Exhibit 10.1

 

 

$500,000,000

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of March 31, 2015

among

SANCHEZ PRODUCTION PARTNERS LP

as Borrower,

ROYAL BANK OF CANADA

as Administrative Agent and Collateral Agent,

SOCIÉTÉ GÉNÉRALE

As Syndication Agent

COMPASS BANK and SUNTRUST BANK

As Co-Documentation Agents

RBC CaPITAL MARKETS and SG AMERICAS SECURITIES, LLC

as Joint Lead Arrangers and Joint Bookrunners,

and

THE LENDERS PARTY HERETO

 

 

 

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Annex I

List of Maximum Credit Amounts

 

 

Exhibit A

Form of Note

Exhibit B

Form of Compliance Certificate

Exhibit C

Security Instruments

Exhibit D

Form of Assignment and Assumption

Exhibit E

Form of Borrowing Request

Exhibit F

Form of Interest Election Request

Exhibit G

Form of Notice of Letter of Credit Request

 

 

Schedule 6.01(q)

Minimum Hedges

Schedule 7.05

Litigation

Schedule 7.06

Environmental Matters

Schedule 7.11

Material Debt and Other Obligations

Schedule 7.14

Subsidiaries

Schedule 7.20

Gas Imbalances

Schedule 7.21

Marketing Contracts

Schedule 7.22

Swap Agreements; Swap Transactions

 

 

 

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of
March 31, 2015, is by and among Sanchez Production Partners LP, a limited
partnership duly formed and existing under the laws of the State of Delaware
(the “Borrower”), each of the Lenders from time to time party hereto, Royal Bank
of Canada (in its individual capacity, “Royal Bank of Canada”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”) and as collateral agent
for the Lenders (in such capacity, together with its successors in such
capacity, the “Collateral Agent”), RBC Capital Markets and SG Americas
Securities, LLC, as joint lead arrangers and joint bookrunners.

RECITALS

WHEREAS, the Borrower, Société Générale, as administrative agent, and certain
lenders, are parties to that certain Second Amended and Restated Credit
Agreement dated as of May 30, 2013 (as amended, amended and restated,
supplemented or otherwise modified prior to the date hereof, the “Existing
Credit Agreement”) whereby the lenders therein extended credit to the Borrower
in the form of loans and letters of credit; and

WHEREAS, the Borrower has entered into a certain Purchase and Sale Agreement
dated as of March 31, 2015 (the “Palmetto PSA”), by and among SEP III
Holdings, LLC, a Delaware limited liability company, as seller (“Palmetto
Seller”), SEP Holdings IV, LLC, a Delaware limited liability company and a
Guarantor under this Agreement, as buyer (“Palmetto Buyer”), and Borrower,
pursuant to which Palmetto Buyer will acquire certain wellbores producing from
the Eagle Ford Shale formation in Gonzales County, Texas, and more particularly
described in the Palmetto PSA (such acquisition, the “Palmetto Acquisition”);
and

WHEREAS, pursuant to the terms of that certain Assignment of Secured
Indebtedness and Authorization to Assign Liens dated as of March 31, 2015, by
and among the Borrower, the Existing Lenders, the Existing Agent, the Lenders,
the Agent and the other parties thereto (the “Assignment Agreement”), the
Existing Lenders have sold and assigned, and the Lenders have purchased and
assumed, all of the outstanding loans and credit extensions outstanding under
the Existing Agreement, together with the benefit of all of the related security
documents and liens, as more particularly set forth therein; and

WHEREAS, the parties hereto desire to enter into this Agreement, which shall
amend and restate and otherwise supersede the Existing Credit Agreement and
provide that the Lenders may continue to extend credit to the Borrower as
provided in this Agreement; and

WHEREAS, the Borrower has requested that the Lenders provide Loan Commitments
(to include availability for Loans and Letters of Credit), pursuant to which
Loans will be made from time to time prior to the Termination Date (including
credit the proceeds of which, together with other consideration, will be used to
consummate the Palmetto Acquisition), and Letter of Credit Commitments, pursuant
to which Letters of Credit will be issued from time to time prior to the
Termination Date; and

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WHEREAS, the Lenders and the Issuer are willing, on the terms and subject to the
conditions hereinafter set forth, to extend the Loan Commitments and make Loans
to the Borrower and issue (or participate in) Letters of Credit;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the Borrower, the Administrative Agent, the Collateral Agent, the
Issuer and the Lenders agree to amend and restate in their entirety the Existing
Credit Agreement and hereto agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING MATTERS

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

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

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

“Acceptable Security Interest” in any Property means a Lien which (a) exists in
favor of the Collateral Agent for the benefit of the Administrative Agent, the
Issuer, the Lenders, and any Swap Counterparty, (b) is superior to all Liens or
rights of any other Person in the Property encumbered thereby, other than
Excepted Liens, (c) secures the Obligations, and (d) is perfected and
enforceable, subject to general principles of equity and the rights of debtors
under applicable Debtor Relief Laws.

“Act” has the meaning assigned to such term in Section 12.16.

“Adjusted EBITDA” means, for any period, the sum of Consolidated Net Income for
such period plus (minus) the following expenses or charges to the extent
deducted from Consolidated Net Income in such period: Interest Expense,
depreciation, depletion, amortization, write off of deferred financing fees,
impairment of long-lived assets, (gain) loss on sale of assets, (gain) loss from
equity investment, accretion of asset retirement obligation, unrealized (gain)
loss on oil, natural gas and natural gas liquids derivatives and realized (gain)
loss on cancelled oil, natural gas and natural gas liquids derivatives, and
other similar charges.

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

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

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“Advance” means any advance hereunder of monies by a Lender to the Borrower as
part of a Borrowing and refers to an ABR Loan or a Eurodollar Loan.

“Affected Lender” has the meaning assigned to such term in Section 5.06.

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

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

“Agents” means each of the Administrative Agent, the Collateral Agent, any
person identified as a “Syndication Agent,” any Person identified as a
“Co-Documentation Agent” or any combination of them as the context requires and
also includes any Person identified as “Lead Arranger” or “Bookrunner.”

“Aggregate Maximum Credit Amount” at any time shall equal the sum of the Maximum
Credit Amounts, as the same may be reduced or terminated pursuant to
Section 2.06, or otherwise modified in accordance with this Agreement.

“Agreement” means this Third Amended and Restated Credit Agreement, as the same
may from time to time be amended, modified, supplemented or amended and
restated.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Base Rate in effect on such day, (b) the Federal Funds Effective Rate
in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one
month interest period in effect on such day (or if such day is not a Business
Day, the immediately preceding Business Day) plus 1%.  Any change in the
Alternate Base Rate due to a change in the Base Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective day of such change in the Base Rate, the Federal Funds Effective
Rate and the Adjusted LIBO Rate, respectively.

“Applicable Margin” means, for any day and with respect to (a) all Loans
maintained as Eurodollar Loans or ABR Loans or (b) Commitment Fee Rate, the
applicable percentage set forth below corresponding to the Borrowing Base
Utilization Percentage:

Borrowing Base Utilization Percentage

Eurodollar Loan

ABR Loan

Commitment Fee Rate

> 90%

2.75%

1.75%

0.500%

> 75% < 90%

2.50%

1.50%

0.500%

> 50% < 75%

2.25%

1.25%

0.500%

> 25% < 50%

2.00%

1.00%

0.375%

< 25%

1.75%

0.75%

0.375%

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Each change in the Applicable Margin shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change, provided, however, that if at any
time the Borrower fails to deliver a Reserve Report pursuant to Section 2.07,
then the “Applicable Margin” shall mean the rate per annum set forth on the grid
when the Borrowing Base Utilization Percentage is at its highest level.  If for
any reason, based upon incorrect or inaccurate information provided to the
Administrative Agent or the Lenders by the Borrower, it is determined that a
higher Applicable Margin should have applied to a period than was actually
applied, then the proper margin shall be applied retroactively, and the Borrower
shall pay to the Administrative Agent, for the benefit of the Lenders, promptly
on demand therefor, an amount equal to the difference between the amount of
interest and fees that would have accrued using the proper margin and the amount
actually paid.

“Applicable Percentage” means, with respect to any Lender at any time, the
percentage of the Aggregate Maximum Credit Amount represented by such Lender’s
Maximum Credit Amount at such time.  The initial Applicable Percentages of the
Lenders are set forth on Annex I.

“Approved Counterparty” means (a) any Lender or any Affiliate of a Lender, (b)
any other Person whose long term senior unsecured debt rating is A by S&P or A2
by Moody’s (or their equivalent) or higher, and (c) any other Person approved by
the Administrative Agent in its sole and absolute discretion.

“Approved Engineer” means Netherland, Sewell and Associates, Inc., Ryder Scott
Company, L.P. or any other independent petroleum engineer satisfactory to the
Administrative Agent in its sole and absolute discretion.

“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.

“Arranger” means, RBC Capital Markets in its capacity as joint lead arranger and
joint bookrunner hereunder.

“Assignment Agreement” has the meaning ascribed thereto in the third recital.

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

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

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“Available Cash” means, with respect to any fiscal quarter ending prior to the
Termination Date:

(a)the sum of (i) all cash and Cash Equivalents of the Borrower on hand at the
end of such fiscal quarter; and (ii) all additional cash and Cash Equivalents of
the Borrower on hand on the date of determination of Available Cash with respect
to such fiscal quarter resulting from working capital borrowings made prior to
the end of such fiscal quarter, less

(b)the amount of any cash reserves established by the board of directors  or
equivalent governing body of the General Partner for the Borrower to (i) provide
for the proper conduct of the business of the Borrower (including reserves for
future maintenance capital expenditures including drilling and for anticipated
future credit needs of the Borrower), (ii) comply with Governmental Requirements
or any loan agreement, security agreement, mortgage, debt instrument or other
agreement or obligation to which the Borrower or a Consolidated Subsidiary is a
party or by which it is bound or its assets are subject or (iii) provide funds
for distributions with respect to any one or more of the next four fiscal
quarters.

“Base Rate” means, at any time, the rate of interest then most recently
established by the Administrative Agent in New York or such other office as the
Administrative Agent shall designate in writing, as its base rate for dollars
loaned in the United States.  The Base Rate is not necessarily intended to be
the lowest rate of interest determined by the Administrative Agent in connection
with extensions of credit.

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

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

“Borrowing Base” means an amount equal to the amount determined in accordance
with Section 2.07, as the same may be redetermined or adjusted from time to time
pursuant to Section 2.07,  Section 8.12(c) or Section 9.12(d), or otherwise
redetermined or adjusted in accordance with this Agreement.

“Borrowing Base Deficiency” means the aggregate outstanding amount, if any, by
which the Revolving Credit Exposure exceeds the lesser of the (a) Borrowing Base
and (b) the Aggregate Maximum Credit Amount.

“Borrowing Base Utilization Percentage” means, as of any day, the fraction
expressed as a percentage, the numerator of which is the Revolving Credit
Exposure on such day, and the denominator of which is the Borrowing Base in
effect on such day.

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

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or
required by law to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or

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prepayment of principal of or interest on, or the Interest Period for a
Eurodollar Loan or a notice by the Borrower with respect to any such Borrowing
or continuation, payment, prepayment, or Interest Period, any day which is also
a day on which dealings in dollar deposits are carried out in the London
interbank market.

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

“Cash Collateral Account” has the meaning assigned to such term in
Section 2.08(j).

“Cash Collateralize” means, with respect to a Letter of Credit, the deposit of
immediately available funds into a cash collateral account maintained with (or
on behalf of) the Administrative Agent on terms reasonably satisfactory to the
Administrative Agent.

“Cash Equivalent” means, at any time:

(a)any direct obligation of (or unconditionally guaranteed by) the United States
or a State thereof (or any agency or political subdivision thereof, to the
extent such obligations are supported by the full faith and credit of the United
States or a State thereof) maturing not more than one year after such time;

(b)commercial paper maturing not more than 270 days from the date of issue, that
is issued by (i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any State of the United States or of the District of
Columbia, and rated A1 or higher by S&P or P1 or higher by Moody’s or (ii) any
Lender (or its holding company);

(c)any certificate of deposit, time deposit or bankers acceptance, maturing not
more than one year after its date of issuance, that is issued by (i) any bank or
trust company organized under the laws of the United States (or any State
thereof), and that has (A) a short term deposit rating of A2 or higher from
Moody’s or A or higher from S&P and (B) a combined capital and surplus greater
than $500,000,000, or (ii) any Lender;

(d)shares of money market mutual or similar funds which invest primarily in
assets satisfying the requirements of clauses (a) through (c) of this
definition; or

(e)money market funds that (i) purport to comply generally with the criteria set
forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended,
(ii) are rated AAA by S&P or Aaa by Moody’s or carrying an equivalent rating by
a national recognized rating agency, and (iii) have portfolio assets of at least
$5,000,000,000.

“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of the Borrower or any of its Subsidiaries
having a fair market value in excess of $100,000 in the aggregate for any
calendar year.

“Change in Control” means any one or more of the following events shall
occur:  (a) the General Partner shall cease to be the sole general partner of
the Borrower, or (b) the Permitted

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Holders shall, collectively, shall cease to own, directly or indirectly, more
than 50% of the Equity Interests of the General Partner or shall cease to
Control, directly or indirectly, the General Partner.

“Change in Law” means (a) the adoption of any law, rule, treaty or regulation
after the date of this Agreement, (b) any change in any law, rule, treaty or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuer (or, for purposes of Section 5.01(b), by any lending office of such
Lender or by such Lender’s or the Issuer’s holding company, if any) with any
request, rule, guideline or directive (whether or not having the force of law)
of any Governmental Authority made or issued after the date of this Agreement;
provided 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 concerning capital adequacy
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Regulations and Supervisory Practices (or any successor similar
authority) or the United States financial 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, promulgated or issued.

“Closing Date” means the date of this Agreement.

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

“Collateral” shall mean the Collateral as defined in the Pledge and Security
Agreement, and the Mortgaged Property.

“Collateral Agent” means Royal Bank of Canada, as collateral agent, under the
Security Instruments (together with any successor(s) and assign(s) thereto).

“Commitment Fee” has the meaning assigned to such term in Section 3.04(a).

“Commitment Fee Rate” means the rate per annum determined from time to time
based on the percentage reflected in the definition of Applicable Margin.

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

“Consolidated Net Income” means with respect to the Borrower and the
Consolidated Subsidiaries, for any period, the aggregate of the net income (or
loss) of the Borrower and the Consolidated Subsidiaries after allowances for
taxes for such period determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded from such net income (to the extent
otherwise included therein) the following (all determined in accordance with
GAAP): (a) the net income of any Person in which the Borrower or a Consolidated
Subsidiary has an interest (which interest does not cause the net income of such
other Person to be consolidated with the net income of the Borrower and the
Consolidated Subsidiaries), except to the extent of the amount of dividends or
distributions actually paid in cash during such period by such other Person to
the Borrower or to a Consolidated Subsidiary, as the case may be; (b) the

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net income (but not loss) during such period of any Consolidated Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
or transfers or loans by that Consolidated Subsidiary is not at the time
permitted by operation of the terms of its charter or any agreement, instrument
or Governmental Requirement applicable to such Consolidated Subsidiary or is
otherwise restricted or prohibited; (c) the net income (or loss) of any Person
acquired in a pooling-of-interests transaction for any period prior to the date
of such transaction; (d) any extraordinary gains or losses during such period;
(e) non-cash gains, losses or adjustments under Accounting Standards
Codification 815 as a result of changes in the fair market value of derivatives;
(f) any gains or losses attributable to writeups or writedowns of assets,
including ceiling test writedowns; (g) non-cash share-based payments under
Accounting Standards Codification 718; and provided further that if the Borrower
or any Consolidated Subsidiary shall acquire or dispose of any Property during
such period having an aggregate fair market value in excess of $5,000,000
(whether in one or a series of related transactions), then Consolidated Net
Income shall be calculated after giving pro forma effect to such acquisition or
disposition, as if such acquisition or disposition had occurred on the first day
of such period.

“Consolidated Subsidiaries” means each Subsidiary of the Borrower (whether now
existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of the
Borrower in accordance with GAAP.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“Current Ratio” means the ratio of

(a)consolidated current assets of the Borrower and its Consolidated Subsidiaries
but including any unused availability under this Agreement and excluding
therefrom any current non-cash asset (including in respect of Swap Transactions)
described in or calculated pursuant to the requirements of Accounting Standards
Codification 815 or 410, each as amended (provided that, for the avoidance of
doubt, the calculation of consolidated current assets shall include any current
assets in respect of the termination of any Swap Transaction)

to

(b)consolidated current liabilities of the Borrower and its Consolidated
Subsidiaries but excluding therefrom any current maturities of Debt (to the
extent such payments are not past due) and current non-cash liabilities
(including in respect of Swap Transactions) described in or calculated pursuant
to the requirements of Accounting Standards Codification 815 or 410, each as
amended (provided that, for the avoidance of doubt, the calculation of
consolidated current liabilities shall include any current liabilities in
respect of the termination of any Swap Transaction).

“Debt” means, for any Person, the sum of the following (without duplication):
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances,

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debentures, notes or other similar instruments; (b) all obligations of such
Person (whether contingent or otherwise) in respect of letters of credit, surety
or other bonds and similar instruments; (c) all accounts payable, accrued
expenses, liabilities or other obligations of such Person, in each such case to
pay the deferred purchase price of Property or services; (d) all obligations
under Capital Leases; (e) all obligations under Synthetic Leases; (f) all Debt
(as defined in the other clauses of this definition) of others secured by (or
for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) a Lien on any Property of such Person, whether or
not such Debt is assumed by such Person (but, to the extent such obligations or
liabilities are limited in recourse to the Obligors, the amount of such
liabilities or obligations constituting Debt shall be limited to the lesser of
the fair market value of such property and the amount of the obligations or
liabilities assumed); (g) all Debt (as defined in the other clauses of this
definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Debt (howsoever such assurance
shall be made) to the extent of the lesser of the amount of such Debt and the
maximum stated amount of such guarantee or assurance against loss; (h) all
obligations or undertakings of such Person to maintain or cause to be maintained
the financial position or covenants of others or to purchase the Debt or
Property of others, in each case, intended as a means of credit enhancement for
creditors of such others and not as a purchase and sale agreement; (i)
obligations to deliver commodities, goods or services, including, without
limitation, Hydrocarbons, in consideration of one or more advance payments,
other than gas balancing arrangements in the ordinary course of business;
(j) obligations to pay for goods or services whether or not such goods or
services are actually received or utilized by such Person; (k) any Debt of a
partnership for which such Person is liable either by agreement, by operation of
law or by a Governmental Requirement but only to the extent of such liability;
(l) Disqualified Capital Stock; and (m) the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment; provided however, that Debt
shall exclude (i) all Swap Obligations and guarantees in respect thereof and
(ii) for purposes of calculating Total Net Debt, accounts payable and other
accrued liabilities (for the deferred purchase price of Property or services)
from time to time incurred in the ordinary course of business with respect to
which no more than 90 days have elapsed since the date of invoice or that are
being contested in good faith by appropriate action and for which adequate
reserves are maintained in accordance with GAAP and other obligations to pay for
goods or services whether or not such goods or services are actually received or
utilized by such Person.  The Debt of any Person shall include all obligations
of such Person of the character described above to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is not included as a liability of such Person under GAAP.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally (including, to the extent applicable, the rights and remedies of
creditors of a “financial company” as such term is defined in Section 201 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act) or providing for the
relief of debtors.

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

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“Defaulting Lender”  means, subject to Section 2.10(g), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within three Business Days of
the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, the Issuer, or any
other Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit) within three Business Days of
the date when due, (b) has notified the Borrower, the Administrative Agent or
the Issuer in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the Borrower,
to confirm in writing to the Administrative Agent and the Borrower that it will
comply with its prospective funding obligations hereunder (provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and the
Borrower), or (d) has, or has a direct or indirect parent company that has, (i)
become the subject of a proceeding under any Debtor Relief Law, or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender.  Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under clauses (a) through (d) above shall be conclusive and
binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender (subject to Section 2.10(g)) upon delivery of written notice
of such determination to the Borrower, the Issuer, and each Lender.

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

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

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

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; or (d) any other Person (other than a natural Person, the
Borrower, a Defaulting Lender, any Affiliate of the Borrower or any other Person
taking direction from, or working in concert with, the Borrower or any of the
Borrower’s Affiliates) approved by the Administrative Agent and the Issuer (such
approvals not to be unreasonably withheld).

“Environmental Laws” means any and all applicable Governmental Requirements
pertaining in any way to health, safety, the environment or the preservation or
reclamation of natural resources, in effect in any and all jurisdictions in
which the Borrower or any of its Subsidiaries is conducting or at any time has
conducted business, or where any Property of the Borrower or any of its
Subsidiaries is located, including without limitation, the Oil Pollution Act of
1990 (“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendments
and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and other environmental conservation or
protection Governmental Requirements.  The term “oil” shall have the meaning
specified in OPA, the terms “hazardous substance” and “release” (or “threatened
release”) have the meanings specified in CERCLA and the terms “solid waste” and
“disposal” (or “disposed”) have the meanings specified in RCRA and the term “oil
and gas waste” shall have the meaning specified in Section 91.1011 of the Texas
Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the
event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment and (b) to the extent the
laws of the state or other jurisdiction in which any Property of the Borrower or
any of its Subsidiaries is located establish a meaning for “oil,” “hazardous
substance,” “release,” “solid waste,” “disposal” or “oil and gas waste” which is
broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such
broader meaning shall apply with respect to Property located in such state or
other jurisdiction.

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

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

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

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate a Pension Plan under Section 4041(c)
of ERISA, the treatment of a Plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate; or (g) the determination that any Pension Plan or
Multiemployer Plan is considered an at-risk plan or a plan in endangered or
critical status within the meaning of Sections 430, 431 and 432 of the Code or
Sections 303, 304 and 305 of ERISA.

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

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

“Excepted Liens” shall mean: (a) Liens for taxes, assessments or other
governmental charges or levies (x) not yet due or (y) that are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained; (b) Liens in connection with workmen’s compensation, unemployment
insurance or other social security, old age pension or public liability
obligations not yet due or that are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in accordance with
GAAP; (c) operators’, vendors’, carriers’, warehousemen’s, repairmen’s,
mechanics’, workmen’s, materialmen’s, construction or other like Liens arising
by operation of law in the ordinary course of business or incident to the
exploration, development, operation and maintenance of Oil and Gas Properties or
statutory landlord’s liens, each of which is in respect of obligations that are
not delinquent or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been maintained in accordance
with GAAP; (d) contractual Liens that arise in the ordinary course of business
under operating agreements, joint venture agreements, oil and gas partnership
agreements, oil and gas leases, farm-out agreements, division orders, contracts
for the sale, transportation or exchange of oil and natural gas, unitization and
pooling declarations and agreements, area of mutual interest agreements,
overriding royalty agreements, marketing agreements, processing agreements, net
profits agreements, development agreements, gas balancing or deferred production
agreements, injection, repressuring and recycling agreements, salt water or
other disposal agreements, seismic or other geophysical permits or agreements,
and other agreements which are usual and customary in the oil and gas business
and are for claims that are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP, provided that any such Lien referred to in this clause
does not materially impair the use of the

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Property covered by such Lien for the purposes for which such Property is held
by the Borrower or any of its Subsidiaries or materially impair the value of
such Property subject thereto; (e) encumbrances (other than to secure the
payment of borrowed money or the deferred purchase price of Property or
services), easements, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations in any rights of way or other Property of the
Borrower or any of its Subsidiaries for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines for the removal of
gas, oil, coal or other minerals or timber, and other like purposes, or for the
joint or common use of real estate, rights of way, facilities and equipment, and
defects, irregularities, zoning restrictions and deficiencies in title of any
rights of way or other Property that in the aggregate do not materially impair
the use of such rights of way or other Property for the purposes of which such
rights of way and other Property are held by the Borrower or any Subsidiary or
materially impair the value of such Property subject thereto; (f) deposits of
cash or Cash Equivalents to secure the performance of bids, tenders, trade
contracts, leases, statutory obligations and other obligations of a like nature
incurred in the ordinary course of business (all of the foregoing other than for
Debt) or to secure obligations on surety or appeal bonds; (g) Liens permitted by
the Security Instruments; (h) Liens arising solely by virtue of any statutory or
common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies and burdening only deposit accounts or other funds
maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account or is subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the Board and no such deposit account is intended by the Borrower
or any of its Subsidiaries to provide collateral to the depository institution;
(i) judgment and attachment Liens not giving rise to an Event of Default; and
(j) Liens comprised of UCC financing statement filings regarding operating
leases covering only the Property leased thereunder.

“Excluded Hedge Obligation” means, with respect to any Obligor, any Swap
Obligation if and to the extent that all or a portion of such Swap Obligation or
the guarantee of such Obligor of, or the grant by such Obligor of a security
interest or other Lien to secure, such Swap Obligation (or any guarantee
thereof) is or becomes illegal under the Commodity Exchange Act or any rule,
regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such
Obligor’s failure for any reason to constitute a Qualified ECP Obligor at the
time such Obligor’s guarantee or such Obligor’s grant of such security
interest  or other Lien becomes effective with respect to such Swap
Obligation.  If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such guarantee obligation or
other liability or security interest or other Lien is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its applicable lending office located in the
jurisdiction imposing such Tax (or any political subdivision thereof) or (ii)
that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender

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with respect to an applicable interest in a Loan or commitment pursuant to a law
in effect on the date on which (i) such Lender acquires such interest in the
Loan or commitment (other than pursuant to an assignment request by the Borrower
under Section 5.06) or (ii) such Lender changes its lending office, except in
each case to the extent that, pursuant to Section 5.03, amounts with respect to
such Taxes were payable either to such Lender’s assignor immediately before such
Lender became a party hereto or to such Lender immediately before it changed its
lending office, (c) Taxes attributable to such Recipient’s failure to comply
with Section 5.03(f) or (g), and (d) any U.S. federal withholding Taxes imposed
under FATCA.

“Existing Agent” shall mean Société Générale, as administrative agent for the
Existing Lenders under the Existing Credit Agreement.

“Existing Credit Agreement” shall have the meaning assigned to such term in the
Recitals.

“Existing Lenders” shall mean the “Lenders” under and as defined in the Existing
Credit Agreement.

“Existing Loans” shall mean the “Loans” under and as defined in the Existing
Credit Agreement.

“Existing Obligations” shall mean the “Obligations” under and as defined in the
Existing Credit Agreement outstanding on the Closing Date.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code, and any intergovernmental agreements
related to or implementing the foregoing, or laws or regulations implementing
such agreements, including any successor provisions, subsequent amendments, and
administrative guidance promulgated thereunder (or which may be promulgated
thereunder in the future).

“Federal Funds Effective Rate” means, for any day, a fluctuating interest rate
per annum equal to:

(a)the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York; or

(b)if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

“Fee Letter” means that certain engagement letter dated March 11, 2015, among
the Borrower, the Administrative Agent and the Arranger.

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“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of such Person.  Unless
otherwise specified, all references to a Financial Officer shall mean a
Financial Officer of the General Partner, on behalf of the Borrower.

“Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of December 31, 2014 and the
related consolidated statement of income, members’ equity and cash flow of the
Borrower and its Consolidated Subsidiaries for the fiscal year ended on such
date.

“Flood Insurance Laws” means, to the extent applicable to any Obligor, Secured
Party or Collateral, the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, the National Flood Insurance Reform Act of
1994, the Biggert-Waters Flood Insurance Reform Act of 2012 and the regulations
issued in connection therewith by the Office of the Controller of the Currency,
the Federal Reserve Board and other Governmental Authorities, each as it may be
amended, reformed or otherwise modified from time to time.

“Foreign Lender” means any Lender that is not a U.S. Person.

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

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.04.

“General Partner” means Sanchez Production Partners GP LLC, a Delaware limited
liability company.

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

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

“Guarantee Agreement” means each agreement executed by the Guarantors in a form
acceptable to the Administrative Agent and Lenders, as the same may be amended,
modified or supplemented from time to time.

“Guarantors” means CEP Mid-Continent LLC, a Delaware limited liability company,
Northeast Shelf Energy, L.L.C., an Oklahoma limited liability company,
Mid-Continent Oilfield Supply, L.L.C., an Oklahoma limited liability company,
SEP Holdings IV, LLC, a Delaware limited liability company, and any additional
Guarantors pursuant to Section 8.13.

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

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

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

“Impacted Lender” means, at any time, a Lender (a) as to which the
Administrative Agent or the Issuer has in good faith determined and notified the
Borrower and, in the case of the Issuer, the Administrative Agent that such
Lender or its Parent Company or a Subsidiary thereof has notified the
Administrative Agent, or has stated publicly, that it will not comply with its
funding obligations under any other loan agreement or credit agreement or other
similar agreement or (b) that has, or whose Parent Company has, a non-investment
grade rating from Moody’s (below Baa3) or S&P (below BBB-) or another nationally
recognized rating agency.  Any determination that a Lender is an Impacted Lender
under clause (a) above will be made by the Administrative Agent or the Issuer,
as the case may be, in its sole discretion acting in good faith.  The
Administrative Agent will promptly send to all parties hereto a copy of any
notice to the Borrower provided for in this definition.

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

“Initial Reserve Report” means (i) the reserve report concerning Oil and Gas
Properties of the Borrower and its Subsidiaries, prepared by Netherland, Sewell
and Associates, Inc., effective as of December 31, 2014, and (ii) the Palmetto
Reserve Report.

