party at its address specified in
the Notice Schedule as its lending offices (unless changed by similar notice in
writing given by the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given (a) in the case of
personal delivery or delivery service, as of the date of first attempted
delivery during normal business hours at the address provided herein, (b) in the
case of telecopy or e-mail, upon receipt, or (c) in the case of registered or
certified United States mail, three days after deposit in the mail; provided,
however that no Borrowing Notice shall become effective until actually received
by the Administrative Agent.

 

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Section 10.4 Payment of Expenses; Indemnity.

(a) Payment of Expenses. The Borrower will promptly (and in any event,
within 30 days after any invoice or other statement or notice) pay: (i) all
transfer, stamp, mortgage, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any of the other Loan Documents or any other document referred to
herein or therein, (ii) all reasonable costs and expenses incurred by or on
behalf of the Administrative Agent (including attorneys’ fees, consultants’ fees
and engineering fees, travel costs and miscellaneous expenses) in connection
with (1) granting, creating documenting and perfecting the security interests in
the Collateral securing the Obligations, (2) before and following the Closing
Date, (A) the negotiation, preparation, execution and delivery of the Loan
Documents and any and all consents, waivers, amendments or modifications to the
Loan Documents or other documents or instruments relating thereto, (B) the
borrowings hereunder and other action reasonably required in the course of
administration hereof, and (C) monitoring or confirming (or preparation or
negotiation of any document related to) the Borrower’s compliance with any
covenants or conditions contained in this Agreement or in any Loan Document, and
(iii) all reasonable costs and expenses incurred by or on behalf of any Lender
Party (including reasonable attorneys’ fees, consultants’ fees and accounting
fees) in connection with the defense or enforcement of any of the Loan Documents
(including this section and including proceedings in bankruptcy) or the defense
of any Lender Party’s exercise of its rights thereunder (including proceedings
in bankruptcy).

(b) Indemnity. The Borrower agrees to indemnify each Lender Party, upon demand,
from and against any and all liabilities, obligations, claims, losses, damages,
penalties, fines, actions, judgments, suits and settlements and costs, expenses
or disbursements relating thereto (including reasonable fees of attorneys,
accountants, experts and advisors) of any kind or nature whatsoever (in this
section collectively called “liabilities and costs”) which to any extent (in
whole or in part) may be imposed on, incurred by, or asserted against such
Lender Party by the Borrower or any Restricted Person or by any third party
growing out of, resulting from or in any other way associated with any of the
Collateral, the Loan Documents and the transactions and events (including the
enforcement or defense thereof) at any time associated therewith or contemplated
therein (including any Environmental Claims or violation or noncompliance with
any Environmental Laws by any Restricted Person or any liabilities or duties of
any Restricted Person or any Lender Party with respect to the presence or
Release of Hazardous Materials found in or released into the environment). For
the avoidance of doubt, any indemnification relating to Taxes shall be covered
exclusively by Section 3.3 and shall not be covered by this Section 10.4.

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY LENDER PARTY;

provided, however that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final non-appealable judgment of a court of
competent jurisdiction. If any Person (including the Borrower

 

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or any of its Affiliates) ever alleges such gross negligence or willful
misconduct by any Lender Party, the indemnification provided for in this section
shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final non-appealable judgment as to the extent and effect of the alleged gross
negligence or willful misconduct. As used in this section the term “Lender
Parties” shall refer not only to the Persons designated as such in Section 1.1
but also to each director, officer, agent, attorney, employee, representative
and Affiliate of such Persons.

Section 10.5 Joint and Several Liability; Parties in Interest. All Obligations
which are incurred by two or more Restricted Persons shall be their joint and
several obligations and liabilities. All grants, covenants and agreements
contained in the Loan Documents shall bind and inure to the benefit of the
parties thereto and their respective successors and assigns; provided, however,
that no Restricted Person may assign or transfer any of its rights or delegate
any of its duties or obligations under any Loan Document without the prior
consent of Required Lenders, except as expressly permitted by this Agreement or
the Loan Documents. Except as otherwise provided in this Agreement, neither the
Borrower nor any Affiliates of the Borrower shall directly or indirectly
purchase or otherwise retire any Obligations owed to any Lender nor will any
Lender accept any offer to do so, unless each Lender shall have received
substantially the same offer with respect to the same Percentage Share of the
Obligations owed to it. If the Borrower or any Affiliate of the Borrower at any
time purchases some but less than all of the Obligations owed to all Lender
Parties, such purchaser shall not be entitled to any rights of any Lender Party
under the Loan Documents unless and until the Borrower or its Affiliates have
purchased all of the Obligations.

Section 10.6 Assignments.

(a) Participations.

(A) Any Lender may sell a participation interest in its commitments hereunder or
any of its rights under its Loans or under the Loan Documents to any Person;
provided, however that the agreement between such Lender and such participant
must at all times provide: (i) that such participation exists only as a result
of the agreement between such participant and such Lender and that such transfer
does not give such participant any right to vote as a Lender or any other direct
claims or rights against any Person other than such Lender, (ii) that such
participant is subject to the requirements set forth in Section 3.3(e), (h) and
(i) (with such documentation to 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 paragraph (b) of this Section), as applicable, and is not entitled
to payment from any Restricted Person under any of Sections 3.2 or 3.3 of
amounts in excess of those payable to such Lender under such
sections (determined without regard to the sale of such participation), and
(iii) unless such participant is an Affiliate of such Lender, that such
participant shall not be entitled to require such Lender to take any action
under any Loan Document or to obtain the consent of such participant prior to
taking any action under any Loan Document, except for actions which would
require the consent of all Lenders under Section 10.1(h). No Lender selling such
a participation shall, as between the other parties hereto and

 

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such Lender, be relieved of any of its obligations hereunder as a result of the
sale of such participation. Each Lender which sells any such participation to
any Person (other than an Affiliate of such Lender) shall give prompt notice
thereof to the Administrative Agent and the Borrower.

(B) 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, however that no
Lender shall have any obligation to disclose all or any portion of the
Participant Register to any Person (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) except to
the extent that such disclosure is necessary to establish that such commitment,
loan or other obligation is in registered form under Section 5f.103-1(c) of the
United States Treasury Regulations. Unless otherwise required by the Internal
Revenue Service, any disclosure required by the foregoing sentence shall be made
by the relevant Lender directly and solely to the Internal Revenue Service. 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.

(b) Assignments. Except for sales of participations under the immediately
preceding subsection (a) or as otherwise provided in this Section 10.6, no
Lender shall make any assignment or transfer of any kind of its commitments or
obligations to participate in any of its rights under its Loans or under the
Loan Documents, except for assignments to an Eligible Transferee, and then only
if such assignment is made in accordance with the following requirements:

(i) In the case of an assignment of Loans and Commitments, immediately after
giving effect to such assignment, the assignor’s Commitment and Loans shall not
be less than $5.0 million and the assignee’s Commitment and Loans shall equal or
exceed $5.0 million (unless such assignor is assigning all of its Commitments
and Loans or unless such assignment is to an Affiliate of such assignor or an
Approved Fund administered or managed by such assignor or an Affiliate of such
assignor); provided, however that the foregoing requirement may be waived by a
writing signed by the Administrative Agent.

(ii) The parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, appropriately completed, together with the Note (if
any) subject to such assignment and a processing fee payable to the
Administrative Agent of $3,500. Upon such execution, delivery, and payment and
upon the satisfaction of the conditions set out in such Assignment and
Acceptance, then (A) the Borrower shall, if requested by the assignor and/or

 

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assignee, issue new Notes, to such assignor and assignee in exchange for the
return of the old Notes to the Borrower, and (B) as of the “Effective Date”
specified in such Assignment and Acceptance the assignee thereunder shall be a
party hereto and a Lender hereunder and the Administrative Agent shall
thereafter deliver or make available to the Borrower and each Lender one or more
schedules showing the revised Percentage Shares of all other Lenders.

(iii) Each assignee Lender shall (to the extent it has not already done so)
provide the Administrative Agent and the Borrower with the documentation
referred to in Section 3.3(e), (h) and (i) and such other “know-your-customer”
documentation as reasonably requested by the Administrative Agent.

(iv) No Assignment to Certain Persons. Other than as set forth in
Section 10.6(c), no such assignment of Loans shall be made to the Borrower or
any of the Borrower’s Affiliates or Subsidiaries.

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

(c) Assignment to Affiliated Lenders.

(1) In addition to the other rights provided in this Section 10.6 and
notwithstanding anything to the contrary in this Agreement, each Lender may
assign all or a portion of its Loans to any Person who, after giving effect to
such assignment, would be an Affiliated Lender or (if such Loans are immediately
cancelled) the Borrower (without the consent of any Person but subject to
acknowledgment by the Administrative Agent (which acknowledgment shall be
provided promptly after request therefor)); provided, however that

(A) except as previously disclosed in writing to the Administrative Agent and
the Lenders, each such Person represents and warrants as of the date of any
assignment to such Person pursuant to this Section 10.6(c), that such Person
does not have any material non-public information with respect to any Loan Party
or any of their respective securities that both (1) has not been disclosed to
the assigning Lender (other than because such assigning Lender does not wish to
receive material non-public information with respect to any Loan Party or any of
their respective securities) prior to such date and (2) could reasonably be
expected to have a material effect upon, or otherwise by material, to a Lender’s
decision to assign Loans to such Person;

(B) the assigning Lender and such Person purchasing such Lender’s Loans shall
execute and deliver to the Administrative Agent an assignment agreement in a
form reasonably satisfactory to the Administrative Agent; and

(C) in the case of an assignment to an Affiliated Lender, at the time of such
assignment and after giving effect to such assignment, the aggregate principal
amount of the Loans held by all Affiliated Lenders taken as a whole shall not
exceed 10% of the aggregate principal amount of the Loans outstanding under this
Agreement at any time.

 

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(ii) Notwithstanding anything to the contrary in this Agreement, no Affiliated
Lender shall have any right to (A) in its role as a Lender, attend (including by
telephone) any meeting or discussions (or portion thereof) among any agent or
any Lender to which representatives of the Loan Parties are not invited or
(B) receive any information or material prepared by any agent or any Lender or
any communication by or among any agent and/or one or more Lenders, except to
the extent such information or materials have been made available to any Loan
Party or any representative of any Loan Party.

(iii) Notwithstanding anything in Section 10.1 or the definition of “Required
Lenders” to the contrary, Affiliated Lenders shall not be permitted to vote on
any amendment, modification, waiver, consent or other action with respect to any
Loan Document; provided, however that no such amendment, modification, waiver,
consent or other action shall deprive such Affiliated Lender of its pro rata
share of any payments to which such Affiliated Lender is entitled under the Loan
Documents without such Affiliated Lender providing its consent; provided,
further, that such Affiliated Lender’s sole right to approve any amendment,
modification, waiver or consent shall be limited to any amendment, modification,
waiver or consent that is of the type described in clauses (ii), (iii), (iv),
(vi) (regarding the right to receive payment) and (vii) of Section 10.1(b) to
the extent that such Affiliated Lender is affected thereby and which, that by
its terms, does not treat the Affiliated Lender on the same or better terms than
any other Lender; and in furtherance of the foregoing, the Affiliated Lender
agrees to execute and deliver to the Administrative Agent any instrument
reasonably requested by the Administrative Agent to evidence the voting of its
interest as a Lender in accordance with the provisions of this Section 10.6(c).

(iv) Each Affiliated Lender, solely in its capacity as a Lender, hereby agrees
that, if any Loan Party shall be subject to any insolvency proceeding, (A) such
Affiliated Lender (in its capacity as such) shall not take any step or action in
such insolvency proceeding to object to, impede, or delay the exercise of any
right or the taking of any action by the Administrative Agent (or the taking of
any action by a third party that is supported by the Administrative Agent) in
relation to such Affiliated Lender’s claim with respect to its Loans (a “Claim”)
(including, without limitation, objecting to any debtor in possession financing,
use of cash collateral, grant of adequate protection, sale or disposition,
compromise, or plan of reorganization) so long as such Affiliated Lender is
treated in connection with such exercise or action on the same or better terms
as the other Lenders, (B) with respect to any matter requiring the vote of
Lenders during the pendency of an insolvency proceeding (including, without
limitation, voting on any plan of reorganization pursuant to 11 U.S.C. §1126),
the Loans held by such Affiliated Lender (and any Claim with respect thereto)
shall be deemed assigned for all purposes to the Administrative Agent which
shall cast such vote in the same proportion, for and against, as the votes of
Lenders who are not Affiliated Lenders, and (C) such Affiliated Lender shall
otherwise give or refrain from giving any consent in any such insolvency
proceeding at the direction of the Required Lenders. For the avoidance of doubt,
the Lenders and each Affiliated Lender agree and acknowledge that the provisions
set forth

 

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in this clause (iv), and any related provisions set forth in any related
assignment agreement, constitute a “subordination agreement” as such term is
contemplated by, and utilized in, Section 510(a) of the Bankruptcy Code, and, as
such, would be enforceable for all purposes in any case where a Loan Party has
filed for protection under the Bankruptcy Code.

(d) Nothing contained in this section shall prevent or prohibit any Lender from
assigning or pledging all or any portion of its Loans and Note to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors and any Operating Circular issued by such Federal Reserve Bank or to
any central bank having jurisdiction over such Lender or to one of its
Affiliates or as otherwise required by applicable Law; provided, however that no
such assignment or pledge shall relieve such Lender from its obligations
hereunder.

(e) By executing and delivering an Assignment and Acceptance, each assignee
Lender thereunder will be confirming to and agreeing with the Borrower, the
Administrative Agents and each other Lender hereunder that such assignee
understands and agrees to the terms hereof, including Article IX hereof.

(f) Subject to acceptance thereof by the Administrative Agent pursuant to
paragraph (b)(ii) of this Section, from and after the effective date specified
in each Assignment and Acceptance, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance, 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 Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance 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 10.4 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph 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 paragraph (a) of this Section.

Section 10.7 Confidentiality. Each Lender Party agrees that it will follow its
customary procedures to keep confidential any proprietary information given to
it by any Restricted Person, provided, however, that this restriction shall not
apply to information which (a) has at the time in question entered the public
domain, (b) is required to be disclosed by Law (whether valid or invalid) of any
Tribunal or is disclosed pursuant to Section 10.17, (c) is disclosed to any
Lender Party’s Affiliates, auditors, attorneys, agents or to any credit
insurance provider relating to the Borrower and its obligations, (d) is
furnished to any other Lender Party or to any purchaser or prospective purchaser
of participations or other interests in any Loan or Loan Document or to any
direct, indirect, actual or prospective counterparty (and its advisor) to any
swap, derivative or securitization transaction related to the obligations under
this Agreement; provided, however that each such purchaser, prospective
purchaser, counterparty or prospective counterparty first agrees to hold such
information in confidence on the terms provided in this section), (e) is
furnished to S&P or Moody’s or any similar organization or any nationally
recognized rating agency in connection with ratings issued with respect to such
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with respect to any Restricted Person, or (f) is disclosed in the course of
enforcing its rights and remedies during the existence of an Event of Default;
provided, however that this obligation of confidence shall not apply to, and
each of the Administrative Agent and the other Lender Parties (and each Person
employed or retained by them who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans) may disclose to
any Tribunal, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and the other Loan
Documents, and all materials of any kind (including opinions or other tax
analyses) related thereto that are or have been provided to the Administrative
Agent or such Lender Party relating to such tax treatment or tax structure.

Section 10.8 Governing Law; Submission to Process.

(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Except to the extent that
the law of another jurisdiction is expressly elected in a Loan Document, the
Loan Documents shall be deemed contracts and instruments made under and governed
by the laws of the State of New York (including for such purposes
Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New
York). In any legal proceeding relating to the Loan Documents or the
Obligations, each of the parties hereto hereby irrevocably submits itself to the
exclusive jurisdiction of the state and federal courts for the Southern District
of New York sitting in New York County, Borough of Manhattan and agrees and
consents that service of process may be made upon it in any legal proceeding
relating to the Loan Documents or the Obligations by any means allowed under
applicable Law; provided, however that nothing contained herein or in any other
Loan Document will prevent any Lender, the 1.5 Lien Collateral Agent or the
Administrative Agent from bringing any action to enforce any award or judgment
or exercise any right under the Loan Documents against any Collateral or any
other property of any Loan Party in any other forum in which jurisdiction can be
established.

(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM OR THAT SUCH COURT LACKS PERSONAL JURISDICTION OVER THE
BORROWER.

Section 10.9 Limitation on Interest. Lender Parties, Restricted Persons and any
other parties to the Loan Documents intend to contract in strict compliance with
applicable usury Law from time to time in effect. In furtherance thereof such
Persons stipulate and agree that none of the terms and provisions contained in
the Loan Documents shall ever be construed to create a contract to pay, for the
use, forbearance or detention of money, interest in excess of the maximum amount
of interest permitted to be charged by applicable Law from time to time in
effect. Neither any Restricted Person nor any present or future guarantors,
endorsers, or other Persons hereafter becoming liable for payment of any
Obligation shall ever be liable for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the

 

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maximum amount that may be lawfully charged under applicable Law from time to
time in effect, and the provisions of this Section 10.9 shall control over all
other provisions of the Loan Documents which may be in conflict or apparent
conflict herewith. Lender Parties expressly disavow any intention to charge or
collect excessive unearned interest or finance charges in the event the maturity
of any Obligation is accelerated. If (a) the maturity of any Obligation is
accelerated for any reason, (b) any Obligation is prepaid and as a result any
amounts held to constitute interest are determined to be in excess of the legal
maximum, or (c) any Lender or any other holder of any or all of the Obligations
shall otherwise collect moneys which are determined to constitute interest which
would otherwise increase the interest on any or all of the Obligations to an
amount in excess of that permitted to be charged by applicable Law then in
effect, then all sums determined to constitute interest in excess of such legal
limit shall, without penalty, be promptly applied to reduce the then outstanding
principal of the related Obligations or, at such Lender’s or holder’s option,
promptly returned to the Borrower or the other payor thereof upon such
determination. In determining whether or not the interest paid or payable, under
any specific circumstance, exceeds the maximum amount permitted under applicable
Law, Lender Parties and Restricted Persons (and any other payors thereof) shall
to the greatest extent permitted under applicable Law, characterize any
non-principal payment as an expense, fee or premium rather than as interest,
exclude voluntary prepayments and the effects thereof, and amortize, prorate,
allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum legal
rate of interest from time to time in effect under applicable Law in order to
lawfully charge the maximum amount of interest permitted under applicable Law.

Section 10.10 Termination. In its sole and absolute discretion the Borrower may
at any time that no Obligations are owing elect in a written notice delivered to
the Administrative Agent to terminate this Agreement. Upon receipt by the
Administrative Agent of such a notice, if no Obligations are then owing, this
Agreement and all other Loan Documents shall thereupon be terminated and the
parties thereto released from all prospective obligations
thereunder. Notwithstanding the foregoing or anything herein to the contrary,
any waivers or admissions made by any Restricted Person in any Loan Document,
any Obligations under any of Sections 3.2 or 3.3, and any obligations which any
Person may have to indemnify or compensate any Lender Party shall survive any
termination of this Agreement or any other Loan Document. At the request and
expense of the Borrower, the Administrative Agent shall prepare and execute all
necessary instruments to reflect and effect such termination of the Loan
Documents. The Administrative Agent is hereby authorized to execute all such
instruments on behalf of all Lenders, without the joinder of or further action
by any Lender.

Section 10.11 Severability. If any term or provision of any Loan Document shall
be determined to be illegal or unenforceable all other terms and provisions of
the Loan Documents shall nevertheless remain effective and shall be enforced to
the fullest extent permitted by applicable Law.

Section 10.12 Counterparts; Electronic Execution of Assignments. This Agreement
may be separately executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to constitute one and the same Agreement. The words “execution,”
“signed,” “signature,” and words of like

 

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

Section 10.13 Waiver of Jury Trial, Punitive Damages, etc.. The Borrower and
each Lender Party hereby knowingly, voluntarily, intentionally, and irrevocably
(a) waives, to the maximum extent not prohibited by Law, any right it may have
to a trial by jury in respect of any litigation based hereon, or directly or
indirectly at any time arising out of, under or in connection with the Loan
Documents or any transaction contemplated thereby or associated therewith,
before or after maturity; (b) waives, to the maximum extent not prohibited by
Law, any right it may have to claim or recover in any such litigation any
“Special Damages”, as defined below, (c) 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 (d) acknowledges that it
has been induced to enter into this Agreement, the other Loan Documents and the
transactions contemplated hereby and thereby by, among other things, the mutual
waivers and certifications contained in this section. As used in this section,
“Special Damages” includes all special, consequential, exemplary, or punitive
damages (regardless of how named), but does not include any payments or funds
which any party hereto has expressly promised to pay or deliver to any other
party hereto.

Section 10.14 Release of Collateral; Collateral Matters.

(a) Notwithstanding anything to the contrary in the Security Documents, the
Lender Parties irrevocably authorize the 1.5 Lien Collateral Agent, at its
option and in its discretion to (A) release Collateral from the Lien and
security interest created by the Security Documents to secure the Loans and
other Obligations at any time or from time to time in accordance with the
provisions of the Intercreditor Agreements or as provided hereby and
(B) subordinate any Lien on any Excluded Assets or any other property granted to
or held by the 1.5 Lien Collateral Agent under any Loan Document to the holder
of any Permitted Lien. Upon request by the 1.5 Lien Collateral Agent, at any
time, the Lenders will confirm in writing the 1.5 Lien Collateral Agent’s
authority to release particular types or items of Collateral or subordinate any
Lien pursuant to this Section 10.14. The applicable property and assets included
in the Collateral shall be automatically released from the Liens securing the
Loans, and the applicable Guarantor shall be automatically released from its
obligations under this Agreement and the Security Documents, under any one or
more of the following circumstances or any applicable circumstance as provided
in the Intercreditor Agreements or the Security Documents:

(i) upon the Security Termination;

(ii) as to any Collateral of the Borrower or a Guarantor that is sold,
transferred or otherwise disposed of by the Borrower or any Guarantor to a
Person that is not (either before or after such sale, transfer or disposition)
the Borrower or

 

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a Restricted Subsidiary of the Borrower in a transaction or other circumstance
that does not violate Section 6.10 and is permitted by all of the other Loan
Documents, at the time of such sale, transfer or other disposition or to the
extent of the interest sold, transferred or otherwise disposed of; provided,
however that the 1.5 Lien Collateral Agent’s Liens upon the Collateral will not
be released if the sale or disposition is subject to Section 7.1;

(iii) as provided in Section 10.1(b); and

(iv) with respect to the assets of any Guarantor, at the time that such
Guarantor is released from its Guarantee of the Obligations pursuant to
Section 10.15.

In connection with any termination or release pursuant to this Section 10.14 or
a release of a Guarantee pursuant to Section 10.15, the 1.5 Lien Collateral
Agent shall execute and deliver to any Loan Party, at such Loan Party’s expense,
all documents that such Loan Party shall reasonably request to evidence such
termination or release (including UCC termination statements), and will duly
assign and transfer to such Loan Party, such of the Collateral that may be in
the possession of the 1.5 Lien Collateral Agent and has not theretofore been
sold or otherwise applied or released pursuant to this Agreement or the Security
Documents. Any execution and delivery of documents pursuant to this
Section 10.14 shall be without recourse to or warranty by the 1.5 Lien
Collateral Agent. In connection with any release pursuant to this Section 10.14
or 10.15, the Loan Party shall be permitted to take any action in connection
therewith consistent with such release including the filing of UCC termination
statements. Upon the receipt of any necessary or proper instruments of
termination, satisfaction or release prepared by the Borrower, the 1.5 Lien
Collateral Agent shall execute, deliver or acknowledge such instruments or
releases to evidence the release of any Collateral permitted to be released
pursuant to this Agreement or the Security Documents.

(b) Notwithstanding any provision in this Agreement or any other Loan Document
to the contrary, in no event is any Building or Mobile Home included in the
definition of “Mortgaged Properties” or the definition of “Collateral” and no
Building or Mobile Home is hereby encumbered by any security interest or lien
granted pursuant to this Agreement or any other Loan Document. As used herein,
“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
statue 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.

Section 10.15 Release of Guarantee. Each Subsidiary’s Guarantee of the
Obligations shall be automatically released upon:

(a) any sale or other disposition of all or substantially all of the assets of
that Guarantor (including by way of merger or consolidation) to a Person that is
not (either before or after giving effect to such transaction) the Borrower or a
Restricted Subsidiary of the Borrower, if the sale or other disposition does not
violate Section 6.10;

 

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(b) any sale or other disposition of the Capital Stock of such Guarantor to a
Person that is not (either before or after giving effect to such transaction)
the Borrower or a Restricted Subsidiary of the Borrower, if the sale or other
disposition does not violate Section 6.10 and the Guarantor ceases to be a
Subsidiary of the Borrower as a result of such sales or disposition;

(c) designation of such Guarantor as an Unrestricted Subsidiary in accordance
with the applicable provisions of this Agreement;

(d) liquidation or dissolution of such Guarantor, provided no Default or Event
of Default has occurred and is continuing; or

(e) the time such Guarantor is no longer required to be a Guarantor of the
Obligations as described below under Section 6.14, provided no Default or Event
of Default has occurred and is continuing.

Section 10.16 USA Patriot Act Notice. The Administrative Agent 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 “Patriot Act”), it is
required to obtain, verify and record information that identifies the Borrower
and its Subsidiaries, which includes the names and addresses of the Borrower and
its Subsidiaries and other information that will allow the Administrative Agent
to identify the Borrower and its Subsidiaries and partners in accordance with
the Patriot Act. This notice is given in accordance with the requirements of the
Patriot Act and is effective as to the Administrative Agent and each Lender
Party.

Section 10.17 Posting of Approved Electronic Communications.

(a) In addition to providing the Administrative Agent with all originals or
copies of all Communications (as defined below) in the manner specified by
Section 10.3, the Borrower hereby also agrees, unless directed otherwise by the
Administrative Agent or unless the electronic mail address referred to below has
not been provided by the Administrative Agent to the Borrower, that it will, or
will cause its Subsidiaries to, provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent or to the Lender Parties pursuant to the Loan
Documents, including all notices, requests, financial statements, financial and
other reports, certificates and other information materials (all such
communications being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium that is properly
identified in a format acceptable to the Administrative Agent to an electronic
mail address as directed by the Administrative Agent.

(b) The Borrower further agrees that (i) the Administrative Agent may make the
Communications available to the Lender Parties by posting the Communications on
Intralinks or a substantially similar electronic transmission system (the
“Electronic Platform”) and (ii) certain of the Lenders may be “public-side”
Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a “Public
Lender”). The Borrower hereby agrees that (A) all Communications that are to be
made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (B) by marking

 

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Communications “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent and each Lender Party to treat such Communications as
either publicly available information or not material information (although it
may be sensitive and proprietary) with respect to the Restricted Persons or
their securities for purposes of United States Federal and state securities
laws; (C) all Communications marked “PUBLIC” are permitted to be made available
through a portion of the Electronic Platform designated “Public Investor” or
other similar designation; and (D) the Administrative Agent shall be entitled to
treat any Communications that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Electronic Platform not designated “Public Investor”
or otherwise not designated as public.

(c) THE ELECTRONIC PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE LENDER
PARTIES DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE
ADEQUACY OF THE ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS
OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS IS MADE BY THE LENDER PARTIES IN CONNECTION WITH THE COMMUNICATIONS
OR THE ELECTRONIC PLATFORM. IN NO EVENT SHALL THE LENDER PARTIES HAVE ANY
LIABILITY TO ANY RESTRICTED PERSON, ANY OTHER LENDER PARTY OR ANY OTHER PERSON
FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING
DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR
EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY RESTRICTED
PERSON’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH
THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY LENDER PARTY IS FOUND IN
A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED PRIMARILY FROM SUCH LENDER PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

(d) The Administrative Agent agrees that the receipt of the Communications by
the Administrative Agent at its e-mail address set forth herein shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Loan Documents. Each Lender Party agrees that receipt of notice
to it (as provided in the next sentence) specifying that the Communications have
been posted to the Electronic Platform shall constitute effective delivery of
the Communications to such Lender Party for purposes of the Loan Documents. Each
Lender Party agrees to notify the Administrative Agent in writing (including by
electronic communication) from time to time of such Lender Party’s e-mail
address to which the foregoing notice may be sent by electronic transmission and
that the foregoing notice may be sent to such e-mail address.

(e) Nothing herein shall prejudice the right of the Administrative Agent or any
Lender Party to give any notice or other communication pursuant to any Loan
Document in any other manner specified in such Loan Document.

 

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Section 10.18 OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS; ETC.

(a) EACH LENDER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT LIENS SHALL BE CREATED
ON THE COLLATERAL PURSUANT TO THE SECURITY DOCUMENTS, WHICH LIENS SHALL BE
SUBJECT TO TERMS AND CONDITIONS OF THE INTERCREDITOR AGREEMENTS. PURSUANT TO THE
EXPRESS TERMS OF THE INTERCREDITOR AGREEMENTS, IN THE EVENT OF ANY CONFLICT
BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENTS AND ANY OF THE LOAN DOCUMENTS,
THE PROVISIONS OF THE APPLICABLE INTERCREDITOR AGREEMENT SHALL GOVERN AND
CONTROL. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE SENIOR LIEN
INTERCREDITOR AGREEMENT AND THE SECOND LIEN INTERCREDITOR AGREEMENT, THE SENIOR
LIEN INTERCREDITOR AGREEMENT SHALL CONTROL.

(b) EACH LENDER HEREBY (I) AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT TO
ENTER INTO EACH OF THE INTERCREDITOR AGREEMENTS ON BEHALF OF THE LENDERS, AND TO
TAKE OR CAUSE ONE OR MORE SUBAGENTS TO TAKE ALL ACTIONS (AND EXECUTE ALL
DOCUMENTS) REQUIRED (OR DEEMED ADVISABLE) BY IT OR SUCH SUBAGENT IN ACCORDANCE
WITH THE TERMS OF THE INTERCREDITOR AGREEMENTS (II) AUTHORIZES THE
ADMINISTRATIVE AGENT TO APPOINT THE 1.5 SUB-AGENT AS ITS SUBAGENT TO ACT FOR IT
AS PRIORITY LIEN AGENT FOR SUCH LENDER UNDER THE SECOND LIEN INTERCREDITOR
AGREEMENT (III) ACKNOWLEDGES THAT THE 1.5 SUB-AGENT IS ALSO ACTING AS PRIORITY
LIEN AGENT UNDER THE SECOND LIEN INTERCREDITOR AGREEMENT FOR THE PRIORITY LIEN
SECURED PARTIES (AS THAT TERM IS DEFINED IN THE SENIOR LIEN INTERCREDITOR
AGREEMENT) AND (IV) CONSENTS TO THE PRIORITY LIEN AGENT’S SERVING IN SUCH
CAPACITIES AND AGREES NOT TO ASSERT ANY CLAIM (INCLUDING AS A RESULT OF ANY
CONFLICT OF INTEREST) AGAINST THE PRIORITY LIEN AGENT ARISING FROM ITS ACTIONS
OR INACTIONS IN SUCH CAPACITIES SO LONG AS SUCH ACTIONS OR INACTIONS ARE
CONSISTENT WITH THE SENIOR INTERCREDITOR AGREEMENT AND THE SECOND LIEN
INTERCREDITOR AGREEMENT OR OTHERWISE DO NOT CONSTITUTE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.

(c) THE PROVISIONS OF THIS SECTION 10.18 ARE NOT INTENDED TO SUMMARIZE ALL
RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENTS. REFERENCE MUST BE MADE TO
EACH OF THE INTERCREDITOR AGREEMENTS ITSELF TO UNDERSTAND ALL TERMS AND
CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND
REVIEW OF THE INTERCREDITOR AGREEMENTS AND THE TERMS AND PROVISIONS THEREOF, AND
NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES MAKES ANY
REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE
PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENTS.

 

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Section 10.19 Post-Closing Obligations. Notwithstanding anything to the contrary
contained in this Agreement or the other Loan Documents, the parties hereto
acknowledge and agree that the Borrower shall deliver, or cause one or more
Guarantors to deliver to the Administrative Agent the following items
within 15 days after the Closing Date (as such date may be extended by an
additional 15 days (with respect to a given action or actions) at the reasonable
discretion of the Administrative Agent):

(a) fully executed counterparts of any Mortgages not yet delivered (in
sufficient counterparts for the prompt recordation in each jurisdiction in which
the Mortgaged Property subject to such Mortgage is located) and to the extent
requested by the Administrative Agent, corresponding UCC fixture filings or
as-extracted collateral filings (or, if UCC fixture filings and as-extracted
collateral filings are not available in the applicable jurisdiction, equivalent
filings as available in such jurisdiction), and any similar filings as shall be
required by local law, in form and substance reasonably satisfactory to the
Administrative Agent, which Mortgages, UCC fixture filings or as-extracted
collateral filings (or, in the case of UCC fixture filings and as-extracted
collateral filings, any other equivalent filings, as available in each
applicable jurisdiction) or other similar filings shall cover each Mortgaged
Property, together with evidence reasonably satisfactory to the Administrative
Agent that such Mortgages, UCC fixture filings or as-extracted collateral
filings (or, in the case of UCC fixture filings and as-extracted collateral
filings, any other equivalent filings, as available in each applicable
jurisdiction) or similar filings have been delivered to the Persons responsible
for recording or filing, as applicable, of such Mortgages, UCC fixture filings,
as-extracted collateral filings, equivalent filings or similar filings, as the
case may be;

(b) title information and lien searches with respect to the Mortgaged
Properties, as requested by the Administrative Agent;

(c) legal opinions addressed to the Lender Parties from (1) local counsel,
covering, without limitation, the enforceability of each Mortgage under the laws
of the jurisdiction in which the Mortgaged Property subject to such Mortgage is
located, the creation of valid mortgage Liens on such Mortgaged Property under
the laws of the jurisdiction in which the Mortgaged Property subject to such
Mortgage is located and other matters customarily addressed in legal opinions of
local counsel with respect to the Mortgages, and (2) outside counsel to the
Borrower of national standing, covering, without limitation, the due
authorization, execution and delivery of the Mortgages with respect to Delaware
and Texas laws, in each case, in form and substance substantially equivalent to
the opinions previously delivered to the Administrative Agent pursuant to
Section 4.1; and

(d) any deposit account control agreements required to perfect the Liens in the
deposit accounts of the Loan Parties, in each case in form and substance
reasonably satisfactory to the Administrative Agent and the Backstop Lender.

Section 10.20 Additional Indebtedness. In connection with the incurrence by any
Loan Party or any Subsidiary thereof of any Priority Lien Obligations, Second
Lien Obligations or Junior Lien Obligations permitted to be incurred pursuant to
the terms hereof and of any other then outstanding Priority Lien Documents, Loan
Documents, Second Lien Documents and Junior Lien Documents, each of the
Administrative Agent and the 1.5 Lien Collateral Agent agree to

 

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execute and deliver any necessary supplements, joinders or confirmations to the
Intercreditor Agreements and any amendments, amendments and restatements,
restatements or waivers of or supplements to or other modifications to any
Security Document (including but not limited to any Mortgages and UCC fixture
filings), and to make or consent to any filings or take any other actions in
connection therewith, as may be reasonably deemed by the Borrower to be
necessary or reasonably desirable for any Lien on the assets of any Loan Party
permitted to secure such Indebtedness to become a valid, perfected lien (with
such priority as may be designated by the relevant Loan Party or Subsidiary, to
the extent such priority is permitted by the Loan Documents) pursuant to the
Security Document being so amended, amended and restated, restated, waived,
supplemented or otherwise modified or otherwise.

Section 10.21 Set off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, after the
occurrence and during the continuance of any Event of Default each Lender Party
is hereby authorized by each Loan Party at any time or from time to time subject
to the consent of the Administrative Agent and the Required Lenders (such
consent not to be unreasonably withheld or delayed), without notice to any Loan
Party or to any other Person (other than the Administrative Agent), any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by such Lender
Party to or for the credit or the account of any Loan Party against and on
account of the obligations and liabilities of any Loan Party to such Lender
Party hereunder, including all claims of any nature or description arising out
of or connected hereto, irrespective of whether or not (a) such Lender Party
shall have made any demand hereunder or (b) the principal of or the interest on
the Loans or any other amounts due hereunder shall have become due and payable
pursuant to Section 2.

Section 10.22 Acknowledgment and Consent to Bail-In of EEA Financial
Institution. Notwithstanding anything to the contrary in any Loan Document or in
any other agreement, arrangement or understanding among any such parties, each
party hereto acknowledges that any liability of any EEA Financial Institution
arising under any Loan Document, to the extent such liability is unsecured, may
be subject to the write-down and conversion powers of an EEA Resolution
Authority and agrees and consents to, and acknowledges and agrees to be bound
by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if
applicable:

(1) a reduction in full or in part or cancellation of any such liability;

(2) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(3) 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.

 

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.

 

W&T OFFSHORE, INC. as the Borrower By:  

/s/ John D. Gibbons

  Name:   John D. Gibbons   Title:   Senior Vice President and Chief Financial
Officer

 

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Franklin Custodian Funds - Franklin Income Fund, as Lender By:  

/s/ Ed Perks

  Name:   Ed Perks   Title:   EVP

 

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CORTLAND CAPITAL MARKET SERVICES LLC as Administrative Agent and 1.5 Lien
Collateral Agent By:  

/s/ Emily Ergang Pappas

  Name:   Emily Ergang Pappas   Title:   Associate Counsel

 

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SCHEDULE 1

DISCLOSURE SCHEDULE

 

ITEM 5.6.    No Material Adverse Change regarding Financial Statements ITEM 5.7.
   Liabilities, Obligations and Restrictions ITEM 5.9.    Litigation Matters
ITEM 5.10    Extraordinary Events, Labor Disputes and Acts of God ITEM 5.11.   
ERISA Plans and Liabilities ITEM 5.12.    Environmental Matters ITEM 5.13.   
Names and Places of Business and State of Incorporation or Formation ITEM 5.14.
   Subsidiaries ITEM 5.20.    Hedging Transactions

 

Sch 1-1

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

ITEM 5.6

No Material Adverse Change regarding Financial Statements

None.

 

Item 5.6 - 1

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

ITEM 5.7

Liabilities, Obligations and Restrictions

None.

 

Item 5.7 - 1

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

ITEM 5.9

Litigation Matters

None.

 

Item 5.9 - 1

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

ITEM 5.10

Extraordinary Events, Labor Disputes and Acts of God

None.

 

Item 5.10 - 1

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

ITEM 5.11

ERISA Plans and Liabilities

None.

 

Item 5.11 - 1

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

ITEM 5.12

Environmental Matters

None.

 

Item 5.12 - 1

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

ITEM 5.13

Names and Places of Business and State of Incorporation or Formation

 

1. Name of Restricted Party: W&T Offshore, Inc.

 

  a. State of Formation: Texas

 

  b. Other names used in preceding five years:

 

  i. Successor by merger with Offshore Energy I LLC, a Delaware limited
liability company

 

  ii. Successor by merger with Offshore Energy II LLC, a Delaware limited
liability company

 

  iii. Successor by merger with Offshore Energy III LLC, a Delaware limited
liability company

 

  iv. Successor by merger with Gulf of Mexico Oil and Gas Properties LLC, a
Delaware limited liability company

 

  v. Successor by merger with Offshore Shelf LLC, a Delaware limited liability
company

 

  c. Prior Chief Executive Office or Principal Place of Business in the
preceding five years:

 

  i. None.

 

  d. Other Offices and Places of Business:

 

  i. 1100 Poydras, Suite 1100, New Orleans, Louisiana, 70163

 

  ii. 13700 Dauphin Island Pkwy, Coden, Alabama 36523

 

2. Name of Restricted Party: W & T Energy VI, LLC

 

  a. State of Formation: Delaware

 

  b. Other names used in preceding five years:

 

  i. None.

 

  c. Prior Chief Executive Office or Principal Place of Business in the
preceding five years:

 

  i. None.

 

Item 5.13 - 1

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

  d. Other Offices and Places of Business:

 

  i. None.

 

3. Name of Restricted Party: W & T Energy VII, LLC

 

  a. State of Formation: Delaware

 

  b. Other names used in preceding five years:

 

  i. None.

 

  c. Prior Chief Executive Office or Principal Place of Business in the
preceding five years:

 

  i. None.

 

  d. Other Offices and Places of Business:

 

  i. None.

 

Item 5.13 - 2

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

ITEM 5.14

Subsidiaries

1. W & T Energy VI, LLC, a Delaware limited liability company (Guarantor, 100%
owned by the Borrower).

2. W & T Energy VII, LLC, a Delaware limited liability company (Guarantor, 100%
owned by the Borrower).

3. White Shoal Pipeline Corporation, a Delaware corporation (not a Guarantor,
74.3% owned by the Borrower).

 

Item 5.14 - 1

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

ITEM 5.20

Hedging Transactions

Summary:

 

Crude Oil: Two-way collars, Priced off WTI (NYMEX)

            Notional
Quantity
(Bbls/day)      Notional
Quantity
(Bbls)      Weighted Average
Contract Price  

Termination Period

         Put Option
(Bought)      Call Option
(Sold)  

2016:

  

3rd Quarter

     5,000         460,000       $ 40.00       $ 81.47      

4th Quarter

     5,000         460,000         40.00         81.47   

 

Natural Gas: Three-way collars, Priced off Henry Hub (NYMEX)

            Notional
Quantity
(MMBTUs/day)      Notional
Quantity
(MMBTUs)      Weighted Average Contract Price  

Termination Period

         Put Option
(Bought)      Call Option
(Sold)      Call
Option
(Bought)  

2016:

  

3rd Quarter

     40,000         2,440,000       $ 2.25       $ 3.50       $ 3.77      

4th Quarter

     40,000         3,680,000         2.25         3.50         3.77   

All counterparties are lenders under the Credit Agreement

No credit support agreements have been entered into with any of the
counterparties

No margins are required or supplied with any counterparty

Oil Contracts per Counterparty:

 

Priced off WTI

(NYMEX)

                                      Oil Contracts  

Seller:

Citi

   Put (bought)      Call (sold)  

Termination Period

   Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price      Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price  

2016:

  

3rd Quarter

     92,000         40.00         92,000         81.80      

4th Quarter

     92,000         40.00         92,000         81.80         

 

 

    

 

 

    

 

 

    

 

 

          184,000       $ 40.00         184,000       $ 81.80         

 

 

    

 

 

    

 

 

    

 

 

 

 

Item 5.20 - 1

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

Priced off WTI

(NYMEX)

                                      Oil Contracts  

Seller:

Goldman Sachs

   Put (bought)      Call (sold)  

Termination Period

   Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price      Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price  

2016:

  

3rd Quarter

     92,000         40.00         92,000         81.00      

4th Quarter

     92,000         40.00         92,000         81.00         

 

 

    

 

 

    

 

 

    

 

 

          184,000       $ 40.00         184,000       $ 81.00         

 

 

    

 

 

    

 

 

    

 

 

 

 

Priced off WTI

(NYMEX)

                                      Oil Contracts  

Seller:

Scotia Bank

   Put (bought)      Call (sold)  

Termination Period

   Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price      Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price  

2016:

  

3rd Quarter

     92,000         40.00         92,000         81.03      

4th Quarter

     92,000         40.00         92,000         81.03         

 

 

    

 

 

    

 

 

    

 

 

          184,000       $ 40.00         184,000       $ 81.03         

 

 

    

 

 

    

 

 

    

 

 

 

 

Item 5.20 - 2

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

Priced off WTI

(NYMEX)

                                      Oil Contracts  

Seller:

Toronto Dominion

   Put (bought)      Call (sold)  

Termination Period

   Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price      Notional
Quantity
(Bbls)      Weighted
Average
Contract
Price  

2016:

  

3rd Quarter

     184,000         40.00         184,000         81.75      

4th Quarter

     184,000         40.00         184,000         81.75         

 

 

    

 

 

    

 

 

    

 

 

          368,000       $ 40.00         368,000       $ 81.75         

 

 

    

 

 

    

 

 

    

 

 

 

Natural Gas Contracts per Counterparty:

 

Priced off WTI

(NYMEX Henry Hub)

                                                    Natural Gas Contracts  

Seller:

Morgan Stanley

   Put (bought)      Call (sold)      Call (Bought)   Ref: F16579208-1, _184-1
          Weighted             Weighted             Weighted  

Termination Period

   Notional
Quantity
(MMBtu)      Average
Contract
Price      Notional
Quantity
(MMBtu)      Average
Contract
Price      Notional
Quantity
(MMBtu)      Average
Contract
Price  

2016:

  

3rd Quarter

     610,000         2.25         610,000         3.50         610,000        
3.74      

4th Quarter

     920,000         2.25         920,000         3.50         920,000        
3.74         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

          1,530,000       $ 2.25         1,530,000       $ 3.50        
1,530,000       $ 3.74         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Priced off WTI

(NYMEX Henry Hub)

                                                    Natural Gas Contracts  

Seller:

Natixis

   Put (bought)      Call (sold)      Call (Bought)   Ref: 160103212, 214, 217
          Weighted             Weighted             Weighted  

Termination Period

   Notional
Quantity
(MMBtu)      Average
Contract
Price      Notional
Quantity
(MMBtu)      Average
Contract
Price      Notional
Quantity
(MMBtu)      Average
Contract
Price  

2016:

  

3rd Quarter

     610,000         2.25         610,000         3.50         610,000        
3.80      

4th Quarter

     920,000         2.25         920,000         3.50         920,000        
3.80         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

          1,530,000       $ 2.25         1,530,000       $ 3.50        
1,530,000       $ 3.80         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Item 5.20 - 3

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

Priced off WTI

(NYMEX Henry Hub)

                                                    Natural Gas Contracts  

Seller:

Toronto Dominion

   Put (bought)      Call (sold)      Call (Bought)   Ref: 476459, 461, 462     
     Weighted             Weighted             Weighted  

Termination Period

   Notional
Quantity
(MMBtu)      Average
Contract
Price      Notional
Quantity
(MMBtu)      Average
Contract
Price      Notional
Quantity
(MMBtu)      Average
Contract
Price  

2016:

  

3rd Quarter

     610,000         2.25         610,000         3.50         610,000        
3.75      

4th Quarter

     920,000         2.25         920,000         3.50         920,000        
3.75         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

          1,530,000       $ 2.25         1,530,000       $ 3.50        
1,530,000       $ 3.75         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Priced off WTI

(NYMEX Henry Hub)

                                                    Natural Gas Contracts  

Seller:

ABN - AMBRO

   Put (bought)      Call (sold)      Call (Bought)  

Ref: 13741337-39

13741345-47

   Notional
Quantity
(MMBtu)      Weighted
Average
Contract
Price      Notional
Quantity
(MMBtu)      Weighted
Average
Contract
Price      Notional
Quantity
(MMBtu)      Weighted
Average
Contract
Price  

Termination Period

                 

2016:

  

3rd Quarter

     610,000         2.25         610,000         3.50         610,000        
3.78      

4th Quarter

     920,000         2.25         920,000         3.50         920,000        
3.78         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

          1,530,000       $ 2.25         1,530,000       $ 3.50        
1,530,000       $ 3.78         

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

For natural gas, contracts close one month ahead of production, i.e July
contracts closed last week of June

 

Item 5.20 - 4

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

SCHEDULE 2

SECURITY SCHEDULE

 

1. Security Agreement, Pledge and Irrevocable Proxy, dated as of September 7,
2016, from W&T Offshore, Inc. (the “Borrower”) in favor of Cortland Capital
Market Services LLC, as 1.5 Lien Collateral Agent for the benefit of the Lenders
(the “1.5 Lien Collateral Agent”).

 

2. Security Agreement, Pledge and Irrevocable Proxy, dated as of September 7,
2016, from W & T Energy VI, LLC and W & T Energy VII, LLC (each a “Guarantor”,
and together the “Guarantors”) in favor of the 1.5 Lien Collateral Agent.

 

3. Guaranty, dated as of September 7, 2016, from W & T Energy VI, LLC in favor
of the Administrative Agent and each of the other Lender Parties.

 

4. Guaranty, dated as of September 7, 2016, from W & T Energy VII, LLC in favor
of the Administrative Agent and each of the other Lender Parties.

 

5. Intercreditor Agreement, dated as of May 11, 2015, by and among the Existing
RCF Agent, as the original priority lien agent, the Administrative Agent as a
New Representative, Morgan Stanley Senior Funding, Inc., as the original second
lien collateral trustee and Wilmington Trust, N.A. as a New Representative.

 

6. Intercreditor Agreement, dated as of September 7, 2016, between the Existing
RCF Agent, as the original priority lien agent, and the 1.5 Lien Collateral
Agent, as the original 1.5 lien agent.

 

Sch 2-1

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

SCHEDULE 3

NOTICE SCHEDULE

Administrative Agent:

Cortland Capital Market Services LLC

225 West Washington Street, 21st Floor

Chicago, Illinois 60606

Attention: Ryan Morick and Legal Department

Email: ryan.morick@cortlandglobal.com and legal@cortlandglobal.com

Fax: 312-376-0751

1.5 Lien Collateral Agent:

Cortland Capital Market Services LLC

225 West Washington Street, 21st Floor

Chicago, Illinois 60606

Attention: Ryan Morick and Legal Department

Email: ryan.morick@cortlandglobal.com and legal@cortlandglobal.com

Fax: 312-376-0751

Lender:

Franklin Advisors, Inc.

One Franklin Parkway, Suite 2100

San Mateo, CA 94403

 

Sch 3-1

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

SCHEDULE 4

MORTGAGED PROPERTIES

[to be attached]

 

Sch 4-1

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

Mortgagor        Block        Area        Addition       

Adjacent

State

       OCS        Effective
Date       

Interest

Type

       Description        WI%        NRI%             Acres

W&T

Offshore Inc.

      2       East Cameron               Cameron, Louisiana       SL 18121      
7/1/2013      

Record

Title

     

 

Portion of Tract 36235 - Portion of Blocks 2 and 3, East Cameron Area, Revised,
Cameron Parish, Louisiana. The beds and bottoms of all water bodies belonging to
the State of Louisiana located in that portion of Blocks 2 and 3, East Cameron
Area, Revised, together with any present lands formed by accretion to the
shoreline, located in Cameron Parish, Louisiana, and not presently under mineral
lease on May 12, 2004, the geographical area of which is more fully described as
follows: Beginning at a point on the North line of Block 2, East Cameron Area,
Revised, also being the Northeast corner of State Lease No. 16475 having
Coordinates of X =1,471,141.95 and Y = 374,758.05; thence East 600.00 feet to
the North line of said Block 2 to a point having Coordinates of X = 1,471,741.95
and Y = 374,758.05; thence South 3,884.61 feet to a point having Coordinates of
X = 1,471,741.95 and Y = 370,873.44; thence West 4,333.94 feet to a point on the
East boundary of said State Lease No. 16475 having Coordinates of X =
1,467,408.01 and Y = 370,873.44; thence North 43 degrees 52 minutes 01 seconds
East 5,388.18 feet on the East boundary of said State Lease No. 16475 to the
point of beginning, containing approximately 220.00 acres, all as more
particularly outlined on a plat in the Office of Mineral Resources, Department
of Natural Resources.

 

      42.52       36.08491           220

 

W&T

Offshore, Inc.

 

      321      

 

East

Cameron

 

      South      

 

Cameron,

Louisiana

 

      G02061       2/1/1971      

Record

Title

      All of Block 321, East Cameron Area       100       83.333           5,000

W&T

Offshore, Inc.

      331      

East

Cameron

             

Cameron

Parish,

Louisiana

      G08658       8/1/1987       ORRI       All of Block 331, East Cameron
Area,       0       1.3333           5,000

 

141

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T

Offshore, Inc.

 

    

  331      

East

Cameron

             

Cameron,

Louisiana

      G08658       8/1/1987       ORRI      

 

All of Block 331, East Cameron Area, INSOFAR AND ONLY INSOFAR as said Block
covers operating rights from a depth below 100 feet below the stratigraphic
equivalent of 12,590 feet MD being the deepest depth drilled in the FMI OCS-G
8658 No. 2 Well to 100,000 feet TVD.

 

      0       1.3333           5,000

W&T

Offshore, Inc.

      338      

East

Cameron

      South      

Cameron,

Louisiana

      G02063       2/1/1971      

 

Record

Title

 

      All of Block, EC 338       71.8306       59.85886           5,000

W&T

Offshore, Inc.

      338      

East

Cameron

      South      

Cameron,

Louisiana

      G02063       2/1/1971      

 

Operating

Rights

 

      All of Block 338, East Cameron Area, from the surface to 7,274’ TVDSS    
  71.8306       59.85886           5,000.02

W&T

Offshore, Inc.

      338      

East

Cameron

      South      

Cameron,

Louisiana

      G02063       2/1/1971      

 

Operating

Rights

 

      All of Block 338, East Cameron Area, from 7,274’ TVDSS to 99,999’ TVDSS  
    71.8306       59.85886           5,000.02

W&T

Offshore, Inc.

      349      

East

Cameron

             

Cameron,

Louisiana

      G14385       5/1/1994      

Operating

Rights

     

 

All of Block 349, East Cameron Area, INSOFAR AS Lease covers operating rights
from surface down to stratigraphic equivalent of the deepest productive
reservoir discovered in the field, which is defined as the base of the Lentic
Sand as seen in the OCS-G 15157 No. A-5 on the CDR TVD Log at 9,296’ TVD.

 

      75       62.5           5,000

W&T

Offshore, Inc.

      349      

East

Cameron

             

Cameron,

Louisiana

      G14385       5/1/1994      

Operating

Rights

     

 

All of Block 349, East Cameron Area, INSOFAR AS Lease covers operating rights
below the stratigraphic equivalent of the deepest productive reservoir
discovered in the field, which is defined as the base of the Lentic Sand as seen
in the OCS-G 157157 A-5 Well No. A-5, on the CDR TVD at 9,296’ TVD.

 

      37.5       37.5           5,000

 

142

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

 

W&T

Offshore, Inc.

 

        204       Eugene Island              

 

Terrebonne and St. Mary, Louisiana

 

      00804       5/1/1960      

UNIT Operating

Rights

      All of Block 204, Eugene Island Area, as to depths below 15,891’ TVDDS    
  100                   5,000

 

W&T

Offshore, Inc.

 

      205       Eugene Island              

 

Terrebonne and St. Mary, Louisiana

 

      00805       5/1/1960      

UNIT

Operating

Rights

      All of Block 205, Eugene Island Area, as to depths below 15,891’ TVDSS    
  100                   5,000

 

W&T

Offshore, Inc.

 

      206       Eugene Island              

 

Terrebonne and St. Mary, Louisiana

 

      00806       5/1/1960      

UNIT

Operating

Rights

      All of Block 206, Eugene Island Area, as to depths below 15,891’ TVDSS    
  100                   5,000

 

W&T

Offshore, Inc.

 

      218       Eugene Island              

 

Terrebonne and St. Mary, Louisiana

 

      00807       5/1/1960      

UNIT

Operating

Rights

      W1/2 of Block 218, Eugene Island Area,, as to depths below 15,891’ TVDSS  
    100                   5,000

 

W&T

Offshore, Inc.

 

      219       Eugene Island               Terrebonne and St. Mary, Louisiana  
    00808       5/1/1960      

UNIT

Operating

Rights

     

 

All of Block 219, Eugene Island Area, below the base of base of the VAL. “HA No.
2 Sand as seen in the Eugene Island E-1 Well at 5,600’, measured depth

 

      100                   5,000

 

W&T

Offshore, Inc.

 

      219       Eugene Island               Terrebonne and St. Mary, Louisiana  
    00808       5/1/1960      

UNIT

Operating

Rights

      All of Block 219, Eugene Island Area, as to depths below 15,891’ TVDSS    
  100                   5,000

 

W&T

Offshore, Inc.

 

      954       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G13081       7/1/1991      

Contractual

Operating

Rights

      All of Block 954, Ewing Bank, from surface down to 12,447’ SSTVD       50
      41.67           5,760.00

 

W&T

Offshore, Inc.

 

      988       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G05809       7/1/1983       ORRI       All of Blocks 944 and 988, Ewing
Bank Area       0       1.188863           5,000

 

W&T

Offshore Inc.

 

      988       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G05809       7/1/1983       Operating Rights       S1/2S1/2 of Block 988,
Ewing Bank Area from 17,000’ TVDSS down to 25,000’ TVDSS.       26.6667        
          1,435.66

 

143

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T

Offshore Inc.

 

   

  988       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G05809       7/1/1983       Operating Rights       S1/2S1/2 of Block 988,
Ewing Bank Area from 25,000’ TVDSS down to 99,999’ TVDSS.       26.6667        
          1,435.66

W&T

Offshore Inc.

      988       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G05809       7/1/1983       Operating Rights      

 

All of Block 944, Ewing Bank Area from surface down to 99,999’ TVDSS and N/2;
N2/S/2 of Block 988, Ewing Bank Area from surface down to 99,999’ TVDSS.

 

      26.6667                   407.54

W&T

Offshore Inc.

      385       Garden Banks              

 

Cameron and Vermilion, Louisiana

 

      G17358       11/1/1996       ORRI       All of Block 385, Garden Banks    
  0       0.5           5,760

W&T

Offshore, Inc.

      386       Garden Banks              

 

Cameron and Vermilion, Louisiana

 

      G10350       10/1/1988       ORRI       All of Block 386, Garden Banks    
  0       0.5           5,760

W&T

Offshore, Inc.

      108       Grand Isle              

 

Lafourche and Jefferson, Louisiana

 

      G32231       6/1/2008      

Record

Title

      All of Block 108, Grand Isle       100          81.25             
4,539.89

W&T

Offshore, Inc.

      18       Green Canyon              

 

Terrebonne and Lafourche, Louisiana

 

      G04940       12/1/1981       Operating Rights       All of Block 18, Green
Canyon, from 17,000’ TVDSS down to 25,000’ TVDSS       25.36                  
5,760

W&T

Offshore, Inc.

      18       Green Canyon              

 

Terrebonne and Lafourche, Louisiana

 

      G04940       12/1/1981       Operating Rights       All of Block 18, Green
Canyon, from 25,000’ TVDSS down to 99,999 TVDSS       25.36                  
5,760

W&T

Offshore, Inc.

      69       Main Pass       South      

 

Plaquemines and St. Bernard, Louisiana

 

      00372       8/5/1947       Operating Rights      

 

Block 69, Main Pass Area, INSOFAR AND ONLY INSOFAR as the lease covers and
affects operating rights in depths below a TVD of 9,000’ below the earth’s
surface.

 

      64       56           1,074.60

W&T

Offshore, Inc.

      69       Main Pass       South      

 

Plaquemines and St. Bernard, Louisiana

 

      00372       8/5/1947      

Record

Title

      That portion of Block 69, Main Pass Area       100       87.5          
1,074.60

 

144

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

 

W&T

Offshore, Inc.

