Execution Version

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FIRST AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT

dated as of April 19, 2017

among

SWIFT ENERGY COMPANY
as Borrower

JPMORGAN CHASE BANK, N.A.
as Administrative Agent

and

the Lenders party hereto
__________________________________________
JPMORGAN CHASE BANK, N.A.
as Sole Lead Arranger and Sole Bookrunner
COMPASS BANK, and
SUNTRUST BANK
as Syndication Agents
BOKF, N.A. DBA BANK OF TEXAS,
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH, and
FIFTH THIRD BANK
as Documentation Agents

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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01
Terms Defined Above    1

Section 1.02
Certain Defined Terms    1

Section 1.03
Types of Loans and Borrowings    30

Section 1.04
Terms Generally; Rules of Construction    30

Section 1.05
Accounting Terms and Determinations; GAAP    30

Section 1.06
Times of Day    31

Section 1.07
Timing of Payment or Performance    31

ARTICLE II
THE CREDITS
Section 2.01
Commitments    31

Section 2.02
Loans and Borrowings    31

Section 2.03
Requests for Borrowings    32

Section 2.04
Interest Elections    33

Section 2.05
Funding of Borrowings    34

Section 2.06
Termination and Reduction of Aggregate Maximum Credit Amounts    34

Section 2.07
Borrowing Base    35

Section 2.08
Borrowing Base Adjustment Provisions.    37

Section 2.09
Letters of Credit    38

Section 2.10
Defaulting Lenders    42

Section 2.11
Increase of Aggregate Maximum Credit Amounts    43

ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
Section 3.01
Repayment of Loans    44

Section 3.02
Interest    45

Section 3.03
Alternate Rate of Interest    45

Section 3.04
Prepayments    46

Section 3.05
Fees    47

ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS
Section 4.01
Payments Generally; Pro Rata Treatment; Sharing of Set-offs    48

Section 4.02
Presumption of Payment by the Borrower    49

Section 4.03
Certain Deductions by the Administrative Agent    50

ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
Section 5.01
Increased Costs    50

Section 5.02
Break Funding Payments    51

Section 5.03
Taxes    51

Section 5.04
Designation of Different Lending Office    55

Section 5.05
Replacement of Lenders    55

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ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01
Closing Date    55

Section 6.02
Each Credit Event    58

ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01
Organization; Powers    58

Section 7.02
Authority; Enforceability    58

Section 7.03
Approvals; No Conflicts    59

Section 7.04
Financial Condition; No Material Adverse Change    59

Section 7.05
Litigation    59

Section 7.06
Environmental Matters    59

Section 7.07
Compliance with the Laws; No Defaults    60

Section 7.08
Investment Company Act    61

Section 7.09
Taxes    61

Section 7.10
ERISA    61

Section 7.11
Disclosure; No Material Misstatements    61

Section 7.12
Insurance    62

Section 7.13
Restriction on Liens    62

Section 7.14
Group Members    62

Section 7.15
Location of Business and Offices    62

Section 7.16
Properties; Title, Etc    62

Section 7.17
Maintenance of Properties    63

Section 7.18
Gas Imbalances    63

Section 7.19
Marketing of Production    64

Section 7.20
Security Documents    64

Section 7.21
Swap Agreements    64

Section 7.22
Use of Loans and Letters of Credit    64

Section 7.23
Solvency    64

Section 7.24
Foreign Corrupt Practices    65

Section 7.25
Anti-Corruption Laws; Sanctions; OFAC    65

Section 7.26
Senior Debt Status    65

Section 7.27
EEA Financial Institution.    65

ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01
Financial Statements; Other Information    66

Section 8.02
Notices of Material Events    69

Section 8.03
Existence; Conduct of Business    70

Section 8.04
Payment of Obligations    70

Section 8.05
Operation and Maintenance of Properties    70

Section 8.06
Insurance    70

Section 8.07
Books and Records; Inspection Rights    71

Section 8.08
Compliance with Laws    71

Section 8.09
Environmental Matters    71

Section 8.10
Further Assurances    72

Section 8.11
Reserve Reports    73

Section 8.12
Title Information    74

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Section 8.13
Additional Collateral; Additional Guarantors    74

Section 8.14
ERISA Compliance    75

Section 8.15
[Reserved].    76

Section 8.16
Marketing Activities    76

Section 8.17
Account Control Agreements; Location of Proceeds of Loans    76

Section 8.18
Unrestricted Subsidiaries    77

ARTICLE IX
NEGATIVE COVENANTS
Section 9.01
Financial Covenants    77

Section 9.02
Indebtedness    78

Section 9.03
Liens    79

Section 9.04
Restricted Payments; Restrictions on Amendments of Permitted Unsecured

Debt and Permitted Second Lien Debt    79
Section 9.05
Investments, Loans and Advances    80

Section 9.06
Nature of Business; No International Operations    81

Section 9.07
Proceeds of Loans    81

Section 9.08
ERISA Compliance    81

Section 9.09
Sale or Discount of Receivables    82

Section 9.10
Mergers, Etc.    82

Section 9.11
Sale of Properties and Termination of Hedging Transactions    82

Section 9.12
Sales and Leasebacks    83

Section 9.13
Environmental Matters    83

Section 9.14
Transactions with Affiliates    84

Section 9.15
Subsidiaries    84

Section 9.16
Negative Pledge Agreements; Dividend Restrictions    84

Section 9.17
Swap Agreements    84

Section 9.18
Amendments to Organizational Documents and Material Contracts    86

Section 9.19
Changes in Fiscal Periods    86

ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01
Events of Default    86

Section 10.02
Remedies    88

ARTICLE XI
THE Administrative AGENTS
Section 11.01
Appointment; Powers    89

Section 11.02
Duties and Obligations of Administrative Agent    90

Section 11.03
Action by Administrative Agent    90

Section 11.04
Reliance by Administrative Agent    91

Section 11.05
Subagents    91

Section 11.06
Resignation or Removal of Administrative Agent    91

Section 11.07
Administrative Agent as a Lender    92

Section 11.08
No Reliance    92

Section 11.09
Administrative Agent May File Proofs of Claim    92

Section 11.10
Authority of Administrative Agent to Release Collateral and Liens; Entry into
Intercreditor Agreements    93

Section 11.11
Duties of the Arranger    93

Section 11.12
Credit Bidding    93

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ARTICLE XII
MISCELLANEOUS
Section 12.01
Notices    2

Section 12.02
Waivers; Amendments    3

Section 12.03
Expenses, Indemnity; Damage Waiver    5

Section 12.04
Successors and Assigns    7

Section 12.05
Survival; Revival; Reinstatement    11

Section 12.06
Counterparts; Integration; Effectiveness    11

Section 12.07
Severability    12

Section 12.08
Right of Setoff    12

Section 12.09
GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY
TRIAL    12

Section 12.10
Headings    14

Section 12.11
Confidentiality    14

Section 12.12
Interest Rate Limitation    14

Section 12.13
Collateral Matters; Swap Agreements    15

Section 12.14
No Third Party Beneficiaries    15

Section 12.15
EXCULPATION PROVISIONS    16

Section 12.16
Patriot Act Notice    16

Section 12.17
Flood Insurance Provisions    16

Section 12.18
Releases    16

Section 12.19
Acknowledgement and Consent to Bail-In of EEA Financial Institutions    17

Section 12.20
Amendment and Restatement    17

Annexes, Exhibits and Schedules

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Annex I
List of Maximum Credit Amounts
 
 
Exhibit A
Form of Note
Exhibit B
Form of Borrowing Request
Exhibit C
Form of Interest Election Request
Exhibit D
Form of Compliance Certificate
Exhibit E
Form of Solvency Certificate
Exhibit F-1
Security Instruments
Exhibit F-2
Form of Guaranty and Collateral Agreement
Exhibit G
Form of Assignment and Assumption
Exhibit H-1
Form of U.S. Tax Compliance Certificate (Non-U.S. Lenders; non-partnerships)
Exhibit H-2
Form of U.S. Tax Compliance Certificate (Foreign Participants; non-partnerships)
Exhibit H-3
Form of U.S. Tax Compliance Certificate (Foreign Participants; partnerships)
Exhibit H-4
Form of U.S. Tax Compliance Certificate (Non-U.S. Lenders; partnerships)
Exhibit I
Form of Reserve Report Certificate
Exhibit J
Form of Perfection Certificate
Exhibit K
Form of Incremental Increase Agreement
 
 
Schedule 1.02
Existing Letters of Credit
Schedule 7.10(d)
ERISA Plan
Schedule 7.12
Insurance
Schedule 7.14
Group Members
Schedule 7.18
Gas Imbalances
Schedule 7.19
Marketing Contracts
Schedule 7.21
Swap Agreements
Schedule 8.09(b)
Environmental Matters
Schedule 9.02
Existing Indebtedness
Schedule 9.03
Existing Liens
Schedule 9.05
Investments

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THIS FIRST AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT dated
as of April 19, 2017, is among SWIFT ENERGY COMPANY, a Delaware corporation (the
“Borrower”), each lender that is a party hereto, JPMORGAN CHASE BANK, N.A., as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity pursuant to the terms hereof, the “Administrative
Agent”), JPMORGAN CHASE BANK, N.A., as Sole Lead Arranger and Sole Book Runner,
and JPMORGAN CHASE BANK, N.A., as Issuing Bank.
R E C I T A L S
A.    The Borrower, JPMorgan Chase Bank, National Association, as administrative
agent and the lenders party thereto are parties to that certain Senior Secured
Revolving Credit Agreement dated as of April 22, 2016 (as amended, supplemented
or otherwise modified from time to time prior to the Closing Date, the “Existing
Credit Agreement”), pursuant to which, among other things, the lenders party
thereto have made certain credit available to the Borrower.
B.    The Borrower has requested and the Administrative Agent and the Lenders
have agreed to amend and restate the Existing Credit Agreement subject to the
terms of this Agreement.
C.    In consideration of the mutual covenants and agreements herein contained
and of the loans, extensions of credit and commitments hereinafter referred to,
the parties hereto agree 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” means, 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.
“Accounting Changes” has the meaning assigned to such term in Section 1.05.
“Additional Lender” has the meaning assigned to such term in Section 2.11(a).
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period (and with respect to clause (c) of the definition of “Alternate
Base Rate” for an Interest Period of one month), an interest rate per annum
equal to the LIBO Rate for such Interest Period multiplied by the Statutory
Reserve Rate.
“Administrative Agent” has the meaning assigned to such term in the preamble
hereto.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

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“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.
“Affiliated Lender” means a Lender that is an Affiliate of the Borrower or any
other Group Member.
“Aggregate Maximum Credit Amounts” means, at any time, an amount equal to the
sum of the Maximum Credit Amounts in effect at such time.
“Agreement” means this First Amended and Restated Senior Secured Revolving
Credit Agreement, including the Schedules and Exhibits hereto, as the same may
be amended, modified, supplemented, restated, replaced or otherwise modified
from time to time.
“Alternate Base Rate” means, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) 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 ½ of 1.0% and (c) the Adjusted LIBO Rate for an Interest Period of one
month on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1.0%; provided that for the purpose of this
definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen
Rate (or if the LIBO Screen Rate is not available for such one month Interest
Period, the Interpolated Rate) at the Specified Time. 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.
“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Affiliates from time to
time concerning or relating to bribery or corruption.
“Applicable Margin” means, for any day, the applicable rate per annum set forth
below as determined based upon the Borrowing Base Utilization Percentage then in
effect:
Borrowing Base Utilization Percentage
<25%
>25% and <50%
>50% and <75%
>75% and <90%

>90%
Eurodollar Loans
2.75%
3.00%
3.25%
3.50%
3.75%
ABR Loans
1.75%
2.00%
2.25%
2.50%
2.75%
Commitment Fee Rate
0.50%
0.50%
0.50%
0.50%
0.50%

Each change in the Applicable Margin shall apply during the period commencing on
the effective date of such change in the Borrowing Base Utilization Percentage
and ending on the date immediately preceding the effective date of the next such
change; provided that, if at any time when the Applicable Margin is determined
based on Borrowing Base Utilization Percentage the Borrower fails to deliver a
Reserve Report pursuant to Section 8.11(a), then beginning on the date that is
30 calendar days from the date of such failure and until such Reserve Report is
delivered, the “Applicable Margin” shall mean the rate per annum set forth on
the grid when the Borrowing Base Utilization Percentage is at its highest level.
“Applicable Percentage” means, with respect to any Lender at any time, the
percentage of the Aggregate Maximum Credit Amounts represented by such Lender’s
Maximum Credit Amount as such percentage is set forth on Annex I; provided
further that when a Defaulting Lender shall exist, “Applicable Percentage” shall
mean the percentage of the Aggregate Maximum Credit Amounts (disregarding any

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Defaulting Lender’s Maximum Credit Amount) represented by such Lender’s Maximum
Credit Amount. As of the Closing Date, each Lender’s Applicable Percentage is
set forth on Annex I.
“Approved Counterparty” means (a) any Secured Swap Provider or (b) any other
Person that has (or the credit support provider of such Person has) a long term
senior unsecured debt or corporate credit rating of A- or A3 by S&P or Moody’s
(or their equivalent) or higher.
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
“Approved Petroleum Engineers” means (a) Netherland, Sewell & Associates, Inc.,
(b) Ryder Scott Company Petroleum Consultants, L.P., (c) DeGolyer and
MacNaughton, (d) Cawley, Gillespie & Associates, Inc. and (e) HJ Gruy and
Associates.
“Arranger” means JPMorgan Chase Bank, N.A., in its capacity as the sole lead
arranger and sole bookrunner hereunder.
“Assignee” has the meaning assigned to such term in Section 12.04(b)(i).
“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, substantially in
the form of Exhibit G or any other form approved by the Administrative Agent.
“Availability Period” means the period from and including the Closing Date to
but excluding the Termination Date.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.
“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.
“Bankruptcy Code” means The Bankruptcy Reform Act of 1978 as codified as 11
U.S.C. Section 101 et seq, as amended from time to time and any successor
statute.
“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of

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attachment on its assets or permit such Person (or such Governmental Authority
or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or
agreements made by such Person.
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.
“Borrower” has the meaning assigned to such term in the preamble 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 Base” means, at any time, an amount equal to the amount determined in
accordance with Section 2.07, as the same may be adjusted from time to time
pursuant to the Borrowing Base Adjustment Provisions. The Borrowing Base on the
Closing Date shall be the amount set forth in Section 2.07(a).
“Borrowing Base Adjustment Provisions” means Section 2.08(a), Section 2.08(b)
and Section 2.08(c) and any other provision hereunder which adjusts (as opposed
to redetermines) the amount of the Borrowing Base.
“Borrowing Base Deficiency” occurs if, at any time, the total Revolving Credit
Exposures exceeds the Borrowing Base then in effect; provided, that, for
purposes of determining the existence and amount of any Borrowing Base
Deficiency, obligations under any Letter of Credit will not be deemed to be
outstanding to the extent such obligations are Cash Collateralized.
“Borrowing Base Properties” means the Oil and Gas Properties constituting Proved
Reserves that (a) are included in the Initial Reserve Report and thereafter in
the most recently delivered Reserve Report delivered pursuant to Section 8.11
and (b) are given Borrowing Base credit.
“Borrowing Base Utilization Percentage” means, as of any day, the fraction
expressed as a percentage, the numerator of which is the sum of the Revolving
Credit Exposures of the Lenders on such day, and the denominator of which is the
Borrowing Base in effect on such day.
“Borrowing Base Value” means, with respect to any Oil and Gas Property
constituting Proved Reserves or any Swap Agreement, the value attributed to such
asset in connection with the most recent determination of the Borrowing Base as
reasonably determined by the Administrative Agent.
“Borrowing Request” means a request by the Borrower substantially in the form of
Exhibit B for a Borrowing in accordance with Section 2.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or
required by law to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
banks are open for dealings in dollar deposits in the London interbank market.
“Capital Lease Obligations” means, with respect to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount

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of such obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
“Cash Collateralize” means, to pledge and deposit with or deliver to the
Administrative Agent (in a manner reasonably satisfactory to the Administrative
Agent and Issuing Bank, which shall require such deposit to made into a
controlled account), for the benefit of any Issuing Bank, the Lenders or any
Secured Parties and other Persons as the context requires, 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
any applicable 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 any such 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.
“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Moody’s Investors Service, Inc. (“Moody’s”), or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition
or (d) repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not more
than 30 days, with respect to securities issued or fully guaranteed or insured
by the United States government.
“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.
“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of any Group Member.
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person (other than a Permitted
Holder) 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) (other than a
group of Permitted Holders) of Equity Interests representing more than 35% of
the aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of the Borrower, (b) occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Borrower by Persons
who were not (i) directors of the Borrower on the date of this Agreement nor
(ii) nominated or appointed by the board of directors of the Borrower, (c) the
Borrower shall cease to own and control, of record and beneficially, directly or
indirectly, 100% of each class of outstanding Equity Interest of each of its
Restricted Subsidiaries (it being understood that the foregoing shall not
restrict any Disposition of all the Equity Interests of a Restricted Subsidiary
to the extent permitted hereunder) or (d) a Specified Change of Control shall
have occurred.
“Change in Law” means the occurrence after the date of this Agreement of any of
the following (a) the adoption of any law, rule, regulation or treaty, (b) any
change in any law, rule, regulation or treaty or in the administration,
interpretation, implementation or application thereof by any Governmental
Authority or

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(c) compliance by any Lender or Issuing Bank (or, for purposes of Section
5.01(b)), by any lending office of such Lender or by such Lender’s or Issuing
Bank’s holding company, if any) with any request, rule, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement; provided that notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith 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 of America or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted, issued or
implemented.
“Chapter 11 Cases” means the Chapter 11 case jointly administered under the
Bankruptcy Code with the cases of the Borrower and certain Affiliates, captioned
as In re: Swift Energy Company, et al., Case No. 15-12670.
“Closing Date” means the date on which the conditions specified in Section 6.01
are satisfied (or waived in accordance with Section 12.02).
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.
“Collateral” means all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Instrument.
“Commitment” means, with respect to each Lender, the commitment of such Lender
to make or continue 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, (b) modified from time to
time pursuant to assignments by or to such Lender pursuant to Section 12.04(b)
or (c) otherwise modified pursuant to the terms of this Agreement. The amount
representing each Lender’s Commitment shall at any time be the lesser of (i)
such Lender’s Maximum Credit Amount and (ii) such Lender’s Applicable Percentage
of the then effective Borrowing Base.
“Commitment Fee Rate” has the meaning assigned to such term in the definition of
“Applicable Margin”.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” means the Compliance Certificate, signed by a Financial
Officer, substantially in the form of Exhibit D.
“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 Net Income” means with respect to the Borrower and the
Consolidated Restricted Subsidiaries, for any period, the aggregate of the net
income (or loss) of the Borrower and the Consolidated Restricted Subsidiaries
after allowances for taxes for such period determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded from such net income
(to the extent otherwise included therein) the following: (a) the net income of
any Person in which the Borrower or any Consolidated

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Restricted Subsidiary has an interest (other than a Consolidated Restricted
Subsidiary), except to the extent of the amount of dividends or distributions
actually paid in cash during such period by such other Person to the Borrower or
to a Consolidated Restricted Subsidiary, as the case may be, from such other
Person’s net income; (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; (c) the income (or loss) of any Person accrued prior to the date it
becomes a Consolidated Restricted Subsidiary of the Borrower or is merged into
or consolidated with the Borrower or any of its Consolidated Restricted
Subsidiaries; (d) any extraordinary gains or losses or expenses during such
period; (e) non-cash gains or losses under FASB ASC Topic 815 resulting from the
net change in mark to market portfolio of commodity price risk management
activities during that period and (f) any gains or losses attributable to
writeups or writedowns of assets, including ceiling test writedowns.
“Consolidated Restricted Subsidiaries” means each Restricted Subsidiary of the
Borrower (whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated with the
financial statements of the Borrower in accordance with GAAP.
“Consolidated Subsidiaries” means each Restricted Subsidiary of the Borrower
(whether now existing or hereafter created or acquired) the financial statements
of which are or shall be (or should have been) consolidated with the financial
statements of the Borrower in accordance with GAAP.
“Consolidated Total Assets” means, as of any date of determination, the amount
that would, in conformity with GAAP, be set forth opposite the caption “total
assets” (or any like caption) on a consolidated balance sheet of the Borrower
and the other Group Members.
“Control” means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.
“Control Agreement” means a deposit 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 the
applicable Loan Party, the Administrative Agent and the relevant financial
institution party thereto. Such agreement shall provide a first priority
perfected Lien in favor of the Administrative Agent, for the benefit of the
Secured Parties, in the applicable Loan Party’s Deposit Account and/or
Securities Account.
“Controlled Account” means (a) a Deposit Account or Securities Account that is
subject to a Control Agreement or (b) in the sole discretion of the
Administrative Agent, a Deposit Account or Securities Account maintained with
the Administrative Agent.
“Credit Party” means the Administrative Agent, any Issuing Bank or any other
Lender.
“Current Assets” means, as of any date of determination, without duplication,
the sum of all amounts that would, in accordance with GAAP, be set forth
opposite the caption “total current assets” (or any like caption) on a
consolidated balance sheet of the Borrower and the other Group Members at such
date, plus the unused Commitments, but excluding all non-cash assets under FASB
ASC Topic 815.
“Current Liabilities” means, as of any date of determination, without
duplication, the sum of all amounts that would, in accordance with GAAP, be set
forth opposite the caption “total current liabilities” (or

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any like caption) on a consolidated balance sheet of the Borrower and the other
Group Members on such date, but excluding (a) all non-cash obligations under
FASB ASC Topic 815 and (b) the current portion of the Loans under this
Agreement.
“Current Ratio” means, with respect to the Borrower and the Consolidated
Restricted Subsidiaries for any date of determination, the ratio of (a) Current
Assets as of the last day of the most recently ended Fiscal Quarter (which may
be such date of determination) to (b) Current Liabilities on such day.
“December 31 Reserve Report” has the meaning assigned to such term in Section
8.11(a).
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
“Defaulting Lender” means, subject to Section 2.11, any Lender that (a) has
failed, within two Business Days of the date required to be funded or paid, to
(i) fund any portion of its Loans, (ii) fund any portion of its participations
in Letters of Credit or (iii) pay over to the Administrative Agent, any Issuing
Bank or any other Lender any other amount required to be paid by it hereunder,
unless, in the case of clause (i) above, such Lender notifies the Administrative
Agent in writing that such failure is the result of such Lender’s good faith
determination that a condition precedent to funding (specifically identified and
including the particular default, if any) has not been satisfied, (b) has
notified the Borrower, the Administrative Agent or any Issuing Bank in writing,
or has made a public statement to the effect, that it does not intend or expect
to comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a Loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by the Administrative Agent, acting in good faith, to provide a
certification in writing from an authorized officer of such Lender that it will
comply with its obligations (and is financially able to meet such obligations)
to fund prospective Loans and participations in then outstanding Letters of
Credit under this Agreement; provided that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s
receipt of such certification in form and substance satisfactory to it, or (d)
has become the subject of a Bankruptcy Event, or Bail-In Action.
“Deficiency Date” has the meaning assigned to such term in Section 3.04(c)(ii).
“Deposit Account” has the meaning assigned to such term in the UCC.
“Disposition” means, with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer, casualty, condemnation or other
disposition thereof. The terms “Dispose” and “Disposed of” shall have
correlative meanings.
“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 Indebtedness or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is one year after the earlier
of (a) the Maturity Date and (b) the date on which there are no Loans, LC
Exposure or other Secured Obligations outstanding and all of the Commitments are
terminated.

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“Documentation Agent” means, collectively, the Documentation Agents identified
on the cover page of this Agreement.
“Dollar Denominated Production Payments” means production payment obligations
recorded as liabilities in accordance with GAAP, together with all undertakings
and obligations in connection therewith.
“dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary Group Member” means any Restricted Subsidiary (a) that is
organized under the laws of the United States of America or any state thereof or
the District of Columbia and (b) that is not a Foreign Group Member.
“EBITDA” means, for any period, the sum of Consolidated Net Income for such
period plus the following expenses or charges to the extent deducted from
Consolidated Net Income in such period: (i) interest, (ii) federal and state
income taxes, (iii) depreciation, depletion, amortization and other similar
noncash charges, (iv) the amount of non-recurring expenses and charges incurred
through December 31, 2017 in an amount not to exceed $10,000,000 in the
aggregate per Fiscal Year during such time, including expenses and charges in
connection with any operational restructuring, severance, relocation,
acquisition, disposition, consolidation of Subsidiaries, Material Acquisition,
Material Disposition, Investment, incurrence of Indebtedness and issuance of
Equity Interests, (v) any fees, expenses or charges of third parties incurred
through September 30, 2016 in connection with the implementation of fresh start
accounting, the Chapter 11 Cases, the Plan of Reorganization, the transactions
contemplated thereby and any other reorganization items, in an aggregate amount
not to exceed $27,500,000 and (vi) any non-cash expenses, charges and
impairments, including non-cash impact attributable to the adoption of fresh
start accounting in connection with the transactions under the Plan of
Reorganization, in accordance with GAAP, minus all noncash income (including
cancellation of indebtedness income) added to Consolidated Net Income (excluding
any such non cash item to the extent it represents the reversal of an accrual or
reserve for potential cash item in any prior period); provided that any realized
cumulative cash gains or losses resulting from the settlement of commodity price
risk contracts not included in Consolidated Net Income shall, to the extent not
included, be added to EBITDA in the case of such gains and subtracted from
EBITDA in the case of such losses (provided that in all events any such realized
cumulative cash gains or losses shall be applied in equal monthly installments
across the term which would have been in effect had such applicable commodity
price risk contract not been settled); provided further that for the purposes of
calculating EBITDA for any period of four consecutive Fiscal Quarters (or less
in the case of any period during which the calculation of EBITDA is being
annualized for purposes of the financial covenant calculations in Section 9.01)
(each, a “Reference Period”), (a) if during such Reference Period (or, in the
case of pro forma calculations, during the period from the last day of such
Reference Period to and including the date as of which such calculation is made)
the Borrower or any Consolidated Restricted Subsidiary shall have made a
Material Disposition or Material Acquisition, EBITDA (including Consolidated Net
Income) for such Reference Period shall be calculated after giving pro forma
effect thereto as if such Material Disposition or Material Acquisition by the
Borrower or its Consolidated Restricted Subsidiaries occurred on the first day
of such Reference Period (with the Reference Period for the purposes of pro
forma calculations being the most recent period of four consecutive Fiscal
Quarters for which the relevant financial information is available) and (b) if
any calculations in the foregoing clause (a) are made on a pro forma basis, such
pro forma adjustments are factually supportable and subject to supporting
documentation and otherwise acceptable to the Administrative Agent. As used in
this definition, “Material Acquisition” means any acquisition by the Borrower or
its Consolidated Restricted Subsidiaries of property or series of related
acquisitions of property that involves consideration in excess of $5,000,000,
and “Material Disposition” means any Disposition or series of related
Dispositions that yields gross proceeds to the Borrower or any Consolidated
Restricted Subsidiary in excess

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of $5,000,000. For avoidance of doubt, amounts added back or subtracted from
Consolidated Net Income pursuant to this definition shall be without duplication
of gains or losses excluded from Consolidated Net Income.
“EEA Financial Institution” means (a) any institution established in any EEA
Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.
“Engineering Reports” has the meaning assigned to such term in Section
2.07(c)(i).
“Environmental Laws” means all Governmental Requirements relating to the
environment, the preservation or reclamation of natural resources, the
regulation or management of any harmful or deleterious substances, or to health
and safety as it relates to environmental protection or exposure to harmful or
deleterious substances.
“Environmental Permit” means any permit, registration, license, notice,
approval, consent, exemption, variance, or other authorization required under or
issued pursuant to applicable Environmental Laws.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.
“ERISA Affiliate” means any entity (whether or not incorporated) which together
with the Borrower or a Subsidiary would be treated as a single employer under
Section 4001(b)(1) of ERISA or Section 414(b) or (c) of the Code or, for
purposes of provisions relating to Section 412 of the Code and Section 302 of
ERISA, Section 414 (m) or (o) of the Code.
“ERISA Event” means (a) a Reportable Event, (b) the withdrawal of the Borrower,
any other Group Member or any ERISA Affiliate from a Plan subject to Section
4063 of ERISA during a plan year in which it was a “substantial employer” as
defined in Section 4001(a)(2) of ERISA or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA, (c) a complete or
partial withdrawal by the Borrower, any other Group Member or any ERISA
Affiliate from a Multiemployer Plan; (d) the filing (or the receipt by any Group
Member or any ERISA Affiliate) of a notice of intent to terminate a Plan under
Section 4041(c) of ERISA or the treatment of a Plan amendment as a termination
under Section 4041 of ERISA, (d) the institution of proceedings to terminate a
Plan by the PBGC, (e) the receipt by any Group Member or any ERISA Affiliate of
a notice of withdrawal liability pursuant to Section 4202 of ERISA, (f)

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any other event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan or the incurrence by any Group Member or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan,
including but not limited to the imposition of any Lien in favor of the PBGC,
(g) on and after the effectiveness of the Pension Act, a determination that a
Plan is, or would be expected to be, in “at risk” status (as defined in
303(i)(4) of ERISA or 430(i)(4) of the Code) or (h) the failure of any Group
Member or any ERISA Affiliate to make by its due date, after expiration of any
applicable grace period, a required installment under Section 430(j) of the Code
with respect to any Plan or any failure by any Plan to satisfy the minimum
funding standards (within the meaning of Section 412 of the Code or Section 302
of ERISA) applicable to such Plan, whether or not waived, or the failure by the
Borrower, any other Group Member or any of their respective ERISA Affiliates to
make any required contribution to a Multiemployer Plan.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.
“Eurodollar” when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Section 10.01.
“Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental
charges or levies which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (b) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’,
vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’,
workers’, materialmen’s, construction or other like Liens arising by operation
of law in the ordinary course of business or incident to the exploration,
development, operation and maintenance of Oil and Gas Properties 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 operating agreements, joint venture
agreements, oil and gas partnership agreements, oil and gas leases, farm-out
agreements, division orders, contracts for the sale, transportation or exchange
of oil and natural gas, unitization and pooling declarations and agreements,
area of mutual interest agreements, overriding royalty agreements, marketing
agreements, processing agreements, net profits agreements, development
agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements,
seismic or other geophysical permits or agreements, and other agreements, in
each case, which are usual and customary in the oil and gas 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 (i) the use of the Property covered by such Lien for
the purposes for which such Property is held by the Borrower or any other Group
Member or (ii) the value of such Property subject thereto; (e) Liens arising by
virtue of any statutory or common law provision or customary deposit account
terms relating to banker’s liens, rights of set-off or similar rights and
remedies and burdening only deposit accounts or other funds maintained with a
creditor depository institution, provided that no such deposit account is a
dedicated cash collateral account or is subject to restrictions against access
by the depositor in excess of those set forth by regulations promulgated by the
Board and no such deposit account is intended by Borrower or any other Group
Member to provide collateral to the depository institution;

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(f) zoning and land use requirements, easements, restrictions, servitudes,
permits, conditions, covenants, exceptions or reservations in any Property of
the Borrower or any other Group Member for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines for the removal of
gas, oil, coal or other minerals or timber, and other like purposes, or for the
joint or common use of real estate, rights of way, facilities and equipment,
that do not secure any monetary obligations and which in the aggregate do not
materially impair (i) the use of such Property for the purposes of which such
Property is held by the Borrower or any other Group Member or (ii) the value of
such Property subject thereto; (g) Liens on cash or securities pledged to secure
performance of tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts, leases, statutory
obligations, regulatory obligations and other obligations of a like nature, in
each case, incurred in the ordinary course of business; (h) judgment and
attachment Liens not giving rise to an Event of Default, provided that any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment shall not have been finally terminated or the period within
which such proceeding may be initiated shall not have expired and no action to
enforce such Lien has been commenced; (i) Liens, titles and interests of lessors
of personal Property leased by such lessors to the Borrower or any other Group
Member, restrictions and prohibitions on encumbrances and transferability with
respect to such Property and the Borrower’s or such Group Member’s interests
therein imposed by such leases, and Liens and encumbrances encumbering such
lessors’ titles and interests in such Property and to which the Borrower’s or
such Group Member’s leasehold interests may be subject or subordinate, in each
case, whether or not evidenced by UCC financing statement filings or other
documents of record; provided that such Liens do not secure Indebtedness of the
Borrower or any other Group Member and do not encumber Property of the Borrower
or any other Group Member other than the Property that is the subject of such
leases and (j) Liens, titles and interests of licensors of software and other
intangible personal Property licensed by such licensors to the Borrower or any
other Group Member, restrictions and prohibitions on encumbrances and
transferability with respect to such Property and the Borrower’s or such Group
Member’s interests therein imposed by such licenses, and Liens and encumbrances
encumbering such licensors’ titles and interests in such Property and to which
the Borrower’s or such Group Member’s license interests may be subject or
subordinate, in each case, whether or not evidenced by UCC financing statement
filings or other documents of record; provided that such Liens do not secure
Indebtedness of the Borrower or any other Group Member and do not encumber
Property of the Borrower or any other Group Member other than the Property that
is the subject of such licenses; 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 Liens granted in favor of the Administrative Agent and the Lenders is to be
hereby implied or expressed by the permitted existence of any Excepted Liens.
“Excluded Accounts” means (a) each account all or substantially all of the
deposits in which consist of amounts utilized to fund payroll, employee benefit
or tax obligations of the Borrower and its Subsidiaries, (b) fiduciary accounts,
(c) to the extent necessary or desirable to comply with the terms of a binding
purchase agreement, escrow accounts holding amounts on deposit in connection
with a binding purchase agreement to the extent that and for so long as such
amounts are refundable to the buyer, (d) “zero balance” accounts and (e) other
accounts so long as the aggregate average daily maximum balance in any such
other account over a 30-day period does not at any time exceed $2,500,000;
provided that the aggregate daily maximum balance for all such bank accounts
excluded pursuant to this clause (d) on any day shall not exceed $5,000,000.
“Excluded Swap Obligation” means, with respect to any Guarantor, (a) any Swap
Obligation if, and to the extent that, and only for so long as, all or a portion
of the guarantee of such Guarantor of, or the grant by such Guarantor of a
security interest to secure, as applicable, 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
Guarantor’s failure to constitute an “eligible contract participant,” as defined
in the Commodity

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Exchange Act and the regulations thereunder, at the time the guarantee of (or
grant of such security interest by, as applicable) such Guarantor becomes or
would become effective with respect to such Swap Obligation.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Credit Party or required to be withheld or deducted from a payment to a Credit
Party: (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 Credit Party being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 5.05) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 5.03, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender acquired the applicable interest in a Loan or Commitment or
to such Lender immediately before it changed its lending office, (c) Taxes
attributable to such Credit Party’s failure to comply with Section 5.03(g) and
(d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing Credit Agreement” has the meaning assigned to such term in the
recitals hereto.
“Existing Letters of Credit” means the letters of credit described on Schedule
1.02 that were issued under the Existing Credit Agreement and that shall be
transferred to and deemed issued under this Agreement, as such letters of credit
may be renewed or amended from time to time.
“Fair Market Value” means, with respect to any asset or group of assets on any
date of determination, the value of the consideration obtainable in a
Disposition of such asset or assets at such date of determination assuming a
Disposition by a willing seller to a willing purchaser dealing at arm’s length
and arranged in an orderly manner over a reasonable period of time having regard
to the nature and characteristics of such asset.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code and any law, regulation, rule,
promulgation or official agreement implementing an official government agreement
with respect to the foregoing.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“Federal Funds Effective Rate” means, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published 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 of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it; provided
that if the Federal Funds Effective Rate shall be less than zero, such rate
shall be deemed to be zero for purposes of this Agreement.
“Financial Officer” means, for any Person, the chief executive officer, chief
financial officer, principal accounting officer or treasurer of such Person.
Unless otherwise specified, all references herein to a Financial Officer means a
Financial Officer of the Borrower.