“Initial Subordinated Note” means that certain 10.00%/10.75% Senior Unsecured
Subordinated PIK Note due 2020 issued on the Closing Date from Borrower, as
issuer, to Palmetto Seller, as holder, in an initial aggregate principal amount
of up to $21,250,000, which note has an initial maturity date not earlier than
six months after the Maturity Date (as in effect on the Closing Date), no
mandatory amortization or scheduled payment of principal thereunder and (subject
to the provisions of Section 9.21) provides for interest payments to be made
only in-kind by capitalizing the accrued but unpaid interest thereunder.

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

“Interest Expense” means, for any period, the sum (determined without
duplication) of the aggregate gross interest expense of the Borrower and the
Consolidated Subsidiaries for such period, including (a) to the extent included
in interest expense under GAAP: (i) amortization of debt discount, (ii)
capitalized interest and (iii) the portion of any payments or accruals under
Capital Leases allocable to interest expense, plus the portion of any payments
or accruals under Synthetic Leases allocable to interest expense whether or not
the same constitutes interest expense under GAAP and (b) cash dividend payments
by the Borrower in respect of any Disqualified Capital Stock; but excluding
non-cash gains, losses or adjustments under Accounting Standards Codification
815 as a result of changes in the fair market value of derivatives.

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

“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition (including, without
limitation, any “short sale” or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit for the purpose of acquisition of Equity Interests in or
Debt of, or advance, loan or capital contribution to, assumption of Debt of,
purchase or other acquisition of any other Debt or equity participation or
interest in, or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person, but
excluding any such advance, loan or extension of credit having a term not
exceeding ninety (90) days representing the purchase price of inventory,
equipment, or supplies sold by such Person in the ordinary course of business);
(c) the purchase or acquisition (in one or a series of transactions) of Property
of another Person that constitutes a business unit or (d) the entering into of
any guarantee of, or other contingent obligation (including the deposit of any
Equity Interests to be sold) with respect to, Debt or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person.

“Issuer” means Royal Bank of Canada, in its capacity as an issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in
Section 2.08(i).  

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

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

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

“Letter of Credit Commitment” at any time means Fifteen Million Dollars
($15,000,000).

“Letter of Credit Disbursement” means a payment made by the Issuer pursuant to a
Letter of Credit issued by the Issuer.

“Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all unpaid and outstanding Reimbursement Obligations.  The
Letter of Credit Exposure of any Lender at any time shall be its Applicable
Percentage of the total Letter of Credit Exposure at such time.

“Leverage Ratio Adjustment Date” means the first date on which either (a) the
Borrower shall have repaid in full all Debt outstanding under the Subordinated
Notes in compliance with the conditions and limitations set forth in this
Agreement, including Section 9.21(b), or (b) the MidCon Assets shall have been
sold in compliance with the conditions and limitations set forth in this
Agreement, including Section 9.12(d); provided that if the “as of” date of the
sale of the MidCon Assets occurs on or before the last day of the preceding
fiscal quarter and the Borrower has not, before the date on which the sale of
the MidCon Assets is consummated, delivered the Financial Officer’s certificate
required by Section 8.01(c), then the Leverage Ratio Adjustment Date shall be
deemed to be the last day of the preceding fiscal quarter.  For the sake of
clarity, if no Subordinated Notes are issued on the Closing Date, then the
Leverage Ratio Adjustment Date shall be deemed to have occurred on the Closing
Date and the covenant set forth in Section 9.01(c) shall be of no force or
effect.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period the greater of (a) zero percent (0%) per annum and (b) the ICE Benchmark
Administration LIBO rate appearing on Reuters Libor Rates LIBOR01 (or on any
successor or substitute page of such service, or any successor to or substitute
for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period.  In the event that such rate is not available at such time
for any reason, then the LIBO Rate with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity

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comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a financing lease, consignment
or bailment for security purposes or (b) production payments and the like
payable out of Oil and Gas Properties.  The term “Lien” shall include easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations.

“Loan Commitment” means, with respect to each Lender, the commitment of such
Lender to make Loans and to acquire participations in Letters of Credit
hereunder, as such commitment may be (a) modified from time to time pursuant to
Sections 2.06, (b) modified from time to time pursuant to assignments by or to
such Lender pursuant to Section 12.04(b) or (c) otherwise modified in accordance
with this Agreement.

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

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

“Majority Lenders” means, at any time while no Loans or Letter of Credit
Exposure is outstanding, Lenders having at greater than fifty percent (50%) of
the Aggregate Maximum Credit Amount; and at any time while any Loans or Letter
of Credit Exposure is outstanding, Lenders holding greater than fifty percent
(50%) of the outstanding aggregate principal amount of the Loans or
participation interests in Letters of Credit (without regard to any sale by a
Lender of a participation in any Loan under Section 12.04(c)).

“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, operations, Property, liabilities (actual or
contingent) or condition (financial or otherwise) of the Borrower and the
Guarantors taken as a whole, (b) the ability of the Borrower, any of its
Subsidiaries or any Guarantor to perform any of its obligations under any Loan
Document to which it is a party, (c) the validity or enforceability of any Loan
Document or (d) the rights and remedies of or benefits available to the
Administrative Agent, any other Agent, the Issuer or any Lender under any Loan
Document.

“Material Domestic Subsidiary” means, as of any date, any Domestic Subsidiary
that (a) is a Wholly-Owned Subsidiary and (b) together with its Subsidiaries,
owns Property having a fair market value of $1,000,000 or more.

“Material Indebtedness” means Debt (other than the Loans and Letters of Credit),
or obligations in respect of one or more Swap Transactions, of any one or more
of the Borrower and

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its Subsidiaries in an aggregate principal amount exceeding $2,500,000.  For
purposes of determining Material Indebtedness, the “principal amount” of the
obligations of the Borrower or any of its Subsidiaries in respect of Swap
Transactions with a particular counterparty at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Swap Transactions were
terminated at such time.

“Material Swap Transactions” has the meaning assigned to such term in
Section 8.01(j).

“Maturity Date” means March 31, 2020.

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

“MidCon Assets” means all or substantially all of the Oil and Gas Properties of
the Borrower and its Subsidiaries located in the States of Oklahoma and Kansas.

“Minimum Hedge” has the meaning assigned to such term in Section 6.01(q).

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

“Mortgaged Property” means any Property owned by the Borrower or any Guarantor
which is subject to the Liens existing and to exist under the terms of the
Mortgages.

“Mortgages” means the mortgages and/or deeds of trust subjecting the Property of
the Borrower or any Guarantor to Liens in favor of Collateral Agent for the
benefit of the Lenders and the Swap Counterparties.

“Multiemployer Plan” means a Plan which is a multiemployer plan as defined in
Section 3(37) or 4001 (a)(3) of ERISA.

“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Borrower or any ERISA Affiliate) at least two of whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.

“Net Revenue Interest” means, with respect to any Oil and Gas Property, the
decimal or percentage share of production from or allocable to such Oil and Gas
Property, after deduction of all overriding royalties and other burdens
(including lessor royalties), that an owner of a Working Interest is entitled to
receive.

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all Lenders or all
affected Lenders in accordance with the terms of Section 12.02 and (ii) has been
approved by the Required Lenders.

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“Non-Defaulting Lender” means a Lender that is not a Defaulting Lender or an
Impacted Lender.

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

“Obligations” means (a) all principal, interest, fees, reimbursements,
indemnifications, and other amounts payable by the Borrower or any of its
Subsidiaries to the Administrative Agent, the Issuer or the Lenders under the
Loan Documents, including without limitation, the Letter of Credit Exposure and
(b) all obligations of the Borrower or any of its Subsidiaries owing to any Swap
Counterparty under any Swap Transaction.  Notwithstanding the foregoing,
Excluded Hedge Obligations shall not be an Obligation of any Guarantor that is
not a Qualified ECP Obligor.

“Obligor” means, as the context may require, (a) the Borrower or (b) a
Guarantor.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

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

“OPA” has the meaning assigned to such term in the definition of “Environmental
Laws”.

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

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.06).

“Palmetto Acquisition” has the meaning assigned to such term in the second
recital.

“Palmetto Acquisition Documents” means, collectively, the Palmetto PSA and all
schedules, exhibits, annexes and amendments thereto and all side letters and
agreements affecting the terms thereof or entered into in connection therewith
(including any Swap Agreement or novation thereof), together with all bills of
sale, assignments, agreements, instruments and other documents executed, made or
delivered by any Person in connection with the Palmetto Acquisition, in each
case in form and substance reasonably acceptable to the Administrative Agent, in
each case, as amended, supplemented, or otherwise modified from time to time in
accordance with this Agreement.

“Palmetto Buyer” has the meaning assigned to such term in the second recital.

“Palmetto PSA” has the meaning assigned to such term in the second recital.

“Palmetto Seller” has the meaning assigned to such term in the second recital.

“Palmetto Reserve Report” means the reserve report concerning Oil and Gas
Properties to be acquired by the Borrower and its Subsidiaries in accordance
with the Palmetto PSA and derived from the reserve report prepared by Ryder
Scott Company L.P. for Sanchez Energy Corp., effective as of December 31, 2014.

“Parent Company” means, with respect to a Lender, the bank holding company (as
defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or
any Person owning, beneficially or of record, directly or indirectly, a majority
of the shares of such Lender.

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

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

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

“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan, but excluding a Multiemployer Plan) that is maintained or is
contributed to by

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the Borrower, any of its Subsidiaries, and any ERISA Affiliate and is either
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code.

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

“Permitted Holders” means (a) Antonio R. Sanchez, III, Eduardo A. Sanchez,
Patricio D. Sanchez, Ana Lee Sanchez Jacobs, and A.R. Sanchez, Jr., (b) any
spouse or descendant of any individual named in (a), (c) any other natural
person who is related to, or who has been adopted by, any such individual or
such individual’s spouse referenced in (a)-(b) above within the second degree of
kinship, (d) any member of SP Holdings and (e) any Person Controlled by any one
or more of the foregoing.

“Permitted Refinancing Debt” means Debt (for purposes of this definition, “new
Debt”) incurred in exchange for, or the net proceeds of which are used to
refinance, all or any portion of the Unsecured Notes (the “Refinanced Debt”);
provided that (a) the portion of such new Debt incurred to refinance the
Refinanced Debt is in an aggregate principal amount not in excess of the sum of
(i) the aggregate principal amount then outstanding of the Refinanced Debt (or,
if the Refinanced Debt is exchanged or acquired for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount), (ii) any accrued and unpaid interest
on the Refinanced Debt refinanced, and (iii) an amount necessary to pay any fees
and expenses, including premiums, related to such exchange or refinancing; (b)
such new Debt has a stated maturity no earlier than the date that is 180 days
after the Maturity Date and an average life no shorter than the period beginning
on the date of incurrence of such new Debt and ending on the date that is 180
days after the Maturity Date; (c) such new Debt does not contain covenants and
Events of Default that are, taken as a whole, more onerous to the Borrower and
its Subsidiaries than those imposed by the Refinanced Debt (as determined in
good faith by the senior management of the General Partner); (d) the stated
interest or coupon rate of such new Debt is reasonably acceptable to the
Administrative Agent; and (e) such new Debt (and any Guarantees in respect
thereof) is unsecured.

“Plan” means any employee pension benefit plan within the meaning of
Section 3(2) of ERISA (including a Pension Plan, but excluding a Multiemployer
Plan), maintained for employees of the Borrower, any of its Subsidiaries, or,
with respect to any such plan that is subject to Section 412 of the Code or
Title IV of ERISA, any ERISA Affiliate.

“Pledge and Security Agreement” means the Third Amended and Restated Pledge and
Security Agreement dated as of the Closing Date executed by the Borrower and
each of the Guarantors existing on the Closing Date, in favor of the Collateral
Agent, which amends and restates that certain Second Amended and Restated Pledge
and Security Agreement dated as of May 30, 2013, by and among the Borrower and
each of the Guarantors in favor of Société Générale, for the benefit of Lenders
and Swap Counterparties, and any supplements thereto executed by any Guarantor
pursuant to Section 8.13(b), each as amended, restated, modified and
supplemented from time to time.

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“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 (including but not limited to
Swap Agreements).

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

“Proved Developed Nonproducing Reserves” means Oil and Gas Properties that are
categorized as “Proved Reserves” that are both “Developed” and “Nonproducing”,
as such terms are defined in the Definitions for Oil and Gas Reserves as
promulgated by the Society of Petroleum Engineers (or any generally recognized
successor) as in effect at the time in question.

“Proved Developed Producing Reserves” means Oil and Gas Properties that are
categorized as “Proved Reserves” that are both “Developed” and “Producing”, as
such terms are defined in the Definitions for Oil and Gas Reserves as
promulgated by the Society of Petroleum Engineers (or any generally recognized
successor) as in effect at the time in question.

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

“Proved Undeveloped Reserves” means Oil and Gas Properties that are categorized
as “Proved Reserves” that are “Undeveloped Reserves”, as such terms are defined
in the Definitions for Oil and Gas Reserves as promulgated by the Society of
Petroleum Engineers (or any generally recognized successor) as in effect at the
time in question.

“Qualified ECP Obligor” means, in respect of any Swap Obligation, each Obligor
that has total assets exceeding $10,000,000 at the time such Swap Obligation is
incurred or such other person as at such time constitutes an “eligible contract
participant” under the Commodity Exchange Act or any regulation promulgated
thereunder.

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

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

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

“Reimbursement Obligations” has the meaning assigned to such term in
Section 2.08(f).

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

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

“Replacement Lender” has the meaning assigned to such term in Section 5.06.

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

“Required Lenders” means, at any time while no Loans or Letter of Credit
Exposure is outstanding, Lenders having at least sixty-six and two-thirds
percent (66-2/3%) of the Aggregate Maximum Credit Amount; and at any time while
any Loans or Letter of Credit Exposure is outstanding, Lenders holding at least
sixty-six and two-thirds percent (66-2/3%) of the outstanding aggregate
principal amount of the Loans or participation interests in Letters of Credit
(without regard to any sale by a Lender of a participation in any Loan under
Section 12.04(c)).

“Reserve Report” means the Initial Reserve Report and each other report setting
forth, as of each December 31st or June 30th (or such other date as required
pursuant to Section 2.07 and the other provisions of this Agreement), the oil
and gas reserves attributable to the Oil and Gas Properties of the Borrower and
its Subsidiaries, together with a projection of the rate of production and
future net income, severance and ad valorem taxes, operating expenses and
capital expenditures with respect thereto as of such date, consistent with SEC
reporting requirements at the time, provided that each such report hereafter
delivered must (a) separately report on the Proved Developed Producing Reserves,
Proved Developed Nonproducing Reserves and Proved Undeveloped Reserves of the
Borrower and its Consolidated Subsidiaries, (b) take into account the Borrower’s
or its Consolidated Subsidiaries’ (or the prior owner’s, if the Borrower or
Consolidated Subsidiaries  have owned such Oil and Gas Properties for less than
one year prior to the date of the report) actual experiences with leasehold
operating expenses and other costs in determining projected leasehold operating
expenses and other costs, (c) identify and take into account any “overproduced”
or “under-produced” status under gas balancing arrangements and (d) reflect
recent information and analysis comparable in scope to that contained in the
Initial Reserve Report.

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

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

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

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“Rolling Period” means for any date of determination, the most recent four
quarters ended on such date.

“Sanctions” has the meaning assigned to such term in Section 7.26(a).

“Secured Parties” means the Collateral Agent, the Administrative Agent, the
Lenders, the Issuer and any Swap Counterparty, and each of their respective
successors, transferees and assigns, in the case of the Lenders and the Issuer,
as permitted by this Agreement.

“Security Instruments” means the Guarantee Agreement, Pledge and Security
Agreement, Mortgages, and other agreements, instruments or certificates
described or referred to in Exhibit C, and any and all other agreements,
instruments, consents or certificates now or hereafter executed and delivered by
the Borrower or any other Person in connection with, or as security for the
payment or performance of the Obligations.

“Senior Secured Net Debt” means, as of any date of determination, the sum of the
aggregate outstanding principal amount of the Loans and the Letter of Credit
Exposure less Available Cash.

“SOG” means Sanchez Oil & Gas Corporation, a Delaware corporation.

“SP Holdings” means SP Holdings, LLC a Delaware limited liability company.

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

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

“Subordinated Note” means the Initial Subordinated Note and any additional notes
issued as payment in kind of interest on such Initial Subordinated Note or any
other Subordinated Note in each case in accordance with the terms thereof. 

“Subsidiary” means: (a) any Person of which at least a majority of the
outstanding Equity Interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors, manager or other governing body
of such Person (irrespective of whether or not at the time Equity Interests of
any other class or classes of such Person shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or Controlled by the Borrower or one or more of its
Subsidiaries or by the

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Borrower and one or more of its Subsidiaries and (b) any partnership of which
the Borrower or any of its Subsidiaries is a general partner.  Unless otherwise
indicated herein, each reference to the term “Subsidiary” shall mean a
Subsidiary of the Borrower.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement, whether exchange
traded, “over-the-counter” or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions, and in any event, any other agreement, contract or
transaction that constitutes a “swap” within the meaning of Section 1a(47) of
the Commodity Exchange Act; provided that no phantom stock or similar plan
providing for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or any of its
Subsidiaries shall be a Swap Agreement; provided, that options, warrants, rights
and other similar interests in respect of Equity Interests in the Borrower shall
not constitute Swap Agreements for purposes of Section 9.17.

“Swap Counterparty” means, as applicable, any Person that (a) was a party to a
particular Swap Transaction with the Borrower or any of its Subsidiaries at the
time it became a Lender under the Credit Agreement, or (b) was a Lender or an
Existing Lender (or Affiliate of a Lender or an Existing Lender) at the time it
became a party to a particular Swap Transaction with the Borrower or any of its
Subsidiaries.

“Swap Obligation” of any Person means all obligations (including, without
limitation, any amounts which accrue after the commencement of any proceeding
under any Debtor Relief Law with respect to such Person, whether or not allowed
or allowable as a claim under any proceeding under any Debtor Relief Law) of
such Person in respect of any Swap Transaction.

“Swap Transaction” means any trade or other transaction entered into by a Person
under a Swap Agreement.

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

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

“Termination Date” means the earlier of the Maturity Date and the date of
termination of the Loan Commitments pursuant to Sections 2.06 or 10.02.

“Total Net Debt” means Debt less Available Cash.

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

“Type” means, relative to any Loan, the portion thereof, if any, being
maintained as an ABR Loan or a Eurodollar Loan.

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

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

“Unsecured Notes” means any senior unsecured notes, subordinated unsecured notes
or senior subordinated unsecured notes, in each case, issued by the Borrower or
a Guarantor in one or more transactions.  For the avoidance of doubt, the
Subordinated Notes shall not constitute Unsecured Notes for purposes of this
Agreement.

“Unsecured Notes Documents” means, as applicable, both individually and
collectively, any Unsecured Notes and any related Unsecured Notes Indenture.

“Unsecured Notes Indenture” means, collectively, any indenture by and among the
Borrower or a Guarantor, as issuer, the guarantors, if any, party thereto and a
trustee, and any and all related documentation entered into in connection
therewith, pursuant to which Unsecured Notes shall have been issued, as the same
may be amended, restated, modified or supplemented from time to time.

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

“Working Interest” means the property interest which entitles the owner thereof
to explore and develop certain land for oil and gas production purposes, whether
under an oil and gas lease or unit, a compulsory pooling order or otherwise.

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Section 1.03 Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth in the
Loan Documents herein), (b) any reference herein to any law shall be construed
as referring to such law as amended, modified, codified or reenacted, in whole
or in part, and in effect from time to time, (c) any reference herein to any
Person shall be construed to include such Person’s successors and assigns
(subject to the restrictions contained in the Loan Documents herein), (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) with respect to the determination of any time period, the
word “from” means “from and including” and the word “to” means “to and
including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Annexes, Exhibits and Schedules to, this Agreement.  No provision of this
Agreement or any other Loan Document shall be interpreted or construed against
any Person solely because such Person or its legal representative drafted such
provision.

Section 1.04 Accounting Terms and Determinations; GAAP.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the Financial Statements except for changes in which the Borrower’s independent
certified public accountants concur and which are disclosed to Administrative
Agent on the next date on which financial statements are required to be
delivered to the Lenders pursuant to Section 8.01(a); provided that, unless the
Borrower and the Required Lenders shall otherwise agree in writing, no such
change shall modify or affect the manner in which compliance with the covenants
contained herein is computed such that all such computations shall be conducted
utilizing financial information presented consistently with prior periods.

ARTICLE II.

THE CREDITS

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

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Section 2.02  Loans and Borrowings.

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

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

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

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

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Section 2.03 Requests for Borrowings.  To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone, email or
facsimile request or by delivery of a written Borrowing Request not later than
(a) Noon, New York time, three (3) Business Days before the date of the proposed
Borrowing, in the case of Eurodollar Borrowings, or (b) 11:00 a.m. New York time
on the same Business Day, in the case of ABR Borrowings.  Each such telephonic,
email or facsimile request not evidenced by delivery of a written Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in the form
attached hereto as Exhibit E.  Each such telephonic, email, facsimile or written
Borrowing Request shall specify the following information in compliance with
Section 2.02:

the aggregate amount of the requested Borrowing;

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

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

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

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

In the case of Eurodollar Borrowings, if no Interest Period is specified with
respect to any requested Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.  Each Borrowing Request
shall constitute a representation that the amount of the requested Borrowing
shall not cause the Revolving Credit Exposures to exceed the lesser of the
Aggregate Maximum Credit Amount and the then effective Borrowing Base.

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

Section 2.04  Interest Elections. 

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

(b) Interest Election Requests.  To make an election pursuant to this
Section 2.04, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a

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Borrowing Request would be required under Section 2.03.  Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in the form attached hereto as Exhibit F and signed by the
Borrower.

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

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

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

the Interest Period to be applicable to such Borrowing after giving effect to
such election, which shall be a period contemplated by the definition of the
term “Interest Period”.

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

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

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

Section 2.05  Funding of Borrowing.

(a) Funding by Lenders.  Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 2:00 p.m., New York time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders.  The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
designated by the Borrower (or, in the case of the initial Borrowing on the
Closing Date, to an account of the Palmetto Seller designated by the Borrower)
in the applicable Borrowing Request; provided that Loans made to finance the
reimbursement of a Letter of Credit

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Disbursement as provided in Section 2.08(e) shall be remitted by the
Administrative Agent to the Issuer that made such Letter of Credit
Disbursement.  Nothing herein shall be deemed to obligate any Lender to obtain
the funds for its Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
its Loan in any particular place or manner.

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

Section 2.06  Termination and Reduction of Aggregate Maximum Credit Amount.

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

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

The Borrower may at any time terminate, or from time to time reduce, the
Aggregate Maximum Credit Amount; provided that (A) each reduction of the
Aggregate Maximum Credit Amount shall be in an amount that is an integral
multiple of $500,000 and not less than $1,000,000 and (B) the Borrower shall not
terminate or reduce the Aggregate Maximum Credit Amount if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 3.03(c),
the Revolving Credit Exposures would exceed the Total Commitments.

The Borrower shall notify the Administrative Agent of any election to terminate
or reduce the Aggregate Maximum Credit Amount under Section 2.06(b)(i) at least
three (3) Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant
to this Section 2.06(b)(ii) shall be irrevocable.  Any termination or reduction
of the Aggregate Maximum Credit Amount shall be permanent and may not be
reinstated.  Each reduction

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of the Aggregate Maximum Credit Amount shall be made ratably among the Lenders
in accordance with each Lender’s Applicable Percentage.

Section 2.07  Borrowing Base.

(a) For the period from and including the Closing Date to but excluding the date
of the first determination of the Borrowing Base pursuant to the further
provisions of this Section 2.07, the initial amount of the Borrowing Base has
been set by the Administrative Agent and acknowledged by the Borrower and agreed
to by the Lenders to be $110,000,000.  For each and every determination or
redetermination of the Borrowing Base under this Agreement, the Borrowing Base
shall be determined or redetermined based on the oil and gas reserves
attributable to the Oil and Gas Properties of the Borrower and its Subsidiaries.

(b) Promptly after December 31 of each calendar year, commencing
December 31, 2015, and in any event prior to April 1st of each calendar year
(commencing April 1, 2016), the Borrower shall furnish to the Administrative
Agent a Reserve Report in form and substance reasonably satisfactory to the
Administrative Agent, prepared by an Approved Engineer, which Reserve Report
shall be dated as of December 31 of the immediately preceding calendar year.  In
addition, within ninety (90) days after each June 30, commencing June 30, 2015,
the Borrower shall furnish to the Administrative Agent a Reserve Report in form
and substance satisfactory to the Administrative Agent prepared by the
Borrower’s petroleum engineers, which report shall be dated as of June 30 of
such calendar year.  Each such Reserve Report shall be accompanied by additional
data concerning pricing, hedging, quantities and purchasers of production, and
other information and engineering and geological data as the Administrative
Agent or the Required Lenders may reasonably request.  Within fifteen (15) days
after receipt of such Reserve Report and all such information, the
Administrative Agent shall make an initial determination of the new Borrowing
Base (the “Proposed Borrowing Base”) and upon such initial determination shall
promptly notify the Lenders in writing of its initial determination of the
Proposed Borrowing Base.  Such initial determinations made by the Administrative
Agent shall be so made by the Administrative Agent in the exercise of its sole
discretion in accordance with the Administrative Agent’s customary practices and
standards for oil and gas lending as they exist at the particular time, and may
include a consideration of the value of the Oil and Gas Properties that are
subject to legal, valid and enforceable mortgage liens held by the
Administrative Agent for the ratable benefit of the Lenders.  In no event shall
the Proposed Borrowing Base exceed the Aggregate Maximum Credit Amount of the
Lenders.  The Required Lenders shall approve or reject the Administrative
Agent’s initial determinations of the Proposed Borrowing Base by written notice
to the Administrative Agent within fifteen (15) days of the Administrative
Agent’s notification of its initial determinations; provided, however, that with
respect to any Proposed Borrowing Base that is equal to or less than the
Borrowing Base then in effect (but not with respect to any increase in the
Borrowing Base) the failure by any Lender to confirm or disapprove in writing
the Administrative Agent’s determination of the Proposed Borrowing Base shall be
deemed an approval of the Proposed Borrowing Base.  If the Required Lenders fail
to approve any such determination of the Proposed Borrowing Base made by the
Administrative Agent hereunder in such fifteen (15) day period, then the
Administrative Agent shall poll the Lenders to ascertain the highest Proposed
Borrowing Base then acceptable to the Required Lenders for purposes of this
Section 2.07(b) and, subject to the last sentence of this Section 2.07(b), such
amounts shall become the new Borrowing Base, effective on the date

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specified in this Section 2.07.  Until such approval or deemed approval, the
Borrowing Base in effect before the Proposed Borrowing Base shall remain in
effect.  Upon agreement by the Administrative Agent and the Required Lenders of
the new Borrowing Base, the Administrative Agent shall, by written notice to the
Borrower and the Lenders, designate the new Borrowing Base available to the
Borrower.  Such designation shall be effective as of the Business Day specified
in such written notice (or, if no effective date is specified in such written
notice, the next Business Day following delivery of such written notice), and
such new Borrowing Base shall remain in effect until the next determination or
redetermination of the Borrowing Base in accordance with this
Agreement.  Anything herein contained to the contrary notwithstanding, any
determination or redetermination of the Borrowing Base resulting in any increase
of the Borrowing Base in effect immediately prior to such determination or
redetermination shall require the approval of all the Lenders in their sole
discretion in accordance with their respective customary practices and standards
for oil and gas lending as they exist at the particular time, and may include a
consideration of the value of the Oil and Gas Properties that are subject to
legal, valid and enforceable mortgage liens held by the Administrative Agent for
the ratable benefit of the Lenders.

(c) In addition to each scheduled redetermination of the Borrowing Base pursuant
to Section 2.07(b) (and in addition to any redetermination of the Borrowing Base
pursuant to Section 2.07(f) and (g)), the Borrower may by notifying the
Administrative Agent thereof, and the Administrative Agent may, at the direction
of the Required Lenders, by notifying the Borrower thereof, each elect to cause
the Borrowing Base to be redetermined once between each scheduled
Redetermination pursuant to Section 2.07(b).  If such discretionary
redetermination of the Borrowing Base pursuant to the provisions of this
Section 2.07(c) is initiated by the Borrower, the Borrower shall deliver a
written request to the Administrative Agent together with a Reserve Report in
form and substance satisfactory to the Administrative Agent, prepared by the
Borrower’s petroleum engineers, containing information similar to the Reserve
Reports delivered pursuant to Section 2.07(b), and such other updated
engineering, production, operating and other data as the Administrative Agent,
the Issuer or any Lender may reasonably request; provided that if the Required
Lenders have requested the discretionary redetermination of the Borrowing Base
pursuant to the provisions of this Section 2.07(c), the Borrower shall deliver
to the Administrative Agent such Reserve Report and other information within
thirty (30) days of receipt of a request therefor.  The Administrative Agent
shall have fifteen (15) days following receipt of such requested information to
make an initial redetermination of the Borrowing Base, and the Administrative
Agent and the Required Lenders shall approve and designate the new Borrowing
Base in accordance with the procedures and standards described in
Section 2.07(b).