 

      98       Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G27965       7/1/2006      

Record

Title

      S1/2 of Block 98, Main Pass Area       100       71.16666          
2,497.28

 

W&T

Offshore, Inc.

 

      98       Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G27965       7/1/2006      

Record

Title

      N1/2 of Block 98, Main Pass Area       100       71.16666          
2,497.28

 

W&T

Offshore, Inc.

 

      107       Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G18088       8/1/1997      

Record

Title

      NW1/4NE1/4NE1/4; NE1/4NW1/4NE1/4; W1/2W1/2E1/2; W1/2 of Block 107, Main
Pass Area       33.3334       27.77783           3,277.67

 

W&T

Offshore, Inc.

 

      107       Main Pass               Plaquemines and St. Bernard, Louisiana  
    G18088       8/1/1997       Operating Rights      

 

NW1/4NE1/4NE1/4; NE1/4NW1/4NE1/4; W1/2W1/2E1/2; and the W1/2 of Block 107, Main
Pass Area, including depths from the surface to 100’ below the stratigraphic
equivalent of the base of the 11,600’ sand as seen in the MP 107 OCS-G 18088 #1
Well at 11,630’ MD

 

      33.3334       27.77783           3,277.67

 

W&T

Offshore, Inc.

 

      180       Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G27966       7/1/2006      

Record

Title

      All of Block 180, Main Pass Area       100       80.33333          
4,994.55

 

W&T

Offshore, Inc.

 

      279       Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G26168       7/1/2004      

Record

Title

      All of Block 279, Main Pass Area       88.5       73.95           4,994.55

 

W&T

Offshore, Inc.

 

      283       Main Pass       South and East      

 

Plaquemines and St. Bernard, Louisiana

 

      G13662       9/1/1992      

Record

Title

      All of Block 283, Main Pass Area       100       83.33           4,560.81

 

W&T

Offshore, Inc.

 

      283       Main Pass       South and East      

 

Plaquemines and St. Bernard, Louisiana

 

      G13662       9/1/1992       Operating Rights       All of Block 283, Main
Pass Area, from 0’ to 99,999’ TVD       100       83.33           4,560.83

 

145

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

 

W&T

Offshore, Inc.

 

 

   

  800       Mississippi Canyon              

 

Plaquemines and Jefferson, Louisiana

 

      G18292       7/1/1997      

Record

Title

      All of Block 800, Mississippi Canyon       57.5       58.35          
5,760

 

W&T

Offshore, Inc.

 

      177       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      00590       9/1/1955      

Record

Title

      All of Block 177, Ship Shoal Area       75       62.5           5,000

 

W&T

Offshore, Inc.

 

      186       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      G32197       8/1/2008      

Record

Title

      All of Block 186, Ship Shoal Area       40       40.2           5,000

 

W&T

Offshore, Inc.

 

      186       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      G32197       8/1/2008       Operating Rights       All of Block 186, Ship
Shoal Area, from 18,000’ TVDSS to 99,999’ TVDSS       40       40.2          
5,000

 

W&T

Offshore, Inc.

 

      214       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      00828       5/1/1960      

Record

Title

      All of Block 214, Ship Shoal Area       64.5161       53.76344          
5,000

 

W&T

Offshore, Inc.

 

      214       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      00828       5/1/1960       Operating Rights       N/2NE/4, N/2S/2NE/4,
SE/4SE/4SE/4, SW/4SE/4SE/4, E/2NE/4SE/4, and NW/4NE/4SE/4 of Block 214, Ship
Shoal Area from 12,087’ TVD to 50,000’ TVD       86.4536       77.23835        
  5,000

 

W&T

Offshore, Inc.

 

      301       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      G10794       5/1/1989      

Record

Title

      All of Block 301, Ship Shoal Area       3.005                   5,000

 

W&T

Offshore, Inc.

 

      314       Ship Shoal       South      

 

Terrebonne and St. Mary, Louisiana

 

      G26074       5/1/2004       Operating Rights       W1/2W1/2 of Block 314,
Ship Shoal Area, INSOFAR AND ONLY INSOFAR as it covers rights from surface to
10,750’ TVD       100       83.333           1,250

 

W&T

Offshore, Inc.

 

      315       Ship Shoal       South      

 

Terrebonne and St. Mary, Louisiana

 

      G09631       6/1/1988      

Record

Title

      All of Block 315, Ship Shoal Area       75       56.25           5,000

 

146

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

 

W&T Offshore, Inc.

 

        349      

 

Ship Shoal

 

             

 

Terrebonne and St. Mary, Louisiana

 

      G12008       6/1/1990      

Record

Title

      All of Block 349, Ship Shoal Area       100       83.333           5,000
W&T Offshore, Inc.       359       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      G12010       6/1/1990      

Record

Title

      All of Block 359, Ship Shoal Area       100       83.333           5,000
W&T Offshore, Inc.       238       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      G03169       7/1/1975      

Record

Title

      All of Block 238, Ship Shoal Area       65.5                   5,000 W&T
Offshore, Inc.       149       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      00434       1/1/1955      

Record

Title

      All of Block 149, Ship Shoal Area, as shown on OCS Leasing Map, LA5      
100                   5,000 W&T Offshore, Inc.       149       Ship Shoal      
       

 

Terrebonne and St. Mary, Louisiana

 

      00434       1/1/1955       Operating Rights      
NE1/4NE1/4;N1/2NW1/4NE1/4; N1/2SE1/4NE1/4; SE1/4SE1/4NE1/4 of Block 149, Ship
Shoal Area       87.5                   5,000 W&T Offshore, Inc.       149      
Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      00434       1/1/1955       Operating Rights       SW1/4NW1/4NE1/4;
SW1/4NE1/4; SW1/4SE1/4NE1/4; W1/2; SE1/4 of Block 149, Ship Shoal Area below
9,000’       87.5                   5,000 W&T Offshore, Inc.       130      
Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      00453       1/1/1955      

Record

Title

      All of Block 130, Ship Shoal Area, as shown on OCS Louisiana Leasing Map,
LA5       100                   5,000

 

147

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Offshore, Inc.         130       Ship Shoal              

 

Terrebonne and St. Mary, Louisiana

 

      00453       1/1/1955       Operating Rights      

 

S1/2S1/2SE/14; SE1/4SE1/4SW1/4; NE1/4SE/14SW1/4; N1/2S1/2SE/14; SE1/4NW1/4SE1/4;
SW1/4NW1/4SE1/4; SW1/4NE1/4SE1/4; SE1/4NE1/4SW1/4 of Block 130, Ship Shoal Area

 

      100                   5,000 W&T Offshore, Inc.       130       Ship Shoal
             

 

Terrebonne and St. Mary, Louisiana

 

      00453       1/1/1955       Operating Rights      

 

W1/2SW1/4SW1/4 of Block 130, Ship Shoal Area, INSOFAR AND ONLY INSOFAR AS to
those depths from 8,5000’ down to 9,7500’.

 

      100                   5,000 W&T Offshore, Inc.       23       South
Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      00386       4/25/1947       Operating Rights      

 

All of the N1/2 of Block 23, South Timbalier Area, INSOFAR AND ONLY INSOFAR AS
said operating rights cover and affect the SE1/4NW1/4NW1/4 of said South
Timbalier Block 23, and then only as to depths from the stratigraphic equivalent
of 7,492 feet MD to the stratigraphic equivalent of 8,108 feet MD, as
encountered in the well named W & T Offshore, Inc. OCS- 0386 No. SD 17ST.

 

      50       41           78.12 W&T Offshore, Inc.       23       South
Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      00386       4/25/1947       Contractual Interest               30      
26.12874             W&T Offshore, Inc.       23       South Timbalier          
   

 

Terrebonne and Lafourche, Louisiana

 

      00386       4/25/1947       Contractual Interest               65      
56.61227             W&T Offshore, Inc.       23       South Timbalier          
   

 

Terrebonne and Lafourche, Louisiana

 

      00386       4/25/1947       Contractual Interest               30      
26.12874             W&T Offshore, Inc.       23       South Timbalier          
   

 

Terrebonne and Lafourche, Louisiana

 

      00386       4/25/1947       Contractual Interest               30      
26.12874            

 

148

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

 

W&T Offshore, Inc.

 

      2      

 

Bay Marchand

 

                      00370       3/15/1948       NA                            
        W&T Offshore, Inc.         148       South Timbalier       South      

 

Terrebonne

and Lafourche,

Louisiana

 

      G01960       2/1/1970      

Record

Title

      E1/2 of Block 148, South Timbalier Area       3.55                   2,500
W&T Offshore, Inc.       148       South Timbalier       South       Terrebonne
and Lafourche, Louisiana       G01960       2/1/1970       Operating Rights    
 

 

W1/2SE1/4;NW1/4SE1/4SE1/4;S1/2SE1

/4SE1/4;SW1/4 NE1/4SE1/4 of Block 148, South Timbalier Area, from the surface to
25,000’ subsurface

 

      3.55                   938 W&T Offshore, Inc.       148       South
Timbalier       South       Terrebonne and Lafourche, Louisiana       G01960    
  2/1/1970       Operating Rights      

 

NE1/4; N1/2NE1/4SE1/4; SE1/4NE1/4SE1/4; AND NE1/4SE1/4SE1/4 of Block 148, South
Timbalier Area, from 17,777’ SSTVD to 99,999’ SSTVD

 

      3.55       33.625           1,563 W&T Offshore, Inc.       229       South
Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      G13938       7/1/1993      

Record

Title

      All of Block 229, South Timbalier Area       100       83.3333          
2,148.46 W&T Offshore, Inc.       229       South Timbalier              
Terrebonne and Lafourche, Louisiana       G13938       7/1/1993       Operating
Rights      

 

All of Block 229, South Timbalier Area, INSOFAR AND ONLY INSOFAR as the lease
covers all depths below TVD of 9,000’

 

      33.34       27.782           2,148.47 W&T Offshore, Inc.       230      
South Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      G27169       6/1/2005      

Record

title

      All of Block 230, South Timbalier Area       100       83.3333          
2,148.46 W&T Offshore, Inc.       315       South Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      G23946       7/1/2002      

Record

Title

      All of Block 315, South Timbalier Area,       50       39.04167          
4,457.74 W&T Offshore, Inc.       316       South Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      G22762       6/1/2001      

Record

Title

      All of Block 316, South Timbalier Area       40       31.23333          
4,434.96

 

149

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Offshore, Inc.         316       South Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      G22762       6/1/2001       Operating Rights      

All of Block 316, South Timbalier Area,

from 12,520’ SSTVD to 99,999’ SSTVD

      40       31.23333           4,434.96 W&T Offshore, Inc.       279      
Vermilion       South and East       Cameron and Vermilion, Louisiana      
G11881       5/1/1990       Operating Rights      

 

All of Block 279, Vermilion Area, South Addition, INSOFAR AND ONLY INSOFAR AS
said lease covers rights from the surface down to 100’ below the stratigraphic
equivalent of 12,013’ MD/11,219’ TVD as found in the W&T OCS-G 11881 No. 1 Well
Sidetrack No. 1.

 

      50                   5,000

 

W&T Offshore, Inc.

 

      149       West Cameron               Cameron, Louisiana       00253      
6/10/1947       Operating Rights      

 

NE1/4 of Block 149, West Cameron

Area, from the surface to 10,697’ TVD

 

      75       55.875           4,434.96 W&T Offshore, Inc.       661       West
Cameron       South       Cameron, Louisiana       G16224       8/1/1996      
ORRI       All of Block 661, West Cameron Area, South Addition, from the surface
down to and including the stratigraphic equivalent of 4,502 feet, being 100 feet
below the depth drilled and logged in the Tarpon Operating & Development, L.L.C.
OCS-G NO. 1 Well.       0      

 

8.3334% BPO ORRI

10% APO1 ORRI

12% APO2 ORRI

 

          5,000 W&T Offshore, Inc.       72       West Delta              

 

Jefferson,

Plaquemines,

and St.

Bernard,

Louisiana

 

      G01082       6/1/1962       Operating Rights      

 

Block 72, West Delta Area, INSOFAR AS same pertains to the N1/2NE1/4 from the
surface down to and including the stratigraphic equivalent of 100 feet beneath
the total depth of 3,105 feet TVD drilled in the Burlington Resources Offshore,
Inc. OCS-G 15363 #1 Well located in West Delta Block 65.

 

      100       83.33333           625 W&T Offshore, Inc.       72       West
Delta              

 

Jefferson,

Plaquemines,

and St.

Bernard,

Louisiana

 

      G01082       6/1/1962       Operating Rights      

Block 72, West Delta Area, INSOFAR

AS the N1/2S1/2 from the surface down

to and including 12,013’ TVDSS

      50       41.66665           1,250

 

150

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Offshore, Inc.       29       West Delta               Jefferson,
Plaquemines, and St. Bernard, Louisiana       00385       6/19/1947      
Operating Rights      

 

SW1/4NW1/4SW1/4 of West Delta Black 29, limited as to depths from the surface
down to and including the stratigraphic equivalent of 10,650’ MD which is 100’
below the deepest depth drilled in Assignee’s earning well, the W&T Offshore,
Inc. 0385 No. C-10 API No. 17194067200S01

 

      75                   5,000 W&T Offshore, Inc.       29       West Delta  
          Jefferson, Plaquemines, and St. Bernard, Louisiana       00385      
6/19/1947       Operating Rights      

 

SE1/4NE1/4SW1/4 of said West Delta Block 29 limited as to depths from the
surface down to and including 11,798’ TVD, such last mentioned depth being 100’
below the deepest depth drilled in Assignor’s earning well, the OCS 0385 CC-31
(ST-1)

 

      100               5,000 W&T Offshore, Inc.       29       West Delta      
        Jefferson, Plaquemines, and St. Bernard, Louisiana       00385      
6/19/1947       Operating Rights      

 

SE1/4SW1/4SW1/4 of Block 29, West Delta Area, INSOFAR AND ONLY INSOFAR AS to
depth from the surface to and including 8,216’ MD, which is 100’ below the
deepest depth drilled in Assignor’s earning well, the W & T Offshore, Inc. OCS
0385 No. CC-29 ST-3, API No. 17719011503S01.

 

      37.5                   5,000 W&T Offshore, Inc.       778, 822      
Mobile Bay              

 

Mobile and Baldwin, Alabama

 

      G05056       4/1/1982      

Record

Title

      That portion of block 822, Mobile Area       12.5       10.41667          
5,585.08 W&T Offshore, Inc.       778, 822       Mobile Bay               Mobile
and Baldwin, Alabama       G05056       4/1/1982       Operating Rights      

 

Portion of Blocks 778 and 822, Mobile Area, INSOFAR AND ONLY INSOFAR as said
operating rights cover from the surface to 3000 feet subsea

 

      12.5       10.41667           5,323.58 W&T Offshore, Inc.       734      
Viosca Knoll       South      

 

Mobile and Baldwin, Alabama

 

      G13672       8/1/1992      

Record

Title

      All of Block 734, Viosca Knoll       100       83.333           4,195.78

 

151

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Offshore, Inc.       734       Viosca Knoll       South      

 

Mobile and Baldwin, Alabama

 

      G13672       8/1/1992       Operating Rights       W1/2W1/2W1/2 of Block
734, Viosca Knoll, from 0’ to 99,999’ TVD.       75       62.4975          
534.92 W&T Offshore, Inc.       24L       High Island              

 

Chambers and Jefferson, Texas

 

      SL M-106410       5/1/2006      

Record

Title

      S1/2SW1/4 of Tract 24L       25       19.25           720 W&T Offshore,
Inc.       24L       High Island              

 

Chambers and Jefferson, Texas

 

      SL M-107044       10/3/2006      

Record

Title

      N1/2SW1/4 of Tract 24L       25       19.25           720 W&T Offshore,
Inc.       397       High Island               Chambers and Jefferson, Texas    
  G13809       12/1/1992      

UNIT

Record

Title

     

 

S1/2 of Block A-397, High Island Area, East Addition, South Extension of Block
A397, High Island Area, East Addition, South Extension

 

      50                   5,760 W&T Offshore, Inc.       397       High Island
              Chambers and Jefferson, Texas       G13809       12/1/1992      

UNIT

Record

Title

     

 

N1/2 of Block A-397, High Island Area, East Addition, South Extension of Block
A397, High Island Area, East Addition, South Extension

 

      100                   5,760 W&T Offshore, Inc.       385       High Island
              Chambers and Jefferson, Texas       G10311       11/1/1988      

UNIT

Record

Title

     

 

All of Block A385, High Island Area, East Addition, South Extension, as shown on
OCS Texas Leasing Map, TX7C

 

      100                   5,760 W&T Offshore, Inc.       384       High Island
              Chambers and Jefferson, Texas       G03316       4/1/1976      

UNIT

Record

Title

     

 

All of Block A 384, High Island Area, East Addition, South Extension, as shown
on OCS Texas Leasing Map, TX7C

 

      100                   5,760 W&T Offshore, Inc.       379       High Island
              Chambers and Jefferson, Texas       G13808       12/1/1992      

UNIT

Record

Title

     

 

All of Block A 379, High Island Area, East Addition, South Extension, as shown
on OCS Texas Leasing Map, TX7C

 

      100                   5,760

 

152

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W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Offshore, Inc.          378       High Island               Chambers and
Jefferson, Texas       G13807       12/1/1992      

UNIT

Record

Title

     

 

All of Block A 378, High Island Area, East Addition, South Extension, as shown
on OCS Texas Leasing Map, TX7C

 

      100                   5,760 W&T Offshore, Inc.       22       High Island
              Chambers and Jefferson, Texas       G05006       4/1/1982      

Record

Title

     

 

That portion of Block 22, High Island Area, Texas Map No. 7, seaward of the
Three Marine League Line.

 

      100                   1,735 W&T Energy VI, LLC       9       Atwater
Valley              

 

Plaquemines, Louisiana

 

      G32555       8/1/2008      

Record

Title

      All of Block 9, Atwater Valley       16.66                   5,760
W&T Energy VI, LLC       186       Atwater Valley              

 

Plaquemines, Louisiana

 

      G32567       8/1/2008      

Record

Title

      All of Block 186, Atwater Valley       40                   5,760
W&T Energy VI, LLC       401       Atwater Valley              

 

Plaquemines, Louisiana

 

      G31798       3/1/2008      

Record

Title

      All of Block 401, Atwater Valley       25                   5,760
W&T Energy VI, LLC       574       Atwater Valley              

 

Plaquemines and Jefferson, Louisiana

 

      G08035       8/1/1985      

Record

Title

      All of Block 574, Atwater Valley       20       17.5           5,760
W&T Energy VI, LLC       575       Atwater Valley              

 

Plaquemines and Jefferson, Louisiana

 

      G08036       8/1/1985      

Record

Title

      All of Block 575, Atwater Valley       20           17.5              
5,760 W&T Energy VI, LLC       618       Atwater Valley              

 

Plaquemines and Jefferson, Louisiana

 

      G08038       7/1/1985      

Record

Title

      All of Block 618, Atwater Valley       20       17.5           5,760
W&T Energy VI, LLC       910       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G13079       7/1/1991      

Record

Title

      All of Block 910, Ewing Bank       100       83.33           1,391.68
W&T Energy VI, LLC       910       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G13079       7/1/1991       Contractual Operating Rights       All of
Block 910, Ewing Bank, from 12,447’ down to 99,999’ SSTVD.       50       41.67
          1,391.68

 

153

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         954       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G13081       7/1/1991      

Record

Title

      All of Block 954, Ewing Bank       50       41.67           5,760.00 W&T
Energy VI, LLC       954       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G13081       7/1/1991       Contractual Operating Rights       All of
Block 954, Ewing Bank, from surface down to 12,447’ SSTVD       50       41.67  
        5,760.00 W&T Energy VI, LLC       1006       Ewing Bank              

 

Terrebonne and Lafourche, Louisiana

 

      G10968       6/1/1989      

Record

Title

      All of Block, EW 1006       66.66       58.3275           5,760 W&T Energy
VI, LLC         1006       Ewing Bank               Terrebonne and Lafourche,
Louisiana       G10968       6/1/1989       Operating Rights       All of Block
1006, Ewing Bank, INSOFAR AND ONLY INSOFAR as said operating rights cover those
depths in the stratigraphic equivalent of the productive interval in the Ewing
Bank OCS-G 10968 No. 2 Well from 11,128 to 11,380 MD of Block 1006, limited to
the SE1/4; E1/2E1/2SW1/4; E1/2SE1/4NW1/4; SW1/4NE1/4       33.33                
  5,760 W&T Energy VI, LLC       1006       Ewing Bank               Terrebonne
and Lafourche, Louisiana       G10968       6/1/1989       ORRI      

 

All of Block 1006, Ewing Bank, INSOFAR AND ONLY INSOFAR as said operating rights
cover those depths in the stratigraphic equivalent of the productive interval in
the Ewing Bank OCS-G 10968 No. 2 Well from 11,128 to 11,380 MD of Block 1006,
limited to the SE1/4; E1/2E1/2SW1/4; E1/2SE1/4NW1/4; SW1/4NE1/4

 

      0       6.666667             W&T Energy VI, LLC       258       Garden
Banks              

 

Cameron and Vermilion, Louisiana

 

      G27632       1/1/2006      

Record

Title

      All of Block 258, Garden Banks       100       81.5           5,760

 

154

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         258       Garden Banks               Cameron and
Vermilion, Louisiana       G27632       1/1/2006       Operating Rights      

 

All of Block 258, Garden Banks, INSOFAR AND ONLY INSOFAR as said lease covers
those depths from the surface to the stratigraphic equivalent of the top of salt
of 24,000’ SS TVD

 

      43.75       38.65625           5,760 W&T Energy VI, LLC       339      
Garden Banks              

 

Cameron and Vermilion, Louisiana

 

      G25673       11/1/2003      

Record

Title

      All of Block 339, Garden Banks       25       22.5           5,760 W&T
Energy VI, LLC       244       Green Canyon              

 

Terrebonne and Lafourche, Louisiana

 

      G11043       5/1/1989       ORRI       All of Block 244, Green Canyon    
  0       6.25           5,760 W&T Energy VI, LLC       328       Green Canyon  
           

 

Terrebonne and Lafourche, Louisiana

 

      G31714       3/1/2008      

Record

Title

      All of Block 328, Green Canyon       12.5                   5,760 W&T
Energy VI, LLC       451       Green Canyon               Terrebonne
and St. Mary, Louisiana       G32509       7/1/2008      

Record

Title

      All of Block 451, Green Canyon       84                   5,760 W&T Energy
VI, LLC       613       Green Canyon              

 

Terrebonne, Lafourche and Jefferson, Louisiana

 

      G23655       2/22/2007       RUE       Right of Use and Easement, Green
Canyon 613, Platform ID 1799, OCS-G 23655 A (Neptune TLP)       20       NA    
       

 

155

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         613       Green Canyon               Terrebonne,
Lafourche and Jefferson, Louisiana       G28365       2/22/2007       RUE      

 

Segment 15924 & 15972 (umbilical). Lease term to Right of Way conversion to
create a 200’ wide R/O/W and operate and maintain existing pipeline and
associated umbilical: an 8 5/8” pipeline (south), 10.66 miles in length, to
transport bulk oil from the south plet in Atwater Area Block 575, through
Atwater Valley 574, 618, 617 & 573, to Platform A, (Neptune TLP) located in
Green Canyon 613. An existing 7” hydraulic umbilical (south), 7.76 miles in
length, from Platform A (Neptune TLP) Green Canyon 613, through Atwater Valley
573, to UTA CI in Atwater Valley Area Block 574.

 

      20       NA             W&T Energy VI, LLC       119       Keathley Canyon
              Cameron and Vermilion, Louisiana       G32600       7/1/2008      

Record

Title

      All of Block 119, Keathley Canyon       65                   5,148.71 W&T
Energy VI, LLC       252       Keathley Canyon              

 

Cameron and Vermilion, Louisiana

 

      G32615       7/1/2008      

Record

Title

      All of Block 252, Keathley Canyon       20                   5,760 W&T
Energy VI, LLC       108       Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G04832       9/1/1981      

Record

Title

      All of Block 108, Main Pass Area       100       83.33333          
4,994.55 W&T Energy VI, LLC       108       Main Pass               Plaquemines
and St. Bernard, Louisiana       G04832       9/1/1981       Operating Rights  
   

 

NE1/4NE1/4 of Block 108, Main Pass Area, from the surface of the earth down to a
depth of 100’ below the stratigraphic equivalent of a true vertical depth of
13,418’ as measured in the LLOG Exploration Offshore, Inc. OCS-G 4832 No. 6 Well

 

      100       83.33333           312.16 W&T Energy VI, LLC       108      
Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G04832       9/1/1981       Operating Rights       S1/2 of Block 108, Main
Pass Area, and limited to those depths from the surface of the earth down to
19,392’ MD / 15,909’ TVD       75       62.5           2,497.29

 

156

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         109       Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G22794       5/1/2001      

Record

Title

      All of Block 109, Main Pass Area       100                   4994.55
W&T Energy VI, LLC       109       Main Pass               Plaquemines and St.
Bernard, Louisiana       G22794       5/1/2001       Operating Rights      

 

SW1/4 NW1/4; NW1/4 SE1/4 NW1/4 AND SW1/4 NE1/4 NW1/4 of Block 109, Main Pass
Area, from the surface of the earth down to a depth of 100’ below the
stratigraphic equivalent of a true vertical depth of 4,622 feet as measured in
the LLOG Exploration Offshore, Inc. OCS-G 22794, No. 1 Well

 

      66.67       53.475           468.24 W&T Energy VI, LLC       109      
Main Pass               Plaquemines and St. Bernard, Louisiana       G22794    
  5/1/2001       Operating Rights      

 

N1/2 NE1/4; NW1/4 SW1/4 NE1/4; NE1/4 SE1/4 NW1/4 and SE1/4 NE1/4 NW1/4 of Block
109, Main Pass Area, from the surface of the earth down to a depth of 100’ below
the stratigraphic equivalent of a true vertical depth of 9,937 feet as measured
in the LLOG Exploration Offshore, Inc. OCS-G 22794, No. 2 Well (Currently named
the D-1 Well)

 

      66.67       53.475           858.44 W&T Energy VI, LLC       252      
Main Pass              

 

Plaquemines and St. Bernard, Louisiana

 

      G23628       8/1/2011       RUE       Right of Use and Easement, Main Pass
252, Platform A and Platform B, Platform ID 23839, OCS-G 23628       100      
NA            

 

157

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         252       Main Pass               Plaquemines and St.
Bernard, Louisiana       14026       6/4/1993       Destination Point of ROW    
 

 

Segment 9910. Pipeline R-O-W 200 feet in width, for the installation, operation,
and maintenance of a 4 1/2 inch pipeline and control umbilical, 12.21 miles in
length, for transport of bulk gas from Shell Offshore Inc.‘s Well No. 4 in Block
783, across Blocks 739, 740 and 696 in the Viosca Knoll Area, and across Block
257 and 256, to Shell Offshore Inc.‘s Platform A in Block 252, in the Main Pass
Area. OCS-G 14026 (Segment 9910).

 

      100             NA                   W&T Energy VI, LLC       252      
Main Pass               Plaquemines and St. Bernard, Louisiana       14027      
6/4/1993       Destination Point of ROW      

 

Segment 9911. Pipeline R-O-W 200 feet in width, for the installation, operation,
and maintenance of a 4 1/2 inch pipeline, 12.21 miles in length, for annulus
service from Shell Offshore Inc.‘s Well No. 4 in Block 783, across Blocks 739,
740 and 696 in Viosca Knoll Area, across Blocks 257 and 256, to Shell Offshore
Inc.‘s Platform A in Block 252, In the Main Pass Area. OCS-G 14027 (Segment
9911).

 

      100             NA                                

 

158

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         252       Main Pass               Plaquemines and St.
Bernard, Louisiana       16017       6/28/1996       Destination Point ROW      

 

Segment 9911. Pipeline R-O-W 200 feet in width, for the installation, operation,
and maintenance of a 4 1/2 inch pipeline, 11.68 miles in length, for annulus
service from Shell Offshore Inc.’s Well No. 4 in Block 783, across Blocks 739,
740 and 696 in Viosca Knoll Area, across Blocks 257 and 256, to Shell Offshore
Inc.’s Platform A in Block 252, in the Main Pass Area. OCS-G 14027 (Segment
9911).

 

      100             NA                                 W&T Energy VI, LLC    
  252       Main Pass               Plaquemines and St. Bernard, Louisiana      
16018       6/28/1996       Destination Point ROW      

 

Segment 10951. Pipeline R-O-W 200 feet in width and 10.19 miles in length, for
the installation, operation, and maintenance of a 6 5/8 inch pipeline (west flow
line) to transport bulk gas from Shell Offshore Inc.’s Subsea Well No. 1 in
Block 828, through the pipeline connection skid in Block 828, across Blocks 784,
740, and 696, Viosca Knoll Area; across Block 256 to Platform B in Block 252,
Main Pass Area. OCS-G 16018 (Segment 10951).

 

      100       NA             W&T Energy VI, LLC       252       Main Pass    
          Plaquemines and St. Bernard, Louisiana       28377       10/4/20017  
    Destination Point ROW      

 

Segments 17209 and 17210. Pipeline R-O-W 200 feet in width, for a 6 5/8 inch
pipeline, 10.34 miles in length, and an associated 3.08 inch umbilical, 11.58
miles in length, to transport bulk gas from a sled in Viosca Knoll Area Block
783, through Viosca Knoll Area Blocks 739, 740 and 696, through Blocks 257 and
256 in Main Pass Area, South and East Addition, to Platform B in Main Pass Area,
South and East Addition. OCS-G 28377 (Segments 17209 & 17210).

 

      100       NA            

 

159

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         252       Main Pass               Plaquemines and St.
Bernard, Louisiana       28377       9/17/2007       Destination Point ROW      

 

Segment 17267. Pipeline R-O-W, 200 feet in width, for a 6 5/8 inch
bi-directional service and bulk gas pipeline (west flow line, previous pipeline
Segment No. 11192, ROW OCS-G 17031) extending from Shell Offshore Inc.’s Subsea
Well A-1 in Block 783, through the A-1 and A-2 pipeline connection skid in Block
783, across Blocks 739,740 and 696, Viosca Knoll Area; across Block 256, to
Platform B in Block 252, Main Pass Area. OCS-G 28387. (Segment 17267).

 

      100             NA                                 W&T Energy VI, LLC    
  252       Main Pass               Plaquemines and St. Bernard, Louisiana      
28388       9/17/2007       Destination Point ROW      

 

Segment 17268. Pipeline R-O-W, 200 feet in width, for a 6 5/8 inch
bi-directional service and bulk gas pipeline (east flow line, previous pipeline
segment 11193, ROW OCS-G 17032) extending from Shell Offshore Inc.’s Subsea Well
A-2 in Block 783, lease OCS-G 6886, through the A-1 and A-2 pipeline connection
skid in Block 783, across Blocks 739, 740 and 696, Viosca Knoll Area; across
Block 256, to Platform B in Block 252, Main Pass Area. Segment 17268. OCS
G-28388.

 

      100       NA            

 

160

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         252       Main Pass               Plaquemines and St.
Bernard, Louisiana       28389       9/17/2007       Destination Point ROW      

 

Segments 17269,17276 AND 17277. Pipeline R-O-W 200 feet in width for a 4 1/2
inch bi-directional service and bulk oil pipeline (west flow line, previous
pipeline Segment No. 11194, ROW OCS G-17033) extending from Shell Offshore
Inc.’s Subsea Well A-3 in Block 783, through the A-3 pipeline connection skid in
Block 783, across Blocks 739, 740, and 696, Viosca Knoll Area, across Block 256
to Platform B in Block 252, Main Pass Area, and two associated
electrical/hydraulic and chemical umbilical lines, Segment Nos. 17276 and 17277
(previous Segments No. 11198 and 11199, respectively) from Platform B in Main
Pass Area Block 252 to Well No. A3 in Viosca Knoll Area 783. OCS-G 28389.
(Segments 17269, 17276 and 17277).

 

      100             NA                                 W&T Energy VI, LLC    
  252       Main Pass               Plaquemines and St. Bernard, Louisiana      
28390       9/17/2007       Destination Point ROW      

 

Segment 17270. Pipeline R-O-W 200 feet in width, for a 4 1/2 inch bi-directional
service and bulk oil pipeline (east flow line, previous pipeline Segment No.
11195, ROW OCS-G 17034) extending from Shell Offshore Inc.’s Subsea Well A-3
pipeline connection skid in Block 783, across blocks 739, 740 and 696, Viosca
Knoll Area, across Block 256, to Platform B in Block 252, Main Pass Area. OCS
G-28390. (Segment 17270).

 

      100       NA            

 

161

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         252       Main Pass               Plaquemines and St.
Bernard, Louisiana       28401       10/4/2007       Destination Point ROW      

 

Segment 17287. Pipeline R-O-W 200 feet in width, for a 6 5/8 inch pipeline,
10.34 miles in length to transport bulk gas from a sled in Viosca Knoll Area
Block 783, through Viosca Knoll Area Blocks 739, 740 and 696, through Blocks 257
and 256 in Main Pass Area, South and East Addition, to Platform B in Main Pass
Area, South and East Addition. OCS G-28401 (Segment 17287).

 

      100       NA             W&T Energy VI, LLC       289       Main Pass    
          Plaquemines and St. Bernard, Louisiana       G13408       1/17/1992  
    Destination Point ROW      

 

Segment 9551. Pipeline R-O-W 200 feet in width, for the installation, operation
and maintenance of an 8 5/8 inch pipeline, 34.78 miles in length to transport
pas and condensate from Shell Offshore Inc.’s Platform A in Block 252, across
Blocks 251, 250, 249, 248, 260, 261, 262, 263, 280, 279, 278, 277 and 288, to
Shell Offshore Inc.’s Platform C in Block 289, all in the Main Pass Area, South
and East Addition. (Bud Pipeline)

 

      100       NA             W&T Energy VI, LLC       150       Mississippi
Canyon              

 

Plaquemines and Jefferson, Louisiana

 

      G02642       5/1/1974      

Record

Title

      All of Block 150, Mississippi Canyon       3.75       3.125          
5,603 W&T Energy VI, LLC       150       Mississippi Canyon              

 

Plaquemines and Jefferson, Louisiana

 

      G02642       9/1/1978      

Unit

Interest

      This Block is part of MC 150 Federal Unit #891016931       1.16625      
0.97187             W&T Energy VI, LLC       194       Mississippi Canyon      
       

 

Plaquemines and Jefferson, Louisiana

 

      G02638       9/1/1978      

Unit

Interest

      This Block is part of MC 150 Federal Unit #891016931       1.16625      
0.97187             W&T Energy VI, LLC       243       Mississippi Canyon      
       

 

Plaquemines and Jefferson, Louisiana

 

      G19931       6/1/1998      

Record

Title

      All of Block 243, Mississippi Canyon       100       87.5           5,760

 

162

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         506       Mississippi Canyon              

 

Plaquemines and Jefferson, Louisiana

 

      G26261       6/1/2004      

Record

Title

      All of Block 506, Mississippi Canyon       50       51           5,760
W&T Energy VI, LLC       538       Mississippi Canyon              

 

Plaquemines and Jefferson, Louisiana

 

      G16614       6/1/1996      

Record

Title

      All of Block 538, Mississippi Canyon       15       15           1,440
W&T Energy VI, LLC       582       Mississippi Canyon       South      

 

Plaquemines and Jefferson, Louisiana

 

      G16623       6/1/1996      

Record

Title

      All of Block 582, Mississippi Canyon       15       15           5,760
W&T Energy VI, LLC       697       Mississippi Canyon              

 

Plaquemines, Jefferson, and St. Bernard, Louisiana

 

      G28021       4/1/2006      

Record

Title

      SE1/4SE1/4; E1/2NE1/4SE1/4 of Block 697, Mississippi Canyon       20      
16.7           540 W&T Energy VI, LLC       698       Mississippi Canyon        
     

 

Plaquemines, Jefferson, and St. Bernard, Louisiana

 

      G28022       7/1/2006      

Record

Title

      All of Block 698, Mississippi Canyon       20       16.7           5,760
W&T Energy VI, LLC       699       Mississippi Canyon              

 

Plaquemines, Jefferson, and St. Bernard, Louisiana

 

      G33169       6/1/2009      

Record

Title

      All of Block 699, Mississippi Canyon       20       16.25           5,760
W&T Energy VI, LLC       738       Mississippi Canyon              

 

Plaquemines, Jefferson, and St. Bernard, Louisiana

 

      G33755       7/1/2010      

Record

Title

      All of Block 738, Mississippi Canyon       20       16.25           5,760
W&T Energy VI, LLC       741       Mississippi Canyon              

 

Plaquemines, Jefferson, and St. Bernard, Louisiana

 

      G31524       1/1/2008      

Record

Title

      NE1/4 of Block 741, Mississippi Canyon       20       15.86667          
1,440

 

163

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W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         742       Mississippi Canyon              

 

Plaquemines, Jefferson, and St. Bernard, Louisiana

 

      G32343       9/1/2008      

Record

Title

      NW1/4 of Block 742, Mississippi Canyon       20       15.45          
1,440 W&T Energy VI, LLC       782       Mississippi Canyon              

 

Plaquemines, Jefferson, and St. Bernard, Louisiana

 

      G33757       7/1/2010      

Record

Title

      All of Block 782, Mississippi Canyon       20       16.25           5,760
W&T Energy VI, LLC       977       Mississippi Canyon              

 

Plaquemines and Jefferson, Louisiana

 

      G35645       7/1/2015      

Record

Title

      All of Block 977, Mississippi Canyon       16.66                   5760
W&T Energy VI, LLC       978       Mississippi Canyon              

 

Plaquemines, Jefferson, St. Bernard, Louisiana

 

      G31535       3/1/2008      

Record

Title

      All of Block 978, Mississippi Canyon       16.66                   5760
W&T Energy VI, LLC       993       Mississippi Canyon              

 

Terrebonne and St. Mary, Louisiana

 

      G24134       7/1/2002      

Record

Title

      S1/2 of Block 993, Mississippi Canyon       15                   2,880.01
W&T Energy VI, LLC       223       Ship Shoal              

 

Terrebonne, Louisiana

 

      G01526       7/1/1967      

Record

Title

     

N1/2NE1/4;SW1/4NE1/4;NW1/4SE1/4N

E1/4;NW1/4;N W1/4NW1/4SW1/4

      43.3019       36.08491           2,344 W&T Energy VI, LLC       223      
Ship Shoal              

 

Terrebonne, Louisiana

 

      G01526       7/1/1967      

Record

Title

     

NE1/4SW1/4;NE1/4NW1/4SW1/4;S1/2

NW1/4SW1/4;S1/2SW1/4

      52.3979       43.66488           1,171.88 W&T Energy VI, LLC       223    
  Ship Shoal              

 

Terrebonne, Louisiana

 

      G01526       7/1/1967      

Record

Title

     

NE1/4SE1/4NE1/4;S1/2SE1/4NE1/4;SE

1/4

      52.3979       43.66488           1,484.38 W&T Energy VI, LLC       223    
  Ship Shoal               Terrebonne, Louisiana       G01526       7/1/1967    
  Operating Rights      

 

NE1/4SW1/4;NE1/4NW1/4SW1/4;S1/2

NW1/4SW1/4;S1/2SW1/4 of Block 223,

Ship Shoal Area, from the surface down

to 11,275’

 

      52.3979       43.66488           1,171.88

 

164

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         223       Ship Shoal               Terrebonne,
Louisiana       G01526       7/1/1967       Operating Rights      

 

NE1/4SW1/4;NE1/4NW1/4SW1/4;S1/2

NW1/4SW1/4;S1/2SW1/4 of Block 223,

Ship Shoal Area, from 11,275’ to 11,873’

 

      54.0164       45.01366           1,171.88 W&T Energy VI, LLC       223    
  Ship Shoal               Terrebonne, Louisiana       G01526       7/1/1967    
  Operating Rights      

 

NE1/4SW1/4;NE1/4NW1/4SW1/4;S1/2

NW1/4SW1/4;S1/2SW1/4 of Block 223,

Ship Shoal Area, from below 11,873’

 

      43.3019       36.08491           1,171.88 W&T Energy VI, LLC       223    
  Ship Shoal               Terrebonne, Louisiana       G01526       7/1/1967    
  Operating Rights      

 

NE1/4SE1/4NE1/4;S1/2SE1/4NE1/4;SE

1/4 surface down to 12,500’

 

      52.3979       47.66488           1,484.38 W&T Energy VI, LLC       223    
  Ship Shoal               Terrebonne, Louisiana       G01526       7/1/1967    
         

 

NE1/4SE1/4NE1/4;S1/2SE1/4NE1/4;SE

1/4 below 12,500’

 

      43.3019       36.08491           1,484.38 W&T Energy VI, LLC       224    
  Ship Shoal               Terrebonne, Louisiana       G01023       6/1/1992    
 

Record

Title

     

 

SW1/4NE1/4NW1/4;SE1/4NW1/4NW1/

4;N1/2S1/2NW

1/4;SW1/4SW1/4NW1/4;W1/2NW1/4S

W1/4;S1/2SW1/ 4;NE1/4NE1/4SE1/4;W1/2SW1/4SE1/4

 

      40       33.33           1,563 W&T Energy VI, LLC       224       Ship
Shoal              

 

Terrebonne, Louisiana

 

      G01023       6/1/1992      

Record

Title

      NE1/4       47.1429       39.28572           1,250 W&T Energy VI, LLC    
  224       Ship Shoal              

 

Terrebonne, Louisiana

 

      G01023       6/1/1992      

Record

Title

     

N1/2N1/2NW1/4;SW1/4NW1/4NW1/4;

SE1/4NE1/4NW 1/4

      47.1429       39.28572           468.75 W&T Energy VI, LLC       224      
Ship Shoal               Terrebonne, Louisiana       G01023       6/1/1992      

Record

Title

     

 

SE1/4SW1/4NW1/4;S1/2SE1/4NW1/4;E

1/2NW1/4SW1

/4;NE1/4SW1/4;NW1/4NW1/4SE1/4

 

      50       41.6667           781.25 W&T Energy VI, LLC       224       Ship
Shoal              

 

Terrebonne, Louisiana

 

      G01023       6/1/1992      

Record

Title

      SW1/4NW1/4SE1/4       50       41.6667           78.13 W&T Energy VI, LLC
      224       Ship Shoal              

 

Terrebonne, Louisiana

 

      G01023       6/1/1992      

Record

Title

      NW1/4NE1/4SE1/4;NE1/4NW1/4SE1/4       47.1429       39.28572          
156.25 W&T Energy VI, LLC       224       Ship Shoal              

 

Terrebonne, Louisiana

 

      G01023       6/1/1992      

Record

Title

     

SE1/4NW1/4SE1/4;E1/2SW1/4SE1/4;S1

/2NE1/4SE1/4; SE1/4SE1/4

      50       41.6667           703.13 W&T Energy VI, LLC       224       Ship
Shoal              

 

Terrebonne, Louisiana

 

      G01023       6/1/1992       Operating Rights       NE1/4 above 12,130’    
  47.1429       39.28572           1,250

 

165

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         224       Ship Shoal               Terrebonne,
Louisiana       G01023       6/1/1992       Operating Rights      

 

N1/2N1/2NW1/4;SW1/4NW1/4NW1/4;

SE1/4NE1/4NW 1/4 above 11,340’

 

      47.1429       39.28572           468.75 W&T Energy VI, LLC       224      
Ship Shoal               Terrebonne, Louisiana       G01023       6/1/1992      
Operating Rights      

 

SE1/4SW1/4NW1/4;S1/2SE1/4NW1/4;E

1/2NW1/4SW1

/4;NE1/4SW1/4;NW1/4NW1/4SE1/4

above 11,240’

 

      47.1429       39.28572           781.25 W&T Energy VI, LLC       224      
Ship Shoal               Terrebonne, Louisiana       G01023       6/1/1992      
Operating Rights      

 

NW1/4NE1/4SE1/4;NE1/4NW1/4SE1/4

above 8,065’

 

      47.1429       39.28572           156.25 W&T Energy VI, LLC       233      
Ship Shoal               Terrebonne, Louisiana       G01528       7/1/1967      

Record

Title

      All of Block 233, Ship Shoal Area       66.25       55.2083          
5,000 W&T Energy VI, LLC       300       Ship Shoal       South      
Terrebonne, Louisiana       G07760       8/1/1985      

Record

Title

      All of Block 300, Ship Shoal Area       75.676       63.03495          
5,000 W&T Energy VI, LLC       50       South Pass               Plaquemines and
Jefferson, Louisiana       G24282       12/17/2002       Destination Point of
ROW      

 

Segment No. 13943, 200 feet in width and 15.81 miles in length, for a 8-5/8”
pipeline to transport crude oil from Mississippi Canyon Block 243 Platform A,
through Mississippi Canyon Blocks, 198, 154, 153, 152, 151, and 107 to a Subsea
tie-in at South Pass Block 50

 

      100       NA             W&T Energy VI, LLC       148       South
Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      G01960       2/1/1970      

Record

Title

      E1/2 of Block 148, South Timbalier Area       40.35       33.625          
2,500 W&T Energy VI, LLC       148       South Timbalier              
Terrebonne and Lafourche, Louisiana       G01960       2/1/1970       Operating
Rights      

 

W1/2SE1/4;NW1/4SE1/4SE1/4;S1/2SE1

/4SE1/4;SW1/4 NE1/4SE1/4 of Block

148, South Timbalier Area, from the

surface to 25,000’ subsurface

 

      40.35       33.625           938 W&T Energy VI, LLC       148       South
Timbalier               Terrebonne and Lafourche, Louisiana       G01960      
2/1/1970       Operating Rights      

 

NE1/4; N1/2NE1/4SE1/4; SE1/4NE1/4SE1/4; AND NE1/4SE1/4SE1/4 of Block 148, South
Timbalier Area, from 17,777’ SSTVD to 99,999’ SSTVD

 

      40.35       33.625           1,563

 

166

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         205       South Timbalier              

 

Terrebonne and Lafourche, Louisiana

 

      G05612       7/1/1983      

Record

Title

      All of Block 205, South Timbalier and Bay Marchand Areas       25      
20.83333           5,000 W&T Energy VI, LLC       205       South Timbalier    
         

 

Terrebonne and Lafourche, Louisiana

 

      G05612       7/1/1983       Operating Rights       E1/2 NW1/4; NE1/4 SW1/4
from surface down to a depth of 8,500’ TVD.       25       20.83333          
937.5 W&T Energy VI, LLC       205       South Timbalier              
Terrebonne and Lafourche, Louisiana       G05612       7/1/1983       Operating
Rights      

 

N1/2 SW1/4 of Block 205, South Timbalier Area, from 8,500’ TVD down to and
including the stratigraphic equivalent of 19,130’ TVD as encountered in the
Amerada-Hess-South Timbalier 205 No. G-1 Well (Formerly known as No. 9).

 

      25       20.83333           625 W&T Energy VI, LLC       205       South
Timbalier               Terrebonne and Lafourche, Louisiana       G05612      
7/1/1983       Operating Rights      

 

SE1/4SW1/4 of Block 205, South Timbalier Area, from 18,640’ TVDSS to 99,999’
TVDSS

 

      25       20.83333           312.5 W&T Energy VI, LLC       205       South
Timbalier               Terrebonne and Lafourche, Louisiana       G05612      
7/1/1983       ORRI      

 

NE1/4 SW1/4 of Block 205, South Timbalier Area, from surface to the deeper of
(I) a subsurface depth of 13,250’ TVD or (II) a depth sufficient to test the
stratigraphic equivalent depth of the 13,200’ Sand as seen at a depth of 11,721’
TVD to 11,801’ TVD and the NW/4 SW/4 from a subsurface depth of 8,500’ TVD to
the deeper of (I) a subsurface depth of 13,250’ TVD or (II) a depth sufficient
to test the stratigraphic equivalent depth of the 13,200’ Sand as seen at a
depth of 11,721’ TVD to 11,801’ TVD.

 

      0       1.25             W&T Energy VI, LLC       205       South
Timbalier               Terrebonne and Lafourche, Louisiana       G05612      
7/1/1983       ORRI      

 

SW1/4 SW1/4 of Block 205, South Timbalier Area, as to depths from the surface of
the earth down to and including the subsurface depth of 8,500 feet TVD

 

      0       1.25            

 

167

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         205       South Timbalier               Terrebonne
and Lafourche, Louisiana       G05612       7/1/1983       ORRI      

 

This ORRI is on the G1 & G3 Wells only, covering All of Block 205, South
Timbalier Area, INSOFAR AND ONLY INSOFAR as said overriding royalty interest
covers the W1/2 W1/2 as to depths from the surface of the earth down to 8,500’
TVD and INSOFAR AND ONLY INSOFAR as said overriding royalty interest covers the
NW/4 as to depths of 8,500’ to 19,130’ TVD as encountered in the Amerada
Hess-South Timbalier No. 9 Well.

 

      0       2             W&T Energy VI, LLC       320       South Timbalier  
           

 

Terrebonne and Lafourche, Louisiana

 

      G24990       5/1/2003      

Record

Title

      All of Block 320, South Timbalier Area, South Addition.       50      
41.67           5,000.00 W&T Energy VI, LLC       320       South Timbalier    
          Terrebonne and Lafourche, Louisiana       G24990       5/1/2003      
Operating Rights      

 

All of Block 320, South Timbalier Area, South Addition, from surface down to
12,447’ SSTVD

 

      50       41.67           5,000.00 W&T Energy VI, LLC       661       West
Cameron              

 

Cameron, Louisiana

 

      G16224       8/1/1996      

Record

Title

      All of Block 661, West Cameron Area       100       83.33333          
5,000 W&T Energy VI, LLC       73       West Cameron              

 

Cameron, Louisiana

 

      G23736       7/1/2002      

Record

Title

      All of Block 73, West Cameron Area       30                   5,000 W&T
Energy VI, LLC       779, 823, 824       Mobile Bay               Mobile and
Baldwin, Alabama       G05057       4/1/1982      

Record

Title

     

 

That portion of block 823, OCS Official Protraction Diagram, Mobile NH16-4,
which is more than three geographical miles seaward from the low water line off
the coast of Mississippi and/or Alabama, MO 823

 

      12.5       10.41667           5,585.08 W&T Energy VI, LLC       779, 823,
824       Mobile Bay               Mobile and Baldwin, Alabama       G05057    
  4/1/1982       Operating Rights      

 

SE/4SE/4 of Mobile Block 823 and the Federal Portion of SW1/4SW1/4 of Mobile
Block 824 from surface down to 3046’ TVD SS

 

      100       76.04167           717.85

 

168

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         783       Viosca Knoll              

 

Mobile and Baldwin, Alabama

 

      G06886       6/1/1984      

Record

Title

      All of Block 783, Viosca Knoll       70       61.25           5,760
W&T Energy VI, LLC       784       Viosca Knoll              

 

Mobile and Baldwin, Alabama

 

      G13060       7/1/1991      

Record

Title

      All of Block 784, Viosca Knoll       100       87.5           5,760
W&T Energy VI, LLC       822       Viosca Knoll              

 

Mobile and Baldwin, Alabama

 

      G16549       7/1/1996      

Record

Title

      All of Block 822, Viosca Knoll       64       59.48           5,760
W&T Energy VI, LLC       823       Viosca Knoll              

 

Mobile and Baldwin, Alabama

 

      G10942       7/1/1989      

Record

Title

      All of Block 823, Viosca Knoll       64       59.48           5,760
W&T Energy VI, LLC       871       Viosca Knoll              

 

Mobile and Baldwin, Alabama

 

      G08469       6/1/19986      

Record

Title

      All of Block 871, Viosca Knoll       25                   5,760 W&T Energy
VI, LLC       A133       Brazos Area       South      

 

Matagorda and Brazoria, Texas

 

      G02665       7/1/1974      

Record

Title

      All of Block A-133, Brazos Area       50       41.6667           5,760
W&T Energy VI, LLC       A133       Brazos Area       South       Matagorda and
Brazoria, Texas       G02665       7/1/1974       Operating Rights      

 

SE1/4 of Block A-133, Brazos Area, Limited to depths below the base of the
stratigraphic equivalent of the “CM-7G” Sand as seen at 13,840’ MD in the Cities
Service Oil and Gas OCS-G 2665 #5 C-2 Well

 

      75       62.5           1,440 W&T Energy VI, LLC       110       High
Island              

 

Chambers and Jefferson, Texas

 

      G02353       8/1/1973      

Record

Title

      All of Block 110, High Island Area       66.3636       55.303          
5,760 W&T Energy VI, LLC       110       High Island              

 

Chambers and Jefferson, Texas

 

      G02353       8/1/1973       Operating Rights       All of Block 110, High
Island Area, from 13,046’ SSTVD to 99,999’ SSTVD       66.3636       55.303    
      5,760 W&T Energy VI, LLC       111       High Island              

 

Chambers and Jefferson, Texas

 

      G02354       8/1/1973      

Record

Title

      All of Block111, High Island Area       60       50           5,760

 

169

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

W & T Offshore, Inc. and W & T Energy VI, LLC

 

W&T Energy VI, LLC         111       High Island               Chambers and
Jefferson, Texas       G02354       8/1/1973       Operating Rights      

 

All of Block 111, High Island Area, from 12,695’ TVDSS to 99,999’ TVDSS.

 

      60             50                 5,760

 

COUNTY      RECORDATION INFORMATION

Andrews County, Texas    Instrument No. 15-4299 Official Public Records of the
County Clerk, Andrews County, Texas

Dawson County, Texas    Volume 776, Page 464 Official Public Records of the
County Clerk, Dawson County, Texas

Gaines County, Texas    Instrument No. 2015-5627 Official Public Records of the
County Clerk, Gaines County, Texas

Martin County, Texas    Volume 472, Page 667 Official Public Records of the
County Clerk, Martin County, Texas

 

And affecting the Leases and Lands described on Exhibit A to said Assignment of
Overriding Royalty Interest.

 

 

170

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

SCHEDULE 5

COMMITMENTS

 

Lender

   Commitment  

Franklin Custodian Funds – Franklin Income Fund

   $ 75,000,000   

 

Sch 5-1

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

SCHEDULE 6

EXISTING AFFILIATE TRANSACTIONS

None.

 

Sch 6-1

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

EXHIBIT A

NOTE

 

$           Houston, Texas               , 20    

FOR VALUE RECEIVED, the undersigned, W&T Offshore, Inc., a Texas corporation
(herein called the “Borrower”), hereby promises to pay to (herein called
“Lender”), the principal sum of Dollars ($), or, if greater or less, the
aggregate unpaid principal amount of the Loans made under this Note by Lender to
the Borrower pursuant to the terms of the Credit Agreement (as hereinafter
defined), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided in
lawful money of the United States of America to the Administrative Agent’s
account at a bank located in New York, New York as designated in writing to the
Borrower by the Administrative Agent, as from time to time may be designated by
the holder of this Note.

This Note (a) is issued and delivered under that certain 1.5 Lien Term Loan
Credit Agreement, dated as of September 7, 2016, by and among the Borrower,
Cortland Capital Market Services LLC, as the Administrative Agent and 1.5 Lien
Collateral Agent, and the lenders party thereto (including Lender) and the other
persons from time to time party thereto (herein, as from time to time
supplemented, amended, restated or otherwise modified, called the “Credit
Agreement”), and is a “Note” as defined therein, (b) is subject to the terms and
provisions of the Credit Agreement, which contains provisions for payments and
prepayments hereunder and acceleration of the maturity hereof upon the happening
of certain stated events and (c) is secured by and entitled to the benefits of
certain Security Documents (as identified and defined in the Credit
Agreement). Payments on this Note shall be made and applied as provided herein
and in the Credit Agreement. Reference is hereby made to the Credit Agreement
for a description of certain rights, limitations of rights, obligations and
duties of the parties hereto and for the meanings assigned to terms used and not
defined herein and to the Security Documents for a description of the nature and
extent of the security thereby provided and the rights of the parties thereto.

The principal amount of this Note, together with all interest accrued hereon,
shall be due and payable in full on the Maturity Date.

Notwithstanding the other provisions of this Note, in no event shall the
interest payable hereon, whether before or after maturity, exceed the maximum
amount of interest which, under applicable Law, may be contracted for, charged,
or received on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations on
how interest accrues hereon.

If this Note is placed in the hands of an attorney for collection after default,
or if all or any part of the indebtedness represented hereby is proved,
established or collected in any court or in any bankruptcy, receivership, debtor
relief, probate or other court proceedings, the Borrower and all endorsers,
sureties and guarantors of this Note jointly and severally agree to pay
reasonable attorneys’ fees and collection costs to the holder hereof in addition
to the principal and interest payable hereunder.

 

Exhibit A-1

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

The Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration of
the maturity of this Note, diligence in collecting, the bringing of any suit
against any party and any notice of or defense on account of any extensions,
renewals, partial payments or changes in any manner of or in this Note or in any
of its terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.

THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY
APPLICABLE FEDERAL LAW.

 

W&T OFFSHORE, INC. By:  

 

Name:   Title:  

 

Exhibit A-2

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

EXHIBIT B

BORROWING NOTICE

Reference is made to that certain 1.5 Lien Term Loan Credit Agreement, dated as
of September 7, 2016 (as from time to time amended, refinanced, replaced,
supplemented, restated or otherwise modified from time to time, the
“Agreement”), by and among W&T Offshore, Inc., a Texas corporation (the
“Borrower”), Cortland Capital Market Services LLC, as the Administrative Agent
and 1.5 Lien Collateral Agent, and certain lenders (“Lenders”). Terms which are
defined in the Agreement are used herein with the meanings given them in the
Agreement.

The Borrower hereby requests a Borrowing of new Loans to be advanced pursuant to
Section 2.2 of the Agreement as follows:

 

Aggregate amount of Borrowing:

   $                

Date on which Loans are to be advanced:

  

Such Loans shall be wired to the following account:

Bank:

Account Name:

ABA Routing No.:

Account No:

Reference:

To induce Lenders to make such Loans, the Borrower hereby represents, warrants,
acknowledges, and agrees to and with the Administrative Agent and each Lender
that:

(a) The officer of the Borrower signing this instrument is the duly elected,
qualified and acting officer of the Borrower as indicated below such officer’s
signature hereto having all necessary authority to act for the Borrower in
making the request herein contained.

(b) The representations and warranties made by the Loan Parties set forth in the
Agreement and the other Loan Documents are true and correct in all material
respects on and as of the date hereof (it being understood and agreed that
(x) any such representation or warranty that is qualified as to “materiality”,
“Material Adverse Change” or similar language is true and correct in all
respects as of the date hereof and (y) any such representation or warranty which
by its terms is made as of a specified date shall be required to be true and
correct in all material respects (or all respects, as the case may be) only as
of such specified date).

(c) No Default or Event of Default exists on the date hereof which has not been
waived in writing as provided in Section 10.1 of the Agreement or will result
from the making of the Loans requested hereby.