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“Fiscal Quarter” means each fiscal quarter for accounting and tax purposes,
ending on the last day of each March, June, September and December.
“Fiscal Year” means each fiscal year for accounting and tax purposes, ending on
December 31 of each year.
“Flood Insurance Regulations” means (a) the National Flood Insurance Act of 1968
as now or hereafter in effect or any successor statute thereto, (b) the Flood
Disaster Protection Act of 1973 as now or hereafter in effect or any successor
statue thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42
USC 4001, et seq.), as the same may be amended or recodified from time to time,
(d) the Flood Insurance Reform Act of 2004 and (e) the Biggert Waters Flood
Reform Act of 2012, and any regulations promulgated thereunder.
“Foreign Group Member” means, any Group Member that is a Subsidiary of the
Borrower which (a) is not organized under the laws of the United States of
America or any state thereof or the District of Columbia or (b) is a FSHCO.
“FSHCO” means (a) any Subsidiary substantially all of the assets of which
consist of Equity Interests in one or more Subsidiaries that are “controlled
foreign corporations” within the meaning of Section 957 of the Code and (b)
Swift Energy International LLC.
“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05; provided that the accounting for operating leases and
Capital Leases Obligations under GAAP as in effect on the date hereof
(including, without limitation, Accounting Standards Codification 840) shall
apply for the purposes of determining compliance with the provisions of this
Agreement, including the definition of Capital Lease Obligations (it being
understood, for avoidance of doubt, that no operating leases, or obligations in
respect of operating leases, shall be treated as Capital Lease Obligations,
respectively, hereunder).
“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 (including
any supra-national bodies such as the European Union or the European Central
Bank).
“Governmental Requirement” means any law (including common law), statute, code,
ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or
requirement, whether now or hereinafter in effect, including energy regulations
and occupational, safety and health standards or controls, of any Governmental
Authority.
“Group Members” means the collective reference to the Borrower and its
Restricted Subsidiaries.
“Guarantee and Collateral Agreement” means an agreement executed by the
Guarantors in substantially the form of Exhibit F-2, as the same may be amended,
modified or supplemented from time to time.
“Guarantors” means:
(a)    Swift Energy Operating, LLC,

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(b)    Swift Energy USA, Inc., and
(c)    each other Domestic Subsidiary Group Member that is a Material Subsidiary
that guarantees the Secured Obligations pursuant to Section 8.13(b) or any other
Group Member that guarantees the Secured Obligations at the election of the
Borrower.
“Hazardous Material” means any chemical, compound, material, product, byproduct,
substance or waste that is defined, regulated or otherwise classified as a
“hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,”
“toxic waste,” “extremely hazardous substance,” “toxic substance,”
“contaminant,” “pollutant,” or words of similar meaning under any applicable
Environmental Law, and for the avoidance of doubt includes Hydrocarbons,
radioactive materials, explosives, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon, and infectious or medical wastes.
“Highest Lawful Rate” means, as to any Lender, at the particular time in
question, the maximum non-usurious rate of interest which, under applicable law,
such Lender is then permitted to contract for, charge or collect from the
Borrower on the Loans or the other obligations of the Borrower hereunder, and as
to any other Person, at the particular time in question, the maximum
non-usurious rate of interest which, under applicable law, such Person is then
permitted to contract for, charge or collect with respect to the obligation in
question. If the maximum rate of interest which, under applicable law, the
Lenders are permitted to contract for, charge or collect from the Borrower on
the Loans or the other obligations of the Borrower hereunder shall change after
the date hereof, the Highest Lawful Rate shall be automatically increased or
decreased, as the case may be, as of the effective time of such change without
notice to the Borrower or any other Person.
“Hydrocarbon Interests” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever nature.
Unless otherwise indicated herein, each reference to the term “Hydrocarbon
Interests” shall mean Hydrocarbon Interests of the Borrower or any other Group
Member, as the context requires.
“Hydrocarbons” means all oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all constituents, elements or compounds thereof and all products refined or
separated therefrom and all other minerals which may be produced and saved from
or attributable to the Oil and Gas Properties of any Person, including all oil
in tanks, and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests or other properties
constituting Oil and Gas Properties.
“Impacted Interest Period” has the meaning assigned to such term in the
definition of “LIBO Rate”.
“Incremental Increase” has the meaning assigned to such term in Section 2.11(a).
“Indebtedness” 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, bank guarantees, 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 (including insurance premium payables) that are one hundred twenty
(120) days past the date of invoice, other than those which are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (d) all Capital Lease

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Obligations; (e) all Indebtedness (as defined in the other clauses of this
definition) of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) a Lien on any
Property of such Person, whether or not such Indebtedness is assumed by such
Person; (f) all Indebtedness (as defined in the other clauses of this
definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Indebtedness (howsoever such
assurance shall be made) to the extent of the lesser of the amount of such
Indebtedness and the maximum stated amount of such guarantee or assurance
against loss; (g) 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 Indebtedness or Property of others; (h) any undischarged balance of
any Volumetric Production Payments and any Dollar Denominated Production
Payments; (i) all obligations of such Person under take/ship or pay contracts if
any goods or services are not actually received or utilized by such Person; (j)
any Indebtedness 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; (k) Disqualified Capital Stock (for purposes hereof,
the amount of any Disqualified Capital Stock shall be its liquidation value and,
without duplication, the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase in respect of Disqualified
Capital Stock); (l) net Swap Obligations of such Person (for purposes hereof,
the amount of any net Swap Obligations on any date shall be deemed to be the
Swap Termination Value thereof as of such date) and (m) the undischarged balance
of any production payment created by such Person or for the creation of which
such Person directly or indirectly received payment. The Indebtedness 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.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
clause (a) above, Other Taxes.
“Indemnitee” has the meaning assigned to such term in Section 12.03(b).
“Information” has the meaning assigned to such term in Section 12.11.
“Initial Reserve Report” means the report of HJ Gruy and Associates dated as of
January 24, 2017, with respect to certain Oil and Gas Properties of the Borrower
and the other Group Members as of December 31st, 2016.
“Interest Election Request” means a request by the Borrower substantially in the
form of Exhibit C 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 (or, if an Event of Default is in
existence, the last day of each calendar month) to occur while such Loan is
outstanding and the final maturity date of such Loan and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months’ duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months’ duration
after the first day of such Interest Period.
“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, twelve months) thereafter, as the Borrower
may elect in its Borrowing Request or Interest Election Request, as applicable,
given with respect thereto;

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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, (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 and (c) no Interest Period may have a
term which would extend beyond the Maturity Date. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
“Interim Redetermination” has the meaning assigned to such term in Section
2.07(b).
“Interim Redetermination Date” means the date on which a Borrowing Base that has
been redetermined pursuant to an Interim Redetermination becomes effective as
provided in Section 2.07(d).
“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period (for which the LIBO Screen Rate is available) that is shorter
than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest
period (for which the LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time.
“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition (including any “short sale”
or any sale of any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any deposit with,
or advance, loan or capital contribution to, assumption of Indebtedness of,
purchase or other acquisition of any other Indebtedness 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, goods, supplies or services sold by such Person in the ordinary
course of business); (c) the purchase or acquisition (in one or a series of
transactions) of Property of another Person constituting a business unit or Oil
and Gas Properties; or (d) the entering into of any guarantee of, or other
contingent obligation (including the deposit of any Equity Interests to be sold)
with respect to, Indebtedness or other liability of any other Person and
(without duplication) any amount committed to be advanced, lent or extended to
such Person.
“Issuing Bank” means (a) JPMorgan Chase Bank, N.A. and (b) and each Lender
approved by the Administrative Agent that is reasonably requested by the
Borrower that agrees to act as an issuer of Letters of Credit hereunder, in each
case, in its capacity as the issuer of Letters of Credit hereunder, and its
successors in such capacity as provided in Section 2.09(i). Any Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by its Affiliates, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate. References
herein and in the other Loan Documents to an Issuing Bank shall be deemed to
refer to such Issuing Bank in respect of the applicable Letter of Credit or to
all Issuing Banks, as the context requires.
“LC Availability Requirements” has the meaning assigned to such term in Section
2.09(a).

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“LC Commitment” means an amount equal to $25,000,000. For the avoidance of
doubt, the LC Commitment is part of, and not in addition to, the aggregate
Commitments.
“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter
of Credit.
“LC Exposure” means, at any time, (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.
“Lender Parent” means, with respect to any Lender, any Person as to which such
Lender is, directly or indirectly, a Subsidiary.
“Lenders” means the Persons listed on Annex I and any Person that shall have
become a party hereto pursuant to an Assignment and Assumption or otherwise that
is in the Register, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption or otherwise and is no longer in the
Register, and any Person that shall have become a party hereto as an Additional
Lender pursuant to Section 2.11(c).
“Letter of Credit” means any letter of credit issued pursuant to this Agreement.
“Letter of Credit Agreements” means all letter of credit applications and other
agreements (including any amendments, modifications or supplements thereto)
submitted by the Borrower, or entered into by the Borrower, with an Issuing Bank
relating to any Letter of Credit.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period (and with respect to clause (c) of the definition of “Alternate
Base Rate”, for an Interest Period of one month), the LIBO Screen Rate at the
Specified Time, two Business Days prior to the commencement of such Interest
Period; provided that if the LIBO Screen Rate shall not be available at such
time for such Interest Period (an “Impacted Interest Period”) then the LIBO Rate
shall be the greater of 0.0% and the Interpolated Rate.
“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar
Borrowing for any applicable Interest Period (and with respect to clause (c) of
the definition of “Alternate Base Rate”, for an Interest Period of one month),
the London interbank offered rate as administered by ICE Benchmark
Administration (or any other Person that takes over the administration of such
rate for dollars) for a period equal in length to such Interest Period as
displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen
that displays such rate or, in the event such rate does not appear on a Reuters
page or screen, on any successor or substitute page on such screen that displays
such rate, or on the appropriate page of such other information service that
publishes such rate from time to time as shall be selected by the Administrative
Agent in its reasonable discretion; provided that, if the LIBO Screen Rate shall
be less than zero, such rate shall be deemed to be zero for the purposes of this
Agreement.
“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of Oil
and Gas Properties. The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations,
including if they burden Property to the extent they secure an obligation owed
to a Person other than the owner of the Property. For the purposes of this
Agreement,

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the Borrower and the other Group Members shall be deemed to be the owner of any
Property which they have acquired or hold 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 Security Instruments, any Notes, any
Letter of Credit Agreements and the Letters of Credit.
“Loan Party” means the Borrower and each Guarantor.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.
“Majority Lenders” means (a) at any time while no Loans or LC Exposure are
outstanding, Lenders having greater than fifty percent (50%) of the Aggregate
Maximum Credit Amounts and (b) at any time while any Loans or LC Exposure are
outstanding, Lenders holding greater 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)).
“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, operations, Property, condition (financial
or otherwise) of the Borrower and the other Group Members taken as a whole, (b)
the ability of the Borrower or any other Loan Party to perform any of its
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 or any other Agent, Issuing Bank or Lender under any Loan
Document.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), of any one or more Group Member in an aggregate principal amount
exceeding $15,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of any Group Member in respect of any Swap
Agreement at any time shall be the Swap Termination Value.
“Material Subsidiary” means, at any date of determination, each Restricted
Subsidiary of the Borrower (a) whose Total Assets (when combined with the assets
of such Restricted Subsidiary’s Subsidiaries) at the last day of the most recent
Fiscal Quarter of the Borrower for which financial statements were required to
be delivered pursuant to Section 8.01 were equal to or greater than five percent
(5.0%) of the Consolidated Total Assets of the Borrower and the Restricted
Subsidiaries at such date or (b) whose revenues (when combined with the revenues
of such Restricted Subsidiary’s Subsidiaries) at the last day of the most recent
Fiscal Quarter of the Borrower for which financial statements were required to
be delivered pursuant to Section 8.01 were equal to or greater than five percent
(5.0%) of the consolidated revenues of the Borrower and the Restricted
Subsidiaries at the last day of the most recent Fiscal Quarter of the Borrower
for which financial statements were required to be delivered pursuant to
Section 8.01, in each case determined in accordance with GAAP; provided that if,
at any time and from time to time after the Closing Date, Restricted
Subsidiaries that are not Material Subsidiaries have, in the aggregate, (i)
Total Assets (when combined with the assets of such Restricted Subsidiary’s
Subsidiaries) as of the last day of such Fiscal Quarter that equal, or exceed,
seven and a half percent (7.5%) of the Consolidated Total Assets of the Borrower
and the Restricted Subsidiaries as of such date or (ii) revenues (when combined
with the revenues of such Restricted Subsidiary’s Subsidiaries) during such
period that equal or exceed seven and a half percent (7.5%) of the consolidated
revenues of the Borrower and the Restricted Subsidiaries for such period, in
each case, determined in accordance with GAAP, then the term “Material
Subsidiary” shall include each such Restricted Subsidiary (starting with the
Restricted Subsidiary that accounts for the most revenues or Consolidated Total
Assets and then in descending order) necessary to account for at least 92.5% of
the consolidated gross revenues

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and 92.5% of the Consolidated Total Assets, each as described in the previous
sentence, so that the remaining non-Material Subsidiaries no longer satisfy such
condition; provided further that, notwithstanding the foregoing, each Restricted
Subsidiary that owns Oil and Gas Properties for which Borrowing Base credit is
given, or is to be given in an upcoming redetermination, shall be a Material
Subsidiary.
“Maturity Date” means April 19, 2022.
“Maximum Credit Amount” means, as to each Lender, the amount set forth opposite
such Lender’s name on Annex I under the caption “Maximum Credit Amounts”, as the
same may be (a) reduced or terminated from time to time in connection with a
reduction or termination of the Aggregate Maximum Credit Amounts pursuant to
Section 2.06, (b) modified from time to time pursuant to any assignment
permitted by Section 12.04(b) or (c) or otherwise modified pursuant to the terms
of this Agreement (including Section 2.11). As of the Closing Date, the
aggregate Maximum Credit Amounts of the Lenders are $600,000,000.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.
“Mortgage” means each of the mortgages or deeds of trust executed by any one or
more Loan Parties for the benefit of the Secured Parties as security for the
Secured Obligations, together with any supplements, modifications or amendments
thereto and assumptions or assignments of the obligations thereunder by any Loan
Party. “Mortgages” shall mean all of such Mortgages collectively.
“Mortgaged Property” means any Property owned by any Loan Party which is subject
to the Liens existing and to exist under the terms of the Security Instruments.
“Multiemployer Plan” means a multiemployer plan as defined in Section 3(37) or
4001(a)(3) of ERISA.
“Net Proceeds” means the aggregate cash proceeds received by any Group Member in
respect of any Disposition of Property (including any cash subsequently received
upon the sale or other Disposition or collection of any non-cash consideration
received in any sale), any Unwind of Swap Agreements, any incurrence of
Indebtedness, or Casualty Event, net of, unless the Loans have been declared or
become due and payable as a result of an Event of Default described in Section
10.01(h) or Section 10.01(i) (or after the occurrence and during the
continuation of an Event of Default described in Section 10.01(h) or Section
10.01(i)), (a) the direct costs relating to such sale of Property, incurrence of
Indebtedness or any Casualty Event (including legal, accounting and investment
banking fees, and sales commissions paid to unaffiliated third parties), (b)
taxes paid or payable as a result thereof (after taking into account any tax
credits or deductions utilized or reasonably expected to be utilized and any tax
sharing arrangements) and (c) Indebtedness (other than the Secured Obligations)
which is secured by a Lien upon any of the assets being sold that is senior to
any Lien created by the Loan Documents with respect to such assets and which
must be repaid as a result of such sale.
“New Borrowing Base Notice” has the meaning assigned to such term in Section
2.07(d).
“New Debt” has the meaning assigned to such term in the definition of Permitted
Refinancing Indebtedness.
“Non-U.S. Lender” means a Lender, with respect to the Borrower, that is not a
U.S. Person.

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“Notes” means the promissory notes, if any, of the Borrower described in Section
2.02(d) and being substantially in the form of Exhibit A, together with all
amendments, modifications, replacements, extensions and rearrangements thereof.
“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.
“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now
or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including all units created under orders,
regulations and rules of any Governmental Authority) which may affect all or any
portion of the Hydrocarbon Interests; (d) all operating agreements, contracts
and other agreements, including production sharing contracts and agreements,
which relate to any of the Hydrocarbon Interests or the production, sale,
purchase, exchange or processing of Hydrocarbons from or attributable to such
Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be
produced and saved or attributable to the Hydrocarbon Interests, including all
oil in tanks, and all rents, issues, profits, proceeds, products, revenues and
other incomes from or attributable to the Hydrocarbon Interests; (f) all
tenements, hereditaments, appurtenances and Properties in any manner
appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and
(g) all Properties, rights, titles, interests and estates described or referred
to above, including any and all Property, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment, rental
equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, injection wells or other wells, structures,
fuel separators, liquid extraction plants, plant compressors, pumps, pumping
units, gathering systems, tanks and tank batteries, fixtures, valves, fittings,
machinery and parts, engines, boilers, meters, apparatus, equipment, appliances,
tools, implements, cables, wires, towers, casing, tubing and rods, surface
leases, rights-of-way, easements and servitudes together with all additions,
substitutions, replacements, accessions and attachments to any and all of the
foregoing.
“Organizational Documents” means (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to such corporation’s
jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
“Other Connection Taxes” means with respect to any Credit Party, Taxes imposed
as a result of a present or former connection between such Credit Party and the
jurisdiction imposing such Tax (other than connections arising from such Credit
Party having executed, delivered, become a party to, performed its obligations
under, received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to, or enforced, any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.05).

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“Participant” has the meaning assigned to such term in Section 12.04(c).
“Participant Register” has the meaning assigned to such term in Section
12.04(c).
“Patriot Act” has the meaning assigned to such term in Section 12.16.
“Payment in Full” means (a) the Commitments have expired or been terminated, (b)
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 indefeasibly
paid in full (other than contingent indemnification obligations), (c) all
Letters of Credit shall have expired or terminated (or are Cash Collateralized
or otherwise secured to the satisfaction of the Issuing Bank) and all LC
Disbursements shall have been reimbursed and (d) all amounts due under Secured
Swap Agreements shall have been indefeasibly paid in full in cash (or such
Secured Swap Agreements are Cash Collateralized or otherwise secured to the
satisfaction of the Secured Swap Provider) (it is understood that the
Administrative Agent shall be (i) permitted to rely on a certificate of a
Responsible Officer of the Borrower to establish the foregoing in clause (d) and
(ii) entitled to deem that the foregoing clause (d) has occurred with respect to
any Secured Swap Provider if it does not respond to a written request from the
Administrative Agent or the Borrower to confirm that the foregoing clause (d)
has occurred within two (2) Business Days of such request).
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
“Pension Act” means the Pension Protection Act of 2006, as it presently exists
or as it may be amended from time to time, or any successor thereto.
“Perfection Certificate” means a perfection certificate substantially in the
form of Exhibit J.
“Permitted Holder” means any Person that, on the Closing Date, is the beneficial
owner, together with any of its Affiliates (but excluding any operating
portfolio companies of the foregoing Persons), of Equity Interests representing
35% or more of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests of the Borrower at such time.
“Permitted Refinancing Indebtedness” means Indebtedness (for purposes of this
definition, “New Debt”) incurred in exchange for, or proceeds of which are used
to refinance, all of any other Indebtedness (the “Refinanced Indebtedness”);
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
Indebtedness (or, if the Refinanced Indebtedness 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 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 Indebtedness and an average life no shorter than the average life
of the Refinanced Indebtedness and does not restrict the prepayment or repayment
of the Secured Obligations,
(c) such New Debt contains covenants, events of default, guarantees and other
terms which (other than “market” interest rate, fees, funding discounts and
redemption or prepayment premiums as determined at the time of issuance or
incurrence of any such Indebtedness), (i) are “market” terms as determined on
the date of issuance or incurrence and (ii) in any event are not more
restrictive on the Borrower and each Group Member than the terms of this
Agreement (as in effect at the time of such issuance or incurrence),

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(d)    no Subsidiary of the Borrower (other than a Guarantor or a Person who
becomes a Guarantor in connection therewith) is an obligor under such New Debt,
(e)    to the extent such New Debt is secured, the holders of the obligations
secured thereby (or a representative or trustee on their behalf) shall have
entered into an intercreditor agreement in form and substance reasonably
satisfactory to the Administrative Agent (it being understood that any such
intercreditor agreement that is reasonably satisfactory to the Majority Lenders
shall be reasonably satisfactory to the Administrative Agent) (which, for
avoidance of doubt, shall provide that the Liens securing such obligations shall
rank junior to the Liens securing the Secured Obligations and shall only be
secured by the same or a subset of the collateral that secures the Secured
Obligations), and
(f)     such New Debt (and any guarantees thereof) is subordinated in right of
payment to the Secured Obligations (or, if applicable, the Guarantee and
Collateral Agreement) to at least the same extent as the Refinanced Indebtedness
and subordinated on terms satisfactory to the Administrative Agent.
“Permitted Sale of Hydrocarbons” has the meaning assigned to such term in
Section 9.11(a).
“Permitted Second Lien Debt” means junior lien secured Indebtedness issued or
incurred by the Borrower and any guarantees thereof by the Guarantors (including
any Persons becoming Guarantors simultaneously with the incurrence of such
Indebtedness):
(a) the terms of which do not provide for any scheduled repayment, mandatory
redemption or sinking fund obligation prior to the 91st day after the Maturity
Date (other than customary offers to purchase upon a change of control, and
customary acceleration rights after an event of default) and do not restrict the
prepayment or repayment of the Secured Obligations,
(b) the covenants, events of default, guarantees and other terms which (other
than “market” interest rate, fees, funding discounts and redemption or
prepayment premiums as determined at the time of issuance or incurrence of any
such Indebtedness), (i) are “market” terms as determined on the date of issuance
or incurrence and (ii) in any event are not more restrictive on the Borrower and
each Group Member than the terms of this Agreement (as in effect at the time of
such issuance or incurrence),
(c) if such Indebtedness is subordinated Indebtedness in right of payment, the
terms of such Indebtedness provide for customary subordination of such
Indebtedness to the Secured Obligations,
(d) the holders of the obligations secured thereby (or a representative or
trustee on their behalf) shall have entered into an intercreditor agreement in
form and substance reasonably satisfactory to the Administrative Agent (it being
understood that any such intercreditor agreement that is reasonably satisfactory
to the Majority Lenders shall be reasonably satisfactory to the Administrative
Agent) (which, for avoidance of doubt, shall provide that the Liens securing
such obligations shall rank junior to the Liens securing the Secured Obligations
and shall only be secured by the same or a subset of the collateral that secures
the Secured Obligations), and
(e) no Subsidiary of the Borrower (other than a Guarantor or a Person who
becomes a Guarantor in connection therewith) is an obligor under such
Indebtedness.
“Permitted Second Lien Debt Documents” means any document or instrument
(including any guarantee, security agreement or mortgage) issued or executed and
delivered with respect to any Permitted Second Lien Debt by any Loan Party.

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“Permitted Second Lien Debt Obligations” means all advances to, and debts,
liabilities, obligations, covenants and duties of, any Loan Party arising under
any Permitted Second Lien Debt Document, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any bankruptcy or insolvency law naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Permitted Second Lien Debt Obligations of the applicable Loan
Parties under the Permitted Second Lien Debt Documents (and any of their
Restricted Subsidiaries to the extent they have obligations under the Permitted
Second Lien Debt Documents) include the obligation (including guarantee
obligations) to pay principal, interest, charges, expenses, fees, attorney
costs, indemnities and other amounts payable by any such Loan Party under any
Permitted Second Lien Debt Document.
“Permitted Unsecured Debt” means unsecured senior, senior subordinated or
subordinated Indebtedness issued or incurred by the Borrower and any guarantees
thereof by the Guarantors (including any Persons becoming Guarantors
simultaneously with the incurrence of such Indebtedness):
(a) that does not restrict the prepayment or repayment of the Secured
Obligations,
(b) that has terms which do not provide for the maturity of such Indebtedness to
be or any scheduled repayment, mandatory redemption or sinking fund obligation
to occur prior to ninety-one (91) days (or one (1) year, if provided by any
holder of the Borrower’s Equity Interests) after the Maturity Date (other than
customary offers to purchase upon a change of control and customary acceleration
rights after an event of default),
(c) where the covenants, events of default, guarantees and other terms which
(other than “market” interest rate, fees, funding discounts and redemption or
prepayment premiums as determined at the time of issuance or incurrence of any
such Indebtedness), (i) are “market” terms as determined on the date of issuance
or incurrence and (ii) in any event are not more restrictive on the Borrower and
each Group Member than the terms of this Agreement (as in effect at the time of
such issuance or incurrence),
(d) where, if such Indebtedness is subordinated Indebtedness in right of
payment, the terms of such Indebtedness provide for customary subordination of
such Indebtedness to the Secured Obligations, and
(e) where no Subsidiary of the Borrower (other than a Guarantor or a Person who
becomes a Guarantor in connection therewith) is an obligor under such
Indebtedness.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Petroleum Industry Standards” means the Definitions for Oil and Gas Reserves
promulgated by the Society of Petroleum Engineers (or any generally recognized
successor) as in effect at the time in question.
“Plan” means any “employee pension benefit plan”, as defined in Section 3(2) of
ERISA, other than a Multiemployer Plan, that is subject to Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA and which (a) is currently or
hereafter sponsored, maintained or contributed to by a Group Member or an ERISA
Affiliate or (b) was at any time during the six calendar years immediately
preceding the date hereof, sponsored, maintained or contributed to by a Group
Member or an ERISA Affiliate or to which a Group Member or an ERISA Affiliate
has any liability.

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“Plan of Reorganization” means the Plan of Reorganization as defined in the
Existing Credit Agreement (i.e., the Joint Plan of Reorganization of the Debtors
(as defined in the Existing Credit Agreement) and Debtors in Possession Pursuant
to Chapter 11 of Bankruptcy Code filed with the Bankruptcy Court (as defined in
the Existing Credit Agreement) on February 5, 2016 [Docket No. 243], as amended,
or supplemented in accordance with its terms).
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
Such rate is set by the Administrative Agent as a general reference rate of
interest, taking into account such factors as the Administrative Agent may deem
appropriate; it being understood that many of the Administrative Agent’s
commercial or other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any customer and that
the Administrative Agent may make various commercial or other loans at rates of
interest having no relationship to such rate.
“Prohibited Transaction” has the meaning assigned to such term in Section 406 of
ERISA and Section 4975(c) of the Code.
“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including cash, securities,
accounts and contract rights.
“Proposed Borrowing Base” has the meaning assigned to such term in Section
2.07(c)(i).
“Proposed Borrowing Base Notice” has the meaning assigned to such term in
Section 2.07(c)(ii).
“Proved Reserves” means oil and gas mineral reserves that, in accordance with
Petroleum Industry Standards, are classified as both “Proved Reserves” and one
of the following: (a) “Developed Producing Reserves”, (b) “Developed
Non-Producing Reserves” or (c) “Undeveloped Reserves”.
“Public-Sider” means a Lender whose representatives may trade in securities of
the Borrower or any of their respective Subsidiaries while in possession of the
financial statements provided by the Borrower under the terms of this Agreement.
“Quotation Day” means, with respect to any Eurodollar Loan for any Interest
Period, two Business Days prior to the commencement of such Impacted Interest
Period.
“Redemption” means with respect to any Indebtedness, 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
Indebtedness. “Redeem” has the correlative meaning thereto.
“Redetermination Date” means, with respect to any Scheduled Redetermination or
any Interim Redetermination, the date that the redetermined Borrowing Base
related thereto becomes effective pursuant to Section 2.07(d).
“Reference Period” has the meaning assigned to such term in the definition of
“EBITDA”.
“Refinanced Indebtedness” has the meaning assigned to such term in the
definition of “Permitted Refinancing Indebtedness”.
“Register” has the meaning assigned to such term in Section 12.04(b)(iv).