(d) With the delivery of each Reserve Report, the Borrower shall provide to the
Administrative Agent a certificate from a Responsible Officer certifying that,
to the best of such Responsible Officer’s knowledge and in all material
respects: (i) the information contained in each such Reserve Report and any
other information delivered in connection therewith is true and correct, (ii)
the Borrower or the Guarantors owns good and defensible title to the Oil and Gas
Properties evaluated in each such Reserve Report and such Properties are free of
all Liens except for Liens permitted by Section 9.03, (iii) except as set forth
on an exhibit to the certificate, on a net basis there are no gas imbalances,
take or pay or other prepayments in excess of the volume specified in
Section 7.20 with respect to their Oil and Gas Properties evaluated in such
Reserve Report that would require the Borrower or any of its Subsidiaries to
deliver Hydrocarbons either

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generally or produced from such Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor, (iv) none of their
Oil and Gas Properties have been transferred since the date of the last
Borrowing Base determination except as set forth on an exhibit to the
certificate, which certificate shall list all of its Oil and Gas Properties sold
and in such detail as reasonably required by the Administrative Agent, (v)
attached to the certificate is a list of all marketing agreements entered into
subsequent to the later of the date hereof or the most recently delivered
Reserve Report that the Borrower could reasonably be expected to have been
obligated to list on Schedule 7.20 had such agreement been in effect on the date
hereof, (vi) attached thereto is a schedule of the Oil and Gas Properties
evaluated by such Reserve Report that are Mortgaged Properties and demonstrating
the percentage of the present value that such Mortgaged Properties represent,
and (vii) the outstanding amount of the Debt of the Borrower or any of its
Subsidiaries does not exceed the amount permitted to be incurred pursuant to
Section 9.02(f).

(e) Notwithstanding anything herein the contrary, in the event that the Borrower
does not furnish any required Reserve Report within ten (10) days of date the
required herein, the Administrative Agent and the Required Lenders may
nonetheless designate the Borrowing Base from time to time thereafter until the
Administrative Agent receives such Reserve Report, whereupon the Administrative
Agent and the Required Lenders or all Lenders, as applicable, shall designate a
new Borrowing Base in accordance with the general procedures outlined in
Section 2.07(b).

(f) In addition to any redetermination described in Section 2.07(b) or (c), if
at any time the aggregate fair market value of Oil and Gas Properties sold or
disposed of pursuant to Section 9.12(d), together with the aggregate net fair
market value to the Borrower of all Material Swap Transactions, in each case,
since the most recent redetermination of the Borrowing Base, exceeds five
percent (5%) of the value of proved developed Oil and Gas Properties included in
the most recently delivered Reserve Report, then the Administrative Agent may,
at the direction of the Required Lenders, by notifying the Borrower thereof,
reduce the Borrowing Base, effective immediately upon such sale, disposition or
consummation of Material Swap Transaction by an amount equal to the Borrowing
Base value (as determined by the Administrative Agent in its reasonable
judgment) of such Oil and Gas Properties sold or disposed of and Swap
Transactions in respect of commodities assigned, terminated (other than as a
result of the expiration thereof), unwound, sold or liquidated, and such new
Borrowing Base shall be effective and applicable to the Borrower, the
Administrative Agent, the Issuer and the Lenders until the next redetermination
or modification of the Borrowing Base pursuant to this Agreement.  Upon any such
redetermination, the Administrative Agent shall promptly deliver a New Borrowing
Base Notice to the Borrower and the Lenders.

(g) Notwithstanding the requirements of Section 12.02(b)(ii), any decrease of
the Borrowing Base resulting solely as a result of any incurrence of Debt
incurred by the Borrower or any of its Subsidiaries pursuant to Section 9.02(f)
shall become effective upon the Administrative Agent’s notice thereof to the
Borrower and the Lenders, and shall not require any approval of the Lenders or
the Required Lenders.

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Section 2.08 Letters of Credit.

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

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall deliver as
permitted by Section 12.01(a) (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuer) to the Issuer and
the Administrative Agent (not less than five (5) Business Days in advance of the
requested date of issuance, amendment, renewal or extension) a notice in the
form of Exhibit G:

requesting the issuance of a Letter of Credit or identifying the Letter of
Credit issued by such Issuer to be amended, renewed or extended;

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

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

specifying the amount of such Letter of Credit;

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

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

Each notice shall constitute a representation that after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, (i) the
Letter of Credit Exposure shall not exceed the Letter of Credit Commitment and
(ii) the Revolving Credit Exposure shall not exceed the lesser of the Aggregate
Maximum Credit Amount and the then effective Borrowing Base.

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If requested by the Issuer, the Borrower also shall submit a letter of credit
application on such Issuer’s standard form in connection with any request for a
Letter of Credit.

(c) Expiration Date.  Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one (1) year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one (1) year after such renewal or extension) and (ii) the
date that is five Business Days prior to the Maturity Date.

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

(e) Reimbursement.  If the Issuer shall make any Letter of Credit Disbursement
in respect of a Letter of Credit issued by such Issuer, the Borrower shall
reimburse such Letter of Credit Disbursement by paying to the Administrative
Agent for the account of the applicable Issuer at the Alternate Base Rate plus
the Applicable Margin, an amount equal to such Letter of Credit Disbursement not
later than 12:00 p.m., New York time, on the day such Letter of Credit
Disbursement is made, if the Borrower shall have received notice of such Letter
of Credit Disbursement prior to 10:00 a.m., New York time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 2:00 p.m., New York time, on the next succeeding
Business Day; provided that if such Letter of Credit Disbursement is not less
than $1,000,000, the Borrower shall, subject to the conditions to Borrowing set
forth herein, be deemed to have requested, and the Borrower does hereby request
under such circumstances, that such payment be financed with an ABR Loan in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Loan.  If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable Letter of Credit Disbursement,
the payment then due from the Borrower in respect thereof and such Lender’s
Applicable Percentage thereof.  Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in
Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuer that issued such Letter

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of Credit the amounts so received by it from the Lenders.  Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
this Section 2.08(e), the Administrative Agent shall distribute such payment to
the Issuer that issued such Letter of Credit or, to the extent that Lenders have
made payments pursuant to this Section 2.08(e) to reimburse such Issuer, then to
such Lenders and such Issuer as their interests may appear.  Any payment made by
a Lender pursuant to this Section 2.08(e) to reimburse the Issuer for any Letter
of Credit Disbursement (other than the funding of ABR Loans as contemplated
above) shall not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such Letter of Credit Disbursement.  Any Letter of
Credit Disbursement not reimbursed by the Borrower or funded as a Loan prior to
2:00 p.m., New York time, shall bear interest for such day at the ABR plus the
Applicable Margin.

(f) Obligations Absolute.  The obligation (a “Reimbursement Obligation”) of the
Borrower to reimburse Letter of Credit Disbursements as provided in
Section 2.08(e) shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit, any Letter of Credit Agreement or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuer under a Letter of Credit issued by such
Issuer against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or any Letter of Credit Agreement, or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.08(f),
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder.  Neither the Administrative
Agent, the Lenders nor the Issuer, nor any of their Related Parties shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuer; provided that
the foregoing shall not be construed to excuse the Issuer from liability to the
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by Governmental Requirements) suffered by the Borrower that are
caused by such Issuer’s failure to exercise commercially reasonable care when
issuing Letters of Credit and determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof or suffered by
the Borrower as a result of Issuer’s gross negligence or willful
misconduct.  The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of  the Issuer (as finally
determined by a court of competent jurisdiction), such Issuer shall be deemed to
have exercised all requisite care in each such determination.  In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuer that
issued such Letter of Credit may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless

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of any notice or information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such Letter of Credit.

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

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

(i) Replacement of an Issuer.   The Issuer may be replaced or resign at any time
by written agreement among the Borrower, the Administrative Agent, such
resigning or replaced Issuer and, in the case of a replacement, the successor
Issuer.  The Administrative Agent shall notify the Lenders of any such
resignation or replacement of an Issuer.  At the time any such resignation or
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the resigning or replaced Issuer pursuant to
Section 3.04(b).  In the case of the replacement of an Issuer, from and after
the effective date of such replacement, (i) the successor Issuer shall have all
the rights and obligations of the replaced Issuer under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii) references herein
to the “Issuer” shall be deemed to refer to such successor or to any previous
Issuer, or to such successor and all previous Issuers, as the context shall
require.  After the resignation or replacement of an Issuer hereunder, the
resigning or replaced Issuer shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuer under this Agreement with
respect to Letters of Credit issued by it prior to such resignation or
replacement, but shall not be required to issue additional Letters of Credit.

(j) Cash Collateralization.  If (i) any Event of Default shall occur and be
continuing and the Borrower receives notice from the Administrative Agent or the
Required Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(j), (ii) the Borrower is required to Cash Collateralize a
Defaulting Lender’s or Impacted Lender’s Letter of Credit Exposure pursuant to
Section 2.10(d) or (e) or (iii) the Borrower is required to pay to the
Administrative Agent the excess attributable to a Letter of Credit Exposure in
connection with any prepayment pursuant to Section 3.03(c), then the Borrower
shall deposit, in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders (such account, the “Cash
Collateral Account”), an amount in cash equal to, in the case of an Event of
Default or a Cash Collateralization pursuant to Section 2.10(d), the Letter of
Credit

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Exposure, and in the case of a payment required by Section 3.03(c), the amount
of such excess as provided in Section 3.03(c), as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower or any of
its Subsidiaries described in Section 10.01(h) or Section 10.01(i).  The
Borrower hereby grants to the Administrative Agent, for the benefit of each
Issuer and the Lenders, an exclusive first priority and continuing perfected
security interest in and Lien on such account and all cash, checks, drafts,
certificates and instruments, if any, from time to time deposited or held in
such account, all deposits or wire transfers made thereto, any and all
investments purchased with funds deposited in such account, all interest,
dividends, cash, instruments, financial assets and other Property from time to
time received, receivable or otherwise payable in respect of, or in exchange
for, any or all of the foregoing, and all proceeds, products, accessions, rents,
profits, income and benefits therefrom, and any substitutions and replacements
therefor.  The Borrower’s obligation to deposit amounts pursuant to this
Section 2.08(j) shall be absolute and unconditional, without regard to whether
any beneficiary of any such Letter of Credit has attempted to draw down all or a
portion of such amount under the terms of a Letter of Credit, and, to the
fullest extent permitted by Governmental Requirements, shall not be subject to
any defense or be affected by a right of set-off, counterclaim or recoupment
which the Borrower or any of its Subsidiaries may now or hereafter have against
any such beneficiary, the Issuer, the Administrative Agent, the Lenders or any
other Person for any reason whatsoever.  Such deposit shall be held as
collateral securing the payment and performance of the Borrower’s and any
Guarantor’s obligations under this Agreement and the other Loan Documents.  The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account.  Interest or profits, if any,
on such investments shall accumulate in such account.  Moneys in such account
shall be applied by the Administrative Agent to reimburse, on a pro rata basis,
each Issuer for Letter of Credit Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the Letter of Credit
Exposure at such time or, if the maturity of the Loans has been accelerated, be
applied to satisfy other obligations of the Borrower and the Guarantors, if any,
under this Agreement or the other Loan Documents.  If the Borrower is required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, and the Borrower is not otherwise required to pay to the
Administrative Agent the excess attributable to a Letter of Credit Exposure in
connection with any prepayment pursuant to Section 3.03(c), then such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.

Section  2.09   Intentionally Omitted.

Section 2.10 Defaulting Lenders or Impacted Lenders.  Notwithstanding any
provision of this Agreement to the contrary, if any Lender becomes a Defaulting
Lender or Impacted Lender, as the case may be, then the following provisions
shall apply for so long as such Lender is a Defaulting Lender or Impacted
Lender, as the case may be:

(a) Any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of such Defaulting Lender (whether
voluntary or

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mandatory, at maturity, pursuant to Article X or otherwise) or received by the
Administrative Agent from a Defaulting Lender pursuant to Section 12.08 shall be
applied at such time or times as may be determined by the Administrative Agent
as follows: first, to the payment of any amounts owing by such Defaulting Lender
to the Administrative Agent hereunder; second, to the payment on a pro rata
basis of any amounts owing by such Defaulting Lender to the Issuer hereunder;
third, to Cash Collateralize the Issuer’s fronting exposure with respect to such
Defaulting Lender in accordance with Section 2.08(j);  fourth, as the Borrower
may request (so long as no Default or Event of Default exists), to the funding
of any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the Issuer’s
future fronting exposure with respect to such Defaulting Lender with respect to
future Letters of Credit issued under this Agreement, in accordance with
Section 2.08(j);  sixth, to the payment of any amounts owing to the Lenders or
the Issuer as a result of any judgment of a court of competent jurisdiction
obtained by any Lender or the Issuer against such Defaulting Lender as a result
of such Defaulting Lender’s breach of its obligations under this Agreement;
seventh, so long as no Default or Event of Default exists, to the payment of any
amounts owing to the Borrower as a result of any judgment of a court of
competent jurisdiction obtained by the Borrower against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (x) such payment is a payment
of the principal amount of any Loans or Letter of Credit Disbursements in
respect of which such Defaulting Lender has not fully funded its appropriate
share, and (y) such Loans were made or the related Letters of Credit were issued
at a time when the conditions set forth in Section 6.02 were satisfied or
waived, such payment shall be applied solely to pay the Loans of, and Letter of
Credit Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis
prior to being applied to the payment of any Loans of, or Letter of Credit
Disbursements owed to, such Defaulting Lender until such time as all Loans and
funded and unfunded participations in Letter of Credit Agreements are held by
the Lenders pro rata in accordance with the Commitments under the applicable
Facility without giving effect to Section 2.10(d).  Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are applied (or held)
to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant
to this Section 2.10(a) shall be deemed paid to and redirected by such
Defaulting Lender, and each Lender irrevocably consents hereto.

(b) fees shall cease to accrue on the unused amount of such Defaulting Lender’s
Applicable Percentage of the Borrowing Base pursuant to Section 3.04(a) and no
fees shall be payable to such Defaulting Lender upon an increase in the
Borrowing Base if such Lender is a Defaulting Lender pursuant to clause (a), (b)
or (d) of the definition thereof;

(c) the Applicable Percentage of the Aggregate Maximum Credit Amount or Loans or
participation interests in Letters of Credit of such Defaulting Lender shall not
be included in determining whether the Majority Lenders or the Required Lenders
have taken or may take any action hereunder (including any consent to any
amendment or waiver pursuant to Section 12.02);

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(d) if any Letter of Credit Exposure exists at the time a Lender becomes a
Defaulting Lender or Impacted Lender then:

all or any part of such Defaulting Lender’s or Impacted Lender’s Letter of
Credit Exposure shall be reallocated among the Non-Defaulting Lenders in
accordance with their respective Applicable Percentages but only to the extent
that as a result thereof (x) the sum of all Non-Defaulting Lenders’ Revolving
Credit Exposure plus such Defaulting Lender’s or Impacted Lender’s Letter of
Credit Exposure would not exceed the Non-Defaulting Lenders’ Applicable
Percentage of the lesser of (A) the existing Aggregate Maximum Credit Amount or
(B) the Borrowing Base then in effect, (y) the sum of each Non-Defaulting
Lender’s Revolving Credit Exposure plus such Non-Defaulting Lender’s share under
this clause (i) of such Defaulting Lender’s or Impacted Lender’s Letter of
Credit Exposure would not exceed such Non-Defaulting Lender’s Applicable
Percentage of the lesser of (A) the existing Aggregate Maximum Credit Amount or
(B) the Borrowing Base then in effect and (z) the conditions set forth in
Section 6.02 are satisfied at such time;  provided however, no reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a
Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of
such Non-Defaulting Lender’s increased exposure following such reallocation;  

if the reallocation described in clause (i) above cannot, or can only partially,
be effected, the Borrower shall within three (3) Business Days following notice
by the Administrative Agent Cash Collateralize such Defaulting Lender’s or such
Impacted Lender’s Letter of Credit Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) in accordance with the procedures set
forth in Section 2.08(j) for so long as such Letter of Credit Exposure is
outstanding;

if the Borrower Cash Collateralizes any portion of such Defaulting Lender’s or
Impacted Lender’s Letter of Credit Exposure pursuant to this Section 2.10(d),
the Borrower shall not be required to pay any fees to such Defaulting Lender or
Impacted Lender pursuant to Section 3.04(b) with respect to such Defaulting
Lender’s or Impacted Lender’s Letter of Credit Exposure during the period such
Defaulting Lender’s or Impacted Lender’s Letter of Credit Exposure is Cash
Collateralized; and

if the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated
pursuant to this Section 2.10(d), then the fees payable to the Non-Defaulting
Lenders pursuant to Section 3.04 (b) shall be adjusted to give effect to such
reallocations in accordance with such Non-Defaulting Lenders’ Applicable
Percentages;

(e) so long as any Lender is a Defaulting Lender or an Impacted Lender, the
Issuer shall not be required to issue, extend, renew, amend or increase any
Letter of Credit, unless it is satisfied that the related exposure will be 100%
covered by the Loan Commitments of the Non-Defaulting Lenders and/or Cash
Collateralized in accordance with this Section 2.10(e) (and, if applicable,
Section 2.08(j)), and participating interests in any such newly issued or
increased Letter of Credit shall be allocated among Non-Defaulting Lenders in a
manner consistent with

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Section 2.10(d)(i) (and Defaulting Lenders or Impacted Lenders shall not
participate therein); and

(f) any amount payable to such Defaulting Lender hereunder (whether on account
of principal, interest, fees or otherwise and including any amount that would
otherwise be payable to such Defaulting Lender pursuant to Section 4.01(c) but
excluding Section 5.06) shall, in lieu of being distributed to such Defaulting
Lender, subject to any Governmental Requirements, (i) first, be applied to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder, (ii) second, to the payment of any amounts then owing by such
Defaulting Lender to the Issuer hereunder, and (iii) third, any remaining funds
to be held in a segregated account as cash collateral for, and application to
any future funding obligations of such Defaulting Lender hereunder or as
otherwise directed by a court of competent jurisdiction.

(g) In the event that the Administrative Agent, the Borrower, and the Issuer
agree in writing, that a Defaulting Lender or Impacted Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender or
Impacted Lender, then the Revolving Credit Exposure of the Lenders shall be
readjusted and reallocated to reflect the inclusion of such Lender’s Loan
Commitment and on such date such Lender shall purchase at par such of the Loans
and participations in Letters of Credit of the other Lenders as the
Administrative Agent shall determine may be necessary in order for such Lender
to hold such Loans and participations in Letters of Credit in accordance with
its Applicable Percentage after giving effect to such reallocation; provided
however; that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while that Lender was a
Defaulting Lender or Impacted Lender; and provided,  further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender or Impacted Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender or Impacted Lender.  In the event that the
Administrative Agent, the Borrower, and the Issuer agrees that an Impacted
Lender has adequately remedied all matters that caused such Lender to be an
Impacted Lender, then the Letter of Credit Exposure of the Lenders shall be
readjusted and reallocated on such date such that the Impacted Lender shall
purchase at par participations in Letters of Credit from the other Lenders as
the Administrative Agent shall determine may be necessary in order for such
Lender to hold such participations in Letters of Credit in accordance with its
Applicable Percentage after giving effect to such reallocation.

ARTICLE III.

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

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

Section 3.02 Interest.

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ABR Loans.  Each ABR Loan comprising an ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Margin, but in no event to exceed the
Highest Lawful Rate.

Eurodollar Loans.  Each Eurodollar Loan comprising a Eurodollar Borrowing shall
bear interest at the LIBO Rate for the Interest Period in effect for such
Eurodollar Loan plus the Applicable Margin, but in no event to exceed the
Highest Lawful Rate.

Post-Default and Borrowing Base Deficiency Rate.  Notwithstanding the foregoing,
(i) if an Event of Default has occurred and is continuing, or if any principal
of or interest on any Loan or any fee or other amount payable by the Borrower or
any Guarantor hereunder or under any other Loan Document is not paid when due
(after giving effect to any applicable grace period) whether at stated maturity,
upon acceleration or otherwise, and including any payments in respect of a
Borrowing Base Deficiency under Section 3.03(c), then all Loans outstanding, in
the case of an Event of Default, and such overdue amount, in the case of a
failure to pay amounts when due, shall bear interest, after as well as before
judgment, at the Alternate Base Rate plus two percent (2%), but in no event to
exceed the Highest Lawful Rate, and (ii) following Administrative Agent’s notice
of any Borrowing Base Deficiency pursuant to Section 3.03(c), the amount of such
Borrowing Base Deficiency shall bear interest, after as well as before judgment,
at the rate then applicable to such Loans, plus the Applicable Margin, if any,
plus an additional two percent (2%), but in no event to exceed the Highest
Lawful Rate.

Interest Payment Dates.  Accrued interest on each Loan shall be payable in
arrears on: (i) with respect to any ABR Loan, the last day of each March, June,
September and December; (ii) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part,
and (iii) in any case, on the Termination Date; provided that (w) interest
accrued pursuant to Section 3.02(c)(i) shall be payable on demand, (x) in the
event of any repayment or prepayment of any Loan (other than an optional
prepayment of an ABR Loan prior to the Termination Date), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (y) in the event of any conversion of any Eurodollar
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion, and
(z) as to any Eurodollar Loan having an Interest Period longer than three (3)
months, each day that is three months, or a multiple thereof, after the first
day of such Interest Period.

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

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Inability to Determine Interest Rate.  If prior to the first date of any
Interest Period:

the Administrative Agent determines (which determination shall be conclusive and
binding upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
LIBO Rate for such Interest Period, or

the Administrative Agent shall have received notice from the Majority Lenders
that the LIBO Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall
be converted, on the last day of the then-current Interest Period, to ABR
Loans.  Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans under the relevant Facility to
Eurodollar Loans.

Section 3.03  Prepayments.

Optional Prepayments.  The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.03(b).

Notice and Terms of Optional Prepayment.  The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 1:00 pm, New York time, three Business Days before the date of prepayment,
or (ii) in the case of prepayment of an ABR Borrowing, not later than 1:00 pm,
New York time, one Business Day before the date of prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid.  Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof.  Each partial prepayment of
any Borrowing shall be in an amount that would be permitted in the case of an
Advance of a Borrowing of the same Type as provided in Section 2.02.  Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the
extent required by Section 3.02.

Mandatory Prepayments.

Borrowing Base Deficiency.  If a Borrowing Base Deficiency exists other than as
a result of a redetermination of the Borrowing Base in accordance

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with the provisions of Section 2.07(f) or Section 9.02(f), then the
Administrative Agent shall give the Borrower and the Lenders prompt written
notice thereof.  The Borrower shall, within ten (10) days after receipt of
written notice of such condition from the Administrative Agent elect by written
notice to the Administrative Agent to take one or more of the following actions
to remedy the Borrowing Base Deficiency:

(1)prepay Advances or, if the Advances have been repaid in full, Cash
Collateralize the Letter of Credit Exposure in an aggregate amount equal to such
deficiency within ten (10) days after the Borrower’s written election;

(2)add additional Oil and Gas Properties acceptable to the Administrative Agent,
in its sole discretion, to the Borrowing Base having a value, based on the same
valuation methodology approved by the Required Lenders in determining the
Borrowing Base that was used to value the then existing Oil and Gas Properties,
such that the Borrowing Base Deficiency is cured within thirty (30) days after
the Borrower’s written election; or

(3)commencing with the thirtieth (30th) day following the date of which the
Administrative Agent gave the Borrower notice of such Borrowing Base Deficiency
and every thirty days after such thirtieth (30th) thereafter (or any such day is
not a Business Day, on the next Business Day after such day), pay the Borrowing
Base Deficiency in six (6) equal monthly installments for the prepayment of the
Advances or, if the Advances have been repaid in full, make deposits into the
Cash Collateral Account to provide cash collateral for the Letter of Credit
Exposure such that the Borrowing Base Deficiency is eliminated in a period of
six (6) months.

Other Borrowing Base Deficiency.  If a Borrowing Base Deficiency results from a
redetermination of the Borrowing Base in accordance with the provisions of
Section 2.07(f) or Section 9.02(f), then the Administrative Agent shall give the
Borrower and the Lenders prompt written notice thereof.  The Borrower shall,
promptly following the receipt of the proceeds of the Material Swap Transaction,
the sale or disposition of Oil and Gas Properties, or the issuance of Unsecured
Notes, as applicable, but in any event, within one (1) Business Day thereof, pay
to the Administrative Agent from such proceeds an amount sufficient to eliminate
such Borrowing Base Deficiency.

Reduction of Loan Commitments.  On the date of each reduction of the Aggregate
Maximum Credit Amount pursuant to Section 2.06, the Borrower agrees to make a
prepayment in respect of the outstanding amount of the Advances to the extent,
if any, that the Revolving Credit Exposure exceeds the lesser of (A) the
Aggregate Maximum Credit Amount, as so reduced, and (B) the Borrowing Base.

Accrued Interest.  Each prepayment under this Section 3.03(c) shall be
accompanied by accrued interest on the amount prepaid to the date of such

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prepayment and amounts, if any, required to be paid pursuant to Section 5.02 as
a result of such prepayment.

No Premium or Penalty.  Prepayments permitted or required under this
Section 3.03 shall be without premium or penalty, except as required under
Section 5.02.

Section 3.04  Fees.

Commitment Fees.  Except as provided in Section 2.10(b), the Borrower agrees to
pay to the Administrative Agent for the account of each Lender a commitment fee
(the “Commitment Fee”), which shall accrue at the rate per annum determined
based on the Commitment Fee Rate on the daily unused amount of the aggregate of
each Lender’s Applicable Percentage of the Borrowing Base during the period from
and including the date of this Agreement to but excluding the Termination Date
(the face amount of any issued and outstanding Letter of Credit shall count as
usage for purposes hereof).  Accrued Commitment Fees shall be payable in arrears
on the last day of March, June, September and December of each year and on the
Termination Date, commencing on the first such date to occur after the date
hereof.  All Commitment Fees shall be computed on the basis of a year of 360
days, unless such computation would exceed the Highest Lawful Rate, in which
case such Commitment Fees shall be computed on the basis of a year of 365 days
(or 366 days in a leap year), and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

Letter of Credit Fees.  Except as provided in Section 2.10(d), the Borrower
agrees to pay (i) to the Administrative Agent for the account of each Lender a
participation fee with respect to its participations in Letters of Credit, which
shall accrue at the same Applicable Margin used to determine the interest rate
applicable to Eurodollar Loans on the average daily amount of such Lender’s
Letter of Credit Exposure (excluding any portion thereof attributable to
unreimbursed Letter of Credit Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date on
which such Lender’s Commitment terminates and the date on which such Lender
ceases to have any Letter of Credit Exposure; (ii) to the Issuer, for its own
account, a fronting fee equal to the greater of $500 or 0.125% of the face
amount of each outstanding Letter of Credit; and (iii) to the Issuer, for its
own account, its standard fees with respect to the amendment, renewal or
extension of any Letter of Credit issued by such Issuer or processing of
drawings thereunder.  Participation fees accrued through and including the last
day of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date to
occur after the date of this Agreement.  Any other fees payable to the Issuer
pursuant to this Section 3.04(b) shall be payable within 10 days after
demand.  All participation fees and fronting fees shall be computed on the basis
of a year of 360 days, unless such computation would exceed the Highest Lawful
Rate, in which case such fees shall be computed on the basis of a year of 365
days (or 366 days in a leap year), and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

Administrative Agent Fees.  The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
specified in the Fee Letter.

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ARTICLE IV.

PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS

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

Payments by the Borrower.  The Borrower shall make each payment required to be
made by it hereunder (whether of principal, interest, fees or reimbursement of
Letter of Credit Disbursements, or of amounts payable under Section 5.01,
 Section 5.02,  Section 5.03 or otherwise) prior to 2:00 p.m., New York time, on
the date when due (after giving effect to applicable grace periods), in
immediately available funds, without defense, deduction, recoupment, set-off or
counterclaim.  Fees, once paid, shall be fully earned and shall not be
refundable under any circumstances.  Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the Administrative Agent
at its offices specified in Section 12.01, except payments to be made directly
to an Issuer as expressly provided herein and except that payments pursuant to
Section 5.01,  Section 5.02,  Section 5.03 and Section 12.03 shall be made
directly to the Persons entitled thereto.  The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof, and any such
payments payable to a Lender shall be made in accordance with such Lender’s
Applicable Percentage, unless otherwise provided herein.  If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension.  All payments hereunder shall be made in dollars.

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

Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in Letter of Credit
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in Letter of Credit
Disbursements and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans and participations in
Letter of Credit Disbursements of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in Letter of Credit

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Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this
Section 4.01(c) shall not be construed to apply to any payment made by the
Borrower pursuant to and in accordance with the express terms of this Agreement
or any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or participations in Letter of
Credit Disbursements to any assignee or Participant, other than to the Borrower
or any Consolidated Subsidiary thereof (as to which the provisions of this
Section 4.01(c) shall apply).  The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under Governmental Requirements,
that any Lender acquiring a participation pursuant to the foregoing arrangements
may exercise against the Borrower rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor
of the Borrower in the amount of such participation.

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

ARTICLE V.

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

Section 5.01 Increased Costs.

Eurodollar Changes in Law.  If any Change in Law shall:

impose, modify or deem applicable any reserve (including marginal, special,
emergency or supplemental reserves), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender for Eurocurrency liabilities under Regulation D of the Board (as the
same may be amended, supplemented or replaced from time to time) or otherwise,
except to the extent reflected in the Adjusted LIBO Rate by virtue of the
Statutory Reserve Rate; or

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

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

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

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

Effect of Failure or Delay in Requesting Compensation.  Failure or delay on the
part of any Lender or the Issuer to demand compensation pursuant to this
Section 5.01 shall not constitute a waiver of such Lender’s or such Issuer’s
right to demand such compensation, provided that no Lender may make any such
demand more than 180 days after the Termination Date, nor for any amount which
has accrued more than 270 days prior to such Lender or Issuer delivering the
certificate required in Section 5.01(c) unless such compensation demand results
from a Change in Law that has a retroactive effect, in which case the time
periods given above will be extended to take into account such retroactive
period.