The officer of the Borrower signing this instrument hereby certifies that, to
the best of his knowledge after due inquiry, the above representations,
warranties, acknowledgments, and agreements of the Borrower are true, correct
and complete. The officer of the Borrower signing this instrument does so in his
capacity as an officer and not individually.

 

Exhibit B-1

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

[Signature Page Follows]

 

Exhibit B-2

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

IN WITNESS WHEREOF, this instrument is executed as of             , 20    .

 

W&T OFFSHORE, INC. By:  

 

Name:   Title:  

Borrowing Notice

 

Exhibit B-3

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

EXHIBIT C

ASSIGNMENT AND ACCEPTANCE

Reference is made to that certain 1.5 Lien Term Loan Credit Agreement, dated as
of September 7, 2016 (as from time to time amended, refinanced, replaced,
supplemented, restated or otherwise modified, the “Agreement”), by and among W&T
Offshore, Inc., a Texas corporation (the “Borrower”), Cortland Capital Market
Services LLC, as the Administrative Agent and 1.5 Lien Collateral Agent, and
various financial institutions and other persons from time to time parties
thereto (“Lenders”). Terms which are defined in the Agreement are used herein
with the meanings given them in the Agreement.

The “Assignor” and the “Assignee” referred to on Schedule 1 agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, without recourse and
without representation or warranty except as expressly set forth herein, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor’s rights and obligations under the Agreement and the other Loan
Documents as of the date hereof equal to the percentage interest specified on
Schedule 1 of all outstanding rights and obligations under the Agreement and the
other Loan Documents. After giving effect to such sale and assignment, the
amount of the Loans owing to the Assignee will be as set forth on Schedule 1.

2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) represents and warrants that it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument or document furnished pursuant thereto;
(iv) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Restricted Person or the performance
or observance by any Restricted Person of any of its obligations under the Loan
Documents or any other instrument or document furnished pursuant thereto; and
(v) attaches the applicable Notes held by the Assignor and requests that the
Administrative Agent exchange such Notes for new Notes payable to the Assignee
in an amount equal to the Loans assumed by the Assignee pursuant hereto and to
the Assignor in an amount equal to the Loans retained by the Assignor, if any,
as specified on Schedule 1.

3. The Assignee (i) confirms that it has received a copy of the Agreement,
together with copies of the financial statements referred to in Section 6.1
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
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
Agreement; (iii) confirms that it is an Eligible Transferee; (iv) appoints and
authorizes the Administrative Agent to take such action as the Administrative
Agent on its behalf and to exercise such powers and discretion under the
Agreement as are delegated to the Administrative Agent by the terms thereof,
together with such

 

Exhibit C-1

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

powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Agreement are required to be performed by it as a Lender; and
(vi) attaches any U.S. Internal Revenue Service or other forms required under
Section 3.3(e), (h) and (i).

4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1.

5. Upon such acceptance and recording by the Administrative Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.

6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Agreement and the
Notes for periods prior to the Effective Date directly between themselves.

7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and Acceptance.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

Exhibit C-2

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

SCHEDULE 1

to

ASSIGNMENT AND ACCEPTANCE

 

Percentage Share assigned:

         % (Percentage Share)   

Aggregate outstanding principal amount of Loans assigned:

   $                

Principal amount of Note(s) payable to Assignee:

   $                

Principal amount of Note payable to Assignor:

   $                

Effective Date:

  

 

  [NAME OF ASSIGNOR], as Assignor By:  

 

  Title   Dated:            , 20       [NAME OF ASSIGNEE], as Assignee By:  

 

  Title

 

Accepted [and Approved] ** CORTLAND CAPITAL MARKET SERVICES LLC as
Administrative Agent By:  

 

Title:  

 

** Consent of the Administrative Agent is required if the Assignee is an
Eligible Transferee solely by reason of clause (b) of the definition of
“Eligible Transferee”.

 

Exhibit C-3

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

EXHIBIT D-1

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships for U.S. Federal Income Tax
Purposes)

Reference is made to that certain 1.5 Lien Term Loan Credit Agreement, dated as
of September 7, 2016 (as amended, refinanced, replaced, supplemented, restated
or otherwise modified from time to time, the “Credit Agreement”), by and among
W&T Offshore, Inc., a Texas corporation (the “Borrower”), Cortland Capital
Market Services LLC, as the Administrative Agent and 1.5 Lien Collateral Agent,
and the various financial institutions and other persons from time to time
parties thereto.

Pursuant to the provisions of Section 3.3 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 on this certificate changes, the undersigned shall
promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

  [NAME OF LENDER] By:  

 

  Name:  

 

  Title:  

 

Dated:            , 20[    ]

 

Exhibit D-1-1

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

EXHIBIT D-2

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships for U.S. Federal Income Tax

Purposes)

Reference is made to that certain 1.5 Lien Term Loan Credit Agreement, dated as
of September 7, 2016 (as amended, refinanced, replaced, supplemented, restated
or otherwise modified from time to time, the “Credit Agreement”), by and among
W&T Offshore, Inc., a Texas corporation (the “Borrower”), Cortland Capital
Market Services LLC, as the Administrative Agent and 1.5 Lien Collateral Agent,
and the various financial institutions and other persons from time to time
parties thereto.

Pursuant to the provisions of Section 3.3 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 on
this certificate changes, the undersigned shall promptly so inform such Lender
in writing, and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

  [NAME OF PARTICIPANT] By:  

 

  Name:  

 

  Title:  

 

Dated:            , 20[    ]

 

Exhibit D-2-1

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

EXHIBIT D-3

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships for U.S. Federal Income Tax
Purposes)

Reference is made to that certain 1.5 Lien Term Loan Credit Agreement, dated as
of September 7, 2016 (as amended, refinanced, replaced, supplemented, restated
or otherwise modified from time to time, the “Credit Agreement”), by and among
W&T Offshore, Inc., a Texas corporation (the “Borrower”), Cortland Capital
Market Services LLC, as the Administrative Agent and 1.5 Lien Collateral Agent,
and the various financial institutions and other persons from time to time
parties thereto.

Pursuant to the provisions of Section 3.3 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 on this certificate
changes, the undersigned shall promptly so inform such Lender and (2) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

  [NAME OF PARTICIPANT] By:  

 

  Name:  

 

  Title:  

 

Dated:            , 20[    ]

 

Exhibit D-3-1

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

EXHIBIT D-4

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Partnerships

for U.S. Federal Income Tax Purposes)

Reference is made to that certain 1.5 Lien Term Loan Credit Agreement, dated as
of September 7, 2016 (as amended, refinanced, replaced, supplemented, restated
or otherwise modified from time to time, the “Credit Agreement”), by and among
W&T Offshore, Inc., a Texas corporation (the “Borrower”), Cortland Capital
Market Services LLC, as the Administrative Agent and 1.5 Lien Collateral Agent,
and the various financial institutions and other persons from time to time
parties thereto.

Pursuant to the provisions of Section 3.3 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 on this certificate changes, the undersigned shall promptly so inform
the Borrower and the Administrative Agent, and (2) the undersigned shall have at
all times furnished the Borrower and the Administrative Agent with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

  [NAME OF LENDER] By:  

 

  Name:  

 

  Title:  

 

Dated:            , 20[    ]

 

Exhibit D-4-1

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

EXHIBIT E

FORM OF SOLVENCY CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFIES, IN SUCH PERSON’S CORPORATE AND NOT INDIVIDUAL
CAPACITY, ON BEHALF OF THE BORROWER AND EACH OTHER OBLIGOR AS FOLLOWS:

1. I am the Senior Vice President and Chief Financial Officer of W&T Offshore,
Inc., a Texas corporation (the “Borrower”).

2. Reference is made to that certain 1.5 lien term loan credit agreement, dated
as of September 7, 2016 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among the
Borrower, Cortland Capital Market Services LLC, as administrative agent, and the
banks, financial institutions and other entities from time to time party thereto
as lenders. Capitalized terms used but not defined herein have the meanings
assigned in the Credit Agreement.

3. I have reviewed the definitions and provisions contained in the Credit
Agreement, and the other Loan Documents that are relevant to the matters
certified by me in Paragraph 4 below, and, in my opinion, have made, or have
caused to be made under my supervision, such examination or investigation as is
necessary to enable me to express an informed opinion as to the matters referred
to herein.

4. Based upon my review and examination described in Paragraph 3 above, I
certify that as of the date hereof, after giving effect to the consummation of
the “Transactions” as defined in, contemplated by and described in the Credit
Agreement and the other transactions contemplated by the Loan Documents, (i) the
sum of the debt (including contingent liabilities) of the Obligors, on a
consolidated basis, does not exceed the fair value or the present fair saleable
value (in each case, on a going-concern basis) of the assets of the Obligors, on
a consolidated basis; (ii) the Obligors, on a consolidated basis, are able to
pay their debts, on a consolidated basis, as they become due generally in the
ordinary course of business, (iii) the capital of the Obligors, on a
consolidated basis, is not unreasonably small in relation to the business of the
Obligors, on a consolidated basis, in existence or otherwise contemplated as of
the date hereof; and (iv) the Obligors, on a consolidated basis, do not intend
to incur, or believe that they will incur, debts (including current obligations
and contingent liabilities) beyond their ability to pay such debt as they mature
in the ordinary course of business. For purposes hereof, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

[SIGNATURE PAGE FOLLOWS]

 

Exhibit E-1

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

The foregoing certifications are made and delivered as of the Closing Date.

 

W&T OFFSHORE, INC. By:  

 

Name:   John D. Gibbons Title:   Senior Vice President and Chief Financial
Officer

 

Exhibit E-2

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

EXHIBIT F

FORM OF SECOND LIEN

INTERCREDITOR AGREEMENT

[see attached]

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

INTERCREDITOR AGREEMENT

dated as of May 11, 2015 between

Toronto Dominion (Texas) LLC,

as Priority Lien Agent,

and

Morgan Stanley Senior Funding, Inc.,

as Second Lien Collateral Trustee

 

 

THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE TERM LOAN CREDIT
AGREEMENT DATED AS OF MAY 11, 2015, AMONG W&T OFFSHORE, INC., AS THE BORROWER,
MORGAN STANLEY SENIOR FUNDING, INC. AS SECOND LIEN ADMINISTRATIVE AGENT AND THE
LENDERS PARTY THERETO FROM TIME TO TIME, (B) THE FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT DATED AS OF NOVEMBER 8, 2013, AS AMENDED, SUPPLEMENTED,
RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG W&T OFFSHORE, INC., THE
LENDERS PARTY THERETO FROM TIME TO TIME AND TORONTO DOMINION (TEXAS), LLC, AS
ADMINISTRATIVE AGENT, (C) THE OTHER LOAN DOCUMENTS REFERRED TO IN SUCH TERM LOAN
CREDIT AGREEMENT AND (D) THE OTHER LOAN DOCUMENTS REFERRED TO IN SUCH CREDIT
AGREEMENT.

 

 

 

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

TABLE OF CONTENTS

 

         Page   ARTICLE I    DEFINITIONS   

Section 1.01

 

Construction; Certain Defined Terms

     1    ARTICLE II    LIEN PRIORITIES   

Section 2.01

 

Relative Priorities

     16   

Section 2.02

 

Prohibition on Marshalling, Etc.

     18   

Section 2.03

 

No New Liens

     18   

Section 2.04

 

Similar Collateral and Agreements

     19   

Section 2.05

 

No Duties of Priority Lien Agent

     19   

Section 2.06

 

No Duties of Second Lien Collateral Trustee

     20    ARTICLE III    ENFORCEMENT RIGHTS; PURCHASE OPTION   

Section 3.01

 

Limitation on Enforcement Action

     21   

Section 3.02

 

Standstill Periods; Permitted Enforcement Action

     23   

Section 3.03

 

Insurance

     25   

Section 3.04

 

Notification of Release of Collateral

     26   

Section 3.05

 

No Interference; Payment Over

     26   

Section 3.06

 

Purchase Option

     29    ARTICLE IV    OTHER AGREEMENTS   

Section 4.01

 

Release of Liens; Automatic Release of Second Liens and Third Liens

     31   

Section 4.02

 

Certain Agreements With Respect to Insolvency or Liquidation Proceedings

     32   

Section 4.03

 

Reinstatement

     40   

Section 4.04

 

Refinancings; Additional Second Lien Debt; Initial Third Lien Indebtedness;
Additional Third Lien Debt

     40   

Section 4.05

 

Amendments to Second Lien Documents and Third Lien Documents

     42   

Section 4.06

 

Legends

     43   

Section 4.07

 

Second Lien Secured Parties and Third Lien Secured Parties Rights as Unsecured
Creditors; Judgment Lien Creditor

     43   

Section 4.08

 

Postponement of Subrogation

     43   

Section 4.09

 

Acknowledgment by the Secured Debt Representatives

     44    ARTICLE V   

GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY

INTERESTS

  

  

Section 5.01

 

General

     44   

Section 5.02

 

Deposit Accounts

     46   

 

i

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

ARTICLE VI    APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS   

Section 6.01

 

Application of Proceeds

     46   

Section 6.02

 

Determination of Amounts

     47    ARTICLE VII    NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE;   
CONSENT OF GRANTORS; ETC.   

Section 7.01

 

No Reliance; Information

     47   

Section 7.02

 

No Warranties or Liability

     48   

Section 7.03

 

Obligations Absolute

     49   

Section 7.04

 

Grantors Consent and Agreement

     50    ARTICLE VIII    REPRESENTATIONS AND WARRANTIES   

Section 8.01

 

Representations and Warranties of Each Party

     50   

Section 8.02

 

Representations and Warranties of Each Representative

     50    ARTICLE IX    MISCELLANEOUS   

Section 9.01

 

Notices

     50   

Section 9.02

 

Waivers; Amendment

     51   

Section 9.03

 

Actions Upon Breach; Specific Performance

     52   

Section 9.04

 

Parties in Interest

     52   

Section 9.05

 

Survival of Agreement

     53   

Section 9.06

 

Counterparts

     53   

Section 9.07

 

Severability

     53   

Section 9.08

 

Governing Law; Jurisdiction; Consent to Service of Process

     53   

Section 9.09

 

WAIVER OF JURY TRIAL

     53   

Section 9.10

 

Headings

     54   

Section 9.11

 

Conflicts

     54   

Section 9.12

 

Provisions Solely to Define Relative Rights

     54   

Section 9.13

 

Certain Terms Concerning the Second Lien Collateral Trustee and the Third Lien
Collateral Trustee

     54   

Section 9.14

 

Certain Terms Concerning the Priority Lien Agent, the Second Lien Collateral
Trustee and the Third Lien Collateral Trustee

     55   

Section 9.15

 

Authorization of Secured Agents

     55   

Section 9.16

 

Further Assurances

     55   

Section 9.17

 

Relationship of Secured Parties

     55   

Section 9.18

 

Third Lien Provisions

     56   

 

ii

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

Annex and Exhibits

Annex I

 

Exhibit A    Form of Priority Confirmation Joinder Exhibit B    Security
Documents

 

iii

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INTERCREDITOR AGREEMENT, dated as of May 11, 2015 (as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof, this
“Agreement”), between TORONTO DOMINION (TEXAS), LLC, as administrative agent for
the Priority Lien Secured Parties referred to herein (in such capacity, and
together with its successors and assigns in such capacity, the “Original
Priority Lien Agent”) and Morgan Stanley Senior Funding, Inc., as administrative
agent for the Second Lien Secured Parties referred to herein (in such capacity,
and together with its successors in such capacity, the “Original Second Lien
Collateral Trustee”).

Reference is made to (a) the Priority Credit Agreement (defined below) and
(b) the Term Loan Credit Agreement (defined below) governing the Second Lien
Notes (defined below).

From time to time following the date hereof, W&T OFFSHORE, INC., a Texas
corporation (together with its successors and assigns, “W&T”) may (i) incur
Additional Second Lien Obligations (each defined below) to the extent permitted
by the Secured Debt Documents (as defined below); in connection with the Term
Loan Credit Agreement and any Additional Second Lien Obligations, W&T and
certain Grantors (defined below), the Second Lien Administrative Agent (defined
below), and the Second Lien Collateral Trustee (defined below) have entered into
the Second Lien Collateral Trust Agreement (defined below) and (ii) incur
Initial Third Lien Obligations and Additional Third Lien Obligations (each as
defined below) to the extent permitted by the Secured Debt Documents (as defined
below); in connection with the Initial Third Lien Obligations, W&T and certain
of its subsidiaries and the Third Lien Collateral Trustee (defined below) shall,
concurrently with the incurrence of such Additional Third Lien Obligations,
enter into a Third Lien Collateral Trust Agreement (defined below).

In consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Priority Lien Agent (for itself and on behalf of the Priority
Lien Secured Parties) and the Second Lien Collateral Trustee (for itself and on
behalf of the Second Lien Secured Parties) agree as follows:

ARTICLE I -

DEFINITIONS

Section 1.01 Construction; Certain Defined Terms. (1) The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires otherwise, (i) any
reference herein to any agreement, instrument, other document, statute or
regulation shall be construed as referring to such agreement, instrument, other
document, statute or regulation as from time to time amended, supplemented or
otherwise modified, (ii) any reference herein to any Person shall be construed
to include such Person’s successors and assigns, but shall not be deemed to
include the subsidiaries of such Person unless express reference is made to such
subsidiaries, (iii) 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, (iv) all references herein to
Articles, Sections and Annexes shall be construed to refer to Articles, Sections
and Annexes of this Agreement, (v) unless otherwise expressly qualified herein,
the words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights and
(vi) the term “or” is not exclusive.

(2) All terms used in this Agreement that are defined in Article 1, 8 or 9 of
the New York UCC (whether capitalized herein or not) and not otherwise defined
herein have the meanings assigned to them in Article 1, 8 or 9 of the New York
UCC. If a term is defined in Article 9 of the New York UCC and another Article
of the New York UCC, such term shall have the meaning assigned to it in
Article 9 of the New York UCC.

 

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(3) Unless otherwise set forth herein, all references herein to (i) the Second
Lien Collateral Trustee shall be deemed to refer to the Second Lien Collateral
Trustee in its capacity as collateral trustee under the Second Lien Collateral
Trust Agreement and (ii) the Third Lien Collateral Trustee shall be deemed to
refer to the Third Lien Collateral Trustee in its capacity as collateral trustee
under the Third Lien Collateral Trust Agreement.

(4) As used in this Agreement, the following terms have the meanings specified
below:

“Accounts” has the meaning assigned to such term in Section 3.01(a).

“Additional Second Lien Debt Facility” means any Indebtedness for which the
requirements of Section 4.04(b) of this Agreement have been satisfied, as
amended, restated, modified, renewed, refunded, restated, restructured,
increased, supplemented, replaced or refinanced in whole or in part from time to
time in accordance with each applicable Secured Debt Document; provided that
neither the Term Loan Credit Agreement nor any Second Lien Substitute Facility
shall constitute an Additional Second Lien Debt Facility at any time.

“Additional Second Lien Documents” means the Additional Second Lien Debt
Facility and the Additional Second Lien Security Documents.

“Additional Second Lien Obligations” means, with respect to any Grantor, any
obligations such Grantor owes to any Additional Second Lien Secured Party (or
any of its Affiliates) in respect of the Additional Second Lien Documents.

“Additional Second Lien Secured Parties” means, at any time, the Second Lien
Collateral Trustee, the trustee, agent or other representative of the holders of
any Series of Second Lien Debt who maintains the transfer register for such
Series of Second Lien Debt, the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Additional Second Lien Document and each
other holder of, or obligee in respect of, any holder or lender pursuant to any
Series of Second Lien Debt outstanding at such time; provided that the Term Loan
Second Lien Secured Parties shall not be deemed Additional Second Lien Secured
Parties.

“Additional Second Lien Security Documents” means the Additional Second Lien
Debt Facility (insofar as the same grants a Lien on the Collateral) and any
other security agreements, pledge agreements, collateral assignments, mortgages,
deeds of trust, collateral agency agreements, control agreements, or grants or
transfers for security, now existing or entered into after the date hereof,
executed and delivered by W&T or any other Grantor creating (or purporting to
create) a Lien upon the Second Lien Collateral in favor of the Additional Second
Lien Secured Parties.

“Additional Third Lien Debt Facility” means any Indebtedness for which the
requirements of Section 4.04(b) of this Agreement have been satisfied, as
amended, restated, modified, renewed, refunded, restated, restructured,
increased, supplemented, replaced or refinanced in whole or in part from time to
time in accordance with each applicable Secured Debt Document; provided that no
Third Lien Substitute Facility shall constitute an Additional Third Lien Debt
Facility at any time.

“Additional Third Lien Documents” means the Additional Third Lien Debt Facility
and the Additional Third Lien Security Documents.

 

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“Additional Third Lien Obligations” means, with respect to any Grantor, any
obligations of such Grantor owed to any Additional Third Lien Secured Party (or
any of its Affiliates) in respect of the Additional Third Lien Documents.

“Additional Third Lien Secured Parties” means, at any time, the Third Lien
Collateral Trustee, the trustee, agent or other representative of the holders of
any Series of Third Lien Debt who maintains the transfer register for such
Series of Third Lien Debt, the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Additional Third Lien Document and each
other holder of, or obligee in respect of, any holder or lender pursuant to any
Series of Third Lien Debt outstanding at such time.

“Additional Third Lien Security Documents” means the Additional Third Lien Debt
Facility (insofar as the same grants a Lien on the Collateral) and any other
security agreements, pledge agreements, collateral assignments, mortgages, deeds
of trust, collateral agency agreements, control agreements, or grants or
transfers for security, now existing or entered into after the date hereof,
executed and delivered by W&T or any other Grantor creating (or purporting to
create) a Lien upon the Third Lien Collateral in favor of the Additional Third
Lien Secured Parties (including any such agreements, assignments, mortgages,
deeds of trust and other documents or instruments associated with any Third Lien
Substitute Facility).

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms “controlling,” “controlled by” and “under common control
with” have correlative meanings.

“Bank Product” means each and any of the following bank services and products
provided to W&T or any other Grantor by any lender (or any Affiliate thereof)
under the Priority Credit Agreement who is entitled to the benefits of the
security under any Priority Lien Documents: (1) commercial credit cards;
(2) stored value cards; and (3) Treasury Management Arrangement (including
controlled disbursement, automated clearinghouse transactions, return items,
overdrafts and interstate depository network services).

“Bank Product Obligations” means any and all obligations of W&T or any other
Grantor, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with any Bank
Product.

“Bankruptcy Code” means Title 11 of the United States Code.

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or
foreign law for the relief of debtors.

“Board of Directors” means: (1) with respect to a corporation, the board of
directors of the corporation; (2) with respect to a partnership, the Board of
Directors of the general partner of the partnership; and (3) with respect to any
other Person, the board or committee of such Person serving a similar function.

 

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“Business Day” means each day that is not a Saturday, Sunday or other day on
which banking institutions in Houston, Texas or in New York, New York are
authorized or required by law to close.

“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.

“Class” means (a) in the case of Priority Lien Debt, the Priority Lien Debt,
taken together, (b) in the case of Second Lien Debt, every Series of Second Lien
Debt, taken together and (c) in the case of Third Lien Debt, every Series of
Third Lien Debt, taken together.

“Collateral” means all of the assets and property of any Grantor, whether real,
personal or mixed, constituting the Priority Lien Collateral, the Second Lien
Collateral and/or the Third Lien Collateral.

“Complete Discharge of Priority Lien Obligations” means the occurrence of all
the following:

(1) termination or expiration of all commitments to extend credit that would
constitute Priority Lien Debt;

(2) payment in full in cash of the principal of and interest and premium (if
any) on all Priority Lien Debt (other than any undrawn letters of credit);

(3) discharge or cash collateralization (at the lower of (i) 105% of the
aggregate undrawn amount and (ii) the percentage of the aggregate undrawn amount
required for release of Liens under the terms of the applicable Priority Lien
Document) of all outstanding letters of credit constituting Priority Lien
Obligations;

(4) payment of Hedging Obligations constituting Priority Lien Obligations (and,
with respect to any particular Hedging Contract (as defined in the Priority
Credit Agreement as in effect on the date hereof), termination of such agreement
and payment in full in cash of all obligations thereunder or such other
arrangements as have been made by the counterparty thereto; and

(5) payment in full in cash of all other Priority Lien Obligations, including
without limitation, Bank Product Obligations, that are outstanding and unpaid at
the time the Priority Lien Debt is paid in full in cash (other than any
obligations for taxes, costs, indemnifications, reimbursements, damages and
other liabilities in respect of which no claim or demand for payment has been
made at or prior to such time);

provided that, if, at any time after the Complete Discharge of Priority Lien
Obligations has occurred, W&T enters into any Priority Lien Document evidencing
a Priority Lien Obligation which incurrence is not prohibited by the applicable
Secured Debt Documents, then such Complete Discharge of Priority Lien
Obligations shall automatically be deemed not to have occurred for all purposes
of this Agreement with respect to such new Priority Lien Obligations (other than
with respect to any actions taken as a result of the occurrence of such first
Complete Discharge of Priority Lien Obligations), and, from and after the date
on which W&T designates such Indebtedness as Priority Lien Debt in accordance
with this Agreement, the obligations under such Priority Lien Document shall
automatically and without any further action be treated as Priority Lien
Obligations for all purposes of this Agreement, including for purposes of the
Lien priorities and rights in respect of Collateral set forth in this Agreement,
any Second

 

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Lien Obligations shall be deemed to have been at all times Second Lien
Obligations and at no time Priority Lien Obligations and any Third Lien
Obligations shall be deemed to have been at all times Third Lien Obligations and
at no time Priority Lien Obligations or Second Lien Obligations. For the
avoidance of doubt, a Replacement as contemplated by Section 4.04(a) shall not
be deemed to cause a Complete Discharge of Priority Lien Obligations.

“Credit Facilities” means, with respect to W&T or any of the Grantors, one or
more current or future debt facilities (including, without limitation, the
Priority Credit Agreement) indentures or commercial paper facilities with banks,
investment banks, insurance companies, trust companies, mutual funds, other
lenders, investors or any of the foregoing providing for revolving credit loans,
term loans, notes, debt securities, guarantees, receivables financing (including
through the sale of receivables to such lenders, or to special purpose entities
formed to borrow from (or sell such receivables to) such lenders against such
receivables), letters of credit, bankers’ acceptances, or other borrowings, in
each case, as amended, restated, modified, renewed, refunded, replaced or
refinanced (in each case, without limitation as to amount), in whole or in part,
from time to time and any agreements and related documents governing
indebtedness or other obligations incurred to refinance amounts then outstanding
or permitted to be outstanding, (whether upon or after termination or otherwise)
(including by means of sales of debt securities to institutional investors) in
whole or in part from time to time

“DIP Financing” has the meaning assigned to such term in Section 4.02(b).

“DIP Financing Liens” has the meaning assigned to such term in Section 4.02(b).

“DIP Lenders” has the meaning assigned to such term in Section 4.02(b).

“Discharge of Priority Lien Obligations” means the occurrence of all of the
following:

(1) termination or expiration of all commitments to extend credit that would
constitute Priority Lien Debt;

(2) payment in full in cash of the principal of and interest and premium (if
any) on all Priority Lien Debt (other than any undrawn letters of credit and
other than (without duplication) Excess Priority Lien Obligations);

(3) discharge or cash collateralization (at the lower of (i) 105% of the
aggregate undrawn amount and (ii) the percentage of the aggregate undrawn amount
required for release of Liens under the terms of the applicable Priority Lien
Document) of all outstanding letters of credit constituting Priority Lien
Obligations;

(4) payment of Hedging Obligations constituting Priority Lien Obligations (and,
with respect to any particular Hedging Contract (as defined in the Priority
Credit Agreement as in effect on the date hereof), termination of such agreement
and payment in full in cash of all obligations there under or such other
arrangements as have been made by the counterparty thereto; and

(5) payment in full in cash of all other Priority Lien Obligations (other than
Excess Priority Lien Obligations), including without limitation, Bank Product
Obligations, that are outstanding and unpaid at the time the Priority Lien Debt
is paid in full in cash (other than Excess Priority Lien Obligations and any
obligations for taxes, costs, indemnifications, reimbursements, damages and
other liabilities in respect of which no claim or demand for payment has been
made at or prior to such time);

 

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provided that, if at any time after the Discharge of Priority Lien Obligations
has occurred, W&T enters into any Priority Lien Document evidencing a Priority
Lien Obligation which incurrence is not prohibited by the applicable Secured
Debt Documents, then such Discharge of Priority Lien Obligations shall
automatically be deemed not to have occurred for all purposes of this Agreement
with respect to such new Priority Lien Obligations (other than with respect to
any actions taken as a result of the occurrence of such first Discharge of
Priority Lien Obligations), and, from and after the date on which W&T designates
such Indebtedness as Priority Lien Debt in accordance with this Agreement, the
obligations under such Priority Lien Document shall automatically and without
any further action be treated as Priority Lien Obligations for all purposes of
this Agreement, including for purposes of the Lien priorities and rights in
respect of Collateral set forth in this Agreement, any Second Lien Obligations
shall be deemed to have been at all times Second Lien Obligations and at no time
Priority Lien Obligations and any Third Lien Obligations shall be deemed to have
been at all times Third Lien Obligations and at no time Priority Lien
Obligations or Second Lien Obligations. For the avoidance of doubt, a
Replacement as contemplated by Section 4.04(a) shall not be deemed to cause a
Discharge of Priority Lien Obligations.

“Discharge of Second Lien Obligations” means the occurrence of all of the
following:

(1) payment in full in cash of the principal of and interest and premium (if
any) on all Second Lien Debt;

(2) payment in full in cash of all other Second Lien Obligations that are
outstanding and unpaid at the time the Second Lien Debt is paid in full in cash
(other than any obligations for taxes, costs, indemnifications, reimbursements,
damages and other liabilities in respect of which no claim or demand for payment
has been made at or prior to such time);

provided that, if at any time after the Discharge of Second Lien Obligations has
occurred, W&T enters into any Second Lien Document evidencing a Second Lien
Obligation which incurrence is not prohibited by the applicable Secured Debt
Documents, then such Discharge of Second Lien Obligations shall automatically be
deemed not to have occurred for all purposes of this Agreement with respect to
such new Second Lien Obligations (other than with respect to any actions taken
as a result of the occurrence of such first Discharge of Second Lien
Obligations), and, from and after the date on which W&T designates such
Indebtedness as Second Lien Debt in accordance with this Agreement, the
obligations under such Second Lien Document shall automatically and without any
further action be treated as Second Lien Obligations for all purposes of this
Agreement, including for purposes of the Lien priorities and rights in respect
of Collateral set forth in this Agreement and any Third Lien Obligations shall
be deemed to have been at all times Third Lien Obligations and at no time Second
Lien Obligations. For the avoidance of doubt, a Replacement as contemplated by
Section 4.04(a) shall not be deemed to cause a Discharge of Second Lien
Obligations.

“Disposition” shall mean any sale, lease, exchange, assignment, license,
contribution, transfer or other disposition. “Dispose” shall have a correlative
meaning.

“Excess Priority Lien Obligations” means Obligations constituting Priority Lien
Obligations for the principal amount of indebtedness (including letters of
credit and reimbursement obligations) under the Priority Credit Agreement and/or
any other Credit Facility pursuant to which Priority Lien Debt has been issued
to the extent that such Obligations for principal, letters of credit and
reimbursement obligations are in excess of the amount in clause (a) of the
definition of “Priority Lien Cap” plus interest, premium, if any, and fees
related to such excess principal amount.

“Excluded Assets” means (i) cash, certificates of deposit, deposit accounts,
money market accounts or other such liquid assets to the extent that such cash,
certificate of deposit, deposit account,

 

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money market account or other such liquid assets are on deposit or maintained
with the Priority Lien Agent or any other holder of Priority Lien Obligations to
cash collateralize letters of credit constituting Priority Lien Obligations
rather than generally to the holders of the Priority Lien Obligations or to the
Priority Lien Collateral Agent for the benefit of the holders of Priority Lien
Obligations as a whole, (ii) any governmental approval, license or permit that
by its terms or by operation of law or regulation would be void, voidable,
terminable or revocable if mortgaged, pledged or assigned under the terms of the
Security Documents, (iii) Capital Stock in excess of 65% of the voting Capital
Stock in Subsidiaries that are (a) FSHCOs (as defined in the Term Loan Credit
Agreement) or (b) Foreign Subsidiaries (as defined in the Term Loan Credit
Agreement) that are CFCs (as defined in the Term Loan Credit Agreement) or are
disregarded entities that own Capital Stock in CFCs and (iv) other property or
assets of W&T or any Grantor that are not required to be subject to a Lien
securing the Priority Lien Obligations pursuant to the Priority Lien Documents
except to the extent that such property or assets are subject to a Priority Lien
generally in favor of all holders of Priority Lien Obligations.

“Governmental Authority” means the government of the United States or any other
nation, or any political subdivision thereof, whether state, provincial or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other Person exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Grantor” means W&T, each other subsidiary of W&T that shall have granted any
Lien in favor of any of the Priority Lien Agent, the Second Lien Collateral
Trustee or the Third Lien Collateral Trustee on any of its assets or properties
to secure any of the Secured Obligations.

“Hedging Obligations” means, with respect to any Grantor, the obligations of
such Grantor owed to any lender (or Affiliate thereof) under the Priority Credit
Agreement who is entitled to the benefits of the security under the Priority
Lien Documents under:

(1) interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements entered into with one or more financial institutions and other
arrangements or agreements designed to protect such Grantor or any subsidiary
thereof entering into the agreement against fluctuations in interest rates with
respect to indebtedness incurred;

(2) foreign exchange contracts and currency protection agreements entered into
with one or more financial institutions and designed to protect such Grantor or
any subsidiary thereof entering into the agreement against fluctuations in
currency exchange rates with respect to indebtedness incurred;

(3) any commodity futures contract, commodity option or other similar agreement
or arrangement designed to protect against fluctuations in the price of
commodities used, produced, processed or sold by that Grantor or any subsidiary
thereof at the time; and

(4) other agreements or arrangements designed to protect such Grantor against
fluctuations in interest rates, commodity prices or currency exchange rates.

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

“Initial Third Lien Debt Facility” means Indebtedness secured by a Third Lien
for which the requirements of Section 4.04(c) of this Agreement have been
satisfied, as amended, restated, modified, renewed, refunded, restated,
restructured, increased, supplemented, replaced or refinanced in whole or in
part from time to time in accordance with each applicable Secured Debt Document.

 

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“Initial Third Lien Documents” means the Initial Third Lien Debt Facility and
the Initial Third Lien Security Documents.

“Initial Third Lien Obligations” means, with respect to any Grantor, any
obligations of such Grantor owed to any Initial Third Lien Secured Party (or any
of its Affiliates) in respect of the Initial Third Lien Documents.

“Initial Third Lien Secured Parties” means, at any time, the Third Lien
Collateral Trustee, the trustees, agents and other representatives of the
holders of the Initial Third Lien Debt Facility (including any holders of notes
pursuant to supplements executed in connection with the issuance of Series of
Third Lien Debt under the Initial Third Lien Debt Facility) who maintains the
transfer register for such Third Lien Debt, the beneficiaries of each
indemnification obligation undertaken by any Grantor under any Initial Third
Lien Document and each other holder of, or obligee in respect of, any Initial
Third Lien Obligations, any holder or lender pursuant to any Initial Third Lien
Document outstanding at such time; provided that the Additional Third Lien
Secured Parties shall not be deemed Initial Third Lien Secured Parties.

“Initial Third Lien Security Documents” means the Initial Third Lien Debt
Facility (insofar as the same grants a Lien on the Collateral) and any other
security agreements, pledge agreements, collateral assignments, mortgages, deeds
of trust, collateral agency agreements, control agreements, or grants or
transfers for security, now existing or entered into after the date hereof,
executed and delivered by W&T or any other Grantor creating (or purporting to
create) a Lien upon the Third Lien Collateral in favor of the Initial Third Lien
Secured Parties (including any such agreements, assignments, mortgages, deeds of
trust and other documents or instruments associated with any Third Lien
Substitute Facility).

“Insolvency or Liquidation Proceeding” means:

(1) any case commenced by or against W&T or any other Grantor under the
Bankruptcy Code or any other Bankruptcy Law, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling of the assets or
liabilities of W&T or any other Grantor, any receivership or assignment for the
benefit of creditors relating to W&T or any other Grantor or any similar case or
proceeding relative to W&T or any other Grantor or its creditors, as such, in
each case whether or not voluntary;

(2) any liquidation, dissolution, marshalling of assets or liabilities or other
winding up of or relating to W&T or any other Grantor, in each case whether or
not voluntary and whether or not involving bankruptcy or insolvency; or

(3) any other proceeding of any type or nature in which substantially all claims
of creditors of W&T or any other Grantor are determined and any payment or
distribution is or may be made on account of such claims.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, hypothecation, or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any agreement to give a security interest therein
and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

 

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“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Obligations” means any principal (including reimbursement obligations and
obligations to provide cash collateral with respect to letters of credit whether
or not drawn), interest (including, to the extent legally permitted, all
interest accrued thereon after the commencement of any Insolvency or Liquidation
Proceeding at the rate, including any applicable post-default rate even if such
interest is not enforceable, allowable or allowed as a claim in such
proceeding), premium (if any), fees, indemnifications, reimbursements, expenses
and other liabilities payable under the documentation governing any
Indebtedness.

“Officer” means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Senior Vice President, any Vice President or any Assistant Vice
President of such Person.

“Officers’ Certificate” means a certificate signed on behalf of W&T by any
Officers of W&T.

“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 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, the lands covered thereby
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 or other
personal property which may be on such premises for the purpose of drilling a
well or for other similar temporary uses) and including any and all oil wells,
gas wells, injection wells or other wells (including those used for either
environmental sampling or remedial purposes), 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.

“Original Priority Lien Agent” has the meaning assigned to such term in the
preamble hereto.

“Original Second Lien Collateral Trustee” has the meaning assigned to such term
in the preamble hereto.

“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

“Priority Confirmation Joinder” means an agreement substantially in the form of
Exhibit A.

 

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“Priority Credit Agreement” means the Fifth Amended and Restated Credit
Agreement, dated as of November 8, 2013, among W&T as borrower, the Original
Priority Lien Agent, the lenders party thereto from time to time and the other
agents named therein, as amended, restated, adjusted, waived, renewed, extended,
supplemented or otherwise modified from time to time with the same and/or
different lenders and/or agents and any credit agreement, loan agreement, note
agreement, promissory note, indenture or any other agreement or instrument
evidencing or governing the terms of any Priority Substitute Credit Facility.

“Priority Lien” means a Lien granted by W&T or any Grantor in favor of the
Priority Lien Agent, at any time, upon any Property of W&T or such Grantor to
secure Priority Lien Obligations (including Liens on such Collateral under the
security documents associated with any Priority Substitute Credit Facility).

“Priority Lien Agent” means the Original Priority Lien Agent, and, from and
after the date of execution and delivery of a Priority Substitute Credit
Facility, the agent, collateral agent, trustee or other representative of the
lenders or holders of the indebtedness and other Obligations evidenced
thereunder or governed thereby, in each case, together with its successors in
such capacity.

“Priority Lien Cap” means, as of any date, (a) the aggregate principal amount of
Indebtedness (including any interest paid in kind) that may be incurred under
clause (1) of the definition of “Permitted Debt” as of such date (as defined in
the Term Loan Credit Agreement as in effect on the date hereof) plus (b) the
amount of all Hedging Obligations, to the extent such Hedging Obligations are
secured by the Priority Liens, plus (c) the amount of all Bank Product
Obligations, plus (d) the amount of accrued and unpaid interest (excluding any
interest paid-in-kind) and outstanding fees, to the extent such Obligations are
secured by the Priority Liens; provided that for all purposes of this Agreement
and the Secured Debt Documents the lenders under the Priority Lien Credit
Agreement shall be entitled to rely on an Officers’ Certificate to the effect
that after giving effect to any credit extension under the Priority Lien Credit
Agreement the Priority Lien Debt does not exceed the Priority Lien Cap.

“Priority Lien Collateral” shall mean all “Collateral”, as defined in the
Priority Credit Agreement or any other Priority Lien Document, and any other
assets of any Grantor now or at any time hereafter subject to Liens which
secure, but only to the extent securing, any Priority Lien Obligation.

“Priority Lien Debt” means the indebtedness under the Priority Credit Agreement
(including letters of credit and reimbursement obligations with respect thereto)
that was permitted to be incurred and secured under the Priority Credit
Agreement, the Term Loan Credit Agreement, any Additional Second Lien Debt
Facility, any Second Lien Substitute Facility, any Initial Third Lien Debt
Facility, any Additional Third Lien Debt Facility and any Third Lien Substitute
Facility (or as to which the lenders under the Priority Credit Agreement
obtained an Officers’ Certificate at the time of incurrence to the effect that
such indebtedness was permitted to be incurred and secured by all applicable
Secured Debt Documents) and additional indebtedness under any Priority
Substitute Credit Facility; provided that for all purposes of this Agreement,
all indebtedness under the Priority Credit Agreement is permitted to be secured
by the applicable Secured Debt Documents and is permitted to be incurred under
all of the Term Loan Second Lien Documents and the Third Lien Documents, whether
or not the lenders under the Priority Credit Agreement obtained an Officers’
Certificate at the time of such incurrence to such effect.

“Priority Lien Documents” means the Priority Credit Agreement, the Priority Lien
Security Documents, the other “Loan Documents” (as defined in the Priority
Credit Agreement) and all other loan documents, notes, guarantees, instruments
and agreements governing or evidencing, or executed or delivered in connection
with, any Priority Substitute Credit Facility.

 

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“Priority Lien Obligations” means the Priority Lien Debt and all other
Obligations in respect of or in connection with Priority Lien Debt together with
Hedging Obligations and the Bank Product Obligations, in each case to the extent
that such Obligations are secured by Priority Liens. For the avoidance of doubt,
Hedging Obligations shall only constitute Priority Lien Obligations to the
extent that such Hedging Obligations are secured under the terms of the Priority
Credit Agreement or Priority Lien Security Documents. Notwithstanding any other
provision hereof, the term “Priority Lien Obligations” will include accrued
interest, fees, costs, and other charges incurred under the Priority Credit
Agreement and the other Priority Lien Documents, whether incurred before or
after commencement of an Insolvency or Liquidation Proceeding, and whether or
not allowable in an Insolvency or Liquidation Proceeding. To the extent that any
payment with respect to the Priority Lien Obligations (whether by or on behalf
of W&T, as proceeds of security, enforcement of any right of set-off, or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside, or required to be paid to a debtor in possession, trustee, receiver, or
similar Person, then the obligation or part thereof originally intended to be
satisfied will be deemed to be reinstated and outstanding as if such payment had
not occurred.

“Priority Lien Secured Parties” means, at any time, the Priority Lien Agent,
each lender or issuing bank under the Priority Credit Agreement, each holder,
provider or obligee of any Hedging Obligations and Bank Product Obligations, the
beneficiaries of each indemnification obligation undertaken by any Grantor under
any Priority Lien Document, each other Person that provides letters of credit,
guarantees or other credit support related thereto under any Priority Lien
Document and each other holder of, or obligee in respect of, any Priority Lien
Obligations (including pursuant to a Priority Substitute Credit Facility), in
each case to the extent designated as a secured party (or a party entitled to
the benefits of the security) under any Priority Lien Document outstanding at
such time.

“Priority Lien Security Documents” means the Priority Credit Agreement (insofar
as the same grants a Lien on the Collateral), each agreement listed in Part A of
Exhibit B hereto, and any other security agreements, pledge agreements,
collateral assignments, mortgages, deeds of trust, control agreements, or grants
or transfers for security, now existing or entered into after the date hereof,
executed and delivered by W&T or any other Grantor creating (or purporting to
create) a Lien upon Collateral in favor of the Priority Lien Agent (including
any such agreements, assignments, mortgages, deeds of trust and other documents
or instruments associated with any Priority Substitute Credit Facility).

“Priority Substitute Credit Facility” means any Credit Facility with respect to
which the requirements contained in Section 4.04(a) of this Agreement have been
satisfied and that Replaces the Priority Credit Agreement then in existence. For
the avoidance of doubt, no Priority Substitute Credit Facility shall be required
to be a revolving or asset-based loan facility and may be a facility evidenced
or governed by a credit agreement, loan agreement, note agreement, promissory
note, indenture or any other agreement or instrument; provided that any Priority
Lien securing such Priority Substitute Credit Facility shall be subject to the
terms of this Agreement for all purposes (including the lien priorities as set
forth herein as of the date hereof).

“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.

“Proved Reserves” means “Proved Reserves” as defined in the Definitions for Oil
and Gas Reserves (the “Reserve Definitions”) promulgated by the Society of
Petroleum Engineers (or any generally recognized successor) as in effect at the
time in question.

“Purchase Notice” has the meaning assigned to such term in Section 3.06.

 

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“Replaces” means, (a) in respect of any agreement with reference to the Priority
Credit Agreement or the Priority Lien Obligations or any Priority Substitute
Credit Facility, that such agreement refunds, refinances or replaces the
Priority Credit Agreement, the Priority Lien Obligations or such Priority
Substitute Credit Facility in whole (in a transaction that is in compliance with
Section 4.04(a)) and that all commitments thereunder are terminated, or, to the
extent permitted by the terms of the Priority Credit Agreement, Priority Lien
Obligations or such Priority Substitute Credit Facility, in part, (b) in respect
of any agreement with reference to the Second Lien Documents, the Second Lien
Obligations or any Second Lien Substitute Facility, that such indebtedness
refunds, refinances or replaces the Second Lien Documents, the Second Lien
Obligations or such Second Lien Substitute Facility in whole (in a transaction
that is in compliance with Section 4.04(a)) and that all commitments thereunder
are terminated, or, to the extent permitted by the terms of the Second Lien
Documents, the Second Lien Obligations or such Second Lien Substitute Facility,
in part and (c) in respect of any agreement with reference to the Third Lien
Documents, the Third Lien Obligations or any Third Lien Substitute Facility,
that such indebtedness refunds, refinances or replaces the Third Lien Documents,
the Third Lien Obligations or such Third Lien Substitute Facility in whole (in a
transaction that is in compliance with Section 4.04(a)) and that all commitments
thereunder are terminated, or, to the extent permitted by the terms of the Third
Lien Documents, the Third Lien Obligations, or such Third Lien Substitute
Facility, in part. “Replace,” “Replaced” and “Replacement” shall have
correlative meanings.

“Reserve Report” has the meaning assigned to the term “Engineering Report” in
the Priority Credit Agreement as in effect on the date hereof.

“Second Lien” means a Lien granted by a Second Lien Document to the Second Lien
Collateral Trustee, at any time, upon any Collateral by any Grantor to secure
Second Lien Obligations (including Liens on such Collateral under the security
documents associated with any Second Lien Substitute Facility).

“Second Lien Administrative Agent” means the Original Second Lien Collateral
Trustee and from and after the date of the execution and delivery of a Second
Lien Substitute Facility, the agent, collateral agent, trustee or other
representative of the lenders or holders of the indebtedness and other
Obligations evidenced thereunder or governed thereby, in each case, together
with its successors in such capacity.

“Second Lien Collateral” shall mean all “Collateral”, as defined in any Second
Lien Document, and any other assets of any Grantor now or at any time hereafter
subject to Liens which secure, but only to the extent securing, any Second Lien
Obligations.

“Second Lien Collateral Trust Agreement” means the Collateral Trust Agreement,
dated as of the date hereof, among W&T, the other Grantors from time to time
party thereto, the Second Lien Collateral Trustee, the other Second Lien
Representatives from time to time party thereto and the Second Lien Collateral
Trustee, as amended, restated, adjusted, waived, renewed, extended, supplemented
or otherwise modified from time to time, in accordance with each applicable
Second Lien Document.

“Second Lien Collateral Trustee” means the Original Second Lien Collateral
Trustee, and, from and after the date of execution and delivery of a Second Lien
Substitute Facility, the agent, collateral agent, trustee or other
representative of the lenders or other holders of the indebtedness and other
obligations evidence thereunder or governed thereby, in each case, together with
its successors in such capacity.

“Second Lien Debt” means the indebtedness under the Second Lien Term Loans
issued on the date hereof and guarantees thereof and all additional indebtedness
incurred under any Additional Second

 

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Lien Documents that was permitted to be incurred and secured in accordance with
the Secured Debt Documents (or as to which the lenders and other holders of
Obligations under the Second Lien Documents obtained an Officers’ Certificate at
the time of incurrence to the effect that such indebtedness was permitted to be
incurred and secured by all applicable Secured Debt Documents) and with respect
to which the requirements of Section 4.04(b) have been (or are deemed)
satisfied, and all Indebtedness incurred under any Second Lien Substitute
Facility.

“Second Lien Documents” means the Term Loan Second Lien Documents and the
Additional Second Lien Documents.

“Second Lien Obligations” means Second Lien Debt and all other Obligations in
respect thereof. Notwithstanding any other provision hereof, the term “Second
Lien Obligations” will include accrued interest, fees, costs, and other charges
incurred under the Term Loan Credit Agreement and the other Second Lien
Documents, whether incurred before or after commencement of an Insolvency or
Liquidation Proceeding and whether or not allowable in an Insolvency or
Liquidation Proceeding.

“Second Lien Purchasers” has the meaning assigned to such term in Section 3.06.

“Second Lien Representative” means (a) in the case of the Second Lien Term
Loans, the Second Lien Collateral Trustee, and (b) in the case of any other
Series of Second Lien Debt, the trustee, agent or representative of the holders
of such Series of Second Lien Debt who (a) is appointed as a Second Lien
Representative (for purposes related to the administration of the security
documents) pursuant to the indenture, credit agreement or other agreement
governing such Series of Second Lien Debt, together with its successors in such
capacity, and (b) has become party to the Second Lien Collateral Trust Agreement
by executing a joinder in the form required under the Second Lien Collateral
Trust Agreement.

“Second Lien Secured Parties” means the Term Loan Second Lien Secured Parties
and the Additional Second Lien Secured Parties.

“Second Lien Security Documents” means the Term Loan Second Lien Security
Documents and the Additional Second Lien Security Documents.

“Second Lien Standstill Period” has the meaning assigned to such term in
Section 3.02(a)(i).

“Second Lien Substitute Facility” means any facility with respect to which the
requirements contained in Section 4.04(a) of this Agreement have been satisfied
and that is permitted to be incurred pursuant to the Priority Lien Documents,
the proceeds of which are used to, among other things, Replace the Term Loan
Credit Agreement and/or any Additional Second Lien Debt Facility then in
existence. For the avoidance of doubt, no Second Lien Substitute Facility shall
be required to be evidenced by notes or other instruments and may be a facility
evidenced or governed by a credit agreement, loan agreement, note agreement,
promissory note, indenture or any other agreement or instrument; provided that
any such Second Lien Substitute Facility shall be subject to the terms of this
Agreement for all purposes (including the lien priority as set forth herein as
of the date hereof) as the other Liens securing the Second Lien Obligations are
subject to under this Agreement.

“Second Lien Term Loans” means the “Loans” (as defined in the Term Loan Credit
Agreement) incurred by W&T under the Term Loan Credit Agreement on the date
hereof.

“Secured Debt Documents” means the Priority Lien Documents, the Second Lien
Documents and the Third Lien Documents.

 

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“Secured Debt Representative” means the Priority Lien Agent, the Second Lien
Collateral Trustee and the Third Lien Collateral Trustee.

“Secured Obligations” means the Priority Lien Obligations, the Second Lien
Obligations and the Third Lien Obligations.

“Secured Parties” means the Priority Lien Secured Parties, the Second Lien
Secured Parties and the Third Lien Secured Parties.

“Security Documents” means the Priority Lien Security Documents, the Second Lien
Security Documents and the Third Lien Security Documents.

“Series of Second Lien Debt” means, severally, the Second Lien Term Loans and
each other issue or series of Second Lien Debt (including any Additional Second
Lien Debt Facility) for which a single transfer register is maintained.

“Series of Secured Debt” means the Priority Lien Debt, each Series of Second
Lien Debt and each Series of Third Lien Debt.

“Series of Third Lien Debt” means, severally, the Initial Third Lien Debt
Facility and each other issue or series of Third Lien Debt (including any
Additional Third Lien Debt Facility) for which a single transfer register is
maintained.

“subsidiary” means, with respect to any specified Person: (1) any corporation,
association, limited liability company or other business entity (other than a
partnership) of which more than 50% of the total voting power of Voting Stock is
at the time owned or controlled, directly or through another subsidiary, by that
Person or one or more of the other subsidiaries of that Person (or a combination
thereof); and (2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
subsidiaries of that Person (or any combination thereof), or (c) as to which
such Person and its subsidiaries are entitled to receive more than 50% of the
assets of such partnership upon its dissolution.

“Standstill Period” means the Second Lien Standstill Period, the Third Lien
First Standstill Period and the Third Lien Second Standstill Period, as
applicable.

“Term Loan Second Lien Documents” means the Term Loan Credit Agreement, the
Second Lien Term Loans, the Term Loan Second Lien Security Documents and all
other loan documents, notes, guarantees, instruments and agreements governing or
evidencing the Term Loan Second Lien Obligations or any Second Lien Substitute
Facility.

“Term Loan Second Lien Obligations” means, with respect to any Grantor, any
obligations of such Grantor owed to any Term Loan Second Lien Secured Party (or
any of its Affiliates) in respect of the Term Loan Second Lien Documents.

“Term Loan Second Lien Secured Parties” means, at any time, the Second Lien
Collateral Trustee, the Second Lien Collateral Trustee, the trustees, agents and
other representatives of the holders of the Second Lien Term Loans (including
any holders of Obligations pursuant to supplements executed in connection with
the issuance of any Series of Second Lien Debt under the Term Loan Credit
Agreement) who maintains the transfer register for such Second Lien Term Loans
or such Series of Second Lien Debt, the beneficiaries of each indemnification
obligation undertaken by any Grantor under any Term Loan Second Lien Document
and each other holder of, or obligee in respect of, any Second

 

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Lien Term Loans, any holder or lender pursuant to any Term Loan Second Lien
Document outstanding at such time; provided that the Additional Second Lien
Secured Parties shall not be deemed Term Loan Second Lien Secured Parties.

“Term Loan Second Lien Security Documents” means the Term Loan Credit Agreement
(insofar as the same grants a Lien on the Collateral), the Second Lien
Collateral Trust Agreement, each agreement listed in Part B of Exhibit B hereto
and any other security agreements, pledge agreements, collateral assignments,
mortgages, deeds of trust, collateral agency agreements, control agreements, or
grants or transfers for security, now existing or entered into after the date
hereof, executed and delivered by W&T or any other Grantor creating (or
purporting to create) a Lien upon Collateral in favor of the Second Lien
Collateral Trustee (including any such agreements, assignments, mortgages, deeds
of trust and other documents or instruments associated with any Second Lien
Substitute Facility).

“Third Lien” means a Lien granted by a Third Lien Document to the Third Lien
Collateral Trustee, at any time, upon any Collateral by any Grantor to secure
Third Lien Obligations (including Liens on such Collateral under the security
documents associated with any Third Lien Substitute Facility).

“Third Lien Collateral” shall mean all “Collateral”, as defined in any Third
Lien Document, and any other assets of any Grantor now or at any time hereafter
subject to Liens which secure, but only to the extent securing, any Third Lien
Obligations.

“Third Lien Collateral Trust Agreement” means from and after the date of
execution and delivery of the Initial Third Lien Debt Facility, a collateral
trust agreement entered into among W&T, the other Grantors, the other Third Lien
Representatives and the Third Lien Collateral Trustee, as amended, restated,
adjusted, waived, renewed, extended, supplemented or otherwise modified from
time to time, in accordance with each applicable Third Lien Document.

“Third Lien Collateral Trustee” means from and after the date of execution and
delivery of the Initial Third Lien Debt Facility, the agent, collateral agent,
trustee or other representative of the lenders or other holders of the
indebtedness and other obligations evidence thereunder or governed thereby, in
each case, together with its successors in such capacity.

“Third Lien Debt” means indebtedness under the Initial Third Lien Debt Facility
and indebtedness incurred under any Additional Third Lien Documents that was
permitted to be incurred and secured in accordance with the Secured Debt
Documents (or as to which the lenders and other holders of Obligations under the
Third Lien Documents obtained an Officers’ Certificate at the time of incurrence
to the effect that such indebtedness was permitted to be incurred and secured by
all applicable Secured Debt Documents) and with respect to which the
requirements of Section 4.04(c) have been satisfied, and all indebtedness
incurred under any Third Lien Substitute Facility.

“Third Lien Documents” means the Initial Third Lien Documents, the Additional
Third Lien Documents and all other loan documents, notes, guarantees,
instruments and agreements governing or evidencing any Third Lien Substitute
Facility.

“Third Lien First Standstill Period” has the meaning assigned to such term in
Section 3.02(a)(ii).

“Third Lien Obligations” means Third Lien Debt and all other Obligations in
respect thereof. Notwithstanding any other provision hereof, the term “Third
Lien Obligations” will include accrued interest, fees, costs, and other charges
incurred under the Third Lien Documents, whether incurred before or after
commencement of an Insolvency or Liquidation Proceeding.

 

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“Third Lien Representative” means (a) in the case of the Initial Third Lien Debt
Facility, the Third Lien Collateral Trustee and (b) in the case of any Series of
Third Lien Debt, the trustee, agent or representative of the holders of such
Series of Third Lien Debt who (i) is appointed as a Third Lien Representative
(for purposes related to the administration of the security documents) pursuant
to the indenture, credit agreement or other agreement governing such Series of
Third Lien Debt, together with its successors in such capacity, and (ii) has
become party to the Third Lien Collateral Trust Agreement by executing a joinder
in the form required under the Third Lien Collateral Trust Agreement.

“Third Lien Second Standstill Period” has the meaning assigned to such term in
Section 3.02(b).

“Third Lien Secured Parties” means the Initial Third Lien Secured Parties and
the Additional Third Lien Secured Parties.

“Third Lien Security Documents” means the Initial Third Lien Secured Documents
and the Additional Third Lien Security Documents.

“Third Lien Substitute Facility” means any facility with respect to which the
requirements contained in Section 4.04(a) of this Agreement have been satisfied
and that is permitted to be incurred pursuant to the Priority Lien Documents and
the Second Lien Documents, the proceeds of which are used to, among other
things, Replace any Initial Third Lien Debt Facility and/or Additional Third
Lien Debt Facility then in existence. For the avoidance of doubt, no Third Lien
Substitute Facility shall be required to be evidenced by notes or other
instruments and may be a facility evidenced or governed by a credit agreement,
loan agreement, note agreement, promissory note, indenture or any other
agreement or instrument; provided that any such Third Lien Substitute Facility
shall be subject to the terms of this Agreement for all purposes (including the
lien priority as set forth herein as of the date hereof) as the other Liens
securing the Third Lien Obligations are subject to under this Agreement.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date hereof.