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“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and such
Person’s Affiliates.
“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
or the regulations issued thereunder, with respect to a Plan, other than those
events as to which the 30-day notice has been waived in regulations issued by
the PBGC.
“Required Lenders” means (a) at any time while no Loans or LC Exposure are
outstanding, Lenders having at least sixty-six and two thirds percent (66-2/3%)
of the Aggregate Maximum Credit Amounts and (b) at any time while any Loans or
LC Exposure are outstanding, Lenders holding at least sixty-six and two thirds
percent (66-2/3%) of the outstanding aggregate principal amount of the Loans or
participation interests in Letters of Credit (without regard to any sale by a
Lender of a participation in any Loan under Section 12.04(c)).
“Reserve Report” means the Initial Reserve Report and any other subsequent
report, in form and substance reasonably satisfactory to the Administrative
Agent, setting forth, as of the dates set forth in Section 8.11(a) (or such
other date in the event of an Interim Redetermination) the oil and gas reserves
attributable to the Oil and Gas Properties of the Borrower and the Guarantors,
together with a projection of the rate of production and future net income,
taxes, operating expenses and capital expenditures with respect thereto as of
such date, based upon the economic and pricing assumptions consistent with the
Administrative Agent’s lending requirements at the time.
“Reserve Report Certificate” has the meaning assigned to such term in Section
8.11(c).
“Responsible Officer” means, as to any Person, the chief executive officer, the
president, any Financial Officer or general counsel of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.
“Restricted Payment” means any dividend or other distribution or return of
capital (whether in cash, securities or other Property) with respect to any
Equity Interests in any Person, or any payment (whether in cash, securities or
other Property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of (a) any such Equity Interests or (b) any option, warrant or other right to
acquire any such Equity Interests.
“Restricted Subsidiary” means any Subsidiary of the Borrower that is not an
Unrestricted Subsidiary.
“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans and its LC
Exposure at such time.
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.

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“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (as of the Closing Date, Belarus,
Burundi, Central African Republic, Crimea, Cuba, Iran, Libya, North Korea,
Somalia, Sudan 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 or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b).
“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by the U.S. government,
including those administered by OFAC or the U.S. Department of State.
“Scheduled Redetermination” has the meaning assigned to such term in Section
2.07(b).
“Scheduled Redetermination Date” means the date on which a Borrowing Base that
has been redetermined pursuant to a Scheduled Redetermination becomes effective
as provided in Section 2.07(d).
“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.
“Secured Cash Management Bank” means any Lender or any Affiliate of a Lender
that is a counterparty to a Cash Management Agreement with the Borrower or any
other Group Member.
“Secured Cash Management Obligations” means all obligations of the Borrower or
any Subsidiary arising from time to time under any Cash Management Agreement
with a Secured Cash Management Bank; provided that if such Secured Cash
Management Bank ceases to be a Lender or an Affiliate of a Lender hereunder,
such obligations owed to such Secured Cash Management Bank shall no longer be
Secured Cash Management Obligations.
“Secured Obligations” means any and all amounts owing or to be owing by any Loan
Party (a) to the Administrative Agent, any Issuing Bank, any Lender or any other
Person under any Loan Document or (b) to any Secured Swap Provider under a
Secured Swap Agreement or Secured Cash Management Bank under Secured Cash
Management Obligations and for clauses (a) and (b) all renewals, extensions
and/or rearrangements of any of the foregoing, in each case, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising (including interest accruing
after the maturity of the Loans and LC Disbursements and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding);
provided that solely with respect to any Group Member that is not an “eligible
contract participant” under the Commodity Exchange Act, Excluded Swap
Obligations of such Group Member shall in any event be excluded from “Secured
Obligations” owing by such Group Member.
“Secured Parties” means, collectively, the Administrative Agent, each Issuing
Bank, the Lenders, each Secured Cash Management Bank, each Secured Swap
Provider, and any other Person owed Secured Obligations. “Secured Party” means
any of the foregoing individually.
“Secured Swap Agreement” means a Swap Agreement between (a) any Loan Party and
(b) a Secured Swap Provider.

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“Secured Swap Provider” means, with respect to any Swap Agreement, (a) a Lender
or an Affiliate of a Lender who is the counterparty to any such Swap Agreement
with a Loan Party and (b) any Person who was a Lender or an Affiliate of a
Lender at the time when such Person entered into any such Swap Agreement who is
a counterparty to any such Swap Agreement with a Loan Party; provided that any
such Secured Swap Provider that ceases to be a Lender or an Affiliate of a
Lender shall continue to be a “Secured Swap Provider” for purposes of this
Agreement to the extent that such Secured Swap Provider entered into a Secured
Swap Agreement with the Borrower or any of its Subsidiaries prior to the date
hereof or at the time such Secured Swap Provider was a Lender (or Affiliate of a
Lender) hereunder and such Secured Swap Agreement remains in effect and there
are remaining obligations under such Secured Swap Agreement (but excluding any
transactions, confirms, or trades entered into after such Person ceases to be a
Lender or an Affiliate of a Lender).
“Securities Account” has the meaning assigned to such term in the UCC.
“Security Instruments” means (a) the Guarantee and Collateral Agreement, (b) the
Mortgages, (c) any Perfection Certificate, (d) any Control Agreement, (e) any
intercreditor agreement, (f) the other agreements, instruments or certificates
described or referred to in Exhibit F-1 and (g) any and all other agreements,
instruments, consents or certificates now or hereafter executed and delivered by
the Borrower, the other Loan Parties or any other Person, in each case in
connection with, or as security for the payment or performance of the Secured
Obligations, as such agreements may be amended, modified, supplemented or
restated from time to time.
“Solvency Certificate” means a solvency certificate signed by a Financial
Officer in substantially the form of Exhibit E hereto.
“Specified Change of Control” means a “Change of Control” (or any other defined
term having a similar purpose or meaning) as defined in any Permitted Unsecured
Debt or Permitted Second Lien Debt.
“Specified Indebtedness” has the meaning assigned to such term in Section
9.04(b).
“Specified Time” means 11:00 A.M., London time.
“Statutory Reserve Rate” means a fraction (expressed as a decimal) not to exceed
the number one, 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 basis, marginal, special, emergency or supplemental reserves)
expressed as a decimal established by any Governmental Authority of the Board or
any other Governmental Authority having jurisdiction 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, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a

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“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a direct or
indirect Subsidiary or Subsidiaries of the Borrower.
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement, whether exchange
traded, “over-the-counter” or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; 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 any Group Member shall be a
Swap Agreement.
“Swap Obligation” means, with respect to any person, any obligation to pay or
perform under any Swap.
“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 any unpaid
amounts 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.
“Syndication Agent” means, collectively, the Syndication Agents identified on
the cover page of this Agreement.
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), value added taxes, or
any other goods and services, use or sales taxes, assessments, fees or other
charges imposed by any Governmental Authority, including any interest, additions
to tax or penalties applicable thereto.
“Termination Date” means the earlier of the Maturity Date and the date of
termination of the Commitments in accordance with the terms of this Agreement.
“Total Assets” means, as of any date of determination with respect to any
Person, the amount that would, in accordance with GAAP, be set forth opposite
the caption “total assets” (or any like caption) on a balance sheet of such
Person at such date.
“Total Debt” means, at any date, all Indebtedness (other than Indebtedness under
clauses (f) with respect to guarantees of Indebtedness not constituting Total
Debt, (i) and (l) of the definition thereof) of the Borrower and the
Consolidated Restricted Subsidiaries on a consolidated basis, excluding the
undrawn portion and/or contingent obligations arising under, or in respect of
letters of credit, bank guarantees and surety or other bonds and similar
instruments; provided that net Swap Obligations to the extent such obligations
are due and payable and not paid on such date shall constitute Total Debt.
“Transactions” means, with respect to (a) the Borrower, the execution, delivery
and performance by the Borrower of this Agreement, 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, the Borrower’s grant of the
security interests and provision of collateral under the Security Instruments
and Borrower’s grant of Liens on Mortgaged Properties (if applicable) and other
Properties pursuant to the Security Instruments and (b) each Loan Party, the
execution, delivery and performance by such Loan Party of each Loan Document to
which it is a party, the guaranteeing of the Secured Obligations and the other
obligations under the Guarantee

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and Collateral Agreement by such Loan Party and (c) each Loan Party, such Loan
Party’s grant of the security interests and provision of collateral under the
Security Instruments, and the grant of Liens by such Loan Party on Mortgaged
Properties (if applicable) and other Properties pursuant to the Security
Instruments.
“Transferee” means any Assignee or Participant.
“Type” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.
“UCC” means the Uniform Commercial Code of the State of New York or of any other
state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.
“Unrestricted Subsidiary” means any Subsidiary of the Borrower which the
Borrower has designated in writing to the Administrative Agent to be an
Unrestricted Subsidiary pursuant to Section 8.18 and satisfies the requirements
to be an Unrestricted Subsidiary as set forth in Section 8.18.
“Unwind” means, with respect to any Swap Agreement, the early termination,
unwind, cancelation or other Disposition of any such Swap Agreement. “Unwound”
shall have a meaning correlative to the foregoing.
“U.S. Person” means a “United States person” within the meaning of Section
7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning assigned such term in Section
5.03(g)(ii)(B)(3).
“Volumetric Production Payments” means production payment obligations recorded
as deferred revenue in accordance with GAAP, together with all undertakings and
obligations in connection therewith.
“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower, the
Guarantors and/or 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” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented, restated or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications

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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” and the word “through”
means “to and including” and (f) any reference herein to Articles, Sections,
Annexes, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Annexes, Exhibits and Schedules to, this Agreement. The use of
the phrase “subject to” as used in connection with Excepted Liens or otherwise
and the permitted existence of any Excepted Liens or any other Liens shall not
be interpreted to expressly or impliedly subordinate any Liens granted in favor
of the Administrative Agent and the other Secured Parties as there is no
intention to subordinate the Liens granted in favor of the Administrative Agent
and the other Secured Parties. No provision of this Agreement or any other Loan
Document shall be interpreted or construed against any Person solely because
such Person or its legal representative drafted such provision.
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 delivered pursuant to Section 7.04(a), except for
Accounting Changes (as defined below) with which the Borrower’s independent
certified public accountants concur and which are disclosed to the
Administrative Agent on the next date on which financial statements are required
to be delivered to the Lenders pursuant to Section 8.01(a). In the event that
any “Accounting Change” shall occur and such change results in a change in the
method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower’s financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Majority Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. “Accounting
Changes” refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
Section 1.06    Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
Section 1.07    Timing of Payment or Performance. When the payment of any
obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day, the date of
such payment (other than as described in the definition of Interest Period) or
performance shall extend to the immediately succeeding Business Day.
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 from time to time on
any Business Day during the Availability Period

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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 the terms of this Agreement, 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 and 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 $100,000 and not less than
$100,000. At the time that each ABR Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $100,000 and not less
than $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 2.09(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 fifteen
(15) 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 a Lender shall make a written request to the Administrative
Agent and the Borrower to have its Loans evidenced by a Note, then, for each
such Lender, the Borrower shall execute and deliver a single Note of the
Borrower dated, in the case of (i) any Lender party hereto as of the date of
this Agreement, as of the date of this Agreement or (ii) any Lender that becomes
a party hereto pursuant to an Assignment and Assumption or Section 2.11, as of
the effective date of the Assignment and Assumption or the relevant Incremental
Increase, payable to such Lender (and, for avoidance of doubt, its registered
assigns) in a principal amount equal to its Maximum Credit Amount as in effect
on such date, and otherwise duly completed. Upon request from a Lender, in the
event that any such Lender’s Maximum Credit Amount increases or decreases for
any reason (whether pursuant to Section 2.06, Section 2.11, Section 12.04(b) or
otherwise), the Borrower shall deliver or cause to be delivered on the effective
date of such increase or decrease, a new Note payable to such Lender (and, for
avoidance of doubt, its registered assigns) in a principal amount equal to its
Maximum Credit Amount after giving effect to such increase or decrease, and
otherwise duly completed. The date, amount, Type, interest rate and, if
applicable, Interest Period of each Loan made by each Lender, and all payments
made on account of the principal thereof, may 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; provided that the failure to make any
such notation or to attach a schedule shall not affect any Lender’s or the
Borrower’s rights or obligations in respect of such Loans or affect the validity
of such transfer by any Lender of its Note.

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Section 2.03    Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 A.M., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, one Business Day before the date of the proposed Borrowing
(provided that any such notice of an ABR Borrowing to finance payments required
by Section 2.09(e) may be given not later than 10:00 A.M., New York City time,
on the date of the proposed borrowing); provided that no such notice shall be
required for any deemed request of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as provided in Section 2.09(e). Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in 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”; and
(v)    the location and number of the Borrower’s account to which funds are to
be disbursed, which shall comply with the requirements of Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Each Borrowing
Request shall constitute a representation that the amount of the requested
Borrowing shall not cause the total Revolving Credit Exposures to exceed the
total Commitments (i.e., the lesser of the Aggregate Maximum Credit Amounts and
the then effective Borrowing Base) on the date of such Borrowing.
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 unless otherwise precluded by the
terms hereof and, if 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.

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(b)    Interest Election Requests. To make an election pursuant to this Section
2.04, the Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under Section
2.03 if the Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery, telecopy or other electronic communication to the
Administrative Agent of a written Interest Election Request signed by the
Borrower.
(c)    Information in Interest Election Requests. Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.02:
(i)    the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to Section 2.04(c)(iii) and Section
2.04(c)(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;
(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
(d)    Notice to Lenders by the Administrative Agent. Promptly following receipt
of an Interest Election Request, the Administrative Agent shall advise each
Lender of the details thereof and of such Lender’s portion of each resulting
Borrowing.
(e)    Effect of Failure to Deliver Timely Interest Election Request and Events
of Default and Borrowing Base Deficiencies on Interest Election. If the Borrower
fails to deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an Eurodollar Borrowing with a one
month Interest Period. Notwithstanding any contrary provision hereof, if (i) a
Borrowing Base Deficiency has occurred and is continuing, no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing with an
Interest Period longer than one month (and any Interest Election Request that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be deemed to request an Interest Period of one
month) and (ii) an Event of Default has occurred and is continuing, 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, 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.

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(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 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent and designated by the Borrower
in the applicable Borrowing Request; provided that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.09(e) shall be
remitted by the Administrative Agent to the applicable 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 10:00 A.M. New York City time
on the proposed date of any Borrowing that such Lender will not make available
to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.05(a) and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.
Section 2.06    Termination and Reduction of Aggregate Maximum Credit Amounts.
(a)    Scheduled Termination of Commitments. Unless previously terminated, the
Commitments shall terminate on the Maturity Date. If at any time the Aggregate
Maximum Credit Amounts 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 Aggregate Credit Amounts.
(i)    The Borrower may at any time terminate, or from time to time reduce, the
Aggregate Maximum Credit Amounts; provided that (A) each reduction of the
Aggregate Maximum Credit Amounts shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 and (B) the Borrower shall
not terminate or reduce the Aggregate Maximum Credit Amounts if, after giving
effect to any concurrent prepayment of the Loans in accordance with Section
3.04(b), 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 Maximum Credit Amounts under Section
2.06(b)(i) at least three Business Days prior to the effective date of such
termination or reduction (or such shorter time as the Administrative Agent may
agree) in writing, specifying such election and the effective date thereof.
Promptly following receipt of any notice, the Administrative Agent shall advise
the Lenders of the contents thereof. Each notice delivered by the Borrower
pursuant to this Section 2.06(b)(ii) shall be irrevocable; provided that a
notice of

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termination of the Aggregate Maximum Credit Amounts delivered by the Borrower
may state that such notice is conditioned upon the effectiveness of other credit
or debt facilities or the consummation of a Material Acquisition or Material
Disposition or an issuance of Equity Interests, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Aggregate Maximum Credit Amounts shall be
permanent and may not be reinstated. Each reduction of the Aggregate Maximum
Credit Amounts shall be made ratably among the Lenders in accordance with each
Lender’s Applicable Percentage.
Section 2.07    Borrowing Base.
(a)    Initial Borrowing Base. For the period from and including the Closing
Date to but excluding the first Redetermination Date, the amount of the
Borrowing Base shall be $330,000,000. Notwithstanding the foregoing, the
Borrowing Base may be subject to further adjustments from time to time pursuant
to the Borrowing Base Adjustment Provisions.
(b)    Scheduled and Interim Redeterminations. The Borrowing Base shall be
redetermined on November 1 2017 and semi-annually thereafter in accordance with
this Section 2.07 (each such redetermination, a “Scheduled Redetermination”),
and, subject to Section 2.07(d), such redetermined Borrowing Base shall become
effective and applicable to the Borrower, the Administrative Agent, the Issuing
Bank(s) and the Lenders on May 1st and November 1st of each year (or as soon as
possible thereafter as contemplated by Section 2.07(d)(i)). The Borrower may, by
notifying the Administrative Agent thereof, one time (i) prior to the first
Scheduled Redetermination and (ii) between each Scheduled Redetermination, elect
to cause the Borrowing Base to be redetermined in accordance with this Section
2.07 and the Administrative Agent may, or at the direction of the Required
Lenders shall, by notifying the Borrower thereof, one-time (A) prior to the
first Scheduled Redetermination and (B) between any Scheduled Redeterminations
elect to cause the Borrowing Base to be redetermined (each such redetermination,
an “Interim Redetermination”) in accordance with this Section 2.07.
(c)    Scheduled and Interim Redetermination Procedure.
(i)    Each Scheduled Redetermination and each Interim Redetermination shall be
effectuated as follows: upon receipt by the Administrative Agent of (A) the
Reserve Report for such redetermination and the related Reserve Report
Certificate (unless waived by the Administrative Agent in the case of an Interim
Redetermination) and (B) such other reports, data and supplemental information,
including the information provided pursuant to Section 8.11(c), as may, from
time to time, be reasonably requested by the Administrative Agent or a Lender
(the Reserve Report, such Reserve Report Certificate and such other reports,
data and supplemental information being the “Engineering Reports”), the
Administrative Agent shall evaluate the information contained in the Engineering
Reports and shall propose a new Borrowing Base (the “Proposed Borrowing Base”)
based upon such information and such other information (including the status of
title information with respect to the Oil and Gas Properties as described in the
Engineering Reports and the existence of any other Indebtedness) as the
Administrative Agent deems appropriate in its sole discretion and consistent
with its oil and gas lending criteria as it exists at the particular time. In no
event shall the Proposed Borrowing Base exceed the Aggregate Maximum Credit
Amounts.
(ii)    The Administrative Agent shall thereafter notify the Borrower and the
Lenders of the Proposed Borrowing Base (the “Proposed Borrowing Base Notice”):
(A)    in the case of a Scheduled Redetermination (1) if the Administrative
Agent shall have received the Engineering Reports required to be delivered by
the Borrower pursuant to Section 8.11(a) and Section 8.11(c) in a timely and
complete manner, then before or on April 15th

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or October 15th, as the case may be, of such year following the date of delivery
or (2) if the Administrative Agent shall not have received the Engineering
Reports required to be delivered by the Borrower pursuant to Section 8.11(a) and
Section 8.11(c) in a timely and complete manner, then promptly after the
Administrative Agent has received complete Engineering Reports from the Borrower
and has had a reasonable opportunity to determine the Proposed Borrowing Base in
accordance with Section 2.07(c)(i); and
(B)    in the case of an Interim Redetermination, promptly, and in any event, in
the case of a Borrower requested Interim Redetermination within fifteen (15)
days after the Administrative Agent has received the required Engineering
Reports (or such later date to which the Borrower and the Administrative Agent
agree).
(iii)    Subject to Section 2.10(b) and Section 12.02(b)(ii) with respect to any
Defaulting Lender, any Proposed Borrowing Base that would (A) increase the
Borrowing Base then in effect must be approved by all Lenders as provided in
this Section 2.07(c)(iii) and (B) decrease or maintain the Borrowing Base then
in effect must be approved by the Required Lenders as provided in this Section
2.07(c)(iii). Upon receipt of the Proposed Borrowing Base Notice, each Lender
shall have fifteen (15) days (or such shorter period as the Administrative Agent
may permit) to agree with the Proposed Borrowing Base or disagree with the
Proposed Borrowing Base by proposing an alternate Borrowing Base. If, at the end
of such 15-day period (or such shorter period as the Administrative Agent may
permit), all of the Lenders, in the case of a Proposed Borrowing Base that would
increase the Borrowing Base then in effect, or the Required Lenders, in the case
of a Proposed Borrowing Base that would decrease or maintain the Borrowing Base
then in effect, have approved, as aforesaid, then the Proposed Borrowing Base
shall become the new Borrowing Base, effective on the date specified in Section
2.07(d). If, however, at the end of such 15-day period (or such shorter period
as the Administrative Agent may permit), all of the Lenders or the Required
Lenders, as applicable, have not approved the Proposed Borrowing Base, as
aforesaid, then the Administrative Agent shall poll the Lenders to ascertain the
highest Borrowing Base then acceptable to a number of Lenders sufficient to
constitute the Required Lenders and, so long as such amount does not increase
the Borrowing Base then in effect, such amount shall become the new Borrowing
Base, effective on the date specified in Section 2.07(d) (provided that, if the
Administrative Agent shall have polled the Lenders and ascertained that the
highest Borrowing Base then acceptable to all of the Lenders increases the
Borrowing Base then in effect, such amount shall become the new Borrowing Base,
effective on the date specified in Section 2.07(d)).
(d)    Effectiveness of a Redetermined Borrowing Base. After a redetermined
Borrowing Base is approved by all of the Lenders or the Required Lenders
(subject to Section 2.10(b) and Section 12.02(b)(ii) with respect to any
Defaulting Lender), as applicable, pursuant to Section 2.07(c)(iii), the
Administrative Agent shall notify the Borrower and the Lenders of the amount of
the redetermined Borrowing Base (such notice, the “New Borrowing Base Notice”)
and such amount shall become the new Borrowing Base effective and applicable to
the Borrower, the Administrative Agent, the Issuing Bank(s) and the Lenders:
(i)    in the case of a Scheduled Redetermination, (A) if the Administrative
Agent shall have received the Engineering Reports required to be delivered by
the Borrower pursuant to Section 8.11(a) and Section 8.11(c) in a timely and
complete manner, then on May 1st or November 1st of each year, as applicable,
following such notice or as soon as possible thereafter, pursuant to the
procedures set forth in Section 2.07(c)(iii), or (B) if the Administrative Agent
shall not have received the Engineering Reports required to be delivered by the
Borrower pursuant to Section 8.11(a) and Section 8.11(c) in a timely and
complete manner, then on the Business Day next succeeding delivery of such New
Borrowing Base Notice; and

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(ii)    in the case of an Interim Redetermination, on the Business Day next
succeeding delivery of such New Borrowing Base Notice.
Such amount shall then become the Borrowing Base until the next Scheduled
Redetermination Date, the next Interim Redetermination Date or the next
adjustment to the Borrowing Base pursuant to the Borrowing Base Adjustment
Provisions, whichever occurs first. Notwithstanding the foregoing, no Scheduled
Redetermination or Interim Redetermination shall become effective until the New
Borrowing Base Notice related thereto is received by the Borrower.
Section 2.08    Borrowing Base Adjustment Provisions.
(a)    Reduction of Borrowing Base Upon Asset Dispositions and Termination of
Swap Positions. If the Borrower or one of the other Group Members Disposes of
Oil and Gas Properties constituting Proved Reserves (but excluding any
Disposition to a Loan Party or from a non-Loan Party to a non-Loan Party, in
each case, subject to prior written notice) or any Equity Interests in any
Person owning Oil and Gas Properties constituting Proved Reserves (but excluding
any Disposition to a Loan Party or from a non-Loan Party to a non-Loan Party, in
each case, subject to prior written notice), or Unwinds Swap Agreements and (i)
the Borrowing Base Value attributable to such Disposed of Oil and Gas Property
(or the Oil and Gas Properties owned by any Group Member whose Equity Interests
were sold) plus (ii) the Borrowing Base Value attributable to such Unwound Swap
Agreements, since the later of (x) the last Redetermination Date and (y) the
last adjustment of the Borrowing Base pursuant to this Section 2.08(a) is in
excess of five percent (5%) of the Borrowing Base as then in effect (as
reasonably determined by the Administrative Agent), individually or in the
aggregate, then the Borrowing Base will be automatically reduced by an amount
equal to the value attributable to such Oil and Gas Properties (or such Oil and
Gas Properties owned by any Subsidiary whose Equity Interests were sold) or such
Unwound Swap Agreement in the current Borrowing Base; provided that the
Administrative Agent shall promptly inform the Borrower of the amount of the
adjusted Borrowing Base. For the purposes of this Section 2.08(a), a Disposition
of Oil and Gas Properties shall be deemed to include the designation of a
Restricted Subsidiary owning Oil and Gas Properties constituting Proved Reserves
as an Unrestricted Subsidiary and the Disposition of Oil and Gas Properties, or
Equity Interests in any Person owning Oil and Gas Properties constituting Proved
Reserves, to an Unrestricted Subsidiary.
(b)    Reduction of Borrowing Base Related to Title. Pursuant to Section
8.12(c), if the Administrative Agent or Required Lenders have adjusted the
Borrowing Base, so that, after giving effect to such reduction, the Borrower
will satisfy the requirements of Section 8.12(c), the Administrative Agent shall
promptly notify the Borrower in writing and, upon receipt of such notice, the
new Borrowing Base will simultaneously become effective.
(c)    Reduction of Borrowing Base Upon Incurrence of Permitted Second Lien Debt
and/or Permitted Unsecured Debt. Upon the issuance or incurrence of any
Permitted Second Lien Debt, Permitted Unsecured Debt or Permitted Refinancing
Indebtedness in an aggregate principal amount in excess of the Refinanced
Indebtedness (other than Permitted Second Lien Debt or Permitted Unsecured Debt
constituting Permitted Refinancing Indebtedness incurred to refinance such
Indebtedness, but only to the extent that the aggregate principal amount of
Permitted Refinancing Indebtedness does not exceed principal amount of the
Refinanced Indebtedness), the Borrowing Base then in effect shall be
automatically reduced by an amount equal to the product of 0.25 multiplied by
the stated principal amount of such Permitted Unsecured Debt, Permitted Second
Lien Debt or, with respect to such Permitted Refinancing Indebtedness, the
extent the aggregate principal amount of such Indebtedness exceeds the
Refinanced Indebtedness, as applicable, without

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regard to any original issue discount, and the Borrowing Base as so reduced
shall become the new Borrowing Base on the Business Day of such issuance or
incurrence.
Section 2.09    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 other Loan Party, in a form reasonably
acceptable to the Administrative Agent and the applicable Issuing Bank, at any
time and from time to time during the period from the Closing Date until the day
which is five (5) Business Days prior to the end of the Availability Period;
provided that, in addition to the conditions set forth in Section 6.02, the
Borrower may not request the issuance, amendment, renewal or extension of
Letters of Credit hereunder if (i) the LC Exposure would exceed the LC
Commitment or (ii) the total Revolving Credit Exposures would exceed the
aggregate Commitments of the Lenders (i.e., the lesser of the Aggregate Maximum
Credit Amounts and the then effective Borrowing Base) (collectively, the “LC
Availability Requirements”). In the event of any inconsistency between the terms
and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the applicable Issuing Bank relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.
(b)    Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the applicable Issuing Bank) to the Issuing Bank and
the Administrative Agent (not less than three (3) Business Days in advance of
the requested date of issuance, amendment, renewal or extension) a notice:
(i)    requesting the issuance of a Letter of Credit or identifying the Letter
of Credit to be amended, renewed or extended;
(ii)    specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day);
(iii)    specifying the date on which such Letter of Credit is to expire (which
shall comply with Section 2.09(c));
(iv)    specifying the amount of such Letter of Credit; and
(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.
Each notice shall constitute a representation that, after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, the LC
Availability Requirements will be satisfied on the date of such issuance,
amendment, renewal or extension.
If requested by the applicable 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.
(c)    Expiration Date. Each Letter of Credit shall expire (or be subject to
termination by notice from the Issuing Bank to the beneficiary thereof) at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or

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extension of a Letter of Credit, one year after such renewal or extension) and
(ii) the date that is five Business Days prior to the Maturity Date.
(d)    Participations. By the issuance of a Letter of Credit (or an amendment to
a Letter of Credit increasing the amount thereof) and without any further action
on the part of the applicable Issuing Bank or the Lenders, such Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from such 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 such Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the
date due as provided in Section 2.09(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 2.09(d) in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default, the existence of a Borrowing Base Deficiency or
reduction or termination of the Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(e)    Reimbursement. If an Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 12:00 noon, New York City time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 A.M., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 12:00 noon, New York City time, on the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
unless the Borrower has notified the relevant Issuing Bank and Administrative
Agent that it will, and does, reimburse such LC Disbursement by the required
date and time, the Borrower shall, subject to the satisfaction of the conditions
to Borrowing set forth in Section 6.02, 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 applicable
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 2.09(e), the Administrative Agent shall distribute such payment to
the applicable Issuing Bank or, to the extent that Lenders have made payments
pursuant to this Section 2.09(e) to reimburse the applicable 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 2.09(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 2.09(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly

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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 any other Loan Document, 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 2.09(f), constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised all
requisite care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g)    Disbursement Procedures. An Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. An Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy or
other electronic transmission) 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 applicable Issuing Bank and the
Lenders with respect to any such LC Disbursement.
(h)    Interim Interest. If an Issuing Bank shall make any LC Disbursement,
then, until the Borrower shall have reimbursed such Issuing Bank for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.09(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 2.09(h) shall be for the
account of such Issuing Bank, except that interest accrued on and after the date
of payment by any Lender pursuant to Section 2.09(e) to reimburse such Issuing
Bank shall be for the account of such Lender to the extent of such payment.
(i)    Replacement of the Issuing Bank. An Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the

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successor Issuing Bank. The Administrative Agent shall notify the Lenders of any
such replacement of the Issuing Bank. At the time any such replacement shall
become effective, the Borrower shall pay all unpaid fees accrued for the account
of the replaced Issuing Bank pursuant to Section 3.05(b). From and after the
effective date of any such replacement, (i) the successor Issuing Bank shall
have all the rights and obligations of the replaced 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 also be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit. 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 Issuing Bank shall be replaced in accordance with
this Section 2.09(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 2.09(j), (ii) the LC Exposure exceeds the LC Commitment at any time as a
result of a reduction in the Borrowing Base, (iii) the Borrower is required to
pay to the Administrative Agent the excess attributable to an LC Exposure in
connection with any prepayment pursuant to Section 3.04(c) or (iv) the Borrower
is required to Cash Collateralize a Defaulting Lender’s LC Exposure pursuant to
Section 2.11, 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 105% of (A) in the case of an
Event of Default, the LC Exposure (net of any Cash Collateral already held at
the applicable time by the Administrative Agent with respect to such LC
Exposure) and (B) in the case of the LC Exposure exceeding the LC Commitment,
the amount of such excess, and (C) in the case of a payment required by Section
3.04(c), the amount of such excess as provided in Section 3.04(c), as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such Cash Collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower or any other Group Member 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(s) 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 2.09(j) shall be absolute and unconditional, without regard to
whether any beneficiary of any such Letter of Credit has attempted to draw down
all or a portion of such amount under the terms of a Letter of Credit, and, to
the fullest extent permitted by applicable law, shall not be subject to any
defense or be affected by a right of set-off, counterclaim or recoupment which
the Borrower or any of its Subsidiaries may now or hereafter have against any
such beneficiary, the Issuing Bank(s), the Administrative Agent, the Lenders or
any other Person for any reason whatsoever. Such deposit shall be held as
collateral securing the payment and performance of the Borrower’s and the
Guarantor’s obligations under this Agreement and the other Loan Documents. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not

