Exhibit 10.2

Execution Version

CREDIT AGREEMENT

DATED AS OF

MAY 28, 2019

AMONG

RATTLER MIDSTREAM LP,

As PARENT,

RATTLER MIDSTREAM OPERATING LLC,

AS BORROWER,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS ADMINISTRATIVE AGENT,

THE LENDERS PARTY HERETO, AND

WELLS FARGO SECURITIES, LLC,

CREDIT SUISSE SECURITIES (USA) LLC,

JPMORGAN CHASE BANK, N.A., AND

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS

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TABLE OF CONTENTS

 

         

Page

ARTICLE I Definitions and Accounting Matters Section 1.01    Terms Defined Above
   1 Section 1.02    Certain Defined Terms    1 Section 1.03    Types of Loans
and Borrowings    33 Section 1.04    Terms Generally; Rules of Construction   
33 Section 1.05    Accounting Terms and Determinations; GAAP    34 Section 1.06
   Divisions    34 Section 1.07    Rates    35 ARTICLE II The Credits Section
2.01    Commitments    35 Section 2.02    Loans and Borrowings    35 Section
2.03    Requests for Borrowings    36 Section 2.04    Interest Elections    37
Section 2.05    Funding of Borrowings; Funding by Lenders    38 Section 2.06   
Termination, Reduction and Increase of Commitments    39 Section 2.07    Letters
of Credit    41 Section 2.08    Cash Collateral    47 Section 2.09    Defaulting
Lenders    48 ARTICLE III Payments of Principal and Interest; Prepayments; Fees
Section 3.01    Repayment of Loans    50 Section 3.02    Interest    50 Section
3.03    Alternate Rate of Interest    51 Section 3.04    Prepayments    51
Section 3.05    Fees    53 ARTICLE IV Payments; Pro Rata Treatment; Sharing of
Set-offs Section 4.01    Payments Generally; Pro Rata Treatment; Sharing of
Set-offs    54 Section 4.02    Presumption of Payment by the Borrower    55
Section 4.03    Certain Deductions by the Administrative Agent    55 ARTICLE V
Increased Costs; Break Funding Payments; Taxes; Illegality Section 5.01   
Increased Costs    56 Section 5.02    Break Funding Payments    57

 

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Section 5.03    Taxes      57 Section 5.04    Mitigation Obligations;
Replacement of Lenders      61 Section 5.05    Illegality      62 Section 5.06
   Alternate Rate of Interest      62 ARTICLE VI

 

Conditions Precedent

Section 6.01    Effective Date      63 Section 6.02    Each Credit Event      66
ARTICLE VII

 

Representations and Warranties

Section 7.01    Organization; Powers      67 Section 7.02    Authority;
Enforceability      67 Section 7.03    Approvals; No Conflicts      68 Section
7.04    Financial Condition; No Material Adverse Change      68 Section 7.05   
Litigation      68 Section 7.06    Environmental Matters      69 Section 7.07   
Compliance with Laws and Agreements; No Defaults      70 Section 7.08   
Investment Company Act      70 Section 7.09    Taxes      70 Section 7.10   
ERISA      71 Section 7.11    Disclosure; No Material Misstatements      71
Section 7.12    Insurance      72 Section 7.13    Restriction on Liens      72
Section 7.14    Subsidiaries      72 Section 7.15    Location of Business and
Offices      72 Section 7.16    Properties; Titles, Etc.      73 Section 7.17   
Maintenance of Properties      74 Section 7.18    Material Contracts      75
Section 7.19    Swap Agreements and Qualified ECP Guarantor      75 Section 7.20
   Use of Loans and Letters of Credit      75 Section 7.21    Solvency      75
Section 7.22    Anti-Corruption Laws and Sanctions; USA PATRIOT Act      76
Section 7.23    FERC      76 Section 7.24    State Regulation      76 Section
7.25    Title to      77 Section 7.26    Flood Insurance Related Matters      77
Section 7.27    EEA Financial Institutions      77 Section 7.28    Beneficial
Ownership Certification      77

 

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ARTICLE VIII

 

Affirmative Covenants

Section 8.01    Financial Statements; Other Information      77 Section 8.02   
Notices of Material Events      80 Section 8.03    Existence; Conduct of
Business      81 Section 8.04    Payment of Obligations      81 Section 8.05   
Performance of Obligations Under Loan Documents      81 Section 8.06   
Operation and Maintenance of Properties      82 Section 8.07    Insurance     
83 Section 8.08    Books and Records; Inspection Rights      83 Section 8.09   
Compliance with Laws      83 Section 8.10    Environmental Matters      83
Section 8.11    Further Assurances      84 Section 8.12    Compliance with
Agreements      85 Section 8.13    Title Information; Flood Deliverables      85
Section 8.14    Additional Collateral; Additional Guarantors      86 Section
8.15    ERISA Compliance      87 Section 8.16    Unrestricted Subsidiaries     
88 Section 8.17    Commodity Exchange Act Keepwell Provisions      88 Section
8.18    Post-Closing Delivery of Control Agreements      89 Section 8.19   
Further Provisions Relating to Control Agreements      89 ARTICLE IX

 

Negative Covenants

Section 9.01    Financial Covenants      89 Section 9.02    Debt      90 Section
9.03    Liens      91 Section 9.04    Dividends, Distributions and Redemptions;
Repayment of Senior Notes and Amendment to Terms of Senior Notes      92 Section
9.05    Investments, Loans and Advances      93 Section 9.06    Nature of
Business; International Operations      95 Section 9.07    Proceeds of Loans   
  95 Section 9.08    ERISA Compliance      96 Section 9.09    Sale or Discount
of Receivables      96 Section 9.10    Mergers, Etc      96 Section 9.11   
Asset Dispositions      97 Section 9.12    Environmental Matters      97 Section
9.13    Transactions With Affiliates      98 Section 9.14    Subsidiaries     
99 Section 9.15    Negative Pledge Agreements; Dividend Restrictions      99
Section 9.16    Swap Agreements      99 Section 9.17    Designation of
Restricted and Unrestricted Subsidiaries      100 Section 9.18    Changes to
Organizational Documents and Material Contracts      101 Section 9.19   
Permitted Activities of the Parent      101 ARTICLE X

 

Events of Default; Remedies

Section 10.01    Events of Default      101

Section 10.02

  

Remedies

     103

 

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ARTICLE XI

 

The Agents

Section 11.01    Appointment; Powers      105 Section 11.02   
Duties and Obligations of Administrative Agent      105 Section 11.03   
Action by Administrative Agent      106 Section 11.04   
Reliance by Administrative Agent      106 Section 11.05    Subagents      107
Section 11.06    Resignation of Administrative Agent      107 Section 11.07   
Agents as Lenders      107 Section 11.08    No Reliance      107 Section 11.09
   Administrative Agent May File Proofs of Claim      108 Section 11.10   
Authority of Administrative Agent to Release Collateral and Liens      109
Section 11.11    The Arrangers and other Agents      109 ARTICLE XII

 

Miscellaneous

Section 12.01    Notices      109 Section 12.02    Waivers; Amendments      110
Section 12.03    Expenses, Indemnity; Damage Waiver      111 Section 12.04   
Successors and Assigns      114 Section 12.05    Survival; Revival;
Reinstatement      117 Section 12.06    Counterparts; Integration; Effectiveness
     118 Section 12.07    Severability      118 Section 12.08    Right of Setoff
     119 Section 12.09    GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS      119 Section 12.10    Headings      120 Section 12.11   
Confidentiality      120 Section 12.12    Interest Rate Limitation      121
Section 12.13    EXCULPATION PROVISIONS      122 Section 12.14    Collateral
Matters; Swap Agreements      123 Section 12.15    No Third Party Beneficiaries
     123 Section 12.16    USA PATRIOT Act Notice      123 Section 12.17   
Acknowledgement and Consent to Bail-In of EEA Financial Institutions      124
Section 12.18    No Advisory or Fiduciary Responsibility      124

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

Annex I    List of Commitments Annex II    List of Individual LC Commitments
Exhibit A    Form of Note Exhibit B    Form of Borrowing Request Exhibit C   
Form of Interest Election Request Exhibit D    Form of Compliance Certificate
Exhibit E    Security Instruments Exhibit F    Form of Assignment and Assumption
Exhibit G    Form of Commitment Increase Certificate Exhibit H   
Form of Additional Lender Certificate Exhibit I-1   
Form of U.S. Tax Compliance Certificate (Foreign Lenders; Not Partnerships)
Exhibit I-2    Form of U.S. Tax Compliance Certificate (Foreign Participants;
Not Partnerships) Exhibit I-3    Form of U.S. Tax Compliance Certificate
(Foreign Participants; Partnerships) Exhibit I-4    Form of U.S. Tax Compliance
Certificate (Foreign Lenders; Partnerships) Schedule 7.14    Subsidiaries
Schedule 7.18    Material Contracts Schedule 7.19    Swap Agreements Schedule
7.26    Flood Insurance Related Matters

 

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THIS CREDIT AGREEMENT, dated as of May 28, 2019, is among: Rattler Midstream LP,
a Delaware limited partnership (the “Parent”); Rattler Midstream Operating LLC,
a Delaware limited liability company (the “Borrower”); each of the Lenders from
time to time party hereto; and Wells Fargo Bank, National Association (in its
individual capacity, “Wells Fargo”), as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the
“Administrative Agent”).

R E C I T A L S

A.    Upon consummation of the Parent IPO (as defined below) and the
transactions contemplated thereby, the Borrower will become a subsidiary of the
Parent, and the Parent will become the managing member of the Borrower.

B.    The Parent and the Borrower have requested that the Lenders provide
certain loans to and extensions of credit on behalf of the Borrower.

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

D.    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 parties 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 rate
determined by reference to the Alternate Base Rate.

“Acquisition Period” means any period commencing on the date that a Material
Acquisition is consummated (so long as the Borrower has delivered written notice
to the Administrative Agent that it is electing in its sole discretion to
commence an Acquisition Period no later than the later to occur of (a) fifteen
(15) days after such date or (b) the last day of the first fiscal quarter ending
during such Acquisition Period) through and including the last day of the second
full fiscal quarter following the date on which such acquisition is consummated;
provided that there shall be at least one (1) full fiscal quarter between any
two (2) Acquisition Periods.

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

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

 

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

“Administrative Agent” has the meaning assigned such term in the introductory
paragraph hereto.

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

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

“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. Solely for
the purposes of this definition, and without limiting the generality of the
foregoing, any Person that owns directly or indirectly 10% or more of the Equity
Interests having ordinary voting power for the election of the directors or
other governing body of a Person (other than as a limited partner of such other
Person) will be deemed to “Control” such other Person. “Controlling” and
“Controlled” have meanings correlative thereto for purposes of this definition.

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

“Aggregate LC Commitment” means $150,000,000.

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

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1⁄2 of 1.00% and (c)(i) the Adjusted LIBO Rate
for a three month Interest Period on such day (or if such day is not a Business
Day, the immediately preceding Business Day) plus (ii) 1.00%, provided that, for
the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the
rate at which dollar deposits of $5,000,000 with a three month maturity 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, on such day (or the immediately preceding Business Day
if such day is not a day on which banks are open for dealings in dollar deposits
in the London interbank market). Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate,
respectively.

“Annualized EBITDA” means, for any Rolling Period ending on or prior March 31,
2020, the sum of (a) EBITDA for such Rolling Period (without giving effect to
any Material Project Add-Back added to Consolidated Net Income in the
calculation of EBITDA) multiplied by the factor for such Rolling Period set
forth in the grid below, plus (b) any Material Project Add-Back for such Rolling
Period:

 

Rolling Period Ending

   Factor  

September 30, 2019

     4  

December 31, 2019

     2  

March 31, 2020

     4/3  

 

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“Annualized Interest Expense” means, for any Rolling Period ending on or prior
to March 31, 2020, Consolidated Interest Expense for such Rolling Period
multiplied by the factor for such Rolling Period set forth in the grid below:

 

Rolling Period Ending

   Factor  

September 30, 2019

     4  

December 31, 2019

     2  

March 31, 2020

     4/3  

“Anti-Corruption Laws” means all state or federal laws, rules, and regulations
applicable to the Borrower or its Subsidiaries from time to time concerning or
relating to bribery or corruption, including the FCPA.

“Applicable Margin” means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the Commitment Fee Rate, as the case may be,
the rate per annum set forth in the grid below based upon the Consolidated Total
Leverage Ratio, determined as provided below in this definition:

 

Level

  

Consolidated Total

Leverage Ratio

   Eurodollar
Loans
(margin)     ABR Loans
(margin)     Commitment
Fee Rate  

1

  

Less than 3.00 to 1.00

     1.250 %      0.250 %      0.250 % 

2

  

Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00

     1.375 %      0.375 %      0.300 % 

3

  

Greater than or equal to 3.50 to 1.00 but less than 4.00 to 1.00

     1.500 %      0.500 %      0.300 % 

4

  

Greater than or equal to 4.00 but less than 4.50 to 1.00

     1.750 %      0.750 %      0.375 % 

5

  

Greater than or equal to 4.50 to 1.00

     2.250 %      1.250 %      0.375 % 

 

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For purposes of this definition, the Consolidated Total Leverage Ratio shall be
calculated quarterly, as of the last day of each fiscal quarter of the Borrower.
Each change in the Applicable Margin resulting from a calculation of the
Consolidated Total Leverage Ratio shall become effective on and after the date
on which financial statements for such fiscal quarter and a compliance
certificate showing such calculation are delivered to the Lenders pursuant to
Section 8.01(a), (b) or (c) and shall remain in effect until the next such
financial statements and compliance certificate are so delivered; provided,
however, that (x) if at any time the Parent and the Borrower fail to deliver any
financial statements or a compliance certificate required by Section 8.01(a),
(b) or (c), as applicable, then, for the period commencing on the date of such
failure and ending on the date on which such financial statements and compliance
certificate are delivered, the “Applicable Margin” means the rate per annum set
forth on the grid when the Consolidated Total Leverage Ratio is at level “5” in
the grid set forth above and (y) subject to the foregoing clause (x), for the
period commencing on the Effective Date and until the date on which the
financial statements and compliance certificate for the fiscal quarter ending on
September 30, 2019 are delivered pursuant to Section 8.01(b) and (c), the
“Applicable Margin” means the rate per annum set forth on the grid when the
Consolidated Total Leverage Ratio is at level “1” in the grid set forth above.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
aggregate Commitments represented by such Lender’s Commitment (or, if the
Commitments have terminated or expired, the percentage of the aggregate
Revolving Credit Exposure represented by such Lender’s Revolving Credit Exposure
at such time); provided that in the case of Section 2.09 when a Defaulting
Lender shall exist, “Applicable Percentage” as used in such Section 2.09 shall
mean the percentage of the Commitments (disregarding any Defaulting Lender’s
Commitments) represented by such Lender’s Commitments (or, if the Commitments
have terminated or expired, the “Applicable Percentage” shall be determined
based upon the aggregate Revolving Credit Exposure then in effect, disregarding
any Defaulting Lender’s Revolving Credit Exposure, and the percentage of such
aggregate Revolving Credit Exposure represented by such Lender’s Revolving
Credit Exposure at such time).

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

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

“Arrangers” means Wells Fargo Securities, LLC and Credit Suisse Securities (USA)
LLC, JPMorgan Chase Bank, N.A., and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (or any other registered broker-dealer wholly-owned by Bank of
America Corporation to which all or substantially all of Bank of America
Corporation’s or any of its subsidiaries’ investment banking, commercial lending
services or related businesses may be transferred following the date of this
Agreement), in their respective capacities as the joint lead arrangers and joint
bookrunners hereunder.

 

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

“Asset Disposition” means the Transfer by a Credit Party of any or all of the
assets of (including, without limitation, Equity Interests owned by) such Credit
Party; provided that none of the following shall constitute Asset Dispositions:

(a)    a Transfer (or series of related Transfers) of Property of such Person
having a fair market value of less than $15,000,000;

(b)    a Transfer between or among the Borrower and the Guarantors;

(c)    a Transfer of cash or cash equivalents;

(d)    the sale of inventory in the ordinary course of business;

(e)    the Transfer of obsolete or worn out property, or property that is no
longer used or useful in the conduct of the business of the Parent, the Borrower
and its Restricted Subsidiaries;

(f)    Transfers of accounts receivable permitted by Section 9.09;

(g)    the early termination or unwinding of any Swap Agreement;

(h)    a Restricted Payment not prohibited by Section 9.04 or an Investment not
prohibited by Section 9.05;

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

(j)    any licensing or sublicensing of intellectual property or other general
intangibles to the extent that such license does not prohibit the licensor from
using the intellectual property, and licenses, leases or subleases of other
Property.

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

“Availability” means, as of any date, an amount equal to (a) the total
Commitments on such date less (b) the total Revolving Credit Exposures of the
Lenders on such date.

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

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

 

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

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

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

“Benefiting Guarantor” means a Guarantor for which funds or other support are
necessary for such Guarantor to constitute an Eligible Contract Participant.

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

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

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

“Borrowing 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, Midland, Texas or Houston, Texas are
authorized or required by law to remain closed; and if such day relates to a
Borrowing or continuation of, a payment or prepayment of principal of or
interest on, or a conversion of or into, or the Interest Period for, a
Eurodollar Loan or a notice by the Borrower with respect to any such Borrowing
or continuation, payment, prepayment, conversion or Interest Period, any day
which is also a day on which dealings in dollar deposits are carried out in the
London interbank market.

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

“Capital Leases” means, subject to Section 1.05, in respect of any Person, all
leases that 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 Collateralize” means, to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of one or more of the Issuing Banks or the
Lenders, as collateral for LC Exposure or obligations of the Lenders to fund
participations in respect of LC Exposure, cash or deposit account balances or,
if the Administrative Agent and the Issuing Bank shall agree, in their sole
discretion, other credit support, in each case pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the Issuing Bank.
“Cash Collateral” shall have a meaning correlative to the foregoing and shall
include the proceeds of such Cash Collateral and other credit support.

 

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“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

“Cash Management Provider” means any Person that, at the time it enters into a
Cash Management Agreement with a Credit Party, is a Lender, an Affiliate of a
Lender, the Administrative Agent or an Affiliate of the Administrative Agent, in
its capacity as a party to such Cash Management Agreement.

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

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof) of Equity Interests representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of Diamondback, (b) Diamondback shall cease to
directly or indirectly own Equity Interests representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the General Partner, (c) the General Partner shall cease to be the
sole general partner of the Parent, with substantially the same powers to manage
the Parent as are granted to the General Partner under the Parent Partnership
Agreement on the Effective Date, (d) at any time after the Parent IPO, the
Parent shall cease to be the sole managing member of the Borrower or shall cease
to own Equity Interests representing 100% of the ordinary voting power
represented by the issued and outstanding Equity Interests in the Borrower, or
(e) the occurrence of a “change of control”, “change in control”, or
substantively similar provision under any Senior Notes Indenture or any other
Material Indebtedness.

“Change in Law” means (a) the adoption of any law, treaty, rule or regulation
after the date of this Agreement, (b) any change in any law, treaty, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 5.01(b), by any lending office of
such Lender or by such Lender’s or the Issuing Bank’s holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement. Notwithstanding anything herein to the contrary, (i) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules,
guidelines, requirements or directives thereunder or issued in connection
therewith (whether or not having the force of law) or in implementation thereof,
and (ii) all requests, rules, regulations, guidelines, interpretations,
requirements, and directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities
(whether or not having the force of law), 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, issued or implemented.

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

 

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

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such commitment may be
(a) modified from time to time pursuant to Section 2.06 and (b) modified from
time to time pursuant to assignments by or to such Lender pursuant to
Section 12.04(b). The initial amount of each Lender’s Commitment is set forth on
Annex I hereto, in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Commitment or in the Additional Lender Certificate
pursuant to which any Additional Lender shall have provided any additional
Commitment, as applicable. The aggregate amount of the Lenders’ Commitments on
the Effective Date is $600,000,000.

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

“Commitment Increase Certificate” has the meaning set forth in
Section 2.06(c)(ii)(F).

“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.

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

“Consolidated Interest Coverage Ratio” means, as of any date of calculation, the
ratio of (a) EBITDA (or, in the case of the Rolling Periods ending on
September 30, 2019, December 31, 2019, and March 31, 2020, Annualized EBITDA) to
(b) the Consolidated Interest Expense (or, in the case of the Rolling Periods
ending on September 30, 2019, December 31, 2019, and March 31, 2020, Annualized
Interest Expense), in each case for the Rolling Period ending (i) for purposes
of Section 9.01, on such date or (ii) for purposes of calculations of the
Consolidated Interest Coverage Ratio on any date other than the last day of a
fiscal quarter, on the last day of the most recent fiscal quarter for which
financial statements are available. Notwithstanding anything to the contrary
contained herein, (x) for any calculation of Consolidated Interest Expense on
and after the Effective Date through but not including the date on which
financial statements for the fiscal quarter ending June 30, 2019 are delivered
pursuant to Section 8.01(b), Consolidated Interest Expense shall be deemed to be
$0.00, and (y) for any calculation of Consolidated Interest Expense (other than
for purposes of Section 9.01) following the date on which financial statements
for the fiscal quarter ending June 30, 2019 are delivered pursuant to
Section 8.01(b) and prior to the date on which financial statements for the
fiscal quarter ending September 30, 2019 are delivered pursuant to
Section 8.01(b), Consolidated Interest Expense shall be deemed to be actual
Consolidated Interest Expense for the two fiscal quarter period ending on
June 30, 2019 multiplied by two.

“Consolidated Interest Expense” means, subject to Section 1.05, for any period,
the sum (determined without duplication) of the aggregate gross interest expense
of the Parent and the

 

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Consolidated Restricted Subsidiaries for such period, (1) including (a) interest
expense under GAAP, (b) capitalized interest, and (c) the portion of any
payments or accruals under Capital Leases allocable to interest expense, plus
the portion of any payments or accruals under Synthetic Leases allocable to
interest expense whether or not the same constitutes interest expense under
GAAP, but (2) excluding the amortization of debt discount and fees and expenses
related to the issuance of Debt, Capital Leases, Synthetic Leases, the Senior
Notes or the Indebtedness.

“Consolidated Net Income” means, for any period of determination, the aggregate
of the net income (or loss) of the Parent and the Consolidated Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded from such net income (to the
extent otherwise included therein) the following: (a) the net income of an
Unrestricted Subsidiary or any Person in which the Parent or any Consolidated
Restricted Subsidiaries have an interest (which interest does not cause the net
income of such other Person to be consolidated with the net income of the Parent
and the Consolidated Restricted Subsidiaries in accordance with GAAP), except to
the extent of the amount of dividends or distributions actually paid in cash
during such period by such Unrestricted Subsidiary or other Person to the Parent
or to a Consolidated Restricted Subsidiary, as the case may be; (b) the net
income (but not loss) during such period of any Consolidated Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions or transfers or loans by that Consolidated Restricted Subsidiary
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument or Governmental Requirement applicable to such
Consolidated Restricted Subsidiary or is otherwise restricted or prohibited, in
each case determined in accordance with GAAP; (c) any extraordinary, unusual or
non-recurring gains or losses during such period and (d) any gains or losses
attributable to writeups or writedowns of assets; and provided further that if
the Parent or any Consolidated Restricted Subsidiary shall acquire or dispose of
any Property during such period or a Subsidiary shall be redesignated as either
an Unrestricted Subsidiary or a Restricted Subsidiary, then Consolidated Net
Income shall be calculated after giving pro forma effect to such acquisition,
disposition or redesignation as if such acquisition, disposition or
redesignation had occurred on the first day of such period.

“Consolidated Net Tangible Assets” means, as of any date of determination, an
amount equal to (a) the total assets of the Credit Parties (less applicable
reserves and other properly deductible items but including investments in
non-consolidated Persons) minus (b) the sum of the current liabilities of the
Credit Parties (excluding current maturities of Debt and any current liabilities
constituting Debt by reason of being renewable or extendible at the option of
the obligor) and the intangible assets of the Credit Parties, all as set forth
on the consolidated balance sheet of the Credit Parties, and computed in
accordance with GAAP, as of the end of the immediately preceding fiscal quarter
of the Parent for which the Parent has delivered financial statements pursuant
to Section 8.01(a) and Section 8.01(b).

“Consolidated Restricted Subsidiary” means each Consolidated Subsidiary that is
a Restricted Subsidiary.

“Consolidated Senior Secured Debt” means, for the Parent and the Consolidated
Restricted Subsidiaries, all of their Total Debt that is secured by contractual
Liens on any of their Property.

 

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“Consolidated Senior Secured Leverage Ratio” means, as of any date of
calculation, the ratio of (a) Consolidated Senior Secured Debt as of such date
net of (i) all unrestricted cash and cash equivalents of the Parent, the
Borrower and the other Restricted Subsidiaries if no amounts were drawn under
this Agreement as of such date or (ii) up to $25.0 million in unrestricted cash
and cash equivalents of the Parent, the Borrower and the other Restricted
Subsidiaries if any amounts were drawn under this Agreement as of such date (it
being understood that (x) cash or cash equivalents that would appear as
“restricted” on a consolidated balance sheet of the Parent or any of the
Borrower or the other Restricted Subsidiaries solely because such cash or cash
equivalents are subject to a Control Agreement for the benefit of the
Administrative Agent shall constitute unrestricted cash or cash equivalents and
(y) cash and cash equivalents shall be included in the determination of cash and
cash equivalents only to the extent that such cash and cash equivalents are
maintained in accounts subject to a Control Agreement for the benefit of the
Administrative Agent) to (b) EBITDA (or Annualized EBITDA, in the case of the
Rolling Periods ending on September 30, 2019, December 31, 2019, and March 31,
2020) for the Rolling Period ending (A) for purposes of Section 9.01, on such
date or (B) for purposes of calculations of the Consolidated Senior Secured
Leverage Ratio on any date other than the last day of a fiscal quarter, on the
last day of the most recent fiscal quarter for which financial statements are
available.