“Treasury Management Arrangement” means any agreement or other arrangement
governing the provision of treasury or cash management services, including
deposit accounts, overdraft, credit or debit card, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled
disbursement, lockbox, account reconciliation and reporting and trade finance
services and other cash management services.

“Voting Stock” of any Person as of any date means the Capital Stock of such
Person that is at the time entitled (without regard to the occurrence of any
contingency) to vote in the election of the Board of Directors of such Person.

“W&T” has the meaning assigned to such term in the preamble hereto.

ARTICLE II -

LIEN PRIORITIES

Section 2.01 Relative Priorities. (a) The grant of the Priority Liens pursuant
to the Priority Lien Documents, the grant of the Second Liens pursuant to the
Second Lien Documents and the grant of the Third Liens pursuant to the Third
Lien Documents create three separate and distinct Liens on the Collateral.

 

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(b)

(1) Notwithstanding anything contained in this Agreement, the Priority Lien
Documents, the Second Lien Documents, the Third Lien Documents or any other
agreement or instrument or operation of law to the contrary, or any other
circumstance whatsoever and irrespective of (i) how a Lien was acquired (whether
by grant, possession, statute, operation of law, subrogation, or otherwise),
(ii) the time, manner, or order of the grant, attachment or perfection of a
Lien, (iii) any conflicting provision of the New York UCC or other applicable
law, (iv) any defect in, or non-perfection, setting aside, or avoidance of, a
Lien or a Priority Lien Document, a Second Lien Document or a Third Lien
Document, (v) the modification of a Priority Lien Obligation, a Second Lien
Obligation or a Third Lien Obligation, or (vi) the subordination of a Lien on
Collateral securing a Priority Lien Obligation to a Lien securing another
obligation of W&T or other Person that is permitted under the Priority Lien
Documents as in effect on the date hereof or securing a DIP Financing, the
Second Lien Collateral Trustee, on behalf of itself and the other Second Lien
Secured Parties hereby agrees that (i) any Priority Lien on any Collateral now
or hereafter held by or for the benefit of any Priority Lien Secured Party shall
be senior in right, priority, operation, effect and all other respects to
(A) any and all Second Liens on any Collateral and (B) any and all Third Liens
on any Collateral, (ii) any Second Lien on any Collateral now or hereafter held
by or for the benefit of any Second Lien Secured Party shall be (A) junior and
subordinate in right, priority, operation, effect and all other respects to any
and all Priority Liens on any Collateral, in any case, subject to the Priority
Lien Cap as provided herein and (B) senior in right, priority, operation, effect
and all other respects to any and all Third Liens on any Collateral and
(iii) any Third Lien on any Collateral now or hereafter held by or for the
benefit of any Third Lien Secured Party shall be junior and subordinate in
right, priority, operation, effect and all other respects to (A) any and all
Priority Liens on any Collateral and (B) any and all Second Liens on any
Collateral.

(2) Notwithstanding anything contained in this Agreement, the Priority Lien
Documents, the Second Lien Documents, the Third Lien Documents or any other
agreement or instrument or operation of law to the contrary, or any other
circumstance whatsoever and irrespective of (i) how a Lien was acquired (whether
by grant, possession, statute, operation of law, subrogation, or otherwise),
(ii) the time, manner, or order of the grant, attachment or perfection of a
Lien, (iii) any conflicting provision of the New York UCC or other applicable
law, (iv) any defect in, or non-perfection, setting aside, or avoidance of, a
Lien or a Priority Lien Document, a Second Lien Document or a Third Lien
Document, (v) the modification of a Priority Lien Obligation, a Second Lien
Obligation or a Third Lien Obligation, or (vi) the subordination of a Lien on
Collateral securing a Priority Lien Obligation to a Lien securing another
obligation of W&T or other Person that is permitted under the Priority Lien
Documents as in effect on the date hereof or securing a DIP Financing the Third
Lien Collateral Trustee, on behalf of itself and the other Third Lien Secured
Parties, hereby agrees that (i) any Priority Lien on any Collateral now or
hereafter held by or for the benefit of any Priority Lien Secured Party shall be
senior in right, priority, operation, effect and all other respects to (A) any
and all Second Liens on any Collateral and (B) any and all Third Liens on any
Collateral, (ii) any Second Lien on any Collateral now or hereafter held by or
for the benefit of any Second Lien Secured Party shall be (A) junior and
subordinate in right, priority, operation, effect and all other respects to any
and all Priority Liens on any Collateral and (B) senior in right, priority,
operation, effect and all other respects to any and all Third Liens on any
Collateral and (iii) any Third Lien on any Collateral now or hereafter held by
or for the benefit of any Third Lien Secured Party shall be junior and
subordinate in right, priority, operation, effect and all other respects to
(A) any and all Priority Liens on any Collateral and (B) any and all Second
Liens on any Collateral.

(c) It is acknowledged that, subject in the case of any Second Lien Obligations
(but not in the case of any Third Lien Obligations) to the Priority Lien Cap (as
provided herein), (i) the aggregate amount of the Priority Lien Obligations may
be increased from time to time pursuant to the terms of the Priority Lien
Documents, (ii) a portion of the Priority Lien Obligations consists or may
consist of indebtedness that is revolving in nature, and the amount thereof that
may be outstanding at any

 

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time or from time to time may be increased or reduced and subsequently
reborrowed, and (iii) (A) the Priority Lien Documents may be replaced, restated,
supplemented, restructured or otherwise amended or modified from time to time
and (B) the Priority Lien Obligations may be increased, extended, renewed,
replaced, restated, supplemented, restructured, repaid, refunded, refinanced or
otherwise amended or modified from time to time, in the case of the foregoing
(A) and (B) all without affecting the subordination of the Second Liens or Third
Liens hereunder or the provisions of this Agreement defining the relative rights
of the Priority Lien Secured Parties, the Second Lien Secured Parties and the
Third Lien Secured Parties. The lien priorities provided for herein shall not be
altered or otherwise affected by any amendment, modification, supplement,
extension, increase, renewal, restatement or Replacement of either the Priority
Lien Obligations (or any part thereof), the Second Lien Obligations (or any part
thereof) or the Third Lien Obligations (or any part thereof), by the release of
any Collateral or of any guarantees for any Priority Lien Obligations or by any
action that any Secured Debt Representative or Secured Party may take or fail to
take in respect of any Collateral.

Section 2.02 Prohibition on Marshalling, Etc. (a) Until the Discharge of
Priority Lien Obligations, the Second Lien Collateral Trustee will not assert
any marshalling, appraisal, valuation, or other similar right that may otherwise
be available to a junior secured creditor.

(b) Until the Complete Discharge of Priority Lien Obligations and the Discharge
of Second Lien Obligations, the Third Lien Collateral Trustee will not assert
any marshalling, appraisal, valuation, or other similar right that may otherwise
be available to a junior secured creditor.

Section 2.03 No New Liens. The parties hereto agree that, (a) so long as the
Complete Discharge of Priority Lien Obligations has not occurred, none of the
Grantors shall, nor shall any Grantor permit any of its subsidiaries to,
(i) grant or permit any additional Liens on any asset of a Grantor to secure any
Third Lien Obligation, or take any action to perfect any additional Liens,
unless it has granted, or substantially concurrently therewith grants (or offers
to grant), a Lien on such asset of such Grantor to secure (A) the Priority Lien
Obligations and has taken all actions required to perfect such Liens and (B) the
Second Lien Obligations and has taken all actions required to perfect such
Liens; provided, however, the refusal or inability of the Priority Lien Agent or
the Second Lien Collateral Trustee to accept such Lien will not prevent the
Third Lien Collateral Trustee from taking the Lien, (ii) grant or permit any
additional Liens on any asset of a Grantor to secure any Second Lien Obligation,
or take any action to perfect any additional Liens, unless it has granted, or
substantially concurrently therewith grants (or offers to grant), a Lien on such
asset of such Grantor to secure (A) the Priority Lien Obligations and has taken
all actions required to perfect such Liens and (B) the Third Lien Obligations
and has taken all actions required to perfect such Liens; provided, however, the
refusal or inability of the Priority Lien Agent or the Third Lien Collateral
Trustee to accept such Lien will not prevent the Second Lien Collateral Trustee
from taking the Lien or (iii) grant or permit any additional Liens on any asset
of a Grantor to secure any Priority Lien Obligation, or take any action to
perfect any additional Liens, unless it has granted, or substantially
concurrently therewith grants (or offers to grant), a Lien on such asset of such
Grantor to secure (A) the Second Lien Obligations and has taken all actions
required to perfect such Liens and (B) the Third Lien Obligations and has taken
all actions required to perfect such Liens; provided, however, (i) no Grantor
shall be required to grant a Lien on any Excluded Assets and (ii) the refusal or
inability of the Second Lien Collateral Trustee or the Third Lien Collateral
Trustee to accept such Lien will not prevent the Priority Lien Agent from taking
the Lien and (b) after the Discharge of Priority Lien Obligations but prior to
the Discharge of Second Lien Obligations, none of the Grantors shall, nor shall
any Grantor permit any of its subsidiaries to, (i) grant or permit any
additional Liens on any asset of a Grantor to secure any Second Lien Obligation,
or take any action to perfect any additional Liens, unless it has granted, or
substantially concurrently therewith grants (or offers to grant), a Lien on such
asset of such Grantor to secure the Third Lien Obligations; provided, however,
the refusal or inability of the Third Lien Collateral Trustee to accept such
Lien will not prevent the Second Lien Collateral Trustee from

 

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taking the Lien or (ii) grant or permit any additional Liens on any asset of a
Grantor to secure any Third Lien Obligations unless it has granted, or
substantially concurrently therewith grants (or offers to grant), a Lien on such
asset of a Grantor to secure the Second Lien Obligations and has taken all
actions required to perfect such Liens; provided, however, the refusal or
inability of the Second Lien Collateral Trustee to accept such Lien will not
prevent the Third Lien Collateral Trustee from taking the Lien, with each such
Lien as described in clauses (a) and (b) of this Section 2.03 to be subject to
the provisions of this Agreement. To the extent that the provisions of the
immediately preceding sentence are not complied with for any reason, without
limiting any other right or remedy available to the Priority Lien Agent, the
other Priority Lien Secured Parties, the Second Lien Collateral Trustee or the
other Second Lien Secured Parties, each of the Second Lien Collateral Trustee,
for itself and on behalf of the other Second Lien Secured Parties and the Third
Lien Collateral Trustee, for itself and on behalf of the other Third Lien
Secured Parties, agrees that any amounts received by or distributed to any
Second Lien Secured Party or Third Lien Secured Party, as applicable, pursuant
to or as a result of any Lien granted in contravention of this Section 2.03
shall be subject to Section 3.05(b).

Section 2.04 Similar Collateral and Agreements. The parties hereto acknowledge
and agree that it is their intention that the Priority Lien Collateral, the
Second Lien Collateral and the Third Lien Collateral be identical (other than
with respect to Excluded Assets of the type described in clause (i) of the
definition thereof, which shall not constitute Second Lien Collateral or Third
Lien Collateral). In furtherance of the foregoing, the parties hereto agree
(a) to cooperate in good faith in order to determine, upon any reasonable
request by the Priority Lien Agent, the Second Lien Collateral Trustee or the
Third Lien Collateral Trustee, the specific assets included in the Priority Lien
Collateral, the Second Lien Collateral and the Third Lien Collateral, the steps
taken to perfect the Priority Liens, the Second Liens and the Third Liens
thereon and the identity of the respective parties obligated under the Priority
Lien Documents, the Second Lien Documents and the Third Lien Documents in
respect of the Priority Lien Obligations, the Second Lien Obligations and the
Third Lien Obligations, respectively, (b) that the Second Lien Security
Documents creating Liens on the Collateral shall be in all material respects the
same forms of documents as the respective Priority Lien Security Documents
creating Liens on the Collateral other than (i) with respect to the priority
nature of the Liens created thereunder in such Collateral, (ii) such other
modifications to such Second Lien Security Documents which are less restrictive
than the corresponding Priority Lien Security Documents, (iii) provisions in the
Second Lien Security Documents which are solely applicable to the rights and
duties of the Second Lien Collateral Trustee and/or the Second Lien Collateral
Trustee, and (iv) with such deletions or modifications of representations,
warranties and covenants as are customary with respect to security documents
establishing Liens securing publicly traded debt securities, (c) that the Third
Lien Security Documents creating Liens on the Collateral shall be in all
material respects the same forms of documents as the respective Priority Lien
Security Documents and Second Lien Security Documents creating Liens on the
Collateral other than (i) with respect to the priority nature of the Liens
created thereunder in such Collateral, (ii) such other modifications to such
Third Lien Security Documents which are less restrictive than the corresponding
Priority Lien Security Documents and Second Lien Security Documents,
(iii) provisions in the Third Lien Security Documents which are solely
applicable to the rights and duties of the Third Lien Collateral Trustee, and
(iv) with such deletions or modifications of representations, warranties and
covenants as are customary with respect to security documents establishing Liens
securing publicly traded debt securities, (d) that at no time shall there be any
Grantor that is an obligor in respect of the Second Lien Obligations that is not
also an obligor in respect of the Priority Lien Obligations and (e) that at no
time shall there be any Grantor that is an obligor in respect of the Third Lien
Obligations that is not also an obligor in respect of the Priority Lien
Obligations and the Second Lien Obligations.

Section 2.05 No Duties of Priority Lien Agent. Each of the Second Lien
Collateral Trustee, for itself and on behalf of each Second Lien Secured Party,
and the Third Lien Collateral Trustee, for itself and on behalf of each Third
Lien Secured Party, acknowledges and agrees that neither the Priority

 

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Lien Agent nor any other Priority Lien Secured Party shall have any duties or
other obligations to any such Second Lien Secured Party or Third Lien Secured
Party with respect to any Collateral, other than to transfer to the Second Lien
Collateral Trustee any remaining Collateral and any proceeds of the sale or
other Disposition of any such Collateral remaining in its possession following
the associated Discharge of Priority Lien Obligations or Complete Discharge of
Priority Lien Obligations, as applicable, in each case without representation or
warranty on the part of the Priority Lien Agent or any Priority Lien Secured
Party. In furtherance of the foregoing, each Second Lien Secured Party
acknowledges and agrees that until the Discharge of Priority Lien Obligations
(subject to the terms of Section 3.02, including the rights of the Second Lien
Secured Parties following the expiration of any applicable Standstill Period),
and each Third Lien Secured Party acknowledges and agrees that until Complete
Discharge of Priority Lien Obligations (subject to the terms of Section 3.02,
including the rights of the Third Lien Secured Parties following the expiration
of any applicable Standstill Period), the Priority Lien Agent shall be entitled,
for the benefit of the Priority Lien Secured Parties, to sell, transfer or
otherwise Dispose of or deal with such Collateral, as provided herein and in the
Priority Lien Documents, without regard to (a) any Second Lien or any rights to
which the Second Lien Collateral Trustee or any Second Lien Secured Party would
otherwise be entitled as a result of such Second Lien or (b) any Third Lien or
any rights to which the Third Lien Collateral Trustee or any Third Lien Secured
Party would otherwise be entitled as a result of such Third Lien. Without
limiting the foregoing, each Second Lien Secured Party and Third Lien Secured
Party agrees that neither the Priority Lien Agent nor any other Priority Lien
Secured Party shall have any duty or obligation first to marshal or realize upon
any type of Collateral, or to sell, Dispose of or otherwise liquidate all or any
portion of such Collateral, in any manner that would maximize the return to the
Second Lien Secured Parties or the Third Lien Secured Parties, notwithstanding
that the order and timing of any such realization, sale, Disposition or
liquidation may affect the amount of proceeds actually received by the Second
Lien Secured Parties or the Third Lien Secured Parties, as applicable, from such
realization, sale, Disposition or liquidation. Each of the Second Lien Secured
Parties and Third Lien Secured Parties waives any claim such Second Lien Secured
Party or Third Lien Secured Party may now or hereafter have against the Priority
Lien Agent or any other Priority Lien Secured Party arising out of any actions
which the Priority Lien Agent or the Priority Lien Secured Parties take or omit
to take (including actions with respect to the creation, perfection or
continuation of Liens on any Collateral, actions with respect to the foreclosure
upon, sale, release or depreciation of, or failure to realize upon, any of the
Collateral, and actions with respect to the collection of any claim for all or
any part of the Priority Lien Obligations from any account debtor, guarantor or
any other party) in accordance with this Agreement and the Priority Lien
Documents or the valuation, use, protection or release of any security for the
Priority Lien Obligations.

Section 2.06 No Duties of Second Lien Collateral Trustee. The Third Lien
Collateral Trustee, for itself and on behalf of each Third Lien Secured Party,
acknowledges and agrees that neither the Second Lien Collateral Trustee nor any
other Second Lien Secured Party shall have any duties or other obligations to
such Third Lien Secured Party with respect to any Collateral, other than to
transfer to the Third Lien Collateral Trustee any remaining Collateral and any
proceeds of the sale or other Disposition of any such Collateral remaining in
its possession following the associated Discharge of Second Lien Obligations
(provided such discharge of Second Lien Obligations occurs after the Complete
Discharge of Priority Lien Obligations), in each case without representation or
warranty on the part of the Second Lien Collateral Trustee or any Second Lien
Secured Party. In furtherance of the foregoing, each Third Lien Secured Party
acknowledges and agrees that after the Discharge of Priority Lien Obligations
and until the Discharge of Second Lien Obligations (subject to the terms of
Section 3.02, including the rights of the Third Lien Secured Parties following
expiration of the Third Lien Second Standstill Period), the Second Lien
Collateral Trustee shall be entitled, for the benefit of the Second Lien Secured
Parties, to sell, transfer or otherwise Dispose of or deal with such Collateral,
as provided herein and in the Second Lien Documents, without regard to any Third
Lien or any rights to which the Third Lien Collateral Trustee or any Third Lien
Secured Party would otherwise be entitled as a result of such Third
Lien. Without

 

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limiting the foregoing, each Third Lien Secured Party agrees that neither the
Second Lien Collateral Trustee nor any other Second Lien Secured Party shall
have any duty or obligation first to marshal or realize upon any type of
Collateral, or to sell, Dispose of or otherwise liquidate all or any portion of
such Collateral, in any manner that would maximize the return to the Third Lien
Secured Parties, notwithstanding that the order and timing of any such
realization, sale, Disposition or liquidation may affect the amount of proceeds
actually received by the Third Lien Secured Parties from such realization, sale,
Disposition or liquidation. Following the Discharge of Second Lien Obligations,
the Third Lien Collateral Trustee and the other Third Lien Secured Parties may,
subject to any other agreements binding on the Third Lien Collateral Trustee or
such other Third Lien Secured Parties, assert their rights under the New York
UCC or otherwise to any proceeds remaining following a sale, Disposition or
other liquidation of Collateral by, or on behalf of the Third Lien Secured
Parties. Each of the Third Lien Secured Parties waives any claim such Third Lien
Secured Party may now or hereafter have against the Second Lien Collateral
Trustee or any other Second Lien Secured Party arising out of any actions which
the Second Lien Collateral Trustee or the Second Lien Secured Parties take or
omit to take (including actions with respect to the creation, perfection or
continuation of Liens on any Collateral, actions with respect to the foreclosure
upon, sale, release or depreciation of, or failure to realize upon, any of the
Collateral, and actions with respect to the collection of any claim for all or
any part of the Second Lien Obligations from any account debtor, guarantor or
any other party) in accordance with this Agreement and the Second Lien Documents
or the valuation, use, protection or release of any security for the Second Lien
Obligations.

ARTICLE III -

ENFORCEMENT RIGHTS; PURCHASE OPTION

Section 3.01 Limitation on Enforcement Action. (a) Prior to (i) the Discharge of
Priority Lien Obligations, the Second Lien Collateral Trustee, for itself and on
behalf of each Second Lien Secured Party, and (ii) the Complete Discharge of
Priority Lien Obligations, the Third Lien Collateral Trustee, for itself and on
behalf of each Third Lien Secured Party, hereby agrees that, subject to
Section 3.05(b) and Section 4.07, none of the Second Lien Collateral Trustee,
any other Second Lien Secured Party, the Third Lien Collateral Trustee or any
other Third Lien Secured Party, as applicable, shall commence any judicial or
nonjudicial foreclosure proceedings with respect to, seek to have a trustee,
receiver, liquidator or similar official appointed for or over, attempt any
action to take possession of, exercise any right, remedy or power with respect
to, or otherwise take any action to enforce its interest in or realize upon, or
take any other action available to it in respect of, any Collateral under any
Second Lien Security Document or Third Lien Security Document, as applicable,
applicable law or otherwise (including but not limited to any right of setoff),
it being agreed that only the Priority Lien Agent, acting in accordance with the
applicable Priority Lien Documents, shall have the exclusive right (and whether
or not any Insolvency or Liquidation Proceeding has been commenced), to take any
such actions or exercise any such remedies, in each case, without any
consultation with or the consent of the Second Lien Collateral Trustee, any
other Second Lien Secured Party, the Third Lien Collateral Trustee or any other
Third Lien Secured Party. In exercising rights and remedies with respect to the
Collateral, the Priority Lien Agent and the other Priority Lien Secured Parties
may enforce the provisions of the Priority Lien Documents and exercise remedies
thereunder, all in such order and in such manner as they may determine in their
sole discretion and regardless of whether such exercise and enforcement is
adverse to the interest of any Second Lien Secured Party or Third Lien Secured
Party. Such exercise and enforcement shall include the rights of an agent
appointed by them to Dispose of Collateral upon foreclosure, to incur expenses
in connection with any such Disposition and to exercise all the rights and
remedies of a secured creditor under the Uniform Commercial Code, the Bankruptcy
Code or any other Bankruptcy Law. Without limiting the generality of the
foregoing, the Priority Lien Agent will have the exclusive right to deal with
that portion of the Collateral consisting of deposit accounts and securities
accounts (collectively “Accounts”), including exercising rights under control
agreements with respect to such Accounts. Each of the Second Lien Collateral
Trustee, for itself and on behalf of the other Second Lien Secured Parties and
the Third

 

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Lien Collateral Trustee, for itself and on behalf of the other Third Lien
Secured Parties, hereby acknowledges and agrees that no covenant, agreement or
restriction contained in any Second Lien Security Document, any other Second
Lien Document, any Third Lien Security Document or any other Third Lien
Document, as applicable, shall be deemed to restrict in any way the rights and
remedies of the Priority Lien Agent or the other Priority Lien Secured Parties
with respect to the Collateral as set forth in this Agreement. Notwithstanding
the foregoing, subject to Section 3.05, each of the Second Lien Collateral
Trustee, on behalf of the Second Lien Secured Parties, and the Third Lien
Collateral Trustee, on behalf of the Third Lien Secured Parties, may, but will
have no obligation to, take all such actions (not adverse to the Priority Liens
or the rights of the Priority Lien Agent and the Priority Lien Secured Parties)
it deems necessary to perfect or continue the perfection of the Second Liens in
the Collateral or to create, preserve or protect (but not enforce) the Second
Liens in the Collateral or to perfect or continue the perfection of the Third
Liens in the Collateral or to create, preserve or protect (but not enforce) the
Third Liens in the Collateral, as applicable. Nothing herein shall limit the
right or ability of the Second Lien Secured Parties to (i) purchase (by credit
bid or otherwise) all or any portion of the Collateral in connection with any
enforcement of remedies by the Priority Lien Agent to the extent that, and so
long as, the Priority Lien Secured Parties receive payment in full in cash of
all Priority Lien Obligations (other than Excess Priority Lien Obligations)
after giving effect thereto or (ii) file a proof of claim with respect to the
Second Lien Obligations. Nothing herein shall limit the right or ability of the
Third Lien Secured Parties to (i) purchase (by credit bid or otherwise) all or
any portion of the Collateral in connection with any enforcement of remedies by
the Priority Lien Agent to the extent that, and so long as, the Priority Lien
Secured Parties receive payment in full in cash of all Priority Lien Obligations
after giving effect thereto or (ii) file a proof of claim with respect to the
Third Lien Obligations.

(b) Following the Discharge of Priority Lien Obligations but prior to the
Discharge of Second Lien Obligations, the Third Lien Collateral Trustee, for
itself and on behalf of each Third Lien Secured Party, hereby agrees that,
subject to Section 3.05(b) and Section 4.07, neither the Third Lien Collateral
Trustee nor any other Third Lien Secured Party shall commence any judicial or
nonjudicial foreclosure proceedings with respect to, seek to have a trustee,
receiver, liquidator or similar official appointed for or over, attempt any
action to take possession of, exercise any right, remedy or power with respect
to, or otherwise take any action to enforce its interest in or realize upon, or
take any other action available to it in respect of, any Collateral under any
Third Lien Security Document, applicable law or otherwise (including but not
limited to any right of setoff), it being agreed that only the Second Lien
Collateral Trustee, acting in accordance with the applicable Second Lien
Documents, shall have the exclusive right (and whether or not any Insolvency or
Liquidation Proceeding has been commenced), to take any such actions or exercise
any such remedies, in each case, without any consultation with or the consent of
the Third Lien Collateral Trustee or any other Third Lien Secured Party. In
exercising rights and remedies with respect to the Collateral, the Second Lien
Collateral Trustee and the other Second Lien Secured Parties may enforce the
provisions of the Second Lien Documents and exercise remedies thereunder, all in
such order and in such manner as they may determine in their sole discretion and
regardless of whether such exercise and enforcement is adverse to the interest
of any Third Lien Secured Party. Such exercise and enforcement shall include the
rights of an agent appointed by them to Dispose of Collateral upon foreclosure,
to incur expenses in connection with any such Disposition and to exercise all
the rights and remedies of a secured creditor under the Uniform Commercial Code,
the Bankruptcy Code or any other Bankruptcy Law. Without limiting the generality
of the foregoing, following the Discharge of Priority Lien Obligations but prior
to Discharge of Second Lien Obligations, the Second Lien Collateral Trustee will
have the exclusive right to deal with the Accounts, including exercising rights
under control agreements with respect to such Accounts. The Third Lien
Collateral Trustee, for itself and on behalf of the other Third Lien Secured
Parties, hereby acknowledges and agrees that no covenant, agreement or
restriction contained in any Third Lien Security Document or any other Third
Lien Document shall be deemed to restrict in any way the rights and remedies of
the Second Lien Collateral Trustee or the other Second Lien Secured Parties with
respect to the Collateral as set forth in this

 

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Agreement. Notwithstanding the foregoing, subject to Section 3.05, the Third
Lien Collateral Trustee may, but will have no obligation to, on behalf of the
Third Lien Secured Parties, take all such actions (not adverse to the Second
Liens or the rights of the Second Lien Collateral Trustee and the Second Lien
Secured Parties) it deems necessary to perfect or continue the perfection of the
Third Liens in the Collateral or to create, preserve or protect (but not
enforce) the Third Liens in the Collateral.

Section 3.02 Standstill Periods; Permitted Enforcement Action. (a)
Notwithstanding the foregoing Section 3.01, both before and during an Insolvency
or Liquidation Proceeding:

(1) prior to Discharge of Priority Lien Obligations, after a period of 180 days
has elapsed (which period will be tolled during any period in which the Priority
Lien Agent is not entitled, on behalf of the Priority Lien Secured Parties, to
enforce or exercise any rights or remedies with respect to any Collateral as a
result of (A) any injunction issued by a court of competent jurisdiction or
(B) the automatic stay or any other stay in any Insolvency or Liquidation
Proceeding) since the date on which the Second Lien Collateral Trustee has
delivered to the Priority Lien Agent written notice of the acceleration of any
Second Lien Debt (the “Second Lien Standstill Period”), the Second Lien
Collateral Trustee and the other Second Lien Secured Parties may enforce or
exercise any rights or remedies with respect to any Collateral; provided,
however that notwithstanding the expiration of the Second Lien Standstill Period
or anything in the Second Lien Collateral Trust Agreement to the contrary, in no
event may the Second Lien Collateral Trustee or any other Second Lien Secured
Party enforce or exercise any rights or remedies with respect to any Collateral,
or commence, join with any Person at any time in commencing, or petition for or
vote in favor of any resolution for, any such action or proceeding, if the
Priority Lien Agent on behalf of the Priority Lien Secured Parties or any other
Priority Lien Secured Party shall have commenced, and shall be diligently
pursuing (or shall have sought or requested relief from, or modification of, the
automatic stay or any other stay or other prohibition in any Insolvency or
Liquidation Proceeding to enable the commencement and pursuit thereof), the
enforcement or exercise of any rights or remedies with respect to the Collateral
or any such action or proceeding (prompt written notice thereof to be given to
the Second Lien Representatives by the Priority Lien Agent); provided, further,
that, at any time after the expiration of the Second Lien Standstill Period, if
neither the Priority Lien Agent nor any other Priority Lien Secured Party shall
have commenced and be diligently pursuing (or shall have sought or requested
relief from, or modification of, the automatic stay or any other stay or other
prohibition in any Insolvency or Liquidation Proceeding to enable the
commencement and pursuit thereof) the enforcement or exercise of any rights or
remedies with respect to any material portion of the Collateral or any such
action or proceeding, and the Second Lien Collateral Trustee shall have
commenced the enforcement or exercise of any rights or remedies with respect to
any material portion of the Collateral or any such action or proceeding, then
for so long as the Second Lien Collateral Trustee is diligently pursuing such
rights or remedies, none of any Priority Lien Secured Party, the Priority Lien
Agent, any Third Lien Secured Party or the Third Lien Collateral Trustee shall
take any action of a similar nature with respect to such Collateral, or
commence, join with any Person at any time in commencing, or petition for or
vote in favor of any resolution for, any such action or proceeding; and

(2) prior to Complete Discharge of Priority Lien Obligations, after a period
of 270 days has elapsed (which period will be tolled during any period in which
the Priority Lien Agent is not entitled, on behalf of the Priority Lien Secured
Parties, to enforce or exercise any rights or remedies with respect to any
Collateral as a result of (A) any injunction issued by a court of competent
jurisdiction or (B) the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding) since the date on which the Third Lien Collateral
Trustee has delivered to the Priority Lien Agent written notice of the
acceleration of any Third Lien Debt (the “Third Lien First Standstill Period”),
the Third Lien Collateral Trustee and the other Third Lien Secured Parties may
enforce or exercise any rights or remedies with respect to any Collateral;
provided, however that notwithstanding the expiration of the Third Lien First
Standstill Period or anything in the Third Lien Collateral Trust Agreement to
the contrary, in no event

 

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may the Third Lien Collateral Trustee or any other Third Lien Secured Party
enforce or exercise any rights or remedies with respect to any Collateral, or
commence, join with any Person at any time in commencing, or petition for or
vote in favor of any resolution for, any such action or proceeding, if (I) the
Priority Lien Agent on behalf of the Priority Lien Secured Parties or any other
Priority Lien Secured Party or (II) the Second Lien Collateral Trustee on behalf
of the Second Lien Secured Parties or any other Second Lien Secured Party shall
have commenced, and shall be diligently pursuing (or shall have sought or
requested relief from, or modification of, the automatic stay or any other stay
in any Insolvency or Liquidation Proceeding to enable the commencement and
pursuit thereof), the enforcement or exercise of any rights or remedies with
respect to the Collateral or any such action or proceeding (prompt written
notice thereof to be given to the Third Lien Representatives by the Priority
Lien Agent or the Second Lien Collateral Trustee, as applicable); provided,
further, that, at any time after the expiration of the Third Lien First
Standstill Period, if none of any Priority Lien Secured Party, the Priority Lien
Agent, any Second Lien Secured Party or the Second Lien Collateral Trustee shall
have commenced and be diligently pursuing the enforcement or exercise of any
rights or remedies with respect to any material portion of the Collateral or any
such action or proceeding, and the Third Lien Collateral Trustee shall have
commenced the enforcement or exercise of any rights or remedies with respect to
any material portion of the Collateral or any such action or proceeding, then
for so long as the Third Lien Collateral Trustee is diligently pursuing such
rights or remedies, none of any Priority Lien Secured Party, the Priority Lien
Agent, any Second Lien Secured Party or the Second Lien Collateral Trustee shall
take any action of a similar nature with respect to such Collateral, or
commence, join with any Person at any time in commencing, or petition for or
vote in favor of any resolution for, any such action or proceeding.

(b) Following the Discharge of Priority Lien Obligations but prior to the
Discharge of Second Lien Obligations and notwithstanding the foregoing
Section 3.01, but subject to the foregoing Section 3.02(a)(ii) both before and
during an Insolvency or Liquidation Proceeding, after a period of 180 days has
elapsed (which period will be tolled during any period in which the Second Lien
Collateral Trustee is not entitled, on behalf of the Second Lien Secured
Parties, to enforce or exercise any rights or remedies with respect to any
Collateral as a result of (A) any injunction issued by a court of competent
jurisdiction or (B) the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding) since the date on which the Third Lien Collateral
Trustee has delivered to the Second Lien Collateral Trustee written notice of
the acceleration of any Third Lien Debt (the “Third Lien Second Standstill
Period”), the Third Lien Collateral Trustee and the other Third Lien Secured
Parties may enforce or exercise any rights or remedies with respect to any
Collateral; provided, however that notwithstanding the expiration of the Third
Lien Second Standstill Period or anything in the Third Lien Collateral Trust
Agreement to the contrary, in no event may the Third Lien Collateral Trustee or
any other Third Lien Secured Party enforce or exercise any rights or remedies
with respect to any Collateral, or commence, join with any Person at any time in
commencing, or petition for or vote in favor of any resolution for, any such
action or proceeding, if the Second Lien Collateral Trustee on behalf of the
Second Lien Secured Parties or any other Second Lien Secured Party shall have
commenced, and shall be diligently pursuing (or shall have sought or requested
relief from, or modification of, the automatic stay or any other stay in any
Insolvency or Liquidation Proceeding to enable the commencement and pursuit
thereof), the enforcement or exercise of any rights or remedies with respect to
the Collateral or any such action or proceeding (prompt written notice thereof
to be given to the Third Lien Representatives by the Second Lien Collateral
Trustee); provided, further, that, at any time after the expiration of the Third
Lien Second Standstill Period, but subject to the foregoing Section 3.02(a)(ii)
if neither the Second Lien Collateral Trustee nor any other Second Lien Secured
Party shall have commenced and be diligently pursuing the enforcement or
exercise of any rights or remedies with respect to any material portion of the
Collateral or any such action or proceeding, and the Third Lien Collateral
Trustee shall have commenced the enforcement or exercise of any rights or
remedies with respect to any material portion of the Collateral or any such
action or proceeding, then for so long as the Third Lien Collateral Trustee is
diligently pursuing such rights or remedies, neither any Second Lien Secured
Party nor the Second Lien

 

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Collateral Trustee shall take any action of a similar nature with respect to
such Collateral, or commence, join with any Person at any time in commencing, or
petition for or vote in favor of any resolution for, any such action or
proceeding.

Section 3.03 Insurance. (a) Unless and until the Complete Discharge of Priority
Lien Obligations has occurred (subject to the terms of Section 3.02, including
the rights of the Second Lien Secured Parties and the Third Lien Secured Parties
following expiration of any applicable Standstill Period), the Priority Lien
Agent shall have the sole and exclusive right, subject to the rights of the
Grantors under the Priority Lien Documents, to adjust and settle claims in
respect of Collateral under any insurance policy in the event of any loss
thereunder and to approve any award granted in any condemnation or similar
proceeding (or any deed in lieu of condemnation) affecting the Collateral;
provided however that notwithstanding the foregoing, after the Discharge of
Priority Lien Obligations but prior to Discharge of Second Lien Obligations, the
Second Lien Collateral Trustee shall have such sole and exclusive right
described in the foregoing. Unless and until the Complete Discharge of Priority
Lien Obligations has occurred, and subject to the rights of the Grantors under
the Priority Lien Documents, all proceeds of any such policy and any such award
(or any payments with respect to a deed in lieu of condemnation) in respect to
the Collateral shall be paid to the Priority Lien Agent pursuant to the terms of
the Priority Lien Documents (including for purposes of cash collateralization of
commitments, letters of credit and Hedging Obligations); provided that
notwithstanding the foregoing, after Discharge of Priority Lien Obligations but
prior to Discharge of Second Lien Obligations, such proceeds shall be paid to
the Second Lien Collateral Trustee pursuant to the Second Lien Documents. If the
Second Lien Collateral Trustee, any Second Lien Secured Party, the Third Lien
Collateral Trustee or any Third Lien Secured Party shall, at any time, receive
any proceeds of any such insurance policy or any such award or payment in
contravention of the foregoing, it shall pay such proceeds over to the Priority
Lien Agent or the Second Lien Collateral Trustee, as applicable. In addition, if
by virtue of being named as an additional insured or loss payee of any insurance
policy of any Grantor covering any of the Collateral, the Second Lien Collateral
Trustee, any other Second Lien Secured Party, the Third Lien Collateral Trustee
or any other Third Lien Secured Party shall have the right to adjust or settle
any claim under any such insurance policy, then unless and until (i) in the case
of the Second Lien Collateral Trustee and the Second Lien Secured Parties, the
Discharge of Priority Lien Obligations has occurred and (ii) in the case of the
Third Lien Collateral Trustee and the Third Lien Secured Parties the Complete
Discharge of Priority Lien Obligations has occurred, the Second Lien Collateral
Trustee, any such Second Lien Secured Party, the Third Lien Collateral Trustee
and any such Third Lien Secured Party shall follow the instructions of the
Priority Lien Agent, or of the Grantors under the Priority Lien Documents to the
extent the Priority Lien Documents grant such Grantors the right to adjust or
settle such claims, with respect to such adjustment or settlement (subject to
the terms of Section 3.02, including the rights of the Second Lien Secured
Parties and the Third Lien Secured Parties following expiration of any
applicable Standstill Period); provided however that notwithstanding the
foregoing, after Discharge of Priority Lien Obligations but prior to Discharge
of Second Lien Obligations, the Third Lien Collateral Agent and the Third Lien
Secured Parties shall follow the instructions of the Second Lien Collateral
Trustee with respect thereto.

(b) Following the Discharge of Priority Lien Obligations but prior to the
Discharge of Second Lien Obligations (subject to the terms of Section 3.02,
including the rights of the Third Lien Secured Parties following expiration of
the Third Lien Second Standstill Period), the Second Lien Collateral Trustee
shall have the sole and exclusive right, subject to the rights of the Grantors
under the Second Lien Documents, to adjust and settle claims in respect of
Collateral under any insurance policy in the event of any loss thereunder and to
approve any award granted in any condemnation or similar proceeding (or any deed
in lieu of condemnation) affecting the Collateral. Unless and until the
Discharge of Second Lien Obligations has occurred, and subject to the rights of
the Grantors under the Second Lien Documents, all proceeds of any such policy
and any such award (or any payments with respect to a deed in lieu of
condemnation) in respect to the Collateral shall be paid to the Second Lien
Collateral Trustee

 

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pursuant to the terms of the Second Lien Documents and, after the Discharge of
Second Lien Obligations has occurred, but prior to Complete Discharge of
Priority Lien Obligations, to the Priority Lien Agent to the extent required
under the Priority Lien Documents, then to the Third Lien Collateral Trustee to
the extent required under the Third Lien Documents and then, to the extent no
Priority Lien Obligations or Third Lien Obligations are outstanding, to the
owner of the subject property, or to such other Person as may be entitled
thereto or as a court of competent jurisdiction may otherwise direct. If the
Third Lien Collateral Trustee or any Third Lien Secured Party shall, at any time
following the Discharge of Priority Lien Obligations but prior to the Discharge
of Second Lien Obligations, receive any proceeds of any such insurance policy or
any such award or payment in contravention of the foregoing, it shall pay such
proceeds over to the Second Lien Collateral Trustee. In addition, if by virtue
of being named as an additional insured or loss payee of any insurance policy of
any Grantor covering any of the Collateral, the Third Lien Collateral Trustee or
any other Third Lien Secured Party shall have the right to adjust or settle any
claim under any such insurance policy, then following Discharge of Priority Lien
Obligations unless and until the Discharge of Second Lien Obligations has
occurred, the Third Lien Collateral Trustee and any such Third Lien Secured
Party shall follow the instructions of the Second Lien Collateral Trustee, or of
the Grantors under the Second Lien Documents to the extent the Second Lien
Documents grant such Grantors the right to adjust or settle such claims, with
respect to such adjustment or settlement (subject to the terms of Section 3.02,
including the rights of the Third Lien Secured Parties following expiration of
the Third Lien Second Standstill Period).

Section 3.04 Notification of Release of Collateral. Each of the Priority Lien
Agent, the Second Lien Collateral Trustee and the Third Lien Collateral Trustee
shall give the other Secured Debt Representatives prompt written notice of the
Disposition by it of, and Release by it of the Lien on, any Collateral. Such
notice shall describe in reasonable detail the subject Collateral, the parties
involved in such Disposition or Release, the place, time manner and method
thereof, and the consideration, if any, received therefor; provided, however,
that the failure to give any such notice shall not in and of itself in any way
impair the effectiveness of any such Disposition or Release.

Section 3.05 No Interference; Payment Over.

(a) No Interference. (1) The Second Lien Collateral Trustee, for itself and on
behalf of each Second Lien Secured Party, agrees that each Second Lien Secured
Party (i) will not take or cause to be taken any action the purpose or effect of
which is, or could be, to make any Second Lien pari passu with, or to give such
Second Lien Secured Party any preference or priority relative to, any Priority
Lien with respect to the Collateral or any part thereof, (ii) will not challenge
or question in any proceeding the validity or enforceability of any Priority
Lien Obligations or Priority Lien Document, or the validity, attachment,
perfection or priority of any Priority Lien, or the validity or enforceability
of the priorities, rights or duties established by the provisions of this
Agreement, (iii) will not take or cause to be taken any action the purpose or
effect of which is, or could be, to interfere, hinder or delay, in any manner,
whether by judicial proceedings or otherwise, any sale, transfer or other
Disposition of the Collateral by any Priority Lien Secured Party or the Priority
Lien Agent acting on their behalf, (iv) shall have no right to (A) direct the
Priority Lien Agent or any other Priority Lien Secured Party to exercise any
right, remedy or power with respect to any Collateral or (B) consent to the
exercise by the Priority Lien Agent or any other Priority Lien Secured Party of
any right, remedy or power with respect to any Collateral, (v) will not
institute any suit or assert in any suit or Insolvency or Liquidation Proceeding
any claim against the Priority Lien Agent or other Priority Lien Secured Party
seeking damages from or other relief by way of specific performance,
instructions or otherwise with respect to, and neither the Priority Lien Agent
nor any other Priority Lien Secured Party shall be liable for, any action taken
or omitted to be taken by the Priority Lien Agent or other Priority Lien Secured
Party with respect to any Priority Lien Collateral, (vi) will not seek, and
hereby waives any right, to have any Collateral or any part thereof marshaled
upon any foreclosure or other Disposition of such Collateral, (vii) will not
attempt, directly or indirectly,

 

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whether by judicial proceedings or otherwise, to challenge the enforceability of
any provision of this Agreement, (viii) will not object to, and hereby waives
any right to object to, forbearance by the Priority Lien Agent or any Priority
Lien Secured Party, and (ix) will not assert, and hereby waives, to the fullest
extent permitted by law, any right to demand, request, plead or otherwise assert
or claim the benefit of any marshalling, appraisal, valuation or other similar
right that may be available under applicable law with respect to the Collateral
or any similar rights a junior secured creditor may have under applicable law;
and

(b) The Third Lien Collateral Trustee, for itself and on behalf of each Third
Lien Secured Party, agrees that each Third Lien Secured Party (i) will not take
or cause to be taken any action the purpose or effect of which is, or could be,
to make any Third Lien pari passu with, or to give such Third Lien Secured Party
any preference or priority relative to, any Priority Lien or Second Lien with
respect to the Collateral or any part thereof, (ii) will not challenge or
question in any proceeding the validity or enforceability of any Priority Lien
Obligations, Priority Lien Document, Second Lien Obligations or Second Lien
Document, or the validity, attachment, perfection or priority of any Priority
Lien or Second Lien, or the validity or enforceability of the priorities, rights
or duties established by the provisions of this Agreement, (iii) will not take
or cause to be taken any action the purpose or effect of which is, or could be,
to interfere, hinder or delay, in any manner, whether by judicial proceedings or
otherwise, any sale, transfer or other Disposition of the Collateral by any
Priority Lien Secured Party or the Priority Lien Agent acting on their behalf or
by any Second Lien Secured Party or the Second Lien Collateral Trustee acting on
their behalf, (iv) shall have no right to (A) direct the Priority Lien Agent,
any other Priority Lien Secured Party, the Second Lien Collateral Trustee or any
other Second Lien Secured Party to exercise any right, remedy or power with
respect to any Collateral or (B) consent to the exercise by the Priority Lien
Agent, any other Priority Lien Secured Party, the Second Lien Collateral Trustee
or any other Second Lien Secured Party of any right, remedy or power with
respect to any Collateral, (v) will not institute any suit or assert in any suit
or Insolvency or Liquidation Proceeding any claim against the Priority Lien
Agent, any other Priority Lien Secured Party, the Second Lien Collateral Trustee
or any other Second Lien Secured Party seeking damages from or other relief by
way of specific performance, instructions or otherwise with respect to, and none
of the Priority Lien Agent, any other Priority Lien Secured Party, the Second
Lien Collateral Trustee or any other Second Lien Secured Party shall be liable
for, any action taken or omitted to be taken by the Priority Lien Agent, any
other Priority Lien Secured Party, the Second Lien Collateral Trustee or any
other Second Lien Secured Party with respect to any Priority Lien Collateral or
Second Lien Collateral, as applicable, (vi) will not seek, and hereby waives any
right, to have any Collateral or any part thereof marshaled upon any foreclosure
or other Disposition of such Collateral, (vii) will not attempt, directly or
indirectly, whether by judicial proceedings or otherwise, to challenge the
enforceability of any provision of this Agreement, (viii) will not object to,
and hereby waives any right to object to, forbearance by the Priority Lien
Agent, any Priority Lien Secured Party, the Second Lien Collateral Trustee or
any Second Lien Secured Party and (ix) will not assert, and hereby waives, to
the fullest extent permitted by law, any right to demand, request, plead or
otherwise assert or claim the benefit of any marshalling, appraisal, valuation
or other similar right that may be available under applicable law with respect
to the Collateral or any similar rights a junior secured creditor may have under
applicable law.

(c) Payment Over. (i) Each of the Second Lien Collateral Trustee, for itself and
on behalf of each other Second Lien Secured Party, and, subject to the
provisions of Section 3.05(c)(ii), the Third Lien Collateral Trustee, for itself
and on behalf of each other Third Lien Secured Party, hereby agrees that if any
Second Lien Secured Party or Third Lien Secured Party, as applicable, shall
obtain possession of any Collateral or shall realize any proceeds or payment in
respect of any Collateral, pursuant to the exercise of any rights or remedies
with respect to the Collateral under any Second Lien Security Document or Third
Lien Security Document, as applicable, or by the exercise of any rights
available to it under applicable law or in any Insolvency or Liquidation
Proceeding, to the extent

 

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permitted hereunder, at any time prior to, in the case of (i) the Second Lien
Collateral Trustee and the Second Lien Secured Parties the Discharge of Priority
Lien Obligations and (ii) the Third Lien Collateral Trustee and the Third Lien
Secured Parties the Complete Discharge of Priority Lien Obligations secured, or
intended to be secured, by such Collateral, then it shall hold such Collateral,
proceeds or payment in trust for the Priority Lien Agent and the other Priority
Lien Secured Parties and transfer such Collateral, proceeds or payment, as the
case may be, to the Priority Lien Agent as promptly as practicable. Furthermore,
the Second Lien Collateral Trustee or the Third Lien Collateral Trustee, as
applicable, shall, at the Grantors’ expense, promptly send written notice to the
Priority Lien Agent upon receipt of such Collateral by any Second Lien Secured
Party at any time prior to Discharge of Priority Lien Obligations or at any time
following Discharge of Second Lien Obligations but prior to Complete Discharge
of Priority Lien Obligations and, subject to the provisions of
Section 3.05(c)(ii), to the Third Lien Secured Party, as applicable, proceeds or
payment and if directed by the Priority Lien Agent within ten (10) days after
receipt by the Priority Lien Agent of such written notice, shall deliver such
Collateral, proceeds or payment to the Priority Lien Agent in the same form as
received, with any necessary endorsements, or as court of competent jurisdiction
may otherwise direct. The Priority Lien Agent is hereby authorized to make any
such endorsements as agent for the Second Lien Collateral Trustee, any other
Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third
Lien Secured Party, as applicable. Each of the Second Lien Collateral Trustee,
for itself and on behalf of each other Second Lien Secured Party, and subject to
the provisions of Section 3.05(c)(ii), to the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, agrees that if, at
any time, it obtains written notice that all or part of any payment with respect
to any Priority Lien Obligations (other than, in the case of the Second Lien
Collateral Trustee, payments made in respect of Excess Priority Lien
Obligations) previously made shall be rescinded for any reason whatsoever, it
will promptly pay over to the Priority Lien Agent any payment received by it and
then in its possession or under its control in respect of any such Priority Lien
Collateral and shall promptly turn any such Collateral then held by it over to
the Priority Lien Agent, and the provisions set forth in this Agreement will be
reinstated as if such payment had not been made, until the Discharge of Priority
Lien Obligations or the Complete Discharge of Priority Lien Obligations, as
applicable. All Second Liens and Third Liens will remain attached to and
enforceable against all proceeds so held or remitted, subject to the priorities
set forth in this Agreement. Anything contained herein to the contrary
notwithstanding, this Section 3.05(c) shall not apply to any proceeds of
Collateral realized in a transaction not prohibited by this Agreement or the
Priority Lien Documents and as to which the possession or receipt thereof by the
Second Lien Collateral Trustee, any other Second Lien Secured Party, the Third
Lien Collateral Trustee or any other Third Lien Secured Party, as applicable, is
otherwise permitted by this Agreement or the Priority Lien Documents.

(2) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, hereby agrees that if any Third Lien Secured Party
shall obtain possession of any Collateral or shall realize any proceeds or
payment in respect of any Collateral, pursuant to the exercise of any rights or
remedies with respect to the Collateral under any Third Lien Security Document
or by the exercise of any rights available to it under applicable law or in any
Insolvency or Liquidation Proceeding, to the extent permitted hereunder, at any
time following the Discharge of Priority Lien Obligations but prior to the
Discharge of Second Lien Obligations secured, or intended to be secured, by such
Collateral, then it shall hold such Collateral, proceeds or payment in trust for
the Second Lien Collateral Trustee and the other Second Lien Secured Parties and
transfer such Collateral, proceeds or payment, as the case may be, to the Second
Lien Collateral Trustee reasonably promptly after obtaining written notice from
the Second Lien Secured Parties that it has possession of such Collateral or
proceeds or payments in respect thereof. Furthermore, at any time following
Discharge of Priority Lien Obligations but prior to Discharge of Second Lien
Obligations the Third Lien Collateral Trustee shall, at the Grantors’ expense,
promptly send written notice to the Second Lien Collateral Trustee upon receipt
of such Collateral by any Third Lien Secured Party, proceeds or payment and if
directed by the Second Lien Collateral Trustee within ten (10) days after
receipt by the Second Lien Collateral Trustee of such written

 

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notice, shall deliver such Collateral, proceeds or payment to the Second Lien
Collateral Trustee in the same form as received, with any necessary
endorsements, or as court of competent jurisdiction may otherwise direct. The
Second Lien Collateral Trustee is hereby authorized to make any such
endorsements as agent for the Third Lien Collateral Trustee or any other Third
Lien Secured Party. The Third Lien Collateral Trustee, for itself and on behalf
of each other Third Lien Secured Party, agrees that if, at any time, it obtains
written notice that all or part of any payment with respect to any Second Lien
Obligations previously made shall be rescinded for any reason whatsoever, it
will promptly pay over to the Second Lien Collateral Trustee any payment
received by it and then in its possession or under its control in respect of any
such Second Lien Collateral and shall promptly turn any such Collateral then
held by it over to the Second Lien Collateral Trustee, and the provisions set
forth in this Agreement will be reinstated as if such payment bad not been made,
until the Discharge of Second Lien Obligations. All Third Liens will remain
attached to and enforceable against all proceeds so held or remitted, subject to
the priorities set forth in this Agreement. Anything contained herein to the
contrary notwithstanding, this Section 3.05(c) shall not apply to any proceeds
of Collateral realized in a transaction not prohibited by this Agreement or the
Second Lien Documents and as to which the possession or receipt thereof by the
Third Lien Collateral Trustee or any other Third Lien Secured Party is otherwise
permitted by this Agreement or the Second Lien Documents.

Section 3.06 Purchase Option.

(a) Notwithstanding anything in this Agreement to the contrary, on or at any
time within sixty (60) days after the Second Lien Collateral Trustee receives
notice of (i) the commencement of an Insolvency or Liquidation Proceeding or
(ii) the acceleration of the Priority Lien Obligations, holders of the Second
Lien Debt and each of their respective designated Affiliates (the “Second Lien
Purchasers”) will have the right, at their sole option and election (but will
not be obligated), at any time upon prior written notice (the “Purchase Notice”)
to the Priority Lien Agent, to purchase from the Priority Lien Secured Parties
all (but not less than all) Priority Lien Obligations (including unfunded
commitments but excluding Excess Priority Lien Obligations) and any loans
provided by any of the Priority Lien Secured Parties in connection with a DIP
Financing that are outstanding on the date of such purchase. Promptly following
the receipt of such notice, the Priority Lien Agent will deliver to the Second
Lien Collateral Trustee a statement of the amount of Priority Lien Debt (other
than Excess Priority Lien Obligations), other Priority Lien Obligations and DIP
Financing then outstanding and the amount of the cash collateral requested by
the Priority Lien Agent to be delivered pursuant to Section 3.06(b)(ii)
below. The right to purchase provided for in this Section 3.06 will expire
unless, within 10 Business Days after the receipt by the Second Lien Collateral
Trustee of such notice from the Priority Lien Agent, the Second Lien Collateral
Trustee delivers to the Priority Lien Agent an irrevocable commitment of the
Second Lien Purchasers to purchase all (but not less than all) of the Priority
Lien Obligations (including unfunded commitments but excluding Excess Priority
Lien Obligations) and any loans provided by any of the Priority Lien Secured
Parties in connection with a DIP Financing and to otherwise complete such
purchase on the terms set forth under this Section 3.06. Unless the right to
purchase shall have expired in accordance with the preceding sentence, neither
the applicable Priority Lien Representative nor any holder of Priority Lien
Obligations will enforce or exercise any rights or remedies with respect to the
Collateral after receipt of the Purchase Notice by such Priority Lien
Representative.

(b) On the date specified by the Second Lien Collateral Trustee (on behalf of
the Second Lien Purchasers) in such irrevocable commitment (which shall not be
less than five Business Days nor more than 20 Business Days, after the receipt
by the Priority Lien Agent of such irrevocable commitment), the Priority Lien
Secured Parties shall sell to the Second Lien Purchasers all (but not less than
all) Priority Lien Obligations (including unfunded commitments but excluding
Excess Priority Lien Obligations) and any loans provided by any of the Priority
Lien Secured Parties in connection with a DIP

 

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Financing that are outstanding on the date of such sale, subject to any required
approval of any Governmental Authority then in effect, if any, and only if on
the date of such sale, the Priority Lien Agent receives the following:

(1) payment, as the purchase price for all Priority Lien Obligations sold in
such sale, of an amount equal to the full amount of all Priority Lien
Obligations (other than (x) outstanding letters of credit as referred to in
clause (ii) below and (y) any Priority Lien Obligations constituting Excess
Priority Lien Obligations) and loans provided by any of the Priority Lien
Secured Parties in connection with a DIP Financing then outstanding (including
principal, interest, fees, reasonable attorneys’ fees and legal expenses, but
excluding contingent indemnification obligations for which no claim or demand
for payment has been made at or prior to such time); provided that in the case
of Hedging Obligations that constitute Priority Lien Obligations the Second Lien
Purchasers shall cause the applicable agreements governing such Hedging
Obligations to be assigned and novated or, if such agreements have been
terminated, such purchase price shall include an amount equal to the sum of any
unpaid amounts then due in respect of such Hedging Obligations, calculated using
the market quotation method and after giving effect to any netting arrangements;

(2) a cash collateral deposit in such amount as the Priority Lien Agent
determines is reasonably necessary to secure the payment of any outstanding
letters of credit constituting Priority Lien Obligations that may become due and
payable after such sale (but not in any event in an amount greater than one
hundred five percent (105%) of the amount then reasonably estimated by the
Priority Lien Agent to be the aggregate outstanding amount of such letters of
credit at such time), which cash collateral shall be (A) held by the Priority
Lien Agent as security solely to reimburse the issuers of such letters of credit
that become due and payable after such sale and any fees and expenses incurred
in connection with such letters of credit and (B) returned to the Second Lien
Collateral Trustee (except as may otherwise be required by applicable law or any
order of any court or other Governmental Authority) promptly after the
expiration or termination from time to time of all payment contingencies
affecting such letters of credit; and

(3) any agreements, documents or instruments which the Priority Lien Agent may
reasonably request pursuant to which the Second Lien Collateral Trustee and the
Second Lien Purchasers in such sale expressly assume and adopt all of the
obligations of the Priority Lien Agent and the Priority Lien Secured Parties
under the Priority Lien Documents and in connection with loans provided by any
of the Priority Lien Secured Parties in connection with a DIP Financing on and
after the date of the purchase and sale and the Second Lien Collateral Trustee
(or any other representative appointed by the holders of a majority in aggregate
principal amount of the Second Lien Term Loans then outstanding) becomes a
successor agent thereunder.

(c) Such purchase of the Priority Lien Obligations (including unfunded
commitments but excluding Excess Priority Lien Obligations) and any loans
provided by any of the Secured Parties in connection with a DIP Financing shall
be made on a pro rata basis among the Second Lien Purchasers giving notice to
the Priority Lien Agent of their interest to exercise the purchase option
hereunder according to each such Second Lien Purchaser’s portion of the Second
Lien Debt outstanding on the date of purchase or such portion as such Second
Lien Purchasers may otherwise agree among themselves. Such purchase price and
cash collateral shall be remitted by wire transfer in federal funds to such bank
account of the Priority Lien Agent as the Priority Lien Agent may designate in
writing to the Second Lien Collateral Trustee for such purpose. Interest shall
be calculated to but excluding the Business Day on which such sale occurs if the
amounts so paid by the Second Lien Purchasers to the bank account designated by
the Priority Lien Agent are received in such bank account prior to 12:00 noon,
New York City time, and interest shall be calculated to and including such
Business Day if the amounts so paid by the Second Lien Purchasers to the bank
account designated by the Priority Lien Agent are received in such bank account
later than 12:00 noon, New York City time.