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bear interest. Interest or profits, if any, on such investments shall accumulate
in such account. Moneys in such account shall be applied by the Administrative
Agent to reimburse the applicable Issuing Bank(s) for LC Disbursements for which
it has not been reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated, be
applied to satisfy other obligations of the Borrower and the Guarantors under
this Agreement or the other Loan Documents. If the Borrower is required to
provide an amount of Cash Collateral hereunder as a result of the occurrence of
an Event of Default, and the Borrower is not otherwise required to pay to the
Administrative Agent the excess attributable to an LC Exposure in connection
with any prepayment pursuant to Section 3.04(c), then such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived.
Section 2.10    Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:
(a)    Commitment Fees. Commitment fees shall cease to accrue on the unfunded
portion of the Commitment of such Defaulting Lender pursuant to Section 3.05(a).
(b)    Waivers and Amendments. The Maximum Credit Amount and the principal
amount of the Loans and participation interests in Letters of Credit of the
Defaulting Lenders (if any) shall not be included in determining whether the
Majority Lenders or Required Lenders, as applicable, have taken or may take any
action hereunder (including any consent to any amendment, waiver or other
modification pursuant to Section 12.02); provided that, without prejudice to the
terms of Section 12.02, this clause (b) shall not apply to the vote of a
Defaulting Lender in the case of an amendment, waiver or other modification
requiring the consent of such Lender or each Lender adversely affected thereby.
(c)    if any LC Exposure exists at the time such Lender becomes a Defaulting
Lender then:
(i)    all or any part of the LC Exposure of such Defaulting Lender shall be
reallocated among the non-Defaulting Lenders in accordance with their respective
Applicable Percentage but only to the extent the sum of all non-Defaulting
Lenders’ Revolving Credit Exposure plus such Defaulting Lender’s LC Exposure
does not exceed the total of all non-Defaulting Lenders’ Commitments;
(ii)    if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (A) Cash Collateralize for the benefit of the
Issuing Bank only the Borrower’s obligations corresponding to such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in accordance with the procedures set forth in Section
2.09(j) for so long as such LC Exposure is outstanding;
(iii)    if the Borrower Cash Collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 3.05(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is Cash Collateralized;
(iv)    if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant
to clause (i) above, then the fees payable to the Lenders pursuant to Section
3.05(a) and Section 3.05(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentage; and

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(v)    if all or any portion of such Defaulting Lender’s LC Exposure is neither
reallocated nor Cash Collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Bank or any other
Lender hereunder, all fees payable Section 3.05(a) with respect to such
Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and
to the extent that such LC Exposure is reallocated and/or Cash Collateralized.
(d)    So long as such Lender is a Defaulting Lender, the Issuing Bank shall not
be required to issue, extend, renew or increase any Letter of Credit, unless it
is satisfied that the related exposure and the Defaulting Lender’s then
outstanding LC Exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or Cash Collateral will be provided by the Borrower
in accordance with Section 2.10(c), and participating interests in any newly
issued, extended, renewed or increased Letter of Credit shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.10(c)(i) (and such
Defaulting Lender shall not participate therein).
(e)    New Letters of Credit. If (a) a Bankruptcy Event or a Bail-In Action with
respect to a Lender Parent of any Lender shall occur following the date hereof
and for so long as such event shall continue or (b) the Issuing Bank has a good
faith belief that any Lender has defaulted in fulfilling its obligations under
one or more other agreements in which such Lender commits to extend credit, the
Issuing Bank shall not be required to issue, extend, renew or increase any
Letter of Credit, unless the Issuing Bank shall have entered into arrangements
with the Borrower or such Lender, satisfactory to the Issuing Bank to defease
any risk to it in respect of such Lender hereunder.
(f)    Defaulting Lender Cure. In the event that the Administrative Agent, the
Borrower and the Issuing Bank each agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the
inclusion of such Lender’s Commitment and on such date such Lender shall
purchase at par such of the Loans of the other Lenders as the Administrative
Agent shall determine may be necessary in order for such Lender to hold such
Loans in accordance with its Applicable Percentage.
Section 2.11    Increase of Aggregate Maximum Credit Amounts.
(a)    Subject to the conditions set forth in Section 2.11(b), the Borrower may,
on one or more occasions, increase the Aggregate Maximum Credit Amounts then in
effect (any such increase an “Incremental Increase”) by increasing the Maximum
Credit Amount of a Lender or by causing a Person that at such time is not a
Lender to become a Lender and have a Maximum Credit Amount (an “Additional
Lender”).
(b)    Any increase in the Aggregate Maximum Credit Amount shall be subject to
the following additional conditions:
(i)    such increase shall not be less than $10,000,000 (and increments of
$1,000,000 above that minimum) unless the Administrative Agent otherwise
consents; provided that the aggregate amount of Incremental Increases shall not
exceed $200,000,000;
(ii)    as of the effective date of such Incremental Increase, no Default, Event
of Default or Borrowing Base Deficiency shall have occurred and be continuing
immediately after giving effect to such increase and the representations and
warranties of the Borrower and the Guarantors set forth in this Agreement and in
the other Loan Documents shall be true and correct in all material respects on
and as of the date of such effective date, except to the extent any such
representations and warranties are expressly

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limited to an earlier date, in which case, on and as of the date of such
increase such representations and warranties shall be true and correct in all
material respects as of such specified earlier date;
(iii)    no Lender’s Maximum Credit Amount may be increased without the consent
of such Lender;
(iv)    the Administrative Agent and each Issuing Bank must consent to the
addition of any Additional Lender, who is not an Affiliate of an existing
Lender, in each case, such consent not to be unreasonably withheld or delayed;
(v)    the maturity date of such increase shall be the same as the Maturity
Date;
(vi)    the increase shall be on the exact same terms and pursuant to the exact
same documentation applicable to the Agreement;
(vii)    to the extent reasonably requested by the Administrative Agent, receipt
by the Administrative Agent of (A) board resolution and officers’ certificates
consistent with those delivered on the Closing Date and (B) reaffirmation
agreements and/or such amendments to the Security Instruments as may be
reasonably requested by the Administrative Agent in order to ensure that such
incremental Indebtedness is provided with the benefit of the applicable Loan
Documents; and
(viii)    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 pursuant to Section 5.02.
(c)    With the consent of the Lenders providing an Incremental Increase, the
Borrower, the Administrative Agent and the Issuing Bank(s) (and without the
consent of any other Lenders), the Loan Documents may be amended or supplemented
in a writing (which may be executed and delivered by the Borrower and the
Administrative Agent) substantially in the form of Exhibit K to reflect any
changes necessary to give effect to such Incremental Increase and make any
Additional Lender a party to this Agreement.
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.

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(c)    Post-Default Rate. Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower or any
Guarantor hereunder or under any other Loan Document is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
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.
(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 first day of any
Interest Period:
(a)    the Administrative Agent determines (which determination shall be
conclusive and binding absent manifest error) that adequate and reasonable means
(including, without limitation, by means of an Interpolated Rate) do not exist
for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for
such Interest Period; or
(b)    the Administrative Agent shall have received notice from the Majority
Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable, determined or
to be determined for such Interest Period will not adequately and fairly reflect
the cost to such Lenders (as conclusively certified by such Lenders) of making
or maintaining their affected Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone, telecopy as promptly as practicable thereafter and, until
the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
(and such Borrowing shall be automatically converted into ABR Loans on the last
day of the applicable Interest Period), and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made either as an ABR
Borrowing or at an alternate rate of interest determined by the Majority Lenders
as their cost of funds.
Section 3.04    Prepayments.

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(a)    Optional Prepayments. The Borrower shall have the right at any time and
from time to time to prepay, without premium or penalty (except with respect to
any amounts due under Section 5.02), any Borrowing in whole or in part, subject
to prior notice in accordance with Section 3.04(b).
(b)    Notice and Terms of Optional Prepayment. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy or other electronic
transmission) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before the date of prepayment, or (ii) in the case of prepayment
of an ABR Borrowing, not later than 11:00 A.M., New York City time, one Business
Day before the date of prepayment (or, in each case, such shorter time as the
Administrative Agent may agree). Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.06(b), then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with Section 2.06(b).
Promptly following receipt of any such notice relating to a Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 3.02 and any amounts due
under Section 5.02.
(c)    Mandatory Prepayments.
(i)    Upon Optional Termination and Reduction. If, after giving effect to any
termination or reduction of the Aggregate Maximum Credit Amounts pursuant to
Section 2.06(b), there is a Borrowing Base Deficiency, then the Borrower shall
(A) prepay the Borrowings on the date of such termination or reduction in an
aggregate principal amount equal to such Borrowing Base Deficiency, and (B) if
any Borrowing Base Deficiency remains after prepaying all of the Borrowings as a
result of any LC Exposure, pay to the Administrative Agent on behalf of the
Lenders an amount equal to such remaining Borrowing Base Deficiency to be held
as Cash Collateral as provided in Section 2.09(j).
(ii)    Upon Redeterminations and Title Related Borrowing Base Adjustment. If
there is a Borrowing Base Deficiency as a result of (A) any redetermination of
the Borrowing Base in accordance with Section 2.07 or (B) a Borrowing Base
adjustment pursuant to Section 2.08(b), then upon such Redetermination Date or
the occurrence of such Borrowing Base Adjustment (such date, the “Deficiency
Date”), the Borrower shall, within 5 Business Days of the Deficiency Date,
inform the Administrative Agent that it intends to do one or more of the
following:
(A)    within thirty (30) days of the Deficiency Date (1) prepay the Borrowings
in an aggregate principal amount equal to such Borrowing Base Deficiency and (2)
if any Borrowing Base Deficiency remains after prepaying all of the Borrowings
as a result of any LC Exposure, Cash Collateralize as provided in Section
2.09(j),
(B)    commencing on the 30th day after the Deficiency Date and continuing on
the same day of each month for the next three months thereafter (or if any such
day is not a Business Day, the immediately preceding Business Day), prepay the
Borrowings in an amount equal to one-fourth (1/4th) of such Borrowing Base
Deficiency so that the Borrowing Base Deficiency is reduced to zero within 120
days of the Deficiency Date, or

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(C)    within thirty (30) days of the Deficiency Date, submit and pledge as
Collateral additional Oil and Gas Properties not evaluated in the most recently
delivered Reserve Report or other collateral reasonably acceptable to the
Administrative Agent owned by the Borrower or any of the other Loan Parties for
consideration in connection with the determination of the Borrowing Base which
the Administrative Agent and the Required Lenders deem satisfactory, in their
sole discretion, to eliminate such Borrowing Base Deficiency;
provided that, notwithstanding the options set forth above, in all cases, the
Borrowing Base Deficiency must be eliminated on or prior to the Termination
Date. If, because of LC Exposure, a Borrowing Base Deficiency remains after
prepaying all of the Loans, the Borrower shall Cash Collateralize Letters of
Credit in an amount equal to such remaining Borrowing Base Deficiency as
provided in Section 2.09(j).
(iii)    Upon Certain Adjustments. If there is a Borrowing Base Deficiency, as a
result of Borrowing Base adjustment pursuant to the Borrowing Base Adjustment
Provisions (other than Section 2.08(b)), then upon the occurrence of such
Borrowing Base adjustment the Borrower shall (A) prepay the Borrowings in an
aggregate principal amount equal to such Borrowing Base Deficiency and (B) if
any Borrowing Base Deficiency remains after prepaying all of the Borrowings as a
result of an LC Exposure, pay to the Administrative Agent on behalf of the
Lenders an amount equal to such remaining Borrowing Base Deficiency to be held
as Cash Collateral as provided in Section 2.09(j).
(iv)    During an Event of Default. If an Event of Default has occurred and is
continuing, upon any (A) Disposition of Property, (B) Unwind of any Swap
Agreement or (C) incurrence or issuance of Indebtedness, an aggregate amount
equal to one hundred percent (100%) of the Net Proceeds received therefrom shall
be applied to repay the Secured Obligations in accordance with the priority set
forth in Section 10.02(d).
(v)    Application of Prepayments to Types of Borrowings. Each prepayment of
Borrowings pursuant to this Section 3.04(c) shall be applied, first, ratably to
any ABR Borrowings then outstanding, and, second, ratably to any Eurodollar
Borrowings then outstanding, and if more than one Eurodollar Borrowing is then
outstanding, to each such Eurodollar Borrowing in order of priority beginning
with the Eurodollar Borrowing with the least number of days remaining in the
Interest Period applicable thereto and ending with the Eurodollar Borrowing with
the most number of days remaining in the Interest Period applicable thereto.
(vi)    Interest to be Paid with Prepayments. Each prepayment of Borrowings
pursuant to this Section 3.04(c) shall be applied ratably to the Loans included
in the prepaid Borrowings. Prepayments pursuant to this Section 3.04(c) shall be
accompanied by accrued interest to the extent required by Section 3.02.
(d)    No Premium or Penalty. Prepayments permitted or required under this
Section 3.04 shall be without premium 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 (determined taking into account both Loans and
LC Exposure) 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 Business Day of March, June, September and December of each
year and on the Termination Date, commencing on

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the first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) (or in such other
manner as the Administrative Agent shall provide so that such computation shall
not exceed the Highest Lawful Rate), and shall be payable for the actual number
of days elapsed (including the first day but excluding the last day).
(b)    Letter of Credit Fees. The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding
the later of the date on which such Lender’s Commitment terminates and the date
on which such Lender ceases to have any LC Exposure, (ii) to each applicable
Issuing Bank a fronting fee, which shall accrue at the rate equal to the greater
of (A) $750 and (B) 0.25% per annum (or such other rate as may be agreed to with
such Issuing Bank) 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; provided
that in no event shall such fee be less than $750.00 during any quarter unless
no LC Exposure existed at any time during such quarter and (iii) to each Issuing
Bank, for its own account, its standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued through and
including the last Business Day of March, June, September and December of each
year shall be payable on such last Business 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 any
Issuing Bank pursuant to this Section 3.05(b) shall be payable within 10 days
after demand. All participation fees and fronting fees shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(c)    Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon in writing 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, New York City
time, on the date when due, in immediately available funds, without defense,
deduction, recoupment, set-off or counterclaim. Fees, once paid, shall be fully
earned and shall not be refundable under any circumstances, absent manifest
error. Any amounts received after such time on any date may, in the discretion
of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. All such
payments shall be made to the Administrative Agent at its

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offices specified in Section 12.01, except payments to be made directly to the
applicable Issuing Bank as expressly provided herein and except that payments
pursuant to Section 5.01, Section 5.02, Section 5.03 and Section 12.03 shall be
made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.
(b)    Application of Insufficient Payments. If at any time insufficient funds
are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c)    Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this Section 4.01(c) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 4.01(c) shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
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 applicable 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 applicable 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 applicable 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

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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(a), Section 2.09(d), Section 2.09(e) or Section 4.02 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.
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)    subject any Credit Party to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;
(ii)    impose, modify or hold applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit (or participations therein) by, or any other acquisition of
funds by, any office of such Lender or any Issuing Bank that is not otherwise
included in the determination of the Adjusted LIBO Rate; or
(iii)    impose on such Lender or any Issuing Bank or the London interbank
market any other condition, cost or expense (other than Taxes) affecting this
Agreement or Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Credit Party of making, converting into, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to increase the cost to such Lender, such Issuing Bank or other Credit Party of
participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit) or to reduce
the amount of any sum received or receivable by such Lender or such other Credit
Party (whether of principal, interest or otherwise), then the Borrower will pay
to such Lender or such other Credit Party such additional amount or amounts as
will compensate such Lender or such other Credit Party for such additional costs
incurred or reduction suffered.
(b)    Capital and Liquidity Requirements. If any Lender or Issuing Bank
reasonably 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 Issuing Bank’s capital or on the capital of such Lender’s or Issuing
Bank’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by any Issuing
Bank, to a level below that which such Lender or Issuing Bank or such Lender’s
or Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or Issuing Bank’s policies and the
policies of such Lender’s or Issuing Bank’s holding company with respect to
capital adequacy or liquidity), then from time to time the Borrower will pay to
such Lender

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or Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s
holding company for any such reduction suffered.
(c)    Certificates for Reimbursement. A certificate of a Lender or Issuing Bank
setting forth the amount or amounts necessary to compensate such Lender or
Issuing Bank or its holding company, as the case may be, as specified in Section
5.01(a) or Section 5.01(b) shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or Issuing
Bank, as the case may be, the amount shown as due on any such certificate within
10 days after receipt thereof.
(d)    Effect of Failure or Delay in Requesting Compensation. Failure or delay
on the part of any Lender or Issuing Bank to demand compensation pursuant to
this Section 5.01 shall not constitute a waiver of such Lender’s or Issuing
Bank’s right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender or Issuing Bank pursuant to this Section 5.01
for any increased costs or reductions incurred more than 365 days prior to the
date that such Lender or 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 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 365-day period referred to above shall be
extended to include the period of retroactive effect thereof.
Section 5.02    Break Funding Payments. The Borrower shall compensate each
Lender for the loss, cost and expense attributable to any of the following (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. 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, Section 5.04 and
Section 5.05, 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 any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
withholding agent) requires the deduction or withholding of any Tax from any
such payment by

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a withholding agent, then the applicable withholding agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax, then the sum payable by the
applicable Loan Party shall be increased as necessary so that, after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5.03), the
applicable Credit Party receives an amount equal to the sum it would have
received had no such deduction or withholding been made.
(c)    Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for, Other Taxes.
(d)    Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Credit Party, within 10 days after 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 such Credit Party or required to be withheld or deducted from a
payment to such Credit Party 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
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties 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 Taxes
by any Loan Party to a Governmental Authority pursuant to this Section 5.03,
such Loan Party 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.
(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

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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), Section 5.03(g)(ii)(B) and Section 5.03(g)(ii)(D) below) shall
not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.
(ii)    Without limiting the generality of the foregoing,
(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;
(B)    any Non-U.S. 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
Non-U.S. 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 Non-U.S. Lender claiming the benefits of an income tax
treaty to which the United States of America is a party (x) with respect to
payments of interest under any Loan Document, executed originals of IRS Form
W-8BEN-E or IRS Form W-8BEN establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN-E or IRS Form W-8BEN establishing an exemption from,
or reduction of, U.S. federal withholding Tax pursuant to the “business profits”
or “other income” article of such tax treaty;
(2)    executed originals of IRS Form W-8ECI;
(3)    in the case of a Non-U.S. Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit H-1 to the effect that such Non-U.S. Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in Section
881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed
originals of IRS Form W-8BEN-E or IRS Form W-8BEN; or
(4)    to the extent a Non-U.S. Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E,
IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of
Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents
from each beneficial owner, as applicable; provided that if the Non-U.S. Lender
is a partnership and one or more direct or indirect partners of such Non-U.S.
Lender are claiming the portfolio interest exemption, such Non-U.S.

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Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit H-4 on behalf of each such direct and indirect partner;
(C)    any Non-U.S. 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
Non-U.S. Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of 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
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5.03 (including by
the payment of additional amounts pursuant to this Section 5.03), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 5.03 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes
with respect to such refund) 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.

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(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    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 amounts 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.
Section 5.05    Replacement of Lenders. If (a) any Lender requests compensation
under Section 5.01, (b) the Borrower is required to pay any Indemnified Taxes or
additional amounts to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 5.03, (c) any Lender is a Defaulting Lender,
or (d) any Lender fails to consent to an election, consent, approval, amendment,
waiver or other modification to this Agreement or any other Loan Document that
requires the consent of all Lenders or all directly and adversely affected
Lenders, and such election, consent, amendment, waiver or other modification is
otherwise consented to by the Required Lenders (excluding the Maximum Credit
Amounts of Defaulting Lenders), then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 12.04(b)), all its interests, rights
and obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents (including any
amounts under Section 5.02), 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.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01    Closing Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 12.02):
(a)    Credit Agreement. The Administrative Agent shall have received from each
party hereto counterparts (in such number as may be requested by the
Administrative Agent) of this Agreement signed on behalf of such party.

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(b)    Loan Documents.
(i)    Execution of Security Instruments. The Administrative Agent shall have
received from each party thereto counterparts (in such number as may be
requested by the Administrative Agent) of the Security Instruments, including
the Guarantee and Collateral Agreement and Perfection Certificate, described on
Exhibit F-1 that have been executed and delivered by a Responsible Officer of
each party thereto.
(ii)    Filings, Registrations and Recordings. Each Security Instrument and any
other document (including any Uniform Commercial Code financing statement)
required by any Security Instrument or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Administrative Agent, for the benefit of the Lenders, a perfected
Lien on the Collateral described therein, prior and superior in right to any
other Person shall be in proper form for filing, registration or recordation.
(iii)    Mortgage Coverage. The Administrative Agent shall be reasonably
satisfied that, upon recording the Mortgages, in each case, in the appropriate
filing offices, it shall have a first priority Lien on at least 85% of the PV-9
of the Borrowing Base Properties.
(iv)    Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent
shall have received (A) the certificates representing the shares of Equity
Interests pledged pursuant to the Guarantee and Collateral Agreement, together
with an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof and (B) each promissory note (if
any) pledged to the Administrative Agent pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank) by the pledgor thereof.
(c)    Secretary’s Certificates. The Administrative Agent shall have received a
certificate of a Responsible Officer of each Loan Party setting forth (i)
resolutions of its board of directors or other appropriate governing body with
respect to the authorization of such Loan Party 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 such Loan Party (A) who are authorized
to sign the Loan Documents to which such Loan Party 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 articles or certificate of incorporation and by-laws or
other applicable Organizational Documents of such Loan Party, certified by a
Responsible Officer as being true and complete. The Administrative Agent and the
Lenders may conclusively rely on such certificate until the Administrative Agent
receives notice in writing from such Loan Party to the contrary.
(d)    Corporate Status; Good Standing Certificates. The Administrative Agent
shall have received certificates of the appropriate State agencies with respect
to the existence, qualification and good standing of each Loan Party in each
jurisdiction where any such Loan Party is organized or owns Borrowing Base
Properties.
(e)    Responsible Officer’s Certificate. The Administrative Agent shall have
received a certificate of a Responsible Officer of the Borrower in form and
substance reasonably satisfactory to the Administrative Agent certifying that
(i) the Borrower has received all government and third party approvals required
by Section 7.03 and such approvals have been obtained on satisfactory terms and
(ii) no action, proceeding or litigation is pending or threatened in any court
or before any Governmental Authority that

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involves any Loan document or that is seeking to enjoin or prevent the
consummation of the Transactions contemplated hereby.
(f)    Solvency Certificate. The Administrative Agent shall have received a
Solvency Certificate, duly executed by a Financial Officer and dated as of the
Closing Date.
(g)    Responsible Officer’s Certificate: Indebtedness. The Administrative Agent
shall have received a certificate of a Responsible Officer of the Borrower in
form and substance reasonably satisfactory to the Administrative Agent
certifying that the Borrower and the other Group Members will have outstanding
no Indebtedness for borrowed money or Disqualified Capital Stock other than the
Secured Obligations under this Agreement.
(h)    Initial Reserve Report. The Administrative Agent shall have received the
Initial Reserve Report accompanied by a certificate covering the matters
described in Section 8.11(c)(i), Section 8.11(c)(ii), Section 8.11(c)(iii) and
Section 8.11(c)(vi).
(i)    Patriot Act. The Administrative Agent shall have received, at least five
(5) days prior to the Closing Date, all documentation and other information
requested at least two (2) Business Days prior to such date and required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act.
(j)    Legal Opinions. The Administrative Agent shall have received an opinion
of (i) Vinson & Elkins LLP, counsel for the Loan Parties and (ii) local counsel
in any jurisdictions where Security Instruments will be recorded to perfect
first priority Liens on any Borrowing Base Properties, in each case in form and
of substance reasonably acceptable to the Administrative Agent.
(k)    Fees. The Administrative Agent, the Arranger and the Lenders shall have
received all fees and other amounts due and payable on or prior to the Closing
Date and, to the extent invoiced, reimbursement or payment of all reasonable and
documented out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.
(l)    Title. The Administrative Agent shall have received title information as
the Administrative Agent may reasonably require, satisfactory to the
Administrative Agent, setting forth the status of title to at least 85% of the
PV-9 of the Borrowing Base Properties.
(m)    Lien Searches. The Administrative Agent shall have received appropriate
UCC searches reflecting no prior Liens encumbering the Properties of the
Borrower and the Loan Parties other than those being released on or prior to the
Closing Date and those permitted by Section 9.03.
(n)    No MAE. Since December 31, 2016, excluding results from (i) general
changes in hydrocarbon prices, (ii) general changes in industry or economic
conditions, and (iii) general changes in political conditions, including any
engagements of hostilities, acts of war or terrorist activities or changes
imposed by a governmental authority associated with additional security, there
has not been any change, development or event that, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect.
(o)    Insurance Certificates. The Administrative Agent shall have received
certificates of insurance coverage of the Loan Parties in form and substance
reasonably satisfactory to the Administrative Agent evidencing that the Loan
Parties are carrying insurance in accordance with Section 8.06.

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The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank(s) 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 5:00 p.m., New York City time, on April 21, 2017 (an, in
the event such conditions are not so satisfied or waived, this Agreement shall
terminate at such time).
Section 6.02    Each Credit Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing (including the initial funding), and of the
Issuing Bank(s) to issue Letters of Credit or amend any Letter of Credit to
increase the amount thereof, is subject to the satisfaction of the following
conditions:
(a)    At the time of and immediately after giving effect to such Borrowing or
any such issuance or amendment of such Letter of Credit, as applicable, no
Default or Event of Default shall have occurred and be continuing.
(b)    The representations and warranties of the Borrower and the Guarantors set
forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects (unless already qualified by materiality in
which case such applicable representation and warranty shall be true and
correct) on and as of the date of such Borrowing or the date of any such
issuance or amendment 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 in all material respects (unless already qualified by materiality in
which case such applicable representation and warranty shall be true and
correct) as of such specified earlier date.
(c)    The receipt by the Administrative Agent of a Borrowing Request in
accordance with Section 2.03 or a request for a Letter of Credit (or any such
amendment to increase the amount of a Letter of Credit) in accordance with
Section 2.09(b), as applicable.
Each request for any such Borrowing or for the issuance of any Letter of Credit
or for any amendment to increase the amount of any Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date
thereof as to the matters specified in Section 6.02(a) through Section 6.02(c).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
Section 7.01    Organization; Powers. Each Group Member is (a)(i) duly
organized, validly existing and (ii) in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority, and
has all 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 (c) is in good standing in, every material
jurisdiction where such qualification is required, except for purposes of
Section 7.01(a)(ii), 7.01(b) and 7.01(c) to the extent that a failure to be so
qualified could not reasonably be expected to result in a Material Adverse
Effect.
Section 7.02    Authority; Enforceability. The Transactions are within each
Group Member’s corporate or equivalent powers and have been duly authorized by
all necessary corporate or equivalent and, if required, owner action. Each Loan
Document to which a Loan Party is a party has been duly executed

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and delivered by it and constitutes its legal, valid and binding obligation, as
applicable, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
Section 7.03    Approvals; No Conflicts. The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any other third Person, 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 financing statements and
the Security Instruments as required by this Agreement (b) will not violate (i)
in any material respect, any applicable law or regulation or any order of any
Governmental Authority or (ii) the Organizational Documents of any Loan Party,
(c) will not violate or result in a default under any indenture, note, credit
agreement or other similar instrument binding upon any Group Member or its
Properties, or give rise to a right thereunder to require any payment to be made
by any Group Member and (d) will not result in the creation or imposition of any
Lien on any Property of any Group Member (other than the Liens created by the
Loan Documents).
Section 7.04    Financial Condition; No Material Adverse Change.
(a)    The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows as of
and for the fiscal year ended December 31, 2016, reported on by BDO USA, LLP
independent public accountants. Such financial statement presents fairly, in all
material respects, the financial position and results of operations and cash
flows of the Borrower and its Consolidated Restricted Subsidiaries as of such
dates and for such periods.
(b)    The most recent financial statements furnished pursuant to Section
8.01(a) present fairly, in all material respects, the financial condition of
Borrower and its Consolidated Restricted Subsidiaries on a consolidated basis,
as of the dates and for the periods set forth above in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the unaudited quarterly financial statements.
(c)    Since the later of (i) the date hereof and (ii) date of the financial
statements most recently delivered pursuant to Section 8.01(a), and after giving
effect to the Transactions, there has been no event, development or circumstance
that has had or could reasonably be expected to have a Material Adverse Effect.
(d)    Neither the Borrower nor any other Group Member has on the date of this
Agreement any Indebtedness (including Disqualified Capital Stock) or any
contingent liabilities, off-balance sheet liabilities or partnerships,
liabilities for taxes, or unusual forward or long-term commitments or unrealized
or anticipated losses from any unfavorable commitments other than in respect of
the Secured Obligations.
Section 7.05    Litigation.
(a)    There are no actions, suits, investigations or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
the Borrower, threatened by, against or affecting any Group Member any of their
respective properties or revenues that (i) are not fully covered by insurance
(except for normal deductibles) as to which there is a reasonable possibility of
an adverse determination that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) 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 Group Members and any property with respect to which any Group Member
has any interest or obligation are in compliance with all, and have not violated
any, applicable Environmental Laws;
(b)    (i) the Group Members and all relevant Persons for any property with
respect to which any Group Member has any interest or obligation hold and are in
compliance with all, and have not violated any, Environmental Permits required
for their respective operations and each of their respective properties; (ii)
all such Environmental Permits are in full force and effect; and (iii) no Group
Member has received any notice or otherwise has knowledge that any such
Environmental Permit may be revoked, adversely modified, or not renewed, or that
any application for any Environmental Permit may be protested or denied or that
the anticipated terms thereof may be adversely modified;
(c)     (i) there are no actions, claims, demands, suits, investigations or
proceedings under any Environmental Laws or regarding any Hazardous Materials
that are pending or, to the Borrower’s knowledge, threatened, against any Group
Member or regarding any property with respect to which any Group Member has any
interest or obligation, or as a result of any operations of any Group Member or
any other Person regarding any property with respect to which any Group Member
has any interest or obligation; and (ii) there are no consent decrees or other
decrees, consent orders, administrative orders or other administrative, arbitral
or judicial requirements outstanding under any Environmental Laws or regarding
any Hazardous Materials, directed to any Group Member or as to which any Group
Member is a party, or regarding any property with respect to which any Group
Member has any interest or obligation;
(d)    (i) there has been no Release or, to the Borrower’s knowledge, threatened
Release, of Hazardous Materials attributable to the operations of any Group
Member at, on, under or from any Group Member’s current or formerly owned,
leased or operated property or at any other location (including, to the
Borrower’s knowledge, any location to which Hazardous Materials have been sent
for re-use, recycling, treatment, storage or disposal) for which any Group
Member could be liable, and (ii) Hazardous Materials are not otherwise present
at any such properties or other locations, in either (i) or (ii) above, in
amounts or concentrations or under conditions which constitute a violation of
any applicable Environmental Law, could reasonably be expected to give rise to
any liability, or, with respect to any Mortgaged Property, could reasonably be
expected to impair its fair saleable value;
(e)    no Group Member, nor to the Borrower’s knowledge any other Person for any
property with respect to which any Group Member has any interest or obligation,
has received any written notice of violation, alleged violation, non-compliance,
liability or potential liability or request for information regarding
Environmental Laws or Hazardous Materials, and, to the Borrower’s knowledge,
there are no conditions or circumstances that would reasonably be expected to
result in the receipt of any such notice or request for information;
(f)    no Group Member has assumed or retained any liability under applicable
Environmental Laws or regarding Hazardous Materials that could reasonably be
expected to result in liability to any Group Member; and
(g)    to the extent reasonably requested by the Administrative Agent, the Group
Members have provided to Lenders complete and correct copies of all
environmental site assessment reports, investigations, studies, analyses, and
correspondence on environmental matters (including matters relating

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to any alleged non-compliance with or liability under Environmental Laws) that
are in any Group Member’s possession or control and relating to their respective
Properties or operations thereon.
Section 7.07    Compliance with the Laws; No Defaults.
(a)    Each Group Member is in compliance with all Governmental Requirements
applicable to it or its Property and all agreements and other instruments
binding upon it or its Property, and possesses all licenses, permits,
franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its Property and the conduct of its business,
except to the extent that any failure of the foregoing could not reasonably be
expected to result in a Material Adverse Effect.
(b)    No Default has occurred and is continuing.
Section 7.08    Investment Company Act. No Group Member 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 Group Member has timely filed or caused to be filed
all income and material other Tax returns and reports required to have been
filed (taking into account any extension of time to file) and has paid or caused
to be paid all material Taxes required to have been paid by it, except Taxes
that are being contested in good faith by appropriate proceedings and for which
the applicable Group Member has set aside on its books adequate reserves in
accordance with GAAP. To the knowledge of Borrower, no material proposed tax
assessment has been asserted with respect to any Group Member.
Section 7.10    ERISA. Except as could not, whether individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect:
(a)    each Plan is, and has been, operated, administered and maintained in
compliance with, and the Borrower and each ERISA Affiliate have complied with,
ERISA, the terms of the applicable Plan and, where applicable, the Code;
(b)    no act, omission or transaction has occurred which could result in
imposition on any the Borrower or any ERISA Affiliate (whether directly or
indirectly) of (i) either a civil penalty assessed pursuant to subsections (c),
(i) or (l) of Section 502 of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under
Section 409 of ERISA;
(c)    no liability to the PBGC (other than required premiums payments which are
not past due after giving effect to any applicable grace periods) by the
Borrower or any ERISA Affiliate has been or is expected by any Group Member or
any ERISA Affiliate to be incurred with respect to any Plan and no ERISA Event
with respect to any Plan has occurred;
(d)    the actuarial present value of the benefit liabilities under each Plan
which is subject to Title IV of ERISA does not (determined as of the end of the
most recent plan year) exceed the current value of the assets (computed on a
plan termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities. The term “actuarial present value of the
benefit liabilities” shall have the meaning specified in Section 4041 of ERISA;
and
(e)    neither the Borrower nor any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the six-year period immediately preceding
the date hereof sponsored, maintained or contributed to, or had any actual or
contingent liability to any Multiemployer Plan.