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

“Consolidated Total Leverage Ratio” means, as of any date of calculation, the
ratio of (a) Total Debt as of such date net of (i) all unrestricted cash and
cash equivalents of the Parent, the Borrower and the other Restricted
Subsidiaries if no amounts were drawn under this Agreement as of such date or
(ii) up to $25.0 million in unrestricted cash and cash equivalents of the
Parent, the Borrower and the other Restricted Subsidiaries if any amounts were
drawn under this Agreement as of such date (it being understood that (x) cash or
cash equivalents that would appear as “restricted” on a consolidated balance
sheet of the Parent or any of the Borrower or the other Restricted Subsidiaries
solely because such cash or cash equivalents are subject to a Control Agreement
for the benefit of the Administrative Agent shall constitute unrestricted cash
or cash equivalents and (y) cash and cash equivalents shall be included in the
determination of cash and cash equivalents only to the extent that such cash and
cash equivalents are maintained in accounts subject to a Control Agreement for
the benefit of the Administrative Agent) to (b) EBITDA (or, in the case of the
Rolling Periods ending on September 30, 2019, December 31, 2019, and March 31,
2020, Annualized EBITDA) for the Rolling Period ending (i) for purposes of
Section 9.01, on such date or (ii) for purposes of calculations of the
Consolidated Total Leverage Ratio on any date other than the last day of a
fiscal quarter, on the last day of the most recent fiscal quarter for which
financial statements are available.

“Consolidated Unrestricted Subsidiary” means each Consolidated Subsidiary that
is an Unrestricted Subsidiary.

“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.

 

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“Control Agreement” means a deposit account control agreement, commodities
account control agreement, or securities account control agreement (or similar
agreement), as applicable, in form and substance reasonably satisfactory to the
Administrative Agent, executed by one or more Credit Parties, the Administrative
Agent and the relevant financial institution party thereto, which establishes
the Administrative Agent’s control (within the meaning of Section 9-104, 9-106
and 8-106, as applicable, of the UCC) with respect to the applicable deposit
account, commodities account, or securities account covered thereby.

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

“Debt” means, for any Person, the sum of the following (without duplication):
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services, but
excluding those from time to time incurred in the ordinary course of business
that are not greater than sixty (60) days past the date such payment is due or
that are being contested in good faith by appropriate action and for which
adequate reserves have been maintained in accordance with GAAP; (d) all
obligations under Capital Leases; (e) all obligations under Synthetic Leases;
(f) all Debt (as defined in the other clauses of this definition) of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) a Lien on any Property of such
Person, whether or not such Debt is assumed by such Person, to the extent of the
lesser of the amount of such Debt and the fair market value of the Property
subject to such Lien; (g) all Debt (as defined in the other clauses of this
definition) of others guaranteed by such Person or with respect to 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; (i) obligations to deliver commodities, goods or
services, including, without limitation, Hydrocarbons, in consideration of one
or more advance payments, other than gas balancing arrangements in the ordinary
course of business; (j) obligations to pay for goods or services even if such
goods or services are not actually received or utilized by such Person; (k) any
Debt of a partnership for which such Person is liable either by agreement, by
operation of law or by a Governmental Requirement but only to the extent of such
liability; and (l) Disqualified Capital Stock. 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. Notwithstanding the foregoing, “Debt” shall not include (i) any obligation
arising from agreements of the Parent or any Restricted Subsidiary providing for
indemnification, contribution, adjustment of purchase price, earn-outs,
holdbacks, deferred compensation or similar obligations, in each case, incurred
or assumed in connection with the disposition or acquisition of any business,
assets or Equity Interests of a Restricted Subsidiary in a transaction permitted
by this Agreement, (ii) any obligation under any gathering, processing,
compression, transporting, fractionating, waste water treatment or other
operational contract entered into in the ordinary course of business (other than
(A) any obligation in respect of borrowed money or (B) any obligation that
constitutes Debt under

 

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clause (i) set forth above in this definition of “Debt”), (iii) any agreement to
make an Investment in form of a purchase of any Equity Interests (or any
guaranty of another Person’s obligation to make such an Investment) if, at the
time such agreement is made, the Investment contemplated thereby could have been
made pursuant to Section 9.05, or (iv) for the avoidance of doubt, Swap
Obligations and direct or indirect guaranties thereof, and other credit support
therefor.

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

“Deeds” has the meaning set forth in Section 7.16(d).

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

“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any
portion of the Loans or participations in Letters of Credit required to be
funded by it hereunder within two (2) Business Days of the date such Loans or
participations were required to be funded hereunder, or (ii) pay to the
Administrative Agent, any Issuing Bank or any other Lender any other amount
required to be paid by it hereunder (including in respect of its participation
in Letters of Credit) within three (3) Business Days of the date when due,
(b) has notified the Borrower, the Administrative Agent or any Issuing Bank in
writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect, (c) has failed, within
three (3) Business Days after written request by the Administrative Agent or the
Borrower, to confirm in writing to the Administrative Agent and the Borrower
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Administrative Agent and
the Borrower), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the FDIC or
any other state or federal regulatory authority acting in such a capacity or
(iii) become the subject of a Bail-In Action; provided that a Lender shall not
be a Defaulting Lender solely by virtue of the ownership or acquisition of any
Equity Interest in that Lender or any direct or indirect parent company thereof
by a Governmental Authority so long as such ownership interest does not result
in or provide such Lender with immunity from the jurisdiction of courts within
the United States or from the enforcement of judgments or writs of attachment on
its assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made 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 2.09) upon delivery of written notice of
such determination to the Borrower, the Issuing Bank and each Lender.

“Diamondback” means Diamondback Energy, Inc., a Delaware corporation.

 

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“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible or exchangeable for Debt or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is one (1) year after the
earlier of (a) the Maturity Date and (b) the date on which there are no Loans,
LC Exposure or other obligations hereunder outstanding and all of the
Commitments are terminated. Notwithstanding the foregoing, any Equity Interest
that would constitute Disqualified Capital Stock solely because the holders of
the Equity Interest have the right to require the Borrower to repurchase or
redeem such Equity Interest upon or following the occurrence of a change of
control or an asset sale will not constitute Disqualified Capital Stock if the
terms of such Equity Interest provide that the Parent or the relevant Restricted
Subsidiary may not repurchase or redeem any such Equity Interest pursuant to
such provisions unless such repurchase or redemption complies with Section 9.04
hereof.

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

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

“EBITDA” means, for any period, (a) the sum (without duplication) of
Consolidated Net Income for such period plus the following expenses or charges
to the extent deducted from Consolidated Net Income in such period:
(i) interest, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) all
noncash charges, including expenses relating to stock based compensation and
hedging, and (vi) any reasonable expenses and charges (up to an aggregate of
$10,000,000 during any calendar year), related to any Investment, acquisition,
disposition, offering of Equity Interests, recapitalization, or issuance or
incurrence of Debt not prohibited hereunder (in each case, whether or not
successful), plus (b) all Material Project Add-Backs applicable to such period,
minus (c) all noncash income added to Consolidated Net Income in such period;
provided that the aggregate amount of Material Project Add-Backs shall not
exceed twenty percent (20%) of Unadjusted EBITDA for such period. For the
purposes of calculating EBITDA for any Rolling Period for any determination of
the Consolidated Total Leverage Ratio or the Consolidated Senior Secured
Leverage Ratio, if at any time during such Rolling Period any Credit Party shall
have made any Material Disposition or Material Acquisition, the EBITDA for such
Rolling Period shall be calculated after giving pro forma effect thereto as if
such Material Disposition or Material Acquisition had occurred on the first day
of such Rolling Period, such pro forma adjustments to be acceptable to
Administrative Agent and the Borrower. Notwithstanding anything to the contrary
contained herein, (x) for any calculation of EBITDA on or after the Effective
Date through but not including the date on which financial statements for the
fiscal quarter ending June 30, 2019 are delivered pursuant to Section 8.01(b),
EBITDA shall be deemed to be $240,000,000, and (y) for any calculation of EBITDA
(other than for purposes of Section 9.01) following the date on which financial
statements for the fiscal quarter ending June 30, 2019 are delivered pursuant to
Section 8.01(b) and prior to the date on which financial statements for the
fiscal quarter ending September 30, 2019 are delivered pursuant to
Section 8.01(b), EBITDA shall be deemed to be actual EBITDA for the two fiscal
quarter period ending on June 30, 2019 multiplied by two.

 

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

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

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

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

“Eligible Contract Participant” means an “eligible contract participant” as
defined in the Commodity Exchange Act and the regulations thereunder.

“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety, the environment, the preservation or reclamation of
natural resources, or the management, Release or threatened Release of any
Hazardous Materials, in effect in any and all jurisdictions in which the Parent,
the Borrower or any Restricted Subsidiaries are conducting or at any time have
conducted business, or where any Property of the Parent, the Borrower, or any
Restricted Subsidiaries are 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.

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

“EPIC” means EPIC Crude Holdings, LP, a Delaware limited partnership.

“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 Interests.

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

 

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

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

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

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

“Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental
charges or levies which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (b) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) statutory and contractual landlord’s
liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’,
suppliers’, workers’, materialmen’s, construction or other like Liens arising by
operation of law or ordinary course of business contracts or incident to the
development, operation and maintenance of Midstream Properties each of which is
in respect of obligations that are not delinquent or which are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (d) contractual Liens which arise in the
ordinary course of business under joint venture agreements, contracts for the
sale, transportation or exchange of oil and natural gas, marketing agreements,
processing agreements, processing plant agreements, dehydration agreements,
operating agreements, pipeline, gathering or transportation agreements,
compression agreements, balancing agreements, construction agreements, disposal
agreements, and other agreements which are usual and customary in the midstream
business and are for claims which are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP, provided that any such Lien
referred to in this clause does not materially impair the use of the Property
covered by such Lien for the purposes for which such Property is held by the
Parent, the Borrower or their Restricted Subsidiaries or materially impair the
value of such Property subject thereto; (e) Liens arising solely by virtue of
any statutory or common law provision relating to banker’s liens, rights of
set-off or similar rights and remedies and burdening only deposit accounts or
other funds maintained with a creditor depository institution, provided that no
such deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board and no such deposit account is intended by
the Parent, the Borrower or their Restricted Subsidiaries to provide collateral
to the depository institution; (f) easements, rights-of-way, restrictions,
servitudes, permits, conditions, covenants, exceptions, zoning and land use
requirements and Immaterial Title Deficiencies or reservations in any Property
of the Parent or any Restricted Subsidiary that do not secure any monetary
obligations and which in the aggregate do not materially impair the use of such
Property for the purposes of which such Property

 

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is held by such Person or materially impair the value of such Property;
(g) Liens on cash or securities pledged to secure performance of tenders, surety
and appeal bonds, government contracts, performance and return of money bonds,
bids, trade contracts, leases, statutory obligations, regulatory obligations and
other obligations of a like nature incurred in the ordinary course of business
and (h) judgment and attachment Liens not giving rise to an Event of Default,
provided that any appropriate legal proceedings which may have been duly
initiated for the review of such judgment shall not have been finally terminated
or the period within which such proceeding may be initiated shall not have
expired and no action to enforce such Lien has been commenced; provided, further
that Liens described in clauses (a) through (e) shall remain “Excepted Liens”
only for so long as no action to enforce such Lien has been commenced and no
intention to subordinate the first priority Lien granted in favor of the
Administrative Agent and the Lenders is to be hereby implied or expressed by the
permitted existence of such Excepted Liens and the term “Excepted Liens” shall
not include any Lien securing Debt for borrowed money other than the
Indebtedness.

“Excluded Account” means (a) each account all of the deposits in which consist
of amounts utilized to fund payroll, employee benefit or tax obligations of the
Credit Parties, (b) fiduciary, trust or escrow accounts, (c) “zero balance”
accounts and (d) other accounts so long as (i) the balance in any one such
account on any day does not exceed $1,000,000 and (ii) the aggregate balance for
all such accounts excluded pursuant to this clause (d) on any day does not
exceed $2,000,000.

“Excluded Swap Obligations” means, with respect to any Credit Party individually
determined on a Credit Party by Credit Party basis, any Swap Obligation, if and
to the extent that, all or a portion of the joint and several liability or the
guaranty of such Credit Party for, or the grant by such Credit Party 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 Credit
Party’s failure for any reason to constitute an Eligible Contract Participant at
the time such guarantee or the grant of such security interest or other Lien
becomes effective with respect to, or any other time such Credit Party is by
virtue of such guarantee or grant of such security interest or other Lien
otherwise deemed to enter into, 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, security interest or other Lien is or becomes
illegal.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower or any Guarantor hereunder or under
any other Loan Document, (a) 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) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower or any Guarantor is located,
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 5.04(b)), any withholding tax that is
imposed on amounts payable to such Foreign

 

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Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office), except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts with respect to
such withholding tax pursuant to Section 5.03(b) or Section 5.03(d), (d) Taxes
attributable to such recipient’s failure to comply with Section 5.03(g), and
(e) any withholding Taxes imposed under FATCA.

“Expansion Capital Expenditures” means all Capital Expenditures other than such
expenditures made for the restoration, repair or maintenance of any fixed or
capital asset.

“FATCA” means Sections 1471 through 1474 of the Code (as of the date hereof) and
any regulations or official interpretations thereof (including any Revenue
Ruling, Revenue Procedure, Notice or similar guidance issued by the U.S.
Internal Revenue Service thereunder as a precondition to relief or exemption
from Taxes under such provisions); provided that FATCA shall also include any
amendments to Sections 1471 through 1474 of the Code if, as amended, FATCA
provides a commercially reasonable mechanism to avoid the tax imposed thereunder
by satisfying the information reporting and other requirements of FATCA.

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

“FDIC” means the Federal Deposit Insurance Corporation, or any successor
thereto.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it;
provided that in no event shall the Federal Funds Effective Rate be less than
0%.

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

“Financial Covenant Election” means a one-time irrevocable election of the
Borrower, in its sole discretion, that can be made in a written certificate by a
Financial Officer of the Borrower delivered to the Administrative Agent at any
time after the Parent or the Borrower has issued an aggregate principal amount
of at least $200,000,000 of Senior Notes pursuant to Section 9.02(g).

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

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

“Flood Deliverables” has the meaning set forth in Section 6.01(s).

 

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

“Foreign Lender” means any Lender that is not: (i) an individual who is a
citizen or resident of the United States of America; (ii) a partnership or a
corporation (or other entity taxed as a corporation for U.S. federal income tax
purposes) created or organized in or under the laws of the United States of
America; (iii) an estate whose income is includible in gross income for U.S.
federal income tax purposes regardless of its source; or (iv) a trust if (1) a
court within the United States of America is able to exercise primary
supervision over the administration of the trust and one or more “United States
person” (within the meaning of the Code) have the authority to control all
substantial decisions of the trust, or (2) it has a valid election in effect
under applicable Treasury regulations to be treated as a United States person.

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

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

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

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

“General Partner” means Rattler Midstream 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
Parent, the Borrower, any Subsidiary, any of their Properties, the
Administrative Agent, the Issuing Bank or any Lender.

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

“Gray Oak” means Gray Oak Pipeline, LLC, a Delaware limited liability company.

 

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“Guarantors” means the Parent, Tall City Towers LLC, a Delaware limited
liability company, and each other Person that guarantees the Indebtedness
pursuant to Section 8.14(b), unless and until expressly released pursuant to the
terms of the Loan Documents.

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

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

“Headquarters Building” means 500 West Texas Avenue, Midland, Texas 79701.

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

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

“Immaterial Title Deficiencies” means defects or deficiencies in title that do
not diminish the aggregate book value of (a) the Midstream Properties of the
Credit Parties and (b) the Headquarters Building by more than ten percent (10%)
in the aggregate.

“Indebtedness” means any and all amounts owing or to be owing by the Parent, the
Borrower, or any other Guarantor (whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising): (a) to the Administrative Agent, any Issuing
Bank or any Lender under any Loan Document; (b) to any Secured Swap Party in
respect of any Secured Swap Obligations (provided that notwithstanding anything
to the contrary herein or in any other Loan Document, “Indebtedness” shall not
include with respect to any Person any Excluded Swap Obligations of such
Person); (c) to any Cash Management Provider in respect of any Cash Management
Agreement; and (d) all renewals, extensions and/or rearrangements of any of the
above.

 

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“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes and (b) to the
extent not otherwise described in clause (a), Other Taxes.

“Indemnitee” has the meaning set forth in Section 12.03(b).

“Industry Competitor” means any Person (other than the Parent, the Borrower, any
Guarantor or any of their Affiliates or Subsidiaries) that is (or one or more of
whose Affiliates are) actively engaged as one of its principal businesses in
(a) gathering, dehydrating or compressing natural gas, crude, condensate or
natural gas liquids; (b) treating, processing, fractionating or transporting
natural gas, crude, condensate or natural gas liquids or the fractionated
products thereof; (c) storing natural gas, crude, condensate, natural gas
liquids or the fractionated products thereof; (d) marketing natural gas, crude,
condensate, natural gas liquids or the fractionated products thereof, or
(e) water distribution, storage, supply, treatment and disposal services.

“Individual LC Commitment” means, for any Issuing Bank, the amount for such
Issuing Bank set forth on Annex II hereto.

“Information” has the meaning set forth in Section 12.11.

“Insurance and Condemnation Event” means the receipt by any Credit Party of any
cash insurance proceeds or condemnation award in an aggregate amount in excess
of $15,000,000 payable by reason of theft, loss, physical destruction or damage,
taking or similar event with respect to any of their respective Property.

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

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

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

 

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“Interstate Pipeline” has the meaning set forth in Section 7.23.

“Investment” means, for any Person: (a) the purchase and acquisition (whether
for cash, Property, services or securities or otherwise in one or a series of
transactions) of (i) Equity Interests (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) or (ii) all or substantially all of
the business or a line of business of another Person, in each case with respect
to this clause (ii) with a purchase price in excess of $5,000,000; (b) the
making of any deposit with, or advance, loan or capital contribution to, the
assumption of Debt of, the purchase or other acquisition of any other Debt of or
equity participation or interest in, or other extension of credit to, any other
Person (including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding ninety (90) days representing the purchase price of
inventory, material, equipment or supplies sold by such Person in the ordinary
course of business); or (c) the entering into of any guarantee of, or other
contingent obligation (including the deposit of any Equity Interests to be sold)
with respect to, Debt or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.

“Issuing Bank” means, collectively, Wells Fargo, Bank of America, N.A., Credit
Suisse AG, Cayman Islands Branch and JPMorgan Chase Bank, N.A., in their
respective capacities as an issuer of Letters of Credit hereunder, and their
respective successors in such capacity as provided in Section 2.07(i). Each
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate. As used herein, references to “the Issuing Bank” and similar
phrases shall be interpreted as references to the applicable Issuing Bank in
respect of a Letter of Credit, as context requires.

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

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

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

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

 

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

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period and subject to the implementation of a Replacement Rate in accordance
with Section 5.06, the rate appearing on Reuters Screen LIBOR01 Page as of 11:00
A.M., London time, two (2) Business Days prior to the beginning of such Interest
Period; provided that such rate shall never be less than 0.0%. In the event that
such rate does not appear on such page (or otherwise on such screen), the “LIBO
Rate” shall be determined by reference to such other comparable publicly
available service for displaying Eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability, by reference to
the rate at which the Administrative Agent is offered dollar deposits at or
about 11:00 A.M., London time, two (2) Business Days prior to the beginning of
such Interest Period in the interbank Eurodollar market where its Eurodollar and
foreign currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days comprised
therein.

“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 the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations. For the
purposes of this Agreement, the Parent, the Borrower, or any Restricted
Subsidiary shall be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, or leases under a financing
lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person in a transaction intended to create a
financing.

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

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

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

“Material Acquisition” means any acquisition of Property or series of related
acquisitions of Property that involves the payment of consideration by the
Credit Parties in excess of a dollar amount equal to $50,000,000.

 

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

“Material Contracts” means, individually or collectively as the context
requires, each Material Gathering Contract, each Material Sales Contract, and
each other contract set forth on Schedule 7.18.

“Material Disposition” means any Transfer of Property or series of related
Transfers of property that yields gross proceeds to the Credit Parties in excess
of a dollar amount equal to $50,000,000.

“Material Gathering Contract” means each gathering, treating or processing
contract entered into by the Parent, the Borrower, or any Restricted Subsidiary
that (a) if a fee-based contract, provides for aggregate payments to the Parent,
the Borrower, or such Restricted Subsidiary during any 12 month period in excess
of $30,000,000, and (b) if a percentage of proceeds contract, is reasonably
anticipated to result in a share of proceeds retained by the Parent, the
Borrower, or such Restricted Subsidiary for its own account during any 12 month
period in excess of $30,000,000.

“Material Indebtedness” means Debt (other than the Loans and Letters of Credit),
or obligations in respect of one or more of one or more Swap Agreements, of any
one or more of the Parent, the Borrower, or their Restricted Subsidiaries in an
aggregate principal amount exceeding $50,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of the Parent,
the Borrower, or their Restricted Subsidiaries in respect of any Swap Agreement
at any time shall be the Swap Termination Value owed by the Parent, the
Borrower, or their Restricted Subsidiaries, as applicable.

“Material Project” means any project of the Credit Parties (a) that has or will
have Expansion Capital Expenditures attributable thereto in excess of
$50,000,000, (b) for which construction or expansion of such project has
commenced, (c) that is identified in a certificate delivered by the Borrower to
the Administrative Agent not less than thirty (30) days prior to the delivery of
the financial statements and compliance certificate pursuant to Section 8.01(a)
or (b) and Section 8.01(c) for the first fiscal quarter for which the Borrower
desires to commence inclusion of a Material Project Add-Back related to such
project in EBITDA, which certificate includes the Material Project EBITDA
Projection for such project and the Borrower’s good faith anticipated commercial
operation date for such project, and (d) for which the Borrower has provided to
the Administrative Agent, as the Administrative Agent may from time to time
reasonably request, in each case in form and substance satisfactory to the
Administrative Agent in its reasonable discretion, information regarding such
project including, to the extent such information is applicable, updated status
reports summarizing each Material Project currently under construction and
covering original anticipated and current projected costs and Capital
Expenditures (including information on actual costs to date) for such Material
Project, the originally identified and current projected commercial operation
date, volume commitments to

 

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such project, pricing arrangements, Swap Agreements relating to such project,
the Borrower’s expectations as to the ability of third parties to perform under
any contracts relating to utilization of such project, and any other aspect of
such project as the Administrative Agent may reasonably request from time to
time.

“Material Project Add-Back” means, with respect to any period for which EBITDA
is calculated, the amount added in the calculation of EBITDA attributable to a
particular Material Project, which amount shall equal with respect to a
particular Material Project for such period:

(a)    prior to the date on which a Material Project has achieved commercial
operation (but including the fiscal quarter in which commercial operation
commences), a percentage, equal to the then-current completion percentage of
such Material Project as of the date of determination as reasonably determined
by the Borrower, of the Material Project EBITDA Projection for such Material
Project (net of any actual EBITDA attributable to such Material Project during
such period); provided that if the actual commercial operation date for any
Material Project does not occur by the originally scheduled commercial operation
date for such project originally disclosed to the Administrative Agent by the
Borrower, then the foregoing amount shall be reduced, for quarters ending after
such originally scheduled commercial operation date to (but excluding) the first
full quarter after the actual commercial operation date, by the following
percentage amounts depending on the period of delay (based on the period of
actual delay or then-estimated delay, whichever is longer): (i) 90 days or less,
0%, (ii) longer than 90 days, but not more than 180 days, 25%, (iii) longer than
180 days but not more than 270 days, 50%, (iv) longer than 270 days but not more
than 365 days, 75%, and (v) longer than 365 days, 100%; and

(b)    beginning with the first full fiscal quarter following the date on which
commercial operation of a Material Project commences, and for the two
immediately succeeding fiscal quarters, the Material Project EBITDA Projection
for such Material Project (net of any actual EBITDA attributable to such
Material Project during such period).

“Material Project EBITDA Projection” means, with respect to any Material
Project, the Borrower’s good faith projection, based on binding and enforceable
customer contracts providing for minimum volume or minimum revenue commitments
relating to such project, the creditworthiness of the other parties to such
contracts, and projected revenues from such contracts, capital costs and
expenses, and other factors deemed appropriate by the Administrative Agent in
its reasonable discretion, of the EBITDA that will be attributable to such
Material Project during the first 12-month period following commencement of
commercial operations of such Material Project, which projection and calculation
thereof shall be reasonably acceptable to the Administrative Agent. After first
providing such projection for any Material Project, the Borrower shall
thereafter, until the end of the first 12-month period following commencement of
commercial operations of such Material Project, re-evaluate such anticipated
EBITDA quarterly and, if there is a material decrease or increase in such amount
(as reasonably determined by the Borrower), the Borrower shall deliver an
updated projection and calculation thereof which, if acceptable to the
Administrative Agent, shall become and be deemed to be the “Material Project
EBITDA Projection” for such Material Project for each calculation of EBITDA
following the date on which such updated projection is delivered to the
Administrative Agent until the next such re-evaluation.

 

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“Material Sales Contract” means each sales contract entered into by the Parent,
the Borrower or any other Restricted Subsidiary that provides for aggregate
payments to the Parent, the Borrower or such other Restricted Subsidiary during
any fiscal year of such party in excess of $30,000,000 after excluding payments
over to third parties of payments due to them relating to the Hydrocarbon
proceeds received under such sales contracts. To the extent, if any, that the
Parent, the Borrower or a Restricted Subsidiary enters into any contract (other
than a gathering, treating or processing contract) that requires such party to
make payments during any fiscal year of such party in excess of $30,000,000 for
Hydrocarbons purchased by such party under such contract, such contract will
also be a “Material Sales Contract”.

“Maturity Date” means May 28, 2024.

“Midstream Properties” means all tangible property used in (a) gathering,
compressing, treating, processing and transporting natural gas, crude,
condensate and natural gas liquids and other Hydrocarbons; (b) fractionating and
transporting natural gas, crude, condensate and natural gas liquids and other
Hydrocarbons; (c) marketing natural gas, crude, condensate and natural gas
liquids and other Hydrocarbons; and (d) water distribution, supply, treatment
and disposal services thereof, including, Gathering Systems, Processing Plants,
storage facilities, surface leases, Rights of Way and servitudes related to each
of the foregoing. Unless otherwise specified herein, “Midstream Properties”
shall be deemed to refer to such properties owned or leased by the Credit
Parties.