 

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(d) Such sale shall be expressly made without representation or warranty of any
kind by the Priority Lien Secured Parties as to the Priority Lien Obligations,
the Collateral or otherwise and without recourse to any Priority Lien Secured
Party, except that the Priority Lien Secured Parties shall represent and warrant
severally as to the Priority Lien Obligations (including unfunded commitments)
and any loans provided by any of the Priority Lien Secured Parties in connection
with a DIP Financing then owing to it: (i) that such applicable Priority Lien
Secured Party owns such Priority Lien Obligations (including unfunded
commitments) and any loans provided by any of the Priority Lien Secured Parties
in connection with a DIP Financing free and clear of any Liens; and (ii) that
such applicable Priority Lien Secured Party has the necessary corporate or other
governing authority to assign such interests.

(e) After such sale becomes effective, the outstanding letters of credit will
remain enforceable against the issuers thereof and will remain secured by the
Priority Liens upon the Collateral in accordance with the applicable provisions
of the Priority Lien Documents as in effect at the time of such sale, and the
issuers of letters of credit will remain entitled to the benefit of the Priority
Liens upon the Collateral and sharing rights in the proceeds thereof in
accordance with the provisions of the Priority Lien Documents as in effect at
the time of such sale, as fully as if the sale of the Priority Lien Debt had not
been made, but only the Person or successor agent to whom the Priority Liens are
transferred in such sale will have the right to foreclose upon or otherwise
enforce the Priority Liens and only the Second Lien Purchasers in the sale will
have the right to direct such Person or successor as to matters relating to the
foreclosure or other enforcement of the Priority Liens.

ARTICLE IV -

OTHER AGREEMENTS

Section 4.01 Release of Liens; Automatic Release of Second Liens and Third
Liens. (a) Prior to (i) the Discharge of Priority Lien Obligations, each of the
Second Lien Collateral Trustee, for itself and on behalf of each other Second
Lien Secured Party, and (ii) the Complete Discharge of Priority Lien Obligations
and subject to 4.01(b) the Third Lien Collateral Trustee, for itself and on
behalf of each other Third Lien Secured Party, agrees that, in the event the
Priority Lien Secured Parties release their Lien on any Collateral, each of the
Second Lien and Third Lien on such Collateral shall terminate and be released
automatically and without further action if (i) such release is permitted under
the Second Lien Documents and the Third Lien Documents, (ii) such release is
effected in connection with the Priority Lien Agent’s foreclosure upon, or other
exercise of rights or remedies with respect to, such Collateral, (iii)(A) after
giving effect to such release and the filing of any additional Second Lien
Security Documents or supplements or amendments to existing Second Lien Security
Documents on or prior to the consummation of such release, the Collateral shall
include Oil and Gas Properties subject to such Second Lien Security Documents
that include not less than 80% of the total discounted future net revenue of the
Grantors’ Oil and Gas Properties located in the United States and adjacent
Federal waters constituting Proved Reserves as estimated by W&T in its most
recent Reserve Report (or otherwise satisfies any minimum Collateral
requirements then in effect in the Priority Lien Documents) (provided that any
release in connection with a sale, transfer or other disposition of Collateral
in a transaction or circumstance that complies with Section 6.10 of the Term
Loan Credit Agreement (or any similar provision of any other Second Lien
Documents) and Section 4.1 of the Second Lien Collateral Trust Agreement shall
not be subject to the condition in this clause (iii)(A)) and (B) after giving
effect to such release and the filing of any additional Third Lien Security
Documents or supplements or amendments to existing Third Lien Security Documents
on or prior to the consummation of such release, the Collateral securing the
Third Lien Obligations shall satisfy any minimum Collateral requirements in the
Third Lien Documents (provided that any release in connection with a sale,
transfer or other disposition of Collateral

 

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in a transaction or circumstance that complies with the applicable provisions of
the Third Lien Documents and the Third Lien Collateral Trust Agreement shall not
be subject to the condition in this clause (iii)(B)) or (iv) such release is
effected in connection with a sale or other Disposition of any Collateral (or
any portion thereof) under Section 363 of the Bankruptcy Code or any other
provision of the Bankruptcy Code if the Priority Lien Secured Parties shall have
consented to such sale or Disposition of such Collateral; provided that, in the
case of each of clauses (ii), (iii) and (iv), the Second Liens and Third Liens
on such Collateral shall attach to (and shall remain subject and subordinate to
all Priority Liens securing Priority Lien Obligations (other than, in the case
of the Second Lien Obligations, Excess Priority Lien Obligations) and, in the
case of the Third Liens, shall remain subject and subordinate to (I) all
Priority Liens securing Priority Lien Obligations and (II) all Second Liens
securing Second Lien Obligations) any proceeds of a sale, transfer or other
Disposition of Collateral not paid to the Priority Lien Secured Parties or that
remain after the Complete Discharge of Priority Lien Obligations.

(b) Following the Discharge of Priority Lien Obligations but prior to the
Discharge of Second Lien Obligations, the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, agrees that, in the
event the Second Lien Secured Parties release their Lien on any Collateral, the
Third Lien on such Collateral shall terminate and be released automatically and
without further action if (i) such release is permitted under the Third Lien
Documents, (ii) such release is effected in connection with the Second Lien
Collateral Trustee’s foreclosure upon, or other exercise of rights or remedies
with respect to, such Collateral, (iii) after giving effect to such release and
the filing of any additional Third Lien Security Documents or supplements or
amendments to existing Third Lien Security Documents on or prior to the
consummation of such release, the Collateral securing the Third Lien Obligations
shall satisfy any minimum Collateral requirements in the Third Lien Documents
(provided that any release in connection with a sale, transfer or other
disposition of Collateral in a transaction or circumstance that complies with
the applicable provisions of the Third Lien Documents and the Third Lien
Collateral Trust Agreement shall not be subject to the condition in this
clause (iii)) or (iv) such release is effected in connection with a sale or
other Disposition of any Collateral (or any portion thereof) under Section 363
of the Bankruptcy Code or any other provision of the Bankruptcy Code if the
Second Lien Secured Parties shall have consented to such sale or Disposition of
such Collateral; provided that, in the case of each of clauses (i), (ii),
(iii) and (iv), the Third Liens on such Collateral shall attach to (and shall
remain subject and subordinate to all Second Liens securing Second Lien
Obligations) any proceeds of a sale, transfer or other Disposition of Collateral
not paid to the Second Lien Secured Parties or that remain after the Discharge
of Second Lien Obligations.

(c) Each of the Second Lien Collateral Trustee and the Third Lien Collateral
Trustee agrees to execute and deliver (at the sole cost and expense of the
Grantors) all such releases and other instruments as shall reasonably be
requested by the Priority Lien Agent or the Second Lien Collateral Trustee, as
applicable, to evidence and confirm any release of Collateral provided for in
this Section 4.01.

Section 4.02 Certain Agreements With Respect to Insolvency or Liquidation
Proceedings. (a) The parties hereto acknowledge that this Agreement is a
“subordination agreement” under Section 510(a) of the Bankruptcy Code and shall
continue in full force and effect, notwithstanding the commencement of any
Insolvency or Liquidation Proceeding by or against W&T or any subsidiary of
W&T. All references in this Agreement to W&T or any subsidiary of W&T or any
other Grantor will include such Person or Persons as a debtor-in-possession and
any receiver or trustee for such Person or Persons in an Insolvency or
Liquidation Proceeding. For the purposes of this Section 4.02, unless otherwise
provided herein, clauses (b) through and including (o) of this Section 4.02
shall be in full force and effect (i) in respect to the Second Lien Collateral
Trustee and the Second Lien Secured Parties at all times prior to the Discharge
of Priority Lien Obligations and (ii) in respect of the Third Lien Collateral
Trustee and the Third Lien Secured Parties at all times prior to Complete
Discharge of Priority Lien Obligations and clauses (p) through and including
(cc) of this Section 4.02 shall be in full force and effect following the
Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien
Obligations.

 

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(b) If W&T or any of its subsidiaries shall become subject to any Insolvency or
Liquidation Proceeding and shall, as debtor(s)-in-possession, or if any receiver
or trustee for such Person or Persons shall, move for approval of financing
(“DIP Financing”) to be provided by one or more lenders (the “DIP Lenders”)
under Section 364 of the Bankruptcy Code or the use of cash collateral under
Section 363 of the Bankruptcy Code, (i) the Second Lien Collateral Trustee, for
itself and on behalf of each Second Lien Secured Party, agrees that neither it
nor any other Second Lien Secured Party and (ii) the Third Lien Collateral
Trustee, for itself and on behalf of each Third Lien Secured Party, agrees that
neither it nor any other Third Lien Secured Party, will raise any objection,
contest or oppose, and each Second Lien Secured Party and Third Lien Secured
Party will waive any claim such Person may now or hereafter have, to any such
financing or to the Liens on the Collateral securing the same (“DIP Financing
Liens”), or to any use, sale or lease of cash collateral that constitutes
Collateral or to any grant of administrative expense priority under Section 364
of the Bankruptcy Code, unless (A) the Priority Lien Agent or the Priority Lien
Secured Parties oppose or object to such DIP Financing or such DIP Financing
Liens or such use of cash collateral or (B) the maximum principal amount of
indebtedness permitted under such DIP Financing exceeds the sum of (I) the
amount of Priority Lien Obligations refinanced with the proceeds thereof (not
including in the case of any objection, contest or opposition by the Second Lien
Collateral Trustee or the Second Lien Secured Parties (but not the Third Lien
Collateral Trustee or the Third Lien Secured Parties) the amount, if any, of any
Excess Priority Lien Obligations refinanced with such proceeds) and (II)
$150,000,000. To the extent such DIP Financing Liens are senior to, or rank pari
passu with, the Priority Liens, (1) the Second Lien Collateral Trustee will, for
itself and on behalf of the other Second Lien Secured Parties, subordinate the
Second Liens on the Collateral to the Priority Liens (other than Excess Priority
Lien Obligations) and to such DIP Financing Liens, so long as the Second Lien
Collateral Trustee, on behalf of the Second Lien Secured Parties, retains Liens
on all the Collateral, including proceeds thereof arising after the commencement
of any Insolvency or Liquidation Proceeding, with the same priority relative to
the Priority Liens and the Excess Priority Lien Obligations and the Third Liens
as existed prior to the commencement of the case under the Bankruptcy Code and
(2) the Third Lien Collateral Trustee will, for itself and on behalf of the
other Third Lien Secured Parties, subordinate the Third Liens on the Collateral
to the Priority Liens, the Second Liens and to such DIP Financing Liens, so long
as the Third Lien Collateral Trustee, on behalf of the Third Lien Secured
Parties, retains Liens on all the Collateral, including proceeds thereof arising
after the commencement of any Insolvency or Liquidation Proceeding, with the
same priority relative to the Priority Liens and the Second Liens as existed
prior to the commencement of the case under the Bankruptcy Code.

(c) Prior to (i) in the case of the Second Lien Collateral Trustee and the
Second Lien Secured Parties the Discharge of Priority Lien Obligations and
(ii) in the case of the Third Lien Collateral Agent and the Third Lien Secured
Parties the Complete Discharge of Priority Obligations, without the consent of
the Priority Lien Agent, in its sole discretion, each of the Second Lien
Collateral Trustee, for itself and on behalf of each Second Lien Secured Party
and the Third Lien Collateral Trustee, for itself and on behalf of each Third
Lien Secured Party, agrees not to propose, support or enter into any DIP
Financing.

(d) Prior to (i) in the case of the Second Lien Collateral Trustee and the
Second Lien Secured Parties the Discharge of Priority Lien Obligations and
(ii) in the case of the Third Lien Collateral Agent and the Third Lien Secured
Parties the Complete Discharge of Priority Obligations, each of the Second Lien
Collateral Trustee, for itself and on behalf of each Second Lien Secured Party
and the Third Lien Collateral Trustee, for itself and on behalf of each Third
Lien Secured Party, agrees that it will not object to, oppose or contest (or
join with or support any third party objecting to, opposing or contesting) a
sale or other Disposition, a motion to sell or Dispose or the bidding procedure
for such sale or Disposition

 

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of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy
Code or any other provision of the Bankruptcy Code if the Priority Lien Secured
Parties shall have consented to such sale or Disposition, such motion to sell or
Dispose or such bidding procedure for such sale or Disposition of such
Collateral and all Priority Liens, Second Liens and Third Liens will attach to
the proceeds of the sale in the same respective priorities as set forth in this
Agreement.

(e) Each of the Second Lien Collateral Trustee, for itself and on behalf of each
other Second Lien Secured Party and the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, waives any claim
that may be had against the Priority Lien Agent or any other Priority Lien
Secured Party arising out of any DIP Financing Liens (that is granted in a
manner that is consistent with this Agreement) or administrative expense
priority under Section 364 of the Bankruptcy Code.

(f) Prior to (i) the Discharge of Priority Lien Obligations, the Second Lien
Collateral Trustee, for itself and on behalf of each other Second Lien Secured
Party, agrees that neither the Second Lien Collateral Trustee nor any other
Second Lien Secured Party, and (ii) prior to the Complete Discharge of Priority
Lien Obligations the Third Lien Collateral Trustee, for itself and on behalf of
each other Third Lien Secured Party, agrees that neither the Third Lien
Collateral Trustee nor any other Third Lien Secured Party, will file or
prosecute in any Insolvency or Liquidation Proceeding any motion for adequate
protection (or any comparable request for relief) based upon their interest in
the Collateral, nor object to, oppose or contest (or join with or support any
third party objecting to, opposing or contesting) (i) any request by the
Priority Lien Agent or any other Priority Lien Secured Party for adequate
protection or (ii) any objection by the Priority Lien Agent or any other
Priority Lien Secured Party to any motion, relief, action or proceeding based on
the Priority Lien Agent or Priority Lien Secured Parties claiming a lack of
adequate protection, except that

(i) the Second Lien Secured Parties may:

(A) freely seek and obtain relief granting adequate protection in the form of a
replacement lien co-extensive in all respects with, but subordinated (as set
forth in Section 2.01) to, and with the same relative priority to the Priority
Liens and the Third Liens as existed prior to the commencement of the Insolvency
or Liquidation Proceeding, all Liens granted in the Insolvency or Liquidation
Proceeding to, or for the benefit of, the Priority Lien Secured Parties; and

(B) freely seek and obtain any relief upon a motion for adequate protection (or
any comparable relief), without any condition or restriction whatsoever, at any
time after the Discharge of Priority Lien Obligations; and

(ii) the Third Lien Secured Parties may:

(A) freely seek and obtain relief granting adequate protection in the form of a
replacement lien co-extensive in all respects with, but subordinated (as set
forth in Section 2.01) to, and with the same relative priority to the Priority
Liens and the Second Liens as existed prior to the commencement of the
Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency or
Liquidation Proceeding to, or for the benefit of, the Priority Lien Secured
Parties and the Second Lien Secured Parties; and

(B) freely seek and obtain any relief upon a motion for adequate protection (or
any comparable relief), without any condition or restriction whatsoever, at any
time after the Complete Discharge of Priority Lien Obligations and the Discharge
of Second Lien Obligations.

 

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(g) Each of the Second Lien Collateral Trustee, for itself and on behalf of each
of the other of the Second Lien Secured Parties and the Third Lien Collateral
Trustee, for itself and on behalf of each of the other Third Lien Secured
Parties, waives any claim it or any such other Second Lien Secured Party or
Third Lien Secured Party, as applicable, may now or hereafter have against the
Priority Lien Agent or any other Priority Lien Secured Party (or their
representatives) arising out of any election by the Priority Lien Agent or any
Priority Lien Secured Parties, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111(b) of the Bankruptcy Code.

(h) (1) The Second Lien Collateral Trustee, for itself and on behalf of each
other Second Lien Secured Party, agrees that in any Insolvency or Liquidation
Proceeding, until the Discharge of Priority Lien Obligations neither the Second
Lien Collateral Trustee nor any other Second Lien Secured Party shall and
(ii) the Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, agrees that in any Insolvency or Liquidation
Proceeding, until the Complete Discharge of Priority Lien Obligations, neither
the Third Lien Collateral Trustee nor any other Third Lien Secured Party shall,
support or vote to accept any plan of reorganization or disclosure statement of
W&T or any other Grantor unless (i) such plan is accepted by the Class of
Priority Lien Secured Parties in accordance with Section 1126(c) of the
Bankruptcy Code or otherwise provides for the payment in full in cash of all
Priority Lien Obligations (including all post-petition interest approved by the
bankruptcy court, fees and expenses and cash collateralization of all letters of
credit) on the effective date of such plan of reorganization, or (ii) such plan
provides on account of the Priority Lien Secured Parties for the retention by
the Priority Lien Agent, for the benefit of the Priority Lien Secured Parties,
of the Liens on the Collateral securing the Priority Lien Obligations, and on
all proceeds thereof whenever received, and such plan also provides that any
Liens retained by, or granted to, the Second Lien Collateral Trustee and the
Third Lien Collateral Trustee are only on property securing the Priority Lien
Obligations and shall have the same relative priority with respect to the
Collateral or other property, respectively, as provided in this Agreement with
respect to the Collateral. Except as provided herein, each of the Second Lien
Secured Parties and the Third Lien Secured Parties shall remain entitled to vote
their claims in any such Insolvency or Liquidation Proceeding.

(i) The Second Lien Collateral Trustee, for itself and on behalf of each other
Second Lien Secured Party, agrees that neither the Second Lien Collateral
Trustee nor any other Second Lien Secured Party and the Third Lien Collateral
Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees
that neither the Third Lien Collateral Trustee nor any other Third Lien Secured
Party, shall seek relief, pursuant to Section 362(d) of the Bankruptcy Code or
otherwise, from the automatic stay of Section 362(a) of the Bankruptcy Code or
from any other stay in any Insolvency or Liquidation Proceeding in respect of
the Collateral without the prior written consent of the Priority Lien Agent.

(j) The Second Lien Collateral Trustee, for itself and on behalf of each other
Second Lien Secured Party, agrees that neither the Second Lien Collateral
Trustee nor any other Second Lien Secured Party and the Third Lien Collateral
Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees
that neither the Third Lien Collateral Trustee nor any other Third Lien Secured
Party, shall oppose or seek to challenge any claim by the Priority Lien Agent or
any other Priority Lien Secured Party for allowance or payment in any Insolvency
or Liquidation Proceeding of Priority Lien Obligations consisting of
post-petition interest, fees or expenses or cash collateralization of all
letters of credit to the extent of the value of the Priority Liens (it being
understood that such value will be

 

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determined without regard to the existence of the Second Liens or the Third
Liens on the Collateral) other than, in the case of the Second Liens, Liens
securing Excess Priority Lien Obligations. Neither Priority Lien Agent nor any
other Priority Lien Secured Party shall oppose or seek to challenge any claim by
the Second Lien Collateral Trustee, any other Second Lien Secured Party, the
Third Lien Collateral Trustee or any other Third Lien Secured Party for
allowance or payment in any Insolvency or Liquidation Proceeding of Second Lien
Obligations or Third Lien Obligations, as applicable, consisting of
post-petition interest, fees or expenses to the extent of the value of the
Second Liens or the Third Liens, as applicable, on the Collateral; provided that
if the Priority Lien Agent or any other Priority Lien Secured Party shall have
made any such claim, such claim (i) shall have been approved or (ii) will be
approved contemporaneously with the approval of any such claim by the Second
Lien Collateral Trustee or any Second Lien Secured Party or the Third Lien
Collateral Trustee or any Third Lien Secured Party, as applicable.

(k)

(1) Without the express written consent of the Priority Lien Agent, none of the
Second Lien Collateral Trustee or any other Second Lien Secured Party shall (or
shall join with or support any third party in opposing, objecting to or
contesting, as the case may be), in any Insolvency or Liquidation Proceeding
involving any Grantor, (i) oppose, object to or contest the determination of the
extent of any Liens held by any of Priority Lien Secured Party or the value of
any claims of any such holder under Section 506(a) of the Bankruptcy Code or
(ii) oppose, object to or contest the payment to the Priority Lien Secured
Parties of interest, fees or expenses under Section 506(b) of the Bankruptcy
Code other than payments of interest in respect of Excess Priority Lien
Obligations.

(2) Without the express written consent of the Priority Lien Agent, none of the
Third Lien Collateral Trustee or any other Third Lien Secured Party shall (or
shall join with or support any third party in opposing, objecting to or
contesting, as the case may be), in any Insolvency or Liquidation Proceeding
involving any Grantor, (i) oppose, object to or contest the determination of the
extent of any Liens held by any of Priority Lien Secured Party or the value of
any claims of any such holder under Section 506(a) of the Bankruptcy Code or
(ii) oppose, object to or contest the payment to the Priority Lien Secured
Parties of interest, fees or expenses under Section 506(b) of the Bankruptcy
Code.

(l) Notwithstanding anything to the contrary contained herein, if in any
Insolvency or Liquidation Proceeding a determination is made that any Lien
encumbering any Collateral is not enforceable for any reason, then each of the
Second Lien Collateral Trustee for itself and on behalf of each other Second
Lien Secured Party and the Third Lien Collateral Trustee, for itself and on
behalf of each other Third Lien Secured Party, agrees that, any distribution or
recovery they may receive in respect of any such Collateral shall be segregated
and held in trust and forthwith paid over to the Priority Lien Agent for the
benefit of the Priority Lien Secured Parties in the same form as received
without recourse, representation or warranty (other than a representation of the
Second Lien Collateral Trustee or the Third Lien Collateral Trustee, as
applicable, that it has not otherwise sold, assigned, transferred or pledged any
right, title or interest in and to such distribution or recovery) but with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct. Each of the Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party and the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, hereby appoints the
Priority Lien Agent, and any officer or agent of the Priority Lien Agent, with
full power of substitution, the attorney-in-fact of each Second Lien Secured
Party and Third Lien Secured Party for the limited purpose of carrying out the
provisions of this Section 4.02(l) and taking any action and executing any
instrument that the Priority Lien Agent may deem necessary or advisable to
accomplish the purposes of this Section 4.02(l), which appointment is
irrevocable and coupled with an interest.

 

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(m) Each of the Second Lien Collateral Trustee, for itself and on behalf of each
other Second Lien Secured Party and the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, hereby agrees that
the Priority Lien Agent shall have the exclusive right to credit bid the
Priority Lien Obligations and further that none of the Second Lien Collateral
Trustee, any other Second Lien Secured Party, the Third Lien Collateral Trustee
or any other Third Lien Secured Party shall (or shall join with or support any
third party in opposing, objecting to or contesting, as the case may be) oppose,
object to or contest such credit bid by the Priority Lien Agent.

(n) Without the consent of the Priority Lien Agent in its sole discretion, each
of the Second Lien Collateral Trustee, for itself and on behalf of each other
Second Lien Secured Party and the Third Lien Collateral Trustee, for itself and
on behalf of each other Third Lien Secured Party, agrees it will not file an
involuntary bankruptcy claim or seek the appointment of an examiner or a trustee
for W&T or any of its subsidiaries.

(o) Each of the Second Lien Collateral Trustee, for itself and on behalf of each
other Second Lien Secured Party and the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, waives any right to
assert or enforce any claim under Section 506(c) or 552 of the Bankruptcy Code
as against any Priority Lien Secured Party or any of the Collateral.

(p) If W&T or any of its subsidiaries shall become subject to any Insolvency or
Liquidation Proceeding and shall, as debtor(s)-in-possession, move for approval
of DIP Financing to be provided by one or more DIP Lenders under Section 364 of
the Bankruptcy Code or the use of cash collateral under Section 363 of the
Bankruptcy Code, the Third Lien Collateral Trustee, for itself and on behalf of
each Third Lien Secured Party, agrees that neither it nor any other Third Lien
Secured Party will raise any objection, contest or oppose, and each Third Lien
Secured Party will waive any claim such Person may now or hereafter have, to any
such financing or to the DIP Financing Liens on the Collateral securing the
same, or to any use, sale or lease of cash collateral that constitutes
Collateral or to any grant of administrative expense priority under Section 364
of the Bankruptcy Code, unless (i) the Second Lien Collateral Trustee or the
Second Lien Secured Parties oppose or object to such DIP Financing or such DIP
Financing Liens or such use of cash collateral or (ii) the maximum principal
amount of indebtedness permitted under such DIP Financing exceeds the sum of
(A) the amount of Second Lien Obligations refinanced with the proceeds thereof
and (B) $150,000,000. To the extent such DIP Financing Liens are senior to, or
rank pari passu with, the Second Liens, the Third Lien Collateral Trustee will,
for itself and on behalf of the other Third Lien Secured Parties, subordinate
the Third Liens on the Collateral to the Second Liens and to such DIP Financing
Liens, so long as the Third Lien Collateral Trustee, on behalf of the Third Lien
Secured Parties, retains Liens on all the Collateral, including proceeds thereof
arising after the commencement of any Insolvency or Liquidation Proceeding, with
the same priority relative to the Priority Liens and the Second Liens as existed
prior to the commencement of the case under the Bankruptcy Code.

(q) Without the consent of the Second Lien Collateral Trustee in its sole
discretion, the Third Lien Collateral Trustee, for itself and on behalf of each
Third Lien Secured Party, agrees not to propose, support or enter into any DIP
Financing.

(r) The Third Lien Collateral Trustee, for itself and on behalf of each Third
Lien Secured Party, agrees that it will not object to, oppose or contest (or
join with or support any third party objecting to, opposing or contesting) a
sale or other Disposition, a motion to sell or Dispose or the bidding procedure
for such sale or Disposition of any Collateral (or any portion thereof) under
Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code
if the Second Lien Secured Parties shall have consented to such sale or
Disposition, such motion to sell or Dispose or such bidding procedure for such
sale or Disposition of such Collateral and all Second Liens and Third Liens will
attach to the proceeds of the sale in the same respective priorities as set
forth in this Agreement.

 

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(s) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, waives any claim that may be had against the Second
Lien Collateral Trustee or any other Second Lien Secured Party arising out of
any DIP Financing Liens (granted in a manner that is consistent with this
Agreement) or administrative expense priority under Section 364 of the
Bankruptcy Code.

(t) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, agrees that neither the Third Lien Collateral Trustee
nor any other Third Lien Secured Party will file or prosecute in any Insolvency
or Liquidation Proceeding any motion for adequate protection (or any comparable
request for relief) based upon their interest in the Collateral, nor object to,
oppose or contest (or join with or support any third party objecting to,
opposing or contesting) (i) any request by the Second Lien Collateral Trustee or
any other Second Lien Secured Party for adequate protection or (ii) any
objection by the Second Lien Collateral Trustee or any other Second Lien Secured
Party to any motion, relief, action or proceeding based on the Second Lien
Collateral Trustee or Second Lien Secured Parties claiming a lack of adequate
protection, except that the Third Lien Secured Parties may:

(i) freely seek and obtain relief granting a replacement lien co-extensive in
all respects with, but subordinated (as set forth in Section 2.01) to, with the
same relative priority to the Second Liens as existed prior to the commencement
of the Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency
or Liquidation Proceeding to, or for the benefit of, the Second Lien Secured
Parties; and

(ii) freely seek and obtain any relief upon a motion for adequate protection (or
any comparable relief), without any condition or restriction whatsoever, at any
time after the Discharge of Second Lien Obligations.

(u) The Third Lien Collateral Trustee, for itself and on behalf of each of the
other of the Third Lien Secured Parties, waives any claim the Third Lien
Collateral Trustee or any such other Third Lien Secured Party may now or
hereafter have against the Second Lien Collateral Trustee or any other Second
Lien Secured Party (or their representatives) arising out of any election by the
Second Lien Collateral Trustee or any Second Lien Secured Parties, in any
proceeding instituted under the Bankruptcy Code, of the application of
Section 1111(b) of the Bankruptcy Code.

(v) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, agrees that in any Insolvency or Liquidation
Proceeding, neither the Third Lien Collateral Trustee nor any other Third Lien
Secured Party shall support or vote for any plan of reorganization or disclosure
statement of W&T or any other Grantor unless (i) such plan is accepted by the
Class of Second Lien Secured Parties in accordance with Section 1126(c) of the
Bankruptcy Code or otherwise provides for the payment in full in cash of all
Second Lien Obligations (including all post-petition interest, fees and
expenses) on the effective date of such plan of reorganization, or (ii) such
plan provides on account of the Second Lien Secured Parties for the retention by
the Second Lien Collateral Trustee, for the benefit of the Second Lien Secured
Parties, of the Liens on the Collateral securing the Second Lien Obligations,
and on all proceeds thereof whenever received, and such plan also provides that
any Liens retained by, or granted to, the Third Lien Collateral Trustee are only
on property securing the Second Lien Obligations and shall have the same
relative priority with respect to the Collateral or other property,
respectively, as provided in this Agreement with respect to the
Collateral. Except as provided herein, the Third Lien Secured Parties shall
remain entitled to vote their claims in any such Insolvency or Liquidation
Proceeding.

 

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(w) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, hereby agrees that until the Discharge of Second Lien
Obligations has occurred, neither Third Lien Collateral Trustee nor any Third
Lien Secured Party shall seek relief, pursuant to Section 362(d) of the
Bankruptcy Code or otherwise, from the automatic stay of Section 362(a) of the
Bankruptcy Code or from any other stay in any Insolvency or Liquidation
Proceeding in respect of the Collateral, without the prior written consent of
the Second Lien Collateral Trustee.

(x) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, agrees that neither Third Lien Collateral Trustee nor
any other Third Lien Secured Party shall oppose or seek to challenge any claim
by the Second Lien Collateral Trustee or any other Second Lien Secured Party for
allowance or payment in any Insolvency or Liquidation Proceeding of Second Lien
Obligations consisting of post-petition interest, fees or expenses to the extent
of the value of the Second Liens (it being understood that such value will be
determined without regard to the existence of the Third Liens on the
Collateral). Neither Second Lien Collateral Trustee nor any other Second Lien
Secured Party shall oppose or seek to challenge any claim by the Third Lien
Collateral Trustee or any other Third Lien Secured Party for allowance or
payment in any Insolvency or Liquidation Proceeding of Third Lien Obligations
consisting of post-petition interest, fees or expenses to the extent of the
value of the Third Liens on the Collateral; provided that if the Second Lien
Collateral Trustee or any other Second Lien Secured Party shall have made any
such claim, such claim (i) shall have been approved or (ii) will be approved
contemporaneously with the approval of any such claim by the Third Lien
Collateral Trustee or any Third Lien Secured Party.

(y) Without the express written consent of the Second Lien Collateral Trustee,
neither Third Lien Collateral Trustee nor any other Third Lien Secured Party
shall (or shall join with or support any third party in opposing, objecting to
or contesting, as the case may be), in any Insolvency or Liquidation Proceeding
involving any Grantor, (i) oppose, object to or contest the determination of the
extent of any Liens held by any of Second Lien Secured Party or the value of any
claims of any such holder under Section 506(a) of the Bankruptcy Code or
(ii) oppose, object to or contest the payment to the Second Lien Secured Party
of interest, fees or expenses under Section 506(b) of the Bankruptcy Code.

(z) Notwithstanding anything to the contrary contained herein, if in any
Insolvency or Liquidation Proceeding a determination is made that any Lien
encumbering any Collateral is not enforceable for any reason, then the Third
Lien Collateral Trustee for itself and on behalf of each other Third Lien
Secured Party, agrees that, any distribution or recovery they may receive in
respect of any such Collateral shall be segregated and held in trust and
forthwith paid over to the Second Lien Collateral Trustee for the benefit of the
Second Lien Secured Parties in the same form as received without recourse,
representation or warranty (other than a representation of the Third Lien
Collateral Trustee that it has not otherwise sold, assigned, transferred or
pledged any right, title or interest in and to such distribution or recovery)
but with any necessary endorsements or as a court of competent jurisdiction may
otherwise direct. The Third Lien Collateral Trustee, for itself and on behalf of
each other Third Lien Secured Party, hereby appoints the Second Lien Collateral
Trustee, and any officer or agent of the Second Lien Collateral Trustee, with
full power of substitution, the attorney-in-fact of each Third Lien Secured
Party for the limited purpose of carrying out the provisions of this
Section 4.02(z) and taking any action and executing any instrument that the
Second Lien Collateral Trustee may deem necessary or advisable to accomplish the
purposes of this Section 4.02(z), which appointment is irrevocable and coupled
with an interest.

 

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(aa) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, hereby agrees that subject to Section 4.01(l) the
Second Lien Collateral Trustee shall have the exclusive right to credit bid the
Second Lien Obligations and further that neither the Third Lien Collateral
Trustee nor any other Third Lien Secured Party shall (or shall join with or
support any third party in opposing, objecting to or contesting, as the case may
be) oppose, object to or contest such credit bid by the Second Lien Collateral
Trustee.

(bb) Without the consent of the Second Lien Collateral Trustee in its sole
discretion, the Third Lien Collateral Trustee, for itself and on behalf of each
other Third Lien Secured Party, agrees it will not file an involuntary
bankruptcy claim or seek the appointment of an examiner or a trustee for W&T or
any of its subsidiaries.

(cc) The Third Lien Collateral Trustee, for itself and on behalf of each other
Third Lien Secured Party, waives any right to assert or enforce any claim under
Section 506(c) or 552 of the Bankruptcy Code as against any Second Lien Secured
Party or any of the Collateral.

Section 4.03 Reinstatement. If any Priority Lien Secured Party is required in
any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise
pay to the estate of any Grantor any amount (a “Recovery”) for any reason
whatsoever, then the Priority Lien Obligations shall be reinstated to the extent
of such Recovery and the Priority Lien Secured Parties shall be entitled to a
reinstatement of Priority Lien Obligations with respect to all such recovered
amounts. Each of the Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party, and the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, agrees that if, at
any time, a Second Lien Secured Party or a Third Lien Secured Party, as
applicable, receives notice of any Recovery, the Second Lien Collateral Trustee,
any other Second Lien Secured Party, the Third Lien Collateral Trustee or any
other Third Lien Secured Party, as applicable, shall promptly pay over to the
Priority Lien Agent any payment received by it and then in its possession or
under its control in respect of any Collateral subject to any Priority Lien
securing such Priority Lien Obligations and shall promptly turn any Collateral
subject to any such Priority Lien then held by it over to the Priority Lien
Agent, and the provisions set forth in this Agreement shall be reinstated as if
such payment had not been made. If this Agreement shall have been terminated
prior to any such Recovery, this Agreement shall be reinstated in full force and
effect, and such prior termination shall not diminish, release, discharge,
impair or otherwise affect the obligations of the parties hereto from such date
of reinstatement. Any amounts received by the Second Lien Collateral Trustee,
any other Second Lien Secured Party, the Third Lien Collateral Trustee or any
other Third Lien Secured Party and then in its possession or under its control
on account of the Second Lien Obligations or Third Lien Obligations, as
applicable, after the termination of this Agreement shall, in the event of a
reinstatement of this Agreement pursuant to this Section 4.03, be held in trust
for and paid over to the Priority Lien Agent for the benefit of the Priority
Lien Secured Parties for application to the reinstated Priority Lien Obligations
until the discharge thereof. This Section 4.03 shall survive termination of this
Agreement.

Section 4.04 Refinancings; Additional Second Lien Debt; Initial Third Lien
Indebtedness; Additional Third Lien Debt.

(a) The Priority Lien Obligations, the Second Lien Obligations and the Third
Lien Obligations may be Replaced, by any Priority Substitute Credit Facility,
Second Lien Substitute Facility or Third Lien Substitute Facility, as the case
may be, in each case, without notice to, or the consent of any Secured Party,
all without affecting the Lien priorities provided for herein or the other
provisions hereof; provided, that (i) the Priority Lien Agent, the Second Lien
Collateral Trustee and the Third Lien Collateral Trustee shall receive on or
prior to incurrence of a Priority Substitute Credit Facility, Second Lien
Substitute Facility or Third Lien Substitute Credit Facility (A) an Officers’
Certificate from W&T

 

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stating that (I) the incurrence thereof is permitted by each applicable Secured
Debt Document to be incurred and (II) the requirements of Section 4.06 have been
satisfied, and (B) a Priority Confirmation Joinder from the holders or lenders
of any indebtedness that Replaces the Priority Lien Obligations, the Second Lien
Obligations or the Third Lien Obligations (or an authorized agent, trustee or
other representative on their behalf), (ii) the aggregate outstanding principal
amount of the Priority Lien Obligations, after giving effect to such Priority
Substitute Credit Facility, shall not exceed the Priority Lien Cap and (iii) on
or before the date of such incurrence, such Priority Substitute Credit Facility,
Second Lien Substitute Facility or Third Lien Substitute Facility is designated
by W&T, in an Officers’ Certificate delivered to the Priority Lien Agent, the
Second Lien Collateral Trustee and the Third Lien Collateral Trustee, as
“Priority Lien Debt”, “Second Lien Debt” or “Third Lien Debt”, as applicable,
for the purposes of the Secured Debt Documents and this Agreement; provided that
no Series of Secured Debt may be designated as more than one of Priority Lien
Debt, Second Lien Debt or Third Lien Debt.

(b) W&T will be permitted to designate as an additional holder of Second Lien
Obligations or Third Lien Obligations hereunder each Person who is, or who
becomes, the registered holder of Second Lien Debt or Third Lien Debt, as
applicable, incurred by W&T after the date of this Agreement in accordance with
the terms of all applicable Secured Debt Documents. W&T may effect such
designation by delivering to the Priority Lien Agent, the Second Lien Collateral
Trustee and the Third Lien Collateral Trustee, each of the following:

(1) an Officers’ Certificate stating that W&T intends to incur (A) Additional
Second Lien Obligations which will be Second Lien Debt, (B) Initial Third Lien
Obligations which will be Third Lien Debt or (C) or Additional Third Lien
Obligations which will be Third Lien Debt, which in each case, will be permitted
by each applicable Secured Debt Document to be incurred and secured by a Second
Lien or Third Lien, as applicable, equally and ratably with all previously
existing and future Second Lien Debt or Third Lien Debt, as applicable;

(2) an authorized agent, trustee or other representative on behalf of the
holders or lenders of any Additional Second Lien Obligations, Initial Third Lien
Obligations or Additional Third Lien Obligations, as applicable, must be
designated as an additional holder of Secured Obligations hereunder and must,
prior to such designation, sign and deliver on behalf of the holders or lenders
of such Additional Second Lien Obligations, Initial Third Lien Obligations or
Additional Third Lien Obligations, as applicable, a Priority Confirmation
Joinder, and, to the extent necessary or appropriate to facilitate such
transaction, a new intercreditor agreement substantially similar to this
Agreement, as in effect on the date hereof; and

(3) evidence that W&T has duly authorized, executed (if applicable) and recorded
(or caused to be recorded) in each appropriate governmental office all relevant
filings and recordations deemed necessary by W&T and the holder of such
Additional Second Lien Obligations, Initial Third Lien Obligations or Additional
Third Lien Obligations, as applicable, or its Secured Debt Representative, to
ensure that the Additional Second Lien Obligations, Initial Third Lien
Obligations or Additional Third Lien Obligations are secured by the Collateral
in accordance with the Second Lien Security Documents or the Third Lien Security
Documents, as applicable (provided that such filings and recordings may be
authorized, executed and recorded following any incurrence on a post-closing
basis if permitted by the Second Lien Representative or Third Lien
Representative for such Additional Second Lien Obligations or Additional Third
Lien Obligations, as applicable).

(c) W&T will be permitted to enter into an Initial Third Lien Debt Facility to
the extent such Initial Third Lien Debt Facility is permitted by the Priority
Credit Agreement, the other Priority Lien Documents, the Term Loan Credit
Agreement and the other Second Lien Documents. Any Third Lien Debt incurred
pursuant to such Initial Third Lien Debt Facility may be secured by a Third Lien

 

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under and pursuant to the Initial Third Lien Security Documents provided the
Third Lien Collateral Trustee, acting for itself and on behalf of the Initial
Third Lien Secured Parties, becomes a party to this Agreement by satisfying the
conditions set forth in clauses (i) and (ii) of the immediately succeeding
paragraph.

In order for the Third Lien Collateral Trustee to become a party to this
Agreement,

(1) the Priority Lien Agent, the Second Lien Collateral Trustee and the Third
Lien Collateral Trustee shall have executed and delivered a Priority
Confirmation Joinder pursuant to which (a) such Third Lien Collateral Trustee
becomes a Secured Debt Representative hereunder and (b) the Third Lien Debt and
the related Initial Third Lien Secured Parties become subject hereto and bound
hereby;

(2) W&T shall have delivered to the Priority Lien Agent and the Second Lien
Collateral Trustee (A) true and complete copies of each Initial Third Lien
Document and (B) an Officer’s Certificate certifying such copies as being true
and correct and identifying the obligations to be designated as Initial Third
Lien Obligations and the initial aggregate principal amount thereof;

(3) without limiting Section 4.06, the Initial Third Lien Documents relating to
such Third Lien Debt shall provide, in a manner satisfactory to the Priority
Lien Agent, that each Initial Third Lien Secured Party shall be subject to and
bound by the provisions of this Agreement in its capacity as a holder of such
Third Lien Debt.

Notwithstanding the foregoing, nothing in this Agreement will be construed to
allow W&T or any other Grantor to incur additional indebtedness unless otherwise
permitted by the terms of each applicable Secured Debt Document.

Each of the then-exiting Priority Lien Agent, the Second Lien Collateral Trustee
and the Third Lien Collateral Trustee shall be authorized to execute and deliver
such documents and agreements (including amendments or supplements to this
Agreement) as such holders, lenders, agent, trustee or other representative may
reasonably request to give effect to any such Replacement or any incurrence of
Additional Second Lien Obligations, Initial Third Lien Obligations or Additional
Third Lien Obligations, it being understood that the Priority Lien Agent, the
Second Lien Collateral Trustee and the Third Lien Collateral Trustee or (if
permitted by the terms of the applicable Secured Debt Documents) the Grantors,
without the consent of any other Secured Party or (in the case of the Grantors)
one or more Secured Debt Representatives, may amend, supplement, modify or
restate this Agreement to the extent necessary or appropriate to facilitate such
amendments or supplements to effect such Replacement or incurrence all at the
expense of the Grantors. Upon the consummation of such Replacement or incurrence
and the execution and delivery of the documents and agreements contemplated in
the preceding sentence, the holders or lenders of such indebtedness and any
authorized agent, trustee or other representative thereof shall be entitled to
the benefits of this Agreement.

Section 4.05 Amendments to Second Lien Documents and Third Lien
Documents. (1)Prior to the Discharge of Priority Lien Obligations, without the
prior written consent of the Priority Lien Agent, no Second Lien Document, and
(ii) prior to Complete Discharge of Priority Lien Obligations without the prior
written consent of the Priority Lien Agent, no Third Lien Document, may be
amended, supplemented, restated or otherwise modified and/or refinanced or
entered into to the extent such amendment, supplement, restatement or
modification and/or refinancing, or the terms of any new Second Lien Document or
Third Lien Document, as applicable, would (i) adversely affect the lien priority
rights of the Priority Lien Secured Parties or the rights of the Priority Lien
Secured Parties to receive payments owing pursuant to the Priority Lien
Documents, (ii) except as otherwise provided for in this Agreement,

 

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add any Liens securing the Collateral granted under the Second Lien Security
Documents or the Third Lien Security Documents, (iii) confer any additional
rights on the Second Lien Collateral Trustee, any other Second Lien Secured
Party, the Third Lien Collateral Trustee or any other Third Lien Secured Party
in a manner adverse to the Priority Lien Secured Parties, (iv) provide for any
scheduled payment of principal, scheduled mandatory redemption or scheduled
sinking fund payment prior to the date that is six months after the maturity
date of the Priority Lien Debt as in effect on the date of determination,
(v) add or modify covenants or events of default that are, taken as a whole,
materially more restrictive than those in the Priority Lien Documents after
giving effect to any amendments or other modifications to the Priority Lien
Documents contemplated in connection with such transaction or (vi) contravene
the provisions of this Agreement or the Priority Lien Documents.

Section 4.06 Legends. Each of

(a) the Priority Lien Agent acknowledges with respect to the Priority Credit
Agreement and the Priority Lien Security Documents,

(b) the Second Lien Collateral Trustee acknowledges with respect to (i) the Term
Loan Credit Agreement and the Term Loan Second Lien Security Documents, and
(ii) the Additional Second Lien Debt Facility and the Additional Second Lien
Security Documents, if any, and

(c) the Third Lien Collateral Trustee acknowledges with respect to (i) the
Initial Third Lien Debt Facility and the Initial Third Lien Security Documents,
if any, and (ii) the Additional Third Lien Debt Facility and the Additional
Third Lien Security Documents, if any, that the Term Loan Credit Agreement, the
Initial Third Lien Debt Facility (if any), the Additional Second Lien Debt
Facility (if any), the Additional Third Lien Debt Facility (if any), the Second
Lien Documents (other than control agreements to which both the Priority Lien
Agent and the Second Lien Collateral Trustee are parties), the Third Lien
Documents (other than control agreements to which the Priority Lien Agent or the
Second Lien Collateral Trustee, as applicable, and the Third Lien Collateral
Trustee are parties) and each associated Security Document (other than control
agreements to which both the Priority Lien Agent and the Second Lien Collateral
Trustee are parties or, in the case of Third Lien Security Documents, other than
control agreements to which the Priority Lien Agent or the Second Lien
Collateral Trustee, as applicable, and the Third Lien Collateral Trustee are
parties) granting any security interest in the Collateral will contain the
appropriate legend set forth on Annex I.

Section 4.07 Second Lien Secured Parties and Third Lien Secured Parties Rights
as Unsecured Creditors; Judgment Lien Creditor. Both before and during an
Insolvency or Liquidation Proceeding, any of the Second Lien Secured Parties and
the Third Lien Secured Parties may take any actions and exercise any and all
rights that would be available to a holder of unsecured claims; provided,
however, that the Second Lien Secured Parties and the Third Lien Secured Parties
may not take any of the actions prohibited by Section 3.02, or Section 3.05(a)
or Section 4.02 or any other provision in this Agreement; provided, further,
that in the event that any of the Second Lien Secured Parties or Third Lien
Secured Parties becomes a judgment lien creditor in respect of any Collateral as
a result of its enforcement of its rights as an unsecured creditor with respect
to the Second Lien Obligations or the Third Lien Obligations, as applicable,
such judgment lien shall be subject to the terms of this Agreement for all
purposes (including in relation to the Priority Lien Obligations and the Second
Lien Obligations, as applicable) as the Second Liens and Third Liens, as
applicable, are subject to this Agreement.

Section 4.08 Postponement of Subrogation. (a) Each of the Second Lien Collateral
Trustee, for itself and on behalf of each other Second Lien Secured Party, and
the Third Lien Collateral Trustee, for itself and on behalf of each other Third
Lien Secured Party, hereby agrees that no payment or distribution to any
Priority Lien Secured Party pursuant to the provisions of this Agreement shall
entitle

 

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any Second Lien Secured Party or Third Lien Secured Party to exercise any rights
of subrogation in respect thereof until, in the case of the Second Lien Secured
Parties, the Discharge of Priority Lien Obligations, and in the case of the
Third Lien Secured Parties, the Complete Discharge of Priority Lien Obligations
and the Discharge of Second Lien Obligations shall have occurred. Following the
Discharge of Priority Lien Obligations, but subject to the reinstatement as
provided in Section 4.03, each Priority Lien Secured Party will execute such
documents, agreements, and instruments as any Second Lien Secured Party may
reasonably request to evidence the transfer by subrogation to any such Person of
an interest in the Priority Lien Obligations that are not Excess Priority Lien
Obligations resulting from payments or distributions to such Priority Lien
Secured Party by such Person, so long as all costs and expenses (including all
reasonable legal fees and disbursements) incurred in connection therewith by
such Priority Lien Secured Party are paid by such Person upon request for
payment thereof.

(b) Following the Discharge of Priority Lien Obligations but prior to the
Discharge of Second Lien Obligations, the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, agrees that no
payment or distribution to any Second Lien Secured Party pursuant to the
provisions of this Agreement shall entitle any Third Lien Secured Party to
exercise any rights of subrogation in respect thereof. Following the Discharge
of Second Lien Obligations, but subject to the reinstatement as provided in
Section 4.03, each Second Lien Secured Party will execute such documents,
agreements, and instruments as any Third Lien Secured Party may reasonably
request to evidence the transfer by subrogation to any such Person of an
interest in the Second Lien Obligations resulting from payments or distributions
to such Second Lien Secured Party by such Person, so long as all costs and
expenses (including all reasonable legal fees and disbursements) incurred in
connection therewith by such Second Lien Secured Party are paid by such Person
upon request for payment thereof.

Section 4.09 Acknowledgment by the Secured Debt Representatives. Each of the
Priority Lien Agent, for itself and on behalf of the other Priority Lien Secured
Parties, the Second Lien Collateral Trustee, for itself and on behalf of the
other Second Lien Secured Parties, and the Third Lien Collateral Trustee, for
itself and on behalf of the other Third Lien Secured Parties, hereby
acknowledges that this Agreement is a material inducement to enter into a
business relationship, that each has relied on this Agreement to enter into the
Priority Credit Agreement, the Term Loan Credit Agreement and the Third Lien
Documents, as applicable, and all documentation related thereto, and that each
will continue to rely on this Agreement in their related future dealings.

ARTICLE V -

GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS

Section 5.01 General. (a) Prior to the Complete Discharge of Priority Lien
Obligations, the Priority Lien Agent agrees that if it shall at any time hold a
Priority Lien on any Collateral that can be perfected by the possession or
control of such Collateral or of any Account in which such Collateral is held,
and if such Collateral or any such Account is in fact in the possession or under
the control of the Priority Lien Agent, the Priority Lien Agent will serve as
gratuitous bailee for (i) the Second Lien Collateral Trustee for the sole
purpose of perfecting the Second Lien of the Second Lien Collateral Trustee on
such Collateral and (ii) the Third Lien Collateral Trustee for the sole purpose
of perfecting the Third Lien of the Third Lien Collateral Trustee on such
Collateral. It is agreed that the obligations of the Priority Lien Agent and the
rights of the Second Lien Collateral Trustee, the other Second Lien Secured
Parties, the Third Lien Collateral Trustee and the other Third Lien Secured
Parties in connection with any such bailment arrangement will be in all respects
subject to the provisions of Article II. Notwithstanding anything to the
contrary herein, the Priority Lien Agent will be deemed to make no
representation as to the adequacy of the steps taken by it to perfect the Second
Lien or Third Lien on any such Collateral and shall have no responsibility,
duty, obligation or liability to the Second Lien Collateral Trustee, any other
Second Lien Secured Party, the Third Lien Collateral Trustee or any other Third
Lien Secured Party or

 

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any other Person for such perfection or failure to perfect, it being understood
that the sole purpose of this Article is to enable the Second Lien Secured
Parties to obtain a perfected Second Lien and the Third Lien Secured Parties to
obtain a perfected Third Lien in such Collateral to the extent, if any, that
such perfection results from the possession or control of such Collateral or any
such Account by the Priority Lien Agent. The Priority Lien Agent acting pursuant
to this Section 5.01 shall not have by reason of the Priority Lien Security
Documents, the Second Lien Security Documents, the Third Lien Security
Documents, this Agreement or any other document or theory, a fiduciary
relationship in respect of any Priority Lien Secured Party, the Second Lien
Collateral Trustee, any Second Lien Secured Party, the Third Lien Collateral
Trustee or any Third Lien Secured Party. Subject to Section 4.03 and
Section 5.01(a), from and after the Discharge of Priority Lien Obligations, the
Priority Lien Agent shall take all such actions in its power as shall reasonably
be requested by the Second Lien Collateral Trustee (at the sole cost and expense
of the Grantors) to transfer possession or control of such Collateral or any
such Account (in each case to the extent the Second Lien Collateral Trustee has
a Lien on such Collateral or Account after giving effect to any prior or
concurrent releases of Liens) to the Second Lien Collateral Trustee for the
benefit of all Second Lien Secured Parties. Subject to Section 4.03 and
Section 5.01(a), from time to time and after the Discharge of Priority Lien
Obligations, the Second Lien Collateral Trustee shall take all such actions in
its power as shall reasonably be requested by (i) if prior to Complete Discharge
of Priority Lien Obligations, the Priority Lien Agent, and (ii) if after
Discharge of Second Lien Obligations and the Complete Discharge of Priority Lien
Obligations, the Third Lien Collateral Trustee (at the sole cost and expense of
the Grantors) to transfer possession or control of such Collateral or any such
Account (in each case to the extent the Second Lien Collateral Trustee has a
Lien on such Collateral or Account after giving effect to any prior or
concurrent releases of Liens) to the Priority Lien Agent for the benefit of all
Priority Lien Secured Parties or to the Third Lien Collateral Trustee for the
benefit of all Third Lien Secured Parties, as applicable.

(b) Following the Discharge of Priority Lien Obligations but prior to the
Complete Discharge of Priority Lien Obligations and prior to the Discharge of
Second Lien Obligations, the Second Lien Collateral Trustee agrees that if it
shall at any time hold a Second Lien on any Collateral that can be perfected by
the possession or control of such Collateral or of any Account in which such
Collateral is held, and if such Collateral or any such Account is in fact in the
possession or under the control of the Second Lien Collateral Trustee, the
Second Lien Collateral Trustee will serve as gratuitous bailee for the Priority
Lien Agent and the Third Lien Collateral Trustee for the sole purpose of
perfecting the Priority Lien of the Priority Lien Agent on such Collateral and
the Third Lien of the Third Lien Collateral Trustee on such Collateral. It is
agreed that the obligations of the Second Lien Collateral Trustee and the rights
of the Priority Lien Agent and the other Priority Secured Parties and Third Lien
Collateral Trustee and the other Third Lien Secured Parties in connection with
any such bailment arrangement will be in all respects subject to the provisions
of Article II. Notwithstanding anything to the contrary herein, the Second Lien
Collateral Trustee will be deemed to make no representation as to the adequacy
of the steps taken by it to perfect the Priority Lien or the Third Lien on any
such Collateral and shall have no responsibility, duty, obligation or liability
to the Priority Lien Agent, any other Priority Secured Party, the Third Lien
Collateral Trustee or any other Third Lien Secured Party or any other Person for
such perfection or failure to perfect, it being understood that the sole purpose
of this Article is to enable the Priority Lien Agent and the Third Lien Secured
Parties to obtain a perfected Priority Lien or Third Lien in such Collateral, as
applicable to the extent, if any, that such perfection results from the
possession or control of such Collateral or any such Account by the Second Lien
Collateral Trustee. The Second Lien Collateral Trustee acting pursuant to this
Section 5.01 shall not have by reason of the Priority Lien Documents, the Second
Lien Security Documents, the Third Lien Security Documents, this Agreement or
any other document or theory, a fiduciary relationship in respect of any
Priority Secured Party, any Second Lien Secured Party, the Third Lien Collateral
Trustee or any Third Lien Secured Party. Subject to Section 4.03, from and after
the Discharge of Second Lien Obligations, the Second Lien Collateral Trustee
shall take all such actions in its power as shall reasonably be requested by the
Third Lien

 

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Collateral Trustee (at the sole cost and expense of the Grantors) to transfer
possession or control of such Collateral or any such Account (in each case to
the extent the Priority Lien Agent or Third Lien Collateral Trustee has a Lien
on such Collateral or Account after giving effect to any prior or concurrent
releases of Liens) to the Priority Lien Agent for the benefit of all Priority
Secured Parties or the Third Lien Collateral Trustee for the benefit of all
Third Lien Secured Parties.

Section 5.02 Deposit Accounts. (a) Prior to the Complete Discharge of Priority
Lien Obligations, to the extent that any Account is under the control of the
Priority Lien Agent at any time, the Priority Lien Agent will act as gratuitous
bailee for (i) the Second Lien Collateral Trustee for the purpose of perfecting
the Liens of the Second Lien Secured Parties and (ii) the Third Lien Collateral
Trustee for the purpose of perfecting the Liens of the Third Lien Secured
Parties in such Accounts and the cash and other assets therein as provided in
Section 3.01 (but will have no duty, responsibility or obligation to the Second
Lien Secured Parties or the Third Lien Secured Parties (including, without
limitation, any duty, responsibility or obligation as to the maintenance of such
control, the effect of such arrangement or the establishment of such perfection)
except as set forth in the last sentence of this Section 5.02(a)). Unless the
Second Liens on such Collateral shall have been or concurrently are released,
after the occurrence of Discharge of Priority Lien Obligations, the Priority
Lien Agent shall, at the request of the Second Lien Collateral Trustee,
cooperate with the Grantors and the Second Lien Collateral Trustee (at the
expense of the Grantors) in permitting control of any other Accounts to be
transferred to the Second Lien Collateral Trustee (or for other arrangements
with respect to each such Accounts satisfactory to the Second Lien Collateral
Trustee to be made).

(b) Following the Discharge of Priority Lien Obligations but prior to the
Complete Discharge of Priority Lien Obligations and prior to the Discharge of
Second Lien Obligations, to the extent that any Account is under the control of
the Second Lien Collateral Trustee at any time, the Second Lien Collateral
Trustee will act as gratuitous bailee for the Priority Lien Agent and the Third
Lien Collateral Trustee for the purpose of perfecting the Liens of the Priority
Lien Secured Parties and the Third Lien Secured Parties in such Accounts and the
cash and other assets therein as provided in Section 3.01 (but will have no
duty, responsibility or obligation to the Priority Lien Secured Parties and the
Third Lien Secured Parties (including, without limitation, any duty,
responsibility or obligation as to the maintenance of such control, the effect
of such arrangement or the establishment of such perfection) except as set forth
in the last sentence of this Section 5.02(b)). Unless the Priority Liens and the
Third Liens on such Collateral shall have been or concurrently are released,
after the occurrence of Discharge of Second Lien Obligations, the Second Lien
Collateral Trustee shall, at the request of (i) if prior to the Complete
Discharge of Priority Lien Obligations, the Priority Lien Agent and (ii) if
following Complete Discharge of Priority Lien Obligations, the Third Lien
Collateral Trustee, cooperate with the Grantors and the Priority Lien Agent or
the Third Lien Collateral Trustee (at the expense of the Grantors) in permitting
control of any other Accounts to be transferred to the Priority Lien Agent or
the Third Lien Collateral Trustee, as applicable, (or for other arrangements
with respect to each such Accounts satisfactory to the Priority Lien Agent or
the Third Lien Collateral Trustee, as applicable to be made).

ARTICLE VI -

APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS

Section 6.01 Application of Proceeds. (a) Prior to the Discharge of Priority
Obligations, and regardless of whether an Insolvency or Liquidation Proceeding
has been commenced, Collateral or Proceeds received in connection with the
enforcement or exercise of any rights or remedies with respect to any portion of
the Collateral will be applied:

(1) first, to the payment in full in cash of all Priority Lien Obligations that
are not Excess Priority Lien Obligations,

 

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(2) second, to the payment in full in cash of all Second Lien Obligations,

(3) third, to the payment in full in cash of all Excess Priority Lien
Obligations,

(4) fourth, to the payment in full in cash of all Third Lien Obligations, and

(5) fifth, to W&T or as otherwise required by applicable law.