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Section 7.11    Disclosure; No Material Misstatements. None of the reports,
financial statements, certificates or other information furnished by or on
behalf of the Group Members 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) contain 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 Group Members represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time and
it further being understood that projections concerning volumes attributable to
the Oil and Gas Properties and production and cost estimates contained in each
Reserve Report are necessarily based upon professional opinions, estimates and
projections and the Group Members do not warrant that such opinions, estimates
and projections will ultimately prove to have been accurate.
Section 7.12    Insurance. For the benefit of each Loan Parties, the Borrower
has (a) all insurance policies sufficient for the compliance by the Loan Parties
with all material Governmental Requirements and all material agreements and (b)
insurance coverage, or self-insurance, in at least such amounts and against such
risk (including 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 Loan Parties. Schedule 7.12, as of the date hereof, sets
forth a list of all insurance maintained by the Borrower.
Section 7.13    Restriction on Liens. No Group Member is subject to any order,
judgment, writ or decree, which either restricts or purports to restrict its
ability to grant Liens to the Administrative Agent and the Lenders on or in
respect of their Properties to secure the Secured Obligations and the Loan
Documents.
Section 7.14    Group Members. There are no Group Members, 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. Each Group Member’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(k)). No
Group Member is a Foreign Group Member (other than any Foreign Group Member as
of the Closing Date).
Section 7.15    Location of Business and Offices. The Borrower’s jurisdiction of
organization is Delaware; the name of the Borrower as listed in the public
records of its jurisdiction of organization is Swift Energy Company; and the
organizational identification number of the Borrower in its jurisdiction of
organization is set forth on Schedule 7.14 (or, in each case, as set forth in a
notice delivered to the Administrative Agent pursuant to Section 8.01(k) in
accordance with Section 12.01). The Borrower’s principal place of business and
chief executive offices are located at the address specified in Section 12.01
(or as set forth in a notice delivered pursuant to Section 8.01(k) and Section
12.01(c)).
Section 7.16    Properties; Title, Etc.
(a)    Each Group Member has good and defensible title to the Oil and Gas
Properties evaluated in the most recently delivered Reserve Report and good
title to all its material personal Properties other than Properties sold,
transferred or otherwise disposed of (i) on or prior to the Closing Date or (ii)
after the Closing Date, in compliance with Section 9.11 from time to time, in
each case, free and clear of all Liens except Liens permitted by Section 9.03.
After giving full effect to the Excepted Liens and the dispositions referenced
in the prior sentence, the Group Member specified as the owner owns the net
interests in production attributable to the Hydrocarbon Interests as reflected
in the most recently delivered Reserve Report, and

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except as otherwise provided by statute, regulation or the standard and
customary provisions of any applicable joint operating agreement, the ownership
of such Properties shall not in any material respect obligate the Group Member
to bear the costs and expenses relating to the maintenance, development and
operations of each such Property in an amount in excess of the working interest
of each Property set forth in the most recently delivered Reserve Report that is
not offset by a corresponding proportionate increase in the Group Member’s net
revenue interest in such Property.
(b)    (i) All leases and agreements necessary for the conduct of the business
of the Group Members are valid and subsisting, in full force and effect, and
(ii) there exists no default or event or circumstance which with the giving of
notice or the passage of time or both would give rise to a default under any
such lease or leases, which, in the case of either (i) or (ii), could reasonably
be expected to have a Material Adverse Effect.
(c)    The rights and Properties presently owned, leased or licensed by the
Group Members including all easements and rights of way, include all rights and
Properties necessary to permit the Group Members to conduct their business in
the same manner as its business is conducted on the date hereof except where the
failure of the foregoing could not reasonably be expected to result in a
Material Adverse Effect.
(d)    Except for Properties being repaired, all of the Properties of the Group
Members which are reasonably necessary for the operation of their businesses are
in good working condition and are maintained in accordance with prudent business
standards, except where the failure of the foregoing could not reasonably be
expected to result in a Material Adverse Effect.
(e)    Each Group Member owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual Property necessary to
operate its business, and the use thereof by the Group Member does not infringe
upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. The Group Members either own or have valid licenses
or other rights to use all databases, geological data, geophysical data,
engineering data, seismic data, maps, interpretations and other technical
information used in their businesses as presently conducted, subject to the
limitations contained in the agreements governing the use of the same, which
limitations are customary for companies engaged in the business of the
exploration and production of Hydrocarbons, with such exceptions as could not
reasonably be expected to have a Material Adverse Effect.
Section 7.17    Maintenance of Properties. The Oil and Gas Properties (and
Properties unitized therewith) of the Group Members have been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all Governmental Requirements in all material respects and in conformity with
the provisions of all leases, subleases or other contracts comprising a part of
the Hydrocarbon Interests and other contracts and agreements forming a part of
the Oil and Gas Properties of the Group Members in all material respects. All
pipelines, wells, gas processing plants, platforms and other material
improvements, fixtures and equipment owned in whole or in part by the Group
Members that are necessary to conduct normal operations are being maintained in
a state adequate to conduct normal operations, and with respect to such of the
foregoing which are operated by the Group Members, in a manner consistent with
the Group Members’ past practices (other than those the failure of which to
maintain in accordance with this Section 7.17 could not reasonably be expected
to have a Material Adverse Effect).
Section 7.18    Gas Imbalances. Except as set forth on Schedule 7.18 or on the
most recent certificate delivered pursuant to Section 8.11(c), on a net basis
there are no gas imbalances, take or pay or other prepayments which would
require any Group Member to deliver Hydrocarbons produced from their

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Oil and Gas Properties at some future time without then or thereafter receiving
full payment therefor exceeding one percent (1.0%) of the aggregate volumes of
Hydrocarbons (on an Mcf equivalent basis) listed in the most recent Reserve
Report.
Section 7.19    Marketing of Production. Except for contracts listed and in
effect on the date hereof on Schedule 7.19, and thereafter either disclosed in
writing to the Administrative Agent or included in the most recently delivered
Reserve Report, (a) the Group Members are receiving a price for all production
sold thereunder which is computed substantially in accordance with the terms of
the relevant contract and are not having deliveries curtailed substantially
below the subject Property’s delivery capacity and (b) no material agreements
exist which are not cancelable on 60 days’ notice or less without penalty or
detriment for the sale of production from the Group Members’ Hydrocarbons
(including calls on or other rights to purchase, production, whether or not the
same are currently being exercised) that (i) pertain to the sale of production
at a fixed price and (ii) have a maturity or expiry date of longer than six (6)
months from the date of such agreement.
Section 7.20    Security Documents. The Security Instruments are effective to
create in favor of the Administrative Agent, for the benefit of the Lenders, a
legal, valid and enforceable security interest in the Mortgaged Property and
Collateral and proceeds thereof. The Secured Obligations are and have been at
all times secured by a legal, valid and enforceability first priority perfected
Liens in favor of the Administrative Agent, covering and encumbering (a) at
least 85% of the PV-9 of the Borrowing Base Properties, (b) the Collateral
granted pursuant to the Guarantee and Collateral Agreement, including the
pledged Equity Interests and the Deposit Accounts and Securities Accounts, in
each case to the extent perfection has occurred, as the case may be, by the
recording of a mortgage, the filing of a UCC financing statement, or, in the
case of Deposit Accounts and Securities Accounts, by obtaining of “control” or,
with respect to Equity Interests represented by certificates, by possession (in
each case, to the extent available in the applicable jurisdiction); provided
that, except in the case of pledged Equity Interests, Liens permitted by Section
9.03 may exist.
Section 7.21    Swap Agreements. Schedule 7.21, as of the Closing Date, and
after the date hereof, each report required to be delivered by the Borrower
pursuant to Section 8.01(d), as of the last Business Day of the period covered
by such report, sets forth, a true and complete list of all Swap Agreements of
the Group Members, 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, but excluding the Security
Instruments) and the counterparty to each such agreement.
Section 7.22    Use of Loans and Letters of Credit. The proceeds of the Loans
and the Letters of Credit shall be used to (a) refinance the Existing Credit
Agreement and (b) provide working capital for lease acquisitions, for
exploration and production operations, for development (including the drilling
and completion of producing wells), for acquisitions of Oil and Gas Properties
permitted hereunder and for other general corporate purposes of the Borrower and
its Subsidiaries. No Group Member is 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 7.23    Solvency. After giving effect to the Transactions and the other
transactions contemplated hereby and thereby (including at the time of and
immediately after giving effect to any Borrowing or the issuance, amendment,
renewal or extension of any Letter of Credit, as applicable) (a) the

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sum of the debt and liabilities (including subordinated and contingent
liabilities) of the Borrower and its Subsidiaries, taken as a whole, does not
exceed the fair value of the present assets of the Borrower and its
Subsidiaries, taken as a whole, (b) the present fair saleable value of the
assets of the Borrower and its Subsidiaries, taken as a whole, is greater than
the total amount that will be required to pay the probable debt and liabilities
(including subordinated and contingent liabilities) of the Borrower and its
Subsidiaries as they become absolute and matured, (c) the Borrower and its
Subsidiaries, taken as a whole, have not incurred, or believe that they will
incur, debts or other liabilities including current obligations beyond their
ability to pay such debt as they mature in the ordinary course of business and
(d) the capital of the Borrower and its Subsidiaries, taken as a whole, is not
unreasonably small to engage in the business of the Borrower and its
Subsidiaries, taken as a whole. For the purpose of this Section 7.24, the amount
of any contingent liability at any time shall be computed as the amount that, in
light of all of the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability (irrespective of whether such contingent liabilities meet the criteria
for accrual under Statement of Financial Accounting Standard No. 5).
Section 7.24    Foreign Corrupt Practices. Neither the Borrower nor any of its
Subsidiaries, nor any director, officer, employee or Affiliate of the Borrower
or any of its Subsidiaries, nor to the knowledge of the Borrower, any agent of
the Borrower or any of its Subsidiaries that will act in any capacity in
connection with or benefit from the credit facility established hereby, is aware
of or has taken any action, directly or indirectly, that would result in a
material violation by such Persons of the FCPA, including without limitation,
making use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA; and, the Borrower, its Subsidiaries and its and their Affiliates have
conducted their business in material compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance therewith.
Section 7.25    Anti-Corruption Laws; Sanctions; OFAC.
(a)    The Borrower has implemented and maintains in effect policies and
procedures designed to ensure compliance by the Borrower, its Subsidiaries and
their respective directors, officers, employees and agents with applicable
Anti-Corruption Laws and applicable Sanctions.
(b)    The Borrower, its Subsidiaries, their respective officers and employees
and, to the knowledge of the Borrower, its directors and agents are in
compliance with Anti-Corruption Laws and applicable Sanctions in all material
respects and are not knowingly engaged in any activity that would reasonably be
expected to result in any Group Member being designated as a Sanctioned Person.
(c)    None of (i) the Borrower, any Subsidiary or any of their respective
directors, officers or employees, or (ii) to the knowledge of the Borrower, any
agent of the Borrower that will act in any capacity in connection with or
benefit from the credit facility established hereby, is a Sanctioned Person. The
Borrower will not directly or, to its knowledge, indirectly use the proceeds
from the Loans or lend, contribute or otherwise make available such proceeds to
any Subsidiary, joint venture partner or other Person, for the purpose of
financing the activities of any Person currently subject to any applicable
Sanctions.
Section 7.26    Senior Debt Status. The Secured Obligations constitute “Senior
Indebtedness”, “Designated Senior Indebtedness” or any similar designation under
and as defined in any agreement

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governing any senior subordinated or subordinated Indebtedness and the
subordination provisions set forth in each such agreement are legally valid and
enforceable against the parties thereto.
Section 7.27    EEA Financial Institution. No Loan Party is an EEA Financial
Institution.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until Payment in Full, the Borrower covenants and agrees with the Lenders that:
Section 8.01    Financial Statements; Other Information. The Borrower will
furnish to the Administrative Agent for delivery to 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 Borrower, its (i) audited consolidated balance sheet and
related statements of operations, stockholders’ equity and cash flows as of the
end of and for such year, setting forth in each case in comparative form the
figures for the previous Fiscal Year of the Borrower, all reported on by an
independent public accountant reasonably acceptable to the Administrative Agent
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis and the other Group Members
(as applicable), on a consolidated basis, in each case, in accordance with GAAP
consistently applied and (ii) its unaudited balance sheet, income statement and
related statement of cash flows as of the end of and for the Fiscal Year most
recently ended which provides consolidating statements, including statements
demonstrating eliminating entries, if any, with respect to any Unrestricted
Subsidiaries, in such form as would be presentable to the auditors of the
Borrower.
(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 Borrower, its
(i) consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such Fiscal Quarter
and the then elapsed portion of such Fiscal Year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous Fiscal Year, all
certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its Consolidated Restricted Subsidiaries on a consolidated basis and the other
Group Members (as applicable), on a consolidated basis, in each case, in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes and (ii) its unaudited balance sheet,
income statement and related statement of cash flows as of the end of and for
the Fiscal Quarter most recently ended which provides consolidating statements,
including statements demonstrating eliminating entries, if any, with respect to
any Unrestricted Subsidiaries, in such form as would be presentable to the
auditors of the Borrower.
The Borrower represents and warrants that the Borrower and each of its
Subsidiaries file their financial statements with the SEC and/or make financial
statements available to potential holders of their 144A securities, and,
accordingly, the Borrower hereby (1) authorizes the Administrative Agent to make
the financial statements to be provided under Section 8.01(a) and Section
8.01(b), along with the Loan Documents, available to Public-Siders and (2)
agrees that at the time such financial statements are provided hereunder, they
shall already have been made available to holders of its securities. The
Borrower will not request that any other material be posted to Public-Siders
without expressly representing and warranting to

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the Administrative Agent in writing that (x) such materials do not constitute
material non-public information within the meaning of the federal securities
laws or (y) make such materials that do constitute material non-public
information within the meaning of the federal securities laws publicly available
by press release or public filing with the SEC.
(c)    Certificate of Financial Officer - Compliance. Concurrently with any
delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
Compliance Certificate (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) certifying that (A) the
Borrower has been in compliance with Section 9.01 at such times as required
therein and, for the Fiscal Quarter of the Borrower ending March 31, 2017, in
compliance with Section 9.01 under the Existing Credit Agreement as of the last
day of such Fiscal Quarter and (B) in connection therewith, setting forth
reasonably detailed calculations demonstrating such compliance, (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the most recently delivered financial statements referred to in Section
8.01(a) and Section 8.01(b) and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate
and (iv) stating whether there are any Subsidiaries which are to become Loan
Parties in order to comply with Section 8.13 and, if any such Subsidiaries
exist, specifying the actions proposed to be taken in connection therewith.
(d)    Certificate of Financial Officer – Swap Agreements. Concurrently with any
delivery of financial statements pursuant to Section 8.01(a) and Section
8.01(b), a certificate of a Financial Officer, in form and substance reasonably
satisfactory to the Administrative Agent, setting forth as of the last Business
Day of such Fiscal Quarter or Fiscal Year, a true and complete list of all Swap
Agreements of the Borrower and each Group Member, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net mark-to-market value therefor (as of the last Business Day
of such Fiscal Quarter or Fiscal Year), any new credit support agreements
relating thereto not listed on Schedule 7.21, any margin required or supplied
under any credit support document, and the counterparty to each such agreement.
(e)    Production Report and Lease Operating Statements. Within 60 days after
the end of each Fiscal Quarter, a report setting forth, for each calendar month
during the then current Fiscal Year to date, the volume of total production and
sales attributable to production (and the prices at which such sales were made
and the revenues derived from such sales) for each such calendar month from the
Oil and Gas Properties of the Group Members, and setting forth the related ad
valorem, severance and production taxes and lease operating expenses
attributable thereto and incurred for each such calendar month.
(f)    Certificate of Insurer - Insurance Coverage. Within five (5) Business
Days following each material change in the insurance maintained in accordance
with Section 8.06, certificates of insurance coverage with respect to the
insurance required by Section 8.06, 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.
(g)    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 any Group Member with the SEC or with
any national securities exchange.
(h)    Notices Under Material Instruments. Concurrently with the furnishing
thereof, copies of any financial statement, report or notice (including any
notice of default) furnished to or by any Person pursuant to the terms of any
preferred stock designation, indenture, loan or credit or other similar

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agreement evidencing Material Indebtedness (other than this Agreement) that has
not been previously furnished to the Lenders pursuant to any other provision of
this Section 8.01.
(i)    Lists of Purchasers. Concurrently with the delivery of any Reserve Report
to the Administrative Agent pursuant to Section 8.11 (commencing with the
Reserve Report as of June 30, 2017), a list of all Persons purchasing
Hydrocarbons in excess of $1,000,000 from any Group Member (or, with respect to
Oil and Gas Properties that are not operated by a Group Member, a list of the
operators of such properties) during the two Fiscal Quarters ending as the date
of such Reserve Report.
(j)    Issuances and Incurrences of Debt. Two (2) Business Days prior written
notice of the incurrence by any Group Member of any Permitted Unsecured Debt,
Permitted Second Lien Debt, Permitted Refinancing Indebtedness or, if in excess
of $10,000,000, any other Indebtedness as well as the amount thereof, the
anticipated closing date and definitive documentation for the foregoing and any
other related information reasonably requested.
(k)    Information Regarding Borrower and Guarantors. Prompt written notice of
(and in any event within five (5) Business Days prior thereto or such other time
as the Administrative Agent may agree in its sole discretion) any change (i) in
a Loan Party’s corporate name or in any trade name used to identify such Person
in the conduct of its business or in the ownership of its Properties, (ii) in
the location of the Loan Party’s chief executive office or principal place of
business, (iii) in the Loan Party’s identity or corporate structure or in the
jurisdiction in which such Person is incorporated or formed, (iv) in the Loan
Party’s jurisdiction of organization, and (v) in the Loan Party’s federal
taxpayer identification number.
(l)    Patriot Act. Promptly upon request, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the Patriot
Act.
(m)    Annual Budget and Projections. Prior to or concurrently with the delivery
of each December 31 Reserve Report hereunder (commencing with the Reserve Report
as of December 31, 2017), a certificate of a Financial Officer, in form and
substance satisfactory to the Administrative Agent, setting forth (i) an annual
business plan and (ii) an operating budget of the Group Members for the such
Fiscal Year (on a Fiscal Quarter basis).
(n)    Notices Related to Oil and Gas Properties and Swap Agreements.
(i)    Notice of Sales of Oil and Gas Properties and Unwinds of Swap Agreements.
In the event the Borrower or any other Group Member intends to (A) sell,
transfer, assign or otherwise dispose of any Oil and Gas Properties constituting
Proved Reserves (or any Equity Interests of any Group Member that owns Oil and
Gas Properties constituting Proved Reserves) and/or (B) Unwind Swap Agreements,
prior written notice of the foregoing (of at least five (5) Business Days or
such shorter time as the Administrative Agent may agree), the price thereof, in
the case of Oil and Gas Properties constituting Proved Reserves (or any Equity
Interests of any Group Member that owns Oil and Gas Properties constituting
Proved Reserves), and, in each case, the anticipated decline in the
mark-to-market value thereof or net cash proceeds therefrom, in the case of Swap
Agreements, and, in each case, the anticipated date of closing and any other
details thereof reasonably requested by the Administrative Agent or any Lender
(including any definitive documentation).
(ii)    Notices of Acquisitions of Oil and Gas Properties. Promptly, but in any
event within five (5) Business Days, written notice of any acquisition of Oil
and Gas Properties by the Group

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Members in one or a series of related transaction having a Fair Market Value in
excess of $5,000,000 or where the consideration paid exceeded $5,000,000.
(iii)    Notice of Casualty Events. Promptly, but in any event within five (5)
Business Days, written notice of the occurrence of any Casualty Event or the
commencement of any action or proceeding that could reasonably be expected to
result in a Casualty Event, in each case, of any Property of any Group Member
having a Fair Market Value in excess of $2,500,000.
(o)    Notices of Certain Changes. Promptly, but in any event within five (5)
Business Days after the execution thereof, copies of any amendment, modification
or supplement to the certificate or articles of incorporation, by-laws, any
preferred stock designation or any other Organizational Document of the Borrower
or any Group Member.
(p)    Take-or-Pay, Ship-or-Pay or Other Prepayments. Concurrently with the
delivery of any Reserve Report to the Administrative Agent pursuant to Section
8.11 (commencing with the Reserve Report as of June 30, 2017), written notice of
the occurrence of the Borrower or any other Group Member entering into a
take-or-pay, ship-or-pay or other prepayments arrangement with respect to the
Oil and Gas Properties of the Borrower or any other Group Member.
(q)    Other Requested Information. Promptly, but in any event within five (5)
Business Days following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Subsidiary (including any Plan or Multiemployer Plan to which any Group Member
or any of their respective ERISA Affiliates contributes or has an obligation to
contribute and any reports or other information, in either case with respect
thereto, required to be filed under ERISA), or compliance with the terms of this
Agreement or any other Loan Document, as the Administrative Agent or any Lender
may reasonably request in writing.
Documents required to be delivered pursuant to this Section 8.01 may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which a Group Member posts such documents to its
publicly-accessible website or to EDGAR (or such other publicly-accessible
internet database that may be established and maintained by the SEC as a
substitute for or successor to EDGAR) or (ii) on which such documents are posted
on the Borrower’s behalf on IntraLinks/IntraAgency or another relevant website,
if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
of any such documents.
Section 8.02    Notices of Material Events. Within three (3) Business Days, the
Borrower will furnish to the Administrative Agent written notice of the
following:
(a)    Defaults. The occurrence of any Default or Event of Default;
(b)    Governmental Matters. 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 Group
Members thereof not previously disclosed in writing to the Lenders or any
material adverse development in any action, suit, proceeding, investigation or
arbitration (whether or not previously disclosed to the Lenders) that, in either
case, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect;

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(c)    ERISA Events. The occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower or any Group Member in an aggregate amount
exceeding $2,500,000; and
(d)    Material Adverse Effect and Borrowing Base Adjustments. Any other
development that results in, or could reasonably be expected to result in either
(i) a Material Adverse Effect or (ii) an adjustment to the Borrowing Base
pursuant to any Borrowing Base Adjustment Provision.
Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
Section 8.03    Existence; Conduct of Business. The Borrower will, and will
cause each Group Member 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 necessary to the conduct of
its business and maintain, if necessary, its qualification to do business in
each other material jurisdiction in which its Oil and Gas Properties is located
or the ownership of its Properties requires such qualification, except to the
extent that the failure to be so qualified could not reasonably be expected to
cause 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 Borrower will, and will cause each
other Group Member to, pay its material obligations (other than Material
Indebtedness), including tax liabilities of the Borrower and all of the other
Group Members before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings and (b) the Borrower or such other Group Member has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP.
Section 8.05    Operation and Maintenance of Properties. The Borrower, at its
own expense, will, and will cause each other Group Member to:
(a)    operate its Oil and Gas Properties (i) in accordance with the customary
practices of the industry and (ii) in compliance with all applicable contracts
and agreements and in compliance with all applicable Governmental Requirements,
in the case of clauses (i) and (ii) above, in all material respects, including
applicable pro ration requirements and applicable Environmental Laws, and all
applicable laws, rules and regulations of every other Governmental Authority
from time to time constituted to regulate the development and operation of its
Oil and Gas Properties and the production and sale of Hydrocarbons and other
minerals therefrom in all material respects;
(b)    keep and maintain all Property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted, in accordance
with the standard of a prudent operator;
(c)    promptly pay and discharge, or make reasonable and customary efforts to
cause to be paid and discharged, all material delay rentals, royalties, expenses
and indebtedness accruing under the leases or other agreements affecting or
pertaining to its Oil and Gas Properties and will do all other things necessary,
in accordance with industry standards, to keep unimpaired their rights with
respect thereto and prevent any forfeiture thereof or default thereunder, in
each case, in all material respects;

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(d)    promptly perform or make reasonable and customary efforts to cause to be
performed, in accordance with customary industry standards, the obligations
required by each and all of the assignments, deeds, leases, sub-leases,
contracts and agreements affecting its interests in its Oil and Gas Properties
and other material Properties, in each case, in all material respects; and
(e)    to the extent the Borrower is not the operator of any Property, the
Borrower shall use reasonable efforts to cause the operator to comply with this
Section 8.05.
Section 8.06    Insurance. The Borrower will maintain, with financially sound
and reputable insurance companies, insurance covering all Group Members, 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 the applicable insurance
policy or policies insuring the Group Members or their Property shall be
endorsed in favor of and made payable to the Administrative Agent as sole “loss
payee” or other formulation reasonably acceptable to the Administrative Agent
and such liability policies shall name the Administrative Agent and the Lenders
as “additional insureds” and provide that the insurer will endeavor to give at
least 30 days prior notice of any cancellation to the Administrative Agent.
Section 8.07    Books and Records; Inspection Rights. The Borrower will, and
will cause each other Group Member to, keep proper books of record and account
in which full, true and correct entries in conformity with GAAP, prudent
accounting practice and all Governmental Requirements shall be made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each other Group Member to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior written 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 during normal business hours and as often as reasonably
requested.
Section 8.08    Compliance with Laws. The Borrower will, and will cause each
Group Member to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its Property in all material
respects. The Borrower will maintain in effect and enforce policies and
procedures designed to ensure compliance by the Group Members and their
respective directors, officers, employees and agents with applicable
Anti-Corruption Laws and applicable Sanctions.
Section 8.09    Environmental Matters.
(a)    The Borrower will, and will cause each Group Member to; (i) comply with
all applicable Environmental Laws, and undertake reasonable efforts to ensure
that all tenants and subtenants (if any), and all Persons with whom any Group
Member has contracted for the exploration, development, production, operation,
or other management of an oil or gas well or lease, comply with all applicable
Environmental Laws; and (ii) generate, use, treat, store, release, transport,
dispose of, and otherwise manage all Hazardous Materials in a manner that could
not reasonably be expected to result in any liability to any Group Member or to
adversely affect any real property owned, leased or operated by any of them, and
take reasonable efforts to prevent any other Person from generating, using,
treating, storing, releasing, transporting, disposing of, or otherwise managing
Hazardous Materials in a manner that could reasonably be expected to result in a
liability to any Group Member, or with respect to any Mortgaged Property, could
reasonably be expected to adversely affect its fair saleable value (for the
avoidance of doubt, with respect to activities on properties neighboring such
real property, such reasonable efforts shall not include any obligation to
monitor such activities or properties); it being understood that this clause (a)
shall be deemed not breached by a noncompliance with any of the foregoing (i) or
(ii) if, upon learning of such noncompliance

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or any condition that results from such noncompliance, any affected Group Member
promptly develops and diligently implements a response to such noncompliance and
any such condition that is consistent with principles of prudent environmental
management and all applicable Environmental Laws, and provided that such
response and condition, in the aggregate with any other such responses and
conditions, could not reasonably be expected to have a Material Adverse Effect.
(b)    The Borrower will promptly, but in no event later than five (5) days
after learning of any action, investigation, demand or inquiry contemplated by
this Section 8.09(b), notify the Administrative Agent and the Lenders in writing
of any action, investigation, demand, or inquiry by any Person threatened in
writing or commenced against the Borrower or any Group Member, or any of their
property or any property with respect to which a Group Member has any interest
or obligation, in connection with any applicable Environmental Laws or regarding
any Hazardous Materials (excluding routine testing and corrective action),
unless the Borrower reasonably determines, based on the information reasonably
available to it at the time, that such action, investigation, demand or inquiry
is unlikely to result in costs and liabilities in excess of $2,500,000 (it being
understood that the amount will be determined in the aggregate with the costs
and liabilities of all related similar actions, investigations, demands or
inquiries) and in any case could not reasonably be expected to have a Material
Adverse Effect (it being understood that the Borrower shall be deemed to have
given notice under this Section 8.09(b) regarding the matters set forth on
Schedule 8.09(b) to this Agreement to the extent such matters are described
thereon).
(c)    If an Event of Default has occurred or is reasonably anticipated, or if
any event or circumstance has occurred or is reasonably suspected that could
reasonably be expected to result in a material diminution in the value of any of
the Mortgaged Properties, the Administrative Agent may (but shall not be
obligated to), at the expense of the Borrower (such expenses to be reasonable in
light of the circumstances), conduct such investigation as it reasonably deems
appropriate to determine the nature and extent of any noncompliance with
applicable Environmental Laws, the nature and extent of the presence of any
Hazardous Material and the nature and extent of any other environmental
conditions that may exist at or affect any of the Mortgaged Properties, and the
Loan Parties and each relevant Group Member shall reasonably cooperate with the
Administrative Agent in conducting such investigation and in implementing any
response to such noncompliance, Hazardous Material or other environmental
condition as the Administrative Agent reasonably deems appropriate. Such
investigation and response may include, without limitation, a detailed visual
inspection of the Mortgaged Properties, including all storage areas, storage
tanks, drains and dry wells and other structures and locations, as well as the
taking of soil samples, surface water samples, and ground water samples and such
other investigations or analyses as the Administrative Agent deems appropriate,
and any containment, cleanup, removal, repair, restoration, remediation or other
remedial work. Upon reasonable request and notice, the Administrative Agent and
its officers, employees, agents and contractors shall have and are hereby
granted the right to enter upon the Mortgaged Properties for the foregoing
purposes.
Section 8.10    Further Assurances.
(a)    The Borrower at its sole expense will, and will cause each other Group
Member to, promptly execute and deliver to the Administrative Agent all such
other documents, agreements and instruments reasonably requested by the
Administrative Agent to (i) further evidence and more fully describe the
collateral intended as security for the Secured Obligations, (ii) correct any
omissions in this Agreement or the Security Instruments, (iii) state more fully
the obligations secured therein, (iv) perfect, protect or preserve any Liens
created pursuant to this Agreement or any of the Security Instruments or the
priority thereof, or (v) 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 to ensure that the Administrative Agent,
on behalf of the Secured Parties, has a perfected security interest in all
assets of the Loan Parties. In