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

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continue, for the period that would have been the Interest Period for such
Loan), over (ii) the amount of interest which would accrue on such principal
amount for such period at the interest rate which such Lender would bid were it
to bid, at the commencement of such period, for dollar deposits of a comparable
amount and period from other banks in the eurodollar market.

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

Section 5.03 Taxes.  For purposes of this Section 5.03, the term “Lender”
includes the Issuer and the term “applicable law” includes FATCA.

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

Payment of Other Taxes by the Borrower.  The Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with Governmental
Requirements or at the option of the Administrative Agent timely reimburse it
for the payment of, any Other Taxes.

Indemnification by the Borrower.  The Borrower shall indemnify the
Administrative Agent, each Lender and each Issuer, within ten (10) days after
written demand therefor, for the full amount of any Indemnified Taxes paid by
the Administrative Agent, such Lender or such Issuer, 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 imposed or asserted on or attributable to
amounts payable under this Section 5.03) and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate of the Administrative Agent, a
Lender or an Issuer as to the amount of such payment or liability under this
Section 5.03 shall be delivered to the Borrower and shall be conclusive absent
manifest error.

Indemnification by the Lenders.  Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the

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Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 12.04(c)(iii) relating to the maintenance
of a Participant Register and (iii) any Excluded Taxes attributable to such
Lender, in each case, that are payable or paid by the Administrative Agent in
connection with any Loan Document, and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to
the amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error.  Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under any Loan Document or otherwise
payable by the Administrative Agent to the Lender from any other source against
any amount due to the Administrative Agent under this Section 5.03(d).

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

Foreign Lenders.  Any Foreign Lender that is entitled to an exemption from or
reduction of any withholding Tax, with respect to payments made under this
Agreement or any other Loan Document shall deliver to the Borrower (with a copy
to the Administrative Agent), (x) on or before the date it becomes a party
hereto, (y) thereafter when reasonably requested by the Borrower or the
Administrative Agent and (z) promptly upon the expiration, obsolescence or
invalidity of any previously delivered form, (i) such properly completed and
executed documentation prescribed by Governmental Requirements or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate, including but not limited to appropriate IRS
Form W-8 (and any required attachments thereto) or W-9, as applicable (or, in
each case, any successor form).  Notwithstanding anything to the contrary in the
preceding sentence, the completion, execution and submission of such
documentation (other than such documentation set forth in clause (ii) of this
Section 5.03(f) and Section 5.03(g)) 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.

FATCA.  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 required to be deducted and withheld from such payment.

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Refund.  If any party determines, in its sole discretion exercised in good
faith, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section 5.03 (including by the payment of
additional amounts pursuant to Section 5.03(a)), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 5.03 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party incurred in connection with such refund and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund).  Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (h) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority.  Notwithstanding anything to the contrary in this paragraph (h), in
no event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (h) if the payment would place the
indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid.  This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

Survival.  Each party’s obligations under this Section 5.03 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

 

Section 5.04 Designation of Different Lending Office.  If any Lender requests
compensation under Section 5.01, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 5.03, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (a) would eliminate or reduce amounts payable pursuant
to Section 5.01 or Section 5.03, as the case may be, in the future and (b) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

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

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the Borrower and the Administrative Agent, all Affected Loans of such Lender
then outstanding shall be automatically converted into ABR Loans on the date
specified by such Lender in such notice) and, to the extent that Affected Loans
are so made as (or converted into) ABR Loans, all payments of principal which
would otherwise be applied to such Lender’s Affected Loans shall be applied
instead to its ABR Loans.

Section 5.06 Replacement of a Lender.  If any Lender (an “Affected Lender”)
(a) makes a demand upon the Borrower for amounts pursuant to Section 5.01 (and
the payment of such amounts are, and are likely to continue to be, materially
more onerous in the reasonable judgment of the Borrower than with respect to the
other Lenders), (b) in connection with any proposed increase in the Borrowing
Base pursuant to Section 2.07 refuses to consent to such increase, or (c) any
Lender has not approved (or is not deemed to have approved) any amendment to, or
waiver of, the terms of this Agreement or any other Loan Document approved by
Administrative Agent and Required Lenders, the Borrower may, within 30 days of
receipt by the Borrower of such demand or such non-consent or non-approval, as
applicable, give notice (a “Replacement Notice”) in writing to the
Administrative Agent and such Affected Lender of its intention to cause such
Affected Lender to sell all of its Loans, Loan Commitments and/or Notes to an
Eligible Assignee (a “Replacement Lender”) designated in such Replacement
Notice; provided, however, that no Replacement Notice may be given by the
Borrower and no Lender may be replaced pursuant to this Section 5.06 if (i) such
replacement conflicts with any Governmental Requirements or regulation, (ii) any
Event of Default (other than an Event of Default that has been waived by the
Required Lenders) shall have occurred and be continuing at the time of such
replacement, or (iii) prior to any such replacement, such Affected Lender shall
have taken any necessary action under Section 5.04 (if applicable) so as to
eliminate the continued need for payment of amounts owing pursuant to
Section 5.01 or shall, if applicable, have waived its right to payment of the
specific amounts that give rise or would give rise to such Replacement Notice
(it being understood for sake of clarity that the Affected Lender shall be under
no obligation to waive such rights to payment and that such Affected Lender, if
it is replaced in accordance with this Section 5.06, shall be entitled to be
reimbursed for all breakage losses in connection with such replacement).  If the
Administrative Agent shall in the exercise of its reasonable discretion and
within 30 days of its receipt of such Replacement Notice, notify the Borrower
and such Affected Lender in writing that the Replacement Lender is satisfactory
to the Administrative Agent (such consent not being required where the
Replacement Lender is already a Lender or an Affiliate of a Lender or an
Eligible Assignee), then such Affected Lender shall, subject to the payment of
any amounts due pursuant to Section 5.02, assign, in accordance with
Section 12.04, all of its Loan Commitments, Loans, Notes (if any), and other
rights and obligations under this Agreement and all other Loan Documents
(including Reimbursement Obligations, if applicable) designated in the
Replacement Notice to such Replacement Lender; provided, however, that (A) such
assignment shall be without recourse, representation or warranty (other than
that it has not previously transferred its interest) and shall be on terms and
conditions reasonably satisfactory to such Affected Lender and such Replacement
Lender, (B) the purchase price paid by such Replacement Lender shall be in the
amount of such Affected Lender’s Loans designated in the Replacement Notice,
and/or its Percentage of outstanding Reimbursement Obligations, as applicable,
together with all accrued and unpaid interest and fees in respect thereof, plus
all other amounts (including the amounts demanded and unreimbursed under
Section 5.01), and (C) the Borrower shall pay to the Affected Lender and the
Administrative Agent all reasonable out-of-pocket expenses incurred by the
Affected Lender and

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the Administrative Agent in connection with such assignment and assumption
(including the processing fees described in Section 12.04).  If the Affected
Lender fails to execute an Assignment and Assumption after five Business Days
notice from the Administrative Agent, such failure to execute shall not impair
the validity of the removal of the Affected Lender and the mandatory assignment
of such Affected Lender’s Loan Commitments, Loans, Notes (if any), and other
rights and obligations under this Agreement and all of the Loan Documents and
such assignment shall be effective without the execution of an Assignment and
Assumption by the Affected Lender.  If the Administrative Agent fails to notify
the Borrower within 30 days of its receipt of such Replacement Notice that such
Replacement Lender is satisfactory, then such Replacement Lender shall be deemed
satisfactory to the Administrative Agent.  Upon the effective date of an
assignment described above, the Replacement Lender shall become a “Lender” for
all purposes under the Loan Documents. 

ARTICLE VI.

CONDITIONS PRECEDENT

Section 6.01 Closing Date.  The obligations of the Lenders to make the initial
Loans and of the Issuer to issue Letters of Credit in connection with the
initial Borrowing hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 12.02), and the Lenders and the Issuer agree that each of the following
conditions have been satisfied or waived as of the Closing Date:

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

The Administrative Agent shall have received a certificate of the General
Partner of the Borrower and of each Guarantor setting forth (i) resolutions of
the board of directors or other managing body of the General Partner with
respect to the authorization of the Borrower or such Guarantor to execute and
deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the individuals who are
authorized to sign the Loan Documents to which the Borrower (acting through the
General Partner) or such Guarantor is a party, (iii) specimen signatures of such
authorized individuals, and (iv) the articles or certificate of incorporation or
formation and bylaws, operating agreement or partnership agreement, as
applicable, of the Borrower, its General Partner and each Guarantor, in each
case, certified as being true and complete.  The Administrative Agent and the
Lenders may conclusively rely on such certificate until the Administrative Agent
receives notice in writing from the Borrower to the contrary.

The Administrative Agent shall have received certificates of the appropriate
state agencies with respect to the existence, qualification and good standing of
the Borrower, the General Partner and each Guarantor.

[Intentionally Omitted].

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

The Administrative Agent shall have received duly executed Notes payable to the
order of each Lender that has requested a Note not later than two (2) Business
Days prior to the Closing Date, which Notes shall be in a principal amount equal
to its Maximum Credit Amount dated as of the date hereof.

The Administrative Agent shall have received from each party thereto duly
executed counterparts (in such number as may be requested by the Administrative
Agent) of the Security Instruments, including the Guarantee Agreement and the
other Security Instruments described on Exhibit C.  In connection with the
execution and delivery of the Security Instruments, (i) the Administrative Agent
shall be reasonably satisfied that the Security Instruments create first
priority, perfected Liens (subject only to Excepted Liens) on at least 80% of
the total value of the Proved Reserves evaluated in the Initial Reserve Report
and (ii) the Collateral Agent shall have received original stock or membership
interest certificates (if such interests are certificated) evidencing all of the
issued and outstanding Equity Interests in each Guarantor, together with the
appropriate undated stock powers, or other equivalent instruments of transfer
reasonably acceptable to the Administrative Agent, for each certificate duly
executed in blank by the registered owner thereof; provided that any original
stock or membership interest certificates (if any) held by the Existing Agent
may be delivered to the Administrative Agent within a reasonable time after the
Closing Date.

No event or circumstance that could cause a Material Adverse Effect shall have
occurred.

The Administrative Agent shall have received: (A) reasonably satisfactory
evidence that, upon the consummation of the Transactions, the Palmetto Buyer has
(or contemporaneously with the funding of the Loans hereunder on the Closing
Date shall have) acquired, pursuant to the Palmetto PSA, title in the aggregate
to Oil and Gas Properties included in the Palmetto Reserve Report equal to or
exceeding 95% of the present value of all of the Oil and Gas Properties included
in the Palmetto Reserve Report, free of any Liens other than Permitted Liens and
Liens in favor of the Collateral Agent; (B) a certificate of a Responsible
Officer of the General Partner (1) certifying that, upon the consummation of the
Transactions, the Palmetto Buyer has (or will have) consummated the acquisition
contemplated by the Palmetto PSA substantially in accordance with its terms and
all conditions to the obligations of the parties set forth in the Palmetto PSA
(other than the payment of the purchase price thereunder) shall have been
satisfied or waived, and no provision thereof shall have been waived, amended,
supplemented or otherwise modified to the extent such waiver, amendment,
supplement or other modification would reasonably be expected to adversely
affect the Lenders (except as otherwise agreed by the Lenders), (2) certifying
that the Oil and Gas Properties described in the Palmetto Reserve Report have
been (or are to be) acquired pursuant to the Palmetto PSA, (3) certifying as to
the final purchase price paid (or to be paid) under the Palmetto PSA after
giving effect to all adjustments as of the closing date for such acquisition,
and specifying, by category, the amount of such adjustment, (4) certifying that
attached thereto is a true and complete executed copy of the Palmetto PSA
pursuant to which such Purchaser has

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acquired (or will acquire) such Oil and Gas Properties, and (5) certifying that
attached thereto is a true and complete executed copy of the Initial
Subordinated Note, if any; and (C) duly executed releases and/or terminations of
any financing statements or mortgages specifically referencing and burdening the
Oil and Gas Properties included in the Palmetto Reserve Report.

The Administrative Agent shall have received an opinion of (i) Akin Gump Strauss
Hauer & Feld, LLP, special New York counsel to the Borrower and (ii) special
local counsel to the Borrower in each jurisdiction where the Mortgaged
Properties are located, such local counsel to be acceptable to Administrative
Agent, each, in form and substance satisfactory to the Administrative Agent, as
to such matters incident to the Transactions as the Administrative Agent may
reasonably request.

The Administrative Agent shall have received a copy of the Initial Reserve
Report.

The Administrative Agent shall have received a certificate of insurance coverage
of the Borrower and its Subsidiaries evidencing that the Borrower and its
Subsidiaries are carrying insurance in accordance with Section 7.12.

The Administrative Agent shall have received the Financial Statements.

The Administrative Agent shall have received the Assignment Agreement duly
executed and delivered by the parties thereto.

The Administrative Agent shall have received the Fee Letter duly executed and
delivered by the parties thereto.

The Administrative Agent shall have received financial projections of the
Borrower and its Subsidiaries for the three (3) fiscal year period commencing
with the 2015 Fiscal Year and continuing through the 2017 Fiscal Year prepared
by the Borrower in good-faith and based on assumptions believed by the Borrower
to be reasonable at the time made.

The Administrative Agent shall have received evidence reasonably satisfactory to
it, that the Borrower shall have maintained in effect all Swap Transactions
disclosed to the Administrative Agent in January 2015 and entered into (or
contemporaneously with the funding of the Loans hereunder on the Closing Date to
be entered into) the Swap Transactions set forth on Schedule 6.01(q) with
Approved Counterparties (the “Minimum Hedges”).

The Administrative Agent shall have received evidence reasonably satisfactory to
it that the Borrower has at least $4,000,000 of unused availability under the
Borrowing Base immediately following the effectiveness of this Agreement.

The Administrative Agent shall have received appropriate UCC search certificates
reflecting no prior Liens encumbering the Properties, the Borrower, and its
Subsidiaries for each of the following jurisdictions: Oklahoma, Kansas,
Delaware, Texas and any other jurisdiction requested by the Administrative
Agent; other than those being assigned or released on or prior to the Closing
Date or Liens permitted by Section 9.03.

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No, action, suit, investigation or other proceeding is pending or threatened
before any arbitrator or Governmental Authority seeking to restrain, enjoin or
prohibit or declare illegal, or seeking damages from the Borrower in connection
with the transactions contemplated in this Agreement or which could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect.

The Administrative Agent is satisfied, in its sole discretion, with the results
of its due diligence examination of the Borrower, the Guarantors and the
Properties owned by the Borrower or Guarantors, including the Borrower’s and the
Guarantors’ proposed development of their Properties, the location
discount/premium and transportation costs for all Hydrocarbons produced on such
Properties, existing Hydrocarbon sales and all aspects of the Borrower’s and the
Guarantors’ existing and contemplated Hydrocarbon marketing activities.

The Administrative Agent and each Lender shall have received all Act disclosures
requested by them prior to execution of this Agreement.

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

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

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

At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Material Adverse Effect shall have occurred.

The representations and warranties of the Borrower and the Guarantors, if any,
set forth in this Agreement and in the other Loan Documents shall be true and
correct on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, except
to the extent any such representations and warranties are expressly limited to
an earlier date, in which case such representations and warranties shall have
been true and correct as of such specified earlier date.

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

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

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

ARTICLE VII.

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that:

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

Section 7.02 Authority; Enforceability.  The Transactions are within the
Borrower’s and each Guarantor’s limited partnership or limited liability company
powers, as applicable, and have been duly authorized by all necessary limited
partnership or limited liability company action, as applicable, and, if
required, partner or member action.  When executed and delivered, each Loan
Document and each of the agreements by which the Borrower or any Guarantor
acquires ownership of the Mortgaged Properties to which the Borrower and any
Guarantor is a party will have been duly executed and delivered by the Borrower
and such Guarantor and will constitute a legal, valid and binding obligation of
the Borrower and such Guarantor, as applicable, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

Section 7.03 Approvals; No Conflicts.  The Transactions (a) do not require any
consent, license, or approval of, registration or filing with, or any other
action by, any Governmental Authority or any other third Person (including the
members or any class of directors of the Borrower or any other Person, whether
interested or disinterested), except such as have been obtained or made and are
in full force and effect, and except for the filing and recording of Security
Instruments to perfect the Liens created by such Security Instruments, (b) will
not violate any Governmental Requirements or regulation or the charter, by-laws,
operating agreement or other organizational documents of the Borrower or any of
the Guarantors or any order of any Governmental Authority, (c) will not violate
or result in a default under any indenture, agreement or other instrument
binding upon the Borrower or any of the Guarantors or their Properties, or give
rise to a right thereunder to require any payment to be made by the Borrower or
any of the Guarantors and (d) will not result in the creation or imposition of
any

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Lien on any Property of the Borrower or any of the Guarantors (other than the
Liens created by the Loan Documents).  The Borrower and each of the Guarantors
has obtained all consents, licenses and approvals required in connection with
the execution, delivery and performance by the Borrower and the Guarantors and
the validity against the Borrower and each of the Guarantors of the Loan
Documents to which it is a party, and such consents, licenses and approvals are
in full force and effect.

Section 7.04 Financial Statements.

The Borrower has delivered to the Administrative Agent and the Lenders the
Financial Statements, and the Financial Statements are correct and complete in
all material respects and present fairly the consolidated financial condition of
the Borrower and its Consolidated Subsidiaries as of their respective dates and
for their respective periods in accordance with GAAP, applied on a consistent
basis.

Since December 31, 2014, (i) there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect and (ii) the business of the Borrower and its Subsidiaries has
been conducted only in the ordinary course consistent with past business
practices.

Neither the Borrower nor any of its Subsidiaries has any Material Indebtedness
(including Disqualified Capital Stock), or any contingent liabilities,
off-balance sheet liabilities or partnerships, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except for the (i) Obligations hereunder, (ii) as
referred to or reflected or provided for in the Financial Statements, or (iii)
Debt otherwise permitted hereunder.

Section 7.05 Litigation.  Except as set forth on Schedule 7.05, there are no
actions, suits, investigations or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its Subsidiaries (a)
which, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect (unless fully covered by
standard insurance which is acknowledged and uncontested by the applicable
insurer and with standard deductibles) or (b) that involve any Loan Document or
the Transactions.  Since the date of this Agreement, there has been no change in
the status of the matters disclosed in Schedule 7.05 that, individually or in
the aggregate, has resulted in, or could reasonably be expected to result in a
Material Adverse Effect.

Section 7.06 Environmental Matters.  Except as could not be reasonably expected
to have a Material Adverse Effect (or with respect to (c), (d) and (e) below,
where the failure to take such actions could not be reasonably expected to have
a Material Adverse Effect):

except as set forth on Schedule 7.06, no Property of the Borrower or any of its
Consolidated Subsidiaries nor the operations conducted thereon violate any order
or requirement of any court or Governmental Authority or any Environmental Laws.

no Property of the Borrower or any of its Consolidated Subsidiaries nor the
operations currently conducted thereon or, to the knowledge of the Borrower, by
any prior

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owner or operator of such Property or operation, are in violation of or subject
to any existing, pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or to any remedial
obligations under Environmental Laws.

all notices, permits, licenses, exemptions, approvals or similar authorizations,
if any, required to be obtained or filed in connection with the operation or use
of any and all Property of the Borrower and each of its Subsidiaries, including,
without limitation, past or present treatment, storage, disposal or release of a
hazardous substance, oil and gas waste or solid waste into the environment, have
been duly obtained or filed or requested, and the Borrower and each of its
Consolidated Subsidiaries are in compliance with the terms and conditions of all
such notices, permits, licenses and similar authorizations.

the Borrower has taken all steps reasonably necessary to determine and has
determined that, except as set forth on Schedule 7.06, no oil, hazardous
substances, solid waste or oil and gas waste, have been disposed of or otherwise
released and there has been no threatened release of any oil, hazardous
substances, solid waste or oil and gas waste on or to any Property of the
Borrower or any of the Guarantors except in compliance with Environmental Laws
and so as not to pose an imminent and substantial endangerment to public health
or welfare or the environment.

to the extent applicable, all Property of the Borrower and each of the
Guarantors currently satisfies all design, operation, and equipment requirements
imposed by the OPA, and the Borrower does not have any reason to believe that
such Property, to the extent subject to the OPA, will not be able to maintain
compliance with the OPA requirements during the term of this Agreement.

except as set forth on Schedule 7.06, neither the Borrower nor any of its
Consolidated Subsidiaries has any known contingent liability or Remedial Work in
connection with any release or threatened release of any oil, hazardous
substance, solid waste or oil and gas waste into the environment.

Section 7.07 Compliance with the Laws and Agreements.  Each of the Borrower and
its Consolidated Subsidiaries are in compliance with all Governmental
Requirements applicable to it or its Property and all agreements and other
instruments binding upon it or its Property, and possesses all licenses,
permits, franchises, exemptions, approvals and other authorizations granted by
Governmental Authorities necessary for the ownership of its Property and the
present conduct of its business, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

Section 7.08 Investment Company Act.  Neither the Borrower nor any of its
Consolidated Subsidiaries is an “investment company” or a company “controlled”
by an “investment company,” within the meaning of, or subject to regulation
under, the Investment Company Act of 1940, as amended.

Section 7.09 Taxes.  Each of the Borrower and its Consolidated Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except Taxes that are being

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contested in good faith by appropriate proceedings and for which the Borrower or
such Consolidated Subsidiary, as applicable, has set aside on its books adequate
reserves in accordance with GAAP.  The charges, accruals and reserves on the
books of the Borrower and its Consolidated Subsidiaries in respect of Taxes and
other governmental charges are, in the reasonable opinion of the Borrower,
adequate.  No tax Lien has been filed and, to the knowledge of the Borrower, no
claim is being asserted with respect to any such Tax or other such governmental
charge, except for tax Liens or claims that could not reasonably be expected to
have a Material Adverse Effect.

Section 7.10 ERISA.

The Borrower and its Consolidated Subsidiaries have complied in all material
respects with ERISA and, where applicable, the Code regarding each Plan, if any,
that they maintain.

No act, omission or transaction has occurred that could result in imposition on
the Borrower, any of its Subsidiaries or any ERISA Affiliate (whether directly
or indirectly) of (i) either a civil penalty assessed pursuant to subsections
(c), (i) or (l) of Section 502 of ERISA or a tax imposed pursuant to Chapter 43
of Subtitle D of the Code or (ii) breach of fiduciary duty liability damages
under Section 409 of ERISA.

No Plan (other than a defined contribution plan) or any trust created under any
such Plan has been terminated since September 2, 1974.  No liability to the PBGC
(other than for the payment of current premiums which are not past due) by the
Borrower, any of its Subsidiaries or any ERISA Affiliate has been or is expected
to be incurred with respect to any Plan.  No ERISA Event with respect to any
Plan has occurred.

Full payment when due has been made of all amounts which the Borrower, any of
its Subsidiaries or any ERISA Affiliate is required under the terms of each
Plan, if any, or Governmental Requirements to have paid as contributions to such
Plan as of the date hereof, and no failure to satisfy the minimum funding
standard (within the meaning of Section 302 of ERISA and Section 412 of the
Code), whether or not waived, exists with respect to any Plan.

Each Pension Plan satisfies the minimum funding requirements of Section 412 of
the Code and, if applicable, Part 3 of Title I of ERISA.

Neither the Borrower nor its Subsidiaries sponsors or  maintains an employee
welfare benefit plan, as defined in Section 3(1) of ERISA that provides benefits
to former employees of such entities, other than as required by Part 6 of Title
I of ERISA.

Neither the Borrower nor its Subsidiaries nor any ERISA Affiliate would be
subject to any withdrawal liability under Part 1 of Subtitle E of Title IV of
ERISA if the Borrower, its Subsidiaries or any ERISA Affiliate were to engage in
a “complete withdrawal” (as defined in Section 4203 of ERISA) or a “partial
withdrawal” (as defined in Section 4205 of ERISA) for any Multiemployer Plan.

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Neither the Borrower, its Subsidiaries nor any ERISA Affiliate is required to
provide security under Section 401(a)(29) of the Code due to a Pension Plan
amendment that results in an increase in current liability for any Pension Plan.

Section 7.11 Disclosure; No Material Misstatements.

Schedule 7.11 describes, as of the Closing Date, all Material Indebtedness of
the Borrower or any of its Consolidated Subsidiaries, and all obligations of the
Borrower or any of its Consolidated Subsidiaries to issuers of surety or appeal
bonds (other than operator’s bonds, plugging and abandonment bonds, and similar
surety obligations obtained in the ordinary course of business) issued for the
account of the Borrower or any of its Consolidated Subsidiaries.

Taken as a whole, none of the reports, Financial Statements, certificates,
Reserve Reports or other information furnished by or on behalf of the Borrower
or any of its Subsidiaries to the Administrative Agent, in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or under any other Loan Document (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which (including the time at which) they were made,
not misleading; provided that, with respect to projected financial information,
prospect information, geological and geophysical data and engineering
projections, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

Section 7.12 Insurance.  The Borrower has, and has caused each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.  The loss payable clauses or provisions in said
insurance policy or policies insuring any of the Collateral for the Loans are
endorsed in favor of and made payable to the Administrative Agent as its
interests may appear and such policies pertaining to liability coverage name the
Administrative Agent and the Lenders as “additional insureds,” and, in either
case, provide that the insurer will give at least thirty (30) days prior notice
of any cancellation to the Administrative Agent.

Section 7.13 Restriction on Liens.  Neither the Borrower nor any of the
Guarantors 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, the Collateral
Agent and the Lenders on or in respect of their Properties to secure the
Obligations.

Section 7.14 Subsidiaries.  Except as set forth on Schedule 7.14 or as disclosed
in writing to the Administrative Agent (which shall promptly furnish a copy to
the Lenders), which shall be a supplement to Schedule 7.14, the Borrower has no
Subsidiaries.  The Borrower has no Foreign Subsidiaries.

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Section 7.15 Location of Business and Offices.  The Borrower’s jurisdiction of
organization is Delaware; the name of the Borrower as listed in the public
records of its jurisdiction of organization is Sanchez Production Partners LP,
and the organizational identification number of the Borrower in its jurisdiction
of organization has been provided to the Administrative Agent (or, in each case,
as set forth in a notice delivered to the Administrative Agent pursuant to
Section 8.01(n) in accordance with Section 12.01).  The Borrower’s principal
place of business and chief executive offices are located at the address
specified in Section 12.01 (or as set forth in a notice delivered pursuant to
Section 8.01(n) and Section 12.01(c)).  Each Subsidiary’s jurisdiction of
organization, name as listed in the public records of its jurisdiction of
organization, organizational identification number in its jurisdiction of
organization, and the location of its principal place of business and chief
executive office is stated on Schedule 7.14 (or as set forth in a notice
delivered pursuant to Section 8.01(n)).

Section 7.16 Properties; Titles; Etc. Subject to Excepted Liens, each of the
Obligors have good and indefeasible title to all of its Oil and Gas Properties
evaluated in the most recently delivered Reserve Report, free and clear of all
Liens except for Excepted Liens.  The Borrower has good and defensible title to
all of the Equity Interests in the Subsidiaries listed on Schedule 7.14, except
for Excepted Liens.  No material Oil and Gas Properties of any Obligor comprise
a “building” or “mobile home” (each as defined in Regulation H promulgated under
the Flood Insurance Laws).

The quantum and nature of the interest of the Obligors in and to their
Hydrocarbon Interests as set forth in the most recent Reserve Report includes
the entire interest of the Obligors in such Hydrocarbon Interests as of the date
of such Reserve Report and are complete and accurate in all material respects as
of the date of such Reserve Report; there are no “back-in” or “reversionary”
interests held by third parties which could materially reduce the interest of
the Obligors in such Hydrocarbon Interests except as taken into account in such
Reserve Report.  The Working Interests held by the Obligors in their Oil and Gas
Properties shall not in any material respect obligate any of such Persons to
bear the costs and expenses relating to the maintenance, development, and
operations of such Oil and Gas Properties in an amount in excess of the Working
Interest of such Person in each such Hydrocarbon Interest set forth in the most
recent Reserve Report.

All oil and gas leases and instruments and other similar agreements comprising
the Borrower’s and its Consolidated Subsidiaries Oil and Gas Properties
necessary for the conduct of business of the Borrower and its Consolidated
Subsidiaries are valid and subsisting, in full force and effect and there exists
no default or event of default or circumstance which with the giving of notice
or lapse of time or both would give rise to a default under any such leases,
instruments or agreements, in each case which would affect in any material
respect the conduct of the business of the Borrower and its
Subsidiaries.  Neither the Borrower, any of the Guarantors nor, to the knowledge
of the Borrower, any other party to any leases, instruments or agreements
comprising its Oil and Gas Properties evaluated in the most recently delivered
Reserve Report, has given or threatened to give written notice of any default
under or inquiry into any possible default under, or action to alter, terminate,
rescind or procure a judicial reformation of, any such lease, instrument or
agreement. 

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All of the Properties of the Borrower and its Consolidated Subsidiaries that are
reasonably necessary for the operation of their business are in good repair,
working order and condition in all material respects and have been maintained by
the Borrower and its Consolidated Subsidiaries as is customary in the oil and
gas industry.  Since the date of the most recent financial statements delivered
pursuant to Sections 6.01(m) and 8.01, neither the business nor the Properties
of the Borrower and its Consolidated Subsidiaries have been materially and
adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of Property or cancellation of contracts, permits, or
concessions by a Governmental Authority, riot, activities of armed forces, or
acts of God or of any public enemy.