(b) Following the Discharge of Priority Obligations but prior to the Discharge
of Second Lien Obligations, and regardless of whether an Insolvency or
Liquidation Proceeding has been commenced, Collateral or Proceeds received in
connection with the enforcement or exercise of any rights or remedies with
respect to any portion of the Collateral will be applied:

(1) first, to the payment in full of all Second Lien Obligations,

(2) second, to the payment in full of all Third Lien Obligations, and

(3) third, to W&T or as otherwise required by applicable law.

Section 6.02 Determination of Amounts. Whenever a Secured Debt Representative
shall be required, in connection with the exercise of its rights or the
performance of its obligations hereunder, to determine the existence or amount
of any Priority Lien Obligations (or the existence of any commitment to extend
credit that would constitute Priority Lien Obligations), Second Lien Obligations
or Third Lien Obligations, or the existence of any Lien securing any such
obligations, or the Collateral subject to any such Lien, it may request that
such information be furnished to it in writing by the other Secured Debt
Representatives and shall be entitled to make such determination on the basis of
the information so furnished; provided, however, that if a Secured Debt
Representative shall fail or refuse reasonably promptly to provide the requested
information, the requesting Secured Debt Representative shall be entitled to
make any such determination by such method as it may, in the exercise of its
good faith judgment, determine, including by reliance upon a certificate of
W&T. Each Secured Debt Representative may rely conclusively, and shall be fully
protected in so relying, on any determination made by it in accordance with the
provisions of the preceding sentence (or as otherwise directed by a court of
competent jurisdiction) and shall have no liability to W&T or any of their
subsidiaries, any Secured Party or any other Person as a result of such
determination.

ARTICLE VII -

NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE;

CONSENT OF GRANTORS; ETC.

Section 7.01 No Reliance; Information. The Priority Lien Secured Parties, the
Second Lien Secured Parties and the Third Lien Secured Parties shall have no
duty to disclose to any Third Lien Secured Party, Second Lien Secured Party or
to any Priority Lien Secured Party, as the case may be, any information relating
to W&T or any of the other Grantors, or any other circumstance bearing upon the
risk of non-payment of any of the Priority Lien Obligations, the Second Lien
Obligations or the Third Lien Obligations, as the case may be, that is known or
becomes known to any of them or any of their Affiliates. In the event any
Priority Lien Secured Party, any Second Lien Secured Party or any Third Lien
Secured Party, in its sole discretion, undertakes at any time or from time to
time to provide any such information to, any Third Lien Secured Party, any
Second Lien Secured Party or any Priority Lien Secured Party, as the case may
be, it shall be under no obligation (a) to make, and shall not make or be

 

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deemed to have made, any express or implied representation or warranty,
including with respect to the accuracy, completeness, truthfulness or validity
of the information so provided, (b) to provide any additional information or to
provide any such information on any subsequent occasion or (c) to undertake any
investigation.

Section 7.02 No Warranties or Liability.

(a) The Priority Lien Agent, for itself and on behalf of the other Priority Lien
Secured Parties, acknowledges and agrees that, except for the representations
and warranties set forth in Article VIII, (i) neither the Second Lien Collateral
Trustee nor any other Second Lien Secured Party has made any express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectability or enforceability of any of the Second
Lien Documents, the ownership of any Collateral or the perfection or priority of
any Liens thereon and (ii) neither the Third Lien Collateral Trustee nor any
other Third Lien Secured Party has made any express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectability or enforceability of any of the Third Lien
Documents, the ownership of any Collateral or the perfection or priority of any
Liens thereon.

(b) The Second Lien Collateral Trustee, for itself and on behalf of the other
Second Lien Secured Parties, acknowledges and agrees that, except for the
representations and warranties set forth in Article VIII, (i) neither the
Priority Lien Agent nor any other Priority Lien Secured Party has made any
express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectability or enforceability of
any of the Priority Lien Documents, the ownership of any Collateral or the
perfection or priority of any Liens thereon and (ii) neither the Third Lien
Collateral Trustee nor any other Third Lien Secured Party has made any express
or implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectability or enforceability of any of the
Third Lien Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon.

(c) The Third Lien Collateral Trustee, for itself and on behalf of the other
Third Lien Secured Parties, acknowledges and agrees that, except for the
representations and warranties set forth in Article VIII, (i) neither the
Priority Lien Agent nor any other Priority Lien Secured Party has made any
express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectability or enforceability of
any of the Priority Lien Documents, the ownership of any Collateral or the
perfection or priority of any Liens thereon and (ii) neither the Second Lien
Collateral Trustee nor any other Second Lien Secured Party has made any express
or implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectability or enforceability of any of the
Second Lien Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon.

(d) (i) The Priority Lien Agent and the other Priority Lien Secured Parties
shall have no express or implied duty to the Second Lien Collateral Trustee, any
other Second Lien Secured Party, the Third Lien Collateral Trustee or any other
Third Lien Secured Party, (ii) the Second Lien Collateral Trustee and the other
Second Lien Secured Parties shall have no express or implied duty to the
Priority Lien Agent, any other Priority Lien Secured Party, the Third Lien
Collateral Trustee or any other Third Lien Secured Party, and (iii) the Third
Lien Collateral Trustee shall have no express or implied duty to the Priority
Lien Agent, any other Priority Lien Secured Party, the Second Lien Collateral
Trustee or any other Second Lien Secured Party, in each case to act or refrain
from acting in a manner which allows, or results in, the occurrence or
continuance of a default or an event of default under any Priority Lien
Document, any Second Lien Document and any Third Lien Document (other than, in
each case, this Agreement), regardless of any knowledge thereof which they may
have or be charged with.

 

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(e) Each of the Second Lien Collateral Trustee, for itself and on behalf of each
other Second Lien Secured Party and the Third Lien Collateral Trustee, for
itself and on behalf of each other Third Lien Secured Party, hereby waives any
claim that may be had against the Priority Lien Agent or any other Priority Lien
Secured Party arising out of any actions which the Priority Lien Agent or such
Priority Lien Secured Party takes or omits to take (including actions with
respect to the creation, perfection or continuation of Liens on any Collateral,
actions with respect to the foreclosure upon, sale, release or depreciation of,
or failure to realize upon, any Collateral, and actions with respect to the
collection of any claim for all or only part of the Priority Lien Obligations
from any account debtor, guarantor or any other party) in accordance with this
Agreement and the Priority Lien Documents or the valuation, use, protection or
release of any security for such Priority Lien Obligations. The Third Lien
Collateral Trustee, for itself and on behalf each other Third Lien Secured
Party, hereby waives any claim that may be had against the Second Lien
Collateral Trustee or any other Second Lien Secured Party arising out of any
actions which the Second Lien Collateral Trustee or such Second Lien Secured
Party takes or omits to take following the Discharge of Priority Lien
Obligations but prior to the Discharge of Second Lien Obligations (including
actions with respect to the creation, perfection or continuation of Liens on any
Collateral, actions with respect to the foreclosure upon, sale, release or
depreciation of, or failure to realize upon, any Collateral, and actions with
respect to the collection of any claim for all or only part of the Second Lien
Obligations from any account debtor, guarantor or any other party) in accordance
with this Agreement and the Second Lien Documents or the valuation, use,
protection or release of any security for such Second Lien Obligations.

Section 7.03 Obligations Absolute. The Lien priorities provided for herein and
the respective rights, interests, agreements and obligations hereunder of the
Priority Lien Agent and the other Priority Lien Secured Parties, the Second Lien
Collateral Trustee and the other Second Lien Secured Parties, and the Third Lien
Collateral Trustee and the other Third Lien Secured Parties shall remain in full
force and effect irrespective of:

(a) any lack of validity or enforceability of any Secured Debt Document;

(b) any change in the time, place or manner of payment of, or in any other term
of (including the Replacing of), all or any portion of the Priority Lien
Obligations, it being specifically acknowledged that a portion of the Priority
Lien Obligations consists or may consist of Indebtedness that is revolving in
nature, and the amount thereof that may be outstanding at any time or from time
to time may be increased or reduced and subsequently reborrowed;

(c) any amendment, waiver or other modification, whether by course of conduct or
otherwise, of any Secured Debt Document;

(d) the securing of any Priority Lien Obligations, Second Lien Obligations or
Third Lien Obligations with any additional collateral or guarantees, or any
exchange, release, voiding, avoidance or non-perfection of any security interest
in any Collateral or any other collateral or any release of any guarantee
securing any Priority Lien Obligations, Second Lien Obligations or Third Lien
Obligations;

(e) the commencement of any Insolvency or Liquidation Proceeding in respect of
W&T or any other Grantor; or

(f) any other circumstances that otherwise might constitute a defense available
to, or a discharge of, W&T or any other Grantor in respect of the Priority Lien
Obligations, the Second Lien Obligations or the Third Lien Obligations.

 

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Section 7.04 Grantors Consent and Agreement. (a) Each Grantor hereby consents to
the provisions of this Agreement and the intercreditor arrangements provided for
herein and agrees that the obligations of the Grantors under the Secured Debt
Documents will in no way be diminished or otherwise affected by such provisions
or arrangements (except as expressly provided herein).

(b) W&T agrees to deliver to the Second Lien Collateral Trustee a copy of any
Officers’ Certificate delivered by W&T as provided in (i) the proviso of the
definition of Priority Lien Cap or (ii) the definition of Priority Lien Debt,
provided, however, that failure to deliver a copy thereof to the Second Lien
Collateral Trustee shall not impair the effectiveness of any such Officers’
Certificate under this Agreement.

ARTICLE VIII -

REPRESENTATIONS AND WARRANTIES

Section 8.01 Representations and Warranties of Each Party. Each party hereto
represents and warrants to the other parties hereto as follows:

(a) Such party is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all requisite power and
authority to enter into and perform its obligations under this Agreement.

(b) This Agreement has been duly executed and delivered by such party.

(c) The execution, delivery and performance by such party of this Agreement
(i) do not require any consent or approval of, registration or filing with or
any other action by any Governmental Authority of which the failure to obtain
could reasonably be expected to have a Material Adverse Effect (as defined in
the Priority Credit Agreement), (ii) will not violate any applicable law or
regulation or any order of any Governmental Authority or any indenture,
agreement or other instrument binding upon such party which could reasonably be
expected to have a Material Adverse Effect and (iii) will not violate the
charter, by-laws or other organizational documents of such party.

Section 8.02 Representations and Warranties of Each Representative. Each of the
Priority Lien Agent, the Second Lien Collateral Trustee and the Third Lien
Collateral Trustee represents and warrants to the other parties hereto that it
is authorized under the Priority Credit Agreement, the Second Lien Collateral
Trust Agreement and the Third Lien Collateral Trust Agreement, as the case may
be, to enter into this Agreement.

ARTICLE IX -

MISCELLANEOUS

Section 9.01 Notices. 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 telecopy, as follows:

(a) if to the Original Priority Lien Agent, to it at:

Toronto Dominion (Texas) LLC

31 West 52nd Street, 20th Floor

New York, New York 10019

Tel: (212) 827-7600

Fax: (212) 827-7227

Attn: Rose Warren

 

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(with a copy to:

909 Fannin, Suite 1950

Houston, Texas 77010

Tel: (713) 653-8211

Fax: (713) 652-2647

Attn: Martin Snyder)

(b) if to the Original Second Lien Collateral Trustee, to it at:

Morgan Stanley Senior Funding, Inc.

1300 Thames Street, 4th Floor

Thames Street Wharf

Baltimore, Maryland 21231

Facsimile: (212) 404-9645

Attention: Documentation Team

(c) if to any other Secured Debt Representative, to such address as specified in
the Priority Confirmation Joinder.

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 (if a business day) and on the next business day thereafter (in all
other cases) if delivered by hand or overnight courier service or sent by
telecopy or on the date five business days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01. As agreed to in writing among W&T, the Priority Lien Agent, the
Second Lien Collateral Trustee and the Third Lien Collateral Trustee from time
to time, notices and other communications may also be delivered by e-mail to the
e-mail address of a representative of the applicable person provided from time
to time by such person.

Section 9.02 Waivers; Amendment. (a) No failure or delay on the part of any
party hereto in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the parties hereto 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 consent to any
departure by any party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section 9.02, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any party hereto in any case shall
entitle such party to any other or further notice or demand in similar or other
circumstances.

(b) Neither this Agreement nor any provision hereof may be terminated, waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by each Secured Debt Representative; provided, however, that this
Agreement may be amended from time to time as provided in Section 4.04. Any
amendment of this Agreement that is proposed to be effected without the consent
of a Secured Debt Representative as permitted by the proviso to the preceding
sentence shall be submitted to such Secured Debt Representative for its review
at least 5 business days prior to the proposed effectiveness of such amendment.

 

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Section 9.03 Actions Upon Breach; Specific Performance. (a) (1) Prior to the
Complete Discharge of Priority Lien Obligations, if any Second Lien Secured
Party or Third Lien Secured Party, contrary to this Agreement, commences or
participates in any action or proceeding against any Grantor or the Collateral,
such Grantor, with the prior written consent of the Priority Lien Agent, may
interpose as a defense or dilatory plea the making of this Agreement, and any
Priority Lien Secured Party may intervene and interpose such defense or plea in
its or their name or in the name of such Grantor and (ii) following the
Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien
Obligations, if any Third Lien Secured Party, contrary to this Agreement,
commences or participates in any action or proceeding against any Grantor or the
Collateral, such Grantor, with the prior written consent of the Second Lien
Collateral Trustee, may interpose as a defense or dilatory plea the making of
this Agreement, and any Second Lien Secured Party may intervene and interpose
such defense or plea in its or their name or in the name of such Grantor.

(b) (1) Prior to the Complete Discharge of Priority Lien Obligations, should any
Second Lien Secured Party or Third Lien Secured Party, contrary to this
Agreement, in any way take, attempt to or threaten to take any action with
respect to the Collateral (including any attempt to realize upon or enforce any
remedy with respect to this Agreement), or take any other action in violation of
this Agreement or fail to take any action required by this Agreement, the
Priority Lien Agent or any other Priority Lien Secured Party (in its own name or
in the name of the relevant Grantor) or the relevant Grantor, with the prior
written consent of the Priority Lien Agent, (A) may obtain relief against such
Second Lien Secured Party or Third Lien Secured Party, as applicable, by
injunction, specific performance and/or other appropriate equitable relief, it
being understood and agreed by each of the Second Lien Collateral Trustee on
behalf of each Second Lien Secured Party and the Third Lien Collateral Trustee
on behalf of each Third Lien Secured Party that (I) the Priority Lien Secured
Parties’ damages from its actions may at that time be difficult to ascertain and
may be irreparable, and (II) each Second Lien Secured Party and Third Lien
Secured Party waives any defense that the Grantors and/or the Priority Lien
Secured Parties cannot demonstrate damage and/or be made whole by the awarding
of damages, and (B) shall be entitled to damages, as well as reimbursement for
all reasonable and documented costs and expenses incurred in connection with any
action to enforce the provisions of this Agreement and (ii) following the
Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien
Obligations, should any Third Lien Secured Party, contrary to this Agreement, in
any way take, attempt to or threaten to take any action with respect to the
Collateral (including any attempt to realize upon or enforce any remedy with
respect to this Agreement), or take any other action in violation of this
Agreement or fail to take any action required by this Agreement, the Second Lien
Collateral Trustee or any other Second Lien Secured Party (in its own name or in
the name of the relevant Grantor) or the relevant Grantor, with the prior
written consent of the Second Lien Collateral Trustee, (A) may obtain relief
against such Third Lien Secured Party by injunction, specific performance and/or
other appropriate equitable relief, it being understood and agreed by the Third
Lien Collateral Trustee on behalf of each Third Lien Secured Party that (I) the
Second Lien Secured Parties damages from its actions may at that time be
difficult to ascertain and may be irreparable, and (II) each Third Lien Secured
Party waives any defense that the Grantors and/or the Second Lien Secured
Parties cannot demonstrate damage and/or be made whole by the awarding of
damages, and (B) shall be entitled to damages, as well as reimbursement for all
reasonable and documented costs and expenses incurred in connection with any
action to enforce the provisions of this Agreement.

Section 9.04 Parties in Interest. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, as well as the other Secured Parties, all of whom are intended to be
bound by, and to be third party beneficiaries of, this Agreement.

 

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Section 9.05 Survival of Agreement. All covenants, agreements, representations
and warranties made by any party in this Agreement shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement.

Section 9.06 Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original but all of which when taken together shall
constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.

Section 9.07 Severability. Any provision of this Agreement 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; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

Section 9.08 Governing Law; Jurisdiction; Consent to Service of Process. (a)
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW).

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement in the courts of any
jurisdiction.

(c) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section 9.08. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

Section 9.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,

 

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EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 9.10 Headings. Article, Section and Annex headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.

Section 9.11 Conflicts. In the event of any conflict or inconsistency between
the provisions of this Agreement and the provisions of any Secured Debt
Documents, the provisions of this Agreement shall control; provided, however,
that if any of the provisions of the Second Lien Security Documents or Third
Lien Security Documents limit, qualify or conflict with the duties imposed by
the provisions of the TIA, in each case, the TIA shall control.

Section 9.12 Provisions Solely to Define Relative Rights. The provisions of this
Agreement are and are intended solely for the purpose of defining the distinct
and separate relative rights of the Priority Lien Secured Parties, the Second
Lien Secured Parties and the Third Lien Secured Parties. None of W&T, any other
Grantor or any other creditor thereof shall have any rights or obligations
hereunder, except as expressly provided in this Agreement (provided that nothing
in this Agreement (other than Sections 4.01, 4.02, 4.04, or 4.05) is intended to
or will amend, waive or otherwise modify the provisions of the Priority Credit
Agreement, the Term Loan Credit Agreement or the Third Lien Documents, as
applicable), and except as expressly provided in this Agreement neither W&T nor
any other Grantor may rely on the terms hereof (other than Sections 4.01, 4.02,
4.04, or 4.05, Article VII and Article IX). Nothing in this Agreement is
intended to or shall impair the obligations of W&T or any other Grantor, which
are absolute and unconditional, to pay the Obligations under the Secured Debt
Documents as and when the same shall become due and payable in accordance with
their terms. Notwithstanding anything to the contrary herein or in any Secured
Debt Document, the Grantors shall not be required to act or refrain from acting
pursuant to this Agreement, any Priority Lien Document, any Second Lien Document
or any Third Lien Document with respect to any Collateral in any manner that
would cause a default under any Priority Lien Document.

Section 9.13 Certain Terms Concerning the Second Lien Collateral Trustee and the
Third Lien Collateral Trustee. (a) The Second Lien Collateral Trustee is
executing and delivering this Agreement solely in its capacity as such and
pursuant to direction set forth in the Second Lien Collateral Trust Agreement;
and in so doing, the Second Lien Collateral Trustee shall not be responsible for
the terms or sufficiency of this Agreement for any purpose. The Second Lien
Collateral Trustee shall have no duties or obligations under or pursuant to this
Agreement other than such duties and obligations as may be expressly set forth
in this Agreement as duties and obligations on its part to be performed or
observed. In entering into this Agreement, or in taking (or forbearing from) any
action under or pursuant to the Agreement, the Second Lien Collateral Trustee
shall have and be protected by all of the rights, immunities, indemnities and
other protections granted to it under the Term Loan Credit Agreement and the
other Second Lien Documents (including without limitation Article 5 and
Section 7.8 of the Second Lien Collateral Trust Agreement).

(b) The Third Lien Collateral Trustee is executing and delivering this Agreement
solely in its capacity as such and pursuant to direction set forth in the Third
Lien Collateral Trust Agreement; and in so doing, the Third Lien Collateral
Trustee shall not be responsible for the terms or sufficiency of this Agreement
for any purpose. The Third Lien Collateral Trustee shall have no duties or
obligations under or pursuant to this Agreement other than such duties and
obligations as may be

 

54

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expressly set forth in this Agreement as duties and obligations on its part to
be performed or observed. In entering into this Agreement, or in taking (or
forbearing from) any action under or pursuant to the Agreement, the Third Lien
Collateral Trustee shall have and be protected by all of the rights, immunities,
indemnities and other protections granted to it under any Third Lien Document.

Section 9.14 Certain Terms Concerning the Priority Lien Agent, the Second Lien
Collateral Trustee and the Third Lien Collateral Trustee. None of the Priority
Lien Agent, the Second Lien Collateral Trustee or the Third Lien Collateral
Trustee shall have any liability or responsibility for the actions or omissions
of any other Secured Party, or for any other Secured Party’s compliance with (or
failure to comply with) the terms of this Agreement. None of the Priority Lien
Agent, the Second Lien Collateral Trustee or the Third Lien Collateral Trustee
shall have individual liability to any Person if it shall mistakenly pay over or
distribute to any Secured Party (or W&T) any amounts in violation of the terms
of this Agreement, so long as the Priority Lien Agent, the Second Lien
Collateral Trustee or the Third Lien Collateral Trustee, as the case may be, is
acting in good faith. Each party hereto hereby acknowledges and agrees that each
of the Priority Lien Agent, the Second Lien Collateral Trustee and the Third
Lien Collateral Trustee is entering into this Agreement solely in its capacity
under the Priority Lien Documents, the Second Lien Documents and the Third Lien
Documents, respectively, and not in its individual capacity. (a) The Priority
Lien Agent shall not be deemed to owe any fiduciary duty to (i) the Second Lien
Collateral Trustee or any other Second Lien Representative or any other Second
Lien Secured Party or (ii) the Third Lien Collateral Trustee or any other Third
Lien Representative or any other Third Lien Secured Party; (b) the Second Lien
Collateral Trustee shall not be deemed to owe any fiduciary duty to (i) the
Priority Lien Agent or any other Priority Lien Secured Party or (ii) the Third
Lien Collateral Trustee or any other Third Lien Representative or any other
Third Lien Secured Party; and (c) the Third Lien Collateral Trustee shall not be
deemed to owe any fiduciary duty to (i) the Priority Lien Agent or any other
Priority Lien Secured Party or (ii) the Second Lien Collateral Trustee or any
other Second Lien Representative or any other Second Lien Secured Party.

Section 9.15 Authorization of Secured Agents. By accepting the benefits of this
Agreement and the other Priority Lien Security Documents, each Priority Lien
Secured Party authorizes the Priority Lien Agent to enter into this Agreement
and to act on its behalf as collateral agent hereunder and in connection
herewith. By accepting the benefits of this Agreement and the other Second Lien
Security Documents, each Second Lien Secured Party authorizes the Second Lien
Collateral Trustee to enter into this Agreement and to act on its behalf as
collateral agent hereunder and in connection herewith. By accepting the benefits
of this Agreement and the other Third Lien Security Documents, each Third Lien
Secured Party authorizes the Third Lien Collateral Trustee to enter into this
Agreement and to act on its behalf as collateral agent hereunder and in
connection herewith.

Section 9.16 Further Assurances. Each of the Priority Lien Agent, for itself and
on behalf of the other Priority Lien Secured Party, the Second Lien Collateral
Trustee, for itself and on behalf of the other Second Lien Secured Parties, the
Third Lien Collateral Trustee, for itself and on behalf of the other Third Lien
Secured Parties, and each Grantor party hereto, for itself and on behalf of its
subsidiaries, agrees that it will execute, or will cause to be executed, any and
all further documents, agreements and instruments, and take all such further
actions, as may be required under any applicable law, or which the Priority Lien
Agent, the Second Lien Collateral Trustee or the Third Lien Collateral Trustee
may reasonably request, to effectuate the terms of this Agreement, including the
relative Lien priorities provided for herein.

Section 9.17 Relationship of Secured Parties. Nothing set forth herein shall
create or evidence a joint venture, partnership or an agency or fiduciary
relationship among the Secured Parties. None of the Secured Parties nor any of
their respective directors, officers, agents or employees shall be responsible
to any other Secured Party or to any other Person for any Grantor’s solvency,
financial condition or ability

 

55

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to repay the Priority Lien Obligations, the Second Lien Obligations or the Third
Lien Obligations, or for statements of any Grantor, oral or written, or for the
validity, sufficiency or enforceability of the Priority Lien Documents, the
Second Lien Documents or the Third Lien Documents, or any security interests
granted by any Grantor to any Secured Party in connection therewith. Each
Secured Party has entered into its respective financing agreements with the
Grantors based upon its own independent investigation, and none of the Priority
Lien Agent, the Second Lien Collateral Trustee or the Third Lien Collateral
Trustee makes any warranty or representation to the other Secured Debt
Representatives or the Secured Parties for which it acts as agent nor does it
rely upon any representation of the other agents or the Secured Parties for
which it acts as agent with respect to matters identified or referred to in this
Agreement.

Section 9.18 Third Lien Provisions. Notwithstanding any of the foregoing
provisions, until such time as the Third Lien Collateral Trustee has, pursuant
to the terms hereof (including but not limited Section 4.04(c)), entered into,
and, for itself and on behalf of the Third Lien Secured Parties, agreed to be
bound by the terms of, this Agreement and executed a Priority Joinder
Confirmation, the provisions of this Agreement relating to the Third Lien
Obligations (including, but not limited to, the definitions of “Additional Third
Lien Debt Facility”, “Additional Third Lien Documents”, “Additional Third Lien
Obligations”, “Additional Third Lien Secured Parties”, “Additional Third Lien
Security Documents”, “Initial Third Lien Debt Facility”, Initial Third Lien
Documents”, “Initial Third Lien Obligations”, Initial Third Lien Secured
Parties”, “Initial Third Lien Security Documents”, “Series of Third Lien Debt”,
“Third Lien”, “Third Lien Collateral”, “Third Lien Collateral Trust Agreement”,
“Third Lien Collateral Trustee”, “Third Lien Debt”, “Third Lien Documents”,
“Third Lien First Standstill Period”, “Third Lien Obligations”, “Third Lien
Representative”, “Third Lien Second Standstill Period”, “Third Lien Secured
Parties”, “Third Lien Security Documents” and “Third Lien Substitute Facility”
and provisions regarding priority, enforcement actions, Standstill Periods,
release of Liens, Insolvency or Liquidation Proceedings, reinstatement,
amendments to Third Lien Documents and application of proceeds) shall not be
operative.

[SIGNATURES BEGIN NEXT PAGE]

 

56

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

 

TORONTO DOMINION (TEXAS), LLC, as Priority Lien Agent By:  

/s/ Wallace Wong

Name:   Wallace Wong Title:   Authorized Signatory

 

Signature Page

Intercreditor Agreement

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

MORGAN STANLEY SENIOR FUNDING, INC., as Second Lien Collateral Trustee By:  

/s/ Henrik Z. Sandstrom

Name:   Henrik Z. Sandstrom Title:   Authorized Signatory

 

Signature Page

Intercreditor Agreement

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

ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN: W&T OFFSHORE, INC.
By:  

/s/ John D. Gibbons

Name:   John D. Gibbons Title:   Senior Vice President and Chief Financial
Officer GUARANTORS: W&T ENERGY VI, LLC By:   W&T Offshore, Inc.   Sole Member
By:  

/s/ John D. Gibbons

Name:   John D. Gibbons Title:   Senior Vice President and Chief Financial
Officer W&T ENERGY VII, LLC By:   W&T Offshore, Inc.   Sole Member By:  

/s/ John D. Gibbons

Name:   John D. Gibbons Title:   Senior Vice President and Chief Financial
Officer

 

Signature Page

Intercreditor Agreement

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

ANNEX I

Provision for the Term Loan Credit Agreement, any Additional Second Lien Debt
Facility, the Second Lien Documents, the Initial Third Lien Debt Facility, any
Additional Third Lien Debt Facility and the Third Lien Documents

Reference is made to the Intercreditor Agreement, dated as of May 11, 2015,
between TORONTO DOMINION (TEXAS), LLC, as Priority Lien Agent (as defined
therein), and Morgan Stanley Senior Funding, Inc., as Second Lien Collateral
Trustee (as defined therein) (the “Intercreditor Agreement”). Each holder of
[any Additional Second Lien Obligations][Initial Third Lien
Obligations][Additional Third Lien Obligations], by its acceptance of such
[Additional Second Lien Obligations][Initial Third Lien Obligations][Additional
Third Lien Obligations] i) consents to the subordination of Liens provided for
in the Intercreditor Agreement, ii) agrees that it will be bound by, and will
take no actions contrary to, the provisions of the Intercreditor Agreement and
iii) authorizes and instructs the [Second/Third] Lien Collateral Trustee on
behalf of each [Second/Third] Lien Secured Party (as defined therein) to enter
into the Intercreditor Agreement as [Second/Third] Lien Collateral Trustee on
behalf of such [Second/Third] Lien Secured Parties. The foregoing provisions are
intended as an inducement to the lenders under the Priority Credit Agreement to
extend credit to W&T and such lenders are intended third party beneficiaries of
such provisions and the provisions of the Intercreditor Agreement.

Provision for all Priority Lien Security Documents, Term Loan Second Lien
Security Documents, any Additional Second Lien Security Documents, the Initial
Third Lien Security Documents and the Additional Third Lien Security Documents
that Grant a Security Interest in Collateral

Reference is made to the Intercreditor Agreement, dated as of May 11, 2015,
between TORONTO DOMINION (TEXAS), LLC, as Priority Lien Agent (as defined
therein), and Morgan Stanley Senior Funding, Inc., as Second Lien Collateral
Trustee (as defined therein) (the “Intercreditor Agreement”). Each Person that
is secured hereunder, by accepting the benefits of the security provided hereby,
[(i) consents (or is deemed to consent), to the subordination of Liens provided
for in the Intercreditor Agreement,] 1 [(i)][(ii)] agrees (or is deemed to
agree) that it will be bound by, and will take no actions contrary to, the
provisions of the Intercreditor Agreement, [(ii)][(iii)] authorizes (or is
deemed to authorize) the [Priority Lien Agent] [Second Lien Collateral Trustee]
[Third Lien Collateral Trustee] on behalf of such Person to enter into, and
perform under, the Intercreditor Agreement and [(iii)][(iv)] acknowledges (or is
deemed to acknowledge) that a copy of the Intercreditor Agreement was delivered,
or made available, to such Person.

Notwithstanding any other provision contained herein, this Agreement, the Liens
created hereby and the rights, remedies, duties and obligations provided for
herein are subject in all respects to the provisions of the Intercreditor
Agreement and, to the extent provided therein, the applicable Security Documents
(as defined in the Intercreditor Agreement). In the event of any conflict or
inconsistency between the provisions of this Agreement and the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall control.

 

1  This bracketed language would not apply to the Priority Lien Security
Documents.

 

Annex I - 1

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

EXHIBIT A

to Intercreditor Agreement

[FORM OF]

PRIORITY CONFIRMATION JOINDER

Reference is made to the Intercreditor Agreement, dated as of May 11, 2015 (as
amended, supplemented, amended and restated or otherwise modified and in effect
from time to time, the “Intercreditor Agreement”) between TORONTO DOMINION
(TEXAS), LLC, as Priority Lien Agent for the Priority Lien Secured Parties (as
defined therein), and Morgan Stanley Senior Funding, Inc., as Second Lien
Collateral Trustee for the Second Lien Secured Parties (as defined therein).

Capitalized terms used but not otherwise defined herein shall have the meaning
set forth in the Intercreditor Agreement. This Priority Confirmation Joinder is
being executed and delivered pursuant to Section 4.04 [(a)][(b)][(c)] of the
Intercreditor Agreement as a condition precedent to the debt for which the
undersigned is acting as representative being entitled to the rights and
obligations of being [Additional [Second/Third] Lien Obligations][Initial third
Lien Obligations] under the Intercreditor Agreement.

1. Joinder. The undersigned, [    ], a [    ], (the “New Representative”) as
[trustee] [collateral trustee] [administrative agent] [collateral agent] under
that certain [describe applicable indenture, credit agreement or other document
governing the Additional Second or [Initial/Additional] Third Lien Obligations]
hereby:

(a) represents that the New Representative has been authorized to become a party
to the Intercreditor Agreement on behalf of the [Priority Lien Secured Parties
under a Priority Substitute Credit Facility] [Term Loan Second Lien Secured
Parties under the Second Lien Substitute Facility] [Additional Second Lien
Secured Parties under the Additional Second Lien Debt Facility] [Initial Third
Lien Secured Parties under the Initial Third Lien Debt Facility] [Additional
Third Lien Secured Parties under the Additional Third Lien Debt Facility] as [a
Priority Lien Agent under a Priority Substitute Credit Facility] [a Second Lien
Collateral Trustee under a Second Lien Substitute Facility] [a Third Lien
Collateral Trustee under a Third Lien Substitute Facility] [Secured Debt
Representative] [Second Lien Representative] [Third Lien Representative] under
the Intercreditor Agreement for all purposes thereof on the terms set forth
therein, and to be bound by the terms of the Intercreditor Agreement as fully as
if the undersigned had executed and delivered the Intercreditor Agreement as of
the date thereof; and

(b) agrees that its address for receiving notices pursuant to the Intercreditor
Agreement shall be as follows:

[Address];

2. Priority Confirmation.

[Option A: to be used if additional debt constitutes Priority Debt] The
undersigned New Representative, on behalf of itself and each Priority Lien
Secured Party for which the undersigned is acting as [Administrative Agent]
hereby agrees, for the benefit of all Secured Parties and each future Secured
Debt Representative, and as a condition to being treated as Priority Lien
Obligations under the Intercreditor Agreement, that the New Representative is
bound by the provisions of the Intercreditor Agreement, including the provisions
relating to the ranking of Priority Liens.

[or]

 

Exhibit A - 1

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

[Option B: to be used if additional debt constitutes a Series of Second Lien
Debt] The undersigned New Representative, on behalf of itself and each holder of
Obligations in respect of the Series of Second Lien Debt [that constitutes
Second Lien Substitute Facility] for which the undersigned is acting as [Second
Lien Representative] [Second Lien Collateral Trustee] hereby agrees, for the
benefit of all Secured Parties and each future Secured Debt Representative, and
as a condition to being treated as Secured Debt under the Intercreditor
Agreement, that:

(a) all Second Lien Obligations will be and are secured equally and ratably by
all Second Liens at any time granted by W&T or any other Grantor to secure any
Obligations in respect of such Series of Second Lien Debt, whether or not upon
property otherwise constituting Collateral for such Series of Second Lien Debt,
and that all such Second Liens will be enforceable by the Second Lien Collateral
Trustee with respect to such Series of Second Lien Debt for the benefit of all
Second Lien Secured Parties equally and ratably;

(b) the New Representative and each holder of Obligations in respect of the
Series of Second Lien Debt for which the undersigned is acting as [Second Lien
Representative] are bound by the provisions of the Intercreditor Agreement,
including the provisions relating to the ranking of Priority Liens, Second Liens
and Third Liens and the order of application of proceeds from enforcement of
Priority Liens, Second Liens and Third Liens; and

(c) the New Representative and each holder of Obligations in respect of the
Series of Second Lien Debt for which the undersigned is acting as [Second Lien
Representative] appoints the Second Lien Collateral Trustee and consents to the
terms of the Intercreditor Agreement and the performance by the Second Lien
Collateral Trustee of, and directs the Second Lien Collateral Trustee to
perform, its obligations under the Intercreditor Agreement and the Second Lien
Collateral Trust Agreement, together with all such powers as are reasonably
incidental thereto. [or]

[Option C: to be used if additional debt constitutes a Series of Third Lien
Debt] The undersigned New Representative, on behalf of itself and each holder of
Obligations in respect of the Series of Third Lien Debt [that constitutes Third
Lien Substitute Facility] for which the undersigned is acting as [Third Lien
Representative][Third Lien Collateral Trustee] hereby agrees, for the benefit of
all Secured Parties and each future Secured Debt Representative, and as a
condition to being treated as Secured Debt under the Intercreditor Agreement,
that:

(a) all Third Lien Obligations will be and are secured equally and ratably by
all Third Liens at any time granted by W&T or any other Grantor to secure any
Obligations in respect of such Series of Third Lien Debt, whether or not upon
property otherwise constituting Collateral for such Series of Third Lien Debt,
and that all such Third Liens will be enforceable by the Third Lien Collateral
Trustee with respect to such Series of Third Lien Debt for the benefit of all
Third Lien Secured Parties equally and ratably;

(b) the New Representative and each holder of Obligations in respect of the
Series of Third Lien Debt for which the undersigned is acting as [Third Lien
Representative] [Third Lien Collateral Trustee] are bound by the provisions of
the Intercreditor Agreement, including the provisions relating to the ranking of
Priority Liens, Second Liens and Third Liens and the order of application of
proceeds from enforcement of Priority Liens, Second Liens and Third Liens; and

[(c) the New Representative and each holder of Obligations in respect of the
Series of Third Lien Debt for which the undersigned is acting as [Third Lien
Representative] appoints the Third Lien Collateral Trustee and consents to the
terms of the Intercreditor Agreement and the performance by the Third Lien
Collateral Trustee of, and directs the Third Lien Collateral Trustee to perform,
its obligations under the Intercreditor Agreement and the Third Lien Collateral
Trust Agreement, together with all such powers as are reasonably incidental
thereto.]2

 

2  Necessary only in the case of an incurrence of Additional Third Lien
Obligations.

 

Exhibit A - 2

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

3. Full Force and Effect of Intercreditor Agreement. Except as expressly
supplemented hereby, the Intercreditor Agreement shall remain in full force and
effect.

4. Governing Law and Miscellaneous Provisions. The provisions of Article IX of
the Intercreditor Agreement will apply with like effect to this Priority
Confirmation Joinder.

5. Expenses. W&T agree to reimburse each Secured Debt Representative for its
reasonable out of pocket expenses in connection with this Priority Confirmation
Joinder, including the reasonable fees, other charges and disbursements of
counsel.

 

Exhibit A - 3

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

IN WITNESS WHEREOF, the parties hereto have caused this Priority Confirmation
Joinder to be executed by their respective officers or representatives as of [
            , 20    ].

 

[insert name of New Representative] By:  

 

Name:  

 

Title:  

 

The Priority Lien Agent hereby acknowledges receipt of this Priority
Confirmation Joinder [and agrees to act as Priority Lien Agent for the New
Representative and the holders of the Obligations represented thereby]:

 

 

as Priority Lien Agent By:  

 

Name:  

 

Title:  

 

The Second Lien Collateral Trustee hereby acknowledges receipt of this Priority
Confirmation Joinder [and agrees to act as Second Lien Collateral Trustee for
the New Representative and the holders of the Obligations represented thereby]:

 

 

as Second Lien Collateral Trustee By:  

 

Name:  

 

Title:  

 

[The Third Lien Collateral Trustee hereby acknowledges receipt of this Priority
Confirmation Joinder [and agrees to act as Third Lien Collateral Trustee for the
New Representative and the holders of the Obligations represented thereby]:

 

 

as Third Lien Collateral Trustee By:  

 

Name:  

 

Title:  

 

Acknowledged and Agreed to by: W&T OFFSHORE, INC., as Borrower By:  

 

Name:  

 

Title:  

 

 

Exhibit A - 4

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

EXHIBIT B

to Intercreditor Agreement

SECURITY DOCUMENTS

PART A.

List of Priority Lien Security Documents

 

  1. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated February 2, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the “1998 Mortgage”), from
W&T Offshore, Inc., as Mortgagor and Debtor (as defined in the 1998 Mortgage) to
the Trustee (as defined in the 1998 Mortgage) and the Priority Lien Agent, as
Administrative Agent, Mortgagee and Secured Party (as defined in the 1998
Mortgage).

 

  2. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2002 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Offshore I
Mortgage”) from Offshore Energy I LLC, as Mortgagor and Debtor (as defined in
the Offshore I Mortgage) to the Trustee (as defined in the Offshore I Mortgage)
and the Priority Lien Agent, as Administrative Agent, Mortgagee and Secured
Party (as defined in the Offshore I Mortgage).

 

  3. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2002 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Offshore II
Mortgage”) from Offshore Energy II LLC, as Mortgagor and Debtor (as defined in
the Offshore II Mortgage) to the Trustee (as defined in the Offshore II
Mortgage) and the Priority Lien Agent, as Administrative Agent, Mortgagee and
Secured Party (as defined in the Offshore II Mortgage).

 

  4. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2002 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Offshore III
Mortgage”) from Offshore Energy III LLC, as Mortgagor and Debtor (as defined in
the Offshore III Mortgage) to the Trustee (as defined in the Offshore III
Mortgage) and the Priority Lien Agent, as Administrative Agent, Mortgagee and
Secured Party (as defined in the Offshore III Mortgage).

 

  5. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2003 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Gulf
Mortgage”) from Gulf of Mexico Oil and Gas Properties LLC, as Mortgagor and
Debtor (as defined in the Gulf Mortgage) to the Trustee (as defined in the Gulf
Mortgage) and the Priority Lien Agent, as Administrative Agent, Mortgagee and
Secured Party (as defined in the Gulf Mortgage).

 

  6.

Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated effective as of August 24, 2006 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Offshore Shelf Mortgage”)

 

Exhibit B - 1

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

  from Offshore Shelf LLC, as Mortgagor and Debtor (as defined in the Offshore
Shelf Mortgage) to the Trustee (as defined in the Offshore Shelf Mortgage) and
the Priority Lien Agent, as Administrative Agent, Mortgagee and Secured Party
(as defined in the Offshore Shelf Mortgage).

 

  7. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of April 30, 2010 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Energy VI
Mortgage”) from W&T Energy VI, LLC, as Mortgagor and Debtor (as defined in the
Energy VI Mortgage) to the Trustee (as defined in the Energy VI Mortgage) and
the Priority Lien Agent, as Administrative Agent, Mortgagee and Secured Party
(as defined in the Energy VI Mortgage).

 

  8. Deed of Trust, Mortgage Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of May 5, 2011 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the “Alabama Mortgage”)
from W&T Energy VI, LLC, as Mortgagor and Debtor (as defined in the Alabama
Mortgage) to the Trustee (as defined in the Alabama Mortgage) and the Priority
Lien Agent, as Administrative Agent, Mortgagee and Secured Party (as defined in
the Alabama Mortgage).

 

  9. Deed of Trust, Mortgage Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of May 5, 2011 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the “Louisiana Mortgage”)
from W&T Energy VI, LLC, as Mortgagor and Debtor (as defined in the Louisiana
Mortgage) to the Trustee (as defined in the Louisiana Mortgage) and the Priority
Lien Agent, as Administrative Agent, Mortgagee and Secured Party (as defined in
the Louisiana Mortgage).

 

  10. Deed of Trust, Mortgage Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of June 21, 2011 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “2011
Mortgage”) from W&T Offshore, Inc, as Mortgagor and Debtor (as defined in
the 2011 Mortgage) to the Trustee (as defined in the 2011 Mortgage) and the
Priority Lien Agent, as Administrative Agent, Mortgagee and Secured Party (as
defined in the 2011 Mortgage).

 

  11. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing
and Financing Statement, dated as of July 1, 2014 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Energy VI
Multistate Mortgage”) from W&T Energy VI, LLC, as Mortgagor and Debtor (as
defined in the Energy VI Multistate Mortgage) to the Trustee (as defined in the
Energy VI Multistate Mortgage) and the Priority Lien Agent, as Administrative
Agent, Mortgagee and Secured Party (as defined in the Energy VI Multistate
Mortgage).

 

  12. Guaranty, dated as of May 5, 2011 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the “Energy VII Guaranty”)
made by W & T Energy VII, LLC, in favor of the Administrative Agent, for its
benefit and the ratable benefit of each other Lender Party (as defined in the
Energy VII Guaranty).

 

  13. Amended and Restated Guaranty, dated as of May 5, 2011 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Energy VI Guaranty”) made by W & T Energy VI, LLC, in favor of the
Administrative Agent, for its benefit and the ratable benefit of each other
Lender Party (as defined in the Energy VI Guaranty).

 

Exhibit B - 2

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

  14. Fourth Amended and Restated Security Agreement, Pledge and Irrevocable
Proxy, dated as of May 5, 2011 (as amended, supplemented, amended and restated
or otherwise modified from time to time, the “Borrower Security Agreement”) made
by W&T Offshore, Inc., in favor of the Administrative Agent, for its benefit and
the ratable benefit of each other Lender Party (as defined in the Borrower
Security Agreement).

 

  15. Security Agreement, Pledge and Irrevocable Proxy, dated as of May 5, 2011
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Guarantor Security Agreement”) made by Energy VI, LLC and Energy
VII, LLC, in favor of the Administrative Agent, for its benefit and the ratable
benefit of each other Lender Party (as defined in the Guarantor Security
Agreement).

PART B.

List of Term Loan Second Lien Security Documents

 

  1. Security Agreement, Pledge and Irrevocable Proxy, dated as of May 11, 2015,
from W&T Offshore, Inc. (the “Borrower”) in favor of Morgan Stanley Senior
Funding, Inc., as Collateral Trustee for the Parity Lien Secured Parties (the
“Collateral Trustee”).

 

  2. Security Agreement, Pledge and Irrevocable Proxy, dated as of May 11, 2015,
from W & T Energy VI, LLC and W & T Energy VII, LLC (each a “Guarantor”, and
together the “Guarantors”) in favor of the Collateral Trustee.

 

  3. Collateral Trust Agreement, dated as of May 11, 2015, by and among the
Borrower, the Guarantors, Morgan Stanley Senior Funding, Inc., as Administrative
Agent under the Term Loan Credit Agreement (in such capacity the “Administrative
Agent”), and the Collateral Trustee.

 

  4. Guaranty, dated as of May 11, 2015, from W & T Energy VI, LLC in favor of
the Administrative Agent and each of the other Lender Parties (as defined in the
Term Loan Credit Agreement).

 

  5. Guaranty, dated as of May 11, 2015, from W & T Energy VII, LLC in favor of
the Administrative Agent and each of the other Lender Parties (as defined in the
Term Loan Credit Agreement).

PART C.

List of Initial Third Lien Security Documents

 

  1. None as of the date hereof.

 

Exhibit B - 3

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EXHIBIT G

FORM OF SENIOR LIEN

INTERCREDITOR AGREEMENT

[see attached]

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

Execution Version

INTERCREDITOR AGREEMENT

dated as of September 7, 2016 between

Toronto Dominion (Texas) LLC,

as Priority Lien Agent,

and

Cortland Capital Market Services LLC

as 1.5 Lien Agent

 

 

THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE SENIOR SECURED 1.5
LIEN CREDIT AGREEMENT DATED AS OF SEPTEMBER 7, 2016, AMONG W&T OFFSHORE, INC.,
AS THE BORROWER, CORTLAND CAPITAL MARKET SERVICES LLC, AS 1.5 LIEN
ADMINISTRATIVE AGENT AND THE LENDERS PARTY THERETO FROM TIME TO TIME, (B) THE
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF NOVEMBER 8, 2013, AS
AMENDED, SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG
W&T OFFSHORE, INC., THE LENDERS PARTY THERETO FROM TIME TO TIME AND TORONTO
DOMINION (TEXAS), LLC, AS ADMINISTRATIVE AGENT, (C) THE OTHER LOAN DOCUMENTS
REFERRED TO IN SUCH SENIOR SECURED 1.5 LIEN CREDIT AGREEMENT AND (D) THE OTHER
LOAN DOCUMENTS REFERRED TO IN SUCH FIFTH AMENDED AND RESTATED CREDIT AGREEMENT.

 

 

 

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TABLE OF CONTENTS

 

          Page   ARTICLE I    DEFINITIONS   

Section 1.01

  

Construction; Certain Defined Terms

     1    ARTICLE II    LIEN PRIORITIES   

Section 2.01

  

Relative Priorities

     11   

Section 2.02

  

Prohibition on Marshalling, Etc.

     11   

Section 2.03

  

No New Liens

     12   

Section 2.04

  

Similar Collateral and Agreements

     12   

Section 2.05

  

No Duties of Priority Lien Agent

     12    ARTICLE III    ENFORCEMENT RIGHTS; PURCHASE OPTION   

Section 3.01

  

Limitation on Enforcement Action

     13   

Section 3.02

  

Standstill Period; Permitted Enforcement Action

     14   

Section 3.03

  

Insurance

     14   

Section 3.04

  

Notification of Release of Collateral

     15   

Section 3.05

  

No Interference; Payment Over

     15   

Section 3.06

  

Purchase Option

     16    ARTICLE IV    OTHER AGREEMENTS   

Section 4.01

  

Release of Liens; Automatic Release of 1.5 Liens

     19   

Section 4.02

  

Certain Agreements With Respect to Insolvency or Liquidation Proceedings

     19   

Section 4.03

  

Reinstatement

     22   

Section 4.04

  

Refinancings; Additional 1.5 Lien Debt

     23   

Section 4.05

  

Amendments to 1.5 Lien Documents

     23   

Section 4.06

  

Legends

     24   

Section 4.07

  

1.5 Lien Secured Parties Rights as Unsecured Creditors; Judgment Lien Creditor

     24   

Section 4.08

  

Postponement of Subrogation

     24   

Section 4.09

  

Acknowledgment by the Secured Debt Representatives

     24    ARTICLE V    GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY
INTERESTS   

Section 5.01

  

General

     25   

Section 5.02

  

Deposit Accounts

     25   

 

i

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ARTICLE VI    APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS   

Section 6.01

  

Application of Proceeds

     25   

Section 6.02

  

Determination of Amounts

     26    ARTICLE VII    NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE;
CONSENT OF GRANTORS; ETC.   

Section 7.01

  

No Reliance; Information

     26   

Section 7.02

  

No Warranties or Liability

     26   

Section 7.03

  

Obligations Absolute

     27   

Section 7.04

  

Grantors Consent

     28    ARTICLE VIII    REPRESENTATIONS AND WARRANTIES   

Section 8.01

  

Representations and Warranties of Each Party

     28   

Section 8.02

  

Representations and Warranties of Each Representative

     28    ARTICLE IX    MISCELLANEOUS   

Section 9.01

  

Notices

     28   

Section 9.02

  

Waivers; Amendment

     29   

Section 9.03

  

Actions Upon Breach; Specific Performance

     30   

Section 9.04

  

Parties in Interest

     30   

Section 9.05

  

Survival of Agreement

     30   

Section 9.06

  

Counterparts

     30   

Section 9.07

  

Severability

     30   

Section 9.08

  

Governing Law; Jurisdiction; Consent to Service of Process

     31   

Section 9.09

  

WAIVER OF JURY TRIAL

     31   

Section 9.10

  

Headings

     31   

Section 9.11

  

Conflicts

     31   

Section 9.12

  

Provisions Solely to Define Relative Rights

     31   

Section 9.13

  

Certain Terms Concerning the Priority Lien Agent, and the 1.5 Lien Agent

     32   

Section 9.14

  

Authorization of Secured Agents

     32   

Section 9.15

  

Further Assurances

     32   

Section 9.16

  

Relationship of Secured Parties

     33   

Section 9.17

  

Appointment

     33   

Section 9.18

  

Duties and Protections

     33   

Section 9.19

  

Resignation

     33   

Section 9.20

  

Cooperation

     34   

Annex and Exhibits

 

Annex I

  

Exhibit A

  

Form of Priority Confirmation Joinder

Exhibit B

  

Security Documents

 

ii

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INTERCREDITOR AGREEMENT, dated as of September 7, 2016 (as amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof,
this “Agreement”), between TORONTO DOMINION (TEXAS), LLC, (“TD Texas”) as
administrative agent for the Priority Lien Secured Parties referred to herein
(in such capacity, and together with its successors and assigns in such
capacity, the “Original Priority Lien Agent”) and CORTLAND CAPITAL MARKET
SERVICES LLC, as administrative agent for the 1.5 Lien Secured Parties referred
to herein (in such capacity, and together with its successors in such capacity,
the “Original 1.5 Lien Agent”).

Reference is made to (a) the Priority Credit Agreement (defined below) and (b)
the 1.5 Lien Credit Agreement (defined below).

Original Priority Lien Agent, Morgan Stanley Senior Funding, Inc. and W&T
Offshore, Inc. (“W&T”) entered into the Intercreditor Agreement dated as of
May 11, 2015 (as amended, supplemented or otherwise modified from time to time
the “Second Lien Intercreditor Agreement”).

In consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Priority Lien Agent (for itself and on behalf of the Priority
Lien Secured Parties) and the 1.5 Lien Agent (for itself and on behalf of the
1.5 Lien Secured Parties) agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Construction; Certain Defined Terms. (a) The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires otherwise, (i) any
reference herein to any agreement, instrument, other document, statute or
regulation shall be construed as referring to such agreement, instrument, other
document, statute or regulation as from time to time amended, supplemented or
otherwise modified, (ii) any reference herein to any Person shall be construed
to include such Person’s successors and assigns, but shall not be deemed to
include the subsidiaries of such Person unless express reference is made to such
subsidiaries, (iii) 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, (iv) all references herein to
Articles, Sections and Annexes shall be construed to refer to Articles, Sections
and Annexes of this Agreement, (v) unless otherwise expressly qualified herein,
the words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights and (vi)
the term “or” is not exclusive.

(b) All terms used in this Agreement that are defined in Article 1, 8 or 9 of
the New York UCC (whether capitalized herein or not) and not otherwise defined
herein have the meanings assigned to them in Article 1, 8 or 9 of the New York
UCC. If a term is defined in Article 9 of the New York UCC and another Article
of the New York UCC, such term shall have the meaning assigned to it in Article
9 of the New York UCC.

 

1

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(c) As used in this Agreement, the following terms have the meanings specified
below:

“1.5 Lien” means a Lien granted by a 1.5 Lien Document to the 1.5 Lien Agent, at
any time, upon any Collateral by any Grantor to secure 1.5 Lien Obligations
(including Liens on such Collateral under the security documents associated with
any 1.5 Lien Substitute Facility).

“1.5 Lien Agent” means the Original 1.5 Lien Agent, and, from and after the date
of execution and delivery of a 1.5 Lien Substitute Credit Facility, the agent,
collateral agent, trustee or other representative of the lenders or holders of
the indebtedness and other Obligations evidenced thereunder or governed thereby,
in each case, together with its successors in such capacity.

“1.5 Lien Collateral” means all “Collateral”, as defined in the 1.5 Lien Credit
Agreement or any other 1.5 Lien Document, and any other assets of any Grantor
now or at any time hereafter subject to Liens which secure, but only to the
extent securing, any 1.5 Lien Obligation.

“1.5 Lien Credit Agreement” means the Senior Secured 1.5 Lien Credit Agreement
dated the date hereof among W&T, as borrower, the Original 1.5 Lien Agent, the
lenders parties thereto, as amended, restated, adjusted, waived, renewed,
extended, supplemented or otherwise modified from time to time with the same
and/or different lenders and/or agents and any credit agreement, loan agreement,
note agreement, promissory note, indenture or any other agreement or instrument
evidencing or governing the terms of any 1.5 Lien Substitute Facility.

“1.5 Lien Debt” means the indebtedness under the 1.5 Lien Credit Agreement that
was permitted to be incurred and secured under the 1.5 Lien Credit Agreement (or
as to which the lenders under the 1.5 Lien Credit Agreement obtained an
Officers’ Certificate at the time of incurrence to the effect that such
indebtedness was permitted to be incurred and secured by all applicable Secured
Debt Documents) and additional indebtedness under any 1.5 Lien Substitute Credit
Facility.

“1.5 Lien Documents” means the 1.5 Lien Credit Agreement, the 1.5 Lien Security
Documents, the other “Loan Documents” (as defined in the 1.5 Lien Credit
Agreement) and all other loan documents, notes, guarantees, instruments and
agreements governing or evidencing, or executed or delivered in connection with,
any 1.5 Lien Substitute Credit Facility.

“1.5 Lien Obligations” means the 1.5 Lien Debt and all other Obligations in
respect of or in connection with 1.5 Lien Debt. Notwithstanding any other
provision hereof, the term “1.5 Lien Obligations” will include accrued interest,
fees, costs, and other charges incurred under the 1.5 Lien Credit Agreement and
the other 1.5 Lien Documents, whether incurred before or after commencement of
an Insolvency or Liquidation Proceeding, and whether or not allowable in an
Insolvency or Liquidation Proceeding. To the extent that any payment with
respect to the 1.5 Lien Obligations (whether by or on behalf of W&T, as proceeds
of security, enforcement of any right of set-off, or otherwise) is declared to
be fraudulent or preferential in any respect, set aside, or required to be paid
to a debtor in possession, trustee, receiver, or similar Person, then the
obligation or part thereof originally intended to be satisfied will be deemed to
be reinstated and outstanding as if such payment had not occurred.

“1.5 Lien Secured Parties” means, at any time, the 1.5 Lien Agent, each lender
or issuing bank under the 1.5 Lien Credit Agreement, the beneficiaries of each
indemnification obligation undertaken by any Grantor under any 1.5 Lien
Document, each other Person that provides letters of credit, guarantees or other
credit support related thereto under any 1.5 Lien Document and each other holder
of, or obligee in respect of, any 1.5 Lien Obligations (including pursuant to a
1.5 Lien Substitute Credit Facility), in each case to the extent designated as a
secured party (or a party entitled to the benefits of the security) under any
1.5 Lien Document outstanding at such time.

 

2

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“1.5 Lien Security Documents” means the 1.5 Lien Credit Agreement (insofar as
the same grants a Lien on the Collateral), each agreement listed in Part B of
Exhibit B hereto, and any other security agreements, pledge agreements,
collateral assignments, mortgages, deeds of trust, control agreements, or grants
or transfers for security, now existing or entered into after the date hereof,
executed and delivered by W&T or any other Grantor creating (or purporting to
create) a Lien upon Collateral in favor of the 1.5 Lien Agent (including any
such agreements, assignments, mortgages, deeds of trust and other documents or
instruments associated with any 1.5 Lien Substitute Credit Facility).

“1.5 Lien Substitute Facility” means any Credit Facility with respect to which
the requirements contained in Section 4.04 of this Agreement have been
satisfied, that is permitted to be incurred pursuant to the Priority Lien
Documents and that Replaces the 1.5 Lien Credit Agreement then in existence. For
the avoidance of doubt, no 1.5 Lien Substitute Facility shall be required to be
evidenced by a credit agreement or loan agreement and may be a facility
evidenced or governed by a note agreement, promissory note, indenture or any
other agreement or instrument; provided that any such 1.5 Lien Substitute
Facility shall be subject to the terms of this Agreement for all purposes
(including the lien priority as set forth herein as of the date hereof) as the
other Liens securing the 1.5 Lien Obligations are subject to under this
Agreement.

“1.5 Lien Term Loans” means the “Loans” (as defined in the 1.5 Lien Credit
Agreement) incurred by W&T under the 1.5 Lien Credit Agreement on the date
hereof.

“Accounts” has the meaning assigned to such term in Section 3.01(a).

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms “controlling,” “controlled by” and “under common control
with” have correlative meanings.

“Bank Product” means each and any of the following bank services and products
provided to W&T or any other Grantor by any lender (or any Affiliate thereof)
under the Priority Credit Agreement who is entitled to the benefits of the
security under any Priority Lien Documents: (1) commercial credit cards; (2)
stored value cards; and (3) Treasury Management Arrangements (including
controlled disbursement, automated clearinghouse transactions, return items,
overdrafts and interstate depository network services).

