Exhibit 10.5

Execution Version

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of
May 2, 2007

 

among

 

 

EXCO RESOURCES, INC.,
as Borrower

 

CERTAIN SUBSIDIARIES OF BORROWER,
as Guarantors

 

The Lenders Party Hereto

 

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

 

J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Lead Arranger

 

$1,000,000,000 Senior Secured Credit Facility

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

ARTICLE I

DEFINITIONS

 

1

 

 

 

 

 

Section 1.01.

 

Defined Terms

 

1

Section 1.02.

 

Classification of Loans and Borrowings

 

27

Section 1.03.

 

Terms Generally

 

27

Section 1.04.

 

Accounting Terms; GAAP

 

27

Section 1.05.

 

Oil and Gas Definitions

 

28

Section 1.06.

 

Time of Day

 

28

 

 

 

 

 

ARTICLE II

THE CREDITS

 

28

 

 

 

 

 

Section 2.01.

 

Commitments

 

28

Section 2.02.

 

Termination and Reduction of the Aggregate Commitment

 

28

Section 2.03.

 

Reserved

 

29

Section 2.04.

 

Loans and Borrowings

 

29

Section 2.05.

 

Requests for Revolving Borrowings

 

29

Section 2.06.

 

Swingline Loans

 

30

Section 2.07.

 

Letters of Credit

 

31

Section 2.08.

 

Funding of Borrowings

 

35

Section 2.09.

 

Interest Elections

 

36

Section 2.10.

 

Repayment of Loans; Evidence of Debt

 

37

Section 2.11.

 

Optional Prepayment of Loans

 

38

Section 2.12.

 

Mandatory Prepayment of Loans

 

39

Section 2.13.

 

Fees

 

40

Section 2.14.

 

Interest

 

41

Section 2.15.

 

Alternate Rate of Interest

 

41

Section 2.16.

 

Increased Costs

 

42

Section 2.17.

 

Break Funding Payments

 

43

Section 2.18.

 

Taxes

 

44

Section 2.19.

 

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

 

45

Section 2.20.

 

Mitigation Obligations; Replacement of Lenders

 

47

 

 

 

 

 

ARTICLE III

BORROWING BASE

 

48

 

 

 

 

 

Section 3.01.

 

Reserve Report; Proposed Borrowing Base

 

48

Section 3.02.

 

Scheduled Redeterminations of the Borrowing Base; Procedures and Standards

 

48

Section 3.03.

 

Special Redeterminations

 

49

Section 3.04.

 

Notice of Redetermination

 

50

 

 

 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

50

 

 

 

 

 

Section 4.01.

 

Organization; Powers

 

50

Section 4.02.

 

Authorization; Enforceability

 

50

Section 4.03.

 

Governmental Approvals; No Conflicts

 

50

 

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Section 4.04.

 

Financial Condition; No Material Adverse Change

 

51

Section 4.05.

 

Properties

 

51

Section 4.06.

 

Litigation and Environmental Matters

 

51

Section 4.07.

 

Compliance with Laws and Agreements

 

52

Section 4.08.

 

Investment Company Status

 

52

Section 4.09.

 

Taxes

 

52

Section 4.10.

 

ERISA

 

52

Section 4.11.

 

Disclosure

 

52

Section 4.12.

 

Labor Matters

 

53

Section 4.13.

 

Capitalization and Credit Party Information

 

53

Section 4.14.

 

Margin Stock

 

53

Section 4.15.

 

Oil and Gas Interests

 

53

Section 4.16.

 

Insurance

 

54

Section 4.17.

 

Solvency

 

54

Section 4.18.

 

Deposit Accounts

 

54

 

 

 

 

 

ARTICLE V

CONDITIONS

 

55

 

 

 

 

 

Section 5.01.

 

Effective Date

 

55

Section 5.02.

 

Each Credit Event

 

58

 

 

 

 

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

59

 

 

 

 

 

Section 6.01.

 

Financial Statements; Other Information

 

59

Section 6.02.

 

Notices of Material Events

 

61

Section 6.03.

 

Existence; Conduct of Business

 

62

Section 6.04.

 

Payment of Obligations

 

62

Section 6.05.

 

Maintenance of Properties; Insurance

 

62

Section 6.06.

 

Books and Records; Inspection Rights

 

63

Section 6.07.

 

Compliance with Laws

 

63

Section 6.08.

 

Use of Proceeds and Letters of Credit

 

63

Section 6.09.

 

Mortgages

 

63

Section 6.10.

 

Title Data

 

63

Section 6.11.

 

Swap Agreements

 

64

Section 6.12.

 

Operation of Oil and Gas Interests

 

64

Section 6.13.

 

Restricted Subsidiaries

 

64

Section 6.14.

 

Pledged Equity Interests

 

65

Section 6.15.

 

Production Proceeds and Bank Accounts

 

65

 

 

 

 

 

ARTICLE VII

NEGATIVE COVENANTS

 

65

 

 

 

 

 

Section 7.01.

 

Indebtedness

 

66

Section 7.02.