Except for Excepted Liens or as otherwise disclosed in writing to the
Administrative Agent:

In each case only with respect to any of the Obligors’ Oil and Gas Properties
that have been assigned a discounted present value equal to or in excess of
$2,000,000 in any Reserve Report, (A) all rentals, royalties, overriding
royalties, shut-in royalties and other payments due under or with respect to any
such Hydrocarbon Interests evaluated in any Reserve Report have been properly
and timely paid in the ordinary course of business and (B) all material expenses
payable under the terms of the contracts and agreements comprising such Oil and
Gas Properties (other than those described above in clause (A)) have been
properly and timely paid in the ordinary course of business, except in each case
where such payments are being contested in good faith by appropriate proceedings
and for which adequate reserves complying with GAAP have been made;

All of the proceeds from the sale of Hydrocarbons produced from the Borrower’s
and its Consolidated Subsidiaries’ Hydrocarbon Interests are being properly and
timely paid to the Borrower without suspense, other than any such proceeds the
late payment or non-payment of which could not reasonably be expected to
materially adversely affect the value of the Borrower’s and its Consolidated
Subsidiaries’ Hydrocarbon Interests taken as a whole; and

No material amount of proceeds that has been received by the Borrower or any of
its Consolidated Subsidiaries from the sale of Hydrocarbons produced from the
Oil and Gas Properties evaluated in the most recently delivered Reserve Report
is subject to any claim for any refund or refund obligation.

Section 7.17 Title.  Upon satisfaction of the covenants in Section 8.18, the
Administrative Agent shall have received title opinions, title reports or other
title due diligence reflecting that the Borrower or the Guarantors shall have
title reasonably satisfactory to the Administrative Agent in such Oil and Gas
Properties of the Borrower and the Guarantors constituting 80% of the Proved
Reserves evaluated in the Initial Reserve Report.

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Section 7.18  Security Instruments. 

The provisions of the Pledge and Security Agreement delivered to the
Administrative Agent are effective to create in favor of the Collateral Agent,
for the ratable benefit of the Administrative Agent, the Lenders and the other
secured parties, a legal, valid and enforceable security interest in the pledged
Collateral (as defined therein) and proceeds thereof and (i) when certificates,
if any, representing or constituting the pledged Collateral are delivered to the
Collateral Agent and (ii) upon the filing of UCC-1 Financing Statements with the
secretary of state of each jurisdiction of formation for each of the debtors
party thereto, the Pledge and Security Agreement shall constitute a first
priority Acceptable Security Interest in, all right, title and interest of the
Obligors, as applicable, in such pledged Collateral and the proceeds thereof,
subject to Excepted Liens.

On the Closing Date, the Equity Interests listed on Schedule I to the Pledge and
Security Agreement will constitute all the issued and outstanding Equity
Interests in the direct and indirect Material Domestic Subsidiaries of the
Borrower; all such Equity Interests have been duly and validly issued and are
fully paid and nonassessable; and the relevant pledgor of said shares is the
record and beneficial owner of said shares.

The provisions of the Mortgages will be effective to grant to the Administrative
Agent, for the ratable benefit of the Lenders, legal, valid and enforceable
mortgage liens on (i) all of the right, title and interest of the Borrower and
its Subsidiaries in the Mortgaged Property to the extent described therein and
(ii) at least 80% of the total value of the Proved Reserves evaluated in the
Initial Reserve Report.  Once such Mortgages have been recorded in the
appropriate recording office and all recording taxes have been paid with respect
thereto, the Mortgages will constitute perfected first liens on, and security
interest in, such mortgaged property, subject to Excepted Liens.

On the Closing Date, all governmental actions and all other filings, recordings,
registrations, third party consents and other actions which are necessary to
create and perfect the Liens provided for in the Security Instruments will have
been made, obtained and taken in all relevant jurisdictions.  No other filings
or recordings are required in order to perfect the security interests created
under any Security Instruments.

Section 7.19 Maintenance of Properties.  Except for such acts or failures to act
as could not be reasonably expected to have a Material Adverse Effect, the Oil
and Gas Properties (and Properties unitized therewith) have been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all Government Requirements and in conformity with the provisions of all leases,
subleases or other contracts comprising a part of the Hydrocarbon Interests and
other contracts and agreements forming a part of the Oil and Gas
Properties.  Specifically in connection with the foregoing, except as could not
reasonably be expected to have a Material Adverse Effect, (a) no Oil and Gas
Property is subject to having allowable production reduced below the full and
regular allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (b)
none of the wells comprising a part of the Oil and Gas Properties (or Properties
unitized therewith) is deviated from the vertical more than the maximum
permitted by Government Requirements, and such wells are, in fact, bottomed
under and are producing from,

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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).  All pipelines, wells, gas processing plants, platforms and other
material improvements, fixtures and equipment owned in whole or in part by the
Borrower or any of its Subsidiaries that are necessary to conduct normal
operations are being maintained in a state adequate to conduct normal
operations, and with respect to such of the foregoing which are operated by the
Borrower or any of its Subsidiaries, in a manner consistent with the Borrower’s
or its Subsidiaries’ past practices (other than those the failure of which to
maintain in accordance with this Section 7.19 could not reasonably be expect to
have a Material Adverse Effect).

Section 7.20 Gas Imbalances; Prepayments.  Except as set forth on Schedule 7.20
with respect to the Closing Date or on the most recent certificate delivered
pursuant to Section 2.07(d), on a net basis there are no gas imbalances, take or
pay or other prepayments which would require the Borrower or any of its
Subsidiaries to deliver, in the aggregate, three percent (3%) or more of the
monthly production from Hydrocarbons produced from the Oil and Gas Properties at
some future time without then or thereafter receiving full payment therefor.

Section 7.21 Marketing of Production.  Except for the contracts listed and in
effect on the date hereof on Schedule 7.21, and thereafter either disclosed in
writing to the Administrative Agent or included in the most recently delivered
Reserve Report (with respect to all of which contracts the Borrower represents
that it or the Guarantors are receiving a price for all production sold
thereunder which is computed substantially in accordance with the terms of the
relevant contract and are not having deliveries curtailed substantially below
the subject Property’s delivery capacity), no material agreements exist which
are not cancelable on 60 days notice or less without penalty or detriment for
the sale of production from the Borrower’s or the Guarantors’ Hydrocarbons
(including, without limitation, calls on or other rights to purchase,
production, whether or not the same are currently being exercised) that (a)
pertain to the sale of production at a fixed price and (b) have a maturity or
expiry date of more than six (6) months after the Closing Date.

Section 7.22 Swap Transactions.  Schedule 7.22 sets forth, as of February
28, 2015, and after the date hereof, each report required to be delivered by the
Borrower pursuant to Section 8.01(c) will set forth, a true and complete list of
all Swap Agreements and Swap Transactions of the Borrower and each of its
Subsidiaries, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net
marked-to-market value thereof, all credit support agreements relating thereto
(including any margin required or supplied) and the counterparty to each such
agreement.

Section 7.23 Use of Loans and Letters of Credit.  The proceeds of the Loans and
the Letters of Credit shall be used (a) for the acquisition, exploration,
operation, maintenance and development of Oil and Gas Properties and related
properties, facilities, rights and interests located in any of the United States
of America (including the Palmetto Acquisition), (b) for general corporate
purposes, including Restricted Payments, provided that if the Borrowing Base
Utilization Percentage is equal to or exceeds 90% before or after giving effect
to the requested Loan or Letter of Credit, then no proceeds of any Loan or any
Letter of Credit may be used to fund Restricted Payments under Section 9.04, (c)
for the payment of expenses incurred by the Borrower in connection with the
Transactions, (d) to provide working capital, and (e) for the

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issuance of Letters of Credit.  The Borrower and its Subsidiaries are not
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulation
T, U or X of the Board).  No part of the proceeds of any Loan or Letter of
Credit will be used for any purpose which violates the provisions of Regulations
T, U or X of the Board.

Section 7.24 Solvency.  After giving effect to the transactions contemplated
hereby, (a) the aggregate assets (after giving effect to amounts that could
reasonably be received by reason of indemnity, offset, insurance or any similar
arrangement), at a fair valuation, of the Borrower and the Guarantors, taken as
a whole, will exceed the aggregate Debt of the Borrower and the Guarantors on a
consolidated basis, (b) each of the Borrower and the Guarantors will not have
incurred or intended to incur, and will not believe that it will incur, Debt
beyond its ability to pay such Debt (after taking into account the timing and
amounts of cash to be received by each of the Borrower and the Guarantors and
the amounts to be payable on or in respect of its liabilities, and giving effect
to amounts that could reasonably be received by reason of indemnity, offset,
insurance or any similar arrangement) as such Debt becomes absolute and matures
and (c) each of the Borrower and the Guarantors will not have (and will have no
reason to believe that it will have thereafter) unreasonably small capital for
the conduct of its business.

Section 7.25 Patriot Act; OFAC; Sanctions. 

None of the Borrower, any of its Subsidiaries or, to the knowledge of the
Borrower, any director, officer of the Borrower or any of its Subsidiaries is a
Person that is, or is owned or controlled by Persons that are: (i) the subject
of any sanctions administered or enforced by OFAC, the U.S. Department of State,
the United Nations Security Council, the European Union, Her Majesty’s Treasury,
or other relevant sanctions authority (collectively, “Sanctions”), or
(ii) located, organized or resident in a country or territory that is, or whose
government is, the subject of Sanctions.

The Borrower will not, directly or indirectly, use the proceeds of the Loans, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, (i) to fund any activities or business of
or with any Person, or in any country or territory, that, at the time of such
funding, is, or whose government is, the subject of Sanctions, or (ii) in any
other manner that would result in a violation of Sanctions by any Person
(including any Person participating in the Loans, whether as underwriter,
advisor, investor, or otherwise).

Each of the Obligors is in compliance with the Foreign Corrupt Practices Act,
15 U.S.C. §§ 78dd-1, et seq., and any foreign counterpart thereto.  None of the
Obligors or their Subsidiaries has made a payment, offering, or promise to pay,
or authorized the payment of, money or anything of value (a) in order to assist
in obtaining or retaining business for or with, or directing business to, any
foreign official, foreign political party, party official or candidate for
foreign political office, (b) to a foreign official, foreign political party or
party official or any candidate for foreign political office, and (c) with the
intent to induce the recipient to misuse his or her official position to direct
business wrongfully to such Credit Party or its Subsidiary or to any other
Person, in violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§78dd-1,
et seq.

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.

Section 7.26 Seniority Designation.  For the purposes of any Unsecured Notes
Documents or any Permitted Refinancing Debt, the Obligations have been
irrevocably designated as “senior indebtedness” (or such other applicable term
denoting seniority) ranking, as applicable, equally in right of payment with any
senior unsecured notes issued under such Unsecured Notes Documents and senior in
right of payment to any subordinated unsecured notes or senior subordinated
unsecured notes issued under such Unsecured Notes Documents, without giving
effect to rights in the Collateral of the Administrative Agent, the Collateral
Agent, the Issuer, the Lenders and the other beneficiaries thereof.

ARTICLE VIII.

AFFIRMATIVE COVENANTS

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

Section 8.01 Financial Statements; Ratings Change; Other Information.  The
Borrower will furnish to the Administrative Agent:

Annual Financial Statements and Annual Budget.  As soon as available, but in any
event not later than ninety (90) days after the end of each fiscal year, (i)
Borrower’s audited consolidated balance sheet and related statements of
operations, partners’ equity and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by independent public accountants of recognized
national standing and reasonably acceptable to the Administrative Agent (without
a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial position and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied and (ii) a budget for the then current fiscal year,
including a pro forma balance sheet and income and cash flow projections.

Quarterly Financial Statements.  As soon as available, but in any event not
later than 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, its consolidated balance sheet and related
statements of operations, partners’ equity and cash flows as of the end of and
for such quarter and the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by a Financial Officer as presenting fairly in all
material respects the financial position and results of operations of the
Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes.

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Certificate of Financial Officer -- Compliance.  Concurrently with any delivery
of financial statements under Section 8.01(a) or Section 8.01(b), a certificate
of a Financial Officer in substantially the form of Exhibit B hereto (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) commencing with the delivery of the financial statements
for the fiscal quarter ending June 30, 2015, setting forth reasonably detailed
calculations demonstrating compliance with Section 9.01, (iii) stating whether
any change in GAAP or in the application thereof has occurred since December 31,
2014 and, if any such change has occurred, specifying the effect of such change
on the financial statements accompanying such certificate, and (iv) setting
forth as of the last Business Day of such calendar month or fiscal year, a true
and complete list of all Swap Agreements and Swap Transactions of the Borrower
and each of its Consolidated Subsidiaries, the material terms thereof (including
the type, term, effective date, termination date and notional amounts or
volumes), the net mark-to-market value therefor, any new credit support
agreements relating thereto not listed on Schedule 7.22, any margin required or
supplied under any credit support document and the counterparty to each such
agreement.

Certificate of Accounting Firm -- Defaults.  Concurrently with any delivery of
financial statements under Section 8.01(a), a certificate of the accounting firm
that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements of
any Default (which certificate may be limited to the extent required by
accounting rules or guidelines).

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

Other Accounting Reports.  Within five (5) Business Days after receipt thereof,
a copy of each other written report or letter submitted to the Borrower or any
of its Subsidiaries by independent accountants in connection with any annual,
interim or special audit made by them of the books of the Borrower or any such
Subsidiary, and a copy of any response by the Borrower or any such Subsidiary to
such letter or report.

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

Reserve Report/Lists of Purchasers.  Concurrently with the delivery of any
Reserve Report to the Administrative Agent pursuant to Section 2.07, (i) a list
of all Persons purchasing Hydrocarbons from the Borrower or any of its
Subsidiaries, and (ii) a monthly cash flow budget for the following twelve month
period, projecting monthly production, volumes, revenues, expenses, taxes and
budgeted capital expenditures.

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Notice of Sales of Oil and Gas Properties.  In the event the Borrower or any of
its Subsidiaries intends to sell, transfer, assign or otherwise dispose of any
Oil or Gas Properties included in the most recently delivered Reserve Report (or
any Equity Interests in any Subsidiary owning interests in such Oil and Gas
Properties) during any period between two successive Scheduled Redetermination
Dates having a fair market value, individually or in the aggregate, in excess of
$250,000, prior written notice of such disposition, the price thereof, the
anticipated date of closing, and any other details thereof requested by the
Administrative Agent.

Notice of Swap Liquidation.  In the event the Borrower or any of its
Subsidiaries intends to assign, terminate (other than as a result of the
expiration thereof), unwind, sell or liquidate one or more Swap Transactions
having a net fair market value to either counterparty of such Swap Transactions,
in excess of $250,000 (any such transaction a “Material Swap Transaction”),
prompt (but in any event at least five (5) days prior to such assignment,
termination, unwinding, sale, or liquidation) written notice of such assignment,
termination, unwinding, sale, or liquidation and the value thereof, and any
other details thereof as requested by the Administrative Agent.  In the event
that the Borrower or any of its Subsidiaries consummates a Material Swap
Transaction as described in the previous sentence, the Borrower shall retain, or
cause its Subsidiaries to retain, as applicable, the proceeds of such
transaction pending a redetermination of the Borrowing Base in accordance with
the provisions of Section 2.07(f).  In the event that a Material Swap
Transaction creates a payment obligation upon settlement from the Borrower or
any of its Subsidiaries, the notice must be accompanied by a certification from
a Responsible Officer that after giving effect to such payment obligation,
Borrower is in compliance with Section 9.01.

Notice of Casualty Events.  Prompt written notice, and in any event within ten
(10) Business Days, of the occurrence of any Casualty Event or the commencement
of any action or proceeding that could reasonably be expected to result in a
Casualty Event.

Information Regarding Borrower and Guarantors.  Prompt written notice (and in
any event within ten (10) days prior thereto) of any change (i) in the Borrower
or any Guarantor’s corporate name or in any trade name used to identify such
Person in the conduct of its business or in the ownership of its Properties,
(ii) in the location of the Borrower or any Guarantor’s chief executive office
or principal place of business, (iii) in the Borrower or any Guarantor’s
identity or corporate structure or in the jurisdiction in which such Person is
incorporated or formed, (iv) in the Borrower or any Guarantor’s jurisdiction of
organization or such Person’s organizational identification number in such
jurisdiction of organization, and (v) in the Borrower or any Guarantor’s federal
taxpayer identification number, if any.

Production Report and Lease Operating Statements.  Concurrently with the
delivery of any Reserve Report to the Administrative Agent pursuant to
Section 2.07, a report setting forth, for each calendar month during the
then-current fiscal year to date, the volume of production and sales
attributable to production (and the prices at which such sales were made and the
revenues derived from such sales) for each such calendar month from the Oil and
Gas Properties, and setting forth the related ad valorem, severance and
production taxes and lease operating expenses attributable thereto and incurred
for each such calendar month.

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Notices of Certain Changes.  Promptly, but in any event within five (5) Business
Days after the execution thereof, copies of any amendment, modification or
supplement to the certificate or articles of incorporation, by-laws, operating
agreement, any preferred stock designation or any other organizational document
of the Borrower or any of the Guarantors, including but not limited to the
documents referred to in Section 9.18.

Reserve Reports and Related Information.  Promptly, but in any event on or
before the applicable due date therefor, each Reserve Report specified in
Section 2.07, together with the other information provided for therein.

Notice of Incurrence or Repayment of Permitted Unsecured Debt or the
Subordinated Note.  Prompt written notice, but in any event within five (5)
Business Days after the incurrence or repayment thereof, of any Debt incurred by
the Borrower or any of its Subsidiaries that is permitted to be incurred
pursuant to Section 9.02(h) or any Debt outstanding under the Subordinated
Note.  Each such notice shall state the amount of the new Debt incurred or
repaid and the aggregate amount of Debt incurred and outstanding pursuant to
Section 9.02(h) and under the Subordinated Note.

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

Section 8.02 Notices of Material Events.  The Borrower will furnish to the
Administrative Agent and each Lender, promptly after any Responsible Officer
obtains knowledge thereof, written notice of the following:

the occurrence of any Default;

(i) the filing or commencement of, or the threat in writing of, any action,
suit, investigation, inquiry, arbitration or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower, any
Subsidiary thereof or any of their Properties; (ii) any material adverse
development in any action, suit, proceeding, investigation or arbitration
(whether or not previously disclosed to the Lenders); and (iii) any demand or
lawsuit by any landowner or other third party threatened in writing against the
Borrower, any Subsidiary thereof or any of their Properties in connection with
any Environmental Laws (excluding routine testing and corrective action) that,
in the case of each of clauses (i) through (iii) of this subsection, if
adversely determined, could reasonably be expected to result in liability in
excess of $500,000;

the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding $500,000;
and

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

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

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

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

Section 8.05 Performance of Obligations Under Loan Documents.  The Borrower will
pay the Notes according to the reading, tenor and effect thereof, and the
Borrower will, and the Borrower will cause each of the Guarantors to do and
perform every act and discharge all of the Obligations, including, without
limitation, this Agreement, at the time or times and in the manner specified.

Section 8.06 Operation and Maintenance of Properties.  The Borrower will, and
will cause each of its Consolidated Subsidiaries to:

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

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

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promptly pay and discharge, or make reasonable and customary efforts to cause to
be paid and discharged, all delay rentals, royalties, expenses and indebtedness
accruing under the leases or other agreements affecting or pertaining to its Oil
and Gas Properties and will do all other things necessary to keep unimpaired
their rights with respect thereto and prevent any forfeiture thereof or default
thereunder.

promptly perform or make reasonable and customary efforts to cause to be
performed, in accordance with industry standards and in all material respects,
the obligations required by each and all of the assignments, deeds, leases,
sub-leases, contracts and agreements affecting its interests in its Oil and Gas
Properties and other material Properties.

to the extent the Borrower or one of its Subsidiaries is not the operator of any
Property, the Borrower shall use reasonable efforts to cause the operator to
comply with this Section 8.06.

Section 8.07 Insurance.  The Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.  The loss payable clauses or provisions in said
insurance policy or policies insuring any of the Collateral for the Loans shall
be endorsed in favor of and made payable to the Administrative Agent as its
interests may appear and such policies shall name the Administrative Agent and
the Lenders as “additional insureds” and provide that the insurer will give at
least thirty (30) days prior notice of any cancellation to the Administrative
Agent.

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

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

Section 8.10  Environmental Matters. 

Except as could reasonably be expected to result in a Material Adverse Effect,
the Borrower shall, and shall cause each of its Subsidiaries to: (i) comply, and
shall cause its Properties and operations and each of its Subsidiaries and each
Subsidiary’s Properties and operations to comply, with all applicable
Environmental Laws; (ii) not dispose of or otherwise release, and shall cause
each Subsidiary not to dispose of or otherwise release, any oil, oil and gas
waste, hazardous substance, or solid waste on, under, about or from any of the
Borrower’s or

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its Subsidiaries’ Properties or any other Property to the extent caused by the
Borrower’s or any of its Subsidiaries’ operations except in compliance with
applicable Environmental Laws; (iii) timely obtain or file, and shall cause each
of its Subsidiaries to timely obtain or file, all notices, permits, licenses,
exemptions, approvals, registrations or other authorizations, if any, required
under applicable Environmental Laws to be obtained or filed in connection with
the operation or use of the Borrower’s or its Subsidiaries’ Properties; (iv)
promptly commence and diligently prosecute to completion, and shall cause each
of its Subsidiaries to promptly commence and diligently prosecute to completion,
any assessment, evaluation, investigation, monitoring, containment, cleanup,
removal, repair, restoration, remediation or other remedial obligations
(collectively, the “Remedial Work”) in the event any Remedial Work is required
under applicable Environmental Laws because of or in connection with the actual
or suspected past, present or future disposal or other release of any oil, oil
and gas waste, hazardous substance or solid waste on, under, about or from any
of the Borrower’s or the Guarantors’ Properties; and (v) establish and
implement, and shall cause each of its Subsidiaries to establish and implement,
such procedures as may be reasonably necessary to continuously determine and
assure that the Borrower’s and the Guarantors’ obligations under this
Section 8.10(a) are timely and fully satisfied.

The Borrower will, and will cause each of the Guarantors to, provide
environmental audits and tests in accordance with American Society of Testing
Materials standards upon request by the Administrative Agent (or as otherwise
required to be obtained by the Administrative Agent by any Governmental
Authority), in connection with any future acquisitions of Oil and Gas Properties
to the extent such Oil and Gas Properties are included as Collateral for the
Borrowing Base.

Section 8.11  Further Assurances. 

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

The Borrower hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral intended as security for the Obligations.  A carbon,
photographic or other reproduction of the Security Instruments or any financing
statement covering such Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.  The Administrative Agent will
promptly send the Borrower any financing or continuation statements

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it files and the Administrative Agent will promptly send the Borrower the filing
or recordation information with respect thereto.

Section 8.12  Title Information. 

On or before the delivery to the Administrative Agent and the Lenders of each
Reserve Report required by Section 2.07(b), to the extent requested by the
Administrative Agent, the Borrower will deliver title information in form and
substance acceptable to the Administrative Agent covering enough of the Oil and
Gas Properties evaluated by such Reserve Report that were not included in the
immediately preceding Reserve Report, so that the Administrative Agent shall
have received together with title information previously delivered to the
Administrative Agent, satisfactory title information on at least 80% of the
total value of the Proved Reserves evaluated by such Reserve Report.

If the Borrower has provided title information for additional Properties under
Section 2.07(b), the Borrower shall, within 60 days of notice from the
Administrative Agent that title defects or exceptions exist with respect to such
additional Properties, either (i) cure any such title defects or exceptions
(including defects or exceptions as to priority) which are not permitted by
Section 9.03 raised by such information, (ii) substitute acceptable Mortgaged
Properties with no title defects or exceptions except for Excepted Liens (other
than Excepted Liens described in clauses (d), (e) and (h) of such definition)
having an equivalent value or (iii) deliver title information in form and
substance reasonably acceptable to the Administrative Agent so that the
Administrative Agent shall have received, together with title information
previously delivered to the Administrative Agent, reasonably satisfactory title
information on at least 80% of the value of the Proved Reserves evaluated by
such Reserve Report.

If the Borrower is unable to cure any title defect requested by the
Administrative Agent or the Lenders to be cured within the 60-day period or the
Borrower does not comply with the requirements to provide acceptable title
information covering 80% of the value of the Proved Reserves evaluated in the
most recent Reserve Report, such default shall not be a Default, but instead the
Administrative Agent and/or the Required Lenders shall have the right to
exercise the following remedy in their sole discretion from time to time, and
any failure to so exercise this remedy at any time shall not be a waiver as to
future exercise of the remedy by the Administrative Agent or the Lenders.  To
the extent that the Administrative Agent or the Required Lenders are not
reasonably satisfied with title to any Oil and Gas Properties after the 60-day
period has elapsed, such unacceptable Oil and Gas Properties shall not count
towards the 80% requirement in this Section 8.12(c), and the Administrative
Agent may send a notice to the Borrower and the Lenders that the then
outstanding Borrowing Base shall be reduced by an amount as determined by the
Required Lenders to cause the Borrower to be in compliance with the requirement
to provide acceptable title information on 80% of the value of the Proved
Reserves.  This new Borrowing Base shall become effective immediately after
receipt of such notice.

Section 8.13  Additional Collateral; Additional Guarantors. 

In connection with each redetermination of the Borrowing Base, the Borrower
shall review the Reserve Report and the list of current Mortgaged Properties to

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ascertain whether the Mortgaged Properties represent at least 80% of the total
value of the Proved Reserves evaluated in the most recently completed Reserve
Report after giving effect to exploration and production activities,
acquisitions, dispositions and production.  In the event that the Mortgaged
Properties do not represent at least 80% of such total value, then the Borrower
shall, and shall cause its Subsidiaries to, grant to the Administrative Agent or
its designee as security for the Obligations a first-priority Lien (provided the
Excepted Liens of the type described in clauses (i) to (iv) and (vi) of the
definition thereof may exist, but subject to the provisos at the end of such
definition) on additional Oil and Gas Properties not already subject to a Lien
of the Security Instruments such that after giving effect thereto, the Mortgaged
Properties will represent at least 80% of such total value.  All such Liens will
be created and perfected by and in accordance with the provisions of deeds of
trust, security agreements and financing statements or other Security
Instruments, all in form and substance reasonably satisfactory to the
Administrative Agent or its designee and in sufficient executed (and
acknowledged where necessary or appropriate) counterparts for recording
purposes.  In order to comply with the foregoing, if any Subsidiary places a
Lien on its Oil and Gas Properties and such Subsidiary is not a Guarantor, then
it shall become a Guarantor and comply with Section 8.13(b).

In the event that (i) the Borrower determines that any Subsidiary is a Material
Domestic Subsidiary or (ii) any Subsidiary that is a Domestic Subsidiary incurs
or guarantees any Debt, then the Borrower shall promptly cause such Subsidiary
to guarantee the Obligations.  In connection with any such guaranty, the
Borrower shall, or shall cause such Subsidiary to, (A) execute and deliver a
supplement to the Guarantee Agreement in the form of Annex 1 to the Guarantee
Agreement executed by such Subsidiary, (B) pledge all of the Equity Interests of
such Subsidiary (including, without limitation, delivery of original stock or
membership interest certificates (if such interests are certificated) evidencing
all of the issued and outstanding Equity Interests of such Subsidiary to
Collateral Agent, together with appropriate undated stock powers, or other
equivalent instruments of transfer reasonably acceptable to Administrative
Agent, for each certificate duly executed in blank by the registered owner
thereof) and (C) execute and deliver such other additional closing documents,
certificates and legal opinions as shall reasonably be requested by the
Administrative Agent or its designee, including without limitation:

the execution and delivery of a supplement to the Pledge and Security Agreement
in the form of Annex 1 to the Pledge and Security Agreement;

a certificate of the Subsidiary that is a Material Domestic Subsidiary or
Domestic Subsidiary that becomes a Guarantor pursuant to this Section 8.13(b),
(A) setting forth resolutions of the managers, board of directors or other
managing body with respect to the authorization of such Person to execute and
deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (B) setting forth the individuals
who are authorized to sign the Loan Documents to which the Person is a party,
(C) providing specimen signatures of such authorized individuals, (D) setting
forth the articles or certificate of incorporation or formation and bylaws,
operating agreement or partnership agreement, as applicable, of such Person, in
each case, certified as being true and complete and (E) certifying that the
representations and warranties of such Person contained in the Loan Documents to
which it is a party are true correct on and as of the date thereof;

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certificates of the appropriate state agencies with respect to the existence,
qualification and good standing of such Subsidiary that becomes a Guarantor
pursuant to this Section 8.13(b);

an opinion of special New York counsel to the Borrower, providing opinions with
respect to such Subsidiary that becomes a Guarantor pursuant to this
Section 8.13(b) regarding the authority of such Subsidiary to execute the
supplement to the Guarantee Agreement,  the Pledge and Security Agreement and
any other Security Instrument to which such Subsidiary is a party, the
enforceability of such documents with regard to such Subsidiary, and the
perfection of Liens created under such Security Instruments; and

UCC search certificates reflecting no prior Liens encumbering such Subsidiary
that becomes a Guarantor pursuant to this Section 8.13(b) other than Liens
permitted by Section 9.03.  