“Midstream Property Title Information” has the meaning assigned such term in
Section 8.13(a).

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash
Collateral consisting of cash or deposit account balances, an amount equal to
105% of the Fronting Exposure of all Issuing Banks with respect to Letters of
Credit issued and outstanding at such time and (b) if the Borrower agrees to
deliver Cash Collateral consisting of property other than cash or deposit
account balances, an amount determined by the Administrative Agent and the
Issuing Bank in their sole discretion.

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

“Mortgaged Property” means any owned real property or leased real property by
any Credit Party which is subjected to the Liens created pursuant to the terms
of the Security Instruments.

“Net Proceeds” means the aggregate cash proceeds received by a Credit Party in
respect of any Asset Disposition, or Insurance and Condemnation Event, net of
(a) the direct costs relating to such Asset Disposition, or Insurance and
Condemnation Event (including legal, accounting and investment banking fees,
underwriting, advisory and consulting fees, title and recording tax expenses and
sales commissions paid to unaffiliated third parties, severance and associated
costs, expenses, and charges of personnel and any relocation expenses incurred
as a result of such Asset Disposition or Insurance and Condemnation Event, and
commissions, discounts, and expenses incurred as a result of such Asset
Disposition or Insurance and Condemnation Event), (b) taxes paid or payable as a
result thereof (after taking into account any available and applicable tax
credits

 

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or deductions and any tax sharing arrangements), (c) Debt (other than the
Indebtedness) which is secured by a Lien upon any of the assets subject to such
Asset Disposition or Insurance and Condemnation Event and which must be repaid
as a result of such Asset Disposition or Insurance and Condemnation Event,
(d) any reserve for sale price adjustment, indemnification, or retained
liability obligations in respect of such Property or such Asset Disposition or
Insurance and Condemnation Event established in accordance with GAAP, and
(e) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or to holders of interests in such Property as
a result of such Asset Disposition or Insurance and Condemnation Event.

“new Debt” has the meaning assigned to such term in the definition of “Permitted
Refinancing Debt”.

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

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

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

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

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

“Parent” has the meaning set forth in the introductory paragraph hereto.

“Parent IPO” means the initial public offering of Equity Interests in the Parent
on the NASDAQ Stock Market pursuant to the Registration Statement.

“Parent Partnership Agreement” means that certain First Amended and Restated
Agreement of Limited Partnership of the Parent, dated as of May 28, 2019, as the
same may be amended, restated or otherwise modified from time to time to the
extent permitted under this Agreement.

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

 

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

“Permitted Acquisition” means any acquisition by the Borrower or any Restricted
Subsidiary that is a Guarantor of all or substantially all of the business or a
line of business (whether by the acquisition of Equity Interests, assets or any
combination thereof) of any other Person (a “Permitted Acquisition Target”), in
each case, if each such acquisition meets all of the following requirements:

(a)    such acquisition is not a hostile or contested acquisition;

(b)    the Parent and its Consolidated Restricted Subsidiaries shall be in
compliance with Section 9.06 immediately after giving effect to such
acquisition, and no other Event of Default shall have occurred and be continuing
both before and after giving effect to such acquisition and any Debt incurred in
connection therewith;

(c)    if such transaction is a merger or consolidation, the Borrower or a
Restricted Subsidiary that is a Guarantor shall be the surviving Person and no
Change in Control shall have been effected thereby; and

(d)    if the acquisition consideration (excluding Equity Interests of the
Parent) in connection with such acquisition exceeds $50,000,000, no less than
three (3) Business Days prior to the proposed closing date of such acquisition,
the Borrower shall have delivered written notice of such acquisition to the
Administrative Agent, which notice shall include the proposed closing date of
such acquisition and a compliance certificate for the most recent fiscal quarter
end preceding such acquisition for which financial statements are available
demonstrating, in form and substance reasonably satisfactory to the
Administrative Agent, compliance on a pro forma basis (as of the date of the
acquisition and after giving effect thereto and any Debt incurred in connection
therewith) with each covenant contained in Section 9.01 (provided, that, if the
Borrower has delivered written notice electing to begin an Acquisition Period,
the calculation of the Consolidated Total Leverage Ratio will be tested as if
the Acquisition Period had been in effect as of the last day of the most
recently ended fiscal quarter).

“Permitted Acquisition Target” has the meaning assigned to such term in the
definition of “Permitted Acquisition”.

“Permitted Refinancing Debt” means Debt (for purposes of this definition, “new
Debt”) incurred in exchange for, or proceeds of which are used to repay,
repurchase, redeem, defease, refund, replace, acquire or otherwise retire or
refinance, all or part of any other Debt (the “Refinanced Debt”); provided that:
(a) such new 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) and (ii) an amount necessary to pay
any accrued and unpaid interest on such Refinanced Debt and any fees and
expenses, including premiums, related to such exchange or refinancing; (b) such
new Debt has a stated maturity no earlier than the stated maturity of the
Refinanced Debt and an average life no shorter than the average life of the
Refinanced Debt; (c) such new Debt’s stated interest rate, fees, and premiums
are on “market” terms; (d) such new Debt does not contain covenants

 

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that, taken as a whole, are materially more onerous to the Borrower and the
Restricted Subsidiaries than those imposed by the Refinanced Debt; and (e) if
the Refinanced Debt (or any guarantee thereof) is subordinated in right of
payment to the Indebtedness (or, if applicable, the Guaranty and Security
Agreement), then such new Debt (and any guarantees thereof) is subordinated in
right of payment to the Indebtedness (or, if applicable, the Guaranty and
Security Agreement) to at least the same extent as the Refinanced Debt or is
otherwise subordinated on terms substantially reasonably satisfactory to the
Administrative Agent.

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

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

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

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

“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.

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

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

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

 

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“Refinanced Debt” has the meaning assigned to such term in the definition of
“Permitted Refinancing Debt”.

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

“Registration Statement” means the Form S-1 Registration Statement File
No. 333-226645 initially filed by the Parent with the SEC on August 7, 2018, as
amended prior to the Effective Date.

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

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

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

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

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

“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of (x) the Parent or the General Partner or (y) the
Borrower, as applicable.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in the
Parent, the Borrower, or any Restricted Subsidiary or any payment (whether in
cash, securities or other Property and including any transfer of cash,
securities, or other Property effected by division of any Person), 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 Parent, the Borrower, or any Restricted Subsidiary or any
option, warrant or other right to acquire any such Equity Interests in the
Parent, the Borrower, or any Restricted Subsidiary.

“Restricted Subsidiary” means any Subsidiary of the Parent that is not an
Unrestricted Subsidiary, including 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 plus such
Lender’s LC Exposure at such time.

“Rights of Way” has the meaning set forth in Section 7.16(b).

 

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“Rolling Period” means (a) for the fiscal quarters ending on September 30, 2019,
December 31, 2019, and March 31, 2020, the period commencing on July 1, 2019 and
ending on the last day of such applicable fiscal quarter and (b) for the fiscal
quarter ending on June 30, 2020, and for each fiscal quarter thereafter, the
period of four (4) consecutive fiscal quarters ending on the last day of such
applicable fiscal quarter.

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

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

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC or the U.S.
Department of State, (b) any Person operating, organized or resident in a
Sanctioned Country or (c) any Person owned fifty percent (50%) or more,
individually or in the aggregate, directly or indirectly, by any such Person or
Persons described in the foregoing clause (a).

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

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

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

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

“Secured Swap Obligations” means all amounts and other obligations owing to any
Secured Swap Party under any Secured Swap Agreement; provided that, for the
avoidance of doubt, if a Secured Swap Party ceases to be a Lender (or an
Affiliate of a Lender), then the Secured Swap Obligations owing to such Secured
Swap Party under any such Secured Swap Agreement shall not include any
obligations arising from transactions entered into after the time that such
Secured Swap Party ceases to be a Lender or an Affiliate of a Lender.

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

“Security Instruments” means the Guaranty and Security Agreement, each Control
Agreement, mortgages, deeds of trust, and other agreements, instruments or
certificates described

 

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or referred to in Exhibit E, and any and all other agreements, instruments,
consents or certificates now or hereafter executed and delivered by the Parent,
the Borrower, any other Guarantor, or any other Person (other than Secured Swap
Agreements, Cash Management Agreements and participation or similar agreements
between any Lender and any other lender or creditor with respect to any
Indebtedness pursuant to this Agreement) in connection with, or as security for
the payment or performance of the Indebtedness, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.

“Senior Notes” means any unsecured senior or senior subordinated Debt securities
(whether registered or privately placed) issued pursuant to a Senior Notes
Indenture.

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

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

“Subsidiary” means (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, managers 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 Parent and/or one or more of its
Subsidiaries and (b) any partnership of which the Parent 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 Parent
(including 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 (including any agreement, contract or transaction that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act); provided that no phantom stock or similar plan providing for
payments only on account of services provided by current or former directors,
officers, employees or consultants of the Borrower or its Subsidiaries shall be
a Swap Agreement.

 

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“Swap Obligation” means, with respect to any Person, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act, including
any such obligation comprised of a guaranty or a security interest or other
Lien.

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

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

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

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

“Total Debt” means, at any date, all Debt of the Parent, the Borrower, and the
Consolidated Restricted Subsidiaries, on a consolidated basis, excluding
(a) non-cash obligations under ASC 815 and (b) Debt under clauses (i) and (j) of
the definition thereof.

“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, (b) each Guarantor, the execution, delivery and performance by such
Guarantor of each Loan Document to which it is a party, the guaranteeing of the
Indebtedness and the other obligations under the Guaranty and Security Agreement
by such Guarantor and such Guarantor’s grant of the security interests and
provision of collateral under the Security Instruments, and the grant of Liens
by such Guarantor on Mortgaged Properties and other Properties pursuant to the
Security Instruments, and (c) with respect to the Parent, the consummation of
the Parent IPO on the Effective Date.

 

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“Transfer” means to sell, assign, convey or otherwise transfer Property
(including any transfer that is effected through the statutory division of a
Person); provided that Transfer does not include the grant, creation or
perfection of a Lien.

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

“USA PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), as amended from time to time, and any successor
statute.

“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 5.03(g)(ii)(B)(3).

“Unadjusted EBITDA” means, for any period, (a) EBITDA for such period (without
giving effect to the limitation on the amount of Material Project Add-Backs
contained in the proviso at the end of the first sentence of the definition of
“EBITDA”) minus (b) the aggregate amount of Material Project Add-Backs for such
period.

“Unrestricted Subsidiary” means any Subsidiary of the Parent (a) designated as
such on Schedule 7.14 on the Effective Date (as updated with any written
disclosures provided in writing to the Administrative Agent in accordance with
and subject to the terms hereof, including, as applicable, Section 9.17),
(b) which the Parent or the Borrower has designated in writing to the
Administrative Agent to be an Unrestricted Subsidiary pursuant to Section 9.17,
or (c) that is a subsidiary of an Unrestricted Subsidiary; provided that in no
event may the Borrower be designated as an Unrestricted Subsidiary.

“Wells Fargo” has the meaning set forth in the introductory paragraph hereto.

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

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

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

Section 1.04    Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” as used in this Agreement shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed
to have the same meaning and effect as the word “shall”. Unless the context
requires otherwise (a) any definition

 

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of or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented, restated or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth in
the Loan Documents), (b) any reference herein to any law shall be construed as
referring to such law as amended, modified, codified or reenacted, in whole or
in part, and in effect from time to time, (c) any reference herein to any Person
shall be construed to include such Person’s successors and assigns (subject to
the restrictions contained in the Loan Documents), (d) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (e) with respect to the determination of any time period, the word
“from” means “from and including” and the word “to” means “to and including”,
(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, and (g) any reference to “the Borrower and the
Restricted Subsidiaries” or “the Borrower and the Subsidiaries” shall be
construed to mean “the Borrower and the other Restricted Subsidiaries” or the
“Borrower and the other Subsidiaries”, as applicable, and (h) any reference to
“the Issuing Bank” shall mean “the Issuing Banks”, “any Issuing Bank”, or “such
Issuing Bank”, as appropriate in such context. No provision of this Agreement or
any other Loan Document shall be interpreted or construed against any Person
solely because such Person or its legal representative drafted such provision.

Section 1.05    Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the Financial Statements except (a) that, notwithstanding GAAP, Parent’s and the
Borrower’s accounting treatment of capital leases and operating leases shall be
consistent with the Parent’s and the Borrower’s accounting treatment thereof as
was in effect on December 15, 2018, and (b) for changes in which Parent’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 Majority Lenders shall otherwise agree in writing,
no such change shall modify or affect the manner in which compliance with the
covenants contained herein is computed such that all such computations shall be
conducted utilizing financial information presented consistently with prior
periods. Notwithstanding anything herein to the contrary, unless otherwise
expressly stated, for the purposes of calculating any of the ratios tested under
Section 9.01 (including testing of such ratios at other times to the extent
required under this Agreement), and the components of each of such ratios, all
Unrestricted Subsidiaries, and their subsidiaries (including their assets,
liabilities, income, losses, cash flows, and the elements thereof) shall be
excluded, except for any cash dividends or distributions actually paid by any
Unrestricted Subsidiary or any of its subsidiaries to the Parent, the Borrower
or any other Restricted Subsidiary, which shall be deemed to be income to the
Parent, the Borrower or such other Restricted Subsidiary when actually received
by it.

Section 1.06    Divisions. For all purposes under the Loan Documents, in
connection with any division or plan of division under Delaware law (or any
comparable event under a different jurisdiction’s laws): (a) if any asset,
right, obligation or liability of any Person becomes the asset, right,
obligation or liability of a different Person, then it shall be deemed to have
been transferred

 

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from the original Person to the subsequent Person, and (b) if any new Person
comes into existence, such new Person shall be deemed to have been organized on
the first date of its existence by the holders of its Equity Interests at such
time.

Section 1.07    Rates. The Administrative Agent does not warrant or accept
responsibility for, and shall not have any liability with respect to, the
administration, submission or any other matter related to the rates in the
definition of LIBO Rate.

ARTICLE II

The Credits

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

Section 2.02    Loans and Borrowings.

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

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

(c)    Minimum Amounts; Limitation on Number of Borrowings. At the commencement
of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in
an aggregate amount that is an integral multiple of $500,000 and not less than
$1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $250,000 and not less
than $1,000,000; provided that an ABR Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the total Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.07(e). Borrowings of more than one Type may be outstanding at the same
time, provided that there shall not at any time be more than a total of six
(6) Eurodollar Borrowings outstanding. Notwithstanding any other provision of
this Agreement, the Borrower shall not be entitled to request, or to elect to
convert or continue, any Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.

(d)    Notes. If requested by a Lender, the Loans made by such Lender shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A, and,

 

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in the case of any Lender party hereto as of the date of this Agreement, such
Note shall be dated as of the date of this Agreement, or in the case of any
Lender that becomes a party hereto pursuant to an Assignment and Assumption or
an Additional Lender Certificate, such Note shall be dated as of the effective
date of such Assignment and Assumption or Additional Lender Certificate, as
applicable, payable to such Lender in a principal amount equal to its Commitment
as in effect on such date, and otherwise duly completed. In the event that any
Lender’s Commitment increases or decreases for any reason (whether pursuant to
Section 2.06, Section 12.04(b) or otherwise), the Borrower shall, upon request
of such Lender, deliver or cause to be delivered on the effective date of such
increase or decrease, a new Note payable to such Lender in a principal amount
equal to its Commitment after giving effect to such increase or decrease, and
otherwise duly completed, against return to the Borrower of the Note so
replaced. The date, amount, Type, interest rate and, if applicable, Interest
Period of each Loan made by each Lender, and all payments made on account of the
principal thereof, shall be recorded by such Lender on its books for its Note,
and, prior to any transfer, may be endorsed by such Lender on a schedule
attached to such Note or any continuation thereof or on any separate record
maintained by such Lender. Failure to make any such notation or to attach a
schedule shall not affect any Lender’s or the Borrower’s rights or obligations
in respect of such Loans or affect the validity of such transfer by any Lender
of its Note.

Section 2.03    Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone or e-mail
(a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, Houston,
Texas time, three (3) Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 11:00 a.m., Houston, Texas
time, on the Business Day of the proposed Borrowing; provided that no such
notice shall be required for any deemed request of an ABR Borrowing to finance
the reimbursement of an LC Disbursement as provided in Section 2.07(e). Each
such telephonic or e-mail Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery, or facsimile to the Administrative Agent of
a written Borrowing Request in substantially the form of Exhibit B and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:

(i)    the aggregate amount of the requested Borrowing;

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

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

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

(v)    the current total Revolving Credit Exposures (without regard to the
requested Borrowing) and the pro forma total Revolving Credit Exposures (giving
effect to the requested Borrowing); and

 

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

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Each Borrowing
Request shall constitute a representation that the amount of the requested
Borrowing shall not cause the total Revolving Credit Exposures to exceed the
total Commitments.

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

Section 2.04    Interest Elections.

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

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

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

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

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

 

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

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

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

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

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

Section 2.05    Funding of Borrowings; Funding by Lenders.

(a)    Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., Houston, Texas time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent in Houston, Texas and
designated by the Borrower in the applicable Borrowing Request; provided that
ABR Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.07(e) shall be remitted by the Administrative Agent to the Issuing
Bank. Nothing herein shall be deemed to obligate any Lender to obtain the funds
for its Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for its Loan in any
particular place or manner.

(b)    Presumption of Funding by the Lenders. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
Section 2.05(a) and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made

 

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its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

Section 2.06    Termination, Reduction and Increase of Commitments.

(a)    Scheduled Termination of Commitments. Unless previously terminated, the
Commitments shall terminate on the Maturity Date. If at any time the Commitments
are terminated or reduced to zero, then the Commitments shall terminate on the
effective date of such termination or reduction.

(b)    Optional Termination and Reduction of Commitments.

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

(ii)    The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the aggregate Commitments 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 Commitments shall be permanent and may not be reinstated. Each reduction
of the aggregate Commitments shall be made ratably among the Lenders in
accordance with each Lender’s Applicable Percentage.

(c)    Optional Increase in Commitments.

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

 

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(ii)    Any increase in the Commitments shall be subject to the following
additional conditions:

(A)    such increase shall not be less than $25,000,000 unless the
Administrative Agent otherwise consents, and no such increase shall be permitted
if after giving effect thereto the aggregate amount of all such increases in the
Commitments would exceed $400,000,000;

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

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

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

(E)    the pro forma Consolidated Total Leverage Ratio as of the effective date
of such increase (calculated in a manner reasonably acceptable to the
Administrative Agent) does not exceed the applicable maximum ratio for the last
day of the fiscal quarter in which such increase occurs as set forth in
Section 9.01(a) assuming that, for purposes of calculating the Consolidated
Total Leverage Ratio as of such date, the Lenders have made Loans to the
Borrower in an aggregate amount equal to the amount of the aggregate Commitments
(including the amount of the increase in the Commitments on such date);

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

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

(iii)    Subject to acceptance and recording thereof pursuant to
Section 2.06(c)(iv), from and after the effective date specified in the
Commitment Increase Certificate or the Additional Lender Certificate (or if any
Eurodollar Borrowings are outstanding, then the last day of the Interest Period
in respect of such Eurodollar Borrowings, unless the Borrower has paid
compensation required by Section 5.02): (A) the amount of the Commitments shall
be increased as set forth therein, and (B) in the case of an Additional Lender
Certificate, any Additional Lender party thereto shall be a party to this
Agreement and have the rights and obligations of a Lender under this Agreement
and the other Loan Documents. In addition, the

 

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Lender or the Additional Lender, as applicable, shall purchase a pro rata
portion of the outstanding Loans (and participation interests in Letters of
Credit) of each of the other Lenders (and such Lenders hereby agree to sell and
to take all such further action to effectuate such sale) such that each Lender
(including any Additional Lender, if applicable) shall hold its Applicable
Percentage of the outstanding Loans (and participation interests) after giving
effect to the increase in the Commitments.

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

(v)    Upon any increase in the Commitments pursuant to this Section 2.06,
Annex I to this Agreement shall be deemed amended to reflect the Commitment of
each Lender (including any Additional Lender) as thereby increased and any
resulting changes in the Lenders’ Applicable Percentages.

Section 2.07    Letters of Credit.

(a)    General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of dollar denominated Letters of Credit for
its own account or for the account of any of its Restricted Subsidiaries, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Availability Period in an aggregate
amount not to exceed (i) with respect to any individual Issuing Bank, such
Issuing Bank’s Individual LC Commitment or (ii) with respect to all Issuing
Banks, the Aggregate LC Commitment. In the event of any direct or indirect
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any letter of credit application or other agreement submitted
by the Borrower to, or entered into by the Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement
shall control. Notwithstanding anything herein to the contrary, the Issuing Bank
shall have no obligation hereunder to issue, and shall not issue, any Letter of
Credit (i) the proceeds of which would be made available to any Person (A) to
fund, in each case in violation of Sanctions, any activity or business of or
with any Sanctioned Person, or involving any country or territory that, at the
time of such funding, is a Sanctioned Country or (B) in any other manner that
would result in a violation of any Sanctions by any party to this Agreement,
(ii) if any order, judgment or decree of any Governmental Authority or
arbitrator, in either case, with jurisdiction over the Issuing Bank, shall by
its terms purport to enjoin or restrain the Issuing Bank from issuing such
Letter of Credit, or any Governmental Requirement relating to the Issuing Bank
or any Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the Issuing Bank with respect to such Letter
of Credit any reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Effective Date, or shall
impose upon the Issuing Bank

 

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any unreimbursed loss, cost or expense which was not applicable on the Effective
Date and which the Issuing Bank in good faith deems material to it or (iii) if
the issuance of such Letter of Credit would violate one or more policies of the
Issuing Bank applicable to letters of credit generally under similar
circumstances for similarly situated borrowers; provided that, notwithstanding
anything herein to the contrary, (x) the Dodd Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines, requirements or
directives thereunder or issued in connection therewith or in the implementation
thereof, and (y) all requests, rules, guidelines, requirements or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed not to be in effect on the Effective Date for purposes of
clause (ii) above, regardless of the date enacted, adopted, issued or
implemented. Notwithstanding anything to the contrary herein, Credit Suisse AG,
Cayman Islands Branch, in its capacity as an Issuing Bank, shall only issue
standby Letters of Credit, subject to the other terms and conditions set forth
herein.

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

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

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

(iii)    specifying the date on which such Letter of Credit is to expire (which
shall comply with Section 2.07(c));

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

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

(vi)    specifying the current total Revolving Credit Exposures (without regard
to the requested Letter of Credit or the requested amendment, renewal or
extension of an outstanding Letter of Credit) and the pro forma total Revolving
Credit Exposures (giving effect to the requested Letter of Credit or the
requested amendment, renewal or extension of an outstanding Letter of Credit).

Each notice shall constitute a representation by the Borrower that after giving
effect to the requested issuance, amendment, renewal or extension, as
applicable, (i) the total LC Exposure shall not exceed the Aggregate LC
Commitment, (ii) the aggregate maximum face amount of Letters of Credit issued
by any Issuing Bank shall not exceed such Issuing Bank’s Individual LC
Commitment and (iii) the total Revolving Credit Exposures shall not exceed the
total

 

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Commitments. No Issuing Bank will issue a Letter of Credit if, after giving
effect to the requested issuance, amendment, renewal or extension, as
applicable, (i) the total LC Exposure would exceed the Aggregate LC Commitment
or (ii) the total Revolving Credit Exposures would exceed the total Commitments.

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

(c)    Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date fifteen (15) months after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, fifteen (15) months after such renewal or extension) and
(ii) the date that is five Business Days prior to the Maturity Date; provided,
however, that any Letter of Credit may provide for the renewal thereof for
additional periods, each of which shall not exceed fifteen (15) months (which
shall in no event extend beyond the date referred to in clause (c)(ii) above).
Notwithstanding the foregoing, each Letter of Credit issued by Credit Suisse AG,
Cayman Islands Branch, in its capacity as an Issuing Bank, shall expire at or
prior to the close of business on the earlier of (A) the date twelve (12) months
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, twelve (12) months after such renewal or
extension) and (B) the date that is five Business Days prior to the Maturity
Date; provided, however, that any Letter of Credit may provide for the renewal
thereof for additional periods, each of which shall not exceed twelve (12)
(which shall in no event extend beyond the date referred to in clause (c)(ii)
above.

(d)    Participations. By the issuance of a Letter of Credit (or an amendment to
a Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in Section 2.07(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 2.07(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 or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. The failure of any Lender to purchase participations in
Letters of Credit required to be purchased by it shall not relieve any other
Lender of its obligations hereunder; provided that each Lender’s obligations
under this Section 2.07(d) are several and no Lender shall be responsible for
any other Lender’s failure to purchase its respective participations in Letters
of Credit as required.

 

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(e)    Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 12:00 noon, Houston, Texas time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Houston, Texas 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 12:00 noon, Houston, Texas time, on the Business Day
immediately following the day that the Borrower receives such notice; provided
that if such LC Disbursement is not less than $1,000,0000, the Borrower shall,
subject to the conditions to Borrowing set forth herein, be deemed to have
requested, and the Borrower does hereby request under such circumstances, that
such payment be financed with an ABR Borrowing in an equivalent amount and, to
the extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.05 with respect to Loans made by such
Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this Section 2.07(e), the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this Section 2.07(e) to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Lender pursuant to this Section 2.07(e) to reimburse the Issuing Bank for any
LC Disbursement (other than the funding of ABR Loans as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement.

(f)    Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.07(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or any Letter of Credit
Agreement, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.07(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related
Parties shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to make

 

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a drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised all requisite care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

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

(h)    Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, until the Borrower shall have reimbursed the Issuing Bank for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.07(e)),
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to ABR Loans. Interest accrued pursuant to this Section 2.07(h) shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Lender pursuant to Section 2.07(e) to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.

(i)    Replacement and Resignation of an Issuing Bank.

(i)    Any Issuing Bank may be removed or replaced at any time by written
agreement among the Borrower, the Administrative Agent, the removed or replaced
Issuing Bank and the successor Issuing Bank, which written agreement shall set
forth such successor Issuing Bank’s Individual LC Commitment. The Administrative
Agent shall notify the Lenders of any such removal or replacement of the Issuing
Bank. At the time any such removal or replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 3.05(b). From and after the effective date of
any such removal or replacement, (i) the successor Issuing Bank shall have all
the rights and obligations of the Issuing Bank under this Agreement with respect
to Letters of Credit to be issued thereafter and (ii) references herein to the
term “Issuing Bank” shall be deemed to refer to

 

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such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the removal or
replacement of the Issuing Bank hereunder, the removed or replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such removal or replacement, but shall not be
required to issue additional Letters of Credit.