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addition, at the Administrative Agent’s request, the Borrower, at its sole
expense, shall provide any information requested to identify any Collateral,
including an updated Perfection Certificate, a customary “lease to well”
reconciliation schedule, list or similar item, exhibits to Mortgages in form and
substance reasonably satisfactory to the Administrative Agent (which such
exhibits shall be in recordable form for the applicable jurisdiction) or any
other information requested in connection with the identification of any
Collateral.
(b)    The Borrower hereby authorizes the Administrative Agent to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Mortgaged Property without the signature of the Borrower
or any other Loan Party where permitted by law, which financing statements may
contain a description of collateral that describes such property in any manner
as the Administrative Agent may reasonably determine is necessary or advisable
to ensure the perfection of the security interest in the Collateral consistent
with the terms of the Loan Documents, including describing such property as “all
assets” or “all property” or words of similar effect. A carbon, photographic or
other reproduction of the Security Instruments or any financing statement
covering the Mortgaged Property or any part thereof shall be sufficient as a
financing statement where permitted by law.
Section 8.11    Reserve Reports.
(a)    On or before April 1st and October 1st of each year, the Borrower shall
furnish to the Administrative Agent and the Lenders a Reserve Report evaluating
the Oil and Gas Properties of the Borrower and its Subsidiaries as of the
immediately preceding December 31st and June 30th, as applicable.  The Reserve
Report as of December 31st of 2016 which shall be delivered on or before April
1st of 2017, shall be prepared by or under the supervision of the chief engineer
of the Borrower in accordance with the Borrower’s past practices and shall be
audited by one or more Approved Petroleum Engineers.  Thereafter, (i) each
Reserve Report as of December 31st and delivered on or before April 1st of each
year (the “December 31 Reserve Report”), shall be prepared by one or more
Approved Petroleum Engineers, and (ii) each Reserve Report as of June 30th
delivered on or before October 1st of each year shall be prepared by one or more
Approved Petroleum Engineers or internally under the supervision of the chief
engineer of the Borrower who shall certify such Reserve Report to be true and
accurate in all material respects and to have been prepared in accordance with
the procedures used in the immediately preceding December 31 Reserve Report.
(b)    In the event of a request for an Interim Redetermination pursuant to
Section 2.07(b), the Borrower shall furnish to the Administrative Agent and the
Lenders a Reserve Report prepared by or under the supervision of the chief
engineer of the Borrower who shall certify such Reserve Report to be true and
accurate in all material respects and to have been prepared in accordance with
the procedures used in the immediately preceding December 31 Reserve Report with
an “as of” date as required by the Administrative Agent as soon as commercially
reasonable, but in any event no later than thirty (30) days following the
receipt of such request; provided that at any time prior to delivery of such
Reserve Report the Administrative Agent may, or at the direction of the Required
Lenders shall, elect to use the most recently delivered Reserve Report, which
such Reserve Report may be rolled forward in a customary manner.
(c)    With the delivery of each Reserve Report, the Borrower shall provide to
the Administrative Agent and the Lenders a Reserve Report Certificate
substantially in the form of Exhibit I from a Responsible Officer certifying
that in all material respects: (i) the information contained in the Reserve
Report and any other information delivered in connection therewith is true and
correct, (ii) except as set forth on an exhibit to the certificate, the Borrower
or the other Loan Parties own good and defensible title to the Oil and Gas
Properties evaluated in such Reserve Report and such Oil and Gas Properties are
free of all Liens except for Liens permitted by Section 9.03, (iii) except as
set forth on an exhibit to the certificate,

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(A) on a net basis there are no gas imbalances, take or pay or other prepayments
in excess of the volume specified in Section 7.18 with respect to the Oil and
Gas Properties evaluated in such Reserve Report which would require the Borrower
or any other Group Member to deliver Hydrocarbons either generally or produced
from such Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor and (B) there are no take-or-pay or ship-or-pay
contracts that have not been disclosed in a previous Reserve Report Certificate,
(iv) none of their Oil and Gas Properties have been sold (other than
Hydrocarbons sold in the ordinary course of business) since the date of the last
Borrowing Base determination except as set forth on an exhibit to the
certificate, which exhibit shall list all of its Oil and Gas Properties sold
(other than Hydrocarbons sold in the ordinary course of business) and in such
detail as reasonably required by the Administrative Agent, (v) attached to the
certificate is a list of all marketing agreements entered into by a Group Member
subsequent to the later of the date hereof or the most recently delivered
Reserve Report which the Borrower could reasonably be expected to have been
obligated to list on Schedule 7.19 had such agreement been in effect on the date
hereof and (vi) attached thereto is a schedule of the Oil and Gas Properties
evaluated by such Reserve Report that are Mortgaged Properties and demonstrating
the percentage of the PV-9 of the Oil and Gas Properties that the value of such
Mortgaged Properties represent and that such percentage is in compliance with
Section 8.13(a) (the certificate described herein, the “Reserve Report
Certificate”). For the avoidance of doubt, the requirement to provide a Reserve
Report Certificate shall require the delivery of such Reserve Report Certificate
at the time each Reserve Report is delivered.
Section 8.12    Title Information.
(a)    On or before the delivery to the Administrative Agent and the Lenders of
each Reserve Report required by Section 8.11(a), the Borrower shall deliver
title information in form and substance acceptable to the Administrative Agent
covering enough of the Borrowing Base Properties evaluated by such Reserve
Report that were not included in the immediately preceding Reserve Report, so
that the Administrative Agent shall have received reasonably satisfactory title
information on Hydrocarbon Interests constituting at least 85% of the PV-9 of
the Borrowing Base Properties evaluated by such Reserve Report as determined by
the Administrative Agent.
(b)    If the Borrower has provided title information for additional Properties
under Section 8.12(a), the Borrower shall, within 60 days of notice from the
Administrative Agent that title defects or exceptions exist with respect to such
additional Properties (or such longer period as the Administrative Agent may
approve in its sole discretion), either (i) cure any such title defects or
exceptions (including defects or exceptions as to priority) which are not
permitted by Section 9.03 raised by such information, (ii) substitute acceptable
Mortgaged Properties with no title defects or exceptions except for Liens
permitted by Section 9.03 having an equivalent or greater value or (iii) deliver
title information in form and substance acceptable to the Administrative Agent
so that the Administrative Agent shall have received, together with title
information previously delivered to the Administrative Agent, satisfactory title
information on Hydrocarbon Interests constituting at least 85% of the PV-9 of
the Borrowing Base Properties evaluated by such Reserve Report as determined by
the Administrative Agent.
(c)    If the Borrower is unable to cure any title defect reasonably requested
by the Administrative Agent or the Lenders to be cured within the 60-day period
or the Borrower does not comply with the requirements to provide acceptable
title information covering 85% of the PV-9 of the Borrowing Base Properties
evaluated in the most recent Reserve Report as determined by the Administrative
Agent, such failure shall not be a Default, but instead the Administrative Agent
and/or the Required Lenders shall each have the right to exercise the following
remedy in their sole discretion from time to time, and any failure to so
exercise this remedy at any time shall not be a waiver as to future exercise of
the remedy by the Administrative Agent or the Lenders. To the extent that the
Administrative Agent or the Required Lenders

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are not reasonably satisfied with title to any Mortgaged Property after the
60-day period has elapsed, such unacceptable Mortgaged Property shall not count
towards the 85% requirement, and the Administrative Agent may send a notice to
the Borrower and the Lenders that the then outstanding Borrowing Base shall be
reduced by an amount as determined by the Required Lenders to cause the Borrower
to be in compliance with the requirement to provide acceptable title information
covering 85% of the PV-9 of the Borrowing Base Properties evaluated by such
Reserve Report. This new Borrowing Base shall become effective immediately after
receipt of such notice.
Section 8.13    Additional Collateral; Additional Guarantors.
(a)    In connection with each redetermination of the Borrowing Base (including,
for avoidance of doubt, any Interim Redetermination), the Borrower shall review
the Reserve Report and the list of current Mortgaged Properties (as described in
Section 8.11(c)(vi)) to ascertain whether the Mortgaged Properties represent at
least 85% of the PV-9 of the Borrowing Base Properties evaluated in the most
recently completed Reserve Report after giving effect to exploration and
production activities, acquisitions, Dispositions and production. In the event
that the Mortgaged Properties do not represent at least 85% of such PV-9 value,
then the Borrower shall, and shall cause the other Loan Parties to, grant,
within thirty (30) days of delivery of the Reserve Report Certificate required
under Section 8.11(c), to the Administrative Agent as security for the Secured
Obligations a first-priority Lien interest (provided that Excepted Liens of the
type described in clauses (a) to (d) and (f) of the definition thereof may
exist, but subject to the provisos at the end of such definition) on additional
Oil and Gas Properties not already subject to a Lien of the Security Instruments
such that after giving effect thereto, the Mortgaged Properties will represent
at least 85% of such PV-9 value. All such Liens will be created and perfected by
and in accordance with the provisions of deeds of trust, security agreements and
financing statements or other Security Instruments, all in form and substance
reasonably satisfactory to the Administrative Agent and with sufficient executed
(and acknowledged where necessary or appropriate) counterparts for recording
purposes. In order to comply with the foregoing, if any Subsidiary grants a Lien
on its Oil and Gas Properties pursuant to this Section 8.13(a) and such
Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with
Section 8.13(b). It is understood that the obligation to pledge and provide
first priority perfected liens on only 85% (rather than 100%) of the PV-9 of the
Borrowing Base Properties is a matter of administrative convenience only and it
is the intention of the parties that the Administrative Agent benefit from an
all assets pledge of the Loan Parties’ Properties; accordingly the percentage of
the PV-9 of the Borrowing Base Properties pledged to the Administrative Agent
for the benefit of the Secured Parties may be up to 100% at any time.
(b)    The Borrower shall promptly cause each Domestic Subsidiary Group Member
that is a wholly-owned Material Subsidiary to guarantee and secure the Secured
Obligations pursuant to the Guarantee and Collateral Agreement, including
pursuant to a supplement or joinder thereto. In connection with any such
guaranty and security interest grant, the Borrower shall, or shall cause (i)
such Material Subsidiary to promptly execute and deliver such Guarantee and
Collateral Agreement (or a supplement thereto, as applicable), (ii) the owners
of the Equity Interests of such Material Subsidiary who are Group Members to
pledge all of the Equity Interests of such Material Subsidiary (including
delivery of original stock certificates evidencing the Equity Interests of such
Subsidiary, together with an appropriate undated stock powers for each
certificate duly executed in blank by the registered owner thereof) and (iii)
such Material Subsidiary or other Person, as applicable, to promptly execute and
deliver such other additional closing documents, legal opinions and certificates
as shall reasonably be requested by the Administrative Agent.
(c)    In the event that any Loan Party becomes the owner of (i) a first tier
Foreign Group Member or (ii) a Domestic Subsidiary Group Member, then the parent
Loan Party shall (A) pledge (x) 65%

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of all Equity Interests of such Foreign Group Member or (y) 100% of all the
Equity Interests of such Domestic Subsidiary Group Member, in each case, that
are owned by such Loan Party (including, in each case, delivery of original
stock certificates, if any, evidencing such Equity Interests, together with
appropriate stock powers for each certificate duly executed in blank by the
registered owner thereof) and (along with such Foreign Group Member or
Subsidiary Group Member, as applicable) execute and deliver such other
additional closing documents, legal opinions and certificates as shall
reasonably be requested by the Administrative Agent.
(d)    The Borrower will at all times cause the other material tangible and
intangible assets of the Borrower and each Group Member to be subject to a Lien
of the Security Instruments.
Section 8.14    ERISA Compliance. The Borrower will promptly furnish and will
cause each Subsidiary of the Borrower and any ERISA Affiliate to promptly
furnish to the Administrative Agent (a) immediately upon becoming aware of the
occurrence of any ERISA Event or of any Prohibited Transaction, which could
reasonably be expected to result in liability of the Borrower or Group Member in
an aggregate amount exceeding $2,500,000, in connection with any Plan or any
trust created thereunder, a written notice of the Borrower or such other Group
Member or 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, the
Department of Labor or the PBGC with respect thereto, and (b) immediately upon
receipt thereof, copies of any notice of the PBGC’s intention to terminate or to
have a trustee appointed to administer any Plan. With respect to each Plan, the
Borrower will, and will cause each Subsidiary and ERISA Affiliate to, (A)
satisfy in full and in a timely manner, without incurring any late payment or
underpayment charge or penalty and without giving rise to any lien, all of the
contribution and funding requirements of Section 412 of the Code and of Section
302 of ERISA, and (B) pay, or cause to be paid, to the PBGC and in a timely
manner, without incurring any late payment or underpayment charge or penalty and
without giving rise to any lien, after giving effect to any applicable grace
period, all premiums required pursuant to Sections 4006 and 4007 of ERISA.
Promptly following receipt thereof from the administrator or plan sponsor, but
in any event within five (5) Business Days following any request therefor, the
Borrower will furnish or will cause any applicable Subsidiary and any applicable
ERISA Affiliate to furnish to the Administrative Agent copies of any documents
described in Sections 101(k) or 101(l) of ERISA that any Loan Party or any ERISA
Affiliate may request with respect to any Multiemployer Plan to which any Loan
Party or any ERISA Affiliate contributes or has an obligation to contribute;
provided, that if the Group Members or any of their ERISA Affiliates have not
requested such documents or notices from the administrator or sponsor of the
applicable Multiemployer Plan, then, upon reasonable request of the
Administrative Agent, the Group Members and/or their ERISA Affiliates shall
promptly, but in any event within five (5) Business Days following such request,
make a request for such documents or notices from such administrator or sponsor
and the Borrower shall provide copies of such documents and notices to the
Administrative Agent promptly, but in any event within five (5) Business Days
following receipt thereof.
Section 8.15    [Reserved].
Section 8.16    Marketing Activities. The Borrower will not, and will not permit
any of the other Group Members to, engage in marketing activities for any
Hydrocarbons or enter into any contracts related thereto other than (i)
contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be
produced from their proved Oil and Gas Properties during the period of such
contract, (ii) contracts for the sale of Hydrocarbons scheduled or reasonably
estimated to be produced from proved Oil and Gas Properties of third parties
during the period of such contract associated with the Oil and Gas Properties of
the Borrower and the other Group Members that the Borrower or one of the other
Group Members has the right to market pursuant to joint operating agreements,
unitization agreements or other similar contracts that are usual and customary
in the oil and gas business and (iii) other contracts for the purchase and/or
sale of Hydrocarbons

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of third parties (A) which have generally offsetting provisions (i.e.
corresponding pricing mechanics, delivery dates and points and volumes) such
that no “position” is taken and (B) for which appropriate credit support has
been taken to alleviate the material credit risks of the counterparty thereto.
Section 8.17    Account Control Agreements; Location of Proceeds of Loans.
(a)    The Borrower will, and will cause each other Loan Party to, in connection
with any Deposit Account and/or any Securities Account (other than Excluded
Accounts for so long as it is an Excluded Account) established, held or
maintained on or after the Closing Date promptly, but in any event within five
(5) Business Days of the establishment of such account, cause such Deposit
Account and/or Securities Account (other than Excluded Accounts for so long as
it is an Excluded Account) to be a Controlled Account.
(b)    The Borrower will, and will cause each Loan Party to, until the proceeds
of any Loans are transferred to a third party in accordance with the Loan
Documents, hold the proceeds of any Loans made under this Agreement in a Deposit
Account and/or a Securities Account that is a Controlled Account.
Section 8.18    Unrestricted Subsidiaries
(a)    The Borrower may designate any Restricted Subsidiary as an Unrestricted
Subsidiary and, subject to Section 8.18(c), any Unrestricted Subsidiary as a
Restricted Subsidiary upon delivery to the Administrative Agent of written
notice from the Borrower; provided that immediately before and after such
designation, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) immediately after giving effect to such designation, the
Borrower shall be in pro forma compliance with Section 9.01(a) and Section
9.01(b), (iii) no Borrowing Base Deficiency not otherwise cured shall be
existing or result therefrom and (iv) the representations and warranties of the
Borrower and the Guarantors set forth in this Agreement and in the other Loan
Documents shall be true and correct in all material respects (unless already
qualified by materiality in which case such applicable representation and
warranty shall be true and correct) on and as of the date of such designation,
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
designation, such representations and warranties shall continue to be true and
correct in all material respects (unless already qualified by materiality in
which case such applicable representation and warranty shall be true and
correct) as of such specified earlier date.
(b)    The designation of any Restricted Subsidiary as an Unrestricted
Subsidiary and any Disposition of Property to an Unrestricted Subsidiary shall
constitute (i) an Investment under Section 9.05 as of the date of designation or
Disposition, as applicable, in an amount equal to the Fair Market Value of the
Borrower’s investment therein and (ii) a Disposition as of the date of
designation or Disposition, including (A) for purposes of the provisions of
Section 2.08 and (B) for purposes of EBITDA where such Disposition shall be
deemed to be a Material Disposition.
(c)    The Borrower may designate any Unrestricted Subsidiary as a Restricted
Subsidiary once upon delivery of written notice to the Administrative Agent;
provided that such designation (i) shall constitute the incurrence at the time
of designation of any Indebtedness and Liens of such Subsidiary existing at such
time, (ii) shall constitute a reduction in any Investment under Section 9.05 to
the extent that such Investment was attributable to such Restricted Subsidiary
being an Unrestricted Subsidiary at the date of designation in an amount equal
to the Fair Market Value of the Borrower’s investment therein, it being
understood that any incurrence of Indebtedness and Liens in connection herewith
shall require compliance with Section 9.02 and Section 9.03, as applicable and
(iii) shall require the Borrower to be in compliance

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with Section 9.01(a) and Section 9.01(b) immediately before such designation and
in pro forma compliance immediately after such designation.
(d)    Any designation of a Restricted Subsidiary of the Borrower as an
Unrestricted Subsidiary, any designation of a Unrestricted Subsidiary as a
Restricted Subsidiary and any Disposition to an Unrestricted Subsidiary will
require the Borrower to provide the Administrative Agent a certificate signed by
a Responsible Officer of the Borrower certifying that such designation complied
with the preceding conditions in Section 8.18(b) or Section 8.18(c), as
applicable.
ARTICLE IX
NEGATIVE COVENANTS
Until Payment in Full, the Borrower covenants and agrees with the Lenders that:
Section 9.01    Financial Covenants.
(a)    Ratio of Total Debt to EBITDA. The Borrower will not, as of the last day
of any Fiscal Quarter commencing with the Fiscal Quarter ending June 30, 2017,
permit its ratio of Total Debt as of such last day to EBITDA for the period of
four Fiscal Quarters then ending on such day to exceed 4.00 to 1.00.
(b)    Current Ratio. Beginning with the Fiscal Quarter ending June 30, 2017 the
Borrower will not, as of the last day of any Fiscal Quarter, permit its Current
Ratio as of such day then ending to be less than 1.00 to 1.00.
Section 9.02    Indebtedness. The Borrower will not, and will not permit any
other Group Member to, incur, create, assume or suffer to exist any
Indebtedness, except:
(a)    the Loans or other Secured Obligations;
(b)    Indebtedness of the Group Members existing on the date hereof set forth
on Schedule 9.02 as well as any Permitted Refinancing Indebtedness in respect
thereof;
(c)    accounts payable and accrued expenses or other obligations to pay the
deferred purchase price of Property or services, from time to time incurred in
the ordinary course of business which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP;
(d)    purchase money Indebtedness or Capital Lease Obligations not to exceed
$10,000,000 in the aggregate at any one time outstanding;
(e)    unsecured Indebtedness associated with worker’s compensation claims,
bonds or surety obligations required by Governmental Requirements or by third
parties in the ordinary course of business in connection with the operation of,
or provision for the abandonment and remediation of, the Oil and Gas Properties;
(f)    (i) Indebtedness among the Borrower and its Subsidiaries which are Loan
Parties, (ii) Indebtedness between the Subsidiaries of the Borrower which are
not Loan Parties and (iii) Indebtedness extended to the Borrower and its
Subsidiaries which are Loan Parties by any Group Members; provided that (A) such
Indebtedness is not held, assigned, transferred, negotiated or pledged to any
Person other than a

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Loan Party and (B) any such Indebtedness owed by either the Borrower or a
Guarantor shall be subordinated to the Secured Obligations on terms satisfactory
to the Administrative Agent;
(g)    endorsements of negotiable instruments for collection in the ordinary
course of business;
(h)    any guarantee of any other Indebtedness permitted to be incurred
hereunder;
(i)    unsecured Indebtedness in respect of Swap Agreements entered into in
compliance with Section 9.17;
(j)    Indebtedness of the Borrower in respect of Permitted Unsecured Debt and
Permitted Second Lien Debt and, in each case, any Permitted Refinancing
Indebtedness of such Indebtedness; and
(k)    other Indebtedness not to exceed $10,000,000 in the aggregate at any one
time outstanding.
Section 9.03    Liens. The Borrower will not, and will not permit any Group
Member to, create, incur, assume or permit to exist any Lien on any of its
Properties (now owned or hereafter acquired), except:
(a)    Liens securing the payment of any Secured Obligations;
(b)    Liens existing on the Closing Date and disclosed on Schedule 9.03 and
Excepted Liens;
(c)    Liens securing purchase money Indebtedness or Capital Leases Obligations
permitted by Section 9.02(d) but only on the Property that is the subject of any
such Indebtedness or lease, accessions and improvements thereto, insurance
thereon, and the proceeds of the foregoing;
(d)    Liens securing any Permitted Refinancing Indebtedness; provided that any
such Permitted Refinancing Indebtedness is not secured by any additional or
different Property not securing the Refinanced Indebtedness;
(e)    Liens on Collateral securing any Permitted Second Lien Debt; and
(f)    Liens on Property not constituting Collateral that secure Indebtedness
and that are not otherwise permitted by the foregoing clauses of this Section
9.03; provided that the aggregate or principal or face amount of all debt
secured by such Liens pursuant to this Section 9.03(f), and the Fair Market
Value of the Properties subject to such Liens (determined as of the date such
Liens are incurred), shall not exceed $10,000,000 in the aggregate at any time
outstanding.
Section 9.04    Restricted Payments; Restrictions on Amendments of Permitted
Unsecured Debt and Permitted Second Lien Debt.
(a)    Restricted Payments. The Borrower will not, and will not permit any of
the other Group Members to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, except (i) the Borrower may declare and
pay Restricted Payments with respect to its Equity Interests payable solely in
additional shares of its Equity Interests (other than Disqualified Capital
Stock), (ii) Subsidiaries may make Restricted Payments ratably to the holders of
their Equity Interests and (iii) the Borrower may make Restricted Payments
pursuant to and in accordance with stock option plans, other equity compensation

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plans or other benefit plans for management, employees or other individual
service providers of the Borrower and the other Group Members which plans have
been approved by the Borrower’s board of directors, to the extent such
Restricted Payments are made in the ordinary course of business.
(b)    Redemptions. The Borrower will not, and will not permit any other Group
Member to prior to the date that is ninety-one (91) days after the Maturity
Date, call, make or offer to make any optional or voluntary Redemption of or
otherwise optionally or voluntarily Redeem (whether in whole or in part), (i)
any Permitted Unsecured Debt, (ii) any Permitted Second Lien Debt, (iii) any
other Indebtedness of the type set forth in clauses (a), (h) and (k) of the
definition of Indebtedness (excluding (A) the Secured Obligations and (B) in the
case of such other Indebtedness of the type set forth in clause (a) of the
definition of Indebtedness, Redemptions in an aggregate amount paid not to
exceed $5,000,000) and (iv) any Permitted Refinancing Indebtedness in respect of
the foregoing (such Indebtedness, collectively, the “Specified Indebtedness”);
provided that the Borrower may prepay such Specified Indebtedness with the
proceeds of any Permitted Refinancing Indebtedness in respect thereof or with
the net cash proceeds of Equity Interests (other than Disqualified Capital
Stock) of the Borrower so long as no Default, Event of Default or Borrowing Base
Deficiency has occurred and is continuing or would occur as a result of such
Redemption.
(c)    Amendments. The Borrower will not, and will not permit any other Group
Member to amend, modify, waive or otherwise change, consent or agree to any
amendment, modification, waiver or other change to any Specified Indebtedness if
doing so would (i) increase the rate of interest thereon, (ii) require the
payment of a fee (whether, without limitation, a consent fee, arrangement fee or
any other fee) unless any such fee paid, when combined with any other such fees
and any Investment made in reliance of Section 9.05(i), does not exceed
$5,000,000 or (iii) (A) with respect to Permitted Second Lien Debt or Permitted
Unsecured Debt cause such Specified Indebtedness to not meet the requirements
set forth in the definition of Permitted Refinancing Indebtedness and Permitted
Second Lien Debt or Permitted Unsecured Debt, as applicable (tested as if such
Specified Indebtedness were being issued or incurred at such time) and (B) with
respect to any other Specified Indebtedness, shorten the average maturity or
average life of such Specified Indebtedness.
Section 9.05    Investments, Loans and Advances. The Borrower will not, and will
not permit any other Group Member to, make or permit to remain outstanding any
Investments in or to any Person, except that the foregoing restriction shall not
apply to:
(a)    Investments which are disclosed to the Lenders in Schedule 9.05;
(b)    accounts receivable arising in the ordinary course of business;
(c)    Investments in Cash Equivalents;
(d)    Investments (i) made among the Borrower and the other Subsidiaries which
are Loan Parties, (ii) made between the Subsidiaries of the Borrower which are
not Loan Parties or (iii) made by any Group Member in or to the Borrower or to
its Subsidiaries which are Loan Parties;
(e)    subject to the limits in Section 9.06, Investments in direct ownership
interests in additional Oil and Gas Properties or investments with respect to
and relating to the production of oil, gas and other liquid or gaseous
hydrocarbons from Oil and Gas Properties which are usual and customary in the
oil and gas exploration and production business located, in each case, within
the geographic boundaries of the United States of America;

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(f)    loans or advances to employees, officers or directors in the ordinary
course of business of the Borrower or any of the other Loan Parties, in each
case only as permitted by applicable law, including Section 402 of the Sarbanes
Oxley Act of 2002, but in any event not to exceed $1,000,000 in the aggregate at
any time;
(g)    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 other Group Member as a result of a bankruptcy or other
insolvency proceeding of the obligor in respect of such debts or upon the
enforcement of any Lien in favor of the Borrower or any of the other Group
Members; 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(g) exceeds $1,000,000;
(h)    Investments pursuant to Swap Agreements otherwise permitted under this
Agreement;
(i)    other Investments, when combined with any fees paid under Section
9.04(c)(iii), not to exceed $5,000,000 in the aggregate at any time;
(j)    loans, advances or extensions of credit to suppliers or contractors under
applicable contracts or agreements in the ordinary course of business in
connection with oil and gas development activities of such Borrower or such
Subsidiary; and
(k)    Investments in Unrestricted Subsidiaries, provided that the aggregate
amount of all such Investments at any one time shall not exceed $10,000,000
(without giving effect to any appreciation in the value of such Investment after
date such Investment is made).
Section 9.06    Nature of Business; No International Operations. The Borrower
and the other Group Members, taken as a whole, will not allow any material
change to be made in the character of its business as an independent oil and gas
exploration and production company. The Group Members will not acquire or make
any other expenditures (whether such expenditure is capital, operating or
otherwise) in or related to, any Oil and Gas Properties not located within the
geographical boundaries of the United States of America or in the offshore
federal waters of the United States of America.
Section 9.07    Proceeds of Loans. The Borrower will not permit the proceeds of
the Borrowings to be used for any purpose other than those permitted by Section
7.22. No Loan Party nor any Person acting on behalf of the Borrower has taken or
will take any action which may 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 not directly or, to the knowledge of the Borrower, indirectly
use, and shall procure that its Subsidiaries and its or their respective
directors, officers, employees and agents shall not directly or, to the
knowledge of such Person, indirectly use, the proceeds of any Borrowing or
Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or
authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Anti-Corruption Laws, (b) for the purpose of
funding, financing or facilitating any activities, business or transaction of or
with any Sanctioned Person, or in any Sanctioned Country to the extent such
activities, businesses or transaction would be prohibited by Sanctions if
conducted by a

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corporation incorporated in the United States or (c) in any manner that would
result in the violation of any Sanctions applicable to any party hereto.
Section 9.08    ERISA Compliance. Except as would not, whether individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, the
Borrower will not, and will not permit any ERISA Affiliate to, at any time:
(a)    engage in any transaction in connection with which the Borrower or any
ERISA Affiliate, could be subject to either a civil penalty assessed pursuant to
subsections (c), (i), (l) or (m) of Section 502 of ERISA or a tax imposed by
Chapter 43 of Subtitle D of the Code;
(b)    terminate, or permit any ERISA Affiliate to terminate, any Plan in a
manner, or take any other action with respect to any Plan, which could result in
any liability of the Borrower or any Subsidiary or any ERISA Affiliate to the
PBGC;
(c)    fail to make, or permit any ERISA Affiliate to fail to make, after giving
effect to any applicable grace period, full payment when due of all amounts
which, under the provisions of any Plan, agreement relating thereto or
applicable law, the Borrower, a Subsidiary or any ERISA Affiliate is required to
pay as contributions thereto;
(d)    fail to satisfy, or allow any ERISA Affiliate to fail to satisfy, the
minimum funding standards (within the meaning of Section 412 of the Code or
Section 302 of ERISA), in any case whether or not waived, with respect to any
Plan; and
(e)    acquire, or permit any ERISA Affiliate to acquire, an interest in any
Person that causes such Person to become an ERISA Affiliate with respect to any
Subsidiary or with respect to any ERISA Affiliate if such Person sponsors,
maintains or contributes to, or at any time in the six-year period immediately
preceding such acquisition has sponsored, maintained, or contributed to, (1) any
Multiemployer Plan, or (2) any other Plan that is subject to Title IV of ERISA
under which the actuarial present value of the benefit liabilities under such
Plan exceeds the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA and determined as of the end of the
most recent plan year) of such Plan allocable to such benefit liabilities.
Section 9.09    Sale or Discount of Receivables. Except for receivables obtained
by the Group Members out of the ordinary course of business or the settlement of
joint interest billing accounts in the ordinary course of business or discounts
granted to settle collection of accounts receivable or the sale of defaulted
accounts arising in the ordinary course of business in connection with the
compromise or collection thereof and not in connection with any financing
transaction, the Borrower will not, and will not permit any other Group Member
to, discount or sell (with or without recourse) any of its notes receivable or
accounts receivable.
Section 9.10    Mergers, Etc.. The Borrower will not, and will not permit any
other Group Member to merge into or with or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its Property to any other
Person, (whether now owned or hereafter acquired) or liquidate or dissolve (any
such transaction, a “consolidation”), except that (a) any Loan Party may
consolidate with or into the Borrower (provided the Borrower shall be the
continuing or surviving entity), (b) any Group Member (other than the Borrower)
may consolidate with any Subsidiary of the Borrower which is a Loan Party
(provided such Subsidiary which is a Loan Party shall be the continuing or
surviving entity) and (c) any Subsidiary which is not a Loan Party may
consolidate with any other Subsidiary

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which is not a Loan Party, in each case, so long as no Default, Event of Default
or Borrowing Base Deficiency has occurred and is continuing or would occur as a
result of such consolidation and notice of such consolidation is provided to the
Administrative Agent five (5) Business Days prior to such consolidation.
Section 9.11    Sale of Properties and Termination of Hedging Transactions. The
Borrower will not, and will not permit any Group Member to, sell, assign,
farm-out, convey or otherwise transfer any Property except for:
(a)    the sale of Hydrocarbons in the ordinary course of business (any such
sale, a “Permitted Sale of Hydrocarbons”);
(b)    if no Default or Event of Default has occurred and is continuing, the
sale or other Disposition (including any farmout or similar agreement) of Oil
and Gas Properties not included in the calculation of the Borrowing Base (which,
for avoidance of doubt, includes Oil and Gas Properties not constituting Proved
Reserves);
(c)    the sale or transfer of equipment that (i) is no longer necessary for the
business of the Borrower or such other Group Member or (ii) is replaced by
equipment of at least comparable value and use;
(d)    the sale or other Disposition (including Casualty Events or in connection
with any condemnation proceeding) of any Oil and Gas Property constituting
Proved Reserves or any interest therein, 100% of the Equity Interests of any
Subsidiary owning Oil and Gas Properties constituting Proved Reserves or the
Unwind of Swap Agreements; provided that
(i)    not less than 80% of the consideration received in respect of such sale
or other Disposition shall be cash (provided that Oil and Gas Properties
received as consideration in connection with an asset swap may be deemed to be
cash in an amount equal to the Fair Market Value of the Oil and Gas Properties
received so long as the aggregate amount of such deemed cash consideration does
not to exceed 10% of the Borrowing Base then in effect at the time of such sale
or other Disposition),
(ii)    no Default or Event of Default has occurred and is continuing nor would
a Default, Event of Default or Borrowing Base Deficiency (after giving effect to
any prepayment of the Loans made with the proceeds of such sale or other
Disposition) result therefrom, and
(iii)    (other than in respect of Casualty Events) the consideration received
in respect of a sale or other Disposition of any Oil and Gas Property, Equity
Interest or interest therein shall be equal to or greater than the Fair Market
Value of the Oil and Gas Property, Equity Interest or interest therein subject
of such sale or other Disposition (as reasonably determined by a Responsible
Officer 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 the foregoing);
(e)    sales and other Dispositions for cash of Properties having a Fair Market
Value in aggregate not to exceed $5,000,000;
(f)    (i) transfers of Properties between the Borrower and its Subsidiaries
which are Loan Parties, (ii) transfers of Properties between the Subsidiaries of
the Borrower which are not Group Members and (iii) transfers of Property from
Subsidiaries which are not Loan Parties to Loan Parties; and
(g)    any transaction permitted by Section 9.05.