“Bank Product Obligations” means any and all obligations of W&T or any other
Grantor, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with any Bank
Product.

“Bankruptcy Code” means Title 11 of the United States Code.

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or
foreign law for the relief of debtors.

“Board of Directors” means: (1) with respect to a corporation, the board of
directors of the corporation; (2) with respect to a partnership, the Board of
Directors of the general partner of the partnership; and (3) with respect to any
other Person, the board or committee of such Person serving a similar function.

 

3

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“Business Day” means each day that is not a Saturday, Sunday or other day on
which banking institutions in Houston, Texas or in New York, New York are
authorized or required by law to close.

“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.

“Class” means (a) in the case of Priority Lien Debt, the Priority Lien Debt,
taken together and (b) in the case of 1.5 Lien Debt, the 1.5 Lien Debt, taken
together.

“Collateral” means all of the assets and property of any Grantor, whether real,
personal or mixed, constituting the Priority Lien Collateral or the 1.5 Lien
Collateral.

“Credit Facilities” means, with respect to W&T or any of the Grantors, one or
more current or future debt facilities (including, without limitation, the
Priority Credit Agreement) indentures or commercial paper facilities with banks,
investment banks, insurance companies, trust companies, mutual funds, other
lenders, investors or any of the foregoing providing for revolving credit loans,
term loans, notes, debt securities, guarantees, receivables financing (including
through the sale of receivables to such lenders, or to special purpose entities
formed to borrow from (or sell such receivables to) such lenders against such
receivables), letters of credit, bankers’ acceptances, or other borrowings, in
each case, as amended, restated, modified, renewed, refunded, replaced or
refinanced (in each case, without limitation as to amount), in whole or in part,
from time to time and any agreements and related documents governing
indebtedness or other obligations incurred to refinance amounts then outstanding
or permitted to be outstanding, (whether upon or after termination or otherwise)
(including by means of sales of debt securities to institutional investors) in
whole or in part from time to time

“DIP Financing” has the meaning assigned to such term in Section 4.02(b).

“DIP Financing Liens” has the meaning assigned to such term in Section 4.02(b).

“DIP Lenders” has the meaning assigned to such term in Section 4.02(b).

“Discharge of Priority Lien Obligations” means the occurrence of all of the
following:

(a) termination or expiration of all commitments to extend credit that would
constitute Priority Lien Debt;

(b) payment in full in cash of the principal of and interest and premium (if
any) on all Priority Lien Debt (other than any undrawn letters of credit);

(c) discharge or cash collateralization (at the lower of (i) 105% of the
aggregate undrawn amount and (ii) the percentage of the aggregate undrawn amount
required for release of Liens under the terms of the applicable Priority Lien
Document) of all outstanding letters of credit constituting Priority Lien
Obligations;

 

4

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(d) payment in full of all of Hedging Obligations constituting Priority Lien
Obligations (and, with respect to any particular Hedging Contract (as defined in
the Priority Credit Agreement as in effect on the date hereof), termination of
such agreement and payment in full in cash of all obligations there under or
such other arrangements as have been made with the counterparty thereto
acceptable to the counterparty; and

(e) payment in full in cash of all other Priority Lien Obligations (other than
Excess Priority Lien Obligations), including without limitation, Bank Product
Obligations, that are outstanding and unpaid at the time the Priority Lien Debt
is paid in full in cash (other than Excess Priority Lien Obligations and any
obligations for taxes, costs, indemnifications, reimbursements, damages and
other liabilities in respect of which no claim or demand for payment has been
made at or prior to such time);

provided that, if at any time after the Discharge of Priority Lien Obligations
has occurred, W&T enters into any Priority Lien Document evidencing a Priority
Lien Obligation which incurrence is not prohibited by the applicable Secured
Debt Documents, then such Discharge of Priority Lien Obligations shall
automatically be deemed not to have occurred for all purposes of this Agreement
with respect to such new Priority Lien Obligations (other than with respect to
any actions taken as a result of the occurrence of such first Discharge of
Priority Lien Obligations), and, from and after the date on which W&T designates
such Indebtedness as Priority Lien Debt in accordance with this Agreement, the
obligations under such Priority Lien Document shall automatically and without
any further action be treated as Priority Lien Obligations for all purposes of
this Agreement, including for purposes of the Lien priorities and rights in
respect of Collateral set forth in this Agreement, any 1.5 Lien Obligations
shall be deemed to have been at all times 1.5 Lien Obligations and at no time
Priority Lien Obligations. For the avoidance of doubt, a Replacement as
contemplated by Section 4.04 shall not be deemed to cause a Discharge of
Priority Lien Obligations.

“Disposition” shall mean any sale, lease, exchange, assignment, license,
contribution, transfer or other disposition. “Dispose” shall have a correlative
meaning.

“Excess Priority Lien Obligations” means Obligations constituting Priority Lien
Obligations for the principal amount of indebtedness (including letters of
credit and reimbursement obligations) under the Priority Credit Agreement and/or
any other Credit Facility pursuant to which Priority Lien Debt has been issued
to the extent that such Obligations for principal, letters of credit and
reimbursement obligations are in excess of the amount in clause (a) of the
definition of “Priority Lien Cap” plus interest, premium, if any, and fees
related to such excess principal amount.

“Excluded Assets” means (i) cash, certificates of deposit, deposit accounts,
money market accounts or other such liquid assets to the extent that such cash,
certificate of deposit, deposit account, money market account or other such
liquid assets are on deposit or maintained with the Priority Lien Agent or any
other holder of Priority Lien Obligations to cash collateralize letters of
credit constituting Priority Lien Obligations rather than generally to the
holders of the Priority Lien Obligations or to the Priority Lien Collateral
Agent for the benefit of the holders of Priority Lien Obligations as a whole,
(ii) any governmental approval, license or permit that by its terms or by
operation of law or regulation would be void, voidable, terminable or revocable
if mortgaged, pledged or assigned under the terms of the Security Documents,
(iii) Capital Stock in excess of 65% of the voting Capital Stock in Subsidiaries
that are (a) FSHCOs (as defined in the 1.5 Lien Credit Agreement) or (b) Foreign
Subsidiaries (as defined in the 1.5 Lien Credit Agreement) that are CFCs (as
defined in the 1.5 Lien Credit Agreement) or are disregarded entities that own
Capital Stock in CFCs and (iv) other property or assets of W&T or any Grantor
that are not required to be subject to a Lien securing the Priority Lien
Obligations pursuant to the Priority Lien Documents except to the extent that
such property or assets are subject to a Priority Lien generally in favor of all
holders of Priority Lien Obligations.

 

5

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“Governmental Authority” means the government of the United States or any other
nation, or any political subdivision thereof, whether state, provincial or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other Person exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Grantor” means W&T, each other subsidiary of W&T that shall have granted any
Lien in favor of any of the Priority Lien Agent or the 1.5 Lien Agent on any of
its assets or properties to secure any of the Secured Obligations.

“Hedging Obligations” means, with respect to any Grantor, the obligations of
such Grantor owed to any lender (or Affiliate thereof) under the Priority Credit
Agreement who is entitled to the benefits of the security under the Priority
Lien Documents under:

(a) interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements entered into with one or more financial institutions and other
arrangements or agreements designed to protect such Grantor or any subsidiary
thereof entering into the agreement against fluctuations in interest rates with
respect to indebtedness incurred;

(b) foreign exchange contracts and currency protection agreements entered into
with one or more financial institutions and designed to protect such Grantor or
any subsidiary thereof entering into the agreement against fluctuations in
currency exchange rates with respect to indebtedness incurred;

(c) any commodity futures contract, commodity option or other similar agreement
or arrangement designed to protect against fluctuations in the price of
commodities used, produced, processed or sold by that Grantor or any subsidiary
thereof at the time; and

(d) other agreements or arrangements designed to protect such Grantor against
fluctuations in interest rates, commodity prices or currency exchange rates.

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

“Insolvency or Liquidation Proceeding” means:

(a) any case commenced by or against W&T or any other Grantor under the
Bankruptcy Code or any other Bankruptcy Law, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling of the assets or
liabilities of W&T or any other Grantor, any receivership or assignment for the
benefit of creditors relating to W&T or any other Grantor or any similar case or
proceeding relative to W&T or any other Grantor or its creditors, as such, in
each case whether or not voluntary;

(b) any liquidation, dissolution, marshalling of assets or liabilities or other
winding up of or relating to W&T or any other Grantor, in each case whether or
not voluntary and whether or not involving bankruptcy or insolvency; or

(c) any other proceeding of any type or nature in which substantially all claims
of creditors of W&T or any other Grantor are determined and any payment or
distribution is or may be made on account of such claims.

 

6

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“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, hypothecation, or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any agreement to give a security interest therein
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Obligations” means any principal (including reimbursement obligations and
obligations to provide cash collateral with respect to letters of credit whether
or not drawn), interest (including, to the extent legally permitted, all
interest accrued thereon after the commencement of any Insolvency or Liquidation
Proceeding at the rate, including any applicable post-default rate even if such
interest is not enforceable, allowable or allowed as a claim in such
proceeding), premium (if any), fees, indemnifications, reimbursements, expenses
and other liabilities payable under the documentation governing any
Indebtedness.

“Officer” means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Senior Vice President, any Vice President or any Assistant Vice
President of such Person.

“Officers’ Certificate” means a certificate signed on behalf of W&T by any
Officers of W&T.

“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 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, the lands covered thereby
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 or other
personal property which may be on such premises for the purpose of drilling a
well or for other similar temporary uses) and including any and all oil wells,
gas wells, injection wells or other wells (including those used for either
environmental sampling or remedial purposes), 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.

“Original Priority Lien Agent” has the meaning assigned to such term in the
preamble hereto.

“Original 1.5 Lien Agent” has the meaning assigned to such term in the preamble
hereto.

 

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“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

“Priority Confirmation Joinder” means an agreement substantially in the form of
Exhibit A.

“Priority Credit Agreement” means the Fifth Amended and Restated Credit
Agreement, dated as of November 8, 2013, among W&T as borrower, the Original
Priority Lien Agent, the lenders party thereto from time to time and the other
agents named therein, as amended, restated, adjusted, waived, renewed, extended,
supplemented or otherwise modified from time to time with the same and/or
different lenders and/or agents and any credit agreement, loan agreement, note
agreement, promissory note, indenture or any other agreement or instrument
evidencing or governing the terms of any Priority Substitute Credit Facility.

“Priority Lien” means a Lien granted by W&T or any Grantor in favor of the
Priority Lien Agent, at any time, upon any Property of W&T or such Grantor to
secure Priority Lien Obligations (including Liens on such Collateral under the
security documents associated with any Priority Substitute Credit Facility).

“Priority Lien Agent” means the Original Priority Lien Agent, and, from and
after the date of execution and delivery of a Priority Substitute Credit
Facility, the agent, collateral agent, trustee or other representative of the
lenders or holders of the indebtedness and other Obligations evidenced
thereunder or governed thereby, in each case, together with its successors in
such capacity.

“Priority Lien Cap” means, as of any date, (a) the aggregate principal amount of
Indebtedness (including any interest paid-in-kind) that may be incurred under
clause (1) of the definition of “Permitted Debt” and secured by a Priority Lien
under clause (1) of the definition of “Permitted Liens” as of such date (each as
defined in the 1.5 Lien Credit Agreement as in effect on the date hereof) plus
(b) the amount of all Hedging Obligations, to the extent such Hedging
Obligations are secured by the Priority Liens, plus (c) the amount of all Bank
Product Obligations, plus (d) the amount of accrued and unpaid interest
(excluding any interest paid-in-kind) and outstanding fees, to the extent such
Obligations are secured by the Priority Liens; provided that for all purposes of
this Agreement and the Secured Debt Documents the lenders under the Priority
Lien Credit Agreement shall be entitled to rely on an Officers’ Certificate to
the effect that after giving effect to any credit extension under the Priority
Credit Agreement the Priority Lien Debt does not exceed the Priority Lien Cap.

“Priority Lien Collateral” shall mean all “Collateral”, as defined in the
Priority Credit Agreement or any other Priority Lien Document, and any other
assets of any Grantor now or at any time hereafter subject to Liens which
secure, but only to the extent securing, any Priority Lien Obligation.

“Priority Lien Debt” means the indebtedness under the Priority Credit Agreement
(including letters of credit and reimbursement obligations with respect thereto)
that was permitted to be incurred and secured under the Priority Credit
Agreement and the 1.5 Lien Documents (or as to which the lenders under the
Priority Credit Agreement obtained an Officers’ Certificate at the time of
incurrence to the effect that such indebtedness was permitted to be incurred and
secured by all applicable Secured Debt Documents) and additional indebtedness
under any Priority Substitute Credit Facility.

“Priority Lien Documents” means the Priority Credit Agreement, the Priority Lien
Security Documents, the other “Loan Documents” (as defined in the Priority
Credit Agreement) and all other loan documents, notes, guarantees, instruments
and agreements governing or evidencing, or executed or delivered in connection
with, any Priority Substitute Credit Facility.

 

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“Priority Lien Obligations” means the Priority Lien Debt and all other
Obligations in respect of or in connection with Priority Lien Debt together with
Hedging Obligations and the Bank Product Obligations, in each case to the extent
that such Obligations are secured by Priority Liens. For the avoidance of doubt,
Hedging Obligations shall only constitute Priority Lien Obligations to the
extent that such Hedging Obligations are secured under the terms of the Priority
Credit Agreement or Priority Lien Security Documents. Notwithstanding any other
provision hereof, the term “Priority Lien Obligations” will include accrued
interest, fees, costs, and other charges incurred under the Priority Credit
Agreement and the other Priority Lien Documents, whether incurred before or
after commencement of an Insolvency or Liquidation Proceeding, and whether or
not allowable in an Insolvency or Liquidation Proceeding. To the extent that any
payment with respect to the Priority Lien Obligations (whether by or on behalf
of W&T, as proceeds of security, enforcement of any right of set-off, or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside, or required to be paid to a debtor in possession, trustee, receiver, or
similar Person, then the obligation or part thereof originally intended to be
satisfied will be deemed to be reinstated and outstanding as if such payment had
not occurred.

“Priority Lien Secured Parties” means, at any time, the Priority Lien Agent,
each lender or issuing bank under the Priority Credit Agreement, each holder,
provider or obligee of any Hedging Obligations and Bank Product Obligations, the
beneficiaries of each indemnification obligation undertaken by any Grantor under
any Priority Lien Document, each other Person that provides letters of credit,
guarantees or other credit support related thereto under any Priority Lien
Document and each other holder of, or obligee in respect of, any Priority Lien
Obligations (including pursuant to a Priority Substitute Credit Facility), in
each case to the extent designated as a secured party (or a party entitled to
the benefits of the security) under any Priority Lien Document outstanding at
such time.

“Priority Lien Security Documents” means the Priority Credit Agreement (insofar
as the same grants a Lien on the Collateral), each agreement listed in Part A of
Exhibit B hereto, and any other security agreements, pledge agreements,
collateral assignments, mortgages, deeds of trust, control agreements, or grants
or transfers for security, now existing or entered into after the date hereof,
executed and delivered by W&T or any other Grantor creating (or purporting to
create) a Lien upon Collateral in favor of the Priority Lien Agent (including
any such agreements, assignments, mortgages, deeds of trust and other documents
or instruments associated with any Priority Substitute Credit Facility).

“Priority Substitute Credit Facility” means any Credit Facility with respect to
which the requirements contained in Section 4.04 of this Agreement have been
satisfied, that is permitted to be incurred pursuant to the 1.5 Lien Credit
Agreement as in effect on the date hereof and that Replaces the Priority Credit
Agreement then in existence. For the avoidance of doubt, no Priority Substitute
Credit Facility shall be required to be a revolving or asset-based loan facility
and may be a facility evidenced or governed by a credit agreement, loan
agreement, note agreement, promissory note, indenture or any other agreement or
instrument; provided that any Priority Lien securing such Priority Substitute
Credit Facility shall be subject to the terms of this Agreement for all purposes
(including the lien priorities as set forth herein as of the date hereof).

“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.

“Proved Reserves” means “Proved Reserves” as defined in the Definitions for Oil
and Gas Reserves (the “Reserve Definitions”) promulgated by the Society of
Petroleum Engineers (or any generally recognized successor) as in effect at the
time in question.

“Purchase Notice” has the meaning assigned to such term in Section 3.06.

 

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“Replaces” means, (a) in respect of any agreement with reference to the Priority
Credit Agreement or the Priority Lien Obligations or any Priority Substitute
Credit Facility, that such agreement refunds, refinances or replaces the
Priority Credit Agreement, the Priority Lien Obligations or such Priority
Substitute Credit Facility in whole (in a transaction that is in compliance with
Section 4.04) and that all commitments thereunder are terminated, or, to the
extent permitted by the terms of the Priority Credit Agreement, Priority Lien
Obligations or such Priority Substitute Credit Facility, in part and (b) in
respect of any agreement with reference to the 1.5 Lien Documents, the 1.5 Lien
Obligations or any 1.5 Lien Substitute Facility, that such indebtedness refunds,
refinances or replaces the 1.5 Lien Documents, the 1.5 Lien Obligations or such
1.5 Lien Substitute Facility in whole (in a transaction that is in compliance
with Section 4.04) and that all commitments thereunder are terminated, or, to
the extent permitted by the terms of the 1.5 Lien Documents, the 1.5 Lien
Obligations or such 1.5 Lien Substitute Facility, in part. “Replace,” “Replaced”
and “Replacement” shall have correlative meanings.

“Reserve Report” has the meaning assigned to the term “Engineering Report” in
the Priority Credit Agreement as in effect on the date hereof.

“Secured Debt Documents” means the Priority Lien Documents and the 1.5 Lien
Documents.

“Secured Debt Representative” means the Priority Lien Agent and the 1.5 Lien
Agent.

“Secured Obligations” means the Priority Lien Obligations and the 1.5 Lien
Obligations.

“Secured Parties” means the Priority Lien Secured Parties and the 1.5 Lien
Secured Parties.

“Security Documents” means the Priority Lien Security Documents and the 1.5 Lien
Security Documents.

“Series of Secured Debt” means the Priority Lien Debt and the 1.5 Lien Debt.

“Standstill Period” has the meaning assigned to such term in Section 3.02(a)(i).

“Subsidiary” means, with respect to any specified Person: (1) any corporation,
association, limited liability company or other business entity (other than a
partnership) of which more than 50% of the total voting power of Voting Stock is
at the time owned or controlled, directly or through another subsidiary, by that
Person or one or more of the other subsidiaries of that Person (or a combination
thereof); and (2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a subsidiary of such Person or (b)
the only general partners of which are that Person or one or more subsidiaries
of that Person (or any combination thereof), or (c) as to which such Person and
its subsidiaries are entitled to receive more than 50% of the assets of such
partnership upon its dissolution.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date hereof.

“Treasury Management Arrangement” means any agreement or other arrangement
governing the provision of treasury or cash management services, including
deposit accounts, overdraft, credit or debit card, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled
disbursement, lockbox, account reconciliation and reporting and trade finance
services and other cash management services.

 

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“Voting Stock” of any Person as of any date means the Capital Stock of such
Person that is at the time entitled (without regard to the occurrence of any
contingency) to vote in the election of the Board of Directors of such Person.

“W&T” has the meaning assigned to such term in the preamble hereto.

ARTICLE II

LIEN PRIORITIES

Section 2.01 Relative Priorities. (a) The grant of the Priority Liens pursuant
to the Priority Lien Documents and the grant of the 1.5 Liens pursuant to the
1.5 Lien Documents create two separate and distinct Liens on the Collateral.

(b) Notwithstanding anything contained in this Agreement, the Priority Lien
Documents, the 1.5 Lien Documents or any other agreement or instrument or
operation of law to the contrary, or any other circumstance whatsoever and
irrespective of (i) how a Lien was acquired (whether by grant, possession,
statute, operation of law, subrogation, or otherwise), (ii) the time, manner, or
order of the grant, attachment or perfection of a Lien, (iii) any conflicting
provision of the New York UCC or other applicable law, (iv) any defect in, or
non-perfection, setting aside, or avoidance of, a Lien or a Priority Lien
Document or a 1.5 Lien Document, (v) the modification of a Priority Lien
Obligation or a 1.5 Lien Obligation, or (vi) the subordination of a Lien on
Collateral securing a Priority Lien Obligation to a Lien securing another
obligation of W&T or other Person that is permitted under the Priority Lien
Documents as in effect on the date hereof or securing a DIP Financing, the 1.5
Lien Agent, on behalf of itself and the other 1.5 Lien Secured Parties hereby
agrees that (i) any Priority Lien on any Collateral now or hereafter held by or
for the benefit of any Priority Lien Secured Party shall be senior in right,
priority, operation, effect and all other respects to any and all 1.5 Liens on
any Collateral and (ii) any 1.5 Lien on any Collateral now or hereafter held by
or for the benefit of any 1.5 Lien Secured Party shall be junior and subordinate
in right, priority, operation, effect and all other respects to any and all
Priority Liens on any Collateral.

(c) It is hereby acknowledged and agreed that, subject to the Priority Lien Cap
(as provided herein), (i) the aggregate amount of the Priority Lien Obligations
may be increased from time to time pursuant to the terms of the Priority Lien
Documents, (ii) a portion of the Priority Lien Obligations consists or may
consist of indebtedness that is revolving in nature, and the amount thereof that
may be outstanding at any time or from time to time may be increased or reduced
and subsequently reborrowed, and (iii) (A) the Priority Lien Documents may be
replaced, restated, supplemented, restructured or otherwise amended or modified
from time to time and (B) the Priority Lien Obligations may be increased,
extended, renewed, replaced, restated, supplemented, restructured, repaid,
refunded, refinanced or otherwise amended or modified from time to time, in the
case of the foregoing (A) and (B) all without affecting the subordination of the
1.5 Liens hereunder or the provisions of this Agreement defining the relative
rights of the Priority Lien Secured Parties and the 1.5 Lien Secured
Parties. The lien priorities provided for herein shall not be altered or
otherwise affected by any amendment, modification, supplement, extension,
increase, renewal, restatement or Replacement of either the Priority Lien
Obligations (or any part thereof) or the 1.5 Lien Obligations (or any part
thereof), by the release of any Collateral or of any guarantees for any Priority
Lien Obligations or by any action that any Secured Debt Representative or
Secured Party may take or fail to take in respect of any Collateral.

Section 2.02 Prohibition on Marshalling, Etc. Until the Discharge of Priority
Lien Obligations, neither the 1.5 Lien Agent nor any other 1.5 Lien Secured
Party will assert any marshalling, appraisal, valuation, or other similar right
that may otherwise be available to a junior secured creditor.

 

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Section 2.03 No New Liens. The parties hereto agree that, so long as the
Discharge of Priority Lien Obligations has not occurred, none of the Grantors
shall, nor shall any Grantor permit any of its subsidiaries to, (i) grant or
permit any additional Liens on any asset of a Grantor to secure any 1.5 Lien
Obligation, or take any action to perfect any additional Liens, unless it has
granted, or substantially concurrently therewith grants (or offers to grant), a
Lien on such asset of such Grantor to secure the Priority Lien Obligations and
has taken all actions required to perfect such Liens; provided, however, the
refusal or inability of the Priority Lien Agent to accept such Lien will not
prevent the 1.5 Lien Agent from taking the Lien or (iii) grant or permit any
additional Liens on any asset of a Grantor to secure any Priority Lien
Obligation, or take any action to perfect any additional Liens, unless it has
granted, or substantially concurrently therewith grants (or offers to grant), a
Lien on such asset of such Grantor to secure the 1.5 Lien Obligations and has
taken all actions required to perfect such Liens; provided that (x) no Grantor
shall be required to grant a Lien on any Excluded Assets and (y) the refusal or
inability of the 1.5 Lien Agent to accept such Lien will not prevent the
Priority Lien Agent from taking the Lien. To the extent that the provisions of
the immediately preceding sentence are not complied with for any reason, without
limiting any other right or remedy available to the Priority Lien Agent, the
other Priority Lien Secured Parties, each of the 1.5 Lien Agent, for itself and
on behalf of the other 1.5 Lien Secured Parties, agrees that any amounts
received by or distributed to any 1.5 Lien Secured Party, pursuant to or as a
result of any Lien granted in contravention of this Section 2.03 shall be
subject to Section 3.05(b).

Section 2.04 Similar Collateral and Agreements. The parties hereto acknowledge
and agree that it is their intention that the Priority Lien Collateral and the
1.5 Lien Collateral be identical (other than with respect to Excluded Assets of
the type described in clause (i) of the definition thereof, which shall not
constitute 1.5 Lien Collateral). In furtherance of the foregoing, the parties
hereto agree (a) to cooperate in good faith in order to determine, upon any
reasonable request by the Priority Lien Agent, or the 1.5 Lien Agent, the
specific assets included in the Priority Lien Collateral, and the 1.5 Lien
Collateral, the steps taken to perfect the Priority Liens, and the 1.5 Liens
thereon and the identity of the respective parties obligated under the Priority
Lien Documents and the 1.5 Lien Documents in respect of the Priority Lien
Obligations and the 1.5 Lien Obligations, respectively, (b) that the 1.5 Lien
Security Documents creating Liens on the Collateral shall be in all material
respects the same forms of documents as the respective Priority Lien Security
Documents creating Liens on the Collateral other than (i) with respect to the
priority nature of the Liens created thereunder in such Collateral, (ii) such
other modifications to such 1.5 Lien Security Documents which are less
restrictive than the corresponding Priority Lien Security Documents, (iii)
provisions in the 1.5 Lien Security Documents which are solely applicable to the
rights and duties of the 1.5 Lien Agent and/or the 1.5 Lien Agent, and (iv) with
such deletions or modifications of representations, warranties and covenants as
are customary with respect to security documents establishing Liens securing
publicly traded debt securities.

Section 2.05 No Duties of Priority Lien Agent. The 1.5 Lien Agent, for itself
and on behalf of each 1.5 Lien Secured Party, acknowledges and agrees that
neither the Priority Lien Agent nor any other Priority Lien Secured Party shall
have any duties or other obligations to any such 1.5 Lien Secured Party with
respect to any Collateral, other than to transfer to the 1.5 Lien Agent any
remaining Collateral and any proceeds of the sale or other Disposition of any
such Collateral remaining in its possession following the associated Discharge
of Priority Lien Obligations without representation or warranty on the part of
the Priority Lien Agent or any Priority Lien Secured Party. In furtherance of
the foregoing, each 1.5 Lien Secured Party acknowledges and agrees that until
the Discharge of Priority Lien Obligations (subject to the terms of Section
3.02, including the rights of the 1.5 Lien Secured Parties following the
expiration of any applicable Standstill Period), the Priority Lien Agent shall
be entitled, for the benefit of the Priority Lien Secured Parties, to sell,
transfer or otherwise Dispose of or deal with such Collateral, as provided
herein and in the Priority Lien Documents, without regard to any 1.5 Lien or any
rights to which the 1.5 Lien Agent or any 1.5 Lien Secured Party would otherwise
be entitled as a result of such 1.5 Lien. Without limiting the foregoing, each
1.5 Lien Secured Party agrees that neither the Priority Lien Agent

 

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nor any other Priority Lien Secured Party shall have any duty or obligation
first to marshal or realize upon any type of Collateral, or to sell, Dispose of
or otherwise liquidate all or any portion of such Collateral, in any manner that
would maximize the return to the 1.5 Lien Secured Parties, notwithstanding that
the order and timing of any such realization, sale, Disposition or liquidation
may affect the amount of proceeds actually received by the 1.5 Lien Secured
Parties, as applicable, from such realization, sale, Disposition or
liquidation. Each of the 1.5 Lien Secured Parties waives any claim such 1.5 Lien
Secured Party may now or hereafter have against the Priority Lien Agent or any
other Priority Lien Secured Party arising out of any actions which the Priority
Lien Agent or the Priority Lien Secured Parties take or omit to take (including
actions with respect to the creation, perfection or continuation of Liens on any
Collateral, actions with respect to the foreclosure upon, sale, release or
depreciation of, or failure to realize upon, any of the Collateral, and actions
with respect to the collection of any claim for all or any part of the Priority
Lien Obligations from any account debtor, guarantor or any other party) in
accordance with this Agreement and the Priority Lien Documents or the valuation,
use, protection or release of any security for the Priority Lien Obligations.

ARTICLE III

ENFORCEMENT RIGHTS; PURCHASE OPTION

Section 3.01 Limitation on Enforcement Action. Prior to the Discharge of
Priority Lien Obligations, the 1.5 Lien Agent, for itself and on behalf of each
1.5 Lien Secured Party, hereby agrees that, subject to Section 3.05(b) and
Section 4.07, none of the 1.5 Lien Agent or any other 1.5 Lien Secured Party
shall commence any judicial or nonjudicial foreclosure proceedings with respect
to, seek to have a trustee, receiver, liquidator or similar official appointed
for or over, attempt any action to take possession of, exercise any right,
remedy or power with respect to, or otherwise take any action to enforce its
interest in or realize upon, or take any other action available to it in respect
of, any Collateral under any 1.5 Lien Security Document, applicable law or
otherwise (including but not limited to any right of setoff), it being agreed
that only the Priority Lien Agent, acting in accordance with the applicable
Priority Lien Documents, shall have the exclusive right (and whether or not any
Insolvency or Liquidation Proceeding has been commenced), to take any such
actions or exercise any such remedies, in each case, without any consultation
with or the consent of the 1.5 Lien Agent or any other 1.5 Lien Secured
Party. In exercising rights and remedies with respect to the Collateral, the
Priority Lien Agent and the other Priority Lien Secured Parties may enforce the
provisions of the Priority Lien Documents and exercise remedies thereunder, all
in such order and in such manner as they may determine in their sole discretion
and regardless of whether such exercise and enforcement is adverse to the
interest of any 1.5 Lien Secured Party. Such exercise and enforcement shall
include the rights of an agent appointed by them to Dispose of Collateral upon
foreclosure, to incur expenses in connection with any such Disposition and to
exercise all the rights and remedies of a secured creditor under the Uniform
Commercial Code, the Bankruptcy Code or any other Bankruptcy Law. Without
limiting the generality of the foregoing, the Priority Lien Agent will have the
exclusive right to deal with that portion of the Collateral consisting of
deposit accounts and securities accounts (collectively “Accounts”), including
exercising rights under control agreements with respect to such Accounts. The
1.5 Lien Agent, for itself and on behalf of the other 1.5 Lien Secured Parties,
hereby acknowledges and agrees that no covenant, agreement or restriction
contained in any 1.5 Lien Security Document or any other 1.5 Lien Document,
shall be deemed to restrict in any way the rights and remedies of the Priority
Lien Agent or the other Priority Lien Secured Parties with respect to the
Collateral as set forth in this Agreement. Notwithstanding the foregoing,
subject to Section 3.05, the 1.5 Lien Agent, on behalf of the 1.5 Lien Secured
Parties, may, but will have no obligation to, take all such actions (not adverse
to the Priority Liens or the rights of the Priority Lien Agent and the Priority
Lien Secured Parties) it deems necessary to perfect or continue the perfection
of the 1.5 Liens in the Collateral or to create, preserve or protect (but not
enforce) the 1.5 Liens in the Collateral. Nothing herein shall limit the right
or ability of the 1.5 Lien Secured Parties to (i) purchase (by credit bid or
otherwise) all or any portion of the Collateral in connection with any
enforcement of

 

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remedies by the Priority Lien Agent to the extent that, and so long as, the
Priority Lien Secured Parties receive payment in full in cash of all Priority
Lien Obligations after giving effect thereto or (ii) file a proof of claim with
respect to the 1.5 Lien Obligations.

Section 3.02 Standstill Period; Permitted Enforcement Action. Notwithstanding
the foregoing Section 3.01, both before and during an Insolvency or Liquidation
Proceeding:

Prior to Discharge of Priority Lien Obligations, after a period of 150 days has
elapsed (which period will be tolled during any period in which the Priority
Lien Agent is not entitled, on behalf of the Priority Lien Secured Parties, to
enforce or exercise any rights or remedies with respect to any Collateral as a
result of (A) any injunction issued by a court of competent jurisdiction or (B)
the automatic stay or any other stay in any Insolvency or Liquidation
Proceeding) since the date on which the 1.5 Lien Agent has delivered to the
Priority Lien Agent written notice of the acceleration of any 1.5 Lien Debt (the
“Standstill Period”), the 1.5 Lien Agent and the other 1.5 Lien Secured Parties
may enforce or exercise their rights or remedies with respect to any Collateral;
provided, however that notwithstanding the expiration of the Standstill Period
or anything in the 1.5 Lien Collateral Trust Agreement to the contrary, in no
event may the 1.5 Lien Agent or any other 1.5 Lien Secured Party enforce or
exercise any rights or remedies with respect to any Collateral, or commence,
join with any Person at any time in commencing, or petition for or vote in favor
of any resolution for, any such action or proceeding, if the Priority Lien Agent
on behalf of the Priority Lien Secured Parties or any other Priority Lien
Secured Party shall have commenced, and shall be diligently pursuing (or shall
have sought or requested relief from, or modification of, the automatic stay or
any other stay or other prohibition in any Insolvency or Liquidation Proceeding
to enable the commencement and pursuit thereof), the enforcement or exercise of
any rights or remedies with respect to the Collateral or any such action or
proceeding (prompt written notice thereof to be given to the 1.5 Lien
Representatives by the Priority Lien Agent); provided, further, that, at any
time after the expiration of the Standstill Period, if neither the Priority Lien
Agent nor any other Priority Lien Secured Party shall have commenced and be
diligently pursuing (or shall have sought or requested relief from, or
modification of, the automatic stay or any other stay or other prohibition in
any Insolvency or Liquidation Proceeding to enable the commencement and pursuit
thereof) the enforcement or exercise of any rights or remedies with respect to
any material portion of the Collateral or any such action or proceeding, and the
1.5 Lien Agent shall have commenced the enforcement or exercise of any rights or
remedies with respect to any material portion of the Collateral or any such
action or proceeding, then for so long as the 1.5 Lien Agent is diligently
pursuing such rights or remedies, none of any Priority Lien Secured Party or the
Priority Lien Agent shall take any action of a similar nature with respect to
such Collateral, or commence, join with any Person at any time in commencing, or
petition for or vote in favor of any resolution for, any such action or
proceeding; and

Section 3.03 Insurance. Unless and until the Discharge of Priority Lien
Obligations has occurred (subject to the terms of Section 3.02, including the
rights of the 1.5 Lien Secured Parties following expiration of the Standstill
Period), the Priority Lien Agent shall have the sole and exclusive right,
subject to the rights of the Grantors under the Priority Lien Documents, to
adjust and settle claims in respect of Collateral under any insurance policy in
the event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding (or any deed in lieu of condemnation)
affecting the Collateral. Unless and until the Discharge of Priority Lien
Obligations has occurred, and subject to the rights of the Grantors under the
Priority Lien Documents, all proceeds of any such policy and any such award (or
any payments with respect to a deed in lieu of condemnation) in respect to the
Collateral shall be paid to the Priority Lien Agent pursuant to the terms of the
Priority Lien Documents (including for purposes of cash collateralization of
commitments, letters of credit and Hedging Obligations). If the 1.5 Lien Agent
or any 1.5 Lien Secured Party shall, at any time, receive any proceeds of any
such insurance policy or any such award or payment in contravention of the
foregoing, it shall pay such proceeds over to the Priority Lien Agent. In
addition, if by virtue of being named as an additional insured

 

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or loss payee of any insurance policy of any Grantor covering any of the
Collateral, the 1.5 Lien Agent or any other 1.5 Lien Secured Party shall have
the right to adjust or settle any claim under any such insurance policy, then
unless and until the Discharge of Priority Lien Obligations has occurred, the
1.5 Lien Agent and any such 1.5 Lien Secured Party shall follow the instructions
of the Priority Lien Agent, or of the Grantors under the Priority Lien Documents
to the extent the Priority Lien Documents grant such Grantors the right to
adjust or settle such claims, with respect to such adjustment or settlement
(subject to the terms of Section 3.02, including the rights of the 1.5 Lien
Secured Parties following expiration of the Standstill Period).

Section 3.04 Notification of Release of Collateral. Each of the Priority Lien
Agent and the 1.5 Lien Agent shall give the other Secured Debt Representatives
prompt written notice of the Disposition by it of, and Release by it of the Lien
on, any Collateral; provided that no such notice shall be necessary for a
Release of the Lien on any Collateral upon Discharge of Priority Lien
Obligations. Such notice shall describe in reasonable detail the subject
Collateral, the parties involved in such Disposition or Release, the place, time
manner and method thereof, and the consideration, if any, received therefor;
provided, however, that the failure to give any such notice shall not in and of
itself in any way impair the effectiveness of any such Disposition or Release.

Section 3.05 No Interference; Payment Over.

(a) No Interference. The 1.5 Lien Agent, for itself and on behalf of each 1.5
Lien Secured Party, agrees that each 1.5 Lien Secured Party (i) will not take or
cause to be taken any action the purpose or effect of which is, or could be, to
make any 1.5 Lien pari passu with, or to give such 1.5 Lien Secured Party any
preference or priority relative to, any Priority Lien with respect to the
Collateral or any part thereof, (ii) will not challenge or question in any
proceeding the validity or enforceability of any Priority Lien Obligations or
Priority Lien Document, or the validity, attachment, perfection or priority of
any Priority Lien, or the validity or enforceability of the priorities, rights
or duties established by the provisions of this Agreement, (iii) will not take
or cause to be taken any action the purpose or effect of which is, or could be,
to interfere, hinder or delay, in any manner, whether by judicial proceedings or
otherwise, any sale, transfer or other Disposition of the Collateral by any
Priority Lien Secured Party or the Priority Lien Agent acting on their behalf,
(iv) shall have no right to (A) direct the Priority Lien Agent or any other
Priority Lien Secured Party to exercise any right, remedy or power with respect
to any Collateral or (B) consent to the exercise by the Priority Lien Agent or
any other Priority Lien Secured Party of any right, remedy or power with respect
to any Collateral, (v) will not institute any suit or assert in any suit or
Insolvency or Liquidation Proceeding any claim against the Priority Lien Agent
or other Priority Lien Secured Party seeking damages from or other relief by way
of specific performance, instructions or otherwise with respect to, and neither
the Priority Lien Agent nor any other Priority Lien Secured Party shall be
liable for, any action taken or omitted to be taken by the Priority Lien Agent
or other Priority Lien Secured Party with respect to any Priority Lien
Collateral, (vi) will not seek, and hereby waives any right, to have any
Collateral or any part thereof marshaled upon any foreclosure or other
Disposition of such Collateral, (vii) will not attempt, directly or indirectly,
whether by judicial proceedings or otherwise, to challenge the enforceability of
any provision of this Agreement, (viii) will not object to, and hereby waives
any right to object to, forbearance by the Priority Lien Agent or any Priority
Lien Secured Party, and (ix) will not assert, and hereby waives, to the fullest
extent permitted by law, any right to demand, request, plead or otherwise assert
or claim the benefit of any marshalling, appraisal, valuation or other similar
right that may be available under applicable law with respect to the Collateral
or any similar rights a junior secured creditor may have under applicable law.

(b) Payment Over. The 1.5 Lien Agent, for itself and on behalf of each other 1.5
Lien Secured Party, hereby agrees that if any 1.5 Lien Secured Party shall
obtain possession of any Collateral or shall realize any proceeds or payment in
respect of any Collateral, pursuant to the exercise of

 

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any rights or remedies with respect to the Collateral under any 1.5 Lien
Security Document or by the exercise of any rights available to it under
applicable law or in any Insolvency or Liquidation Proceeding, to the extent
permitted hereunder, at any time prior to, the Discharge of Priority Lien
Obligations, then it shall hold such Collateral, proceeds or payment in trust
for the Priority Lien Agent and the other Priority Lien Secured Parties and
transfer such Collateral, proceeds or payment, as the case may be, to the
Priority Lien Agent as promptly as practicable. Furthermore, the 1.5 Lien Agent,
shall, at the Grantors’ expense, promptly send written notice to the Priority
Lien Agent upon receipt of such Collateral by any 1.5 Lien Secured Party at any
time prior to Discharge of Priority Lien Obligations, proceeds or payment and if
directed by the Priority Lien Agent within ten (10) days after receipt by the
Priority Lien Agent of such written notice, shall deliver such Collateral,
proceeds or payment to the Priority Lien Agent in the same form as received,
with any necessary endorsements, or as court of competent jurisdiction may
otherwise direct. The Priority Lien Agent is hereby authorized to make any such
endorsements as agent for the 1.5 Lien Agent or any other 1.5 Lien Secured
Party. The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien
Secured Party, agrees that if, at any time, it obtains written notice that all
or part of any payment with respect to any Priority Lien Obligations (other than
payments made in respect of Excess Priority Lien Obligations) previously made
shall be rescinded for any reason whatsoever, it will promptly pay over to the
Priority Lien Agent any payment received by it and then in its possession or
under its control in respect of any such Priority Lien Collateral and shall
promptly turn any such Collateral then held by it over to the Priority Lien
Agent, and the provisions set forth in this Agreement will be reinstated as if
such payment had not been made, until the Discharge of Priority Lien
Obligations. All 1.5 Liens will remain attached to and enforceable against all
proceeds so held or remitted, subject to the priorities set forth in this
Agreement. Anything contained herein to the contrary notwithstanding, this
Section 3.05(b) shall not apply to any proceeds of Collateral realized in a
transaction not prohibited by this Agreement or the Priority Lien Documents and
as to which the possession or receipt thereof by the 1.5 Lien Agent, or any
other 1.5 Lien Secured Party, is otherwise permitted by this Agreement or the
Priority Lien Documents.

Section 3.06 Purchase Option.

(a) Notwithstanding anything in this Agreement to the contrary, on or at any
time within sixty (60) days after the 1.5 Lien Agent receives notice of (i) the
commencement of an Insolvency or Liquidation Proceeding or (ii) the acceleration
of the Priority Lien Obligations, holders of the 1.5 Lien Debt and each of their
respective designated Affiliates (the “1.5 Lien Purchasers”) will have the
right, at their sole option and election (but will not be obligated), at any
time upon prior written notice (the “Purchase Notice”) to the Priority Lien
Agent, to purchase from the Priority Lien Secured Parties all (but not less than
all) Priority Lien Obligations (including unfunded commitments but excluding
Excess Priority Lien Obligations) and any loans provided by any of the Priority
Lien Secured Parties in connection with a DIP Financing that are outstanding on
the date of such purchase. Promptly following the receipt of such notice, the
Priority Lien Agent will deliver to the 1.5 Lien Agent a statement of the amount
of Priority Lien Debt (other than Excess Priority Lien Obligations), other
Priority Lien Obligations and DIP Financing then outstanding and the amount of
the cash collateral requested by the Priority Lien Agent to be delivered
pursuant to Section 3.06(b)(ii) below. The right to purchase provided for in
this Section 3.06 will expire unless, within 10 Business Days after the receipt
by the 1.5 Lien Agent of such notice from the Priority Lien Agent, the 1.5 Lien
Agent delivers to the Priority Lien Agent an irrevocable commitment of the 1.5
Lien Purchasers to purchase all (but not less than all) of the Priority Lien
Obligations (including unfunded commitments but excluding Excess Priority Lien
Obligations) and any loans provided by any of the Priority Lien Secured Parties
in connection with a DIP Financing and to otherwise complete such purchase on
the terms set forth under this Section 3.06. Unless the right to purchase shall
have expired in accordance with the preceding sentence, neither the applicable
Priority Lien Representative nor any holder of Priority Lien Obligations will
enforce or exercise any rights or remedies with respect to the Collateral after
receipt of the Purchase Notice by such Priority Lien

 

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Representative. For the avoidance of doubt, the 1.5 Lien Agent (on behalf of
itself and the other 1.5 Lien Secured Parties) hereby acknowledges and agrees
that (A) the obligations of the Priority Lien Secured Parties to sell their
respective Priority Lien Obligations under this Section 3.06(a) are several and
not joint and several, (B) to the extent any Priority Lien Secured Party
breaches its obligation to sell its Priority Lien Obligations under this
Section 3.06(a) (a “Defaulting Priority Lien Secured Party”), nothing in this
Section 3.06(a) shall be deemed to require the Priority Lien Agent or any other
Priority Lien Secured Party to purchase such Defaulting Priority Lien Secured
Party’s Priority Lien Obligations for resale to the 1.5 Lien Secured Parties and
(C) in all cases, the Priority Lien Agent and each Priority Lien Secured Party
complying with the terms of this Section 3.06(a) shall not be deemed to be in
default of this Agreement or otherwise be deemed liable for any action or
inaction of any Defaulting Priority Lien Secured Party; provided that nothing in
this last sentence of this Section 3.06(a) shall (x) require the 1.5 Lien
Secured Parties to purchase less than all of Priority Lien Obligations or (y)
prohibit the 1.5 Lien Secured Parties from purchasing less than all of the
Priority Lien Obligations if a Priority Lien Secured Party becomes a Defaulting
Priority Lien Secured Party and the 1.5 Lien Secured Parties purchase Priority
Lien Obligations from all non-Defaulting Priority Lien Secured Parties.

(b) On the date specified by the 1.5 Lien Agent (on behalf of the 1.5 Lien
Purchasers) in such irrevocable commitment (which shall not be less than five
Business Days nor more than 20 Business Days, after the receipt by the Priority
Lien Agent of such irrevocable commitment), the Priority Lien Secured Parties
shall sell to the 1.5 Lien Purchasers all (but not less than all) Priority Lien
Obligations (including unfunded commitments but excluding Excess Priority Lien
Obligations) and any loans provided by any of the Priority Lien Secured Parties
in connection with a DIP Financing that are outstanding on the date of such
sale, subject to any required approval of any Governmental Authority then in
effect, if any, and only if on the date of such sale, the Priority Lien Agent
receives the following:

(i) payment, as the purchase price for all Priority Lien Obligations sold in
such sale, of an amount equal to the full amount of all Priority Lien
Obligations (other than outstanding letters of credit as referred to in clause
(ii) below) and loans provided by any of the Priority Lien Secured Parties in
connection with a DIP Financing then outstanding (including principal, interest,
fees, reasonable attorneys’ fees and legal expenses, but excluding contingent
indemnification obligations for which no claim or demand for payment has been
made at or prior to such time); provided that in the case of Hedging Obligations
that constitute Priority Lien Obligations the 1.5 Lien Purchasers shall cause
the applicable agreements governing such Hedging Obligations to be assigned and
novated or, if such agreements have been terminated, such purchase price shall
include an amount equal to the sum of any unpaid amounts then due in respect of
such Hedging Obligations, calculated using the market quotation method and after
giving effect to any netting arrangements;

(ii) a cash collateral deposit in such amount as the Priority Lien Agent
determines is reasonably necessary to secure the payment of any outstanding
letters of credit constituting Priority Lien Obligations that may become due and
payable after such sale (but not in any event in an amount greater than one
hundred five percent (105%) of the amount then reasonably estimated by the
Priority Lien Agent to be the aggregate outstanding amount of such letters of
credit at such time), which cash collateral shall be (A) held by the Priority
Lien Agent as security solely to reimburse the issuers of such letters of credit
that become due and payable after such sale and any fees and expenses incurred
in connection with such letters of credit and (B) returned to the 1.5 Lien Agent
(except as may otherwise be required by applicable law or any order of any court
or other Governmental Authority) promptly after the expiration or termination
from time to time of all payment contingencies affecting such letters of credit;
and

(iii) any agreements, documents or instruments which the Priority Lien Agent may
reasonably request pursuant to which the 1.5 Lien Agent and the 1.5 Lien
Purchasers in such sale

 

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expressly assume and adopt all of the obligations of the Priority Lien Agent and
the Priority Lien Secured Parties under the Priority Lien Documents and in
connection with loans provided by any of the Priority Lien Secured Parties in
connection with a DIP Financing on and after the date of the purchase and sale
and the 1.5 Lien Agent (or any other representative appointed by the holders of
a majority in aggregate principal amount of the 1.5 Lien Term Loans then
outstanding) becomes a successor agent thereunder.

Notwithstanding the foregoing, in the event that the Second Lien Purchasers (as
such term is defined in the Second Lien Intercreditor Agreement) shall have
delivered a Purchase Notice (as defined in the Second Lien Intercreditor
Agreement) to purchase Priority Lien Obligations (as such term is defined in the
Second Lien Intercreditor Agreement), the rights of the 1.5 Lien Purchasers to
purchase the Priority Lien Obligations hereunder shall be suspended, and if such
Second Lien Purchasers shall purchase the Priority Lien Obligations (as such
term is defined in the Second Lien Intercreditor Agreement), the rights of the
1.5 Lien Purchasers to purchase the Priority Lien Obligations hereunder shall
terminate.

(c) Such purchase of the Priority Lien Obligations (including unfunded
commitments but excluding Excess Priority Lien Obligations) and any loans
provided by any of the Secured Parties in connection with a DIP Financing shall
be made on a pro rata basis among the 1.5 Lien Purchasers giving notice to the
Priority Lien Agent of their interest to exercise the purchase option hereunder
according to each such 1.5 Lien Purchaser’s portion of the 1.5 Lien Debt
outstanding on the date of purchase or such portion as such 1.5 Lien Purchasers
may otherwise agree among themselves. Such purchase price and cash collateral
shall be remitted by wire transfer in federal funds to such bank account of the
Priority Lien Agent as the Priority Lien Agent may designate in writing to the
1.5 Lien Agent for such purpose. Interest shall be calculated to but excluding
the Business Day on which such sale occurs if the amounts so paid by the 1.5
Lien Purchasers to the bank account designated by the Priority Lien Agent are
received in such bank account prior to 12:00 noon, New York City time, and
interest shall be calculated to and including such Business Day if the amounts
so paid by the 1.5 Lien Purchasers to the bank account designated by the
Priority Lien Agent are received in such bank account later than 12:00 noon, New
York City time.

(d) Such sale shall be expressly made without representation or warranty of any
kind by the Priority Lien Secured Parties as to the Priority Lien Obligations,
the Collateral or otherwise and without recourse to any Priority Lien Secured
Party, except that the Priority Lien Secured Parties shall represent and warrant
severally as to the Priority Lien Obligations (including unfunded commitments)
and any loans provided by any of the Priority Lien Secured Parties in connection
with a DIP Financing then owing to it: (i) that such applicable Priority Lien
Secured Party owns such Priority Lien Obligations (including unfunded
commitments) and any loans provided by any of the Priority Lien Secured Parties
in connection with a DIP Financing free and clear of any Liens; and (ii) that
such applicable Priority Lien Secured Party has the necessary corporate or other
governing authority to assign such interests.

(e) After such sale becomes effective, the outstanding letters of credit will
remain enforceable against the issuers thereof and will remain secured by the
Priority Liens upon the Collateral in accordance with the applicable provisions
of the Priority Lien Documents as in effect at the time of such sale, and the
issuers of letters of credit will remain entitled to the benefit of the Priority
Liens upon the Collateral and sharing rights in the proceeds thereof in
accordance with the provisions of the Priority Lien Documents as in effect at
the time of such sale, as fully as if the sale of the Priority Lien Debt had not
been made, but only the Person or successor agent to whom the Priority Liens are
transferred in such sale will have the right to foreclose upon or otherwise
enforce the Priority Liens and only the 1.5 Lien Purchasers in the sale will
have the right to direct such Person or successor as to matters relating to the
foreclosure or other enforcement of the Priority Liens.

 

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ARTICLE IV

OTHER AGREEMENTS

Section 4.01 Release of Liens; Automatic Release of 1.5 Liens.

(a) Prior to the Discharge of Priority Lien Obligations, the 1.5 Lien Agent, for
itself and on behalf of each other 1.5 Lien Secured Party, agrees that, in the
event the Priority Lien Secured Parties release their Lien on any Collateral,
the 1.5 Lien on such Collateral shall terminate and be released automatically
and without further action if (i) such release is permitted under the 1.5 Lien
Documents, (ii) such release is effected in connection with the Priority Lien
Agent’s foreclosure upon, or other exercise of rights or remedies with respect
to, such Collateral, (iii) after giving effect to such release and the filing of
any additional 1.5 Lien Security Documents or supplements or amendments to
existing 1.5 Lien Security Documents on or prior to the consummation of such
release, the Collateral shall include Oil and Gas Properties subject to such 1.5
Lien Security Documents that include not less than 90% of the total discounted
future net revenue of the Grantors’ Oil and Gas Properties located in the United
States and adjacent Federal waters constituting Proved Reserves as estimated by
W&T in its most recent Reserve Report (or otherwise satisfies any minimum
Collateral requirements then in effect in the Priority Lien Documents) (provided
that any release in connection with a sale, transfer or other disposition of
Collateral in a transaction or circumstance that complies with Section 6.10 of
the 1.5 Lien Credit Agreement (or any similar provision of any other 1.5 Lien
Documents) shall not be subject to the condition in this clause (iii) or
(iv) such release is effected in connection with a sale or other Disposition of
any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code
or any other provision of the Bankruptcy Code if the Priority Lien Secured
Parties shall have consented to such sale or Disposition of such Collateral;
provided that, in the case of each of clauses (ii), (iii) and (iv), the 1.5
Liens on such Collateral shall attach to (and shall remain subject and
subordinate to all Priority Liens securing Priority Lien Obligations (other than
Excess Priority Lien Obligations)) any proceeds of a sale, transfer or other
Disposition of Collateral not paid to the Priority Lien Secured Parties or that
remain after the Discharge of Priority Lien Obligations.

(b) The 1.5 Lien Agent agrees to execute and deliver (at the sole cost and
expense of the Grantors) all such releases and other instruments as shall
reasonably be requested by the Priority Lien Agent or the 1.5 Lien Agent, as
applicable, to evidence and confirm any release of Collateral provided for in
this Section 4.01.

Section 4.02 Certain Agreements With Respect to Insolvency or Liquidation
Proceedings. (a) The parties hereto acknowledge that this Agreement is a
“subordination agreement” under Section 510(a) of the Bankruptcy Code and shall
continue in full force and effect, notwithstanding the commencement of any
Insolvency or Liquidation Proceeding by or against W&T or any subsidiary of
W&T. All references in this Agreement to W&T or any subsidiary of W&T or any
other Grantor will include such Person or Persons as a debtor-in-possession and
any receiver or trustee for such Person or Persons in an Insolvency or
Liquidation Proceeding. For the purposes of this Section 4.02, unless otherwise
provided herein, clauses (b) through and including (o) of this Section 4.02
shall be in full force and effect in respect to the 1.5 Lien Agent and the 1.5
Lien Secured Parties at all times prior to the Discharge of Priority Lien
Obligations.

(b) If W&T or any of its subsidiaries shall become subject to any Insolvency or
Liquidation Proceeding and shall, as debtor(s)-in-possession, or if any receiver
or trustee for such Person or Persons shall, move for approval of financing
(“DIP Financing”) to be provided by one or more lenders (the “DIP Lenders”)
under Section 364 of the Bankruptcy Code or the use of cash collateral under
Section 363 of the Bankruptcy Code, the 1.5 Lien Agent, for itself and on behalf
of each 1.5 Lien Secured Party, agrees that neither it nor any other 1.5 Lien
Secured Party, will raise any objection, contest or oppose, and each 1.5 Lien
Secured Party will waive any claim such Person may now or hereafter have, to any
such financing or to the Liens on the Collateral securing the same (“DIP
Financing Liens”), or to any use, sale

 

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or lease of cash collateral that constitutes Collateral or to any grant of
administrative expense priority under Section 364 of the Bankruptcy Code, unless
(A) the Priority Lien Agent or the Priority Lien Secured Parties oppose or
object to such DIP Financing or such DIP Financing Liens or such use of cash
collateral or (B) the maximum principal amount of indebtedness permitted under
such DIP Financing exceeds the sum of (I) the amount of Priority Lien
Obligations refinanced with the proceeds thereof and (II) $100,000,000. To the
extent such DIP Financing Liens are senior to, or rank pari passu with, the
Priority Liens, the 1.5 Lien Agent will, for itself and on behalf of the other
1.5 Lien Secured Parties, subordinate the 1.5 Liens on the Collateral to the
Priority Liens and to such DIP Financing Liens, so long as the 1.5 Lien Agent,
on behalf of the 1.5 Lien Secured Parties, retains Liens on all the Collateral,
including proceeds thereof arising after the commencement of any Insolvency or
Liquidation Proceeding, with the same priority relative to the Priority Liens as
existed prior to the commencement of the case under the Bankruptcy Code. Nothing
in this Section 4.02(b) shall limit or impair the right of the 1.5 Lien Agent to
object to any motion regarding DIP Financing or cash collateral to the extent
that the objection could be asserted in an Insolvency Proceeding by unsecured
creditors generally, is consistent with the other terms of this Section 4.02 and
is not based on the status of any 1.5 Lien Secured Party as a holder of a Lien.

(c) Prior to the Discharge of Priority Lien Obligations without the consent of
the Priority Lien Agent, in its sole discretion, each of the 1.5 Lien Agent, for
itself and on behalf of each 1.5 Lien Secured Party, agrees not to propose,
support or enter into any DIP Financing provided that if no Priority Lien
Secured Party offers to provide DIP Financing within the amount permitted under
clause (B) of Section 4.02(b) on or before the date of the hearing to approve
DIP Financing, then a 1.5 Lien Secured Party may seek to provide such DIP
Financing secured by Liens equal or senior in priority to the Liens securing the
Priority Lien Obligations and the Priority Lien Secured Parties may object
thereto on any and all grounds; provided that such DIP Financing may not
“roll-up” or otherwise refinance any pre-petition 1.5 Lien Obligations.

(d) Prior to the Discharge of Priority Lien Obligations, the 1.5 Lien Agent, for
itself and on behalf of each 1.5 Lien Secured Party, agrees that it will not
object to, oppose or contest (or join with or support any third party objecting
to, opposing or contesting) a sale or other Disposition, a motion to sell or
Dispose or the bidding procedure for such sale or Disposition of any Collateral
(or any portion thereof) under Section 363 of the Bankruptcy Code or any other
provision of the Bankruptcy Code if the Priority Lien Secured Parties shall have
consented to such sale or Disposition, such motion to sell or Dispose or such
bidding procedure for such sale or Disposition of such Collateral and all
Priority Liens, and 1.5 Liens will attach to the proceeds of the sale in the
same respective priorities as set forth in this Agreement.

(e) The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured
Party, waives any claim that may be had against the Priority Lien Agent or any
other Priority Lien Secured Party arising out of any DIP Financing Liens (that
is granted in a manner that is consistent with this Agreement) or administrative
expense priority under Section 364 of the Bankruptcy Code.