(ii)    Subject to the appointment and acceptance of a successor Issuing Bank,
any Issuing Bank may resign as an Issuing Bank at any time upon thirty
(30) days’ prior written notice to the Administrative Agent, the Borrower, and
the Lenders, in which case, such resigning Issuing Bank may be replaced in
accordance with Section 2.08(i)(i) above.

(j)    Cash Collateralization. If (i) any Event of Default shall occur and be
continuing and the Borrower receives notice from the Administrative Agent or the
Majority Lenders demanding the deposit of cash collateral pursuant to this
Section 2.07(j), or (ii) the Borrower is required to pay to the Administrative
Agent the excess attributable to an LC Exposure in connection with any
prepayment pursuant to Section 3.04(c), then the Borrower shall deposit, in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to, in the case of
an Event of Default, the LC Exposure, and in the case of a payment required by
Section 3.04(c), the amount of such excess as provided in Section 3.04(c), as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Parent, the Borrower or any Restricted Subsidiary described in
Section 10.01(h) or Section 10.01(i). The Borrower hereby grants to the
Administrative Agent, for the benefit of the Issuing Bank and the Lenders, an
exclusive first priority and continuing perfected security interest in and Lien
on such account and all cash, checks, drafts, certificates and instruments, if
any, from time to time deposited or held in such account, all deposits or wire
transfers made thereto, any and all investments purchased with funds deposited
in such account, all interest, dividends, cash, instruments, financial assets
and other Property from time to time received, receivable or otherwise payable
in respect of, or in exchange for, any or all of the foregoing, and all
proceeds, products, accessions, rents, profits, income and benefits therefrom,
and any substitutions and replacements therefor. The Borrower’s obligation to
deposit amounts pursuant to this Section 2.07(j) shall be absolute and
unconditional, without regard to whether any beneficiary of any such Letter of
Credit has attempted to draw down all or a portion of such amount under the
terms of a Letter of Credit, and, to the fullest extent permitted by applicable
law, shall not be subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower or any Restricted Subsidiaries may
now or hereafter have against any such beneficiary, the Issuing Bank, the
Administrative Agent, the Lenders or any other Person for any reason whatsoever.
Such deposit shall be held as collateral securing the payment and performance of
the obligations of the Borrower and the Guarantors under this Agreement and the
other Loan Documents. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments,
if any, shall be made at the option and sole discretion of the Administrative
Agent, but subject to the consent (not to be unreasonably withheld) of the
Borrower, and at the Borrower’s risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such

 

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account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated, be applied to
satisfy other obligations of the Borrower and any Restricted Subsidiary under
this Agreement or the other Loan Documents. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, and the Borrower is not otherwise required to pay to the
Administrative Agent the excess attributable to an LC Exposure in connection
with any prepayment pursuant to Section 3.04(c), then such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within three
(3) Business Days after all Events of Default have been cured or waived.

Section 2.08    Cash Collateral.

(a)    Defaulting Lenders. At any time that there shall exist a Defaulting
Lender, within one (1) Business Day following the written request of the
Administrative Agent or the Issuing Bank (with a copy to the Administrative
Agent), the Borrower shall Cash Collateralize the Fronting Exposure of the
Issuing Bank with respect to such Defaulting Lender (determined after giving
effect to Section 2.09(a)(iv) and any Cash Collateral provided by such
Defaulting Lender) in an amount not less than the Minimum Collateral Amount. The
Borrower may use proceeds of Borrowings for the provision of Cash Collateral (so
long as no Default or Event of Default exists).

(b)    Grant of Security Interest. The Borrower, and to the extent provided by
any Defaulting Lender, such Defaulting Lender, hereby grants to the
Administrative Agent, for the benefit of the Issuing Bank, and agrees to
maintain, a first priority security interest in all such Cash Collateral as
security for the Defaulting Lender’s obligation to fund participations in
respect of LC Exposure, to be applied pursuant to subsection (c) below. If at
any time the Administrative Agent determines that Cash Collateral is subject to
any right or claim of any Person other than the Administrative Agent and the
Issuing Bank as herein provided, or that the total amount of such Cash
Collateral is less than the Minimum Collateral Amount, the Borrower will, within
2 Business Days upon demand by the Administrative Agent, pay or provide to the
Administrative Agent additional Cash Collateral in an amount sufficient to
eliminate such deficiency (after giving effect to any Cash Collateral provided
by the Defaulting Lender).

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

(d)    Termination of Requirement. Cash Collateral (or the appropriate portion
thereof) provided to reduce the Fronting Exposure of the Issuing Bank shall no
longer be required to be held as Cash Collateral pursuant to this Section 2.08
following (i) the elimination of the applicable Fronting Exposure (including by
the termination of Defaulting Lender status of the applicable Lender), or
(ii) the determination by the Administrative Agent and the Issuing Bank that
there exists excess Cash Collateral; provided that, subject to Section 2.09, the
Person

 

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providing Cash Collateral and the Issuing Bank may agree that Cash Collateral
shall be held to support future anticipated Fronting Exposure or other
obligations; and provided further that to the extent that such Cash Collateral
was provided by the Borrower, such Cash Collateral shall remain subject to the
security interest granted pursuant to the Loan Documents.

Section 2.09    Defaulting Lenders.

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

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

(ii)    Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article X or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 12.08 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to the Issuing Banks hereunder; third, to Cash
Collateralize the Fronting Exposure of the Issuing Banks with respect to such
Defaulting Lender in accordance with Section 2.08; fourth, as the Borrower may
request (so long as no Default or Event of Default exists), to the funding of
any Loan or funded participation 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 (A) satisfy such Defaulting Lender’s potential future funding obligations
with respect to Loans and funded participations under this Agreement and
(B) Cash Collateralize the Issuing Banks’ future Fronting Exposure with respect
to such Defaulting Lender with respect to future Letters of Credit issued under
this Agreement, in accordance with Section 2.08; sixth, to the payment of any
amounts owing to the Lenders or the Issuing Banks as a result of any judgment of
a court of competent jurisdiction obtained by any Lender or any Issuing Bank
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
(1) such payment is a payment of the principal amount of any Loans or funded
participations in Letters of Credit in respect of which such Defaulting Lender
has not fully funded its appropriate share, and (2) 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 funded participations in Letters of Credit owed to, all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or funded participations in Letters of Credit owed to, such
Defaulting Lender until such time as all Loans and funded and

 

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unfunded participations in LC Exposure are held by the Lenders pro rata in
accordance with the Commitment under the Agreement without giving effect to
Section 2.09(a)(iv). Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.09(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(iii)    Certain Fees.

(A)    No Defaulting Lender shall be entitled to receive any commitment fee for
any period during which that Lender is a Defaulting Lender (and the Borrower
shall not be required to pay any such fee that otherwise would have been
required to have been paid to that Defaulting Lender).

(B)    Each Defaulting Lender shall be entitled to receive letter of credit fees
pursuant to Section 3.05(b) for any period during which that Lender is a
Defaulting Lender only to the extent allocable to its Applicable Percentage of
the stated amount of Letters of Credit for which it has provided Cash Collateral
pursuant to Section 2.09.

(C)    With respect to any commitment fee or letter of credit fee not required
to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the
Borrower shall (1) pay to each Non-Defaulting Lender that portion of any such
fee otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in LC Exposure that has been reallocated to such
Non-Defaulting Lender pursuant to clause (iv) below, (2) pay to each Issuing
Bank, as applicable, the amount of any such fee otherwise payable to such
Defaulting Lender to the extent allocable to such Issuing Bank’s Fronting
Exposure to such Defaulting Lender, and (3) not be required to pay the remaining
amount of any such fee.

(iv)    Reallocation of Participations to Reduce Fronting Exposure. All or any
part of such Defaulting Lender’s participation in LC Exposure shall be
reallocated among the Non-Defaulting Lenders in accordance with their respective
Applicable Percentages (calculated without regard to such Defaulting Lender’s
Commitment) but only to the extent that (x) the conditions set forth in
Section 6.02 are satisfied at the time of such reallocation (and, unless the
Borrower shall have otherwise notified the Administrative Agent at such time,
the Borrower shall be deemed to have represented and warranted that such
conditions are satisfied at such time), and (y) such reallocation does not cause
the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed
such Non-Defaulting Lender’s Applicable Percentage of the aggregate Commitments.
Subject to Section 12.17, 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.

(v)    Cash Collateral. If the reallocation described in clause (iv) above
cannot, or can only partially, be effected, the Borrower shall, without
prejudice to any right or remedy available to it hereunder or under law, Cash
Collateralize the Issuing Bank’s Fronting Exposure in accordance with the
procedures set forth in Section 2.09.

 

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(b)    Defaulting Lender Cure. If the Borrower, the Administrative Agent and the
Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender,
the Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any Cash Collateral),
such Lender will, to the extent applicable, purchase at par that portion of
outstanding Loans of the other Lenders or take such other actions as the
Administrative Agent may determine to be necessary to cause the Loans and funded
and unfunded participations in Letters of Credit to be held pro rata by the
Lenders in accordance with the Commitments under this Agreement (without giving
effect to Section 2.09(a)(iv)), whereupon such Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of the Borrower while
that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.

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

ARTICLE III

Payments of Principal and Interest; Prepayments; Fees

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

Section 3.02    Interest.

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

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

(c)    Post-Default Rate. Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing, then all Loans outstanding shall bear interest,
after as well as before judgment, at a rate per annum equal to two percent (2%)
plus the rate applicable to ABR Loans as provided in Section 3.02(a), but in no
event to exceed the Highest Lawful Rate.

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

 

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

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

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

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

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

Section 3.04    Prepayments.

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

(b)    Notice and Terms of Optional Prepayment. The Borrower shall notify the
Administrative Agent by telephone or e-mail (confirmed by facsimile) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 12:00 noon, New York City time, three (3) Business Days before
the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing,
not later than 12:00 noon, New York City time, one (1) 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.

 

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(c)    Mandatory Prepayments.

(i)    If, after giving effect to any termination or reduction of the
Commitments pursuant to Section 2.06(b), the total Revolving Credit Exposures
exceeds the total Commitments, then the Borrower shall (A) prepay the Borrowings
on the date of such termination or reduction in an aggregate principal amount
equal to such excess, and (B) if any excess remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.07(j).

(ii)    The Borrower shall prepay the outstanding principal amount of Loans in
amounts equal to one hundred percent (100%) of the aggregate Net Proceeds from
any Asset Disposition. Such prepayments shall be made within one (1) Business
Day after the date of receipt of the Net Proceeds of any such Asset Disposition
by such Credit Party; provided that so long as no Event of Default has occurred
and is continuing, no prepayments of aggregate Net Proceeds from Asset
Dispositions shall be required hereunder to the extent such Net Proceeds are
used to (A) acquire other assets useful in the ordinary course of the business
of the Credit Parties, (B) fund Expansion Capital Expenditures, or (C) make
Permitted Acquisitions, in each case, within three hundred sixty (360) days
after receipt of such Net Proceeds by the Credit Parties, or such longer period
of time as may be agreed to by Majority Lenders; provided, however, that any
portion of the Net Proceeds not actually reinvested within the applicable time
period shall be prepaid in accordance with this Section 3.04(c).

(iii)    [Reserved].

(iv)    The Borrower shall prepay the outstanding principal amount of Loans in
an amount equal to one hundred percent (100%) of the aggregate Net Proceeds from
any Insurance and Condemnation Event received by any Credit Party. Such
prepayments shall be made within one (1) Business Day after the date of receipt
of Net Proceeds of any such Insurance and Condemnation Event by such Credit
Party; provided that, so long as no Event of Default has occurred and is
continuing, no prepayments of aggregate Net Proceeds from Insurance and
Condemnation Events shall be required hereunder to the extent such Net Proceeds
are used to (A) acquire other assets useful in the ordinary course of the
business of the Credit Parties, (B) fund Expansion Capital Expenditures, or
(C) make Permitted Acquisitions, in each case, within three hundred sixty
(360) days after receipt of such Net Proceeds by the Credit Parties, or such
longer period of time as may be agreed to by Majority Lenders; provided,
however, that any portion of the Net Proceeds not actually reinvested within the
applicable time period shall be prepaid in accordance with this Section 3.04(c).

(v)    A mandatory prepayment under this Section 3.04(c) shall not reduce the
aggregate Commitments.

 

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(d)    Prepayments in General.

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

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

(iii)    Prepayments permitted or required under this Section 3.04 shall be
without premium or penalty, except as required under Section 5.02.

Section 3.05    Fees.

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

(b)    Letter of Credit Fees. The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding
the later of the date on which such Lender’s Commitment terminates and the date
on which such Lender ceases to have any LC Exposure (during the continuation of
an Event of Default, such participation fee shall increase by 2% per annum over
the then applicable rate), (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC
Exposure attributable to such Issuing Bank (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure attributable to such Issuing Bank, provided that in no event shall any
such fee for any such Issuing Bank be less than $500 during any calendar year,
and (iii) to the Issuing Bank, for its own account, its standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees

 

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accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the date of this
Agreement; provided that all such fees shall be payable on the Termination Date
and any such fees accruing after the Termination Date shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this
Section 3.05(b) shall be payable within 10 days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 360 days,
unless such computation would exceed the Highest Lawful Rate, in which case
interest shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

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

ARTICLE IV

Payments; Pro Rata Treatment; Sharing of Set-offs

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

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

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

 

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

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

Section 4.03    Certain Deductions by the Administrative Agent. If any Lender
shall fail to make any payment required to be made by it pursuant to
Section 2.05(b), Section 2.07(d), Section 2.07(e), or Section 4.02, or otherwise
hereunder, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid. If at any time prior to the acceleration or maturity of the Loans, the
Administrative Agent shall receive any payment in respect of principal of a Loan
or a reimbursement of an LC Disbursement while one or more Defaulting Lenders
shall be party to this Agreement, the Administrative Agent shall apply such
payment first to the Borrowing(s) for which such Defaulting Lender(s) shall have
failed to fund its pro rata share until such time as such Borrowing(s) are paid
in full or each Lender

 

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(including each Defaulting Lender) is owed its Applicable Percentage (without
giving effect to Section 2.09(a)(iv)) of all Loans then outstanding. After
acceleration or maturity of the Loans, all principal will be paid ratably as
provided in Section 10.02(c).

ARTICLE V

Increased Costs; Break Funding Payments; Taxes; Illegality

Section 5.01    Increased Costs.

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

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

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

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

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

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

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

 

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(d)    Effect of Failure or Delay in Requesting Compensation. Failure or delay
on the part of any Lender or the Issuing Bank to demand compensation pursuant to
this Section 5.01 shall not constitute a waiver of such Lender’s or the Issuing
Bank’s right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender or the Issuing Bank pursuant to this
Section 5.01 for any increased costs or reductions incurred more than 180 days
prior to the date that such Lender or the Issuing Bank, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s or the Issuing Bank’s intention to claim
compensation therefor; provided, further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

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

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

Section 5.03    Taxes.

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

(b)    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 without deduction or withholding for any Taxes, except as required by
applicable law. If any applicable law (as determined in the good faith
discretion of an applicable withholding agent) requires the

 

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deduction or withholding of any Tax from any such payment by a withholding
agent, then the applicable withholding agent shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower
or a Guarantor, as applicable, shall be increased as necessary so that, after
such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5.03), the
amounts received with respect to this Agreement equal the sum which would have
been received had no such deduction or withholding been made.

(c)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to
the relevant Governmental Authority in accordance with applicable law, or at the
written direction of the Administrative Agent timely reimburse it for, Other
Taxes.

(d)    Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section 5.03) payable or paid by the Borrower or a Guarantor, as applicable, or
required to be withheld or deducted from a payment to the Administrative Agent
or a Lender, as applicable, and any 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 as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

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

(f)    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.

 

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(g)    Status of Lenders.

(i)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 5.03(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii)    Without limiting the generality of the foregoing,

(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed copies
of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding tax;

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

(1)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (1) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN (or IRS
Form W-8BEN-E, as applicable) establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (2) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN (or IRS Form W-8BEN-E, as applicable) establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

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

(3)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit I-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower

 

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within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN (or IRS Form
W-8BEN-E, as applicable); or

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

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

(D)    if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

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

(h)    Treatment of Certain Refunds. If any party determines, in its sole, but
reasonable, discretion exercised in good faith, that it has received a refund of
any Taxes as to which it has been indemnified pursuant to this Section 5.03
(including by the payment of additional amounts pursuant to this Section 5.03),
it shall pay to the indemnifying party an amount equal to such refund (but only
to the extent of indemnity payments made under this Section with respect to the
Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses
(including

 

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Taxes) of such indemnified party and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this 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) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This 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.

(i)    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 the Loan
Documents.

Section 5.04    Mitigation Obligations; Replacement of Lenders.

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

(b)    Replacement of Lenders. If any Lender requests compensation under
Section 5.01, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.03, if it becomes unlawful for any Lender or its applicable lending
office to make Eurodollar Loans or any Governmental Authority has imposed
material restrictions on the authority of such Lender to purchase or sell, or to
take deposits of, dollars in the London interbank market, in each case, as
described in Section 5.05, or while a Lender is a Defaulting Lender, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 12.04(b)), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such

 

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Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 5.01 or payments required to be made pursuant to Section 5.03, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

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

Section 5.06    Alternate Rate of Interest. If the Administrative Agent has made
the determination (such determination to be conclusive absent manifest error)
that (a) any applicable interest rate specified herein is no longer a widely
recognized benchmark rate for newly originated loans in the U.S. syndicated loan
market in the applicable currency or (b) the applicable supervisor or
administrator (if any) of any applicable interest rate specified herein or any
Governmental Authority having, or purporting to have, jurisdiction over the
Administrative Agent has made a public statement identifying a specific date
after which any applicable interest rate specified herein shall no longer be
used for determining interest rates for loans in the U.S. syndicated loan market
in the applicable currency, then the Administrative Agent may, to the extent
practicable (in consultation with, and approval by, the Borrower and as
determined by the Administrative Agent to be generally in accordance with
similar situations in other transactions in which it is serving as
administrative agent or otherwise consistent with market practice generally),
establish a replacement interest rate (the “Replacement Rate”), in which case,
the Replacement Rate shall, subject to the next two sentences, replace such
applicable interest rate for all purposes under the Loan Documents. In
connection with the establishment and application of the Replacement Rate, this
Agreement and the other Loan Documents shall be amended solely with the consent
of the Administrative Agent and the Borrower as may be necessary or appropriate,
in the opinion of the Administrative Agent and the Borrower, to effect the
provisions of this Section 5.06. Notwithstanding anything to the contrary in
this Agreement or the other Loan Documents (including Section 12.02(b)), such
amendment shall become effective without any further action or consent of any
other party to this Agreement so long as the Administrative Agent shall not have

 

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received, within five (5) Business Days of the delivery of such amendment to the
Lenders, written notices from such Lenders that in the aggregate constitute
Majority Lenders, with each such notice stating that such Lender objects to such
amendment (which such notice shall note with specificity the particular
provisions of the amendment to which such Lender objects). To the extent the
Replacement Rate is approved by the Administrative Agent and the Borrower in
connection with this Section 5.06, the Replacement Rate shall be applied in a
manner consistent with market practice; provided that, in each case, to the
extent such market practice is not administratively feasible for the
Administrative Agent, such Replacement Rate shall be applied as otherwise
reasonably determined by the Administrative Agent (it being understood that any
such modification by the Administrative Agent shall not require the consent of,
or consultation with, any of the Lenders).

ARTICLE VI

Conditions Precedent

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

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

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

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

 

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

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

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

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

(i)    be reasonably satisfied that the Security Instruments create first
priority, perfected Liens on substantially all of the assets of the Borrower and
the Guarantors; and

(ii)    have received certificates, together with undated stock powers for such
certificates, representing all of the issued and outstanding certificated Equity
Interests held by the Borrower of each of the Restricted Subsidiaries (direct or
indirect), if any, and all of the issued and outstanding certificated Equity
Interests held by the Parent of the Borrower, if any.

(h)    The Administrative Agent shall have received an opinion of Akin Gump
Strauss Hauer & Feld LLP, counsel to the Credit Parties, in form and of
substance acceptable to the Administrative Agent.

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

(j)    The Administrative Agent shall have received satisfactory title
information as the Administrative Agent may reasonably require with respect to
the status of title to the Midstream Properties of the Credit Parties.

(k)    The Administrative Agent shall be reasonably satisfied with the
environmental condition of the Midstream Properties of the Credit Parties.

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

(m)    The Administrative Agent shall have received appropriate UCC search
certificates reflecting no prior Liens encumbering the Properties of the Parent,
the Borrower and the other Restricted Subsidiaries, other than Liens permitted
by Section 9.03.

 

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(n)    The Administrative Agent shall have reviewed and be satisfied with the
Parent’s and Restricted Subsidiaries’ capital structure and financing plan, and
shall have performed and be satisfied with such other due diligence regarding
the Parent, the Restricted Subsidiaries and their Properties as the
Administrative Agent may require.

(o)    The Administrative Agent and the Lenders shall have received, and be
reasonably satisfied in form and substance with, (i) all documentation and other
information required by bank regulatory authorities under applicable
“know-your-customer” rules and anti-money laundering laws and regulations,
including but not restricted to the USA PATRIOT Act and (ii) to the extent the
Borrower qualifies as a “legal entity customer” under the Beneficial Ownership
Regulation, a Beneficial Ownership Certification.

(p)    No material litigation, arbitration or similar proceeding shall be
pending or threatened which calls into question the validity or enforceability
of this Agreement, the other Loan Documents or the Transactions.

(q)    The Parent IPO shall have been consummated in accordance with the
Registration Statement and the certificate of formation and other organizational
documents of the Parent, as they may be amended from time to time to the extent
permitted hereunder, with the Parent receiving minimum proceeds from the public
issuance of its Equity Interests in connection therewith in an aggregate amount
at least equal to $400,000,000, and the Administrative Agent shall have received
certified copies of the Registration Statement and all amendments thereto.

(r)    None of the Credit Parties shall have any Debt for borrowed money
outstanding after giving effect to the Transactions (other than any Loans
hereunder and, to the extent constituting Debt for borrowed money, Capital
Leases).

(s)    The Administrative Agent shall have received (i) a certificate of a
Responsible Officer of the Parent or the General Partner certifying as to a
true, correct and complete list, as of the date of such certificate, of all
“Buildings” (as defined by the applicable Flood Insurance Regulations) located
on real property that is subject to Liens created by the Security Instruments,
(ii) a life of loan flood hazard determination with respect to all such
Buildings, or such other evidence reasonably satisfactory to the Lenders that
such Buildings are not then located in a flood hazard area, (iii) if such real
property is located in a special flood hazard area, evidence of flood insurance
in such amounts as are acceptable to the Administrative Agent and required under
applicable Flood Insurance Regulations, and (iv) such other certificates or
notices reasonably required by the Administrative Agent to facilitate compliance
with any applicable Flood Insurance Regulations, each in form and substance
reasonably satisfactory to the Administrative Agent (the items listed in the
foregoing clauses (i) through (iv), collectively, the “Flood Deliverables”).

(t)    The Administrative Agent shall have received a closing certificate of a
Responsible Officer of the Borrower, dated as of the Effective Date, confirming
on behalf of the Credit Parties that (i) the representations and warranties of
the Parent, the Borrower, and the other Restricted Subsidiaries in this
Agreement or any of the other Loan Documents, as applicable, are true and
correct, (ii) no Default or Event of Default then exists, (iii) since
December 31, 2018, nothing has occurred which has had a Material Adverse Effect,
and (iv) the Credit Parties have received all consents and approvals required by
Section 7.03.

 

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(u)    After giving effect to any initial Borrowings made on the Effective Date,
the Consolidated Total Leverage Ratio shall not exceed 3.00 to 1.00.

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

Without limiting the generality of the provisions of Section 11.04, for purposes
of determining compliance with the conditions specified in this Section 6.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required under this Section 6.01 to be consented to or approved by or acceptable
or reasonably satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the Effective Date specifying its
objection thereto. All documents executed or submitted pursuant to this
Section 6.01 by and on behalf of the Parent, the Borrower, or any other
Restricted Subsidiary shall be in form and substance reasonably satisfactory to
the Administrative Agent. The obligations of the Lenders to make Loans and of
the Issuing Banks to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 12.02) at or prior to 2:00 p.m., Houston, Texas time, on
August 12, 2019 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time). The Administrative Agent
shall notify the Borrower and the Lenders of the Effective Date, and such notice
shall be conclusive and binding.

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

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

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

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

 

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

(e)    The receipt by the Administrative Agent of a Borrowing Request in
accordance with Section 2.03 or a request for a Letter of Credit (or an
amendment, extension or renewal of a Letter of Credit) in accordance with
Section 2.07(b), as applicable.

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

ARTICLE VII

Representations and Warranties

Each of the Parent and the Borrower represents and warrants to the Lenders that,
after giving effect to the Effective Date:

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

Section 7.02    Authority; Enforceability. The Transactions are within the
Parent’s, the Borrower’s, and each other Guarantor’s corporate, limited
liability company, partnership, or other organizational powers and have been
duly authorized by all necessary organizational action and, if required, action
by any holders of their Equity Interests. Each Loan Document to which the
Parent, the Borrower, and each other Guarantor is a party has been duly executed
and delivered by such Person and constitutes a legal, valid and binding
obligation of the Parent, the Borrower, or such other 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.