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Section 9.12    Sales and Leasebacks. The Borrower will not, and will not permit
any other Group Member to enter into any arrangement with any Person providing
for the leasing by any Group Member of real or personal property that has been
or is to be sold or transferred by such Group Member to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of such Group Member.
Section 9.13    Environmental Matters. The Borrower will not, and will not
permit any other Group Member, to undertake (or allow to be undertaken at any
property subject to its control) anything which will subject any such property
to any obligation to conduct any investigation or remediation under any
applicable Environmental Laws or regarding any Hazardous Material that could
reasonably be expected to have a Material Adverse Effect, it being understood
that the foregoing will not be deemed to limit (i) any obligation under
applicable Environmental Law to disclose any relevant facts, conditions or
circumstances to the appropriate Governmental Authority as and to the extent
required by any such Environmental Law, (ii) any investigation or remediation
required to be conducted under applicable Environmental Law, (iii) any
investigation reasonably requested by a prospective purchaser of any property,
provided that such investigation is subject to conditions and limitations
(including indemnification and insurance obligations regarding the conduct of
such investigation) that are reasonably protective of the Borrower and any Group
Member, or (iv) any investigation or remediation required pursuant to any lease
agreements with the owners of any Properties.
Section 9.14    Transactions with Affiliates. Except for payment of Restricted
Payments permitted by Section 9.04, the Borrower will not, and will not permit
any other Group Member to, enter into any transaction, including any purchase,
sale, lease or exchange of Property or the rendering of any service, with any
Affiliate (other than between the Borrower and other Loan Parties) unless such
transactions are otherwise not prohibited under this Agreement and are upon fair
and reasonable terms no less favorable to it than it would obtain in a
comparable arm’s length transaction with a Person not an Affiliate.
Section 9.15    Subsidiaries(a)    . The Borrower shall not, and shall not
permit any Group Member to, sell, assign or otherwise Dispose of any Equity
Interests in any Group Members except in compliance with Section 9.11(f). The
Borrower shall not, and shall not permit any other Group Member to, have any
foreign Subsidiaries (other than those in existence on the Closing Date).
Section 9.16    Negative Pledge Agreements; Dividend Restrictions. The Borrower
will not, and will not permit any other Group Member to, create, incur, assume
or suffer to exist any contract, agreement or understanding which in any way
prohibits or restricts (a) the granting, conveying, creation or imposition of
any Lien on any of its Property to secure the Secured Obligations or which (i)
requires the consent of other Persons in connection therewith or (ii) provides
that any such occurrence shall constitute a default or breach of such agreement
or (b) the Borrower or any other Group Member from (i) paying dividends or
making distributions to any Loan Party, (ii) paying any Indebtedness owed to any
Loan Party (other than any restrictions imposed on any Loan Party making any
such payment pursuant to the Loan Documents during an Event of Default or
pursuant to the terms of any Permitted Second Lien Debt Documents having the
same restrictions as the Loan Documents), (iii) making loans or advances to, or
other Investments in, any Loan Party (other than any restrictions imposed on any
Loan Party making such loan or advance pursuant to the Loan Documents during an
Event of Default or pursuant to the terms of any Permitted Second Lien Debt
Documents having the same restrictions as the Loan Documents) or (iv) prepaying
or repaying Secured Obligations; provided that (A) the foregoing shall not apply
to restrictions and conditions under the Loan Documents and (B) clause (a) of
the foregoing shall not apply to restrictions or conditions imposed by any
agreement for purchase money Indebtedness or Capital Lease Obligations permitted
by this Agreement if

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such restrictions or conditions apply only to the Property securing such
purchase money Indebtedness or Capital Lease Obligations.
Section 9.17    Swap Agreements.
(a)    The Borrower will not, and will not permit any other Group Member to,
enter into any Swap Agreements with any Person other than:
(i)    Swap Agreements with an Approved Counterparty in respect of commodities
entered into not for speculative purposes the notional volumes for which (when
aggregated with other commodity Swap Agreements then in effect other than basis
differential swaps on volumes already hedged pursuant to other Swap Agreements)
do not exceed, as of the date such Swap Agreement is entered into (A) ninety
percent (90%) of the reasonably anticipated projected production (as such
production is projected in the most recent Reserve Report delivered pursuant to
the terms of this Agreement) from Proved Reserves from the Borrower’s and its
Restricted Subsidiaries’ Oil and Gas Properties for each month during the period
which such Swap Agreement is in effect for each of crude oil, natural gas and
natural gas liquids, calculated separately (it being understood that natural gas
liquids may be hedged with Swap Agreements for natural gas, in which case any
such Swap Agreements for natural gas shall be measured as counting toward the
amount notional volumes of natural gas liquids which are permitted to be subject
to Swap Agreements hereunder on a BTU equivalent basis), for the period of
twenty-four (24) months following the date such Swap Agreement is entered into
and (B) ninety percent (90%) of the reasonably anticipated projected production
(as such production is projected in the most recent Reserve Report delivered
pursuant to the terms of this Agreement) from the Borrower’s and its Restricted
Subsidiaries’ proved, developed, producing Oil and Gas Properties for each month
during the period which such Swap Agreement is in effect for each of crude oil,
natural gas and natural gas liquids, calculated separately (it being understood
that natural gas liquids may be hedged with Swap Agreements for natural gas, in
which case any such Swap Agreements for natural gas shall be measured as
counting toward the amount notional volumes of natural gas liquids which are
permitted to be subject to Swap Agreements hereunder on a BTU equivalent basis)
for the period of twenty-five (25) to sixty (60) months following the date such
Swap Agreement is entered into; provided that (x) the Borrower may update the
projections referenced in Section 9.17(a)(i)(A) and Section 9.17(a)(i)(B) above
(as well as Section 9.17(a)(ii)(A) below) by providing the Administrative Agent
an internal report prepared by or under the supervision of the chief engineer of
the Borrower and its other Group Members and any additional informational
reasonably requested by the Administrative Agent that is, in each case,
reasonably satisfactory to the Administrative Agent (and shall include new
reasonably anticipated Hydrocarbon production from new wells or other production
improvements and any dispositions, well shut-ins and other reductions of, or
decreases to, production) and (y) any Swap Agreements shall not, in any case,
have a tenor of greater than five (5) years; provided further that the foregoing
limitations shall not apply to purchased put options or floors for Hydrocarbons
that are not related to corresponding calls, collars or swaps and with respect
to which any Group Member has no payment obligation other than premiums and
charges the total amount of which are fixed and known at the time such
transaction is entered into;
(ii)    in connection with a proposed acquisition by the Borrower or its
Restricted Subsidiaries of Oil and Gas Properties pursuant to a binding and
enforceable purchase and sale agreement and in addition to the Swap Agreements
permitted to be entered into pursuant to Section 9.17(a)(i), Swap Agreements
with Approved Counterparties in respect of commodities entered into not for
speculative purposes; provided that:
(A)    the notional volumes for which (exclusive of puts, floors and basis
differential swaps on volumes already hedged pursuant to other Swap Agreements
for which the

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total amount of obligations thereunder are known and fixed at the time such
transaction is entered into) do not exceed, as of the date such Swap Agreement
is entered into (as such production is projected in the most recent Reserve
Report delivered pursuant to the terms of this Agreement (subject to the terms
of the proviso in Section 9.17(a)(i)(x))) and for each month during the period
during which such Swap Agreement is in effect) fifteen percent (15%) of the
reasonably anticipated production from Proved Reserves from the Borrower’s and
its Restricted Subsidiaries’ Oil and Gas Properties for each month during the
period which such Swap Agreement is in effect for each of crude oil, natural gas
and natural gas liquids, calculated separately (it being understood that natural
gas liquids may be hedged with Swap Agreements for natural gas in which case any
such Swap Agreements for natural gas shall be measured as counting toward the
amount notional volumes of natural gas liquids which are permitted to be subject
to Swap Agreements hereunder on a BTU equivalent basis) for the period of
thirty-six (36) months following the date such Swap Agreement is entered into;
(B)    such Swap Agreements are entered into on or after the date on which the
Borrower or any of its Restricted Subsidiaries signs such a binding and
enforceable purchase and sale agreement in connection with such proposed
acquisition of Oil and Gas Properties;
(C)    such Swap Agreements shall not, in any case, have a tenor of greater than
three (3) years; and
(D)    the Borrower shall Unwind such Swap Agreements to the extent necessary to
be in compliance with the limitations set forth in Section 9.17(a)(i) on the
earliest of (1) the date of consummation of such proposed acquisition of Oil and
Gas Properties, (2) the date that is 90 days after the execution of the purchase
and sale agreement relating to such acquisition to the extent that such
acquisition has not been consummated by such date, and (3) any Loan Party knows
with reasonable certainty that such acquisition will not be consummated or such
purchase and sale agreement is terminated; and
(iii)    Swap Agreements in respect of interest rates with an Approved
Counterparty, which effectively convert interest rates from floating to fixed,
the notional amounts of which (when aggregated with all other Swap Agreements of
the Borrower and its Subsidiaries then in effect effectively converting interest
rates from floating to fixed) do not exceed 80% of the then outstanding
principal amount of all the Borrower’s Indebtedness for borrowed money which
bears interest at a floating rate;
(b)    in no event shall any Swap Agreement contain any requirement, agreement
or covenant for any Group Member to post collateral or margin to secure their
obligations under such Swap Agreement or to cover market exposures (other than
under the Security Instruments);
(c)    Swap Agreements shall only be entered into in the ordinary course of
business (and not for speculative purposes);
(d)    no Swap Agreement in respect of commodities shall be terminated, unwound,
cancelled or otherwise disposed of except to the extent permitted by Section
9.11; and
(e)    if, after the end of any calendar month, the aggregate volume of all Swap
Agreements in respect of commodities for which settlement payments were
calculated in such calendar month and the preceding calendar month (other than
basis differential swaps on volumes hedged by other Swap Agreements) exceeded,
or will exceed, 100% of actual production of crude oil, natural gas and natural
gas liquids, calculated separately, in such calendar months, then the Borrower
shall terminate, create off-setting positions, allocate

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volumes to other production the Borrower or any Subsidiary is marketing, or
otherwise Unwind existing Swap Agreements such that, at such time, future
hedging volumes will not exceed 100% of reasonably anticipated projected
production from proved, developed producing Oil and Gas Properties for each of
crude oil, natural gas and natural gas liquids, calculated separately, for the
then-current and any succeeding calendar months.
Section 9.18    Amendments to Organizational Documents and Material Contracts.
The Borrower shall not, and shall not permit any other Group Member to, amend,
supplement or otherwise modify (or permit to be amended, supplemented or
modified) its Organizational Documents in any material respect that could
reasonably be expected to be materially adverse to the interests of the
Administrative Agent or the Lenders without the consent of the Administrative
Agent.
Section 9.19    Changes in Fiscal Periods. The Borrower shall not, and shall not
permit any other Group Member to have its Fiscal Year end on a date other than
December 31 or change the its method of determining Fiscal Quarters.
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) days;
(c)    any representation or warranty made or deemed made by or on behalf of the
Borrower or any other Group Member 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, notice, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
(d)    the Borrower or any other Group Member shall fail to observe or perform
any covenant, condition or agreement contained in Section 8.01(k), Section 8.02,
Section 8.03 (only with respect to the Borrower’s existence), Section 8.17,
Section 8.18 or in Article IX;
(e)    the Borrower or any other Group Member 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), Section 10.01(c) or
Section 10.01(d)) or any other Loan Document, and such failure shall continue
unremedied for a period of 30 days after the earlier to occur of (A) notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender) or (B) a Responsible Officer of the Borrower
or such other Group Member otherwise becoming aware of such default;

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(f)    the Borrower or any other Group Member 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 after the applicable grace or notice period, if any,
specified in the relevant document for such Material Indebtedness;
(g)    any other event or condition occurs that results in any Material
Indebtedness of any Group Member becoming due prior to its scheduled maturity or
that enables or permits (after giving effect to any applicable notice periods,
if any, and any applicable grace periods) the holder or holders of any such
Material Indebtedness or any trustee or agent on its or their behalf to cause
any such Material Indebtedness to become due, or to require the Redemption
thereof or any offer to Redeem to be made in respect thereof, prior to its
scheduled maturity or require the Borrower or any other Group Member 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 any Group Member, or its or their debts, or of a substantial part of
its or their assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any other Group Member or for a substantial part of its or
their assets, and, in any such case, such proceeding or petition shall continue
undismissed for sixty (60) days or an order or decree approving or ordering any
of the foregoing shall be entered;
(i)    the Borrower or any other Group Member shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in Section 10.01(h), (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any other Group Member or for a substantial
part of its or their assets, (iv) file an answer admitting the material
allegations of a petition filed against it or them in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) take any action for
the purpose of effecting any of the foregoing; or any partner, or stockholder of
the Borrower shall make any request or take any action for the purpose of
calling a meeting of the partners or stockholders, as applicable, of the
Borrower to consider a resolution to dissolve and wind up the Borrower’s affairs
or (vii) become unable, admit in writing its inability or fail generally to pay
its debts as they become due;
(j)    (i) one or more judgments for the payment of money in an aggregate amount
in excess of $10,000,000 (to the extent not covered by independent third party
insurance 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 any Group Member or any
combination thereof and the same shall remain undischarged for a period of sixty
(60) consecutive days during which execution shall not be effectively stayed;
(k)    the Loan Documents after delivery thereof shall for any reason, except to
the extent permitted by the terms thereof, cease to be in full force and effect
and valid, binding and enforceable in accordance with their terms against the
Borrower or a Loan Party 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 Collateral purported to be covered thereby, except to the extent permitted
by the terms of this Agreement, or the Borrower or any other Loan Party or any
of their Affiliates shall so state or assert in writing; or

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(l)    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(g), Section 10.01(h) or Section 10.01(i), at any time thereafter during
the continuance of such Event of Default, the Administrative Agent 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/or the LC Commitments, and thereupon the
Commitments and/or the LC Commitments shall terminate immediately, and (ii)
declare the Notes and the Loans then outstanding to be due and payable in whole
(or in part, in which case any principal not so declared to be due and payable
may thereafter be declared to be due and payable), and thereupon the principal
of the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower and the Guarantors
accrued hereunder and under the Notes and the other Loan Documents (including
the payment of cash collateral to secure the LC Exposure as provided in Section
2.09(j)), shall become due and payable immediately, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other notice
of any kind, all of which are hereby waived by the Borrower and each Guarantor;
and in case of an Event of Default described in Section 10.01(g), Section
10.01(h) or Section 10.01(i), the 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 the payment of cash collateral to secure the LC Exposure as provided
in Section 2.09(j)), shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and each Guarantor.
(b)    In the case of the occurrence of an Event of Default, the Administrative
Agent and the Lenders will have all other rights and remedies available at law
and equity.
(c)    In the case of the occurrence of an Event of Default which results in the
Commitments terminating then the Borrowing Base shall automatically and
concurrently be reduced to $0.
(d)    All proceeds realized from the liquidation or other Disposition of
collateral and to any other amounts received after maturity of the Loans,
whether from the Borrower, another Loan Party, by acceleration or otherwise,
shall be applied:
(i)    first, to payment or reimbursement of that portion of the Secured
Obligations constituting fees, expenses and indemnities payable to the
Administrative Agent in its capacity as such;
(ii)    second, pro rata to payment or reimbursement of that portion of the
Secured Obligations constituting fees, expenses and indemnities payable to the
Lenders;
(iii)    third, pro rata to payment of accrued interest on the Loans and
regularly scheduled payments in respect of Secured Swap Agreement (but not any
close-out or termination amounts);
(iv)    fourth, pro rata to payment of principal outstanding on the Loans and
the Secured Obligations then owing under Secured Swap Agreements (to the extent
not paid pursuant to clause Third);
(v)    fifth, pro rata to any other Secured Obligations;

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(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 Secured Obligations shall have
been indefeasibly paid in full in cash, shall be paid to the Borrower or as
otherwise required by any Governmental Requirement.
ARTICLE XI
THE ADMINISTRATIVE AGENTS
Section 11.01    Appointment; Powers. Each Lender and Issuing Bank hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto. Each Lender (and each Person that becomes a Lender hereunder
pursuant to Section 12.04) hereby authorizes and directs the Administrative
Agent to enter into the Security Instruments on behalf of such Lender, in each
case, as needed to effectuate the transactions permitted by this Agreement and
agrees that the Administrative Agent may take such actions on its behalf as is
contemplated by the terms of such applicable Security Instrument. Without
limiting the provisions of Sections 11.02 and 12.03, each Lender hereby consents
to the Administrative Agent and any successor serving in such capacity and
agrees not to assert any claim (including as a result of any conflict of
interest) against the Administrative Agent, or any such successor, arising from
the role of the Administrative Agent or such successor under the Loan Documents
so long as it is either acting in accordance with the terms of such documents
and otherwise has not engaged in gross negligence or willful misconduct.

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 or Event of
Default has occurred and is continuing (the use of the term “agent” herein and
in the other Loan Documents with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law; rather, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties), (b) the
Administrative Agent shall have no duty to take any discretionary action or
exercise any discretionary powers, except as provided in Section 11.03, and (c)
except as expressly set forth herein, the Administrative Agent shall not have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any Group Member that is communicated to
or obtained by the bank serving as Administrative Agent or any of its Affiliates
in any capacity. The Administrative Agent shall be deemed not to have knowledge
of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, (v) the satisfaction of any condition set forth in Article VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent or as to those conditions precedent
expressly required to be to the Administrative

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Agent’s satisfaction, (vi) the existence, value, perfection or priority of any
collateral security or the financial or other condition of the Borrower and the
other Group Members or any other obligor or guarantor, or (vii) any failure by
the Borrower or any other Person (other than itself) to perform any of its
obligations hereunder or under any other Loan Document or the performance or
observance of any covenants, agreements or other terms or conditions set forth
herein or therein. For purposes of determining compliance with the conditions
specified in Article VI, each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the proposed closing date specifying
its objection thereto. No Person identified as Arranger or as a Syndication
Agent or Documentation Agent, in each case in its respective capacity as such,
shall have any responsibilities or duties, or incur any liability, under this
Agreement or the other Loan Documents.
Section 11.03    Action by Administrative Agent. The Administrative Agent shall
have no duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Majority Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02) and in all cases the Administrative Agent shall be
fully justified in failing or refusing to act hereunder or under any other Loan
Documents unless it shall (a) receive written instructions from the Majority
Lenders or the Lenders, as applicable, (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
12.02) specifying the action to be taken and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions as aforesaid and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a
Default or Event of Default has occurred and is continuing, then the
Administrative Agent shall take such action with respect to such Default or
Event of 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 or Event of
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. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Majority Lenders or the Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02), and otherwise the Administrative
Agent shall not be liable for any action taken or not taken by it hereunder or
under any other Loan Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith
INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or
willful misconduct.
Section 11.04    Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon and each of the
Borrower, the Lenders and the Issuing Bank(s) 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

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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.
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 or Removal of Administrative Agent. The
Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank(s) and the Borrower. Upon any such resignation, the Majority
Lenders shall have the right, in consultation with the Borrower, to appoint from
among the Lenders a successor. If no successor shall have been so appointed by
the Majority Lenders and shall have accepted such appointment within 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(s), appoint a qualified financial institution as 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 Administrative Agent.
Section 11.07    Administrative Agent as a Lender. The bank serving as the
Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.
Section 11.08    No Reliance. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, any arranger
of this Agreement or any amendment thereto or any other Lender and their
respective Related Parties 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 arranger of this Agreement or any amendment thereto or
any other Lender and their respective Related Parties and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document, any related agreement or any
document furnished hereunder or thereunder. The Administrative Agent shall not
be required to keep themselves informed as to the performance or observance by,
the Borrower or any of the other Group Members of this Agreement, the Loan
Documents or any other document referred to or provided for herein or to inspect
the Properties or books of any such Person. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Arranger shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
Group Member (or any of their Affiliates) which may come

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into the possession of such Agent or any of its Affiliates. In this regard, each
Lender acknowledges that Simpson Thacher & Bartlett LLP is acting in this
transaction as special counsel to the Administrative Agent only, except to the
extent otherwise expressly stated in any legal opinion or any Loan Document.
Each other party hereto will consult with its own legal counsel to the extent
that it deems necessary in connection with the Loan Documents and the matters
contemplated therein.
Section 11.09    Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any of the other Loan Parties, the
Administrative Agent (irrespective of whether the principal of any Loan or LC
Disbursement 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, LC Disbursements and all
other Secured Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Lenders, the Issuing Bank 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 3.05 and Section 12.03.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the Secured
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
Section 11.10    Authority of Administrative Agent to Release Collateral and
Liens; Entry into Intercreditor Agreements.

(i)    irrevocably authorize the Administrative Agent to comply with the
provisions of Section 12.18 (without requirement of notice to or consent of any
Person except as expressly required by Section 12.02(b)); and
(ii)    authorize the Administrative Agent to execute and deliver to the Loan
Parties, any and all releases of Liens, termination statements, assignments or
other documents as reasonably requested by such Loan Party in connection with
any sale or other Disposition of Property to the extent such sale or other
Disposition is permitted by the terms of Section 9.11 or is otherwise authorized
by the terms of the Loan Documents.

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Upon request by the Administrative Agent at any time, the Majority Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guarantee and Collateral Agreement
pursuant to this Section 11.10 or Section 12.18.
(b)    The Lenders, each Issuing Bank and each other Secured Party irrevocably
(i) authorizes the Administrative Agent to enter into or amend any intercreditor
agreement with the Collateral Agent or other representative of the holders of
Indebtedness that is permitted to be secured by a Lien on the Collateral as
permitted under this Agreement, in each case for the purpose of adding the
holders of such Indebtedness (or their representative) as a party thereto and
otherwise causing such Indebtedness to be subject thereto and (ii) and consents
to the Administrative Agent and agrees not to assert any claims against the
Administrative Agent or any successor thereof arising from the role of the
Administrative Agent or such successor under such intercreditor agreement, so
long as it is acting in accordance with the terms of the Loan Documents and such
intercreditor agreement (it being understood that any action taken by the
Administrative Agent acting at the direction of, or with the negative consent
of, the Majority Lenders shall be an action that is undertaken in accordance
with the terms of the Loan Documents). Upon request by the Administrative Agent
at any time, the Majority Lenders will confirm in writing the Administrative
Agent’s authority to enter into or amend such intercreditor agreement pursuant
to this Section 11.10.
Section 11.11    Duties of the Arranger . The Arranger 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.
Section 11.12    Credit Bidding. The Secured Parties hereby irrevocably
authorize the Administrative Agent, at the direction of the Majority Lenders, to
credit bid all or any portion of the Secured Obligations (including by accepting
some or all of the Collateral in satisfaction of some or all of the Secured
Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such
manner purchase (either directly or through one or more acquisition vehicles)
all or any portion of the Collateral (a) at any sale thereof conducted under the
provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of
the Bankruptcy Code, or any similar laws in any other jurisdictions to which a
Credit Party is subject, or (b) at any other sale, foreclosure or acceptance of
collateral in lieu of debt conducted by (or with the consent or at the direction
of) the Administrative Agent (whether by judicial action or otherwise) in
accordance with any applicable law. In connection with any such credit bid and
purchase, the Secured Obligations owed to the Secured Parties shall be entitled
to be credit bid by the Administrative Agent at the direction of the Majority
Lenders on a ratable basis (with Secured Obligations with respect to contingent
or unliquidated claims receiving contingent interests in the acquired assets on
a ratable basis that shall vest upon the liquidation of such claims in an amount
proportional to the liquidated portion of the contingent claim amount used in
allocating the contingent interests) for the asset or assets so purchased (or
for the equity interests or debt instruments of the acquisition vehicle or
vehicles that are issued in connection with such purchase). In connection with
any such bid (i) the Administrative Agent shall be authorized to form one or
more acquisition vehicles and to assign any successful credit bid to such
acquisition vehicle or vehicles, (ii) each of the Secured Parties’ ratable
interests in the Secured Obligations which were credit bid shall be deemed
without any further action under this Agreement to be assigned to such vehicle
or vehicles for the purpose of closing such sale, (iii) the Administrative Agent
shall be authorized to adopt documents providing for the governance of the
acquisition vehicle or vehicles (provided that any actions by the Administrative
Agent with respect to such acquisition vehicle or vehicles, including any
Disposition of the assets or equity interests thereof, shall be governed,
directly or indirectly, by, and the governing documents shall provide for,
control by the vote of the Majority Lenders or their permitted assignees under
the terms of this Agreement or the governing documents of the applicable
acquisition vehicle or vehicles, as the case may be, irrespective of the
termination

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of this Agreement and without giving effect to the limitations on actions by the
Majority Lenders contained in Section 12.02 of this Agreement), (iv) the
Administrative Agent on behalf of such acquisition vehicle or vehicles shall be
authorized to issue to each of the Secured Parties, ratably on account of the
relevant Secured Obligations which were credit bid, interests, whether as
equity, partnership, limited partnership interests or membership interests, in
any such acquisition vehicle and/or debt instruments issued by such acquisition
vehicle, all without the need for any Secured Party or acquisition vehicle to
take any further action, and (v) to the extent that Secured Obligations that are
assigned to an acquisition vehicle are not used to acquire Collateral for any
reason, such Secured Obligations shall automatically be reassigned to the
Secured Parties pro rata and the equity interests and/or debt instruments issued
by any acquisition vehicle on account of such Secured Obligations shall
automatically be cancelled, without the need for any Secured Party or any
acquisition vehicle to take any further action. Notwithstanding that the ratable
portion of the Secured Obligations of each Secured Party are deemed assigned to
the acquisition vehicle or vehicles as set forth in clause (ii) above, each
Secured Party shall execute such documents and provide such information
regarding the Secured Party (and/or any designee of the Secured Party which will
receive interests in or debt instruments issued by such acquisition vehicle) as
the Administrative Agent may reasonably request in connection with the formation
of any acquisition vehicle, the formulation or submission of any credit bid or
the consummation of the transactions contemplated by such credit bid.
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 fax or by electronic mail (with read-receipt or
similar feature enabled), as follows:
(i)    if to the Borrower, to it at 575 North Dairy Ashford, Suite 1200,
Houston, Texas 77079, Attention of G. Gleeson Van Riet (Fax No. 281-423-0025 and
email Gleeson.VanRiet@swiftenergy.com), with a copy, which shall not constitute
notice, to (x) 575 North Dairy Ashford, Suite 1200, Houston, Texas 77079,
Attention of Chris Abundis (email chris.abundis@swiftenergy.com) and (y) Vinson
& Elkins LLP at 1001 Fannin Street, Suite 2500, Houston, Texas 77002, Attention
Brian Moss (Fax No. 713-615-5845 and email bmoss@velaw.com);
(ii)    if to the Administrative Agent, to it at 712 Main St, 5th Floor,
Houston, TX 77002, Attention of Jo Linda Papadakis (Fax No. 713-216-7770) with a
copy, which shall not constitute notice, to Simpson Thacher & Bartlett LLP at
600 Travis Street, Suite 5400, Houston, Texas 77002, Attention Matthew Einbinder
(Fax No. 713-821-5602);
(iii)    if to the Issuing Bank, to it at 10 South Dearborn, Chicago, Illinois
60603-2003, Attention of Nanette Wilson (Fax No. 888-292-9533); and
(iv)    if to any other Lender or Issuing Bank, to it at its address (or fax
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

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or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c)    Any party hereto may change its address or fax 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 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 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 any Loan Party 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 or Event of Default, regardless of whether
the Administrative Agent, any Lender or any Issuing Bank may have had notice or
knowledge of such Default or Event of Default at the time.
(b)    Neither this Agreement nor any provision hereof nor any Loan Document nor
any provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into (x) by the Borrower and/or the
other applicable Loan Parties and the Majority Lenders or (y) by the Borrower
and/or the other applicable Loan Parties and the Administrative Agent with the
consent of the Majority Lenders; provided that no such agreement shall:
(i)    increase the Maximum Credit Amount of any Lender without the written
consent of such Lender,
(ii)    increase the Borrowing Base without the written consent of each Lender
(other than any Defaulting Lender), or decrease or maintain the Borrowing Base
without the consent of the Required Lenders; provided that a Scheduled
Redetermination and the delivery of a Reserve Report may be postponed by the
Majority Lenders; provided further that it is understood that any waiver (or
amendment or modification that would have the effect of a waiver) of the right
of the Required Lenders to adjust (through a reduction of) the Borrowing Base or
the amount of such adjustment in the form of a reduction to the Borrowing Base
pursuant to the Borrowing Base Adjustment Provisions in connection with the
occurrence of a relevant event giving rise to such right shall require the
consent of the Required Lenders,
(iii)    reduce the principal amount of any Loan or LC Disbursement or reduce
the stated rate of interest thereon, or reduce any fees payable hereunder, or
reduce any other Secured Obligations hereunder or under any other Loan Document,
without the written consent of each Lender directly and adversely affected
thereby (except in connection with any amendment or waiver of the applicability
of any post-default increase in interest rates, which shall be effective with
the consent of Majority Lenders),

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(iv)    postpone the scheduled date of (A) payment or prepayment of the
principal amount of any Loan or LC Disbursement, (B) any interest thereon, or
(C) any fees payable hereunder, or any other Secured Obligations hereunder or
under any other Loan Document, or reduce the amount of, waive or excuse any such
payment, or postpone the Termination Date without the written consent of each
Lender directly and adversely affected thereby,
(v)    change Section 4.01(b) or Section 4.01(c) in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent
of each Lender directly and adversely affected thereby; provided that the
foregoing shall not restrict the operation of Section 2.11,
(vi)    waive or amend Section 10.02(c) without the written consent of each
directly and adversely affected Lender; provided that any waiver or amendment to
Section 10.02(c) or to this proviso in this Section 12.02(b)(vi), or any
amendment or modification to any Security Instrument that results in the Secured
Swap Agreement secured by such Security Instrument no longer being secured
thereby on an equal and ratable basis with the principal of the Loans, or any
amendment or other change to the definition of the terms “Secured Swap
Agreement,” or “Secured Swap Provider,” which would result in an equivalent
effect shall also require the written consent of each Secured Swap Provider
adversely affected thereby,
(vii)    release any Guarantor (other than as a result of a transaction
permitted hereby), release all or substantially all of the collateral (other
than as provided in Section 11.10), without the written consent of each directly
and adversely affected Lender (other than any Defaulting Lender), or
(viii)    change any of the provisions of this Section 12.02(b) or the
definitions of “Majority Lenders” or “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or grant any
consent hereunder or any other Loan Documents, without the written consent of
each directly and adversely affected Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or any Issuing Bank hereunder or under any other Loan
Document without the prior written consent of the Administrative Agent or
Issuing Bank, as the case may be. Notwithstanding the foregoing, any supplement
to any Schedule 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.
(c)    Notwithstanding anything to the contrary contained in the Loan Documents,
the Administrative Agent and the Borrower, may amend, modify or supplement any
Loan Document without the consent of any Lender in order to (i) correct, amend,
cure or resolve any ambiguity, omission, defect, typographical error,
inconsistency or other manifest error therein, (ii) add a guarantor or
collateral or otherwise enhance the rights and benefits of the Lenders, (iii)
make administrative or operational changes not adverse to any Lender or (iv)
adhere to any local Governmental Requirement or advice of local counsel.
(d)    Notwithstanding anything to the contrary contained in any Loan Documents,
the Commitment of any Defaulting Lender may not be increased without its consent
(it being understood, for avoidance of doubt, that no Defaulting Lender shall
have any right to approve or disapprove any increase, decrease or reaffirmation
of the Borrowing Base) and the Administrative Agent may with the consent of the
Borrower amend, modify or supplement the Loan Documents to effectuate an
increase to the Borrowing Base where such Defaulting Lender does not consent to
an increase to its Commitment, including not increasing the Borrowing Base by
the portion thereof applicable to the Defaulting Lender.
Section 12.03    Expenses, Indemnity; Damage Waiver.