Section 8.14 ERISA Compliance.  The Borrower will promptly furnish, and will
cause its Subsidiaries to promptly furnish, to the Administrative Agent (a)
promptly after the filing thereof with the United States Secretary of Labor, the
Internal Revenue Service or the PBGC, copies of each annual and other report
with respect to each Plan, if any, or any trust created thereunder, (b)
immediately upon becoming aware of the occurrence of any ERISA Event or of any
“prohibited transaction,” as described in Section 406 of ERISA or in
Section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by the President or the principal Financial
Officer of the General Partner on behalf of the Borrower or the Borrower’s
Subsidiaries, as the case may be, specifying the nature thereof, what action the
Borrower, its Subsidiaries or the ERISA Affiliate is taking or proposes to take
with respect thereto, and, when known, any action taken or proposed by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto, and (c) immediately upon receipt thereof, copies of any notice of the
PBGC’s intention to terminate or to have a trustee appointed to administer any
Plan.  With respect to each Pension Plan, if any, the Borrower will, and the
Borrower will cause each of its Subsidiaries to, (i) satisfy in full and in a
timely manner, without incurring any late payment or underpayment charge or
penalty and without giving rise to any lien, all of the contribution and funding
requirements of Section 412 of the Code (determined without regard to
subSection (c) thereof) and of Section 302 of ERISA (determined without regard
to subSection (c) thereof), and (ii) pay, or cause to be paid, to the PBGC in a
timely manner, without incurring any late payment or underpayment charge or
penalty, all premiums required pursuant to sections 4006 and 4007 of ERISA.

Section 8.15 [Intentionally Omitted]

Section 8.16 Title.  With respect to Oil and Gas Properties acquired after the
Closing Date or not previously included in the Borrowing Base, and to the extent
necessary for the Administrative Agent to receive satisfactory title information
on at least 80% of the total value of the Proved Reserves to be included in the
Borrowing Base, the Borrower shall from time to time upon the reasonable request
of the Administrative Agent, take such actions and execute and deliver such
documents and instruments as the Administrative Agent shall require to ensure
that the Administrative Agent shall, at all times, have received satisfactory
title opinions (including,

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if requested, supplemental or new title opinions addressed to it), title
reports, or other title due diligence, which title diligence shall be in form
and substance reasonably acceptable to the Administrative Agent and shall
include information regarding the before payout and after payout ownership
interests held by the Borrower and its Subsidiaries, for all wells located on
the Oil and Gas Properties shown in the most recent Reserve Report.

Section 8.17 Keepwell.  The Borrower hereby absolutely, unconditionally and
irrevocably undertakes to provide such funds or other support as may be needed
from time to time by each other Obligor to honor all of its obligations under
its Guarantee Agreement in respect of Swap Obligations (provided, however, that
the Borrower shall only be liable under this Section 8.17 for the maximum amount
of such liability that can be hereby incurred without rendering its obligations
under this Section 8.17 or otherwise under any guarantee voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount).  The obligations of the Borrower under this
Section 8.17 shall remain in full force and effect until the Obligations have
been paid in full and all Commitments hereunder have terminated.  The Borrower
intends that this Section 8.17 constitute, and this Section 8.17 shall be deemed
to constitute, a “keepwell, support, or other agreement” for the benefit of each
other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

Section 8.18 Additional Covenants Upon Issuance of Unsecured Notes.  If the
Borrower or any Guarantor issues any Unsecured Notes permitted under
Section 9.02(f) hereof, the Borrower shall:

deliver, or cause to be delivered, to the Administrative Agent not later than
three (3) Business Days following the date on which any final prospectus or
final offering memorandum prepared in connection with the original issuance of
any Unsecured Notes is delivered to the prospective or actual holders of the
Unsecured Notes, a  true and correct copy of such final prospectus or final
offering memorandum;

deliver to the Administrative Agent not more than five (5) Business Days after
the date of issuance of any Unsecured Notes by the Borrower or any Guarantor, a
true and correct copy of the Unsecured Notes Indenture (or any supplement (if
any) to the Unsecured Notes Indenture) entered into by the Borrower or any
Guarantor in connection with the Unsecured Notes;

deliver to the Administrative Agent concurrently with the issuance of any
Unsecured Notes, a certificate of a Responsible Officer confirming such issuance
and setting forth the aggregate principal amount of Unsecured Notes issued;

deliver to the Administrative Agent promptly such other related materials
evidencing the issuance of the Unsecured Notes as the Administrative Agent may
reasonably request; and

if, after giving effect to the issuance of any Unsecured Notes and the automatic
reduction of the Borrowing Base pursuant to Section 9.02(f), a Borrowing Base
Deficiency results, repay Loans and cash collateralize Letters of Credit in
accordance with Section 3.03(c)(ii).

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ARTICLE IX.

NEGATIVE COVENANTS

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

Section 9.01  Financial Covenants.  

Current Ratio.  The Borrower will not permit, as of the last day of any fiscal
quarter, commencing with the fiscal quarter ending June 30, 2015, its Current
Ratio to be less than 1.0 to 1.0.

Maximum Total Net Debt to Adjusted EBITDA.  The Borrower will not permit, as of
the last day of any fiscal quarter, commencing with the fiscal quarter ending
June 30, 2015, its ratio of (i) Total Net Debt of the Borrower and its
Consolidated Subsidiaries to (ii) Adjusted EBITDA for the Rolling Period ending
on such date (but subject to clause (d) below), to be greater than, with respect
to any fiscal quarter ending prior to the Leverage Ratio Adjustment Date, 4.50
to 1.0 and, with respect to any fiscal quarter ending on or after the Leverage
Ratio Adjustment Date, 4.0 to 1.0.

Maximum Senior Secured Debt to Adjusted EBITDA.  The Borrower will not permit,
as of the last day of any fiscal quarter ending prior to the Leverage Ratio
Adjustment Date, commencing with the fiscal quarter ending June 30, 2015, its
ratio of (i) Senior Secured Net Debt of the Borrower and its Consolidated
Subsidiaries to (ii) Adjusted EBITDA for each Rolling Period ending on such date
(but subject to clause (d) below), to be greater than 3.50 to 1.0.

(d)Notwithstanding anything to the contrary in this Agreement (including the
definition of “Rolling Period”), (i) Adjusted EBITDA for the four fiscal quarter
period ending June 30, 2015, shall equal Adjusted EBITDA for the fiscal quarter
ending June 30, 2015 multiplied by four (4), (ii) Adjusted EBITDA for the four
fiscal quarter period ending September 30, 2015, shall equal Adjusted EBITDA for
the two fiscal quarter period ending September 30, 2015 multiplied by two (2)
and (iii) Adjusted EBITDA for the four fiscal quarter period ending December 31,
2015, shall equal Adjusted EBITDA for the three fiscal quarter period ending
December 31, 2015 multiplied by four-thirds (4/3).

Section 9.02  Debt.  Neither the Borrower nor any of its Subsidiaries will
incur, create, assume or suffer to exist any Debt, except:

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

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accounts payable and other accrued expenses, liabilities or other obligations to
pay (for the deferred purchase price of Property or services) from time to time
incurred in the ordinary course of business with respect to which no more than
90 days have elapsed since the date of invoice or that are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP;

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

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

Debt of any Obligor in respect of workers’ compensation claims, performance
bonds, surety bonds, and appeal bonds issued for its account, in each case in
the ordinary course of business, or surety/bonds to governmental agencies;

Debt incurred under Unsecured Notes and any guarantees by a Guarantor in respect
thereof in an aggregate principal amount that would not cause, as of the date on
which such Debt is incurred, the ratio of Total Net Debt to Adjusted EBITDA to
exceed the maximum amount then permitted under Section 9.01(b) after giving pro
forma effect to such incurrence, provided that (1) such Unsecured Notes and any
Unsecured Notes Indenture under which such Unsecured Notes are issued contain
customary terms and conditions for unsecured notes of similar type and of like
tenor and amount and do not contain any financial covenants that are, taken as a
whole, more onerous to the Borrower and its Subsidiaries than those imposed by
this Agreement (as determined in good faith by the senior management of the
General Partner) (as in effect on the date of Incurrence of such Debt), (2) the
final stated maturity date and the average life (based on the stated final
maturity date and payment schedule provided at the date of issuance) of such
Unsecured Notes shall not be earlier than 180 days after the Maturity Date (as
in effect on the date of Incurrence of such Debt), and (3) at the time of and
immediately after giving effect to each incurrence of such Debt, no Default or
Event of Default shall have occurred and be continuing, and provided, further,
that immediately upon any incurrence of Debt permitted by this clause (f), the
Borrowing Base then in effect shall be automatically reduced by an amount equal
to 25% of the aggregate principal amount of such Debt incurred (calculated at
the face amount of the Debt incurred without giving effect to any original issue
discount) and (b) any Permitted Refinancing Debt in respect thereof;

Debt of an Obligor in the form of guarantees and other “Debt” of the type
described in clause (g) or clause (h) of the definition of Debt, in each case,
in respect of Debt otherwise permitted under this Section 9.02;

Debt outstanding under the Subordinated Notes; and

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other unsecured Debt not to exceed $5,000,000 in the aggregate at any one time
outstanding.

Section 9.03 Liens.  Neither the Borrower nor any of its Subsidiaries will
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:

Liens securing the payment of any Obligations;

Excepted Liens; or

Liens on Property not constituting Collateral for the Obligations and not
otherwise permitted by the foregoing clauses of this Section 9.03; provided that
the aggregate principal or face amount of all Debt secured under this
Section 9.03(c) shall not exceed $100,000 at any time.  The filing of a
financing statement or other document or instrument in connection with any Lien
permitted under the foregoing provisions of this Section 9.03 to perfect or
otherwise provide notice of such Lien is permitted.

Section 9.04 Dividends, Distributions and Redemptions.  The Borrower will not,
and will not permit any of its Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment, return any capital to
its stockholders, members or unitholders or make any distribution of its
Property to its Equity Interest holders, except: (i) the Borrower may declare
and pay dividends or distributions to its Equity Interest holders payable solely
in additional Equity Interests (other than Disqualified Capital Stock but
including cash in lieu of fractional Equity Interests to the extent of Available
Cash), (ii) Subsidiaries may declare and pay dividends or distributions ratably
with respect to their Equity Interests, (iii) so long as no Borrowing Base
Deficiency, Default or Event of Default has occurred and is continuing or would
result therefrom, after giving effect to such dividend or distributions, and any
redetermination of the Borrowing Base as a result of such dividend, the Borrower
would have at least 10% of unused borrowing capacity that can be accessed under
this Agreement, and subject to Section 7.23, the Borrower may declare and pay,
or incur a liability to make, quarterly cash distributions in an amount equal to
Available Cash, (iv) the Borrower may make issuances and/or sales of Equity
Interests (other than Disqualified Capital Stock) in the Borrower in exchange
for, or purchase or redemption of, Equity Interests in the Borrower and cash
payments in lieu of the issuance of fractioned Equity Interests in connection
therewith as a split or other distribution of Equity Interests where the
distributions are made on a pro rata basis to all of its equity holders, (v) the
Borrower may repurchase its Equity Interests in connection with the
administration of any long-term incentive plan, including (A) in connection with
the cashless exchange of unit options, (B) the repurchase of restricted units
from employees, directors and other recipients under such plan at nominal
values, and (C) the repurchase of Equity Interests from employees, directors and
other recipients to satisfy federal, state or local tax withholding obligations
of such employees, directors and other recipients with respect to income deemed
earned as the result of options, unit grants or other awards made under such
plan, and (vi) the payment of reasonable compensation, fees and expenses (as
determined by the Borrower) to, and indemnity provided on behalf of, the General
Partner and directors, officers and employees of the General Partner, the
Borrower or any Subsidiary.

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Section 9.05 Investments, Loans and Advances.  Neither the Borrower nor any of
its Subsidiaries will make or permit to remain outstanding any Investments in or
to any Person, except that the foregoing restriction shall not apply to:

Investments reflected in the Financial Statements;

accounts or notes receivable arising out of extensions of trade credit,
prepayments or similar transactions in the ordinary course of business;

cash and Cash Equivalents;

Investments (i) made by the Borrower in or to the Guarantors, (ii) made by any
Subsidiary in or to the Borrower or any Guarantor, but subject to the conditions
set forth in Section 9.02(c), if applicable, and (iii) made by the Borrower or
any Guarantor in or to any Subsidiary that is not a Guarantor, provided that the
aggregate of all Investments made by the Borrower or any Guarantor in or to any
Subsidiary that is not a Guarantor shall not exceed $2,000,000 at any time;

Investments (including, without limitation, capital contributions) in general or
limited partnerships or other types of entities (each, a “venture”) entered into
by the Borrower or any of its Subsidiaries with others in the ordinary course of
business; provided that (i) the interest in such venture is acquired in the
ordinary course of business and on fair and reasonable terms and (ii) such
venture interests acquired and capital contributions made (valued as of the date
such interest was acquired or the contribution made) do not exceed, in the
aggregate at any time outstanding an amount equal to $2,000,000;

subject to the limits in Section 9.06, Investments in direct ownership interests
in additional Oil and Gas Properties and gas gathering systems related thereto
or Persons owning Oil and Gas Properties and gas gathering systems related
thereto or related to farm-out, farm-in, joint operating, joint venture or area
of mutual interest agreements, gathering systems, pipelines or other similar
arrangements which are usual and customary in the oil and gas exploration and
production business located within the geographic boundaries of the United
States of America;

loans or advances to employees, officers or directors in the ordinary course of
business of the Borrower or any of its Subsidiaries, in each case only as
permitted by Governmental Requirements, including Section 402 of the Sarbanes
Oxley Act of 2002, but in any event not to exceed $250,000 in the aggregate at
any time; or

Investments in stock, obligations or securities received in settlement of debts
arising from Investments permitted under this Section 9.05 owing to the Borrower
or any of its Subsidiaries as a result of a bankruptcy or other insolvency
proceeding of the obligor in respect of such debts or upon the enforcement of
any Lien in favor of the Borrower or any of its Subsidiaries; provided that the
Borrower shall give the Administrative Agent prompt written notice in the event
that the aggregate amount of all Investments held at any one time under this
Section 9.05(h) exceeds $250,000.

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Section 9.06 Nature of Business.  The Borrower will not, and will not permit its
Subsidiaries to, engage in any material line of business substantially different
from those lines of business conducted by the Borrower and its Subsidiaries on
the date hereof or any business substantially related or incidental thereto, and
will not permit any of its Subsidiaries to, operate its business outside the
boundaries of the United States and its adjoining waters, including, without
limitation, the Gulf of Mexico.

Section 9.07 Limitation on Leases.  Neither the Borrower nor any of its
Subsidiaries will create, incur, assume or suffer to exist any obligation for
the payment of rent or hire of Property of any kind whatsoever (real or personal
but excluding leases of Hydrocarbon Interests), under leases or lease agreements
which would cause the aggregate amount of all payments made by the Borrower and
its Subsidiaries pursuant to all such leases or lease agreements, including,
without limitation, any residual payments at the end of any lease, to exceed
$2,000,000 in any period of twelve consecutive calendar months during the life
of such leases.

Section 9.08 Proceeds of Notes.  The Borrower will not permit the proceeds of
the Loans or Letters of Credit to be used for any purpose other than those
permitted by Section 7.23.  Neither the Borrower nor any Person acting on behalf
of the Borrower has taken or will take any action which might cause any of the
Loan Documents to violate Regulations T, U or X or any other regulation of the
Board or to violate Section 7 of the Securities Exchange Act of 1934 or any rule
or regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.  If requested by the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1 or such
other form referred to in Regulation U, Regulation T or Regulation X of the
Board, as the case may be.

Section 9.09 ERISA Compliance.  The Borrower and its Subsidiaries will not at
any time:

engage in any transaction in connection with which the Borrower or any of its
Subsidiaries could be subjected to either a civil penalty assessed pursuant to
subsections (c), (i) or (l) of Section 502 of ERISA or a tax imposed by Chapter
43 of Subtitle D of the Code;

terminate any Pension Plan in a manner, or take any other action with respect to
any Pension Plan, which could result in any liability of the Borrower or any of
its Subsidiaries to the PBGC;

fail to make full payment when due of all amounts which, under the provisions of
any Plan, agreement relating thereto or Governmental Requirements, the Borrower
or any of its Subsidiaries is required to pay as contributions thereto;

permit to exist any failure to satisfy the minimum funding standards, within the
meaning of Section 302 of ERISA or Section 412 of the Code, whether or not
waived, with respect to any Pension Plan;

permit the actuarial present value of the benefit liabilities under any Pension
Plan that is regulated under Title IV of ERISA to exceed the current value of
the assets

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(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Pension Plan allocable to such benefit liabilities; the term “actuarial
present value of the benefit liabilities” shall have the meaning specified in
Section 4041 of ERISA;

contribute to or assume an obligation to contribute to any Multiemployer Plan;

acquire an interest in any Person that causes such Person to become an ERISA
Affiliate with respect to the Borrower or any of its Subsidiaries if such Person
sponsors, maintains or contributes to (i) any Multiemployer Plan, if such Person
would, if it withdrew from such plan, be subject to withdrawal liability under
Part 1 of Subtitle E of Title IV of ERISA in excess of $1,000,000, or (ii) any
other Pension Plan under which the projected benefit obligation under the
Pension Plan exceeds the fair market value of the Plan’s assets by $1,000,000;

incur a liability to or on account of a Pension Plan or Multiemployer Plan under
sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA, as applicable;

contribute to or assume an obligation to contribute to any employee welfare
benefit plan, as defined in Section 3(1) of ERISA maintained to provide benefits
to former employees of such entities that the Borrower or its Subsidiaries
reasonably believes may not be terminated by such entities in their sole
discretion at any time without any material liability; or

amend a Pension Plan resulting in an increase in current liability such that the
Borrower or any of its Subsidiaries is required to provide security to such Plan
under Section 401(a)(29) of the Code.

Section 9.10 Sale or Discount of Receivables.  Except for receivables obtained
by the Borrower or any of its Subsidiaries out of the ordinary course of
business or the settlement of joint interest billing accounts in the ordinary
course of business or discounts granted to settle collection of accounts
receivable or the sale of defaulted accounts arising in the ordinary course of
business in connection with the compromise or collection thereof and not in
connection with any financing transaction, neither the Borrower nor any of its
Subsidiaries will discount or sell (with or without recourse) any of its notes
receivable or accounts receivable.

Section 9.11 Mergers; Etc.  Neither the Borrower nor any of its Subsidiaries
will merge into or with or consolidate with any other Person, or sell, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property to any other Person, except that any
Wholly-Owned Subsidiary may merge with any other Wholly-Owned Subsidiary and
that the Borrower may merge with any Wholly-Owned Subsidiary so long as the
Borrower is the survivor.

Section 9.12 Sale of Properties.  The Borrower will not, and will not permit any
of the Guarantors to, sell, assign, farm-out, convey or otherwise transfer any
Property except for: (a) the sale of Hydrocarbons in the ordinary course of
business; (b) farmouts of undeveloped acreage and assignments in connection with
such farmouts; (c) the sale or transfer of equipment that is no longer necessary
for the business of the Borrower or such Subsidiary or is replaced by equipment
of at least comparable value and use; (d) sales or other dispositions (excluding

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Casualty Events) of Oil and Gas Properties or any interest therein or
Subsidiaries owning Oil and Gas Properties (including the MidCon Asset Sale);
provided that (i) 100% of the consideration received in respect of such sale or
other disposition shall be cash, (ii) the consideration received in respect of
such sale or other disposition shall be equal to or greater than the fair market
value of the Oil and Gas Property, interest therein or Subsidiary subject of
such sale or other disposition (as reasonably determined by the board of
directors (or comparable governing body) of the General Partner and, if
requested by the Administrative Agent, the Borrower shall deliver a certificate
of a Responsible Officer certifying to that effect), (iii) if such sale or other
disposition of Oil and Gas Property or Subsidiary owning Oil and Gas Properties
included in the most recently delivered Reserve Report during any period between
two successive redeterminations of the Borrowing Base has a fair market value
(as determined by the Administrative Agent), individually or in the aggregate,
in excess of five percent (5%) of the Borrowing Base then in effect, the
Borrowing Base shall be reduced, effective immediately upon such sale or
disposition, by an amount equal to the value, if any, assigned such Property in
the most recently delivered Reserve Report or such other amount as determined by
the Required Lenders, (iv) if any such sale or other disposition is of a
Subsidiary owning Oil and Gas Properties, such sale or other disposition shall
include all the Equity Interests of such Subsidiary and (v) if, after giving
effect to the sale or other disposition of such Oil and Gas Properties, the
aggregate notional volumes of projected monthly production that remain hedged
pursuant to Swap Transactions of the Borrower exceed for any period following
the consummation of such sale or other disposition the notional volumes of
projected monthly production from the Oil and Gas Properties of the Borrower and
its Subsidiaries that the Borrower would be permitted to hedge in accordance
with Section 9.17(a) if it were then entering into such Swap Transactions (for
purposes of this Section 9.12(d), the “Maximum Hedge Amount”), then the Borrower
shall unwind, novate, terminate or enter into offsetting positions (each of
which shall be a permitted sale or disposition for purposes of this Section
9.12) with respect to an amount of the notional volumes hedged under Swap
Transactions such that the aggregate notional volumes of projected monthly
production covered by remaining Swap Transactions shall not exceed the Maximum
Hedge Amount; (e) the sale or other disposition of cash, Cash Equivalents or
Equity Interests in the Borrower; and (f) sales and other dispositions of
Properties not regulated by Section 9.12(a) to (d) having a fair market value
not to exceed $250,000 during any 12-month period.

Section 9.13 Transactions with Affiliates.  The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property or the rendering
of any service, with any Affiliate (other than the Guarantors and Wholly-Owned
Subsidiaries of the Borrower) unless such transactions are upon fair and
reasonable terms no less favorable to it than it would obtain in a comparable
arm’s length transaction with a Person not an Affiliate (as determined in good
faith by the board of directors (or comparable governing body) of the General
Partner or the conflicts committee thereof); provided,  however, that the
foregoing shall not apply to (a) that certain Shared Services Agreement, dated
May 8, 2014, between SP Holdings and the Borrower, (b) that certain Contract
Operating Agreement, dated May 8, 2014, between SOG and the Borrower, (c) that
certain Geophysical Seismic Data Use License Agreement, dated May 8, 2014, among
SOG, the Borrower and certain Subsidiaries of the Borrower, (d) any issuances of
Equity Interests or other awards, payments or grants in cash, Equity Interests
or otherwise pursuant to, or the funding of, employment agreements, and
incentive compensation plans approved by the General Partner’s board of
directors, (e) any issuance (but not any redemption or purchase) by the Borrower
of its

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units (including incentive distribution units) to the General Partner and (f)
any transaction approved in good faith by the conflicts committee of the board
of directors (or comparable governing body) of the General Partner.

Section 9.14 Subsidiaries.  The Borrower shall not, and shall not permit its
Subsidiaries to, create or acquire any additional Subsidiary unless the Borrower
complies with Section 8.13(b).  Except as otherwise permitted herein, the
Borrower shall not, and shall not permit any of its Subsidiaries to, sell,
assign or otherwise dispose of any Equity Interests in any of the
Guarantors.  The Borrower shall have no Foreign Subsidiaries.

Section 9.15 Negative Pledge Agreements; Dividend Restrictions.  Neither the
Borrower nor any of its Subsidiaries will create, incur, assume or suffer to
exist any contract, agreement or understanding (other than this Agreement or the
Security Instruments) that in any way prohibits or restricts (a) the granting,
conveying, creation or imposition of any Lien on any of its Property in favor of
the Collateral Agent, the Administrative Agent, the Issuer and the Lenders or
(b) any Subsidiary from paying dividends or making distributions to the Borrower
or any Guarantor, or which requires the consent of or notice to other Persons in
connection therewith; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law, by this Agreement or any Unsecured
Notes Documents, (ii) the foregoing shall not apply to customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided that such restrictions and conditions apply only to
the Subsidiary that is to be sold and such sale is permitted hereunder,
(iii) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Debt permitted by this Agreement if
such restrictions or conditions apply only to the Property or assets securing
such Debt and (iv) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.

Section 9.16 Gas Imbalances, Take-or-Pay or Other Prepayments.  The Borrower
will not, and will not permit any of its Subsidiaries to, allow gas imbalances,
take-or-pay or other prepayments with respect to the Oil and Gas Properties of
the Borrower or any of its Subsidiaries that would require the Borrower or such
Subsidiary to deliver, in the aggregate, three percent (3%) or more of the
monthly production of Hydrocarbons of the Borrower and its Subsidiaries at some
future time without then or thereafter receiving full payment therefor.

Section 9.17 Swap Transactions.  Neither the Borrower nor any of its
Subsidiaries will be a party to, or enter into, any Swap Transactions with any
Person other than:

On the Closing Date (to the extent not entered into prior to the Closing Date)
the Minimum Hedges and from and after the Closing Date other Swap Transactions
by the Borrower in respect of commodities (A) with an Approved Counterparty and
(B) the notional volumes for which (when aggregated with other commodity Swap
Transactions then in effect (including the Minimum Hedges and any other Swap
Transactions in effect on the Closing Date), other than basis differential swaps
on volumes already hedged pursuant to other Swap Transactions) do not exceed,
calculated separately for each of crude oil and natural gas, as of the date such
Swap Transaction is executed:

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for the twenty-four (24) month period immediately following the date on which
such Swap Transaction is executed, the lesser of (x) 100% of the Borrower’s and
its Subsidiaries’ projected monthly production from Proved Developed Producing
Reserves and (y) 90% of the Borrower’s and its Subsidiaries’ projected monthly
production from Proved Reserves;

for the second twenty-four (24) month period immediately following the date on
which such Swap Transaction is executed, the lesser of (x) 90% of the Borrower’s
and its Subsidiaries’ projected monthly production from Proved Developed
Producing Reserves and (y) 85% of the Borrower’s and its Subsidiaries’ projected
monthly production from Proved Reserves; and

for the twelve (12) month period immediately following the period described in
the immediately preceding subclause (ii), the lesser of (x) 85% of the
Borrower’s and its Subsidiaries’ projected monthly production from Proved
Developed Producing Reserves and (y) 80% of the Borrower’s and its Subsidiaries’
projected monthly production from Proved Reserves;

provided, however, that the aggregate notional volumes under all such commodity
Swap Transactions (other than floor or put options) shall not exceed the most
recent month’s actual production, calculated separately for each of crude oil
and natural gas, in any given month; no Swap Transaction shall in any event have
a tenor greater than five (5) years; and the projections of Proved Developed
Producing Reserves and Proved Reserves that must be used in determining the
maximum allowable hedging shall be based on the Borrower’s reasonable business
judgment and consistent application of petroleum engineering methodologies for
estimating Proved Developed Producing Reserves and Proved Reserves using the
then-strip pricing.

 

In addition to Swap Transactions in respect of commodity prices permitted by
Section 9.17(a) above, the Borrower shall be permitted to execute incremental
Swap Transactions in connection with a proposed acquisition of Oil and Gas
Properties or Persons owning Oil and Gas Properties during the period between
(i) the date on which the Borrower signs a definitive acquisition agreement in
connection with such proposed acquisition and (ii) the earliest of (A) the date
such proposed acquisition is consummated, (B) the date such proposed acquisition
is terminated and (C) 90 days after such definitive acquisition agreement was
executed (or such longer period as to which the Administrative Agent may agree);
provided that, (1) such Swap Transactions are with an Approved Counterparty;
(2) the aggregate notional volumes under such incremental Swap Transactions
shall not exceed 35% of the projected monthly production from the Borrower’s and
its Subsidiaries’ Proved Reserves (as forecast based upon the most recent
Reserve Report) for a period not exceeding 36 months from the date each such
incremental Swap Transaction is executed; (3) to the extent aggregate notional
volumes under all Swap Transactions of the Borrower exceed 100% of the projected
monthly production from the Borrower’s and its Subsidiaries’ existing Proved
Reserves (prior to the consummation of such proposed acquisition), the Borrower
shall maintain at least 15% of unused borrowing capacity that can be accessed
under this Agreement; (4) a Person approved in writing by Administrative Agent
has guaranteed the obligations thereunder in the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower would be required to
pay if such Swap Transaction were terminated at such time pursuant to a written
guarantee agreement

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in favor of Administrative Agent for the benefit of the Lenders in a form
reasonably acceptable to the Administrative Agent; and (5) all such incremental
Swap Transactions entered into with respect to a proposed acquisition must be
terminated, unwound or offset within 90 days following the date such proposed
acquisition is terminated (it being understood, for avoidance of doubt, that
such incremental Swap Transactions may be retained to the extent such Swap
Transactions could be entered into, as of the date of termination of the
proposed acquisition, pursuant to Section 9.17(a)).

Swap Transactions in respect of interest rates with an Approved Counterparty,
which effectively convert interest rates from floating to fixed, the notional
amounts of which (when aggregated with all other Swap Transactions of the
Borrower and its Subsidiaries then in effect effectively converting interest
rates from floating to fixed) do not exceed 75% of the outstanding principal
amount of the Borrower’s Debt for borrowed money which bears interest at a
floating rate at the time a particular such Swap Transaction is entered into.

In no event shall any Swap Agreement have any requirement, agreement or covenant
for the Borrower or any of its Subsidiaries to post collateral or margin (other
than the Collateral, to the extent permitted under this Agreement) to secure
their obligations under such Swap Agreement or to cover market
exposures.  Notwithstanding anything to the contrary in this Section 9.17, there
shall be no prohibition against the Borrower entering into any “put” contracts
or commodity price floors so long as such agreements are entered into for
non-speculative purposes and in the ordinary course of business for the purpose
of hedging against fluctuations of commodity prices.  The parties hereto
acknowledge and agree that the Minimum Hedges are not prohibited by this
Section 9.17.