 

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Section 7.03    Approvals; No Conflicts. The Transactions (a) except to the
extent the approval or consent of the Department of the Interior, United States
of America or similar Governmental Authority, as the case may be, is required by
applicable law or regulation to the transfer or assignment of an interest in any
of the Mortgaged Property, do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority
or any other third Person (including holders of Equity Interests or any class of
directors, managers, or supervisors, as applicable, whether interested or
disinterested, of the Parent, the Borrower or any other Person), nor is any such
consent, approval, registration, filing or other action necessary for the
validity or enforceability of any Loan Document or the consummation of the
transactions contemplated thereby, except such as have been obtained or made and
are in full force and effect other than the recording and filing of the Security
Instruments and financing statements as required by this Agreement, (b) will not
violate any applicable law or regulation or the charter, by-laws, limited
partnership agreement, limited liability company agreements or other
organizational documents of the Borrower or any Restricted Subsidiary or any
order of any Governmental Authority, (c) will not result in a default under any
indenture, agreement or other instrument binding upon the Parent, the Borrower,
or any Restricted Subsidiary or their respective Properties, or give rise to a
right thereunder to require any payment to be made by the Parent, the Borrower,
or any Restricted Subsidiary, and (d) will not result in the creation or
imposition of any Lien on any Property of the Parent, the Borrower, or any
Restricted Subsidiary (other than the Liens created by the Loan Documents).

Section 7.04    Financial Condition; No Material Adverse Change.

(a)    The Parent has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows as
set forth in the Registration Statement, including its audited consolidated
balance sheet and related statements of operations, owners’ equity and cash
flows as of the end of and for the fiscal year ended December 31, 2018. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Parent and its
Consolidated Restricted Subsidiaries as of such dates and for such periods in
accordance with GAAP.

(b)    Since December 31, 2018, there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.

(c)    As of the date hereof, the Parent, the Borrower, and the Restricted
Subsidiaries have no material Debt (including Disqualified Capital Stock) or any
contingent liabilities, off-balance sheet liabilities or partnerships,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in the Financial Statements, and except those that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Parent and the Restricted Subsidiaries taken as a
whole.

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

 

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Section 7.06    Environmental Matters. Except for such matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

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

(b)    the Parent and the Restricted Subsidiaries have obtained all
Environmental Permits required for their respective operations and each of their
Properties, with all such Environmental Permits being currently in full force
and effect, and neither the Parent nor any Restricted Subsidiary has received
any written notice or otherwise has knowledge that any such existing
Environmental Permit will be revoked or that any application for any new
Environmental Permit or renewal of any existing Environmental Permit will be
protested or denied;

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

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

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

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

 

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(g)    there has been no exposure of any Person or property to any Hazardous
Materials as a result of or in connection with the operations and businesses of
any of the Parent’s or the Restricted Subsidiaries’ Properties that could
reasonably be expected to form the basis for a claim for damages or
compensation; and

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

Section 7.07    Compliance with Laws and Agreements; No Defaults.

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

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

(c)    No Default has occurred and is continuing.

Section 7.08    Investment Company Act. None of the Parent, the Borrower, or any
Restricted Subsidiary 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 Parent, the Borrower, and the Restricted
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 (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Parent, the Borrower, or such
Restricted Subsidiary, as applicable, has set aside on its books adequate
reserves in accordance with GAAP or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Material Adverse Effect. The
charges, accruals and reserves on the books of the Parent, the Borrower, and the
Restricted Subsidiaries in respect of Taxes and other governmental charges are,
in the reasonable opinion of the Parent and the Borrower, adequate. No Tax Lien
has been filed and, to the knowledge of the Borrower, no claim is being asserted
with respect to any such Tax or other such governmental charge.

 

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Section 7.10    ERISA.

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

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

(c)    No act, omission or transaction has occurred which could reasonably be
expected to result in imposition on the Parent, the Borrower, any Restricted
Subsidiary 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) material breach of fiduciary duty liability damages under section 409 of
ERISA.

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

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

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

Section 7.11    Disclosure; No Material Misstatements. The Parent, the Borrower,
and each Restricted Subsidiary has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of the Restricted Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the other reports, financial
statements, certificates or other information furnished by or on behalf of the
Parent, the Borrower, or any Restricted Subsidiary to the Administrative Agent
or any Lender or any of their Affiliates in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or under any
other Loan Document (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Parent and the Borrower
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time. There is no fact peculiar to
the Borrower

 

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or any Restricted Subsidiary which could reasonably be expected to have a
Material Adverse Effect or in the future is reasonably likely to have a Material
Adverse Effect and which has not been set forth in this Agreement or the Loan
Documents or the other documents, certificates and statements furnished to the
Administrative Agent or the Lenders by or on behalf of the Parent, the Borrower,
or any Restricted Subsidiary prior to, or on, the date hereof in connection with
the transactions contemplated hereby.

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

Section 7.13    Restriction on Liens. Except as permitted by Section 9.15, none
of the Parent, the Borrower, or any Restricted Subsidiary is a party to any
material agreement or arrangement, or subject to any order, judgment, writ or
decree, which either restricts or purports to restrict its ability to grant
Liens to the Administrative Agent for the benefit of the Secured Parties on or
in respect of their Properties to secure the Indebtedness and the Loan
Documents.

Section 7.14    Subsidiaries. Except as set forth on Schedule 7.14 or as
disclosed in writing to the Administrative Agent (which shall promptly furnish a
copy to the Lenders), which shall be a supplement to Schedule 7.14, the Parent
has no Subsidiaries. Schedule 7.14 (as updated with any written disclosures
provided in writing to the Administrative Agent in accordance with and subject
to the terms hereof, including, as applicable, Section 9.17) identifies each
Subsidiary as either Restricted or Unrestricted, and each Restricted Subsidiary
on such schedule is a Wholly-Owned Subsidiary.

Section 7.15    Location of Business and Offices. Each of the Parent’s and the
Borrower’s jurisdiction of organization is the State of Delaware; the name of
the Parent as listed in the public records of its jurisdiction of organization
is “Rattler Midstream LP”; and the organizational identification number of the
Parent in its jurisdiction of organization is 6912951; the name of the Borrower
as listed in the public records of its jurisdiction of organization is “Rattler
Midstream Operating LLC”; and the organizational identification number of the
Borrower in its jurisdiction of organization is 5577244 (or, in each case, as
set forth in a notice delivered to the Administrative Agent pursuant to
Section 8.01(l) in accordance with Section 12.01). The Parent’s and the
Borrower’s principal place of business and chief executive offices are located
at the address

 

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specified in Section 12.01 (or as set forth in a notice delivered pursuant to
Section 8.01(l) 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(l)).

Section 7.16    Properties; Titles, Etc.

(a)    Except for Immaterial Title Deficiencies, the Parent, the Borrower and
the Restricted Subsidiaries have good and defensible title to the Rights of Way
(as defined below), the Deeds (as defined below), and/or other property
interests in all of their material real and personal Property. All such Property
is free and clear of all Liens except Liens permitted by Section 9.03.

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

(c)    The Rights of Way establish continuous land rights for the Gathering
Systems and grant the Parent, the Borrower or any applicable Restricted
Subsidiary (or their predecessors in interest) the right to construct, operate
and maintain the Gathering Systems in, over, under, or across the land covered
thereby in the same way that a reasonably prudent owner and operator would
construct, operate and maintain similar assets and, if applicable, in the same
way as the Parent, the Borrower and any applicable Restricted Subsidiary have
constructed, operated and maintained the Gathering Systems prior to the
Effective Date; provided, however, (i) some of the Rights of Way granted to the
Parent, the Borrower or such applicable Restricted Subsidiary (or their
predecessors in interest) by private parties and Governmental Authorities are
revocable at the right of the applicable grantor, (ii) some of the Rights of Way
cross properties that are subject to liens in favor of third parties that have
not been subordinated to the Rights of Way, and (iii) some Rights of Way are
subject to certain defects, limitations and restrictions; provided, further,
none of the limitations, defects, and restrictions described in clauses (i),
(ii) and (iii) above, individually or in the aggregate, (A) materially interfere
with the ordinary conduct of business of the Parent, the Borrower, or any
Restricted Subsidiary, (B) materially detract from the value or the use of the
portion of the Gathering Systems that are covered or (C) could reasonably be
expected to have a Material Adverse Effect.

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

 

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(e)    All Rights of Way and all Deeds necessary for the conduct of the business
of the Parent, the Borrower, and the Restricted Subsidiaries are valid and
subsisting, in full force and effect, and there exists no breach, default or
event or circumstance that, with the giving of notice or the passage of time or
both, would constitute a default under any such Rights of Way or Deeds that
could reasonably be expected to have a Material Adverse Effect.

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

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

(h)    No eminent domain proceeding or taking has been commenced or, to the
knowledge of the Parent, the Borrower, and/or the Restricted Subsidiaries, is
contemplated with respect to all or any portion of the Midstream Properties,
except for any such proceedings or takings which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

(i)    No portion of the Midstream Properties has, as of the date of this
Agreement, suffered any material damage by fire or other casualty loss except
that which has heretofore been repaired or replaced or is in the process of
being repaired or replaced, except for any such loss in respect of which the
Parent, the Borrower, and the Restricted Subsidiaries are in compliance with
their obligations to make the prepayments required on account of a casualty loss
as and when required under Section 3.04(c).

(j)    The Parent, the Borrower, or the Restricted Subsidiaries, as applicable,
own, or are licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual Property material to their business, and the use thereof by
the Parent, the Borrower, or any Restricted Subsidiary does not infringe upon
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

Section 7.17    Maintenance of Properties. Except for such acts or failures to
act as could not be reasonably expected to have a Material Adverse Effect, the
offices, plants, gas processing plants, pipelines, improvements, fixtures,
equipment, and other Property owned, leased or used by the Parent, the Borrower,
or any Restricted Subsidiary in the conduct of its business are (a) being
maintained in a state adequate to conduct normal operations, (b) in good
operating condition, subject to ordinary wear and tear, and routine maintenance
or repair, (c) sufficient for the operation of such business as currently
conducted, and (d) in conformity with all Governmental Requirements relating
thereto.

 

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Section 7.18    Material Contracts. Schedule 7.18 hereto contains a complete
list, as of the Effective Date, of all Material Contracts, including all
amendments thereto. All such Material Contracts are in full force and effect on
the Effective Date. Neither the Parent, nor the Borrower nor any Restricted
Subsidiary is in breach under any Material Contract in any way that could
reasonably be expected to have a Material Adverse Effect, and to the knowledge
of the Parent and the Borrower, no other Person that is party thereto is in
breach under any Material Contract in any way that could reasonably be expected
to have a Material Adverse Effect. None of the Material Contracts prohibit the
transactions contemplated under the Loan Documents. Except as shown in
Schedule 7.18 hereto, each of the Material Contracts is currently in the name
of, or has been assigned to the Parent, the Borrower, or a Restricted Subsidiary
(with the consent or acceptance of each other party thereto if and to the extent
that such consent or acceptance is required thereunder), and a security interest
in each of the Material Contracts may be granted to the Administrative Agent.
The Borrower has delivered to the Administrative Agent a complete and current
copy of each Material Contract existing on the Effective Date.

Section 7.19    Swap Agreements and Qualified ECP Guarantor. Schedule 7.19, as
of the date hereof, and after the date hereof, each report required to be
delivered by the Parent and the Borrower pursuant to Section 8.01(f), sets
forth, a true and complete list of all Swap Agreements of the Parent, the
Borrower and each Restricted Subsidiary, the material terms thereof (including
the type, term, effective date, termination date and notional amounts or
volumes), the net mark to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied) and the
counterparty to each such agreement. As of the Effective Date, the Parent and
the Borrower will be Qualified ECP Guarantors.

Section 7.20    Use of Loans and Letters of Credit. The proceeds of the Loans
and the Letters of Credit shall be used (a) to fund capital expenditures, (b) to
finance working capital, (c) for general company purposes, (d) to pay fees and
expenses related to the Loan Documents and (e) to make distributions permitted
by Section 9.04. The Parent, the Borrower, and the Restricted Subsidiaries are
not engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of
Regulation T, U or X of the Board). No part of the proceeds of any Loan or
Letter of Credit will be used for any purpose which violates the provisions of
Regulations T, U or X of the Board.

Section 7.21    Solvency. After giving effect to the transactions contemplated
hereby (including any Borrowing or the issuance, amendment, renewal or extension
of any Letter of Credit from time to time), (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 Parent, the Borrower, and the Restricted Subsidiaries, on a consolidated
basis, will exceed the aggregate Debt of the Parent, the Borrower, and the
Restricted Subsidiaries on a consolidated basis, as the Debt becomes absolute
and matures, (b) each of the Parent, 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 such Person 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 Parent, 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.

 

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Section 7.22    Anti-Corruption Laws and Sanctions; USA PATRIOT Act. Each of the
Parent and the Borrower has implemented and maintains in effect such policies
and procedures, if any, as it reasonably deems appropriate, in light of its
business and international activities (if any), that are reasonably designed to
ensure compliance by the Parent and its Subsidiaries and their respective
directors, officers, employees and agents acting in their respective capacity as
such with applicable Anti-Corruption Laws and applicable Sanctions, and the
Parent and its Subsidiaries and, to the knowledge of the Parent and the
Borrower, their respective directors, officers, employees and agents, are in
compliance with applicable Anti-Corruption Laws and applicable Sanctions in all
material respects. None of (a) the Parent and its Subsidiaries, or any of their
respective directors, officers or employees, or (b) to the knowledge of the
Parent and the Borrower, any agent of the Parent or any Subsidiary that will act
in such capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit,
use of proceeds or other transaction contemplated by this Agreement will violate
any applicable Anti-Corruption Law or applicable Sanctions. The information and
documentation provided is true, correct, and complete in order to identify the
Parent, the Borrower, and each Restricted Subsidiary for purposes of
Section 12.16.

Section 7.23    FERC. To the extent, if any, that any portion of the Gathering
Systems is a common carrier pipeline transporting crude in interstate commerce
subject to the jurisdiction of the FERC (an “Interstate Pipeline”):

(a)    The Interstate Pipeline has rates on file with the FERC to perform
interstate gathering of crude, and to the knowledge of the Parent and the
Borrower, no provision of the tariff containing such rates is unduly
discriminatory or preferential.

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

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

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

(e)    Without limiting the generality of Section 7.07(a) of this Agreement, as
of the date of this Agreement and on each date the representation and warranty
in this Section 7.23(e) is made, no additional material certificate, license,
permit, consent, authorization or order is required by any Credit Party from the
FERC to construct, own, operate and maintain any such Interstate Pipeline or to
transport crude on such Interstate Pipeline under existing contracts and
agreements.

Section 7.24    State Regulation. Each Credit Party is in compliance, in all
material respects, with all rules, regulations and orders of all rules,
regulations and orders of any State agency with jurisdiction to regulate its
Midstream Properties, and as of the date of this Agreement, no Credit Party is
liable for any refunds or interest thereon as a result of an order from any such
State agency.

 

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Section 7.25    Title to Hydrocarbons. No Credit Party has title to any of the
Hydrocarbons which are transported and distributed through the Gathering
Systems, except pursuant to agreements under which the relevant Credit Party
does not have any exposure to commodity price volatility as a result of having
title to such Hydrocarbons.

Section 7.26    Flood Insurance Related Matters. Except as set forth on Schedule
7.26 as it may be supplemented from time to time by delivery of a written notice
to the Administrative Agent, no Mortgage encumbers improved real property that
contains Buildings or Manufactured (Mobile) Homes (as those terms are defined in
applicable Flood Insurance Regulations). The Credit Parties have obtained flood
insurance in accordance with Section 8.07 with respect to each Building
constituting Mortgaged Property that is located in a special flood hazard area.

Section 7.27    EEA Financial Institutions. Neither the Parent, the Borrower,
nor any of their respective Subsidiaries is an EEA Financial Institution.

Section 7.28    Beneficial Ownership Certification. As of the Effective Date,
the information included in the Beneficial Ownership Certificate is true and
correct in all respects.

ARTICLE VIII

Affirmative Covenants

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

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

(a)    Annual Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 90 days after the end of
each fiscal year of the Parent, commencing with the fiscal year ending
December 31, 2019, its audited consolidated balance sheet and related statements
of operations, owners’ 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 (if financial statements of the Parent exist for such previous
fiscal year), all reported on by independent public accountants of recognized
national standing (without a “going concern” or like qualification or exception
and without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Parent and its Consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied (it being understood that the filing with the SEC
by the Parent of such annual financial statements of the Parent and its
Consolidated Subsidiaries shall satisfy the requirements of this Section 8.01(a)
to the extent such annual financial statements include the information specified
herein).

 

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(b)    Quarterly Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Parent, its
consolidated balance sheet and related statements of operations, owners’ equity
and cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year (if financial
statements of the Parent exist for such previous fiscal year), all certified by
one of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Parent and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes (it being understood that the filing with the SEC by the Parent of
such quarterly financial statements of the Parent and its Subsidiaries shall
satisfy the requirements of this Section 8.01(b) to the extent such quarterly
financial statements include the information specified herein).

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

(d)    Annual Budget. Within 120 days after January 1 of each year, an annual
operating budget for the Parent and the Restricted Subsidiaries for such year,
including the projected cash flow of the Borrower and the Restricted
Subsidiaries and the assumptions used in calculating such projections, the
projected Capital Expenditures to be incurred by the Parent and the Restricted
Subsidiaries, and such other information as may be reasonably requested by the
Administrative Agent.

(e)    Certificate of Financial Officer – Reconciling Information. At any time
(i) all of the Consolidated Subsidiaries of the Parent are not Consolidated
Restricted Subsidiaries, then concurrently with any delivery of financial
statements under Section 8.01(a) or Section 8.01(b), a certificate of a
Financial Officer setting forth consolidating spreadsheets that show all
Consolidated Unrestricted Subsidiaries and the eliminating entries, in such form
as would be presentable to the auditors of the Parent and (ii) the financial
statements delivered pursuant to Section 8.01(a) or Section 8.01(b) are not
prepared in accordance with Section 1.05 with respect to capital leases and
operating leases, then concurrently with any such delivery of financial
statements, a certificate of a Financial Officer setting forth and certifying as
to internally prepared financial statements reflecting the accounting treatment
of capital leases and operating leases pursuant to Section 1.05.

(f)    Certificate of Financial Officer – Swap Agreements. If the Borrower or
any Restricted Subsidiary has any existing Swap Agreements at such time,
concurrently with any delivery of financial statements under Section 8.01(a) or
Section 8.01(b), a certificate of a

 

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Financial Officer, in form and substance satisfactory to the Administrative
Agent, setting forth as of the last Business Day of such quarter, a true and
complete list of all Swap Agreements of the Borrower and each Restricted
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net mark-to-market
value therefor, any new credit support agreements relating thereto not listed on
Schedule 7.19, any margin required or supplied under any credit support
document, and the counterparty to each such agreement.

(g)    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 reasonably requested by the Administrative Agent or any Lender, all
copies of the applicable policies.

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

(i)    SEC and Other Filings; Reports to Shareholders. Promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent, the Borrower or any
Restricted Subsidiary with the SEC, or with any national securities exchange, or
distributed by the Parent to its common unitholders generally, as the case may
be (it being understood that the filing with the SEC or any such securities
exchange by the Parent of such reports, proxy statements, and other materials
filed by the Parent, the Borrower, or a Restricted Subsidiary shall satisfy the
requirements of this Section 8.01(i) to the extent such reports, proxy
statements, and other materials include the information specified herein).

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

(k)    Notice of Material Insurance and Condemnation Events and Material Asset
Dispositions. Promptly after the occurrence of any Insurance and Condemnation
Event or Asset Disposition, in either case involving Net Proceeds in an
aggregate amount in excess of $50,000,000, notice of such Insurance and
Condemnation Event or Asset Disposition that reasonably describes such Insurance
and Condemnation Event or Asset Disposition, as applicable.

(l)    Information Regarding Borrower and Guarantors. Prompt written notice of
(and in any event within thirty (30) days thereafter) any change (i) of the
Borrower’s or any Guarantor’s corporate name or any trade name used to identify
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business or in the ownership of its Properties, (ii) in the location of the
Borrower’s or any Guarantor’s chief executive office or principal place of
business, (iii) in the Borrower’s or any Guarantor’s identity or corporate
structure or in the jurisdiction in which such Person is incorporated or formed,
(iv) in the Borrower’s or any Guarantor’s jurisdiction of organization or such
Person’s organizational identification number in such jurisdiction of
organization, and (v) in the Borrower’s or any Guarantor’s federal taxpayer
identification number.

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

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

(o)    Other Requested Information. Promptly following any request therefor,
(i) such other information regarding the operations, business affairs and
financial condition of the Parent, the Borrower, or any Restricted Subsidiary
(including, without limitation, any Plan and any reports or other information
required to be filed with respect thereto under the Code or under ERISA), or
compliance with the terms of this Agreement or any other Loan Document, as the
Administrative Agent or any Lender may reasonably request or (ii) information
and documentation reasonably requested by the Administrative Agent or any Lender
for purposes of compliance with applicable “know your customer” requirements
under the USA PATRIOT Act or other applicable anti-money laundering laws and the
Beneficial Ownership Regulation.

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

(q)    Issuance of Senior Notes and Permitted Refinancing Debt. In the event the
Parent or the Borrower decides to issue Senior Notes or any Permitted
Refinancing Debt as contemplated by Section 9.02(g), two (2) Business Days prior
written notice of such offering therefor, the amount thereof and the anticipated
date of closing and a copy of the preliminary offering memorandum (if any) and
the final offering memorandum (if any) and any other material documents relating
to such offering of Senior Notes or such Permitted Refinancing Debt and whether
such issuance of Debt is intended to Redeem any Senior Notes.

Section 8.02    Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a)    the occurrence of any Default;

(b)    the filing or commencement of, or the threat in writing of, any action,
suit, proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against or affecting the Parent, the Borrower, any
Subsidiary or any Affiliate of the foregoing not

 

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previously disclosed in writing to the Lenders or any material adverse
development in any action, suit, proceeding, investigation or arbitration
(whether or not previously disclosed to the Lenders) that, in either case, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

(c)    [reserved];

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

(e)    any change in the information provided in any relevant Beneficial
Ownership Certification delivered hereunder that would result in a change to the
list of beneficial owners identified in parts (c) or (d) of such certification.

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

Section 8.03    Existence; Conduct of Business. The Parent and the Borrower
will, and will cause each Restricted Subsidiary to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business and maintain, if necessary, its qualification to
do business in each other jurisdiction in which its Midstream Properties are
located or the ownership of its Properties requires such qualification, except
(other than with respect to preserving and keeping in full force and effect the
legal existence of the Parent and the Borrower) where the failure to do or cause
to be done such things, in each case, 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 9.10.

Section 8.04    Payment of Obligations. The Parent and the Borrower will, and
will cause each Restricted Subsidiary to, pay its material obligations,
including Tax liabilities of each such Person 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) such Person has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect or result in the
seizure or levy of any material Property of such Person.

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

 

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

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

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

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

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

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

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

(g)    maintain all material agreements, licenses, permits, and other rights
required for any of the foregoing described in this Section 8.06 in full force
and effect in accordance with their terms, timely make any payments due
thereunder, and prevent any default thereunder which could result in a
termination or loss thereof, except any such failure to pay or default that
could not reasonably, individually or in the aggregate, be expected to cause a
Material Adverse Effect.

(h)    to the extent the Parent, the Borrower or any Restricted Subsidiary is
not the operator of any Property, the Borrower shall use commercially reasonable
efforts to cause the operator to comply with this Section 8.06, but failure of
the operator so to comply will not constitute a Default or an Event of Default
hereunder.

 

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Section 8.07    Insurance. The Parent and the Borrower will, and will cause each
of the Restricted 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” or “lender
loss payees” and provide that the insurer will endeavor to give at least thirty
(30) days prior notice of any cancellation to the Administrative Agent. With
respect to each portion of the real Property (other than any portion of the
Gathering System) owned by the Parent, the Borrower, or any other Credit Party
on which any Building is located, the Parent and the Borrower will, and will
cause each other Credit Party to, (a) obtain flood insurance in such total
amount as the applicable Flood Insurance Regulations may require, if at any time
such “Building” is located on any such real Property in a special flood hazard
area such that flood insurance is required under the applicable Flood Insurance
Regulations, and (b) otherwise comply with all Flood Insurance Regulations
applicable to any such real Property.

Section 8.08    Books and Records; Inspection Rights. The Parent and the
Borrower will, and will cause each of the Restricted 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 Parent and the Borrower will, and will cause each of the
Restricted 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 Parent and the Borrower will, and will
cause each of the Restricted Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to them or their
Property, including all Anti-Corruption Laws and applicable Sanctions, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The Borrower will
maintain in effect and enforce such policies and procedures, if any, as it
reasonably deems appropriate, in light of its businesses and international
activities (if any), that are reasonably designed to ensure compliance by the
Borrower, its Subsidiaries and each of their respective directors, officers,
employees and agents acting in their respective capacity as such with applicable
Anti-Corruption Laws and applicable Sanctions.

Section 8.10    Environmental Matters.

(a)    The Parent and the Borrower each shall at its sole expense: (i) comply,
and shall cause its Properties and operations and each Subsidiary and each
Restricted Subsidiary’s Properties and operations to comply, with all applicable
Environmental Laws, the breach of which could be reasonably expected to have a
Material Adverse Effect; (ii) not dispose of or otherwise release, and shall
cause each Subsidiary not to dispose of or otherwise release, any oil, oil and
gas

 

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

(b)    The Parent and the Borrower will promptly, but in no event later than
five days after becoming aware thereof, notify the Administrative Agent and the
Lenders in writing of any threatened action, investigation or inquiry by any
Governmental Authority or any threatened demand or lawsuit by any Person against
the Parent, the Borrower, or the Restricted Subsidiaries or their Properties of
which the Parent or the Borrower has knowledge in connection with any
Environmental Laws (excluding routine testing and corrective action) if the
Parent or the Borrower reasonably anticipates that such action will result in
liability (whether individually or in the aggregate) in excess of $50,000,000
not fully covered by insurance, subject to normal deductibles.

(c)    In connection with any acquisition by any Credit Party of any Midstream
Property, other than an acquisition of additional interests in Midstream
Properties in which the Borrower or any Restricted Subsidiary previously held an
interest, to the extent the Parent or such Restricted Subsidiary obtains or is
provided with same, the Parent and the Borrower will, and will cause each other
Restricted Subsidiary to, promptly following the Parent’s or such Restricted
Subsidiary’s obtaining or being provided with the same, deliver to the
Administrative Agent such final and non-privileged material environmental
reports of such Midstream Properties as are reasonably requested by the
Administrative Agent.