(f) Prior to the Discharge of Priority Lien Obligations, the 1.5 Lien Agent, for
itself and on behalf of each other 1.5 Lien Secured Party, agrees that neither
the 1.5 Lien Agent nor any other 1.5 Lien Secured Party, will file or prosecute
in any Insolvency or Liquidation Proceeding any motion for adequate protection
(or any comparable request for relief) based upon their interest in the
Collateral, nor object to, oppose or contest (or join with or support any third
party objecting to, opposing or contesting) (i) any request by the Priority Lien
Agent or any other Priority Lien Secured Party for adequate protection or (ii)
any objection by the Priority Lien Agent or any other Priority Lien Secured
Party to any motion, relief, action or proceeding based on the Priority Lien
Agent or Priority Lien Secured Parties claiming a lack of adequate protection,
except that the 1.5 Lien Secured Parties may:

(I) freely seek and obtain relief granting adequate protection in the form of a
replacement lien co-extensive in all respects with, but subordinated (as set
forth in Section 2.01) to, and with the same relative priority to the Priority
Liens as existed prior to the commencement of the Insolvency or Liquidation
Proceeding, all Liens granted in the Insolvency or Liquidation Proceeding to, or
for the benefit of, the Priority Lien Secured Parties; and

(II) freely seek and obtain any relief upon a motion for adequate protection (or
any comparable relief), without any condition or restriction whatsoever, at any
time after the Discharge of Priority Lien Obligations.

 

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(g) The 1.5 Lien Agent, for itself and on behalf of each of the other of the 1.5
Lien Secured Parties, waives any claim it or any such other 1.5 Lien Secured
Party may now or hereafter have against the Priority Lien Agent or any other
Priority Lien Secured Party (or their representatives) arising out of any
election by the Priority Lien Agent or any Priority Lien Secured Parties, in any
proceeding instituted under the Bankruptcy Code, of the application of Section
1111(b) of the Bankruptcy Code.

(h) The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured
Party, agrees that in any Insolvency or Liquidation Proceeding, until the
Discharge of Priority Lien Obligations neither the 1.5 Lien Agent nor any other
1.5 Lien Secured Party shall support or vote to accept any plan of
reorganization or disclosure statement of W&T or any other Grantor unless (i)
such plan is accepted by the Class of Priority Lien Secured Parties in
accordance with Section 1126(c) of the Bankruptcy Code or otherwise provides for
the payment in full in cash of all Priority Lien Obligations (including all
post-petition interest approved by the bankruptcy court, fees and expenses and
cash collateralization of all letters of credit) on the effective date of such
plan of reorganization or (ii) such plan provides on account of the Priority
Lien Secured Parties for the retention by the Priority Lien Agent, for the
benefit of the Priority Lien Secured parties, of the Liens on the Collateral
securing the Priority Lien Obligations, and on all proceeds thereof whenever
received, and such plan also provides that any Liens retained by, or granted to,
the 1.5 Lien Agent are only on property securing the Priority Lien Obligations
and shall have the same relative priority with respect to the Collateral or
other property, respectively, as provided in this Agreement with respect to the
Collateral. Except as provided herein, each of the 1.5 Lien Secured Parties
shall remain entitled to vote their claims in any such Insolvency or Liquidation
Proceeding.

(i) The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured
Party, agrees that neither the 1.5 Lien Agent nor any other 1.5 Lien Secured
Party, shall seek relief, pursuant to Section 362(d) of the Bankruptcy Code or
otherwise, from the automatic stay of Section 362(a) of the Bankruptcy Code or
from any other stay in any Insolvency or Liquidation Proceeding in respect of
the Collateral without the prior written consent of the Priority Lien Agent.

(j) The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured
Party, agrees that neither the 1.5 Lien Agent nor any other 1.5 Lien Secured
Party shall oppose or seek to challenge any claim by the Priority Lien Agent or
any other Priority Lien Secured Party for allowance or payment in any Insolvency
or Liquidation Proceeding of Priority Lien Obligations consisting of
post-petition interest, fees or expenses or cash collateralization of all
letters of credit to the extent of the value of the Priority Liens (it being
understood that such value will be determined without regard to the existence of
the 1.5 Liens on the Collateral). Neither Priority Lien Agent nor any other
Priority Lien Secured Party shall oppose or seek to challenge any claim by the
1.5 Lien Agent, or any other 1.5 Lien Secured Party, for allowance or payment in
any Insolvency or Liquidation Proceeding of 1.5 Lien Obligations, consisting of
post-petition interest, fees or expenses to the extent of the value of the 1.5
Liens, on the Collateral; provided that if the Priority Lien Agent or any other
Priority Lien Secured Party shall have made any such claim, such claim (i) shall
have been approved or (ii) will be approved contemporaneously with the approval
of any such claim by the 1.5 Lien Agent or any 1.5 Lien Secured Party, as
applicable.

 

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(k) Without the express written consent of the Priority Lien Agent, none of the
1.5 Lien Agent or any other 1.5 Lien Secured Party shall (or shall join with or
support any third party in opposing, objecting to or contesting, as the case may
be), in any Insolvency or Liquidation Proceeding involving any Grantor, (i)
oppose, object to or contest the determination of the extent of any Liens held
by any Priority Lien Secured Party or the value of any claims of any such holder
under Section 506(a) of the Bankruptcy Code or (ii) oppose, object to or contest
the payment to the Priority Lien Secured Parties of interest, fees or expenses
under Section 506(b) of the Bankruptcy Code.

(l) Notwithstanding anything to the contrary contained herein, if in any
Insolvency or Liquidation Proceeding a determination is made that any Lien
encumbering any Collateral is not enforceable for any reason, then the 1.5 Lien
Agent for itself and on behalf of each other 1.5 Lien Secured Party, agrees
that, any distribution or recovery they may receive in respect of any such
Collateral shall be segregated and held in trust and forthwith paid over to the
Priority Lien Agent for the benefit of the Priority Lien Secured Parties in the
same form as received without recourse, representation or warranty (other than a
representation of the 1.5 Lien Agent, that it has not otherwise sold, assigned,
transferred or pledged any right, title or interest in and to such distribution
or recovery) but with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The 1.5 Lien Agent, for itself and on behalf
of each other 1.5 Lien Secured Party, hereby appoints the Priority Lien Agent,
and any officer or agent of the Priority Lien Agent, with full power of
substitution, the attorney-in-fact of each 1.5 Lien Secured Party for the
limited purpose of carrying out the provisions of this Section 4.02(l) and
taking any action and executing any instrument that the Priority Lien Agent may
deem necessary or advisable to accomplish the purposes of this Section 4.02(l),
which appointment is irrevocable and coupled with an interest.

(m) The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured
Party, hereby agrees that the Priority Lien Agent shall have the exclusive right
to credit bid the Priority Lien Obligations and further that none of the 1.5
Lien Agent, or any other 1.5 Lien Secured Party, shall (or shall join with or
support any third party in opposing, objecting to or contesting, as the case may
be) oppose, object to or contest such credit bid by the Priority Lien Agent.

(n) Without the consent of the Priority Lien Agent in its sole discretion, the
1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured Party,
agrees it will not file an involuntary bankruptcy claim or seek the appointment
of an examiner or a trustee for W&T or any of its subsidiaries.

(o) The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured
Party, waives any right to assert or enforce any claim under Section 506(c) or
552 of the Bankruptcy Code as against any Priority Lien Secured Party or any of
the Collateral.

Section 4.03 Reinstatement. If any Priority Lien Secured Party is required in
any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise
pay to the estate of any Grantor any amount (a “Recovery”) for any reason
whatsoever, then the Priority Lien Obligations shall be reinstated to the extent
of such Recovery and the Priority Lien Secured Parties shall be entitled to a
reinstatement of Priority Lien Obligations with respect to all such recovered
amounts. The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien
Secured Party, agrees that if, at any time, a 1.5 Lien Secured Party, receives
notice of any Recovery, the 1.5 Lien Agent, any other 1.5 Lien Secured Party,
shall promptly pay over to the Priority Lien Agent any payment received by it
and then in its possession or under its control in respect of any Collateral
subject to any Priority Lien securing such Priority Lien Obligations and shall
promptly turn any Collateral subject to any such Priority Lien then

 

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held by it over to the Priority Lien Agent, and the provisions set forth in this
Agreement shall be reinstated as if such payment had not been made. If this
Agreement shall have been terminated prior to any such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto from such date of reinstatement. Any amounts received by the
1.5 Lien Agent, or any other 1.5 Lien Secured Party, and then in its possession
or under its control on account of the 1.5 Lien Obligations, after the
termination of this Agreement shall, in the event of a reinstatement of this
Agreement pursuant to this Section 4.03, be held in trust for and paid over to
the Priority Lien Agent for the benefit of the Priority Lien Secured Parties for
application to the reinstated Priority Lien Obligations until the discharge
thereof. This Section 4.03 shall survive termination of this Agreement.

Section 4.04 Refinancings; Additional 1.5 Lien Debt. The Priority Lien
Obligations and the 1.5 Lien Obligations may be Replaced by any Priority
Substitute Credit Facility or 1.5 Lien Substitute Facility, as the case may be,
in each case, without notice to, or the consent of any Secured Party, all
without affecting the Lien priorities provided for herein or the other
provisions hereof; provided, that (i) the Priority Lien Agent and the 1.5 Lien
Agent shall receive on or prior to incurrence of a Priority Substitute Credit
Facility, or 1.5 Lien Substitute Facility (A) an Officers’ Certificate from W&T
stating that (I) the incurrence thereof is permitted by each applicable Secured
Debt Document to be incurred and (II) the requirements of Section 4.06 have been
satisfied, and (B) a Priority Confirmation Joinder from the holders or lenders
of any indebtedness that Replaces the Priority Lien Obligations or the 1.5 Lien
Obligations (or an authorized agent, trustee or other representative on their
behalf), (ii) the aggregate outstanding principal amount of the Priority Lien
Obligations, after giving effect to such Priority Substitute Credit Facility,
shall not exceed the Priority Lien Cap and (iii) on or before the date of such
incurrence, such Priority Substitute Credit Facility or 1.5 Lien Substitute
Facility is designated by W&T, in an Officers’ Certificate delivered to the
Priority Lien Agent and the 1.5 Lien Agent as “Priority Lien Debt” or “1.5 Lien
Debt”, as applicable, for the purposes of the Secured Debt Documents and this
Agreement; provided that no Series of Secured Debt may be designated as more
than one of Priority Lien Debt or 1.5 Lien Debt.

Notwithstanding the foregoing, nothing in this Agreement will be construed to
allow W&T or any other Grantor to incur additional indebtedness unless otherwise
permitted by the terms of each applicable Secured Debt Document.

Each of the then-exiting Priority Lien Agent, and the 1.5 Lien Agent shall be
authorized to execute and deliver such documents and agreements (including
amendments or supplements to this Agreement) as such holders, lenders, agent,
trustee or other representative may reasonably request to give effect to any
such Replacement, it being understood that the Priority Lien Agent, the 1.5 Lien
Agent or (if permitted by the terms of the applicable Secured Debt Documents)
the Grantors, without the consent of any other Secured Party or (in the case of
the Grantors) one or more Secured Debt Representatives, may amend, supplement,
modify or restate this Agreement to the extent necessary or appropriate to
facilitate such amendments or supplements to effect such Replacement all at the
expense of the Grantors. Upon the consummation of such Replacement and the
execution and delivery of the documents and agreements contemplated in the
preceding sentence, the holders or lenders of such indebtedness and any
authorized agent, trustee or other representative thereof shall be entitled to
the benefits of this Agreement.

Section 4.05 Amendments to 1.5 Lien Documents. Prior to the Discharge of
Priority Lien Obligations, without the prior written consent of the Priority
Lien Agent, no 1.5 Lien Document, may be amended, supplemented, restated or
otherwise modified and/or refinanced or entered into to the extent such
amendment, supplement, restatement or modification and/or refinancing, or the
terms of any new 1.5 Lien Document, would (i) adversely affect the lien priority
rights of the Priority Lien Secured Parties or the rights of the Priority Lien
Secured Parties to receive payments owing pursuant to the Priority Lien

 

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Documents, (ii) except as otherwise provided for in this Agreement, add any
Liens securing the Collateral granted under the 1.5 Lien Security Documents or,
(iii) confer any additional rights on the 1.5 Lien Agent for the benefit of the
1.5 Lien Secured Parties or any other 1.5 Lien Secured Party in a manner adverse
to the Priority Lien Secured Parties, (iv) provide for any scheduled payment of
principal, scheduled mandatory redemption or scheduled sinking fund payment
prior to the date that is six months after the maturity date of the Priority
Lien Debt as in effect on the date of determination, (v) add or modify covenants
or events of default that are, taken as a whole, materially more restrictive
than those in the Priority Lien Documents after giving effect to any amendments
or other modifications to the Priority Lien Documents contemplated in connection
with such transaction or (vi) contravene the provisions of this Agreement or the
Priority Lien Documents.

Section 4.06 Legends. Each of

(a) the Priority Lien Agent acknowledges with respect to the Priority Credit
Agreement and the Priority Lien Security Documents and

(b) the 1.5 Lien Agent acknowledges with respect to the 1.5 Lien Credit
Agreement and the 1.5 Lien Security Documents that the 1.5 Lien Credit
Agreement, the 1.5 Lien Documents (other than control agreements to which both
the Priority Lien Agent and the 1.5 Lien Agent are parties), and each associated
Security Document (other than control agreements to which both the Priority Lien
Agent and the 1.5 Lien Agent are parties) granting any security interest in the
Collateral will contain the appropriate legend set forth on Annex I.

Section 4.07 1.5 Lien Secured Parties Rights as Unsecured Creditors; Judgment
Lien Creditor. Both before and during an Insolvency or Liquidation Proceeding,
any of the 1.5 Lien Secured Parties may take any actions and exercise any and
all rights that would be available to a holder of unsecured claims; provided,
however, that the 1.5 Lien Secured Parties may not take any of the actions
prohibited by Section 3.02, or Section 3.05(a) or Section 4.02 or any other
provision in this Agreement; provided, further, that in the event that any of
the 1.5 Lien Secured Parties becomes a judgment lien creditor in respect of any
Collateral as a result of its enforcement of its rights as an unsecured creditor
with respect to the 1.5 Lien Obligations, such judgment lien shall be subject to
the terms of this Agreement for all purposes (including in relation to the
Priority Lien Obligations and the 1.5 Lien Obligations, as applicable) as the
1.5 Liens are subject to this Agreement.

Section 4.08 Postponement of Subrogation. The 1.5 Lien Agent, for itself and on
behalf of each other 1.5 Lien Secured Party, hereby agrees that no payment or
distribution to any Priority Lien Secured Party pursuant to the provisions of
this Agreement shall entitle any 1.5 Lien Secured Party to exercise any rights
of subrogation in respect thereof until the Discharge of Priority Lien
Obligations shall have occurred. Following the Discharge of Priority Lien
Obligations, but subject to the reinstatement as provided in Section 4.03, each
Priority Lien Secured Party will execute such documents, agreements, and
instruments as any 1.5 Lien Secured Party may reasonably request to evidence the
transfer by subrogation to any such Person of an interest in the Priority Lien
Obligations that are not Excess Priority Lien Obligations resulting from
payments or distributions to such Priority Lien Secured Party by such Person, so
long as all costs and expenses (including all reasonable legal fees and
disbursements) incurred in connection therewith by such Priority Lien Secured
Party are paid by such Person upon request for payment thereof.

Section 4.09 Acknowledgment by the Secured Debt Representatives. Each of the
Priority Lien Agent, for itself and on behalf of the other Priority Lien Secured
Parties, and the 1.5 Lien Agent, for itself and on behalf of the other 1.5 Lien
Secured Parties, hereby acknowledges that this Agreement is a material
inducement to enter into a business relationship, that each has relied on this
Agreement to enter into the Priority Credit Agreement, the 1.5 Lien Credit
Agreement, and all documentation related thereto, and that each will continue to
rely on this Agreement in their related future dealings.

 

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ARTICLE V

GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS

Section 5.01 General. Prior to the Discharge of Priority Lien Obligations, the
Priority Lien Agent agrees that if it shall at any time hold a Priority Lien on
any Collateral that can be perfected by the possession or control of such
Collateral or of any Account in which such Collateral is held, and if such
Collateral or any such Account is in fact in the possession or under the control
of the Priority Lien Agent, the Priority Lien Agent will serve as gratuitous
bailee for the 1.5 Lien Agent for the sole purpose of perfecting the 1.5 Lien of
the 1.5 Lien Agent on such Collateral. It is agreed that the obligations of the
Priority Lien Agent and the rights of the 1.5 Lien Agent and the other 1.5 Lien
Secured Parties in connection with any such bailment arrangement will be in all
respects subject to the provisions of Article II. Notwithstanding anything to
the contrary herein, the Priority Lien Agent will be deemed to make no
representation as to the adequacy of the steps taken by it to perfect the 1.5
Lien on any such Collateral and shall have no responsibility, duty, obligation
or liability to the 1.5 Lien Agent, any other 1.5 Lien Secured Party or any
other Person for such perfection or failure to perfect, it being understood that
the sole purpose of this Article is to enable the 1.5 Lien Secured Parties to
obtain a perfected 1.5 Lien in such Collateral to the extent, if any, that such
perfection results from the possession or control of such Collateral or any such
Account by the Priority Lien Agent. The Priority Lien Agent acting pursuant to
this Section 5.01 shall not have by reason of the Priority Lien Security
Documents, the 1.5 Lien Security Documents, this Agreement or any other document
or theory, a fiduciary relationship in respect of any Priority Lien Secured
Party, the 1.5 Lien Agent or any 1.5 Lien Secured Party. Subject to Section 4.03
and Section 5.01(a), from and after the Discharge of Priority Lien Obligations,
the Priority Lien Agent shall take all such actions in its power as shall
reasonably be requested by the 1.5 Lien Agent (at the sole cost and expense of
the Grantors) to transfer possession or control of such Collateral or any such
Account (in each case to the extent the 1.5 Lien Agent has a Lien on such
Collateral or Account after giving effect to any prior or concurrent releases of
Liens) to the 1.5 Lien Agent for the benefit of all 1.5 Lien Secured Parties.

Section 5.02 Deposit Accounts. Prior to the Discharge of Priority Lien
Obligations, to the extent that any Account is under the control of the Priority
Lien Agent at any time, the Priority Lien Agent will act as gratuitous bailee
for the 1.5 Lien Agent for the purpose of perfecting the Liens of the 1.5 Lien
Secured Parties in such Accounts and the cash and other assets therein as
provided in Section 3.01 (but will have no duty, responsibility or obligation to
the 1.5 Lien Secured Parties (including, without limitation, any duty,
responsibility or obligation as to the maintenance of such control, the effect
of such arrangement or the establishment of such perfection) except as set forth
in the last sentence of this Section 5.02(a)). Unless the 1.5 Liens on such
Collateral shall have been or concurrently are released, after the occurrence of
Discharge of Priority Lien Obligations, the Priority Lien Agent shall, at the
request of the 1.5 Lien Agent, cooperate with the Grantors and the 1.5 Lien
Agent (at the expense of the Grantors) in permitting control of any other
Accounts to be transferred to the 1.5 Lien Agent (or for other arrangements with
respect to each such Accounts satisfactory to the 1.5 Lien Agent to be made).

ARTICLE VI

APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS

Section 6.01 Application of Proceeds. Prior to the Discharge of Priority
Obligations, and regardless of whether an Insolvency or Liquidation Proceeding
has been commenced, Collateral or Proceeds received in connection with the
enforcement or exercise of any rights or remedies with respect to any portion of
the Collateral will be applied:

(i) first, to the payment in full in cash of all Priority Lien Obligations that
are not Excess Priority Lien Obligations;

 

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(ii) second, to the payment in full in cash of all 1.5 Lien Obligations;

(iii) third, to the payment in full in cash of all Excess Priority Lien
Obligations;

(iv) fourth, as required pursuant to the Second Lien Intercreditor Agreement;
and

(v) fifth, to W&T or as otherwise required by applicable law.

Section 6.02 Determination of Amounts. Whenever a Secured Debt Representative
shall be required, in connection with the exercise of its rights or the
performance of its obligations hereunder, to determine the existence or amount
of any Priority Lien Obligations (or the existence of any commitment to extend
credit that would constitute Priority Lien Obligations), or 1.5 Lien
Obligations, or the existence of any Lien securing any such obligations, or the
Collateral subject to any such Lien, it may request that such information be
furnished to it in writing by the other Secured Debt Representatives and shall
be entitled to make such determination on the basis of the information so
furnished; provided, however, that if a Secured Debt Representative shall fail
or refuse reasonably promptly to provide the requested information, the
requesting Secured Debt Representative shall be entitled to make any such
determination by such method as it may, in the exercise of its good faith
judgment, determine, including by reliance upon a certificate of W&T. Each
Secured Debt Representative may rely conclusively, and shall be fully protected
in so relying, on any determination made by it in accordance with the provisions
of the preceding sentence (or as otherwise directed by a court of competent
jurisdiction) and shall have no liability to W&T or any of their subsidiaries,
any Secured Party or any other Person as a result of such determination.

ARTICLE VII

NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE;

CONSENT OF GRANTORS; ETC.

Section 7.01 No Reliance; Information. The Priority Lien Secured Parties and the
1.5 Lien Secured Parties shall have no duty to disclose to any 1.5 Lien Secured
Party or to any Priority Lien Secured Party, as the case may be, any information
relating to W&T or any of the other Grantors, or any other circumstance bearing
upon the risk of non-payment of any of the Priority Lien Obligations or the 1.5
Lien Obligations, as the case may be, that is known or becomes known to any of
them or any of their Affiliates. In the event any Priority Lien Secured Party or
any 1.5 Lien Secured Party, in its sole discretion, undertakes at any time or
from time to time to provide any such information to any 1.5 Lien Secured Party
or any Priority Lien Secured Party, as the case may be, it shall be under no
obligation (a) to make, and shall not make or be deemed to have made, any
express or implied representation or warranty, including with respect to the
accuracy, completeness, truthfulness or validity of the information so provided,
(b) to provide any additional information or to provide any such information on
any subsequent occasion or (c) to undertake any investigation.

Section 7.02 No Warranties or Liability.

(a) The Priority Lien Agent, for itself and on behalf of the other Priority Lien
Secured Parties, acknowledges and agrees that, except for the representations
and warranties set forth in Article VIII, neither the 1.5 Lien Agent nor any
other 1.5 Lien Secured Party has made any express or

 

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implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectability or enforceability of any of the
1.5 Lien Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon.

(b) The 1.5 Lien Agent, for itself and on behalf of the other 1.5 Lien Secured
Parties, acknowledges and agrees that, except for the representations and
warranties set forth in Article VIII, neither the Priority Lien Agent nor any
other Priority Lien Secured Party has made any express or implied representation
or warranty, including with respect to the execution, validity, legality,
completeness, collectability or enforceability of any of the Priority Lien
Documents, the ownership of any Collateral or the perfection or priority of any
Liens thereon.

(c) The Priority Lien Agent and the other Priority Lien Secured Parties shall
have no express or implied duty to the 1.5 Lien Agent or any other 1.5 Lien
Secured Party and the 1.5 Lien Agent and the other 1.5 Lien Secured Parties
shall have no express or implied duty to the Priority Lien Agent or any other
Priority Lien Secured Party, in each case to act or refrain from acting in a
manner which allows, or results in, the occurrence or continuance of a default
or an event of default under any Priority Lien Document and any 1.5 Lien
Document (other than, in each case, this Agreement), regardless of any knowledge
thereof which they may have or be charged with.

(d) The 1.5 Lien Agent, for itself and on behalf of each other 1.5 Lien Secured
Party, hereby waives any claim that may be had against the Priority Lien Agent
or any other Priority Lien Secured Party arising out of any actions which the
Priority Lien Agent or such Priority Lien Secured Party takes or omits to take
(including actions with respect to the creation, perfection or continuation of
Liens on any Collateral, actions with respect to the foreclosure upon, sale,
release or depreciation of, or failure to realize upon, any Collateral, and
actions with respect to the collection of any claim for all or only part of the
Priority Lien Obligations from any account debtor, guarantor or any other party)
in accordance with this Agreement and the Priority Lien Documents or the
valuation, use, protection or release of any security for such Priority Lien
Obligations.

Section 7.03 Obligations Absolute. The Lien priorities provided for herein and
the respective rights, interests, agreements and obligations hereunder of the
Priority Lien Agent and the other Priority Lien Secured Parties, the 1.5 Lien
Agent and the other 1.5 Lien Secured Parties, shall remain in full force and
effect irrespective of:

(a) any lack of validity or enforceability of any Secured Debt Document;

(b) any change in the time, place or manner of payment of, or in any other term
of (including the Replacing of), all or any portion of the Priority Lien
Obligations, it being specifically acknowledged that a portion of the Priority
Lien Obligations consists or may consist of Indebtedness that is revolving in
nature, and the amount thereof that may be outstanding at any time or from time
to time may be increased or reduced and subsequently reborrowed;

(c) any amendment, waiver or other modification, whether by course of conduct or
otherwise, of any Secured Debt Document;

(d) the securing of any Priority Lien Obligations, or 1.5 Lien Obligations with
any additional collateral or guarantees, or any exchange, release, voiding,
avoidance or non-perfection of any security interest in any Collateral or any
other collateral or any release of any guarantee securing any Priority Lien
Obligations, or 1.5 Lien Obligations;

 

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(e) the commencement of any Insolvency or Liquidation Proceeding in respect of
W&T or any other Grantor; or

(f) any other circumstances that otherwise might constitute a defense available
to, or a discharge of, W&T or any other Grantor in respect of the Priority Lien
Obligations, or the 1.5 Lien Obligations.

Section 7.04 Grantors Consent and Agreement. (a) Each Grantor hereby consents to
the provisions of this Agreement and the intercreditor arrangements provided for
herein and agrees that the obligations of the Grantors under the Secured Debt
Documents will in no way be diminished or otherwise affected by such provisions
or arrangements (except as expressly provided herein).

(b) W&T agrees to deliver to the 1.5 Lien Agent a copy of any Officers’
Certificate delivered by W&T as provided in (i) the proviso of the definition of
Priority Lien Cap or (ii) the definition of Priority Lien Debt, provided,
however, that failure to deliver a copy thereof to the 1.5 Lien Agent shall not
impair the effectiveness of any such Officers’ Certificate under this Agreement.

ARTICLE VIII

REPRESENTATIONS AND WARRANTIES

Section 8.01 Representations and Warranties of Each Party. Each party hereto
represents and warrants to the other parties hereto as follows:

(a) Such party is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all requisite power and
authority to enter into and perform its obligations under this Agreement.

(b) This Agreement has been duly executed and delivered by such party.

(c) The execution, delivery and performance by such party of this Agreement (i)
do not require any consent or approval of, registration or filing with or any
other action by any Governmental Authority of which the failure to obtain could
reasonably be expected to have a Material Adverse Effect (as defined in the
Priority Credit Agreement), (ii) will not violate any applicable law or
regulation or any order of any Governmental Authority or any indenture,
agreement or other instrument binding upon such party which could reasonably be
expected to have a Material Adverse Effect and (iii) will not violate the
charter, by-laws or other organizational documents of such party.

Section 8.02 Representations and Warranties of Each Representative. Each of the
Priority Lien Agent and the 1.5 Lien Agent represents and warrants to the other
parties hereto that it is authorized under the Priority Credit Agreement and the
1.5 Lien Credit Agreement, as the case may be, to enter into this Agreement.

ARTICLE IX

MISCELLANEOUS

Section 9.01 Notices. 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 telecopy, as follows:

(a) if to the Original Priority Lien Agent, to it at:

Toronto Dominion (Texas) LLC

31 West 52nd Street, 20th Floor

New York, New York 10019

  Tel: (212) 827-7600

  Fax: (212) 827-7227

  Attn: Rose Warren

 

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(with a copy to:

909 Fannin, Suite 1950

Houston, Texas 77010

  Tel: (713) 653-8211

  Fax: (713) 652-2647

  Attn: Martin Snyder)

(b) if to the Original 1.5 Lien Agent, to it at:

Cortland Capital Market Services LLC

225 West Washington Street, 21st Floor

Chicago, Illinois 60606

Attention: Ryan Morick and Legal Department

Email: Ryan.morick@cortlandglobal.com and legal@cortlandglobal.com

Fax: (312) 376 0751

Tel: (312) 564 5100

(c) if to any other Secured Debt Representative, to such address as specified in
the Priority Confirmation Joinder.

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 (if a business day) and on the next business day thereafter (in all
other cases) if delivered by hand or overnight courier service or sent by
telecopy or on the date five business days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01. As agreed to in writing among W&T, the Priority Lien Agent, and
the 1.5 Lien Agent from time to time, notices and other communications may also
be delivered by e-mail to the e-mail address of a representative of the
applicable person provided from time to time by such person.

Section 9.02 Waivers; Amendment. (a) No failure or delay on the part of any
party hereto in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the parties hereto 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 consent to any
departure by any party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section 9.02, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any party hereto in any case shall
entitle such party to any other or further notice or demand in similar or other
circumstances.

(b) Neither this Agreement nor any provision hereof may be terminated, waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by each Secured Debt Representative; provided, however, that this
Agreement may be amended from time to time as provided in Section 4.04. Any
amendment of this Agreement that is proposed to be effected without the consent
of a Secured Debt Representative as permitted by the proviso to the preceding
sentence shall be submitted to such Secured Debt Representative for its review
at least 5 business days prior to the proposed effectiveness of such amendment.

 

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Section 9.03 Actions Upon Breach; Specific Performance. (a) Prior to the
Discharge of Priority Lien Obligations, if any 1.5 Lien Secured Party, contrary
to this Agreement, commences or participates in any action or proceeding against
any Grantor or the Collateral, such Grantor, with the prior written consent of
the Priority Lien Agent, may interpose as a defense or dilatory plea the making
of this Agreement, and any Priority Lien Secured Party may intervene and
interpose such defense or plea in its or their name or in the name of such
Grantor.

(b) Prior to the Discharge of Priority Lien Obligations, should any 1.5 Lien
Secured Party, contrary to this Agreement, in any way take, attempt to or
threaten to take any action with respect to the Collateral (including any
attempt to realize upon or enforce any remedy with respect to this Agreement),
or take any other action in violation of this Agreement or fail to take any
action required by this Agreement, the Priority Lien Agent or any other Priority
Lien Secured Party (in its own name or in the name of the relevant Grantor) or
the relevant Grantor, with the prior written consent of the Priority Lien Agent,
(A) may obtain relief against such 1.5 Lien Secured Party, by injunction,
specific performance and/or other appropriate equitable relief, it being
understood and agreed by the 1.5 Lien Agent on behalf of each 1.5 Lien Secured
Party that (I) the Priority Lien Secured Parties’ damages from its actions may
at that time be difficult to ascertain and may be irreparable, and (II) each 1.5
Lien Secured Party waives any defense that the Grantors and/or the Priority Lien
Secured Parties cannot demonstrate damage and/or be made whole by the awarding
of damages, and (B) shall be entitled to damages, as well as reimbursement for
all reasonable and documented costs and expenses incurred in connection with any
action to enforce the provisions of this Agreement.

Section 9.04 Parties in Interest. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, as well as the other Secured Parties, all of whom are intended to be
bound by, and to be third party beneficiaries of, this Agreement.

Section 9.05 Survival of Agreement. All covenants, agreements, representations
and warranties made by any party in this Agreement shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement.

Section 9.06 Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original but all of which when taken together shall
constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.

Section 9.07 Severability. Any provision of this Agreement 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; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

30

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Section 9.08 Governing Law; Jurisdiction; Consent to Service of Process. (a)
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW).

(b) Each party hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement in the courts of any
jurisdiction.

(c) Each party hereto hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section 9.08. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

Section 9.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 9.10 Headings. Article, Section and Annex headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.

Section 9.11 Conflicts. In the event of any conflict or inconsistency between
the provisions of this Agreement and the provisions of any Secured Debt
Documents, the provisions of this Agreement shall control; provided, however,
that if any of the provisions of the 1.5 Lien Security Documents limit, qualify
or conflict with the duties imposed by the provisions of the TIA, in each case,
the TIA shall control.

Section 9.12 Provisions Solely to Define Relative Rights. The provisions of this
Agreement are and are intended solely for the purpose of defining the distinct
and separate relative rights of the

 

31

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Priority Lien Secured Parties and the 1.5 Lien Secured Parties. None of W&T, any
other Grantor or any other creditor thereof shall have any rights or obligations
hereunder, except as expressly provided in this Agreement (provided that nothing
in this Agreement (other than Sections 4.01, 4.02, 4.04, or 4.05) is intended to
or will amend, waive or otherwise modify the provisions of the Priority Credit
Agreement or the 1.5 Lien Credit Agreement, and except as expressly provided in
this Agreement neither W&T nor any other Grantor may rely on the terms hereof
(other than Sections 4.01, 4.02, 4.04, or 4.05, Article VII and Article
IX). Nothing in this Agreement is intended to or shall impair the obligations of
W&T or any other Grantor, which are absolute and unconditional, to pay the
Obligations under the Secured Debt Documents as and when the same shall become
due and payable in accordance with their terms. Notwithstanding anything to the
contrary herein or in any Secured Debt Document, the Grantors shall not be
required to act or refrain from acting pursuant to this Agreement, any Priority
Lien Document, or any 1.5 Lien Document with respect to any Collateral in any
manner that would cause a default under any Priority Lien Document.

Section 9.13 Certain Terms Concerning the Priority Lien Agent, and the 1.5 Lien
Agent. None of the Priority Lien Agent, or the 1.5 Lien Agent shall have any
liability or responsibility for the actions or omissions of any other Secured
Party, or for any other Secured Party’s compliance with (or failure to comply
with) the terms of this Agreement or the Second Lien Intercreditor
Agreement. None of the Priority Lien Agent, or the 1.5 Lien Agent shall have
individual liability to any Person if it shall mistakenly pay over or distribute
to any Secured Party (or W&T) any amounts in violation of the terms of this
Agreement, so long as the Priority Lien Agent and the 1.5 Lien Agent is acting
in good faith. Each party hereto hereby acknowledges and agrees that each of the
Priority Lien Agent and the 1.5 Lien Agent is entering into this Agreement
solely in its capacity under the Priority Lien Documents and the 1.5 Lien
Documents, respectively, and not in its individual capacity. (a) The Priority
Lien Agent shall not owe any fiduciary duty to the 1.5 Lien Agent or any other
1.5 Lien Representative or any other 1.5 Lien Secured Party; and (b) the 1.5
Lien Agent shall not owe any fiduciary duty to the Priority Lien Agent or any
other Priority Lien Secured Party.

Section 9.14 Authorization of Secured Agents. By accepting the benefits of this
Agreement and the other Priority Lien Security Documents, each Priority Lien
Secured Party authorizes the Priority Lien Agent to enter into this Agreement
and to act on its behalf as collateral agent hereunder and in connection
herewith. By accepting the benefits of this Agreement and the other 1.5 Lien
Security Documents, each 1.5 Lien Secured Party (i) authorizes the 1.5 Lien
Agent to enter into this Agreement and to act on its behalf as collateral agent
hereunder and in connection herewith, (ii) authorizes the 1.5 Lien Agent to
appoint the Priority Lien Agent as its subagent to act for the 1.5 Lien Agent as
Priority Lien Agent (as such term is defined in the Second Lien Intercreditor
Agreement) for the 1.5 Lien Secured Parties under the Second Lien Intercreditor
Agreement and (iii) acknowledges that the Priority Lien Agent hereunder is also
acting as Priority Lien Agent (as such term is defined in the Second Lien
Intercreditor Agreement) for the Priority Lien Secured Parties under the Second
Lien Intercreditor Agreement and (iv) consents to the Priority Lien Agent’s
serving in the capacities described in the foregoing clauses (ii) and (iii) and
agrees not to assert any claim (including as a result of any conflict of
interest) against Toronto Dominion (Texas) LLC arising from its actions or
inactions in such capacities as long as such actions are consistent with this
Agreement and the Second Lien Intercreditor Agreement or otherwise do not
constitute gross negligence or willful misconduct.

Section 9.15 Further Assurances. Each of the Priority Lien Agent, for itself and
on behalf of the other Priority Lien Secured Party, and the 1.5 Lien Agent, for
itself and on behalf of the other 1.5 Lien Secured Parties, and each Grantor
party hereto, for itself and on behalf of its subsidiaries, agrees that it will
execute, or will cause to be executed, any and all further documents, agreements
and instruments, and take all such further actions, as may be required under any
applicable law, or which the Priority Lien Agent or the 1.5 Lien Agent may
reasonably request, to effectuate the terms of this Agreement, including the
relative Lien priorities provided for herein.

 

32

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Section 9.16 Relationship of Secured Parties. Nothing set forth herein shall
create or evidence a joint venture, partnership or an agency or fiduciary
relationship among the Secured Parties. None of the Secured Parties nor any of
their respective directors, officers, agents or employees shall be responsible
to any other Secured Party or to any other Person for any Grantor’s solvency,
financial condition or ability to repay the Priority Lien Obligations, or the
1.5 Lien Obligations, or for statements of any Grantor, oral or written, or for
the validity, sufficiency or enforceability of the Priority Lien Documents, or
the 1.5 Lien Documents, or any security interests granted by any Grantor to any
Secured Party in connection therewith. Each Secured Party has entered into its
respective financing agreements with the Grantors based upon its own independent
investigation, and none of the Priority Lien Agent, or the 1.5 Lien Agent makes
any warranty or representation to the other Secured Debt Representatives or the
Secured Parties for which it acts as agent nor does it rely upon any
representation of the other agents or the Secured Parties for which it acts as
agent with respect to matters identified or referred to in this Agreement.

Section 9.17 Appointment. The 1.5 Lien Agent hereby appoints the Priority Lien
Agent as its agent (in such capacity the “1.5 Sub-Agent”) to act for the 1.5
Lien Agent as “Priority Lien Agent” (as defined in the Second Lien Intercreditor
Agreement) for the 1.5 Lien Secured Parties under the Second Lien Intercreditor
Agreement, and the Priority Lien Agent hereby accepts such appointment as the
1.5 Sub-Agent.

Section 9.18 Duties and Protections. The Priority Lien Agent (including the
Original Priority Lien Agent in its capacities as Priority Lien Agent and as 1.5
Sub-Agent) shall have no duties or obligations under or pursuant to this
Agreement or the Second Lien Intercreditor Agreement other than such duties and
obligations as may be expressly set forth in this Agreement or the Second Lien
Intercreditor Agreement, as applicable, as duties and obligations on its part to
be performed or observed. In entering into this Agreement and the Second Lien
Intercreditor Agreement, or in taking (or refraining from taking) any action
under or pursuant to this Agreement or the Second Lien Intercreditor Agreement,
the Priority Lien Agent (including the Priority Lien Agent in its capacities as
“Priority Lien Agent” under the Second Lien Intercreditor Agreement for both the
Priority Lien Secured Parties and the 1.5 Lien Secured Parties) shall have and
be protected by all of the rights, immunities, indemnities and other protections
granted to it under any Priority Lien Document or under any 1.5 Lien Document,
including under Article 9 and Section 10.18 of the 1.5 Lien Credit Agreement in
effect on the date hereof and under Article IX of the Priority Credit Agreement
and Section 13 of the Fourth Amendment (as such term is defined in the Priority
Credit Agreement) in effect on the date hereof.

Section 9.19 Resignation. The Priority Lien Agent may resign as 1.5 Sub-Agent at
any time in its sole discretion by five (5) Business Days written notice to the
1.5 Lien Agent. Following such resignation, Priority Lien Agent shall (i) have
no duties or obligations to the 1.5 Lien Agent or the 1.5 Lien Secured Parties
as Priority Lien Agent under the Second Lien Intercreditor Agreement to exercise
(or refrain from exercising) rights or remedies in respect of the Collateral on
behalf of, or at the direction of, the 1.5 Lien Agent or any 1.5 Lien Secured
Party, other than the obligation to transfer to the 1.5 Lien Agent any remaining
Collateral and any proceeds of the sale or other Disposition of any such
Collateral remaining in its possession following the Discharge of Priority Lien
Obligations, in each case without representation or warranty and (ii) incur no
liability to the 1.5 Lien Agent or any of the 1.5 Lien Secured Parties as a
result of exercising (or refraining from exercising) any rights or remedies in
respect of the Collateral on behalf of, or at the direction of, the 1.5 Lien
Agent or any 1.5 Lien Secured Party or under this Agreement. In the event that
the Priority Lien Agent shall resign as 1.5 Sub-Agent, the 1.5 Lien Agent shall
have the right to be designated as Priority Lien Agent for the 1.5 Lien Secured
Parties under the Intercreditor Agreement.

 

33

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Section 9.20 Cooperation. The 1.5 Lien Agent agrees to cooperate with and assist
the Priority Lien Agent in performing its duties and obligations as 1.5
Sub-Agent, including by providing such information with respect to the 1.5 Lien
Obligations and by providing such notices to the 1.5 Lien Secured Parties as the
1.5 Sub-Agent may request from time to time.

[SIGNATURES BEGIN NEXT PAGE]

 

34

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

 

TORONTO DOMINION (TEXAS), LLC, as Priority Lien Agent By:  

 

Name:   Martin T. Snyder Title:   Vice President

 

Signature Page

Intercreditor Agreement

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

CORTLAND CAPITAL MARKET SERVICES LLC

as 1.5 Lien Agent

By:  

 

Name:   Title:  

 

Signature Page

Intercreditor Agreement

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

ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN: W&T OFFSHORE, INC.
By:  

 

Name:   Title:   GUARANTORS: W&T ENERGY VI, LLC By:  

W&T Offshore, Inc.

Sole Member

By:  

 

Name:   Title:   W&T ENERGY VII, LLC By:  

W&T Offshore, Inc.

Sole Member

By:  

 

Name:   Title:  

 

Signature Page

Intercreditor Agreement

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

ANNEX I

Provision for the 1.5 Lien Credit Agreement.

Reference is made to the Intercreditor Agreement, dated as of September 7, 2016,
between TORONTO DOMINION (TEXAS), LLC, as Priority Lien Agent (as defined
therein), CORTLAND CAPITAL MARKET SERVICES LLC, as 1.5 Lien Agent (as defined
therein) (the “Intercreditor Agreement”). Each Person that is secured hereunder,
by accepting the benefits of the security provided hereby, (i) consents (or is
deemed to consent) to the subordination of Liens provided for in the
Intercreditor Agreement, (ii) agrees (or is deemed to agree) that it will be
bound by, and will take no actions contrary to, the provisions of the
Intercreditor Agreement, (iii) authorizes (or is deemed to authorize) the 1.5
Lien Agent on behalf of such Person to enter into, and perform under, the
Intercreditor Agreement and (iv) acknowledges (or is deemed to acknowledge) that
a copy of the Intercreditor Agreement was delivered, or made available, to such
Person.

Notwithstanding any other provision contained herein, this Agreement, the Liens
created hereby and the rights, remedies, duties and obligations provided for
herein are subject in all respects to the provisions of the Intercreditor
Agreement and, to the extent provided therein, the applicable Security Documents
(as defined in the Intercreditor Agreement). In the event of any conflict or
inconsistency between the provisions of this Agreement and the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall control.

Provision for all Priority Lien Security Documents and 1.5 Lien Security
Documents.

Reference is made to the Intercreditor Agreement, dated as of September 7, 2016,
between TORONTO DOMINION (TEXAS), LLC, as Priority Lien Agent (as defined
therein), CORTLAND CAPITAL MARKET SERVICES LLC, as 1.5 Lien Agent (as defined
therein) (the “Intercreditor Agreement”). Each Person that is secured hereunder,
by accepting the benefits of the security provided hereby, [(i) consents (or is
deemed to consent) to the subordination of Liens provided for in the
Intercreditor Agreement]3, [(i)][(ii)] agrees (or is deemed to agree) that it
will be bound by, and will take no actions contrary to, the provisions of the
Intercreditor Agreement, [(ii)][(iii)] authorizes (or is deemed to authorize)
the [Priority Lien Agent][1.5 Lien Agent] on behalf of such Person to enter
into, and perform under, the Intercreditor Agreement and [(iii)][(iv)]
acknowledges (or is deemed to acknowledge) that a copy of the Intercreditor
Agreement was delivered, or made available, to such Person.

Notwithstanding any other provision contained herein, this Agreement, the Liens
created hereby and the rights, remedies, duties and obligations provided for
herein are subject in all respects to the provisions of the Intercreditor
Agreement and, to the extent provided therein, the applicable Security Documents
(as defined in the Intercreditor Agreement). In the event of any conflict or
inconsistency between the provisions of this Agreement and the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall control.

 

3  This bracketed language does not apply to Priority Lien Security Documents

 

Annex I - 1

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

EXHIBIT A

to Intercreditor Agreement

[FORM OF]

PRIORITY CONFIRMATION JOINDER

Reference is made to the Intercreditor Agreement, dated as of September     ,
2016 (as amended, supplemented, amended and restated or otherwise modified and
in effect from time to time, the “Intercreditor Agreement”) between TORONTO
DOMINION (TEXAS), LLC, as Priority Lien Agent for the Priority Lien Secured
Parties (as defined therein), and CORTLAND CAPITAL MARKET SERVICES LLC, as 1.5
Lien Agent for the 1.5 Lien Secured Parties (as defined therein).

Capitalized terms used but not otherwise defined herein shall have the meaning
set forth in the Intercreditor Agreement. This Priority Confirmation Joinder is
being executed and delivered pursuant to Section 4.04 of the Intercreditor
Agreement as a condition precedent to the debt for which the undersigned is
acting as representative being entitled to the rights and obligations of being
[Priority Lien Obligations][1.5 Lien Obligations] under the Intercreditor
Agreement.

1. Joinder. The undersigned, [                    ], a [                    ],
(the “New Representative”) as [trustee] [collateral trustee] [administrative
agent] [collateral agent] under that certain [describe the Priority Substitute
Credit Facility or 1.5 Lien Substitute Credit Facility here] hereby:

(a) represents that the New Representative has been authorized to become a party
to the Intercreditor Agreement on behalf of the [Priority Lien Secured Parties
under a Priority Substitute Credit Facility] [1.5 Lien Secured Parties under the
1.5 Lien Substitute Facility] as [a Priority Lien Agent under a Priority
Substitute Credit Facility] [a 1.5 Lien Agent under a 1.5 Lien Substitute
Facility] under the Intercreditor Agreement for all purposes thereof on the
terms set forth therein, and to be bound by the terms of the Intercreditor
Agreement as fully as if the undersigned had executed and delivered the
Intercreditor Agreement as of the date thereof; and

(b) agrees that its address for receiving notices pursuant to the Intercreditor
Agreement shall be as follows:

[Address];

2. Priority Confirmation.

[Option A: to be used if additional debt constitutes Priority Debt] The
undersigned New Representative, on behalf of itself and each Priority Lien
Secured Party for which the undersigned is acting as [Administrative Agent]
hereby agrees, for the benefit of all Secured Parties and each future Secured
Debt Representative, and as a condition to being treated as Priority Lien
Obligations under the Intercreditor Agreement, that the New Representative is
hereby a party to and is bound by the provisions of the Intercreditor Agreement,
including the provisions relating to the ranking of Priority Liens. [or]

[Option B: to be used if additional debt constitutes a Series of 1.5 Lien Debt]
The undersigned New Representative, on behalf of itself and each 1.5 Lien
Secured Party for which the undersigned is acting as [Administrative Agent]
hereby agrees, for the benefit of all Secured Parties and each future Secured
Debt Representative, and as a condition to being treated as 1.5 Lien Obligations
under the Intercreditor Agreement, that the New Representative is hereby a party
to and is bound by the provisions of the Intercreditor Agreement, including the
provisions relating to the ranking of 1.5 Liens.

 

Exhibit A - 1

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

3. Full Force and Effect of Intercreditor Agreement. Except as expressly
supplemented hereby, the Intercreditor Agreement shall remain in full force and
effect.

4. Governing Law and Miscellaneous Provisions. The provisions of Article IX of
the Intercreditor Agreement will apply with like effect to this Priority
Confirmation Joinder.

5. Expenses. W&T agree to reimburse each Secured Debt Representative for its
reasonable out of pocket expenses in connection with this Priority Confirmation
Joinder, including the reasonable fees, other charges and disbursements of
counsel.

 

Exhibit A - 2

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

IN WITNESS WHEREOF, the parties hereto have caused this Priority Confirmation
Joinder to be executed by their respective officers or representatives as of
[            , 20    ].

 

[insert name of New Representative] By:  

 

Name:  

 

Title:  

 

The Priority Lien Agent hereby acknowledges receipt of this Priority
Confirmation Joinder [and agrees to act as Priority Lien Agent for the New
Representative and the holders of the Obligations represented thereby]:

 

 

as Priority Lien Agent

By:

 

 

Name:

 

 

Title:

 

 

The 1.5 Lien Agent hereby acknowledges receipt of this Priority Confirmation
Joinder [and agrees to act as 1.5 Lien Agent for the New Representative and the
holders of the Obligations represented thereby]:

 

 

as 1.5 Lien Agent By:  

 

Name:  

 

Title:  

 

 

Exhibit A - 3

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

Acknowledged and Agreed to by: W&T OFFSHORE, INC., as Borrower By:  

 

Name:  

 

Title:  

 

 

Exhibit A - 4

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

EXHIBIT B

to Intercreditor Agreement

SECURITY DOCUMENTS

[UPDATE]

PART A.

List of Priority Lien Security Documents

 

  1. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated February 2, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the “1998 Mortgage”), from
W&T Offshore, Inc., as Mortgagor and Debtor (as defined in the 1998 Mortgage) to
the Trustee (as defined in the 1998 Mortgage) and the Priority Lien Agent, as
Administrative Agent, Mortgagee and Secured Party (as defined in the 1998
Mortgage).

 

  2. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2002 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Offshore I
Mortgage”) from Offshore Energy I LLC, as Mortgagor and Debtor (as defined in
the Offshore I Mortgage) to the Trustee (as defined in the Offshore I Mortgage)
and the Priority Lien Agent, as Administrative Agent, Mortgagee and Secured
Party (as defined in the Offshore I Mortgage).

 

  3. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2002 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Offshore II
Mortgage”) from Offshore Energy II LLC, as Mortgagor and Debtor (as defined in
the Offshore II Mortgage) to the Trustee (as defined in the Offshore II
Mortgage) and the Priority Lien Agent, as Administrative Agent, Mortgagee and
Secured Party (as defined in the Offshore II Mortgage).

 

  4. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2002 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Offshore III
Mortgage”) from Offshore Energy III LLC, as Mortgagor and Debtor (as defined in
the Offshore III Mortgage) to the Trustee (as defined in the Offshore III
Mortgage) and the Priority Lien Agent, as Administrative Agent, Mortgagee and
Secured Party (as defined in the Offshore III Mortgage).

 

  5. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of December 13, 2003 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Gulf
Mortgage”) from Gulf of Mexico Oil and Gas Properties LLC, as Mortgagor and
Debtor (as defined in the Gulf Mortgage) to the Trustee (as defined in the Gulf
Mortgage) and the Priority Lien Agent, as Administrative Agent, Mortgagee and
Secured Party (as defined in the Gulf Mortgage).

 

  6. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated effective as of August 24, 2006 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Offshore Shelf Mortgage”) from Offshore Shelf LLC, as Mortgagor and Debtor (as
defined in the Offshore Shelf Mortgage) to the Trustee (as defined in the
Offshore Shelf Mortgage) and the Priority Lien Agent, as Administrative Agent,
Mortgagee and Secured Party (as defined in the Offshore Shelf Mortgage).

 

Exhibit B - 1

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

  7. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of April 30, 2010 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Energy VI
Mortgage”) from W&T Energy VI, LLC, as Mortgagor and Debtor (as defined in the
Energy VI Mortgage) to the Trustee (as defined in the Energy VI Mortgage) and
the Priority Lien Agent, as Administrative Agent, Mortgagee and Secured Party
(as defined in the Energy VI Mortgage).

 

  8. Deed of Trust, Mortgage Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of May 5, 2011 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the “Alabama Mortgage”)
from W&T Energy VI, LLC, as Mortgagor and Debtor (as defined in the Alabama
Mortgage) to the Trustee (as defined in the Alabama Mortgage) and the Priority
Lien Agent, as Administrative Agent, Mortgagee and Secured Party (as defined in
the Alabama Mortgage).

 

  9. Deed of Trust, Mortgage Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of May 5, 2011 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the “Louisiana Mortgage”)
from W&T Energy VI, LLC, as Mortgagor and Debtor (as defined in the Louisiana
Mortgage) to the Trustee (as defined in the Louisiana Mortgage) and the Priority
Lien Agent, as Administrative Agent, Mortgagee and Secured Party (as defined in
the Louisiana Mortgage).

 

  10. Deed of Trust, Mortgage Assignment, Security Agreement, Fixture Filing and
Financing Statement, dated as of June 21, 2011 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “2011
Mortgage”) from W&T Offshore, Inc., as Mortgagor and Debtor (as defined in the
2011 Mortgage) to the Trustee (as defined in the 2011 Mortgage) and the Priority
Lien Agent, as Administrative Agent, Mortgagee and Secured Party (as defined in
the 2011 Mortgage).

 

  11. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing
and Financing Statement, dated as of July 1, 2014 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Energy VI
Multistate Mortgage”) from W&T Energy VI, LLC, as Mortgagor and Debtor (as
defined in the Energy VI Multistate Mortgage) to the Trustee (as defined in the
Energy VI Multistate Mortgage) and the Priority Lien Agent, as Administrative
Agent, Mortgagee and Secured Party (as defined in the Energy VI Multistate
Mortgage).

 

  12. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing
and Financing Statement dated as of January 28, 2016 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “Texas ORRI
Mortgage”) from W&T Offshore, Inc., as Mortgagor and Debtor (as defined in the
Texas ORRI Mortgage) to the Trustee (as defined in the Texas ORRI Mortgage) and
the Priority Lien Agent, as Administrative Agent, Mortgagee and Secured Party
(as defined in the Texas ORRI Mortgage).

 

  13. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing
and Financing Statement, dated as of March 21, 2016 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the “2016 Alabama
Mortgage”) from W&T Offshore, Inc., as Mortgagor and Debtor (as defined in the
2016 Alabama Mortgage) to the Trustee (as defined in the 2016 Alabama Mortgage)
and the Priority Lien Agent, as Administrative Agent, Mortgagee and Secured
Party (as defined in the 2016 Alabama Mortgage).

 

Exhibit B - 2

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

  14. Guaranty, dated as of May 5, 2011 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the “Energy VII Guaranty”)
made by W & T Energy VII, LLC, in favor of the Administrative Agent, for its
benefit and the ratable benefit of each other Lender Party (as defined in the
Energy VII Guaranty).

 

  15. Amended and Restated Guaranty, dated as of May 5, 2011 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Energy VI Guaranty”) made by W & T Energy VI, LLC, in favor of the
Administrative Agent, for its benefit and the ratable benefit of each other
Lender Party (as defined in the Energy VI Guaranty).

 

  16. Fourth Amended and Restated Security Agreement, Pledge and Irrevocable
Proxy, dated as of May 5, 2011 (as amended, supplemented, amended and restated
or otherwise modified from time to time, the “Borrower Security Agreement”) made
by W&T Offshore, Inc., in favor of the Administrative Agent, for its benefit and
the ratable benefit of each other Lender Party (as defined in the Borrower
Security Agreement).

 

  17. Security Agreement, Pledge and Irrevocable Proxy, dated as of May 5, 2011
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Guarantor Security Agreement”) made by Energy VI, LLC and Energy
VII, LLC, in favor of the Administrative Agent, for its benefit and the ratable
benefit of each other Lender Party (as defined in the Guarantor Security
Agreement).

PART B.

List of 1.5 Lien Security Documents

 

1. Security Agreement, Pledge and Irrevocable Proxy, dated as of
September 7, 2016, from W&T Offshore, Inc. (the “Borrower”) in favor of the
Original 1.5 Lien Agent.

 

2. Security Agreement, Pledge and Irrevocable Proxy, dated as of
September 7, 2016, from W & T Energy VI, LLC and W & T Energy VII, LLC (each a
“Guarantor”, and together the “Guarantors”) in favor of the Original 1.5 Lien
Agent.

 

3. Guaranty, dated as of September 7, 2016, from W & T Energy VI, LLC in favor
of the Original 1.5 Lien Agent and each of the other Lender Parties (as defined
in the 1.5 Lien Credit Agreement).

 

4. Guaranty, dated as of September 7, 2016, from W & T Energy VII, LLC in favor
of the Original 1.5 Lien Agent and each of the other Lender Parties (as defined
in the 1.5 Lien Credit Agreement).

 

5. Intercreditor Agreement, dated as of May 11, 2015, by and among Toronto
Dominion (Texas) LLC Agent, as the original priority lien agent, the 1.5 Lien
Agent as a New Representative, Morgan Stanley Senior Funding, Inc., as the
original second lien collateral trustee and Wilmington Trust, N.A. as a New
Representative.

 

6. Intercreditor Agreement, dated as of September 7, 2016, between Toronto
Dominion (Texas) LLC, as the original priority lien agent, and the 1.5 Lien
Collateral Agent, as the original 1.5 Lien Agent.

 

Exhibit B - 3

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

7. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Baldwin County, Alabama;

8. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Baldwin County, Alabama;

9. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Mobile County, Alabama; and

10. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Mobile County, Alabama.

11. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Cameron Parish, Louisiana.

12. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Cameron Parish, Louisiana.

13. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Jefferson Parish, Louisiana.

14. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Jefferson Parish, Louisiana.

15. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Lafourche Parish, Louisiana.

16. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Lafourche Parish, Louisiana.

17. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Plaquemines Parish, Louisiana.

18. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Plaquemines Parish, Louisiana.

19. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in St. Bernard Parish, Louisiana.

 

Exhibit B - 4

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

20. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in St. Bernard Parish, Louisiana.

21. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in St. Mary Parish, Louisiana.

22. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in St. Mary Parish, Louisiana.

23. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Terrebonne Parish, Louisiana.

24. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Terrebonne Parish, Louisiana.

25. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Vermilion Parish, Louisiana.

26. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Vermilion Parish, Louisiana.

27. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Hancock County, Mississippi.

28. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Hancock County, Mississippi.

29. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Harrison County (First Judicial District), Mississippi.

30. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Harrison County (First Judicial District), Mississippi.

31. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Harrison County (Second Judicial District), Mississippi.

32. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Harrison County (Second Judicial District), Mississippi.

 

Exhibit B - 5

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

33. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Jackson County, Mississippi.

34. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Jackson County, Mississippi.

35. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Andrews County, Texas.

36. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Brazoria County, Texas.

37. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Chambers County, Texas.

38. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Chambers County, Texas.

39. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Dawson County, Texas.

40. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Gaines County, Texas.

41. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Jefferson County, Texas.

42. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Jefferson County, Texas.

43. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Borrower to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Martin County, Texas.

44. 1.5 Lien Deed of Trust, Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement from the Guarantor to Rebecca Conrad, as Trustee,
and Cortland Capital Market Services LLC, as 1.5 Lien Collateral Agent, to be
filed in Matagorda County, Texas.

 

Exhibit B - 6