Section 9.18 Tax Status as Partnership; Operating Agreements.  The Borrower
shall not alter its status as a partnership for purposes of United States
federal income Taxes.  The Borrower shall not, and shall not permit any
Subsidiary to, amend or modify any provision of its articles, bylaws, or
partnership or limited liability company organization or operating documents or
agreements, or any agreements with Affiliates of the type referred to in
Section 9.13, if such amendment or modification could reasonably be expected to
be adverse to the Administrative Agent, the Collateral Agent, the Issuer and the
Lenders in any material respect, without the prior written consent of the
Administrative Agent and the Majority Lenders, which consent shall not be
unreasonably withheld or delayed.  The Borrower agrees that any amendments or
modifications to any provisions of any of the instruments referenced above
dealing with the purpose or business, voting rights or management or operation
shall be deemed reasonably to have an adverse effect on the Administrative
Agent, the Collateral Agent, the Issuer and the Lenders that is material.

Section 9.19 Acquisition Properties.  The Borrower will not, and will not permit
any of its Subsidiaries to, amend, modify or supplement any of the agreements or
related documents by which the Borrower or any Guarantor acquires additional Oil
and Gas Properties if the effect thereof could reasonably be expected to have a
Material Adverse Effect (and provided that the Borrower promptly furnishes to
the Administrative Agent a copy of such amendment, modification or supplement).

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Section 9.20 Accounting Changes.  The Borrower shall not make any change in its
(a) accounting policies or reporting practices, except as required by GAAP, or
(b) fiscal year.

Section 9.21 Prepayment of Permitted Unsecured Notes; Payment on Subordinated
Note; Amendments to Debt Documents.  The Borrower will not, and will not permit
any Subsidiary to:

call, make or offer to make any optional or voluntary Redemption of, or
otherwise optionally or voluntarily Redeem, any of the Unsecured Notes (or any
Permitted Refinancing Debt) in respect thereof; provided, however, that (i) the
Borrower may prepay the Unsecured Notes (or any Permitted Refinancing Debt) with
the proceeds of (A) any Permitted Refinancing Debt or any additional Unsecured
Notes issued pursuant to Section 9.02(f), (B) the net cash proceeds of a sale of
Equity Interests (other than Disqualified Stock) of the Borrower that is
contemporaneous with such optional or voluntary Redemption or (C) a combination
of any Permitted Refinancing Debt and the net cash proceeds of a sale of Equity
Interests (other than Disqualified Stock) of the Borrower that is
contemporaneous with such optional or voluntary Redemption; and (ii) so long as
no Borrowing Base Deficiency then exists, no Event of Default or Default has
occurred and is continuing or would result therefrom, and the Borrower would
have at least 10% of unused borrowing capacity that can be accessed under this
Agreement, the Borrower may optionally or voluntarily Redeem any Unsecured Notes
(or any Permitted Refinancing Debt) in an amount equal to Available Cash;
further provided, however, that (for the avoidance of doubt) nothing in this
Section 9.21(a) shall limit the Borrower’s ability to make any scheduled
payments or mandatory prepayments with respect to any Unsecured Notes;

make any (i) repayment or prepayment in respect of the principal amount of Debt
outstanding under the Subordinated Note or (ii) payment in cash, Cash Equivalent
or other Property (other than Subordinated Notes) in respect of accrued interest
on the principal amount of Debt outstanding thereunder unless otherwise approved
in advance in writing by the Required Lenders; provided, however, that the
Borrower shall be permitted to Redeem Subordinated Notes with up to fifty
percent (50%) of the proceeds of (x) any issuance of Equity Interests by the
Borrower or (y) any asset sales and Casualty Events, in each case, so long as no
Default, Event of Default or Borrowing Base Deficiency exists at the time of
such repayment or results therefrom (after giving effect to such payment) and
the Borrower would have at least 10% of unused borrowing capacity that can be
accessed under this Agreement after giving effect to such payment and any
related transactions; and further provided, however, that (for the avoidance of
doubt), the Borrower shall be permitted to make payments of interest in-kind (by
capitalizing the accrued but unpaid interest under the Subordinated Notes or by
issuing additional Subordinated Notes); and

amend, modify, waive or otherwise change, consent or agree to any amendment,
modification, waiver or other change to, (i) any of the terms of any Unsecured
Notes Documents or any Permitted Refinancing Debt if the effect thereof would be
to shorten its maturity or average life or increase the amount of any payment of
principal thereof or increase the rate or shorten any period for payment of
interest thereon, provided that the foregoing shall not prohibit the execution
of (A) supplemental indentures associated with the incurrence of additional
Unsecured Notes to the extent permitted by Section 9.02(f), (B) other indentures
or

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agreements in connection with the issuance of Permitted Refinancing Debt, or
(C) supplemental indentures to add guarantors if required by the terms of any
Unsecured Notes Indenture provided such Person complies with Section 8.13(b);
and (ii) any Subordinated Note if such amendment, modification or waiver could
reasonably be expected to be adverse to the Administrative Agent, the Collateral
Agent, the Issuer and the Lenders in any material respect, without the prior
written consent of the Administrative Agent, the Issuer and the Required
Lenders.

Section 9.22 Marketing Activities.  The Borrower will not, and will not permit
any of its Subsidiaries to, engage in marketing activities for any Hydrocarbons
or enter into any contracts related thereto other than (a) contracts for the
sale of Hydrocarbons scheduled or reasonably estimated to be produced from their
Oil and Gas Properties during the period of such contract, (b) contracts for the
sale of Hydrocarbons scheduled or reasonably estimated to be produced from Oil
and Gas Properties of third parties during the period of such contract
associated with the Oil and Gas Properties of the Borrower and its Subsidiaries
that the Borrower or one of its Subsidiaries has the right to market pursuant to
joint operating agreements, unitization agreements or other similar contracts
that are usual and customary in the oil and gas business and (c) other contracts
for the purchase and/or sale of Hydrocarbons of third parties (i) which have
generally offsetting provisions (i.e. corresponding pricing mechanics, delivery
dates and points and volumes) such that no “position” is taken and (ii) for
which appropriate credit support has been taken to alleviate the material credit
risks of the counterparty thereto.

ARTICLE X.

EVENTS OF DEFAULT; REMEDIES

Section 10.01 Events of Default.  One or more of the following events shall
constitute an “Event of Default”:

the Borrower shall fail to pay any principal of any Loan or any Reimbursement
Obligation in respect of any Letter of Credit Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

the Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in Section 10.01(a)) payable under any
Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;

any representation or warranty made or deemed made by or on behalf of the
Borrower or any of its Subsidiaries in or in connection with any Loan Document
or any amendment or modification of any Loan Document or waiver under such Loan
Document, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, shall prove to have been incorrect
in any material respect when made or deemed made;

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the Borrower or any of its Subsidiaries shall fail to observe or perform any
covenant, condition or agreement contained in Section 8.01(n),  Section 8.02,
 Section 8.03 or in ARTICLE IX;

the Borrower or any of its Subsidiaries shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in Section 10.01(a),  Section 10.01(b) or Section 10.01(d)) or any
other Loan Document, and such failure shall continue unremedied for a period of
30 days after the earlier to occur of (i) notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender)
or (ii) a Responsible Officer of the General Partner or any of the Borrower’s
Subsidiaries otherwise becoming aware of such default;

any event or condition occurs (after giving effect to any notice or cure period)
that results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the Redemption thereof or any offer to Redeem to be
made in respect thereof, prior to its scheduled maturity or require the Borrower
or any of its Subsidiaries to make an offer in respect thereof;

an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any of its Subsidiaries or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any of its Subsidiaries or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for 90 days or an order or decree approving or ordering any of the
foregoing shall be entered;

the Borrower or any of its Subsidiaries shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in Section 10.01(g), (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any of its Subsidiaries or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing; or any member of the Borrower shall
make any request or take any action for the purpose of calling a meeting of the
members of the Borrower to consider a resolution to dissolve and wind-up the
Borrower’s affairs;

the Borrower or any of its Subsidiaries shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;

one or more final judgments for the payment of money in an aggregate amount in
excess of $2,500,000 (to the extent not covered by independent third party
insurance

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provided by insurers of the highest claims paying rating or financial strength
as to which the insurer does not dispute coverage and is not subject to an
insolvency proceeding) or (ii) any one or more non monetary judgments that have,
or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, shall be rendered against the Borrower, any of its
Subsidiaries or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Borrower or any of its Subsidiaries to
enforce any such judgment;

the Loan Documents after delivery thereof shall for any reason, except to the
extent permitted by the terms thereof, cease to be in full force and effect and
valid, binding and enforceable in accordance with their terms against the
Borrower or a Guarantor party thereto or shall be repudiated by them, or cease
to create a valid and perfected Lien of the priority required thereby on any of
the Collateral purported to be covered thereby, except to the extent permitted
by the terms of this Agreement, or the Borrower or any of its Subsidiaries shall
so state in writing;

an ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $2,500,000 in any year; or

a Change in Control shall occur.

Section 10.02 Remedies.  

In the case of an Event of Default other than one described in Section 10.01(g),
 Section 10.01(h) or Section 10.01(i), at any time thereafter during the
continuance of such Event of Default, the Administrative Agent, at the request
of the Required Lenders, shall, by notice to the Borrower, take either or both
of the following actions, at the same or different times: (i) terminate the Loan
Commitments, and thereupon the Loan Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower and the Guarantors
accrued hereunder and under the Notes and the other Loan Documents (including,
without limitation, the payment of cash collateral to secure the Letter of
Credit Exposure as provided in Section 2.08(j)), shall become due and payable
immediately, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other notice of any kind, all of which are
hereby waived by the Borrower and each Guarantor; and in case of an Event of
Default described in Section 10.01(g),  Section 10.01(h) or Section 10.01(i),
the Loan Commitments shall automatically terminate and the Notes and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and the other obligations of the Borrower and the Guarantors
accrued hereunder and under the Notes and the other Loan Documents (including,
without limitation, the payment of cash collateral to secure the Letter of
Credit Exposure as provided in Section 2.08(j)), shall

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automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower and
each Guarantor.

In the case of the occurrence of an Event of Default, the Administrative Agent
and the Lenders will have all other rights and remedies available at law and
equity.

All proceeds realized from the liquidation or other disposition of Collateral or
otherwise received after maturity of the Notes, whether by acceleration or
otherwise, shall be applied, respectively as follows:

First, to the Agents and the other Secured Parties, ratably, in an amount equal
to the reimbursement of expenses and indemnities provided for under this
Agreement and the Security Instruments;

Second, to the Secured Parties, ratably, in payment of that portion of the
Obligations constituting interest due, in each case, under their respective Loan
Documents or Swap Agreement;

Third, to the Secured Parties, ratably, in payment of that portion of the
Obligations constituting fees due under their respective Loan Documents or Swap
Agreement;

Fourth, ratably to the Secured Parties (and ratably among them) in payment of
all of the remaining Obligations owing to the Lenders or an Affiliate of the
Lenders under their respective Loan Documents or Swap Agreement;

Fifth, to serve as cash collateral to be held by the Administrative Agent to
secure the Letter of Credit Exposure under this Agreement; and

Sixth, to the Borrower or to whomever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct, any surplus then
remaining from such proceeds.

Section 10.03 Disposition of Proceeds.  The Security Instruments contain an
assignment by the Borrower and/or the Guarantors unto and in favor of the
Collateral Agent (with respect to the Pledge and Security Agreement) and the
Administrative Agent for the benefit of the Administrative Agent, the Issuer,
the Lenders and any Swap Counterparty of all of the Borrower’s or each
Guarantor’s interest in and to production and all proceeds attributable thereto
that may be produced from or allocated to the Mortgaged Property.  The Security
Instruments further provide in general for the application of such proceeds to
the satisfaction of the Obligations and other obligations described therein and
secured thereby.  Notwithstanding the assignment contained in such Security
Instruments, except after the occurrence and during the continuance of an Event
of Default, (a) the Collateral Agent, the Administrative Agent and the Lenders
agree that they will neither notify the purchaser or purchasers of such
production nor take any other action to cause such proceeds to be remitted to
the Collateral Agent, the Administrative Agent or the Lenders, but the Lenders
will instead permit such proceeds to be paid to the Borrower and its
Subsidiaries and (b) the Lenders hereby authorize the Collateral

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Agent and the Administrative Agent to take such actions as may be necessary to
cause such proceeds to be paid to the Borrower and/or its Subsidiaries. 

ARTICLE XI.

THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT

Section 11.01 Appointment; Powers.  Each of the Lenders and each Issuer hereby
irrevocably appoints the Administrative Agent and the Collateral Agent as its
agent and authorizes the Administrative Agent and the Collateral Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent and the Collateral Agent by the terms hereof and the other
Loan Documents, together with such actions and powers as are reasonably
incidental thereto.

Section 11.02 Duties and Obligations of Administrative Agent and Collateral
Agent.  The Administrative Agent and the Collateral Agent shall have no duties
or obligations except those expressly set forth in the Loan Documents.  Without
limiting the generality of the foregoing, (a) the Administrative Agent and
Collateral Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing (the use of the
term “agent” herein and in the other Loan Documents with reference to the
Administrative Agent or the Collateral Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any Governmental Requirements; rather, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties),
(b) neither the Administrative Agent nor the Collateral Agent shall have any
duty to take any discretionary action or exercise any discretionary powers,
except as provided in Section 11.03, and (c) except as expressly set forth
herein, the Administrative Agent and the Collateral Agent shall have no duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or the Collateral Agent or
any of their Affiliates in any capacity.  Neither the Administrative Agent nor
the Collateral Agent shall be deemed to have knowledge of any Default unless and
until written notice thereof is given to the Administrative Agent or the
Collateral Agent by the Borrower or a Lender, and shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, (v) the satisfaction of any condition set forth in ARTICLE VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent, (vi) the existence, value, perfection
or priority of any collateral security or the financial or other condition of
the Borrower and its Subsidiaries or any other obligor or guarantor, or (vii)
any failure by the Borrower or any other Person (other than itself) to perform
any of its obligations hereunder or under any other Loan Document or the
performance or observance of any covenants, agreements or other terms or
conditions set forth herein or therein.  For purposes of determining compliance
with the

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conditions specified in ARTICLE VI, each Lender shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the Closing Date specifying its
objection thereto.

Section 11.03 Action by Agent.  Neither the Administrative Agent nor the
Collateral Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent or the Collateral Agent is required to exercise in writing
as directed by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 12.02) and in all cases the Administrative Agent and the Collateral
Agent shall be fully justified in failing or refusing to act hereunder or under
any other Loan Documents unless it shall (a) receive written instructions from
the Required Lenders or the Lenders, as applicable, (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02) specifying the action to be taken and (b) be
indemnified to its satisfaction by the Lenders against any and all liability and
expenses which may be incurred by it by reason of taking or continuing to take
any such action.  The instructions as aforesaid and any action taken or failure
to act pursuant thereto by the Administrative Agent or the Collateral Agent
shall be binding on all of the Lenders.  If a Default has occurred and is
continuing, then the Administrative Agent or the Collateral Agent, as
applicable, shall take such action with respect to such Default as shall be
directed by the requisite Lenders in the written instructions (with indemnities)
described in this Section 11.03, provided that, unless and until the
Administrative Agent or the Collateral Agent shall have received such
directions, the Administrative Agent or the Collateral Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interests of the
Lenders.  In no event, however, shall the Administrative Agent or the Collateral
Agent be required to take any action which exposes the Administrative Agent or
the Collateral Agent to personal liability or which is contrary to this
Agreement, the Loan Documents or Governmental Requirements.  If a Default has
occurred and is continuing, neither the Syndication Agent nor any
Co-Documentation Agent shall have any obligation to perform any act in respect
thereof.  No Agent shall be liable for any action taken or not taken by it with
the consent or at the request of the Required Lenders or the Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02), and otherwise neither the
Administrative Agent nor the Collateral Agent shall be liable for any action
taken or not taken by it hereunder or under any other Loan Document or under any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except
for its own gross negligence or willful misconduct.

Section 11.04 Reliance by Agent.  Each Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  Each
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon and each of the Borrower, the Lenders and each
Issuer hereby waives the right to dispute such Agent’s record of such statement,
except in the case of gross negligence or willful

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misconduct by such Agent.  Each Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.  The
Agents may deem and treat the payee of any Note as the holder thereof for all
purposes hereof unless and until a written notice of the assignment or transfer
thereof permitted hereunder shall have been filed with the Administrative Agent.

Section 11.05 Subagents.  The Administrative Agent and the Collateral Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by the Administrative Agent or the
Collateral Agent, respectively.  The Administrative Agent and the Collateral
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties.  The exculpatory
provisions of the preceding Sections of this ARTICLE XI shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and the
Collateral Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Agent.

Section 11.06 Resignation or Removal of Agents.  Subject to the appointment and
acceptance of a successor Agent as provided in this Section 11.06, any Agent may
resign at any time by notifying the Lenders, each Issuer and the Borrower, and
any Agent may be removed at any time with or without cause by the Required
Lenders.  Upon any such resignation or removal, the Required Lenders shall have
the right, subject to the consent of the Borrower, such consent not to be
unreasonably withheld or delayed, to appoint a successor.  If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation or removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders and each Issuer, appoint a successor Agent.  Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder.  The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor.  After the Agent’s
resignation hereunder, the provisions of this ARTICLE XI and Section 12.03 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Agent.

Section 11.07 Agents and Lenders.  Each bank serving as an Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not an Agent hereunder.

Section 11.08 No Reliance.  Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent, any other Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and each
other Loan Document to which it is a party.  Each Lender also acknowledges that
it will, independently and without reliance upon the

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Administrative Agent, any other Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.  The Agents shall not be required to
keep themselves informed as to the performance or observance by the Borrower or
any of its Subsidiaries 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, no Agent or Arranger shall have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower (or any of its Affiliates) which may come into the possession of such
Agent or any of its Affiliates.  In this regard, each Lender acknowledges that
Mayer Brown LLP is acting in this transaction as special counsel to the
Administrative Agent with respect to this Agreement and to the Collateral Agent
only.  Each other party hereto will consult with its own legal counsel to the
extent that it deems necessary in connection with the Loan Documents and the
matters contemplated therein.

Section 11.09 Administrative Agent and Collateral Agent May File Proofs of
Claim.  In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Borrower or any of its Subsidiaries, the
Administrative Agent and the Collateral Agent (irrespective of whether the
principal of any Loan shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

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, the Collateral Agent, and
the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the Collateral Agent, and
the Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders, the Collateral Agent, and the Administrative Agent
under Section 12.03) allowed in such judicial proceeding; and

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 the Collateral Agent and, in the event
that the Administrative Agent and the Collateral Agent shall consent to the
making of such payments directly to the Lenders, to pay to the Administrative
Agent and to the Collateral Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent,
the Collateral Agent and their respective agents and counsel, and any other
amounts due the Administrative Agent or the Collateral Agent under
Section 12.03.

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

Section 11.10 Authority of Administrative Agent and Collateral Agent to Release
Collateral and Liens.  Each Lender and each Issuer hereby authorizes the
Administrative Agent or the Collateral Agent to release any collateral under any
Security Instrument that is permitted to be sold or released pursuant to the
terms of the Loan Documents or, upon the expiration and termination of the Loan
Commitments and repayment in full of the principal of and interest on each Loan
and all fees payable hereunder and all other amounts payable under the Loan
Documents, and the expiration or termination of all Letters of Credit (other
than Letters of Credit as to which other arrangements satisfactory to the
Administrative Agent and the Issuer have been made), and the reimbursement of
all Letter of Credit Disbursements.  Each Lender and each Issuer hereby
authorizes the Administrative Agent and the Collateral Agent to execute and
deliver to the Borrower, at the Borrower’s sole cost and expense, any and all
releases of Liens, termination statements, assignments or other documents
reasonably requested by the Borrower in connection with any sale or other
disposition of Property to the extent such sale or other disposition is
permitted by the terms of Section 9.12 or is otherwise authorized by the terms
of the Loan Documents.

Section 11.11 The Arranger, etc..  None of the Arranger, any Person identified
as a “Syndication Agent,” any Person identified as a “Co-Documentation Agent,”
any Person identified as “Lead Arranger” or any Person identified as
“Bookrunner” shall have any duties, responsibilities or liabilities under this
Agreement and the other Loan Documents other than its respective duties,
responsibilities and liabilities in its capacity as a Lender hereunder to the
extent it is a party to this Agreement as a Lender.

ARTICLE XII.

MISCELLANEOUS

Section 12.01 Notices. 

Except in the case of notices and other communications expressly permitted to be
given by telephone (and subject to Section 12.01(b)), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:

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if to the Borrower, to it at

Sanchez Production Partners LP
1000 Main Street, Suite 3000
Houston, Texas 77002
Telephone:  832-742-3818
Fax:  832-308-3720
Attn:  Chief Financial Officer

if to the Administrative Agent, to it at

Royal Bank of Canada
Agency Services Group
4th Floor, 20 King Street West
Toronto, Ontario, Canada
M5H 1CA
Attention:  Manager Agency
Facsimile:  (416) 842-4023
Email:   RBCAgentNotices@rbccm.com

With a copy to:
Royal Bank of Canada
2800 Post Oak Boulevard
Suite 3900
Houston, Texas  77056
Attention:  Mark Lumpkin
Facsimile:  713-403-5624

for all correspondence related to Letter of Credit requests, to it at

Royal Bank of Canada
One Liberty Plaza
3rd Floor
New York, NY  10006-1404
Attention:  Manager Trade Products
Telephone:  212-428-6235
Facsimile:  212-428-6332

if to any other Lender, in its capacity as such, or any other Lender in its
capacity as an Issuer, to it at its address (or telecopy number) set forth in
its Administrative Questionnaire.

Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to ARTICLE II,  ARTICLE III,  ARTICLE IV and ARTICLE V unless otherwise
agreed by the Administrative Agent and the applicable Lender.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by

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electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

Section 12.02 Waivers; Amendments.

No failure on the part of the Administrative Agent, any other Agent, the Issuer
or any Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege, or any abandonment or
discontinuance of steps to enforce such right, power or privilege, under any of
the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under any of the Loan
Documents preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  The rights and remedies of the Administrative
Agent, any other Agent, each Issuer and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
Section 12.02(b), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, any other Agent, any Lender or the Issuer may have had
notice or knowledge of such Default at the time.

Neither this Agreement nor any provision hereof nor any Security Instrument
securing the payment or performance of the Obligations hereunder, nor any
provision thereof, may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent, or the Collateral Agent
(as applicable), with the consent of the Required Lenders; provided that the
consent of the Required Lenders, or any other party other than the Borrower and
the Administrative Agent, or the Collateral Agent (as applicable), shall not be
required for amendments to the Security Instruments solely for the purpose of
adding additional collateral to secure the payment and performance of the
Obligations; provided further that no such agreement shall (i) increase the
Maximum Credit Amount of any Lender without the written consent of such Lender,
(ii) increase the Borrowing Base without the written consent of each Lender that
is not a Defaulting Lender, decrease or maintain the Borrowing Base without the
consent of the Required Lenders, or modify in any manner Section 2.07 without
the consent of each Lender (except as permitted pursuant to Section 2.07(g)),
(iii) reduce the principal amount of any Loan or Letter of Credit Disbursement
or reduce the rate of interest thereon, or reduce any fees payable hereunder, or
reduce any other Obligations hereunder or under any other Loan Document, without
the written consent of each Lender affected thereby, (iv) postpone the scheduled
date of payment of the principal amount of any Loan or Letter of Credit
Disbursement, or any interest thereon, or any fees payable hereunder, or any
other Obligations hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or

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postpone or extend the Termination Date or the Maturity Date without the written
consent of each Lender affected thereby, (v) change any Loan Document in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, including without limitation,
Section 4.01(b) or Section 4.01(c), (vi) waive or amend Section 6.01,
 Section 8.13 or Section 10.02(c) or change the definition of the terms
“Domestic Subsidiary”, “Foreign Subsidiary”, “Material Domestic Subsidiary” or
“Subsidiary”, without the written consent of each Lender, (vii) release any
Guarantor (except as set forth in the Guarantee Agreement), release all or
substantially all of the collateral (other than as provided in Section 11.10),
or reduce the percentage set forth in Section 8.13(a) to less than 80%, without
the written consent of each Lender, (viii) change any of the provisions of this
Section 12.02(b) or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or make any
determination or grant any consent hereunder or any other Loan Documents,
without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any other Agent, or the Issuer hereunder or under any
other Loan Document without the prior written consent of the Administrative
Agent, such other Agent or such Issuer, as the case may be, (ix) amend or modify
the definition of Obligations to delete or exclude any obligation or liability
described therein without the written consent of each Lender, or (x) permit the
Borrower to assign or transfer any of its rights or obligations under this
Agreement or other Loan Documents without the written consent of each
Lender.  Notwithstanding the foregoing, any supplement to Schedule 7.14
(Subsidiaries) shall be effective simply by delivering to the Administrative
Agent a supplemental schedule clearly marked as such, and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the Lenders.

Section 12.03 Expenses; Indemnity; Damage Waiver. 

The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, Collateral Agent, the Issuer and the Arranger including,
without limitation, the reasonable fees, charges and disbursements of counsel
and other outside consultants for the Administrative Agent, the Collateral
Agent, the Issuer and the Arranger, the reasonable travel, photocopy, mailing,
courier, telephone and other similar expenses and, in connection with the
syndication of the credit facilities provided for herein, including expenses in
connection with Intralinks, the preparation, negotiation, execution, delivery
and administration (both before and after the execution hereof and including
advice of counsel to the Administrative Agent, the Collateral Agent, the Issuer
and the Arranger as to the rights and duties of the Administrative Agent, the
Collateral Agent, the Issuer, the Arranger, and the Lenders with respect
thereto) of this Agreement and the other Loan Documents and any amendments,
modifications or waivers of or consents related to the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket costs, expenses, Taxes,
assessments and other charges incurred by any Agent, or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket expenses incurred by
each Issuer in connection with the amendment of any Letter of Credit issued by
such Issuer or any demand for payment thereunder, (iv) all reasonable
out-of-pocket expenses incurred by any Agent, Arranger, the Issuer or any
Lender, including the fees, charges and disbursements of one primary counsel,

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any local counsel or special counsel for the Administrative Agent, the
Collateral Agent, the Arranger, the Issuer and the Lenders, in connection with
the enforcement or protection of its rights in connection with this Agreement or
any other Loan Document, including its rights under this Section 12.03, or in
connection with the Loans made or Letters of Credit issued hereunder, including,
without limitation, all such reasonable out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or Letters
of Credit.

THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER, EACH ISSUER AND EACH
LENDER, AND THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF ANY OF
THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST,
AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, AND
DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST
ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED
HEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN
DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (ii) THE FAILURE OF THE BORROWER OR ANY OF ITS SUBSIDIARIES TO COMPLY
WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY
GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY
BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN
ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS
DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE
OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, ANY REFUSAL BY THE
ISSUER TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT ISSUED BY SUCH
ISSUER IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY
COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, (v) THE OPERATIONS OF THE
BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES BY THE BORROWER AND ITS
SUBSIDIARIES, (vi) ANY ASSERTION BY A THIRD PARTY THAT THE LENDERS WERE NOT
ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS,
(vii) THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY OF ITS SUBSIDIARIES
WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES, (viii) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL,
GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR
ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR
ANY OF ITS SUBSIDIARIES IN VIOLATION OF ENVIRONMENTAL LAWS OR ANY ACTUAL OR
ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED
OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES IN VIOLATION OF
ENVIRONMENTAL LAWS, (ix) ANY

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ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES, (x) ANY OTHER VIOLATION OF ENVIRONMENTAL LAWS OR LAWS RELATING TO
ANY HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xi)
ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING
RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH
INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE (A) DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (B) IN RESPECT
OF ANY PROPERTY FOR ANY OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON,
ITS SUCCESSORS OR ASSIGNS HAVE OBTAINED TITLE AND POSSESSION OF SUCH PROPERTY BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE).

To the extent that the Borrower fails to pay any amount required to be paid by
it to such Agent or the Issuer under Section 12.03(a) or (b), each Lender
severally agrees to pay to such Agent or such Issuer, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against such Agent or such Issuer in its capacity as such.

To the extent permitted by Governmental Requirements, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

All amounts due under this Section 12.03 shall be payable within ten (10)
Business Days of written demand therefor.

Section 12.04 Successors and Assigns. 

The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby

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(including any Affiliate of the Issuer that issues any Letter of Credit), except
that (i) the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 12.04.  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuer that issues any Letter
of Credit), Participants (to the extent provided in Section 12.04(c)) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, each Issuer and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

(i)  Subject to the conditions set forth in Section 12.04(b)(ii), any Lender may
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement to an Eligible Assignee (including all or a portion of its
Loan Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:

(1)the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender or an Affiliate of a Lender or, if an Event of Default
has occurred and is continuing, to any other Eligible Assignee; and

(2)the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment to an assignee that is a Lender or any
Affiliate of a Lender, immediately prior to giving effect to such assignment.

(i) Assignments shall be subject to the following additional conditions:

(1)except in the case of an assignment to an assignee that is a  Lender
immediately prior to giving effect to such assignment or an Affiliate of a
Lender or an assignment of the entire remaining amount of the assigning Lender’s
Loan Commitment, the amount of the Loan Commitment of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, provided that no such consent of the
Borrower shall be required if an Event of Default has occurred and is
continuing;

(2)each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

(3)except in the case of an assignment to an Affiliate of a Lender, the parties
to each assignment shall execute and deliver to the

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Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and

(4)the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

Subject to Section 12.04(b)(iv) and the acceptance and recording of an
Assignment and Assumption, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Section 5.01,  Section 5.02,  Section 5.03 and Section 12.03).  Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this Section 12.04 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 12.04(c).

The Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Maximum Credit Amount of, and principal amount of the Loans
and Letter of Credit Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, each Issuer and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower, the Issuer and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.  In connection with any
changes to the Register, if necessary, the Administrative Agent will reflect the
revisions on Annex I and forward a copy of such revised Annex I to the Borrower,
each Issuer and each Lender.

Upon its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in Section 12.04(b) and any written
consent to such assignment required by Section 12.04(b), the Administrative
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register.  No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this Section 12.04(b).

Any Lender may, without the consent of the Borrower the Administrative Agent or
the Issuer, sell participations to one or more banks or other entities (a

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“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Loan Commitment and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent, each Issuer and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the proviso to Section 12.02 that affects
such Participant.  In addition such agreement must provide that the Participant
be bound by the provisions of Section 12.03.  Subject to Section 12.04(c)(ii),
the Borrower agrees that each Participant shall be entitled to the benefits of
Section 5.01,  Section 5.02 and Section 5.03 (in each case, without duplication
of any benefits afforded the Lender granting the participation) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 12.04(b).  To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 12.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 4.01(c) as
though it were a Lender.

A Participant shall not be entitled to receive any greater payment under
Section 5.01 or Section 5.03 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent.  A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 5.03 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 5.03(f) and (g) as though it were a Lender.

Each Lender that sells a participation shall, acting solely for this purpose as
an agent of the Borrower, maintain a register on which it enters the name and
address of each Participant and the principal amounts (and stated interest) of
each Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any commitments, loans, letters of credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations.  The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the
contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity
as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

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

Section 12.05 Survival; Revival; Reinstatement. 

All covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, any other Agent, the Issuer or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Loan Commitments have not
expired or terminated.  The provisions of Section 5.01,  Section 5.02,
 Section 5.03 and Section 12.03 and ARTICLE XI shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Loan Commitments or the termination of this Agreement, any
other Loan Document or any provision hereof or thereof.

To the extent that any payments on the Obligations or proceeds of any collateral
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, debtor in possession, receiver or
other Person under any bankruptcy law, common law or equitable cause, then to
such extent, the Obligations so satisfied shall be revived and continue as if
such payment or proceeds had not been received and the Administrative Agent’s
and the Lenders’ Liens, security interests, rights, powers and remedies under
this Agreement and each Loan Document shall continue in full force and
effect.  In such event, each Loan Document shall be automatically reinstated,
and the Borrower shall take such action as may be reasonably requested by the
Administrative Agent and the Lenders to effect such reinstatement.

Section 12.06 Counterparts; Integration; Effectiveness.  

This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract.

This Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE

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FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

Except as provided in Section 6.01, this Agreement shall become effective when
it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or electronic mail
in portable document format (pdf) shall be effective as delivery of a manually
executed counterpart of this Agreement.

Section 12.07 Severability.  Any provision of this Agreement or any other Loan
Document held to be invalid, illegal or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08 Right of Setoff.  If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations (of whatsoever
kind, including, without limitations obligations under Swap Agreements) at any
time owing by such Lender or Affiliate to or for the credit or the account of
the Borrower or any of its Subsidiaries against any of and all the obligations
of the Borrower or any of its Subsidiaries owed to such Lender now or hereafter
existing under this Agreement or any other Loan Document, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
any other Loan Document and although such obligations may be unmatured.  The
rights of each Lender under this Section 12.08 are in addition to other rights
and remedies (including other rights of setoff) which such Lender or its
Affiliates may have.

Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.  THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT UNITED STATES
FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
LOCATED. 

ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, IN EITHER CASE LOCATED IN NEW YORK COUNTY,
NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY

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ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.  THIS SUBMISSION TO
JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING
JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.

EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE
RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANOTHER PARTY IN ANY OTHER JURISDICTION.

EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09. 

Section 12.10 Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 12.11 Confidentiality.  Each of the Agents, each Issuer and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including

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accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory or self-regulatory
authority or body, (c) to the extent required by Governmental Requirements or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement or any other Loan Document, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 12.11, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any actual or prospective counterparty (or its advisors) to any Swap Agreement
relating to the Borrower and their obligations, (g) with the consent of the
Borrower, (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 12.11 or (ii) becomes
available to the Administrative Agent, the Issuer or any Lender on a
nonconfidential basis from a source other than the Borrower or (i) to any credit
insurance provider relating to the Borrower and its Obligations so long as any
such credit insurance provider is party to a written agreement by which it is
subject to the confidentiality provisions of this Section 12.11.  For the
purposes of this Section 12.11, “Information” means all information received
from the Borrower or any of its Subsidiaries relating to the Borrower or any of
its Subsidiaries and their businesses, other than any such information that is
available to the Administrative Agent, the Issuer or any Lender on a
nonconfidential basis prior to disclosure by the Borrower or any of its
Subsidiaries; provided that, in the case of information received from the
Borrower, or any of its Subsidiaries after the date hereof, such information is
clearly identified at the time of delivery as confidential.  Any Person required
to maintain the confidentiality of Information as provided in this Section 12.11
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

Section 12.12 Maximum Interest.  It is the intention of the parties hereto to
conform strictly to applicable usury laws, and, anything herein to the contrary
notwithstanding, the Obligations of the Borrower to each Lender under this
Agreement shall be subject to the limitation that payments of interest shall not
be required to the extent that receipt thereof would be contrary to provisions
of law applicable to such Lender limiting rates of interest that may be charged
or collected by such Lender.  Accordingly, if the transactions contemplated
hereby would be usurious under Governmental Requirements (including the Federal
and state laws of the United States of America, or of any other jurisdiction
whose laws may be mandatorily applicable) with respect to a Lender, then, in
that event, notwithstanding anything to the contrary in this Agreement, it is
agreed as follows: (a) the provisions of this Section 12.12 shall govern and
control; (b) the aggregate of all consideration that constitutes interest under
Governmental Requirements that is contracted for, charged or received under this
Agreement, or under any other Loan Document or otherwise in connection with this
Agreement by such Lender shall under no circumstances exceed the Highest Lawful
Rate, and any excess shall be credited to the Borrower by such Lender (or, if
such consideration shall have been paid in full, such excess promptly refunded
to the Borrower); (c) all sums paid, or agreed to be paid, to such Lender for
the use, forbearance and detention of the indebtedness of the Borrower to such
Lender hereunder shall, to the extent permitted by Governmental Requirements, be
amortized, prorated, allocated

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and spread throughout the full term of such indebtedness until payment in full
so that the actual rate of interest is uniform throughout the full term thereof;
and (d) if at any time the interest provided pursuant to Section 3.02, together
with any other fees and expenses payable pursuant to this Agreement and the
other Loan Documents and deemed interest under Governmental Requirements,
exceeds that amount that would have accrued at the Highest Lawful Rate, then the
amount of interest and any such fees to accrue to such Lender pursuant to this
Agreement shall be limited, notwithstanding anything to the contrary in this
Agreement, to that amount that would have accrued at the Highest Lawful Rate,
but any subsequent reductions, as applicable, shall not reduce the interest to
accrue to such Lender pursuant to this Agreement below the Highest Lawful Rate
until the total amount of interest accrued pursuant to this Agreement and such
fees deemed to be interest equals the amount of interest that would have accrued
to such Lender if a varying rate per annum equal to the interest provided
pursuant to Section 3.02 had at all times been in effect, plus the amount of
fees that would have been received but for the effect of this Section 12.12.

Section 12.13 EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT
AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS
AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL
COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS
ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT
IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF
THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH
LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE
VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE
OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

Section 12.14 Collateral Matters; Swap Agreements.  The benefit of the Security
Instruments and of the provisions of this Agreement relating to any collateral
securing the Obligations shall also extend to and be available to Swap
Counterparties to any Swap Agreement with the Borrower or any of its
Subsidiaries on a pro rata basis in respect of any obligations of the Borrower
or any of its Subsidiaries that arise under any such Swap Agreements; provided
that, with respect to any Swap Transaction that remains secured after the Swap
Counterparty thereto is no longer a Lender or an Affiliate of a Lender or the
outstanding Obligations have been repaid in full and the Commitments have
terminated, the provisions of Article XI shall also continue to apply to such
counterparty in consideration of its benefits hereunder and each such
counterparty shall, if requested by the Administrative Agent, promptly execute
and deliver to the Administrative Agent all such other documents, agreements and
instruments reasonably

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requested by the Administrative Agent to evidence the continued applicability of
the provisions of Article XI.  No Swap Counterparty shall have any voting rights
or consent under any Loan Document as a result of the existence of obligations
owed to it under any such Swap Agreements.

Section 12.15 No Third Party Beneficiaries.  This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and the Issuer to
issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Borrower, and no other Person (including, without limitation, any
Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or
materialsman) shall have any rights, claims, remedies or privileges hereunder or
under any other Loan Document against the Administrative Agent, any other Agent,
the Issuer or any Lender for any reason whatsoever.  There are no third party
beneficiaries.

Section 12.16 USA Patriot Act Notice.  Each Lender hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrower and each
Obligor, which information includes the name and address of the Borrower and
each Obligor and other information that will allow such Lender to identify the
Borrower and each Obligor in accordance with the Act.

Section 12.17 Amendment and Restatement.  The parties hereto agree that on the
Closing Date, the following transactions shall be deemed to occur automatically,
without further action by any party hereto:

the Existing Credit Agreement shall be deemed to be amended and restated in its
entirety in the form of this Agreement;

the Loans shall serve to extend, renew and continue, but not to extinguish or
novate, the Existing Loans and the corresponding promissory notes and to amend,
restate and supersede, but not to extinguish or cause to be novated the Existing
Obligations under, the Existing Credit Agreement;  

the Borrower hereby agrees that, upon the effectiveness of this Agreement, the
Existing Loans outstanding under the Existing Credit Agreement and all accrued
and unpaid interest thereon shall be deemed to be outstanding under and payable
by this Agreement;

all Existing Obligations (including any Existing Obligations that have accrued,
but are not payable, as of the Closing Date) shall, to the extent not paid on
the Closing Date, be deemed to be Obligations outstanding (and in the case of
any accrued Existing Obligations that have accrued, but are not payable, as of
the Closing Date, such accrued Existing Obligations shall be paid on the date or
dates that such Existing Obligations were due under the Existing Agreement);

the Liens in favor of Administrative Agent securing payment of the Existing
Obligations shall remain in full force and effect with respect to the
Obligations and are hereby reaffirmed in accordance with the Security Documents;
and

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the parties acknowledge and agree that this Agreement and the other Loan
Documents do not constitute a novation, payment and reborrowing or termination
of the Existing Obligations and that all such Existing Obligations are in all
respects continued and outstanding as Obligations under this Agreement with only
the terms being modified from and after the effective date of this Agreement as
provided in this Agreement and the other Loan Documents.

Section 12.18 No General Partner’s Liability for Revolving Facility. It is
hereby understood and agreed that the General Partner shall have no personal
liability, as general partner or otherwise, for the payment of any amount owing
or to be owing hereunder or under any other Loan Document with respect to the
Loan Commitments, Loans or Letters of Credit.  In furtherance of the foregoing,
the Administrative Agent, the Collateral Agent and the Lenders agree for
themselves and their respective successors and assigns that no claim arising
against the Borrower or any of its Subsidiaries under any Loan Document with
respect to the Loan Commitments, Loans or Letters of Credit shall be asserted
against the General Partner (in its individual capacity), any claim arising
against the Borrower or any of its Subsidiaries under any Loan Document with
respect to the Loan Commitments, Loans or Letters of Credit shall be made only
against and shall be limited to the assets of the Borrower and its Subsidiaries,
and no judgment, order or execution entered in any suit, action or proceeding,
whether legal or equitable, on this Agreement or any of the other Loan Documents
with respect to the Loan Commitments, Loans or Letters of Credit shall be
obtained or enforced against the General Partner (in its individual capacity) or
its assets for the purpose of obtaining satisfaction and payment of the
Obligations with respect to the Loan Commitments, Loans or Letters of Credit or
any claims arising under this Agreement or any other Loan Document with respect
to the Loan Commitments, Loans or Letters of Credit, any right to proceed
against the General Partner individually or its respective assets being hereby
expressly waived by the Administrative Agent, the Collateral Agent and Lenders
for themselves and their respective successors and assigns.  Nothing in this
Section 12.18, however, shall be construed so as to prevent the Administrative
Agent, the Collateral Agent or any Lender from commencing any action, suit or
proceeding with respect to, or causing legal papers to be served upon, the
General Partner for the purpose of (a) obtaining jurisdiction over the Borrower
or its Subsidiaries, (b) obtaining judgment, order or execution against the
General Partner arising out of any fraud or intentional misrepresentation by the
General Partner in connection with the Loan Documents or (c) the recovery of
moneys received by the General Partner in violation of this Agreement or any
other Loan Document.

 

 

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

BORROWER:

SANCHEZ PRODUCTION PARTNERS LP, a
Delaware limited partnership

By:Sanchez Production Partners GP LLC,

its general partner

By:/s/ Charles C. Ward 
Name: Charles C. Ward
Title:   Chief Financial Officer

 

 

 

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ADMINISTRATIVE AGENT AND

COLLATERAL AGENT:

 

Royal Bank of Canada,

as Administrative Agent and Collateral Agent

By:/s/ Yvonne Brzier 
Name:  Yvonne Brazier

Title:    Manager, Agency Services

 

 

 

ISSUER AND LENDER:

 

 

Royal Bank of Canada,

as Issuer and a Lender

By:/s/ Evans Swann, Jr. 
Name:  Evans Swann, Jr.

Title:    Authorized Signatory

 

 

 

 

 

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SOCIÉTÉ GÉNÉRALE, as a Lender

By: 
Name: 
Title: 

 

 

 

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COMPASS BANK, as a Lender

By: 
Name: 
Title: 

 

 

 

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SUNTRUST BANK, as a Lender

By: 
Name:  
Title: 

 

 

 

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ONEWEST BANK N.A.
as a Lender

By: 
Name:  
Title: 

 

 

 

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ANNEX I

LIST OF MAXIMUM CREDIT AMOUNTS

AGGREGATE MAXIMUM CREDIT AMOUNT

NAME OF LENDER

APPLICABLE
PERCENTAGE

MAXIMUM CREDIT
AMOUNT

 

 

 

Royal Bank of Canada

25.00000000% 
$
125,000,000.00 

Société Générale

25.00000000% 
$
125,000,000.00 

Compass Bank

18.18181818% 
$
90,909,090.91 

SunTrust Bank

18.18181818% 
$
90,909,090.91 

OneWest Bank N.A.

13.63636364% 
$
68,181,818.18 

TOTAL

100.00000000% 
$
500,000,000.00 

 

 

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EXHIBIT A
FORM OF NOTE

$[                 ]

[           ], 2015

 

FOR VALUE RECEIVED, Sanchez Production Partners LP, a Delaware limited
partnership (the “Borrower”), hereby promises to pay to [               ] or its
registered assigns (the “Lender”), at the principal office of Royal Bank of
Canada, as administrative agent (the “Administrative Agent”), the principal sum
of [           ] Dollars ($[         ]) (or such lesser amount as shall equal
the aggregate unpaid principal amount of the Loans) made by the Lender to the
Borrower under the Credit Agreement (defined below), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.

The date, amount, Type, interest rate, Interest Period and maturity of each Loan
made by the Lender to the Borrower, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, may be endorsed by the Lender on the schedules
attached hereto or any continuation thereof or on any separate record maintained
by the Lender.  Failure to make any such notation or to attach a schedule shall
not affect any Lender’s or the Borrower’s rights or obligations in respect of
such Loans or affect the validity of such transfer by any Lender of this Note.

This Note is issued pursuant to, and is subject to the terms and conditions set
forth in, that certain Third Amended and Restated Credit Agreement, dated as of
March 31, 2015, by and among the Borrower, the Administrative Agent, and certain
other lenders parties thereto from time to time (the “Credit Agreement”) and is
entitled to the benefits provided for in the Credit Agreement and the other Loan
Documents.  The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events, for prepayments of Loans
upon the terms and conditions specified therein and other provisions relevant to
this Note.  Capitalized terms used in this Note have the respective meanings
assigned to them in the Credit Agreement

This Note is one of the notes that represents an extension, renewal, and
replacement of, and is given in substitution and exchange for, certain
promissory notes evidencing prior indebtedness of the Borrower in the original
aggregate principal amount of up to $350,000,000 executed by the Borrower under
the Second Amended and Restated Credit Agreement dated as of May 30, 2013, as
such Second Amended and Restated Credit Agreement was or may have been from time
to time thereafter amended or modified, and the indebtedness evidenced hereby
and thereby is a continuing indebtedness, and nothing herein contained or
implied shall be construed to deem such indebtedness or any accrued and unpaid
interest thereon paid, satisfied, novated or terminated, or any collateral or
security therefore released or terminated.

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

SANCHEZ PRODUCTION PARTNERS LP, a
Delaware limited partnership

By:Sanchez Production Partners GP LLC,

its general partner

By: 

 

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EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE

The undersigned hereby certifies that he is the Chief Financial Officer of
Sanchez Production Partners GP LLC, a Delaware limited liability company (the
“General Partner”) and sole general partner of Sanchez Production Partners LP, a
Delaware limited partnership (the “Borrower”), and that as such he is authorized
to execute this certificate on behalf of the General Partner, as the general
partner of the Borrower.  With reference to the Third Amended and Restated
Credit Agreement dated as of March 31, 2015 (together with all amendments,
supplements or restatements thereto being the “Credit Agreement”) among the
Borrower, Royal Bank of Canada, as Administrative Agent, and the other agents
and lenders (the “Lenders”) which are or become a party thereto, and such
Lenders, each of the undersigned represents and warrants as follows (each
capitalized term used herein having the same meaning given to it in the
Agreement unless otherwise specified):

(a)The representations and warranties of the Borrower contained in Article VII
of the Agreement and in the Loan Documents and otherwise made in writing by or
on behalf of the Borrower or any other Guarantor pursuant to the Credit
Agreement and the Loan Documents were true and correct when made, and are
repeated at and as of the time of delivery hereof and are true and correct in
all material respects at and as of the time of delivery hereof, except to the
extent such representations and warranties are expressly limited to an earlier
date or the Required Lenders have expressly consented in writing to the
contrary.

(b)Since December 31, 2014, no change has occurred, either in any case or in the
aggregate, in the condition, financial or otherwise, of the Borrower or any of
its Subsidiaries that could reasonably be expected to have a Material Adverse
Effect.

(c)There exists no Default or Event of Default.

(d)There has been no change in the Borrower’s application of GAAP since
December 31, 2014.

(e)[Attached hereto as Exhibit A are the detailed computations necessary to
determine whether the Borrower is in compliance with [Section 8.13 and]
Section 9.01 as of the end of the fiscal quarter ending
[                  ].][Commencing with fiscal quarter ending June 30, 2015]

(f)Attached hereto as Exhibit B are the Swap Agreements and Swap Transactions of
the Borrower and each of its Consolidated Subsidiaries in place as of the end of
the fiscal quarter ending [                 ], setting forth with respect to (i)
all Swap Transactions, calculations evidencing compliance with Section 9.17 of
the Credit Agreement and (ii) each Swap Transaction, the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower or any such
Consolidated Subsidiary would be required to pay if such Swap Transaction were
terminated at such time; the information in both (i) and (ii) shall be prepared
as of the end of such fiscal quarter based on all transactions outstanding as of
the end of such fiscal quarter under any Swap Transactions then in effect,
including transactions which are scheduled to commence on a future date.

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EXECUTED AND DELIVERED this [  ] day of [                   ].

SANCHEZ PRODUCTION PARTNERS LP, a
Delaware limited partnership

By:Sanchez Production Partners GP LLC,

its general partner

By: 
Charles C. Ward, Chief Financial Officer

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Exhibit A to Compliance Certificate

[To be inserted]

 

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Exhibit B to Compliance Certificate

[To be inserted]

 

 

 

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EXHIBIT C
SECURITY INSTRUMENTS

Security to consist of (1) the Guarantee Agreement executed by all existing
Material Domestic Subsidiaries and covenant to cause all future Material
Domestic Subsidiaries to execute a supplement to the Guarantee Agreement,
(2) the Pledge and Security Agreement executed by the Borrower and all existing
Material Domestic Subsidiaries and covenant to cause all future Material
Domestic Subsidiaries to execute a supplement to the Pledge and Security
Agreement and (3) Mortgages over Mortgaged Property.

 

 

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EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between the
Assignor identified in item 1 below (the “Assignor”) and the Assignee identified
in item 2 below (the “Assignee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee.  The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the credit facility that is the
subject of the Credit Agreement (including without limitation any letters of
credit included in such facility) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned by the Assignor to the
Assignee pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”).  Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

Assignor:

________________________________

 

Assignee:

________________________________, [a Lender/an Affiliate of {identify Lender}/an
Approved Fund of {identify Lender}/a Person approved by the Administrative Agent
and the Issuer]

 

Borrower:

Sanchez Production Partners LP

 

Administrative Agent:

Royal Bank of Canada, as the Administrative Agent under the Credit Agreement

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Credit Agreement:

The $500,000,000 Third Amended and Restated Credit Agreement dated as of
March 31, 2015 among Sanchez Production Partners LP as Borrower, Royal Bank of
Canada as Administrative Agent and the Lenders party hereto.

 

Assigned Interest:

 

Assignor

Assignee

Amount of Loan
Commitments
Assigned

Aggregate Amount of
Loan Commitments
for all Lenders

Percentage
Assigned of
Commitments
for all Lenders

CUSIP Number

 

 

$

$

%

 

 

Effective Date:   _____________ ___, 201___.

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR
[NAME OF ASSIGNOR]

By: 
Name: 
Title:   

ASSIGNEE
[NAME OF ASSIGNEE]

By: 
Name: 
Title:   

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Consented to:

Royal Bank of Canada,
as Administrative Agent

By:
 
Name: 
Title:   

Consented to:

SANCHEZ PRODUCTION PARTNERS LP,
a Delaware limited partnership, as Borrower

By:
SANCHEZ PRODUCTION PARTNERS GP LLC,
its general partner

By: 
Name: 
Title:   

 

 

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ANNEX I

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

Representations and Warranties. 

Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

Assignee.  The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all the
requirements to be an assignee under the Credit Agreement (subject to such
consents, if any, as may be required under Section 12.04(b) of the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it is sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the person exercising
discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to
Section 8.01 thereof, as applicable, and such other documents and information as
it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest, (vi) it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest, and (vii) if it
is a Foreign Lender, attached to this Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee; and (b) agrees that (i)
it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

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Payments.  From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

General Provisions.  This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.  This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.  Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption.  This Assignment and Assumption shall be
governed by, and construed in accordance with, the law of the State of New York.

 

 

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EXHIBIT E
FORM OF BORROWING REQUEST

______________, 201_

Royal Bank of Canada
Agency Services Group
4th Floor, 20 King Street West
Toronto, Ontario, Canada
M5H 1CA
Attention:  Manager Agency
Facsimile:  (416) 842-4023
Email:   RBCAgentNotices@rbccm.com

Royal Bank of Canada
2800 Post Oak Boulevard
Suite 3900
Houston, Texas  77056
Attention:  Mark Lumpkin
Facsimile:  713-403-5624

Ladies and Gentlemen:

Reference is made to the Third Amended and Restated Credit Agreement, dated as
of March 31, 2015, among Sanchez Production Partners LP, as Borrower, Royal Bank
of Canada, as Administrative Agent, and the Lenders party thereto (as in effect
on the date hereof, the “Credit Agreement”; capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to such terms in the
Credit Agreement).  The undersigned hereby gives notice pursuant to Section 2.03
of the Credit Agreement of its request to have the following Loans in the
aggregate amount of $[_____] (the “Requested Borrowing”) made to it on [insert
date of Requested Borrowing]:

Type of Loan

Amount

 

 

______________________________________

______________

 

 

______________________________________

______________

 

 

______________________________________

______________

 

The amount of the currently effective Borrowing Base is $[_____].  The current
Revolving Credit Exposure (without regard to the Requested Borrowing) is
$[_____].   The pro forma Revolving Credit Exposure (after giving effect to the
Requested Borrowing) is $[_____].

Please disburse the proceeds of the Requested Borrowing to [insert bank and
account information].

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The undersigned represents and warrants that (a) the borrowing requested hereby
complies with the requirements of the Credit Agreement, (b) each condition
contained in Sections 6.02(a) through 6.02(d) of the Credit Agreement has been
completed and satisfied in full at and as of the date hereof and (c) the amount
of the Requested Borrowing shall not cause the Revolving Credit Exposures to
exceed the Total Commitments.

SANCHEZ PRODUCTION PARTNERS LP, a
Delaware limited partnership

By:Sanchez Production Partners GP LLC,

its general partner

By: 
Name: 
Title: 

 

 

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EXHIBIT F
FORM OF INTEREST ELECTION REQUEST

______________, 201__

Royal Bank of Canada
Agency Services Group
4th Floor, 20 King Street West
Toronto, Ontario, Canada
M5H 1CA
Attention:  Manager Agency
Facsimile:  (416) 842-4023
Email:   RBCAgentNotices@rbccm.com

Royal Bank of Canada
2800 Post Oak Boulevard
Suite 3900
Houston, Texas  77056
Attention:  Mark Lumpkin
Facsimile:  713-403-5624

Ladies and Gentlemen:

Reference is made to the Third Amended and Restated Credit Agreement, dated as
of March 31, 2015, among Sanchez Production Partners LP, as Borrower, Royal Bank
of Canada, as Administrative Agent, and the Lenders party thereto (as in effect
on the date hereof, the “Credit Agreement”; capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to such terms in the
Credit Agreement).  The undersigned hereby gives notice pursuant to
Section 2.04(b) of the Credit Agreement of its desire to continue the Loans
specified below as Loans of the Types and in the amounts specified below on
[insert effective date of continuation]:

Loans to be Continued

Continued Loans

Type of Loan

Last Day of
Current
Interest Period

Amount

Type of Loan

Interest Period

Amount

 

 

 

 

 

 

____________

_____________

____________

___________

_________

______

 

The undersigned represents and warrants that the continuations requested hereby
comply with the requirements of the Credit Agreement.

SANCHEZ PRODUCTION PARTNERS LP, a
Delaware limited partnership

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By:

Sanchez Production Partners GP LLC,

its general partner

By: 
Name: 
Title: 

 

 

Third Amended and Restated Credit Agreement – EXHIBIT F - Page 2

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EXHIBIT G
FORM OF NOTICE OF LETTER OF CREDIT REQUEST

____________, 201_

Royal Bank of Canada
One Liberty Plaza
3rd Floor
New York, NY  10006-1404
Attention:  Manager Trade Products
Telephone:  212-428-6235
Facsimile:  212-428-6332

Royal Bank of Canada
Agency Services Group
4th Floor, 20 King Street West
Toronto, Ontario, Canada
M5H 1CA
Attention:  Manager Agency
Facsimile:  (416) 842-4023
Email:   RBCAgentNotices@rbccm.com

Royal Bank of Canada
2800 Post Oak Boulevard
Suite 3900
Houston, Texas  77056
Attention:  Mark Lumpkin
Facsimile:  713-403-5624

Ladies and Gentlemen:

Reference is made to the Third Amended and Restated Credit Agreement, dated as
of March 31, 2015, among Sanchez Production Partners LP, as Borrower, Royal Bank
of Canada, as Administrative Agent, and the Lenders party thereto (as in effect
on the date hereof, the “Credit Agreement”; capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to such terms in the
Credit Agreement).  The undersigned hereby gives notice pursuant to
Section 2.08(b) of the Credit Agreement of its request to have the following
Letter of Credit [issued/amended/renewed/extended] on [insert requested date of
issuance, amendment, renewal or extension]:

Description/Letter of Credit No.

Beneficiary

Expiration
Date

Amount

 

 

 

 

_________________________

________

___________

_____________

 

 

 

 

_________________________

________

___________

_____________

 

 

 

 

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_________________________

________

___________

_____________

 

[Please amend/renew/extend the above-referenced Letter of Credit as follows:]

The amount of the currently effective Borrowing Base is $[______].  A Borrowing
Base Deficiency [does/does not] exist on the date hereof.  The current Revolving
Credit Exposure (without regard to the requested Letter of Credit or the
requested amendment, renewal, or extension of an outstanding Letter of Credit)
is $[______].  The pro forma Revolving Credit Exposure (after giving effect to
the requested Letter of Credit or the requested amendment, renewal or extension
of an outstanding Letter of Credit is $[______].

The undersigned represents and warrants that (a) the [issuance/amendment/
renewal/extension] requested hereby complies with the requirements of the Credit
Agreement, (b) each condition contained in Section 6.02(a) through 6.02(d) of
the Credit Agreement is true and correct at and as of the date hereof and (c)
after giving pro forma effect to the [issuance/amendment/renewal/extension] of
the requested Letter of Credit, (i) the Letter of Credit Exposure shall not
exceed the Letter of Credit Commitment and (ii) the Revolving Credit Exposures
shall not exceed the lesser of the Aggregate Maximum Credit Amount and the
currently effective Borrowing Base.

SANCHEZ PRODUCTION PARTNERS LP, a
Delaware limited partnership

By:Sanchez Production Partners GP LLC,

its general partner

By:
Name:
Title:

 

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