Section 8.11    Further Assurances.

(a)    The Parent and the Borrower at their sole expense will, and will cause
each Restricted Subsidiary to, promptly execute and deliver to the
Administrative Agent all such other documents, agreements and instruments
reasonably requested by the Administrative Agent to

 

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comply with, cure any defects or accomplish the conditions precedent, covenants
and agreements of the Parent, the Borrower or any of the Restricted
Subsidiaries, as the case may be, in the Loan Documents, including the Notes, or
to further evidence and more fully describe the Collateral intended as security
for the Indebtedness, or to correct any omissions in this Agreement or the
Security Instruments, or to state more fully the obligations secured therein, or
to perfect, protect or preserve any Liens created pursuant to this Agreement or
any of the Security Instruments or the priority thereof, or to make any
recordings, file any notices or obtain any consents, all as may be reasonably
necessary or appropriate, in the reasonable discretion of the Administrative
Agent, in connection therewith.

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

Section 8.12    Compliance with Agreements. The Parent and the Borrower will,
and will cause each other Restricted Subsidiary to, comply with all agreements,
contracts and instruments binding on it or affecting their Properties or
business, including the Material Contracts, except to the extent that such
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

Section 8.13    Title Information; Flood Deliverables.

(a)    If the Parent, the Borrower, or any other Credit Party acquires any
material (as reasonably determined by the Administrative Agent) Midstream
Properties, the Borrower shall, or shall cause such other Credit Party to,
concurrently with its delivery of additional Security Instruments pursuant to
Section 8.14(a), provide to the Administrative Agent, with respect to such
Midstream Properties, reasonable title information such that the Administrative
Agent shall have such title information for the Midstream Properties of the
Borrower and the other Credit Parties that is satisfactory to it in all material
respects in its reasonable exercise of its credit judgment as a senior secured
lender, in each case, subject to Immaterial Title Deficiencies (such title
information, collectively, “Midstream Property Title Information”). The Borrower
shall, within thirty (30) days of notice from the Administrative Agent (or such
longer period as the Administrative Agent may agree in its sole discretion)
objecting to title defects or exceptions that are not Excepted Liens and that
exist with respect to such additional Midstream Properties, or asserting that
title information is missing, in each case, other than with respect to any
Immaterial Title Deficiencies, either (i) cure any such title defects or
exceptions (including defects or exceptions as to priority) that are not
permitted by Section 9.03 raised by such information, or (ii) deliver additional
title information to the Administrative Agent so that the Administrative Agent
shall have received, together with title information previously delivered to the
Administrative Agent, Midstream Property Title Information on the Midstream
Properties of the Parent, the Borrower, and the other Credit Parties. For the
avoidance of doubt, the Credit Parties shall have no obligation to cure any
title defects or exceptions that constitute Immaterial Title Deficiencies or
that are Excepted Liens or otherwise permitted under Section 9.03.

 

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(b)    The Parent or the Borrower shall, or shall cause such other Credit Party
to, in connection with, but reasonably prior to and in accordance with the
following sentence, its delivery of additional Security Instruments pursuant to
Section 8.14(a), provide to the Administrative Agent the applicable Flood
Deliverables with respect to any real property that will be subject to such
additional Security Instruments. To the extent any such real property to be
mortgaged is subject to the provisions of the Flood Insurance Regulations, upon
the earlier of (i) ten (10) Business Days from the date the Flood Deliverables
are provided to the Lenders and (ii) receipt of notice from each Lender that
such Lender has completed all necessary diligence with respect to compliance
with the Flood Insurance Regulations, the Administrative Agent may permit
execution and delivery of the applicable Mortgage in favor of the Administrative
Agent.

Section 8.14    Additional Collateral; Additional Guarantors.

(a)    (i) Within sixty (60) days (or such longer period as the Administrative
Agent may agree in its sole discretion) after (A) the consummation by any Credit
Party of a Material Acquisition and (B) each semi-annual period ending on
June 30 or December 31, beginning with the period beginning on the date hereof
and ending on June 30, 2019, and (ii) the closing date of any Permitted
Acquisition, the Borrower shall cause the Credit Parties to provide to the
Administrative Agent, without duplication, copies of all recorded Deeds and
Rights of Way with respect to its Midstream Properties or other real properties
that have been received or otherwise acquired by any Credit Party as a result of
such Material Acquisition or Permitted Acquisition or during such period, as
applicable, and, subject to the limitations in Section 8.14(d), to execute and
deliver mortgages or other applicable Security Instruments on such Midstream
Properties, other real properties, Deeds and Rights of Way in favor of the
Administrative Agent, in each case in form and substance reasonably satisfactory
to the Administrative Agent. In connection with the foregoing, to the extent
reasonably requested by the Administrative Agent, for owned real property assets
having an individual fair market value or purchase price, as applicable, in
excess of $25,000,000, subject to the limitations in Section 8.14(d), the
Borrower shall deliver, or shall cause to be delivered, (x) title and extended
coverage insurance covering such real property subject to the additional
Security Instruments in an amount equal to the purchase price of such interest
in real property (or such other lesser amount as shall be reasonably specified
by the Administrative Agent), as well as a current ALTA survey thereof, together
with a surveyor’s certificate, (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Security Instruments, but only to the extent obtainable by the Borrower through
the use of commercially reasonable efforts and without the payment of any fee,
charge or other costs (other than de minimis fees, charges or other costs paid
to the third-party providers of such consents or estoppels) by the Borrower in
connection therewith, each of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent, and (z) legal opinions, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

(b)    The Parent and the Borrower shall (i) cause each Restricted Subsidiary
that is not a party to the Guaranty and Security Agreement to, promptly, but in
any event no later than thirty (30) days after the formation or acquisition (or
similar event) of such Restricted Subsidiary,

 

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execute and deliver a supplement to the Guaranty and Security Agreement,
(ii) pledge, or cause the applicable Restricted Subsidiary or Restricted
Subsidiaries to pledge, all of the Equity Interests of such new Restricted
Subsidiary (including, without limitation, delivery of any stock certificates
evidencing the Equity Interests of such Restricted Subsidiary, together with an
appropriate undated stock power for each certificate duly executed in blank by
the registered owner thereof, if applicable) and (iii) execute and deliver, and
cause each Restricted Subsidiary to execute and deliver, such other additional
closing documents, certificates and legal opinions as shall reasonably be
requested by the Administrative Agent.

(c)    Subject to Section 8.18, the Parent and the Borrower will in connection
with any deposit account, commodities account, or any securities account (other
than an Excluded Account for so long as it is an Excluded Account) established,
held or maintained by a Credit Party after the Effective Date, cause such
deposit account, commodities account, or securities account (in each case, other
than an Excluded Account for so long as it is an Excluded Account) to be subject
to a Control Agreement within thirty (30) days of the establishment thereof or
longer if the Administrative Agent approves in its sole discretion and at all
times thereafter. Notwithstanding the foregoing, for each deposit or securities
account that becomes a deposit or securities account of a Restricted Subsidiary
as a result of a Permitted Acquisition (in each case, other than Excluded
Accounts), the Parent Guarantor will, by no later than sixty (60) days after the
date of such Permitted Acquisition or such later date as the Administrative
Agent may agree in its sole discretion, either (a) cause such account to be
subject to a Control Agreement, or (b) close such account and transfer any funds
therein to an account that otherwise meets the requirements of this
Section 8.14.

(d)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, (i) as of the Effective Date, no Building (as defined in the
applicable Flood Insurance Regulations), Manufactured (Mobile) Home (as defined
in the applicable Flood Insurance Regulations), or the land situated under any
such Building or Manufactured (Mobile) Home that is owned by any Credit Party is
included in the Collateral and no Building or Manufactured (Mobile) Home shall
be encumbered by any Security Instrument, other than, in each case, the
Headquarters Building and (ii) other than the Headquarters Building, the Credit
Parties shall not be required to mortgage any Building or Manufactured (Mobile)
Home, or the lands situated under any such Building or Manufactured (Mobile)
Home, unless and until the aggregate fair market value of all such unmortgaged
Buildings, Manufactured (Mobile) Homes, and the unmortgaged land situated under
such Buildings and Manufactured (Mobile) Homes exceeds $25,000,000 (in which
case the Credit Parties shall promptly cause the aggregate fair market value of
such unmortgaged Buildings, Manufactured (Mobile) Homes, and unmortgaged land
situated underneath such unmortgaged Buildings and Manufactured (Mobile) Homes
to become less than $25,000,000 by delivering the applicable and requisite
Security Instruments and Flood Deliverables in accordance with Section 8.13(b));
provided, that the Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, permit to exist any Lien on any unmortgaged
Building, Manufactured (Mobile) Home or the unmortgaged land situated underneath
any such unmortgaged Building or Manufactured (Mobile) Home except the Excepted
Liens and any other Liens permitted under Section 9.03 hereof (other than
Section 9.03(d)).

Section 8.15    ERISA Compliance. The Parent and the Borrower will promptly
furnish and will cause Restricted Subsidiaries and any ERISA Affiliate to
promptly furnish to the

 

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

Section 8.16    Unrestricted Subsidiaries. The Parent and the Borrower:

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

(b)    will not, and will not permit any of the other Restricted Subsidiaries
to, incur, assume, guarantee or be or become liable for any Debt of any of the
Unrestricted Subsidiaries, other than non-recourse pledges of Equity Interests
in Unrestricted Subsidiaries granted to secure Debt of Unrestricted
Subsidiaries.

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

Section 8.17    Commodity Exchange Act Keepwell Provisions. Each of the Parent
and the Borrower, to the extent that it is a Qualified ECP Guarantor, hereby
guarantees the payment and performance of all Indebtedness of each Credit Party
(other than itself) and absolutely, unconditionally and irrevocably undertakes
to provide such funds or other support as may be needed from time to time by
each Credit Party (other than itself) in order for such Credit Party to honor
its obligations under the Guaranty and Security Agreement including obligations
with respect to Swap Agreements (provided, however, that the Parent and the
Borrower, to the extent each is a Qualified ECP Guarantor, shall only be liable
under this Section 8.17 for the maximum amount of such liability that can be
hereby incurred (a) without rendering its obligations under this Section 8.17,
or otherwise under this Agreement or any Loan Document, as it relates to such
other Credit Parties, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount and (b)
without rendering such Credit Party liable for amounts to creditors, other than
the Secured Parties, that such Credit Party would not otherwise have made
available to such creditors if this Section 8.17 was not in effect). The
obligations of the Parent and the Borrower, to the extent each is a Qualified
ECP Guarantor, under this Section 8.17 shall remain in full force and effect
until all Indebtedness is paid in full to the Lenders, the Administrative Agent
and all other Secured Parties, and all of the Lenders’ Commitments are
terminated. Each of the Parent and the Borrower that is a Qualified ECP
Guarantor 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 Credit Party for all purposes of Section 1a(18)(A)(v)(II)
of the Commodity Exchange Act.

 

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Section 8.18    Post-Closing Delivery of Control Agreements. Notwithstanding the
requirements set forth in Section 8.14(c), with respect each deposit account,
commodities account, and securities account of the Credit Parties in existence
on the Effective Date (other than, in each case, Excluded Accounts), the Parent,
the Borrower and each Restricted Subsidiary shall, no later than the sixtieth
(60th) calendar day after the Effective Date (or such later date as the
Administrative Agent may agree in its sole discretion), deliver to the
Administrative Agent duly executed Control Agreements in accordance with and to
the extent required by the Guaranty and Security Agreement or close such account
and transfer any funds therein to an account that otherwise meets the
requirements of this Section 8.18.

Section 8.19    Further Provisions Relating to Control Agreements. Each Control
Agreement that is a deposit account control agreement will provide that the
depositary bank will comply with instructions originated by the Administrative
Agent directing dispositions of funds in the deposit account without further
consent by the applicable Credit Party. Each Control Agreement that is a
securities account control agreement will provide that the securities
intermediary will comply with entitlement orders originated by the
Administrative Agent without further consent by the applicable Credit Party. The
Administrative Agent agrees that it shall not issue any such instructions or
entitlement orders or otherwise exercise any control right granted under any
such Control Agreement unless (a) an Event of Default of the type set forth in
Sections 10.01(a), (b), (f), (g), (h), (i), or (j) has occurred or (b) the Notes
and the Loans then outstanding have become due and payable in whole (and not
merely in part), whether at the due date thereof, by acceleration or otherwise.

ARTICLE IX

Negative Covenants

Beginning on the Effective Date and until the Commitments have expired or
terminated and the principal of and interest on each Loan and all fees payable
hereunder and all other amounts payable under the Loan Documents have been paid
in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Parent and the Borrower each
covenant and agree with the Lenders that:

Section 9.01    Financial Covenants.

(a)    Consolidated Total Leverage Ratio.

(i)    Prior to the time that the Financial Covenant Election is made, the
Parent and the Borrower will not permit, as of the last day of any fiscal
quarter, commencing with the fiscal quarter ending September 30, 2019, the
Consolidated Total Leverage Ratio to be greater than:

(A)    for the last day of any fiscal quarter during an Acquisition Period, 5.50
to 1.00; or

(B)    for the last day of any other fiscal quarter, 5.00 to 1.00.

 

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(ii)    Commencing with the last day of the fiscal quarter, if any, in which the
Financial Covenant Election is made (but in no event prior to September 30,
2019), the Parent and the Borrower will not permit, as of the last day of any
fiscal quarter, the Consolidated Total Leverage Ratio to be greater than 5.25 to
1.00.

(b)    Consolidated Senior Secured Leverage Ratio. Commencing with the last day
of the fiscal quarter, if any, in which the Financial Covenant Election is made
(but in no event prior to September 30, 2019), the Parent and the Borrower will
not permit, as of the last day of any fiscal quarter, the Consolidated Senior
Secured Leverage Ratio to be greater than 3.50 to 1.00.

(c)    Interest Coverage Ratio. The Parent and the Borrower will not permit as
of the last day of any fiscal quarter, commencing with the fiscal quarter ending
September 30, 2019, the Consolidated Interest Coverage Ratio to be less than
2.50 to 1.00.

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

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

(b)    (i) Debt of the Borrower and its Restricted Subsidiaries existing on the
date hereof that is reflected in the Financial Statements and any Permitted
Refinancing Debt in respect thereof and (ii) Debt of any Permitted Acquisition
Target outstanding at the time of such Permitted Acquisition and any Permitted
Refinancing Debt in respect thereof, if, in the case of this clause (ii), (A) no
Default or Event of Default has occurred and is then continuing, (B) no Default
or Event of Default would result from the incurrence of such Debt after giving
effect on a pro forma basis to the incurrence of such Debt (and any concurrent
repayment of Debt with the proceeds of such incurrence, if any), (C) the Parent
and the Borrower are in pro forma compliance with the financial covenants
contained in Section 9.01 after giving effect to the incurrence of such Debt,
and (D) such Debt was not incurred by such Permitted Acquisition Target in
connection with such Permitted Acquisition.

(c)    Debt under Capital Leases and purchase money financings in an aggregate
principal amount not to exceed $25,000,000 at any one time outstanding.

(d)    Debt associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of the Midstream Properties.

(e)    intercompany Debt between the Borrower and any Guarantor or between
Guarantors to the extent permitted by Section 9.05(f); provided that (i) such
Debt is not held, assigned, transferred, negotiated or pledged to any Person
other than the Borrower or a Guarantor and (ii) any such Debt shall be
subordinated to the Indebtedness on terms set forth in the Guaranty and Security
Agreement.

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

 

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(g)    unsecured Senior Notes of the Parent or the Borrower and any guarantees
thereof and any unsecured Permitted Refinancing Debt and any guarantees thereof;
provided that (i) at the time of incurring such Senior Notes or Permitted
Refinancing Debt, (A) no Default or Event of Default has occurred and is then
continuing and (B) no Default or Event of Default would result from the
incurrence of such Senior Notes or Permitted Refinancing Debt, as applicable,
after giving effect on a pro forma basis to the incurrence of such Senior Notes
or Permitted Refinancing Debt (and any concurrent repayment of Debt with the
proceeds of such incurrence, if any), (ii) the Parent and the Borrower are in
pro forma compliance with the financial covenants contained in Section 9.01
after giving effect to the issuance of such Senior Notes, (iii) such Senior
Notes or Permitted Refinancing Debt, as applicable, does not have any scheduled
principal amortization prior to the date that is one hundred eighty (180) days
after the Maturity Date, (iv) such Senior Notes or Permitted Refinancing Debt
does not mature sooner than the date that is one hundred eighty (180) days after
the Maturity Date, and (v) such Senior Notes or Permitted Refinancing Debt does
not have any mandatory prepayment or redemption provisions (other than customary
change of control and asset sale tender offer provisions) that would require a
mandatory prepayment or redemption in priority to the Indebtedness.

(h)    Debt consisting of the financing of insurance premiums incurred in the
ordinary course of business.

(i)    Debt permitted by Section 8.16(b).

(j)    other Debt not to exceed $100,000,000 in the aggregate at any one time
outstanding.

Section 9.03    Liens. The Parent and the Borrower will not, and will not permit
any of the Restricted Subsidiaries to, create, incur, assume or permit to exist
any Lien on any of their Properties (now owned or hereafter acquired),
except:(a) (i) Liens securing the payment of any Indebtedness and (ii) Liens on
cash or deposits granted in favor of the Issuing Bank to Cash Collateralize any
Defaulting Lender’s participation in Letters of Credit.

(b)    Excepted Liens.

(c)    Liens securing Debt permitted by Section 9.02(c) but only on the Property
under lease or acquired with the proceeds of such Debt, and all improvements,
repairs, additions, attachments and accessions thereto, parts, replacements and
substitutions therefor, and products and proceeds thereof.

(d)    other Liens securing obligations that in the aggregate do not exceed
$20,000,000.

(e)    Liens arising under an indenture in favor of the trustee thereunder for
its own benefit and not for the benefit of the holders of Debt under such
indenture.

(f)    Liens on cash, cash equivalents and other property arising in connection
with the defeasance, discharge or redemption of Debt.

 

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(g)    Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto.

(h)    Liens on Equity Interests in Unrestricted Subsidiaries.

(i)    Liens on assets of any Permitted Acquisition Target at the time of such
Permitted Acquisition; provided that (i) such Liens were not incurred in
connection with or contemplation of such Permitted Acquisition, (ii) the Liens
do not apply to any other property or assets of the Parent, the Borrower, or any
other Restricted Subsidiary other than improvements, additions, repairs,
attachments and accessions thereto, construction thereon, assets and property
affixed or appurtenant thereto, parts, replacements and substitutions therefor
and products and proceeds thereof, (iii) the Debt secured thereby does not
exceed one hundred percent (100%) of the aggregate book value of such assets of
the Permitted Acquisition Target at the time of such Permitted Acquisition, and
(iv) the aggregate amount of Debt secured thereby does not exceed $20,000,000.

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

(a)    Restricted Payments. The Parent and the Borrower will not, and will not
permit any of the Restricted Subsidiaries to, declare or make, directly or
indirectly, any Restricted Payment, return any capital to its holders of Equity
Interests or make any distribution of its Property to its Equity Interest
holders without the prior approval of the Majority Lenders, except that:

(i)    the Borrower may declare and make distributions to Diamondback and its
wholly owned Subsidiaries that are holders of Equity Interests in the Borrower
on the Effective Date, or within thirty-five (35) days thereafter, in an amount
not to exceed the amount of equity proceeds contributed to the Borrower from the
Parent from the net proceeds of the Parent IPO;

(ii)    the Parent may declare and make cash distributions to the holders of
Class B Equity Interests in the Parent in an aggregate amount not to exceed
$20,000 in any calendar quarter;

(iii)    the Parent may declare and make cash distributions to the General
Partner in an aggregate amount not to exceed $20,000 in any calendar quarter;

(iv)    the Parent and the Borrower may declare and pay dividends and
distributions to their equity holders, if and to the extent that (A) such
dividend or distribution is paid within sixty-five (65) days after the date of
declaration thereof, (B) as of the date of such declaration, no Default or Event
of Default existed, and (C) as of the date of such declaration, if such dividend
or distribution had been paid as of such date of declaration, no Default or
Event of Default would have existed;

(v)    the Parent and the Restricted Subsidiaries may declare and pay dividends
or distributions with respect to their Equity Interests payable solely in
additional Equity Interests (other than Disqualified Capital Stock);

 

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(vi)    any Restricted Subsidiary of the Parent may declare and pay dividends or
distributions ratably with respect to its Equity Interests;

(vii)    the Parent and the Restricted Subsidiaries may declare and make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management, employees, directors, and consultants of the
Parent and its Subsidiaries;

(viii)    the Parent may declare and pay dividends or distributions consisting
of Equity Interests in Unrestricted Subsidiaries; and

(ix)    on or substantially contemporaneously with the consummation of the
Parent IPO and in connection with Diamondback’s withdrawal as the organizational
limited partner of the Parent, the Parent may make Restricted Payments to
Diamondback in an amount not to exceed $1,000 on account of Diamondback’s
initial capital contribution in the Parent.

(b)    Redemption of Senior Notes; Amendment of Indenture. The Parent and the
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
prior to the date that is 91 days after the Maturity Date:

(i)    make any optional or voluntary Redemption of or otherwise optionally or
voluntarily Redeem whether in whole or in part any Senior Notes in cash, in each
case other than:

(A)    Redemptions made in exchange for, or from the proceeds of, Permitted
Refinancing Debt; and

(B)    Redemptions made from the proceeds of the sale or issuance of Equity
Interests by the Parent or the Borrower if no Default or Event of Default has
occurred and is continuing or would exist after giving effect to such
Redemption.

(ii)    amend, modify, waive or otherwise change any of the terms of any Senior
Notes or any indenture, agreement, instrument, certificate or other document
relating to any Senior Notes incurred under Section 9.02(g) if after such
amendment, waiver or change such Senior Notes would no longer qualify as Senior
Notes.

Section 9.05    Investments, Loans and Advances. The Parent and the Borrower
will not, and will not permit any of the Restricted Subsidiaries to, make or
permit to remain outstanding any Investments in or to any Person (whether by
division or otherwise), except that the foregoing restriction shall not apply
to:

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

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

(c)    commercial paper maturing within one year from the date of creation
thereof rated in the highest grade by S&P or Moody’s.

 

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(d)    deposits maturing within one year from the date of creation thereof with,
including certificates of deposit issued by, any Lender or any office located in
the United States of any other bank or trust company which is organized under
the laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000 (as of the date of such bank
or trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time,
by S&P or Moody’s, respectively.

(e)    deposits in money market funds investing exclusively in Investments
described in Section 9.05(b), Section 9.05(c) or Section 9.05(d).

(f)    Investment made by a Guarantor or the Borrower in or to a Guarantor or
the Borrower.

(g)    subject to the limits in Section 9.06, Investments (including, without
limitation, capital contributions) in general or limited partnerships or other
types of entities (each a “venture”) entered into by the Borrower or one of the
Restricted Subsidiaries with others in the ordinary course of business; provided
that (i) no Default or Event of Default exists at the time of, or would exist
after making any such Investment, any such venture is engaged exclusively in
activities described in Section 9.06(a) through (h), (ii) the interest in such
venture is acquired in the ordinary course of business and on fair and
reasonable terms and (iii) such venture interests acquired and capital
contributions made (valued as of the date such interest was acquired or the
contribution made) do not exceed, in the aggregate at any time outstanding an
amount equal to $50,000,000.

(h)    loans or advances to employees, officers or directors in the ordinary
course of business of the Parent or the Borrower as permitted by applicable law,
including Section 402 of the Sarbanes Oxley Act of 2002, but in any event not to
exceed $1,000,000 in the aggregate at any time.

(i)    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 the Restricted Subsidiaries as a result of a bankruptcy or
other insolvency proceeding of the obligor or in lieu thereof in respect of such
debts or upon the enforcement of any Lien in favor of the Borrower or any
Restricted Subsidiary; 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(i) exceeds $2,000,000
(measured by consideration paid at the time such Investment is received).

(j)    Permitted Acquisitions and Investments owned by any Permitted Acquisition
Target at the time of such Permitted Acquisition.

(k)    other Investments in an aggregate amount at any time outstanding not to
exceed the greater of (i) $150,000,000 and (ii) 10% of Consolidated Net Tangible
Assets, in each case under this subsection (k) measured by consideration paid at
the time such Investment is made, less returns of invested capital (as opposed
to returns on account of invested capital) subsequently received in respect of
such Investment.

 

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(l)    guarantees of Debt permitted by Section 9.02(a), (g), or (j).

(m)    to the extent constituting an Investment, Swap Agreements permitted under
Section 9.16 and guarantees thereof.

(n)    Investments in EPIC and Gray Oak, subject to (i) both prior to and after
giving pro forma effect thereto, (A) no Default or Event of Default has occurred
and is continuing, (B) the Consolidated Total Leverage Ratio does not exceed
4.50 to 1.00, and (C) Availability is not less than 10.0% of the total
Commitments and (ii) the Credit Parties pledging the Equity Interests in EPIC
and Gray Oak that such applicable Credit Parties acquire to the extent permitted
by the applicable organizational documents of the owner of EPIC and the owner of
Gray Oak.

(o)    Investments in the form of deposits or advances that are subject to
Excepted Liens.

(p)    Investments in the form of the disposition of Equity Interests in an
Unrestricted Subsidiary (and any Equity Interests received in exchange for such
disposition).

Section 9.06    Nature of Business; International Operations. The Parent and the
Borrower will not, and will not permit any Restricted Subsidiary to, engage
(directly or indirectly) in any primary line of business other than:
(a) gathering, dehydrating or compressing natural gas, crude, condensate,
natural gas liquids and other Hydrocarbons; (b) treating, processing,
fractionating or transporting natural gas, crude, condensate or natural gas
liquids or the fractionated products thereof and other Hydrocarbons; (c) storing
natural gas, crude, condensate, natural gas liquids or the fractionated products
thereof and other Hydrocarbons; (d) marketing natural gas, crude, condensate,
natural gas liquids or the fractionated products thereof and other Hydrocarbons;
(e) water distribution, storage, supply, treatment and disposal services;
(f) gathering, distributing, marketing, treating, processing, transporting,
storing, disposing of, and otherwise handling, Hydrocarbons, water, sand,
minerals, chemicals or other products or substances commonly created, used,
recovered, produced, consumed or processed in the conduct of the oil and gas
business; (g) building, acquiring and operating the facilities and equipment to
do the foregoing; and (h) owning, leasing and managing office buildings. From
and after the date hereof, the Parent, the Borrower and the other Restricted
Subsidiaries will not acquire or make any other expenditure (whether such
expenditure is capital, operating or otherwise) to purchase or lease, or acquire
Rights of Way in, any real Property not located within the geographical
boundaries of the United States of America and they will not form or acquire any
Foreign Subsidiaries.