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(a)    The Borrower shall pay (i) all reasonable and documented out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent (provided that counsel shall be limited
to (x) one (1) counsel to such Persons, taken as a whole, one (1) local counsel
in each relevant jurisdiction and one (1) regulatory counsel to all such Persons
with respect to a relevant regulatory matter, taken as a whole, (y), solely in
the event of a conflict of interest, one (1) additional counsel (and, if
necessary, one (1) regulatory counsel and one (1) local counsel in each relevant
jurisdiction or for each matter) to each group of similarly situated affected
indemnified persons and (z) other counsel consented to by the Borrower (such
consent not to be unreasonably withheld, delayed or conditioned)), 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
this Agreement, 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 the
Administrative 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 or
conducting of title reviews, mortgage matches and collateral reviews, (iii) all
reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (iv) all out-of-pocket expenses
incurred by the Administrative Agent, the Issuing Bank or any Lender, including
the fees, charges and disbursements of any counsel for the Administrative Agent,
the Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights in connection with this Agreement or any other Loan Document,
including its rights under this Section 12.03, or in connection with the Loans
made or Letters of Credit issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit.
(b)    The Borrower shall and shall cause each Loan Party to indemnify the
Administrative Agent, the Arranger, the Issuing Bank and each Lender, and each
Related Party of any of the foregoing persons (each such person being called an
“Indemnitee”) against, and defend and hold each Indemnitee harmless from, any
and all losses, claims, damages, penalties, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee
(provided that counsel shall be limited to (x) one (1) counsel to such
Indemnitees, taken as a whole, one (1) local counsel in each relevant
jurisdiction and one (1) regulatory counsel to all such Indemnitees with respect
to a relevant regulatory matter, taken as a whole, (y), solely in the event of a
conflict of interest, one (1) additional counsel (and, if necessary, one (1)
regulatory counsel and one (1) local counsel in each relevant jurisdiction or
for each matter) to each group of similarly situated affected Indemnitees and
(z) other counsel consented to by the Borrower (such consent not to be
unreasonably withheld, delayed or conditioned)), incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of, and any enforcement against the Borrower or any other
Group Member of any rights under this Agreement or any other Loan Document or
any Agreement or instrument contemplated hereby or thereby, (ii) the performance
by the Parties hereto or the parties to any other Loan Document of their
respective obligations hereunder or thereunder of the consummation of the
transactions contemplated hereby or by any other Loan Document, (iii) the
failure of the Borrower or any other Group Member 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 other Group Members set forth in any
of the Loan Documents or any instruments, documents or certifications delivered
in connection therewith, (v)

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any loan or Letter of Credit or the use of the proceeds therefrom, including (A)
any refusal by an Issuing Bank to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not comply
with the terms of such Letter of Credit, or (B) the payment of a drawing under
any Letter of Credit notwithstanding the non-compliance, non-delivery or other
improper presentation of the documents presented in connection therewith, (vi)
any other aspect of the Loan Documents, (vii) the operations of the business of
the Borrower or any other Group Member by such persons, (viii) any assertion
that the lenders were not entitled to receive the proceeds received pursuant to
the Security Instruments, (ix) any actual or alleged presence or release of
Hazardous Materials or any liability under Environmental Law related to the
Borrower or any other Group Member, (x) the past ownership by the Borrower or
any other Group Member 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 or (xi) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by any
Loan Party, and regardless of whether any Indemnitee is a party thereto, and
such indemnity shall extend to each Indemnitee notwithstanding the sole or
concurrent negligence of every kind or character whatsoever, whether active or
passive, whether an affirmative act or an omission, including 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 including ordinary negligence; 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
directly resulted from (A) the gross negligence, willful misconduct or bad faith
of such Indemnitee, (B) a material breach by such Indemnitee of its obligations
under this Agreement at a time when the Borrower has not breached its
obligations hereunder in any material respect or (C) a dispute solely among
Indemnitees (other than a proceeding against any Indemnitee in its capacity or
in fulfilling its role as Arranger, Administrative Agent, Bookrunner, Lender or
any other similar role in connection with this Agreement) not arising out of any
act or omission on the part of the Borrower or its affiliates. without limiting
the foregoing, and to the extent permitted by applicable law, the Borrower shall
not, and shall cause each Group Member not to, assert and hereby waives and
agrees to cause each Group Member to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them may have by
statute or otherwise against any Indemnitee. No Indemnitee shall be liable for
any damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in
connection with 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 whether occurring on, prior to or
after the Closing Date. This Section 12.03(b) shall not apply with respect to
Taxes other than any Taxes that represent losses, claims, damages, etc. arising
from any non-Tax claim.
(c)    To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent, the Arranger or the Issuing Bank under
Section 12.03(a) or Section 12.03(b), each Lender severally agrees to pay to the
Administrative Agent, the Arranger or the Issuing Bank, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Arranger or the Issuing Bank in its
capacity as such.
(d)    To the extent permitted by applicable law, the no party hereto shall, and
the Borrower shall cause each Group Member not to, assert, and hereby waives,
and the Borrower agrees to cause each Group Member to waive, any claim against
any other party hereto and any Indemnitee, on any theory of

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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 whether occurring on, prior to or after the
Closing Date; provided that, nothing in this Section 12.03(d) shall relieve (i)
the Borrower of any obligation it may have to indemnify an Indemnitee against
special, indirect, consequential or punitive damages asserted against such
Indemnitee by a third party or (ii) any Lender of its obligations under Section
12.03(c).
(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 any Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and 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 any Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in Section 12.04(c))
and, to the extent expressly contemplated herein, the Related Parties of each of
the Administrative Agent, any Issuing Bank, the Lenders and the other Secured
Parties) 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 (each, an “Assignee”) 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) of:
(A)    the Borrower; provided that no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund, or,
if an Event of Default has occurred and is continuing, to any Assignee; and
(B)    the Administrative Agent and each Issuing Bank; provided that no consent
of the Administrative Agent shall be required for an assignment to a Lender or
an Affiliate of a Lender.
(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 Approved Fund 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 (and
shall be in increments of $1,000,000 in excess thereof) unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

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(B)    each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
(C)    the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 and the assignor shall have paid (or another
Person shall have paid on its behalf) in full any amounts owing by it to the
Administrative Agent and any Issuing Bank;
(D)    the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and
(E)    the assignee must not be a natural person (or a holding company,
investment vehicle or trust for, or owned and operated for the primary benefit
of, a natural Person), a Defaulting Lender or an Affiliate or a Subsidiary of
the Borrower or any other Loan Party.
(iii)    Subject to Section 12.04(b)(iv) and the acceptance and recording
thereof, from and after the effective date specified in each Assignment and
Assumption, the Assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section 5.01,
Section 5.02, Section 5.03 and Section 12.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 12.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
Section 12.04(c).
(iv)    The Administrative Agent, acting solely for this purpose as a
non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Maximum Credit
Amount of, and principal amount of (and stated interest on) 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(s)
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, any 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, at its election, forward a copy
of such revised Annex I to the Borrower, each 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 and, as required by Section 5.03(g), applicable tax forms or
certifications (taking into account whether the Assignee shall already be a
Lender hereunder and shall have provided the required tax forms and
certifications), the processing and recordation fee referred to in this Section
12.04(b) and any written consent to such assignment required by this Section
12.04(b), the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this Section 12.04(b).

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(c)    Any Lender may, without the consent of the Borrower, the Administrative
Agent or the Issuing Bank, sell participations to one or more banks or other
entities (other than the Borrower, any Affiliate of the Borrower or any natural
person (or a holding company, investment vehicle or trust for, or owned and
operated for the primary benefit of, a natural Person)) (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) 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 (iv) such Lender shall continue
to give prompt attention to and process (including, if required, through
discussions with Participants) requests for waivers or amendments hereunder. 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 Participant may have consent rights with respect to any amendment,
modification or waiver described in clauses (i), (iii), (iv), (v), (vi) and
(vii) of the proviso to Section 12.02(b) that affects such Participant and for
which such Lender would have consent rights. In addition such agreement must
provide that the Participant be bound by the provisions of Section 12.03. The
Borrower agrees that each Participant shall be entitled to the benefits of
Section 5.01, Section 5.02 and Section 5.03 (subject to the requirements and
limitations therein, including the requirements under Section 5.03(g) (it being
understood that the documentation required under Section 5.03(g) shall be
delivered to the participating Lender)) to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section 12.04; provided that such Participant (A) agrees to be subject to
the provisions of Section 5.02 and Section 5.03 as if it were an assignee under
paragraph (b) of this Section 12.04 and (B) shall not be entitled to receive any
greater payment under Section 5.02 or Section 5.03, with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from an adoption of or any change in any law or in the interpretation or
application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof that occurs after the
Participant acquired the applicable participation. 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, acting solely for this purpose as a non-fiduciary agent of the
Borrower, shall maintain a register on which it enters the name and address of
each Participant and the principal amounts of (and stated interest on) 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 to any
Person (including the identity of any Participant or any information relating to
a Participant’s interest in any Commitments, Loans, Letters of Credit or its
other obligations under any Loan Document) except to the extent that such
disclosure is necessary to establish that such Commitment, Loan, 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.
(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 any pledge or assignment to secure obligations to a Federal
Reserve Bank or any central bank having jurisdiction over such Lender, and this
Section 12.04(d) shall not apply to any such pledge or assignment of a security
interest; provided

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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. The Borrower, upon receipt of written notice
from the relevant Lender, agrees to issues Notes to any Lender requiring Notes
to facilitate transactions described in this Section 12.04(d) in accordance with
Section 2.02(d) or as the Borrower may otherwise consent (such consent not to be
unreasonably withheld or delayed).
(e)    Notwithstanding any other provisions of this Section 12.04, no transfer
or assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrower and the other Loan Parties to file a registration
statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any
state.
(f)    Notwithstanding anything in this Agreement or the other Loan Documents to
the contrary, Affiliated Lenders will not receive information provided solely to
the Lenders by the Administrative Agent (except to the extent such information
or materials have been made available to any Loan Party) or any Lender and will
not be permitted to attend or participate in meetings or conference calls
attended solely by the Lenders and the Administrative Agent, other than the
right to receive notices of prepayments and other administrative notices in
respect of its Loans or Commitments required to be delivered pursuant to Article
II.
(g)    Notwithstanding anything in Section 12.02, the definition of “Majority
Lenders” or the definition of “Required Lenders” to the contrary, for purposes
of determining whether the Majority Lenders or Required Lenders have (i)
consented (or not consented) to any amendment, modification, waiver, consent or
other action with respect to any of the terms of any Loan Document or any
departure by any Loan Party therefrom, or subject to Section 12.04(h), any plan
of reorganization pursuant to the Bankruptcy Code, (ii) otherwise acted on any
matter related to any Loan Document, or (iii) directed or required the
Administrative Agent or any Lender to undertake any action (or refrain from
taking any action) with respect to or under any Loan Document, no Affiliated
Lender shall have any right to consent (or not consent), otherwise act or direct
or require the Administrative Agent or any Lender to take (or refrain from
taking) any such action and all Loans held by any Affiliated Lenders shall be
deemed to be not outstanding for all purposes of calculating whether the
Majority Lenders, the Required Lenders or all Lenders, as the case may be, have
taken any action unless the action in question effects such Affiliated Lender in
a disproportionately adverse manner compared to its effect on other Lenders.
(h)    Notwithstanding anything in this Agreement or the other Loan Documents to
the contrary, each Affiliated Lender hereby agrees that if a proceeding under
the Bankruptcy Code shall be commenced by or against the Borrower or any other
Loan Party at a time when such Lender is an Affiliated Lender, such Affiliated
Lender irrevocably authorizes and empowers the Administrative Agent to vote on
behalf of such Affiliated Lender with respect to the Loans held by such
Affiliated Lender in any manner in the Administrative Agent’s sole discretion,
unless the Administrative Agent instructs such Affiliated Lender to vote, in
which case such Affiliated Lender shall vote with respect to the Loans held by
it as the Administrative Agent directs; provided that such Affiliated Lender
shall be entitled to vote in accordance with its sole discretion (and not in
accordance with the direction of the Administrative Agent) in connection with
any plan of reorganization to the extent any such plan of reorganization
proposes to treat any Secured Obligations held by such Affiliated Lender in a
disproportionately adverse manner to such Affiliated Lender compared to the
proposed treatment of similar Secured Obligations held by Lenders that are not
Affiliated Lenders.
Section 12.05    Survival; Revival; Reinstatement.

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(a)    All covenants, agreements, representations and warranties made by the
Loan Parties 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 other Loan
Documents 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 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 until Payment in Full. The provisions of
Article III, Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and
Article XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement, any other Loan Document or any
provision hereof or thereof.
(b)    To the extent that any payments on the Secured Obligations or proceeds of
any collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Secured Obligations shall be revived
and continue as if such payment or proceeds had not been received and the
Administrative Agent’s and the Lenders’ Liens, security interests, rights,
powers and remedies under this Agreement and each Loan Document shall continue
in full force and effect. In such event, each Loan Document shall be
automatically reinstated and the Borrower shall, and shall cause each other Loan
Party to, take any action requested by the Administrative Agent and the Lenders
to effect such reinstatement.
Section 12.06    Counterparts; Integration; Effectiveness.
(a)    This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Agreement by email or facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
(b)    This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
thereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof and thereof. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
(c)    Except as provided in Section 6.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy, facsimile or other similar
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

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extent of such invalidity, illegality or unenforceability without affecting the
validity, legality and enforceability of the remaining provisions hereof or
thereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 12.08    Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations (of whatsoever
kind, including obligations under Swap Agreements) at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower or any
other Group Member against any of and all the obligations of the Borrower or any
other Group Member 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; provided that to the extent
prohibited by applicable law as described in the definition of “Excluded Swap
Obligation,” no amounts received from, or set off with respect to, any Guarantor
shall be applied to any Excluded Swap Obligations of such Guarantor. 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, Issuing Bank(s) and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Secured
Obligations owing to such Defaulting Lender as to which it exercised such right
of setoff. The rights of each Lender, Issuing Bank(s) and their respective
Affiliates under this Section 12.08 are in addition to other rights and remedies
(including other rights of setoff) that such Lender, Issuing Bank(s) or their
respective Affiliates may have. Each Lender and 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;
WAIVER OF JURY TRIAL.
(a)    THIS AGREEMENT, THE NOTES AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(b)    EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS (AND THE
BORROWER SHALL CAUSE EACH GROUP MEMBER TO SUBMIT) FOR ITSELF AND ITS PROPERTY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY
THEREOF AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT; PROVIDED, THAT
NOTHING CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENT WILL PREVENT ANY PARTY
FROM BRINGING ANY ACTION TO ENFORCE ANY AWARD OR JUDGMENT OR

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EXERCISE ANY RIGHT UNDER THE LOAN DOCUMENTS IN ANY OTHER FORUM IN WHICH
JURISDICTION CAN BE ESTABLISHED. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c)    EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.
(D)    EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT (I) SERVICE
OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO HOLDINGS OR THE BORROWER, AS THE CASE MAY BE AT ITS
ADDRESS SET FORTH IN SECTION 12.01 OR AT SUCH OTHER ADDRESS OF WHICH THE
ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO AND (II) AGREES
THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
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 and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider thereof as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate thereof, (b) subject to
an agreement to comply with the provisions of this Section 12.11, to any actual
or prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates, (d) upon the request or demand of
any Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Governmental Requirement, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) that has been publicly disclosed,
(h) to the National Association of Insurance Commissioners

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or any similar organization or 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, (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document, (j)
to the extent such Information (i) becomes publically available other than as a
result of a breach of this Section 12.11 or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower or (k) if agreed by the Borrower in its
sole discretion by any other Person. “Information” means all written information
received from the Borrower relating to the Borrower or its business, other than
any such information that is available to the Administrative Agent, any Issuing
Bank or any Lender on a non-confidential basis prior to disclosure by the
Borrower and other than information pertaining to this Agreement routinely
provided by arrangers to data service providers, including league table
providers, that serve the lending industry; provided that in the case of
information received from the Borrower 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.
Each Lender acknowledges that information furnished to it pursuant to this
Agreement or the other Loan Documents may include material non-public
information concerning the Borrower and its Affiliates and their related parties
or their respective securities, and confirms that it has developed compliance
procedures regarding the use of material non-public information and that it will
handle such material non-public information in accordance with those procedures
and applicable law, including Federal and state securities laws.
All information, including requests for waivers and amendments, furnished by the
Borrower or the Administrative Agent pursuant to, or in the course of
administering, this Agreement or the other Loan Documents will be
syndicate-level information, which may contain material non-public information
about the Borrower and its Affiliates and their related parties or their
respective securities. Accordingly, each Lender represents to the Borrower and
the Administrative Agent that it has identified in its Administrative
Questionnaire a credit contact who may receive information that may contain
material non-public information in accordance with its compliance procedures and
applicable law, including Federal and state securities laws.
Section 12.12    Interest Rate Limitation. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Notes and other Secured Obligations arising under the Loan
Documents, it is agreed as follows: (a) the aggregate of all consideration which
constitutes interest under law applicable to any Lender that is contracted for,
taken, reserved, charged or received by such Lender under any of the Loan
Documents or agreements or otherwise in connection with the Loans or 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 Secured Obligations (or,
to the extent that the principal amount of the Secured Obligations shall have
been or would thereby be paid in full, refunded by such Lender to the Borrower);
and (b) in the event that the maturity of the Loans or 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

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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 Secured Obligations
(or, to the extent that the principal amount of the Secured Obligations shall
have been or would thereby be paid in full, refunded by such Lender 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 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    Collateral Matters; Swap Agreements. The benefit of the
Security Instruments and of the provisions of this Agreement relating to any
collateral securing the Secured Obligations shall also extend to and be
available to the Secured Swap Providers in respect of the Secured Swap
Agreements as set forth herein. Except as set forth in Section 12.02(b)(vi), no
Lender or any Affiliate of a Lender 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.
Section 12.14    No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and any 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 any other Loan Party 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 Issuing Bank or any
Lender for any reason whatsoever. There are no third party beneficiaries.
Section 12.15    EXCULPATION PROVISIONS. Each of the parties hereto hereby
acknowledges and agrees that (a) no fiduciary, advisory or agency relationship
between the Loan Parties and the Credit Parties is intended to be or has been
created in respect of any of the transactions contemplated by this Agreement or
the other Loan Documents, irrespective of whether the Credit Parties have
advised or are advising the Loan Parties on other matters, and the relationship
between the Credit Parties, on the one hand, and the Loan Parties, on the other
hand, in connection herewith and therewith is solely that of creditor and
debtor, (b) the Credit Parties, on the one hand, and the Loan Parties, on the
other hand, have an arm’s length business relationship that does not directly or
indirectly give rise to, nor do the Loan Parties rely on, any fiduciary duty to
the Loan Parties or their affiliates on the part of the Credit Parties, (c) the
Loan Parties are capable of evaluating and understanding, and the Loan Parties
understand and accept, the terms, risks and conditions of the transactions
contemplated by this Agreement and the other Loan Documents, (d) the Loan
Parties have been advised that the Credit Parties are engaged in a broad range
of transactions that may involve interests that differ from the Loan Parties’
interests and that the Credit Parties have no obligation to disclose

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such interests and transactions to the Loan Parties, (e) the Loan Parties have
consulted their own legal, accounting, regulatory and tax advisors to the extent
the Loan Parties have deemed appropriate in the negotiation, execution and
delivery of this Agreement and the other Loan Documents, (f) each Credit Party
has been, is, and will be acting solely as a principal and, except as otherwise
expressly agreed in writing by it and the relevant parties, has not been, is
not, and will not be acting as an advisor, agent or fiduciary for the Loan
Parties, any of their affiliates or any other Person, (g) none of the Credit
Parties has any obligation to the Loan Parties or their affiliates with respect
to the transactions contemplated by this Agreement or the other Loan Documents
except those obligations expressly set forth herein or therein or in any other
express writing executed and delivered by such Credit Party and the Loan Parties
or any such affiliate and (h) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Credit Parties or among the Loan Parties and the Credit
Parties. 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 12.16    Patriot Act Notice. Each Lender hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required
to obtain, verify and record information that identifies the Borrower and other
Loan Parties, which information includes the name and address of the Borrower
and other Loan Parties and other information that will allow such Lender to
identify the Borrower and other Loan Parties in accordance with the Patriot Act.
Section 12.17    Flood Insurance Provisions. Notwithstanding any provision in
this Agreement or any other Loan Document to the contrary, in no event is any
Building (as defined in the applicable Flood Insurance Regulation) or
Manufactured (Mobile) Home (as defined in the applicable Flood Insurance
Regulation) included in the definition of “Mortgaged Property” and no Building
or Manufactured (Mobile) Home is hereby encumbered by this Agreement or any
other Loan Document.
Section 12.18    Releases.
(a)    Release Upon Payment in Full. Upon Payment in Full, the Administrative
Agent, at the written request and expense of the Borrower, will promptly
release, reassign and transfer the Collateral to the Loan Parties.
(b)    Further Assurances. If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Group Member in a transaction permitted by the
Loan Documents and such Collateral shall no longer constitute or be required to
be Collateral under the Loan Documents, then the Administrative Agent, at the
request and sole expense of the Borrower and the applicable Group Member, shall
promptly execute and deliver to such Group Member all releases or other
documents reasonably necessary or desirable for the release of the Liens created
by the applicable Security Instrument on such Collateral; provided that the
Borrower shall have delivered to the Administrative Agent, at least five (5)
Business Days prior to the date of the proposed release (or such other time
period as the Administrative Agent may agree), a written request for release
identifying the relevant Group Member, together with a certification by the
Borrower stating (x) that such transaction is in compliance with this Agreement
and the other Loan Documents (y) the Borrower has complied with its obligations
under Section 8.01(n)(i), if applicable and (z) no Collateral other than the
Collateral required to be released is being released. At the request and sole
expense of the Borrower, a Group Member shall be released from its obligations
under the Loan Documents in the event that all the capital stock or other Equity
Interests of such Group Member shall be sold, transferred or otherwise disposed

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of in a transaction permitted by the Loan Documents and such Equity Interests
shall no longer constitute or be required to be Collateral under the Loan
Documents; provided that the Borrower shall have delivered to the Administrative
Agent, at least five (5) Business Days prior to the date of the proposed release
(or such other time period as the Administrative Agent may agree), a written
request for release identifying the relevant Group Member, together with a
certification by the Borrower stating (x) that such transaction is in compliance
with this Agreement and the other Loan Documents and the Borrower has complied
with its obligations under Section 8.01(n)(i), if applicable, and (y) no
Collateral other than the Collateral required to be released is being released.
Section 12.19    Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document 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)    conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or
any other Loan Document; or
(iii)    the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion powers of any EEA Resolution
Authority.
Section 12.20    Amendment and Restatement. This Agreement amends and restates
in its entirety the Existing Credit Agreement, and from and after the date
hereof, the terms and provisions of the Existing Credit Agreement shall be
superseded by the terms and provisions of this Agreement, and this Agreement is
not a new or substitute credit agreement or novation of the Existing Credit
Agreement. The Borrower and each Guarantor hereby agrees that all Liens securing
the “Secured Obligations” (as defined in the Existing Credit Agreement) shall
continue in full force and effect to secure the Secured Obligations.
Concurrently with the occurrence of the Closing Date, (a) the parties hereto
acknowledge and agree that the Liens created by the mortgages and deeds of trust
securing the Existing Credit Agreement and the Security Instruments (as defined
in the Existing Credit Agreement) shall be carried forward to secure the Secured
Obligations and evidenced by the Security Instruments and have not been released
or impaired in any way, (b) the Administrative Agent, in its capacity as
administrative agent under the Existing Credit Agreement and as holder,
mortgagee or beneficiary of the collateral under or pursuant to the Loan
Documents (as defined in the Existing Credit Agreement) hereby assigns,
transfers and conveys to the Administrative Agent, without recourse or warranty,
all Liens granted to it in connection with the Existing Credit Agreement, (c)
the Security Instruments, which are being amended and restated on the Closing
Date and all other ancillary documents executed in connection with such Security
Instruments shall supersede and replace in their entirety each such Security
Instrument (as defined in the Existing Credit Agreement) as in effect
immediately prior to such amendment and restatement and all ancillary documents
executed in connection therewith and all such

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superseded agreements and ancillary documents shall be of no further force and
effect and (d) the Existing Letters of Credit shall be deemed issued under this
Agreement.

[SIGNATURES BEGIN NEXT PAGE]

The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.
BORROWER:
SWIFT ENERGY COMPANY,
a Delaware Corporation
 
 
 
 
 
By: /s/ G. Gleeson Van Riet
 
Name: G. Gleeson Van Riet
 
Title: Executive Vice President and Chief Financial Officer

18

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ADMINISTRATIVE AGENT AND LENDER:
JPMORGAN CHASE BANK, N.A.
 
 
 
 
 
By:  /s/ Jo Linda Papdakis
 
Name: Jo Linda Papadakis
 
Title: Authorized Officer

Signature Page
First Amended and Restated Credit Agreement

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LENDER:
Compass Bank
 
 
 
 
 
 
 
By:  /s/ Les Werme
 
Name: Les Werme
 
Title: Executive Director

Signature Page
First Amended and Restated Credit Agreement

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

LENDER:
SunTrust Bank

 
 
 
 
 
 
 
By: /s/ John Kovarik
 
Name: John Kovarik
 
Title: Director

Signature Page
First Amended and Restated Credit Agreement

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LENDER:
BOKF, N.A. DBA BANK OF TEXAS
 
 
 
 
 
 
 
By: /s/ Daniel Fain
 
Name: Daniel Fain
 
Title: Assistant Vice President

Signature Page
First Amended and Restated Credit Agreement

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LENDER:
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH
 
 
 
By: /s/ Richard Antl
 
Name: Richard Antl
 
Title: Authorized Signatory
 
 
 
By: /s/ William M. Reid
 
Name: William M. Reid
 
Title: Authorized Signatory

Signature Page
First Amended and Restated Credit Agreement

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LENDER:
FIFTH THIRD BANK, as Lender
 
 
 
By:  /s/ Justin Bellamy
 
Name: Justin Bellamy
 
Title: Director

Signature Page
First Amended and Restated Credit Agreement

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LENDER:
BRANCH BANKING AND TRUST COMPANY
 
 
 
By:  /s/ Ryan K. Michael
 
Name: Ryan K. Michael
 
Title: Senior Vice President

Signature Page
First Amended and Restated Credit Agreement

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LENDERS:
COMERICA BANK
 
 
 
By: /s/ Jason M. Klesel
 
Name: Jason M. Klesel
 
Title: Assistant Vice President

Signature Page
First Amended and Restated Credit Agreement

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LENDERS:
Credit Suisse AG, Cayman Islands Branch
 
 
 
By:  /s/ Nupur Kumar
 
Name: Nupur Kumar
 
Title: Authorized Signatory
 
 
 
By:  /s/ Warren Van Heyst
 
Name: Warren Van Heyst
 
Title: Authorized Signatory

Signature Page
First Amended and Restated Credit Agreement

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LENDERS:
KEYBANK NATIONAL ASSOCIATION
 
 
 
By:  /s/ George McKann
 
Name: George McKann
 
Title: Senior Vice President

Signature Page
First Amended and Restated Credit Agreement

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

LENDERS:
Associated Bank, N.A.
 
 
 
By: /s/ Brian Caddell
 
Name: Brian Caddell
 
Title: Senior Vice President

Signature Page
First Amended and Restated Credit Agreement

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LENDERS:
WHITNEY BANK
 
 
 
By: /s/ William Jochetz
 
Name: William Jochetz
 
Title: Vice President

Signature Page
First Amended and Restated Credit Agreement

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ANNEX I
LIST OF MAXIMUM CREDIT AMOUNTS
Aggregate Maximum Credit Amounts
Name of Lender
Applicable Percentage
Maximum Credit Amount
JPMORGAN CHASE BANK, N.A.
10.606060610%
$63,636,363.63
COMPASS BANK
9.090909091%
$54,545,454.55
SUNTRUST BANK
9.090909091%
$54,545,454.55
BOKF, N.A. DBA BANK OF TEXAS
9.090909091%
$54,545,454.55
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH
9.090909091%
$54,545,454.55
FIFTH THIRD BANK
9.090909091%
$54,545,454.55
BRANCH BANKING AND TRUST COMPANY
8.333333333%
$50,000,000.00
COMERICA BANK
8.333333333%
$50,000,000.00
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
8.333333333%
$50,000,000.00
KEYBANK N.A.
8.333333333%
$50,000,000.00
ASSOCIATED BANK, N.A.
5.303030303%
$31,818,181.81
WHITNEY BANK
5.303030303%
$31,818,181.81
TOTAL
100.00%
$600,000,000.00

Annex I - 1