Section 9.07    Proceeds of Loans. The Borrower will not permit the proceeds of
the Loans to be used for any purpose other than those permitted by Section 7.20.
Neither the Borrower nor any Person acting on behalf of the Borrower has taken
or will take any action that 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.
The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall

 

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

Section 9.08    ERISA Compliance. The Parent and the Borrower will not, and will
not permit any of the Restricted Subsidiaries to, at any time:

(a)    engage in, or permit any ERISA Affiliate to engage in, any transaction in
connection with which the Parent, the Borrower, a Restricted Subsidiary or any
ERISA Affiliate could be subjected to either a material civil penalty assessed
pursuant to subsections (c), (i), (l) or (m) of section 502 of ERISA or a
material tax imposed by Chapter 43 of Subtitle D of the Code.

(b)    fail to make, or permit any ERISA Affiliate to fail to make, full payment
when due of all amounts which, under the provisions of any Plan, agreement
relating thereto or applicable law, the Parent, the Borrower, a Restricted
Subsidiary or any ERISA Affiliate is required to pay as contributions thereto.

(c)    permit to exist, or allow any ERISA Affiliate to permit to exist, any
accumulated funding deficiency within the meaning of section 302 of ERISA or
section 412 of the Code, whether or not waived, with respect to any Plan.

(d)    contribute to or assume an obligation to contribute to, or permit any
ERISA Affiliate to contribute to or assume an obligation to contribute to,
(i) any employee welfare benefit plan, as defined in section 3(1) of ERISA,
including, without limitation, any such Plan maintained to provide benefits to
former employees of such entities, that may not be terminated by such entities
in their sole discretion at any time without any material liability or (ii) any
employee pension benefit plan, as defined in section 3(2) of ERISA, that is
subject to Title IV of ERISA, section 302 of ERISA or section 412 of the Code.

Section 9.09    Sale or Discount of Receivables. Except for receivables obtained
by the Parent, the Borrower or any Restricted Subsidiary out of the ordinary
course of business or the settlement of joint interest billing accounts in the
ordinary course of business or discounts granted to settle collection of
accounts receivable or the sale of defaulted accounts arising in the ordinary
course of business in connection with the compromise or collection thereof and
not in connection with any financing transaction, the Parent and the Borrower
will not, and will not permit any of the Restricted Subsidiaries to, discount or
sell (with or without recourse) any of its notes receivable or accounts
receivable.

Section 9.10    Mergers, Etc. The Parent and the Borrower will not, and will not
permit any of the Restricted Subsidiaries to, merge into or with or consolidate
with any other Person, or sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions and including by statutory division
of such Person) all or substantially all of its Property to any other

 

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Person, except that (a) the Borrower or any Restricted Subsidiary may merge or
consolidate with, or sell, lease or otherwise dispose of all or substantially
all of its Property to, the Borrower or any Restricted Subsidiary, and any
Restricted Subsidiary may divide and (b) the Borrower or any Guarantor may merge
with another Person in order to consummate a Permitted Acquisition or other
Investment permitted by Section 9.05, but in each case under clauses (a) and
(b), (i) in the case of a merger or division involving a Guarantor, a Guarantor
must be the surviving entity or the Person created as a result of such division
must become a Guarantor in accordance with Section 8.14, as applicable, and
(ii) notwithstanding clause (i), in the case of a merger involving the Borrower,
the Borrower must be the surviving entity.

Section 9.11    Asset Dispositions. The Parent and the Borrower will not, and
will not permit any Restricted Subsidiary to, make any Asset Disposition except
for Asset Dispositions that meet all of the following requirements:

(a)    at the time of such Asset Disposition, no Default or Event of Default
shall exist or would result from such Asset Disposition,

(b)    the purchase price for such Asset Disposition shall be at fair market
value (as reasonably determined by the board of directors (or comparable
governing body) of the Borrower and, if requested by the Administrative Agent,
the Borrower shall deliver a certificate of a Responsible Officer of the
Borrower certifying to that effect),

(c)    not less than 75% of the purchase price for such Asset Disposition shall
be paid to the Parent and its Subsidiaries in the form of cash, cash equivalents
or assets useful in the ordinary course of business of the Parent and its
Subsidiaries by the transferee of any such assets or its Affiliates,

(d)    such Asset Disposition is not a Transfer of Equity Interests in the
Borrower,

(e)    if such Asset Disposition is a Transfer of more than fifty percent (50%)
of the common voting Equity Interests in a Restricted Subsidiary, either
(i) such Asset Disposition shall include all of the common voting Equity
Interests of such Restricted Subsidiary or (ii) any common voting Equity
Interests in such Restricted Subsidiary that are not Transferred as part of such
Asset Disposition shall be treated as an Investment for purposes of Section 9.05
and such Investment must be permitted under Section 9.05, and

(f)    the fair market value of the Property Transferred pursuant to such Asset
Disposition, when aggregated with all other Asset Dispositions made during such
calendar year, does not exceed $75,000,000.

Notwithstanding the foregoing, a Credit Party may make an Asset Disposition of
Equity Interests in, or other securities of, an Unrestricted Subsidiary.
Following any Asset Disposition (including, without limitation, any Asset
Disposition of the Equity Interests in, or other securities of, an Unrestricted
Subsidiary), the Borrower must make any mandatory prepayment required in
connection therewith under Section 3.04(c) if, as and when so required.

Section 9.12    Environmental Matters . The Parent and the Borrower will not,
and will not permit any of the Restricted Subsidiaries to, cause any of its
Property to be in violation of, or do

 

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anything which will subject any such Property to a Release or threatened Release
of Hazardous Materials, exposure to any Hazardous Materials, or to any Remedial
Work under any Environmental Laws, assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and circumstances, if
any, pertaining to such Property where such violations or remedial obligations
could reasonably be expected to have a Material Adverse Effect.

Section 9.13    Transactions With Affiliates.

(a)    The Parent and the Borrower will not, and will not permit any of the
Restricted Subsidiaries to, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property or the rendering
of any service, with any Affiliate unless such transaction is 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.

(b)    Notwithstanding subsection (a), the Parent, the Borrower and the other
Restricted Subsidiaries may enter into and perform the following transactions:

(i)    the payment of reasonable fees, compensation, and reimbursements or
advances of reasonable and documented out-of-pocket expenses made or paid to or
for the benefit of any employee, officer or director of the Parent, any of its
Restricted Subsidiaries, the General Partner or Diamondback or any of its
Subsidiaries, and any employment agreement, employee benefit plan, officer or
director indemnification agreement or any similar arrangement entered into by
the Parent or any of its Restricted Subsidiaries in the ordinary course of
business, and any customary indemnities permitted or required by bylaw,
partnership agreement, LLC agreement, statutory provisions or any of the
foregoing agreements, plans or arrangements and provisions for customary
officers’ and directors’ liability insurance in the ordinary course of business;

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

(iii)    any issuance or sale of Equity Interests of the Parent or the Borrower;

(iv)    the transactions permitted by Sections 9.04, 9.10, 9.11, or 9.15;

(v)    the existence of, the entry into, and the performance by the Parent or
any Restricted Subsidiary of its obligations under the terms of, (A) any
agreement that is described in or contemplated by the Registration Statement
under the heading “Certain Relationships and Related Party
Transactions—Agreements with our Affiliates in Connection with the Transactions”
and (B) any agreement constituting an amendment, supplement or other
modification of an agreement referred to in clause (A), in each case if the
terms of such agreement in this clause (B), taken as a whole, are not materially
less favorable to the Parent and its Restricted Subsidiaries than the agreement
referred to in clause (A) as determined by the board of directors (or such
applicable governing body of the Parent or the applicable Restricted
Subsidiary);

(vi)    any transaction in which the Parent or any of its Restricted
Subsidiaries delivers to the Administrative Agent a letter from an accounting,
appraisal or

 

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investment banking firm of national standing stating that such transaction is
fair to the Parent or such Restricted Subsidiary from a financial point of view
or that such transaction meets the requirements of paragraph (a); and

(vii)    transactions approved by the board of directors (or any conflicts
committee thereof) of the General Partner in accordance with the Parent
Partnership Agreement.

Section 9.14    Subsidiaries. The Parent and the Borrower will not, and will not
permit any of the Restricted Subsidiaries to, create or acquire any additional
Subsidiary unless the Borrower gives written notice to the Administrative Agent
of such creation or acquisition and complies with Section 8.14(b), to the extent
required thereby. The Parent will not, and will not permit any Restricted
Subsidiary to, (a) Transfer any Equity Interests in the Borrower or (b) Transfer
any Equity Interests in any other Restricted Subsidiary except (i) to the
Borrower or a Restricted Subsidiary that is a Guarantor or (ii) in compliance
with Section 9.11. The Parent and the Borrower will not permit any Equity
Interests of any Restricted Subsidiary to be directly owned by any Person other
than the Borrower or a Restricted Subsidiary that is a Guarantor.

Section 9.15    Negative Pledge Agreements; Dividend Restrictions. The Parent
and the Borrower will not, and will not permit any of the Restricted
Subsidiaries to, create, incur, assume or suffer to exist any contract,
agreement or understanding (other than this Agreement, the other Loan Documents,
the agreements creating Liens permitted by Sections 9.03(c), (h) and (i), the
instruments or agreements evidencing Senior Notes or any Permitted Refinancing
Debt in respect thereof, any Debt permitted by Section 9.02(b)(ii), or any Swap
Agreement permitted by Section 9.16, usual and customary restrictions on the
pledge or transfer of equity interests in certain joint ventures, usual and
customary restrictions in purchase and sale agreements relating to the Property
subject thereof, restrictions on the granting of Liens contained in agreements
subject to Excepted Liens, restrictions on the granting of Liens on the Equity
Interests in Unrestricted Subsidiaries, restrictions in agreements of the types
contemplated by Section 9.13(b), restrictions on the granting of Liens in
licenses, easements, leases and gathering, processing, compression,
transporting, fractionating, waste water treatment and other operational
contracts entered into in the ordinary course of business, and restrictions on
cash or other deposits or net worth imposed by customers and suppliers in the
ordinary course of business) which in any material way prohibits or restricts
the granting, conveying, creation or imposition of any Lien on any of its
Property in favor of the Administrative Agent and the Lenders or restricts any
Restricted Subsidiary from paying dividends or making distributions to the
Parent, the Borrower, or any Guarantor, or which requires the consent of or
notice to other Persons in connection therewith.

Section 9.16    Swap Agreements . The Parent and the Borrower will not, and will
not permit any other Restricted Subsidiary to, enter into any Swap Agreements
with any Person other than Swap Agreements in respect of commodities or interest
rates (a) with an Approved Counterparty and (b) that are entered into for the
purpose of hedging exposure to interest rates or commodity price risk (including
basis risk) or to reduce overall costs with respect to interest rates or
commodity prices (including protection against changes in, and reduction of,
costs that are directly or indirectly a function of, or correlated to, interest
rates or commodity prices) and that are not for speculative purposes. In no
event shall any Swap Agreement contain any requirement, agreement or covenant
for the Parent, the Borrower or any other Restricted Subsidiary to maintain or
post (other than pursuant to a Security Instrument) collateral or margin to
secure their obligations under such Swap Agreement or to cover market exposures.

 

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Section 9.17    Designation of Restricted and Unrestricted Subsidiaries.

(a)    Unless designated as an Unrestricted Subsidiary on Schedule 7.14 as of
the date hereof or thereafter, in compliance with Section 9.17(b) or
Section 9.17(d), any Person that becomes a Subsidiary of the Parent or any of
its Restricted Subsidiaries shall be classified as a Restricted Subsidiary.

(b)    The Parent may designate by written notification thereof to the
Administrative Agent, any Restricted Subsidiary (other than the Borrower),
including a newly or to be formed or newly or to be acquired Subsidiary, as an
Unrestricted Subsidiary if (i) prior, and immediately after giving effect, to
such designation, no Default would exist and (ii) such designation is deemed to
be an Investment in an Unrestricted Subsidiary in an amount equal to the fair
market value as of the date of such designation of the Parent’s and its
Restricted Subsidiaries’ direct and indirect ownership interest in such
Subsidiary and such Investment would be permitted to be made at the time of such
designation under Section 9.05. Except as provided in this Section 9.17, no
Restricted Subsidiary may be designated as an Unrestricted Subsidiary.

(c)    The Parent may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary if after giving effect to such designation, (i) the representations
and warranties of the Parent, the Borrower and the other Restricted Subsidiaries
contained in each of the Loan Documents are true and correct in all material
respects on and as of such date as if made on and as of the date of such
redesignation (or, if stated to have been made expressly as of an earlier date,
were true and correct in all material respects as of such date), (ii) no Default
exists, (iii) the Parent and the Borrower comply with the requirements of
Section 8.14(b) and Section 8.16 and (iv) the Parent directly or indirectly owns
all of the Equity Interests in such Subsidiary. Any such designation shall be
treated as a cash dividend to the Parent or the Borrower in an amount equal to
the lesser of (A) the fair market value of the Borrower’s and its Restricted
Subsidiaries’ direct ownership interests in such Subsidiary and (B) the amount
of the Parent or the Borrower’s and its Restricted Subsidiaries’ aggregate
investment previously made for purposes of the limitation on Investments under
Section 9.05. Upon the designation of an Unrestricted Subsidiary as a Restricted
Subsidiary, all Investments previously made in such Unrestricted Subsidiary
shall no longer be counted in determining the limitation on Investments under
Section 9.05(k).

(d)    Each Subsidiary of an Unrestricted Subsidiary shall automatically be
designated as an Unrestricted Subsidiary.

(e)    Upon designation of a Restricted Subsidiary as an Unrestricted Subsidiary
in compliance with this Section 9.17, (i) such Subsidiary shall be automatically
released from all obligations, if any, under the Loan Documents, including the
Guaranty and Security Agreement and all other applicable Security Instruments
and (ii) all Liens granted pursuant to the Guaranty and Security Agreement and
all other applicable Security Instruments on the Property of, and the Equity
Interests in, such Unrestricted Subsidiary shall be automatically released.

 

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Section 9.18    Changes to Organizational Documents and Material Contracts. The
Parent and the Borrower shall not, and shall not permit any other Credit Party
to, (a) amend, supplement or otherwise modify (or permit to be amended,
supplemented or modified) its certificate of formation, limited liability
company agreement, limited partnership agreement (including, without limitation,
the Parent Partnership Agreement), articles of incorporation, bylaws, any
preferred stock designation or any other organic document of such Person in any
manner that would be adverse to the Lenders in any material respect (provided
that any amendment, supplement or other modification to the conflicts rules and
procedures or other provisions governing transactions with Affiliates thereunder
shall be deemed to be material if adverse to the Lenders in any respect) or
(b) amend, supplement or otherwise modify (or permit to be amended, supplemented
or modified) any Material Contract in any manner that would be adverse to the
Lenders in any material respect.

Section 9.19    Permitted Activities of the Parent. The Parent covenants and
agrees with the Administrative Agent and the Lenders that the Parent shall not
(a) engage in any material operating or business activities other than
(i) ownership of the Equity Interests in and Investments in the Borrower and
other Subsidiaries (subject to clause (d) below), (ii) activities incidental to
maintenance of its and its Subsidiaries’ existence and the management of their
businesses (including the maintenance of the Parent’s existence as a master
limited partnership), (iii) issuances and sales of Equity Interests (subject to
clause (b) below), (iv) the incurrence and payment of taxes and professional
fees, (v) activities incidental to the maintenance of the General Partner,
(vi) transactions permitted under Sections 9.04, 9.10, 9.11, or 9.13, and
(vii) as permitted in clause (c) below, (b) sell, transfer, assign, or otherwise
dispose of its Equity Interests in the Borrower, (c) incur any Liens or Debt for
borrowed money (other than those relating to the Loans hereunder or the Senior
Notes), or (d) own or control any direct Subsidiaries (other than (x) the
Borrower and (y) any direct Subsidiary that is formed as a shell corporation
solely for the purpose of facilitating the issuance of Senior Notes pursuant to
Section 9.02(g)).

ARTICLE X

Events of Default; Remedies

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

(a)    the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof, by acceleration or otherwise.

(b)    the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in Section 10.01(a)) payable
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of five (5) Business Days.

(c)    any representation or warranty made or deemed made by or on behalf of the
Parent, the Borrower, or any Restricted Subsidiary in or in connection with any
Loan Document or any amendment or modification of any Loan Document or waiver
under such Loan Document, or in any report, certificate, financial statement or
other document furnished pursuant to or in

 

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connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made (or, if already qualified by materiality, Material
Adverse Effect or a similar qualification, true and correct in all respects).

(d)    the Parent, the Borrower, or any Restricted Subsidiary shall fail to
observe or perform any covenant, condition or agreement contained in
Section 8.01(j), Section 8.01(l), Section 8.02, Section 8.03, Section 8.14,
Section 8.16, Section 8.17, Section 8.18, Section 8.19, or in Article IX.

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

(f)    the Parent, the Borrower, or any other Restricted Subsidiary shall fail
to make any payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall become due
and payable, and such failure continues beyond any applicable grace period.

(g)    any event or condition (other than customary change of control or asset
sale tender offer provisions of any Senior Notes Indenture or any agreement
governing any Permitted Refinancing Debt which would require a mandatory
prepayment or redemption of the Debt arising thereunder, and other than the
delivery of a notice of voluntary prepayment or redemption to the extent
permitted hereunder) occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without
the giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the Redemption thereof or
any offer to Redeem to be made in respect thereof, prior to its scheduled
maturity or require the Parent, the Borrower, or any other Restricted Subsidiary
to make an offer in respect thereof.

(h)    an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Parent, the Borrower, or any Guarantor or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Parent, the Borrower, or any Guarantor or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for thirty (30) days or an order or decree
approving or ordering any of the foregoing shall be entered.

(i)    the Parent, the Borrower, or any Guarantor 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
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effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in Section 10.01(h),
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Parent, the Borrower, or
any Guarantor 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 material action for the purpose of effecting any of the foregoing;
or any holder of Equity Interests of the Parent (that owns greater than ten
percent (10%) of its membership interests) or the Borrower shall make any
request or take any action for the purpose of calling a meeting of the equity
holders of the Parent or the Borrower to consider a resolution to dissolve and
wind up the Parent’s or the Borrower’s affairs.

(j)    the Parent, the Borrower, or any Guarantor shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due.

(k)    (i) one or more judgments for the payment of money in an aggregate amount
in excess of $50,000,000 (to the extent not covered by independent third party
insurance provided by insurers of the highest claims paying rating or financial
strength as to which the insurer does not dispute coverage and is not subject to
an insolvency proceeding) or (ii) any one or more non-monetary judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect, shall be rendered against the Parent, the Borrower,
or any other Restricted Subsidiary or any combination thereof and the same shall
remain undischarged for a period of thirty (30) consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of the Parent, the
Borrower, or any other Restricted Subsidiary to enforce any such judgment.

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

(m)    a Change in Control shall occur.

Section 10.02    Remedies.

(a)    In the case of an Event of Default other than one described in
Section 10.01(h), Section 10.01(i) or Section 10.01(j), at any time thereafter
during the continuance of such Event of Default, the Administrative Agent may,
and at the request of the Majority Lenders, shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Notes and the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
and the Guarantors accrued hereunder and under the Notes and the

 

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other Loan Documents (including, without limitation, the payment of cash
collateral to secure the LC Exposure as provided in Section 2.07(j)), shall
become due and payable immediately, without presentment, demand, protest, notice
of intent to accelerate, notice of acceleration or other notice of any kind, all
of which are hereby waived by the Borrower and each Guarantor; and in case of an
Event of Default described in Section 10.01(h), Section 10.01(i) or
Section 10.01(j), the Commitments shall automatically terminate and the Notes
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and the other obligations of the Borrower and the
Guarantors accrued hereunder and under the Notes and the other Loan Documents
(including, without limitation, the payment of cash collateral to secure the LC
Exposure as provided in Section 2.07(j)), shall automatically become due and
payable, without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration, or other notice of any kind, all of which are hereby
waived by the Borrower and each Guarantor.

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

(c)    Except as provided in Section 4.03, all proceeds realized from the
liquidation or other disposition of Collateral or otherwise received after
maturity of the Notes, whether by acceleration or otherwise, shall be applied:

(i)    first, to payment or reimbursement of that portion of the Indebtedness
constituting fees, expenses and indemnities payable to the Administrative Agent
in its capacity as such;

(ii)    second, pro rata to payment or reimbursement of that portion of the
Indebtedness constituting fees, expenses and indemnities payable to the Lenders
and the Issuing Banks;

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

(iv)    fourth, pro rata to payment of (A) principal outstanding on the Loans,
(B) LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time, and (C) Indebtedness referred to in clause (b) and (c) of
the definition of Indebtedness;

(v)    fifth, pro rata to any other Indebtedness;

(vi)    sixth, to serve as cash collateral to be held by the Administrative
Agent to secure the LC Exposure; and

(vii)    seventh, any excess, after all of the Indebtedness shall have been paid
in full in cash, shall be paid to the Borrower or as otherwise required by any
Governmental Requirement.

Notwithstanding the foregoing, amounts received from the Borrower or any
Guarantor that is not an Eligible Contract Participant shall not be applied to
any Excluded Swap Obligations (it being understood, that in the event that any
amount is applied to Indebtedness other than Excluded Swap Obligations as a
result of this clause, the Administrative Agent shall make such adjustments as
it determines are appropriate to distributions pursuant to clause “fourth” above
from amounts

 

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received from Eligible Contract Participants to ensure, as nearly as possible,
that the proportional aggregate recoveries with respect to Excluded Swap
Obligations described in clause “fourth” are the same as the proportional
aggregate recoveries with respect to other Indebtedness pursuant to such clause
above).

ARTICLE XI

The Agents

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

Section 11.02    Duties and Obligations of Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing (the use of the term “agent” herein and in the other Loan
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law; rather, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties), (b) the Administrative
Agent shall have no duty to take any discretionary action or exercise any
discretionary powers, except as provided in Section 11.03, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Parent, the Borrower, or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Parent, the Borrower or a Lender, and
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or under any other Loan Document or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or in
any other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, (v) the satisfaction of any condition set forth in
Article VI or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent or as to those conditions
precedent expressly required to be to the Administrative Agent’s satisfaction,
(vi) the existence, value, perfection or priority of any collateral security or
the financial or other condition of the Parent, the Borrower, or any of its
Subsidiaries or any other obligor or guarantor, or (vii) any failure by the
Parent, the Borrower, or any of its Subsidiaries or any other Person (other than
itself) to perform any of its obligations hereunder or under any other Loan
Document or the performance or observance of any covenants, agreements or other
terms or conditions set forth herein or therein. For purposes of determining
compliance with the conditions specified in Article VI, each Lender shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
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thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Administrative Agent shall have received written notice from
such Lender prior to the proposed closing date specifying its objection thereto.

Section 11.03    Action by Administrative Agent. The Administrative Agent shall
have no duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Majority Lenders or the Lenders, as
applicable, (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 12.02) and in all cases
the Administrative Agent shall be fully justified in failing or refusing to act
hereunder or under any other Loan Documents unless it shall (a) receive written
instructions from the Majority Lenders or the Lenders, as applicable, (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02) specifying the action to be taken
and (b) be indemnified to its satisfaction by the Lenders against any and all
liability and expenses which may be incurred by it by reason of taking or
continuing to take any such action. The instructions as aforesaid and any action
taken or failure to act pursuant thereto by the Administrative Agent shall be
binding on all of the Lenders. If a Default has occurred and is continuing, then
the Administrative Agent shall take such action with respect to such Default as
shall be directed by the requisite Lenders in the written instructions (with
indemnities) described in this Section 11.03, provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interests of the Lenders. In no event, however, shall the
Administrative Agent be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement, the Loan Documents or applicable law. If a Default has occurred and
is continuing, none of the Agents shall have any obligation to perform any act
in respect thereof. The Administrative Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Majority
Lenders or the Lenders, as applicable, (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in
Section 12.02), and otherwise no Agent shall be liable for any action taken or
not taken by it hereunder or under any other Loan Document or under any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except
for its own gross negligence or willful misconduct.

Section 11.04    Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon and each of the
Parent, the Borrower, the Lenders and the Issuing Bank hereby waives the right
to dispute the Administrative Agent’s record of such statement, except in the
case of gross negligence or willful misconduct by the Administrative Agent. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts. The Administrative Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
permitted hereunder shall have been filed with the Administrative Agent.

 

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

Section 11.06    Resignation of Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided in this
Section 11.06, the Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Borrower, and the Administrative Agent may be
removed at any time by the Majority Lenders if the Administrative Agent, in its
capacity as a Lender, is a Defaulting Lender at such time. Upon any such
resignation, the Majority Lenders shall have the right, subject, if no Event of
Default exists, to the consent of the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Majority Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article XI and Section 12.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Agent.

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

Section 11.08    No Reliance. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and each other Loan Document to which it is a party. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document, any related

 

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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 Parent, the Borrower or any of their 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 Parent, the Borrower or their
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 the Arrangers shall have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Parent or the Borrower (or any of their
respective Affiliates) which may come into the possession of such Agent or any
of its Affiliates. In this regard, each Lender acknowledges that Vinson & Elkins
L.L.P. is acting in this transaction as special counsel to the Administrative
Agent only, except to the extent otherwise expressly stated in any legal opinion
or any Loan Document. Each other party hereto will consult with its own legal
counsel to the extent that it deems necessary in connection with the Loan
Documents and the matters contemplated therein.

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

(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Indebtedness
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 12.03) allowed in such judicial proceeding;
and

(b)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 12.03.

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

 

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Section 11.10    Authority of Administrative Agent to Release Collateral and
Liens. Each Lender and Issuing Bank hereby authorizes the Administrative Agent
to, and upon the written request of the Borrower, the Administrative Agent, at
the Borrower’s sole expense, shall (i) release any Collateral that is permitted
to be sold or released pursuant to the terms of the Loan Documents, (ii) release
any Guarantor from the Guaranty and Security Agreement pursuant to the terms
hereof or thereof, and (iii) release or subordinate any Lien on any Collateral
granted to or held by the Administrative Agent under any Loan Document to the
holder of any Lien on such Collateral permitted pursuant to Sections 9.03(c) or
(i). Each Lender and the Issuing Bank hereby authorizes the Administrative Agent
to execute and deliver to the Borrower, at the Borrower’s sole cost and expense,
any and all releases of Liens, termination statements, assignments, releases of
guarantees or other documents reasonably requested by the Borrower in connection
with (A) the events described in the preceding sentence and (B) any designation
of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with
Section 9.17.

Section 11.11    The Arrangers and other Agents. Neither the Arrangers nor any
Agent (other than the Administrative Agent) shall have any duties,
responsibilities or liabilities under this Agreement and the other Loan
Documents other than their duties, responsibilities and liabilities in their
capacity as Lenders hereunder.

ARTICLE XII

Miscellaneous

Section 12.01    Notices.

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

(i)    if to the Borrower or the Parent to it at 500 West Texas, Suite 1225,
Midland, Texas, 70701, Attention of Teresa L. Dick (Facsimile No. (405)
286-5920, e-mail address: tdick@diamondbackenergy.com);

(ii)    if to the Administrative Agent, to it at 1000 Louisiana, Suite 900,
Houston, Texas, 77002; Attention of Andrew Ostrov (Facsimile No. (866) 620-0623,
e-mail address: andrew.ostrov@wellsfargo.com), with a copy to WLS Charlotte
Agency Services (Facsimile No. (704) 590-2782, email address:
Donna.Verwold@wellsfargo.com), 1525 W. WT Harris Blvd., Charlotte, NC 28262; or

(iii)    if to any other Lender, to it at its address (or facsimile number) set
forth in its Administrative Questionnaire.

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

 

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

Section 12.02    Waivers; Amendments.

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

(b)    Neither this Agreement nor any provision hereof nor any Security
Instrument nor any provision thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Majority Lenders or by the Borrower and the Administrative Agent with
the consent of the Majority Lenders; provided that no such agreement shall
(i) increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder, or
reduce any other Indebtedness hereunder or under any other Loan Document,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment or prepayment of the principal amount of any Loan or
LC Disbursement, or any interest thereon, or any fees payable hereunder, or any
other Indebtedness hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or postpone or extend the
Termination Date without the written consent of each Lender affected thereby,
(iv) change Section 4.01(b) or Section 4.01(c) in a manner that would alter the
pro rata sharing of payments required thereby, without the written consent of
each Lender, (v) waive or amend Section 3.04(c), Section 6.01, Section 8.14,
Section 10.02(c) or Section 12.14 or change the definition of the terms
“Domestic Subsidiary”, “Foreign Subsidiary”, “Subsidiary” or “Applicable
Percentage”, without the written consent of each Lender (other than any
Defaulting Lender), (vi) release any Guarantor (except as set forth in the
Guaranty and Security Agreement or as provided for in Section 11.10), release
all or substantially all of the collateral (other than as provided in
Section 11.10), without the written

 

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consent of each Lender (other than any Defaulting Lender), or (vii) change any
of the provisions of this Section 12.02(b) or the definition of “Majority
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 Issuing Bank
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent, such other Agent or the Issuing Bank, as the case may
be. Notwithstanding the foregoing, (i) any supplement to Schedule 7.14
(Subsidiaries) (provided that, for the avoidance of doubt, any such designation
of an Unrestricted Subsidiary and/or a Restricted Subsidiary must be made in
accordance with and subject to Section 9.17) and Schedule 7.26 (Flood Insurance
Related Matters) 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 and
(ii) the Administrative Agent and the Borrower may, without the consent of any
Lender, enter into amendments or modifications to this Agreement or any of the
other Loan Documents or to enter into additional Loan Documents as the
Administrative Agent and the Borrower reasonably deem appropriate in order to
implement any Replacement Rate or otherwise effectuate the terms of Section 5.06
in accordance with the terms of Section 5.06.

Section 12.03    Expenses, Indemnity; Damage Waiver.

(a)    The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred
by the Administrative Agent and its Affiliates, including, without limitation,
the reasonable fees, charges and disbursements of counsel (which shall be
limited to one counsel to the Administrative Agent and one local counsel as
reasonably necessary in any relevant jurisdiction material to the interests of
the Lenders taken as a whole (and solely in the case of an actual conflict of
interest, one additional counsel and (if reasonably necessary) one local counsel
in each relevant jurisdiction to the Administrative Agent and its Affiliates)
and other outside consultants for the Administrative Agent, the reasonable
travel, photocopy, mailing, courier, telephone and other similar expenses, and
the cost of environmental invasive and non-invasive assessments and audits and
surveys and appraisals, in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration (both before and after the execution hereof and
including advice of counsel to the Administrative Agent as to the rights and
duties of the Administrative Agent and the Lenders with respect thereto) of this
Agreement and the other Loan Documents and any amendments, modifications or
waivers of or consents related to the provisions hereof or thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated),
(ii) all costs, expenses, Taxes, assessments and other charges incurred by any
Agent or any Lender in connection with any filing, registration, recording or
perfection of any security interest contemplated by this Agreement or any
Security Instrument or any other document referred to therein, (iii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, and (iv) all out-of-pocket expenses incurred
by any Agent, the Issuing Bank or any Lender, including the reasonable fees,
charges and disbursements of any counsel for any Agent, the Issuing Bank or any
Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Loan Document, including its rights
under this Section 12.03, or in connection with the Loans made or Letters of
Credit issued

 

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hereunder, including, without limitation, all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit, except in the case of out-of-pocket expenses
described in this clause (iv) to the extent that Section 12.03(b) expressly
provides that the Borrower shall not indemnify such party for such out-of-pocket
expenses.

(b)    THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGERS, THE ISSUING BANK,
AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH
SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE
HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED
EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY
INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY OR THEREBY (OTHER THAN EXPENSES IN CONNECTION WITH THE EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS DATED OF EVEN DATE
HEREWITH, WHICH EXPENSES SHALL ONLY BE PAID BY THE BORROWER TO THE EXTENT
PROVIDED IN SECTION 12.03(a)), (ii) THE PERFORMANCE BY THE PARTIES HERETO OR THE
PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY
OTHER LOAN DOCUMENT, (iii) THE FAILURE OF THE PARENT, THE BORROWER OR ANY
RESTRICTED SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING
THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iv) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY
GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS
OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (v) ANY LOAN OR LETTER OF
CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION,
(A) ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER
OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT
STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A
DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE,
NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN
CONNECTION THEREWITH, (vi) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vii) THE
OPERATIONS OF THE BUSINESS OF THE PARENT, THE BORROWER AND THEIR RESTRICTED
SUBSIDIARIES BY THE PARENT, THE BORROWER AND THEIR RESTRICTED SUBSIDIARIES,
(viii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS
RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (ix) ANY ENVIRONMENTAL LAW
APPLICABLE TO THE PARENT, THE BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR
PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE,
RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL
OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR

 

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HAZARDOUS MATERIALS ON ANY OF THEIR PROPERTIES, (x) THE BREACH OR NON-COMPLIANCE
BY THE PARENT, THE BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE PARENT, THE BORROWER OR ANY RESTRICTED SUBSIDIARY, (xi) THE
PAST OWNERSHIP BY THE PARENT, THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND
FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xii) THE
PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED
RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF
OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS MATERIALS ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE PARENT, THE BORROWER OR ANY RESTRICTED
SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS
ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE PARENT, THE BORROWER OR ANY OF
THEIR RESTRICTED SUBSIDIARIES, (xiii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY
WAY TO THE PARENT, THE BORROWER OR ANY OF THEIR RESTRICTED SUBSIDIARIES,
(xiv) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE
LOAN DOCUMENTS, OR (xv) 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, INCLUDING ITS OWN ORDINARY NEGLIGENCE, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE; PROVIDED THAT THE BORROWER
SHALL NOT INDEMNIFY ANY INDEMNITEE FOR (i) CLAIMS AMONG LENDERS OR BETWEEN
LENDERS AND THEIR RELATED PARTIES (OTHER THAN SUCH CLAIMS AGAINST AN AGENT OR
ARRANGER IN ITS CAPACITY AS SUCH) TO THE EXTENT NOT RELATED TO A BREACH OF AN
OBLIGATION OF THE PARENT, THE BORROWER OR ANY SUBSIDIARY AND (iii) LOSSES,
CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES THAT ARE DETERMINED BY A COURT
OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO BE A DIRECT
RESULT OF A MATERIAL BREACH OF THIS AGREEMENT MADE BY SUCH INDEMNITEE IN BAD
FAITH.

(c)    To the extent that the Borrower fails to pay any amount required to be
paid by it to any Agent, the Arrangers or the Issuing Bank under
Section 12.03(a) or (b), each Lender

 

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severally agrees to pay to such Agent, the Arrangers or the Issuing Bank, as the
case may be, such Lender’s Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against such Agent, the Arrangers or the Issuing Bank in its
capacity as such.

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

(e)    All amounts due under this Section 12.03 shall be payable not later than
10 days after written demand therefor.

Section 12.04    Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) other than in connection with a transaction
permitted under Section 9.10, the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section 12.04. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

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

(A)    the Borrower, provided that no consent of the Borrower shall be required
if such assignment is to a Lender, an Affiliate of a Lender, an Approved Fund,
or, if an Event of Default has occurred and is continuing, is to any other
assignee; provided, further, that if at the end of fifteen (15) days after the
Borrower has received a request for such approval, the Borrower has not
communicated its approval or disapproval in writing to the Administrative Agent,
such silence shall be deemed to be an approval of such assignment; and

 

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(B)    the Administrative Agent and each Issuing Bank; provided that no consent
of the Administrative Agent shall be required for an assignment to an assignee
that is a Lender or an Affiliate of a Lender immediately prior to giving effect
to such assignment.

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

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

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

(C)    the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500;

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

(E)    no such assignment shall be made to (i) the Borrower or any of the
Borrower’s Subsidiaries or Affiliates, (ii) any Defaulting Lender or any of its
Subsidiaries, or any Person who, upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause (ii), (iii) any
natural Person (or a holding company, investment vehicle or trust for, or owned
and operated for the primary benefit of, a natural Person), or (iv) any Industry
Competitor.

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

(iv)    The Administrative Agent, acting for this purpose as a non-fiduciary
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
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Lenders, and the Commitment of, and principal amount (and stated interest) of
the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive (absent manifest error), and the Borrower, the Administrative Agent,
the Issuing Bank and the Lenders shall treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, the Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice. In connection with any changes to the Register, if necessary, the
Administrative Agent will reflect the revisions on Annex I and forward a copy of
such revised Annex I to the Borrower, the Issuing Bank and each Lender.

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

(c)    (i)    Any Lender may, without the consent of the Borrower, the
Administrative Agent and the Issuing Bank, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (C) the Borrower, the Administrative Agent, the Issuing Bank
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement, and (D) no such participation may be sold to a natural Person or an
Industry Competitor. Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
proviso to Section 12.02 that affects such Participant. In addition such
agreement must provide that the Participant be bound by the provisions of
Section 12.03. Subject to Section 12.04(c)(ii), the Borrower agrees that each
Participant shall be entitled to the benefits of Section 5.01, Section 5.02 and
Section 5.03 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.04(b). To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 12.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 4.01(c) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as a non-fiduciary agent of
the Borrower, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
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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.

(i)    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(e) as
though it were a Lender.

(d)    Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank or other central banking authority, and
this Section 12.04(d) shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(e)    Notwithstanding any other provisions of this Section 12.04, no transfer
or assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrower or any of the Restricted Subsidiaries to file a
registration statement with the SEC or to qualify the Loans under the “Blue Sky”
laws of any state.

Section 12.05    Survival; Revival; Reinstatement.

(a)    All covenants, agreements, representations and warranties made by the
Borrower and the Guarantors herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, any other Agent, the Issuing Bank or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of (i) Section 5.01,
Section 5.02, Section 5.03 and Article XI shall survive and remain in full force
and effect for a period of one hundred eighty (180) days following the Maturity
Date, (ii) Section 12.11 shall survive and remain in full force and effect for a
period

 

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not to exceed two (2) years after the Maturity Date, and (iii) Section 12.03
shall survive and remain in full force and effect, in each case, regardless of
the consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement, any other Loan Document or any
provision hereof or thereof.

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

Section 12.06    Counterparts; Integration; Effectiveness.

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

(b)    This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
thereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof and thereof. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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

 

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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, but excluding (i) deposits utilized to fund payroll,
employee benefits or tax obligations of the Credit Parties and (ii) funds held
in fiduciary, trust or escrow accounts) at any time held and other obligations
(of whatsoever kind, including, without limitations obligations under Swap
Agreements) at any time owing by such Lender or Affiliate to or for the credit
or the account of the Parent, the Borrower, or any Restricted Subsidiary against
any of and all the obligations of the Parent, the Borrower, or any Restricted
Subsidiary owed to such Lender now or hereafter existing under this Agreement or
any other Loan Document, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations may be unmatured. The rights of each Lender under this
Section 12.08 are in addition to other rights and remedies (including other
rights of setoff) which such Lender or its Affiliates may have; provided that in
the event that any Defaulting Lender shall exercise any such right of setoff,
(x) all amounts so set off shall be paid over immediately to the Administrative
Agent for further application in accordance with the provisions of
Section 10.02(c) and, pending such payment, shall be segregated by such
Defaulting Lender from its other funds and deemed held in trust for the benefit
of the Administrative Agent, the Issuing Bank and the Lenders, and (y) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the Indebtedness owing to such Defaulting Lender
as to which it exercised such right of setoff. The rights of each Lender, the
Issuing Bank and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such
Lender, the Issuing Bank or their respective Affiliates may have. Each Lender
and the Issuing Bank agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application.

Section 12.09    GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

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

(b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT
PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF

 

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ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION
TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING
JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.

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

(d)    EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; PROVIDED THAT NOTHING CONTAINED IN THIS
SECTION 12.09(d)(ii)) SHALL LIMIT THE BORROWER’S INDEMNIFICATION OBLIGATIONS TO
THE EXTENT SET FORTH IN SECTION 12.03 TO THE EXTENT SUCH SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES ARE INCLUDED IN ANY THIRD PARTY CLAIM IN
CONNECTION WITH WHICH SUCH INDEMNITEE IS OTHERWISE ENTITLED TO INDEMNIFICATION
HEREUNDER; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 12.09.

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

Section 12.11    Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such

 

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Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority (including any self-regulatory
authority), (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement
or any other Loan Document, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section 12.11, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any Swap Agreement relating to the
Parent or the Borrower and its obligations, (g) with the consent of the
Borrower, (h) to any nationally recognized rating agency that requires access to
information about a Lender’s investment portfolio in connection with ratings
issued with respect to such Lender or to any collector of market data or (i) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section 12.11 or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Parent or the Borrower. For the purposes of this
Section 12.11, “Information” means all information received from the Parent, the
Borrower or any Subsidiary relating to the Parent, the Borrower or any
Subsidiary and their businesses, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Parent, the Borrower or a
Subsidiary; provided that, in the case of information received from the Parent,
the Borrower or any Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section 12.11
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, “Information” shall not
include, and the Borrower, the Borrower’s Subsidiaries, the Administrative
Agent, each Lender and the respective Affiliates of each of the foregoing (and
the respective partners, directors, officers, employees, agents, advisors and
other representatives of the aforementioned Persons), and any other party, may
disclose to any and all Persons, without limitation of any kind (A) any
information with respect to the United States federal and state income tax
treatment of the transactions contemplated hereby and any facts that may be
relevant to understanding the United States federal or state income tax
treatment of such transactions (“tax structure”), which facts shall not include
for this purpose the names of the parties or any other person named herein, or
information that would permit identification of the parties or such other
persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or tax structure, and
(B) all materials of any kind (including opinions or other tax analyses) that
are provided to the Borrower, the Administrative Agent or such Lender relating
to such tax treatment or tax structure.

Section 12.12    Interest Rate Limitation. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
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agreed as follows: (a) the aggregate of all consideration which constitutes
interest under law applicable to any Lender that is contracted for, taken,
reserved, charged or received by such Lender under any of the Loan Documents or
agreements or otherwise in connection with the Notes shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Lender on the principal amount of the Indebtedness (or, to the extent
that the principal amount of the Indebtedness shall have been or would thereby
be paid in full, refunded by such Lender to the Borrower); and (b) in the event
that the maturity of the Notes is accelerated by reason of an election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Borrower). All sums paid or agreed to be paid to
any Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to such Lender, be amortized, prorated,
allocated and spread throughout the stated term of the Loans evidenced by the
Notes until payment in full so that the rate or amount of interest on account of
any Loans hereunder does not exceed the maximum amount allowed by such
applicable law. If at any time and from time to time (i) the amount of interest
payable to any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Lender pursuant to this Section 12.12 and (ii) in respect of
any subsequent interest computation period the amount of interest otherwise
payable to such Lender would be less than the amount of interest payable to such
Lender computed at the Highest Lawful Rate applicable to such Lender, then the
amount of interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.12. To the extent that Chapter 303 of the Texas
Finance Code is relevant for the purpose of determining the Highest Lawful Rate
applicable to a Lender, such Lender elects to determine the applicable rate
ceiling under such Chapter by the weekly ceiling from time to time in effect.
Chapter 346 of the Texas Finance Code does not apply to the Borrower’s
obligations hereunder.

Section 12.13    EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT
AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS
AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL
COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS
ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT
IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND

 

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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.

(a)    The benefit of the Security Instruments and of the provisions of this
Agreement relating to any Collateral securing the Indebtedness shall also extend
to and be available to the Cash Management Providers and the Secured Swap
Parties on a pro rata basis (but subject to the terms of the Loan Documents,
including, without limitation, provisions thereof relating to the application
and priority of payments to the Persons entitled thereto) in respect of any
obligations of the Parent, the Borrower or any of its Subsidiaries which arise
under Secured Swap Agreements. No Secured Swap Party shall have any voting
rights under any Loan Document as a result of the existence of obligations owed
to it under any such Swap Agreements.

(b)    The Borrower hereby guarantees the payment and performance of all
Indebtedness of each other Credit Party and absolutely, unconditionally and
irrevocably undertakes to provide such funds or other support as may be needed
from time to time by each Benefiting Guarantor in order for such Benefiting
Guarantor to honor its obligations under the Guaranty and Security Agreement and
any other Security Instruments including obligations with respect to Swap
Agreements (provided, however, that the Borrower shall only be liable under this
Section 12.14(b) for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 12.14(b), or
otherwise under this Agreement or any other Loan Document, as it relates to such
Benefiting Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of Borrower under this Section 12.14(b) shall remain in full force
and effect until all Indebtedness is paid in full, and all of the Lenders’
Commitments are terminated. The Borrower intends that this Section 12.14(b)
constitute, and this Section 12.14(b) shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each Benefiting
Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange
Act.

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

Section 12.16    USA PATRIOT Act Notice. Each Lender hereby notifies the Parent,
the Borrower, and each Restricted Subsidiary that pursuant to the requirements
of the USA PATRIOT Act, it is required to obtain, verify and record information
that identifies the Parent, the Borrower,

 

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and each Restricted Subsidiary, which information includes the name, tax
identification number and address of the Parent and the Borrower and other
information that will allow such Lender to identify the Parent and the Borrower
in accordance with the USA PATRIOT Act.

Section 12.17    Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the Write-Down and Conversion Powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)    the effects of any Bail-In Action on any such liability, including, if
applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

Section 12.18    No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each of the Parent and the Borrower acknowledges and agrees, and
acknowledges its Subsidiaries’ understanding, that: (a) (i) no fiduciary,
advisory or agency relationship between the Parent, the Borrower and their
respective Subsidiaries and the Administrative Agent or any Lender is intended
to be or has been created in respect of the transactions contemplated hereby or
by the other Loan Documents, irrespective of whether the Administrative Agent or
any Lender has advised or is advising the Parent, the Borrower or any Subsidiary
on other matters; (ii) the arranging and other services regarding this Agreement
provided by the Administrative Agent and the Lenders are arm’s-length commercial
transactions between the Parent, the Borrower and their Subsidiaries, on the one
hand, and the Administrative Agent and the Lenders, on the other hand; (iii)
each of the Parent and the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent that it has deemed appropriate; and
(iv) each of the Parent and the Borrower is capable of evaluating, and
understands and accepts, the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents; and (b) (i) the
Administrative Agent and the Lenders each is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties,
has not been, is not, and will not be acting as an advisor, agent or fiduciary
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or any of their Subsidiaries, or any other Person; (ii) neither the
Administrative Agent nor the Lenders has any obligation to the Parent, the
Borrower or any of their Subsidiaries with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Administrative Agent and the Lenders and
their respective Affiliates may be engaged, for their own accounts or the
accounts of customers, in a broad range of transactions that involve interests
that differ from those of the Parent, the Borrower and their Subsidiaries, and
neither the Administrative Agent nor the Lenders has any obligation to disclose
any of such interests to the Parent, the Borrower or their respective
Subsidiaries. To the fullest extent permitted by Governmental Requirements, each
of the Parent and the Borrower hereby agrees and acknowledges that it will not
assert any claims that it may have against the Administrative Agent and the
Lenders with respect to any breach or alleged breach of agency or fiduciary duty
in connection with any aspect of any transaction contemplated hereby.

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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:     RATTLER MIDSTREAM OPERATING LLC     By:  

/s/ Teresa L. Dick

    Name:   Teresa L. Dick     Title:   Chief Financial Officer, Executive Vice
President and Assistant Secretary PARENT:     RATTLER MIDSTREAM LP     By:
Rattler Midstream GP LLC, its General Partner     By:  

/s/ Teresa L. Dick

    Name:   Teresa L. Dick     Title:   Chief Financial Officer, Executive Vice
President and Assistant Secretary

 

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ADMINISTRATIVE AGENT,     WELLS FARGO BANK, NATIONAL ISSUING BANK AND LENDER:  
  ASSOCIATION, as Administrative Agent, Issuing Bank and as a Lender     By:  

/s/ Andrew Ostrov

    Name:   Andrew Ostrov     Title:   Director

 

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LENDERS:     BANK OF AMERICA, N.A.         By:  

/s/ Ronald E. McKaig

        Name:   Ronald E. McKaig         Title:   Managing Director

 

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LENDERS:     CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH         By:  

/s/ Nupar Kumar

        Name:   Nupar Kumar         Title:   Authorized Signatory         By:  

/s/ Christopher Zybrick

        Name:   Christopher Zybrick     Title:   Authorized Signatory

 

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LENDERS:     JPMORGAN CHASE BANK, N.A.         By:  

/s/ David M. Morris

        Name:   David M. Morris         Title:   Authorized Officer

 

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LENDERS:     CITIBANK, N.A.         By:  

/s/ Jeff Ard

        Name:   Jeff Ard         Title:   Vice President

 

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LENDERS:     PNC BANK, NATIONAL ASSOCIATION         By:  

/s/ Sandra Salazar

        Name:   Sandra Salazar         Title:   Managing Director

 

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LENDERS:     BARCLAYS BANK PLC         By:  

/s/ Sydney G. Dennis

        Name:   Sydney G. Dennis         Title:   Director

 

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LENDERS:     CAPITAL ONE, NATIONAL ASSOCIATION         By:  

/s/ Christopher Kuna

        Name:   Christopher Kuna         Title:   Director

 

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LENDERS:     SUNTRUST BANK         By:  

/s/ Nick Rolf

        Name:   Nick Rolf         Title:   Vice President

 

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LENDERS:     THE BANK OF NOVA SCOTIA, HOUSTON BRANCH         By:  

/s/ Ryan Knape

        Name:   Ryan Knape         Title:   Director

 

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LENDERS:     U.S. BANK NATIONAL ASSOCIATION         By:  

/s/ Bruce E. Hernandez

        Name:   Bruce E. Hernandez         Title:   Senior Vice President

 

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LENDERS:     GOLDMAN SACHS BANK USA         By:   /s/ Ryan Durkin         Name:
  Ryan Durkin         Title:   Authorized Signatory

 

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ANNEX I

LIST OF COMMITMENTS

 

Name of Lender

   Applicable Percentage     Commitment  

Wells Fargo Bank, National Association

     10.41666667 %    $ 62,500,000.00  

Bank of America, N.A.

     10.41666667 %    $ 62,500,000.00  

Credit Suisse AG, Cayman Islands Branch

     10.41666667 %    $ 62,500,000.00  

JPMorgan Chase Bank, N.A.

     10.41666667 %    $ 62,500,000.00  

Citibank, N.A.

     9.166666667 %    $ 55,000,000.00  

PNC Bank, National Association

     9.166666667 %    $ 55,000,000.00  

Barclays Bank PLC

     6.666666667 %    $ 40,000,000.00  

Capital One, National Association

     6.666666667 %    $ 40,000,000.00  

Suntrust Bank

     6.666666667 %    $ 40,000,000.00  

The Bank of Nova Scotia, Houston Branch

     6.666666667 %    $ 40,000,000.00  

U.S. Bank National Association

     6.666666667 %    $ 40,000,000.00  

Goldman Sachs Bank USA

     6.666666667 %    $ 40,000,000.00     

 

 

   

 

 

 

TOTAL

     100.000000000 %    $ 600,000,000     

 

 

   

 

 

 

 

Annex I – 1

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ANNEX II

LIST OF INDIVIDUAL LC COMMITMENTS

 

Name of Issuing Bank

   Individual LC Commitment  

Wells Fargo Bank, National Association

   $ 37,500,000  

Bank of America, N.A.

   $ 37,500,000  

Credit Suisse AG, Cayman Islands Branch

   $ 37,500,000  

JPMorgan Chase Bank, N.A.

   $ 37,500,000     

 

 

 

TOTAL

   $ 150,000,000     

 

 

 

 

Annex II – 1