 

Liens

 

67

Section 7.03.

 

Fundamental Changes

 

67

Section 7.04.

 

Investments, Loans, Advances, Guarantees and Acquisitions

 

68

Section 7.05.

 

Swap Agreements

 

69

Section 7.06.

 

Restricted Payments

 

70

Section 7.07.

 

Transactions with Affiliates

 

70

Section 7.08.

 

Restrictive Agreements

 

70

 

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Section 7.09.

 

Disqualified Stock and Fiscal Year

 

71

Section 7.10.

 

Amendments of Organizational Documents; Certain Agreements and Senior Notes

 

71

Section 7.11.

 

Financial Covenants

 

71

Section 7.12.

 

Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities

 

72

Section 7.13.

 

Interestholder Subsidiaries

 

72

 

 

 

 

 

ARTICLE VIII

GUARANTEE OF OBLIGATIONS

 

73

 

 

 

 

 

Section 8.01.

 

Guarantee of Payment

 

73

Section 8.02.

 

Guarantee Absolute

 

73

Section 8.03.

 

Guarantee Irrevocable

 

74

Section 8.04.

 

Reinstatement

 

74

Section 8.05.

 

Subrogation

 

74

Section 8.06.

 

Subordination

 

74

Section 8.07.

 

Payments Generally

 

75

Section 8.08.

 

Setoff

 

75

Section 8.09.

 

Formalities

 

75

Section 8.10.

 

Limitations on Guarantee

 

75

 

 

 

 

 

ARTICLE IX

EVENTS OF DEFAULT

 

76

 

 

 

 

ARTICLE X

THE ADMINISTRATIVE AGENT

 

78

 

 

 

 

ARTICLE XI

MISCELLANEOUS

 

80

 

 

 

 

 

Section 11.01.

 

Notices

 

80

Section 11.02.

 

Waivers; Amendments

 

81

Section 11.03.

 

Expenses; Indemnity; Damage Waiver

 

82

Section 11.04.

 

Successors and Assigns

 

84

Section 11.05.

 

Survival

 

87

Section 11.06.

 

Counterparts; Integration; Effectiveness

 

87

Section 11.07.

 

Severability

 

88

Section 11.08.

 

Right of Setoff

 

88

Section 11.09.

 

GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

 

88

Section 11.10.

 

WAIVER OF JURY TRIAL

 

89

Section 11.11.

 

Headings

 

89

Section 11.12.

 

Confidentiality

 

89

Section 11.13.

 

Interest Rate Limitation

 

90

Section 11.14.

 

USA PATRIOT Act

 

90

Section 11.15.

 

Original Credit Agreement

 

90

Section 11.16.

 

Reaffirmation and Grant of Security Interest

 

91

Section 11.17.

 

Reallocation of Aggregate Commitment

 

91

 

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SCHEDULES:

Schedule 2.01

–

Applicable Percentages and Initial Commitments

Schedule 4.06

–

Disclosed Matters

Schedule 4.13

–

Capitalization and Credit Party Information

Schedule 4.18

–

Deposit and Investment Accounts

Schedule 7.01

–

Existing Indebtedness

Schedule 7.02

–

Existing Liens

Schedule 7.07

–

Transactions with Affiliates

Schedule 7.08

–

Existing Restrictions

 

EXHIBITS:

 

Exhibit A

–

Form of Assignment and Assumption

Exhibit B

–

Form of Opinion of Borrower’s Counsel

Exhibit C

–

Form of Counterpart Agreement

Exhibit D

–

Form of Solvency Certificate

Exhibit E

–

Form of Note

 

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 2, 2007, among EXCO
RESOURCES, INC., as Borrower, CERTAIN SUBSIDIARIES OF BORROWER, as Guarantors,
the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01.  DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS
HAVE THE MEANINGS SPECIFIED BELOW:

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

“Acquisition” means, the acquisition by the Borrower or any Restricted
Subsidiary, whether by purchase, merger (and, in the case of a merger with any
such Person, with such Person being the surviving corporation) or otherwise, of
all or substantially all of the Equity Interest of, or the business, property or
fixed assets of or business line or unit or a division of, any other Person
primarily engaged in the business of producing oil or natural gas or the
acquisition by the Borrower or any Restricted Subsidiary of property or assets
consisting of Oil and Gas Interests.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, in its capacity as contractual
representative of the Lenders hereunder pursuant to Article X and not in its
individual capacity as a Lender, and any successor agent appointed pursuant to
Article X.

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

“Advance Payment Contract” means any contract whereby any Credit Party either
(a) receives or becomes entitled to receive (either directly or indirectly) any
payment (an “Advance Payment”) to be applied toward payment of the purchase
price of Hydrocarbons produced or to be produced from Oil and Gas Interests
owned by any Credit Party and which Advance Payment is, or is to be, paid in
advance of actual delivery of such production to or for the account of the
purchaser regardless of such production, or (b) grants an option or right of
refusal to the purchaser to take delivery of such production in lieu of payment,
and, in either of the foregoing instances, the Advance Payment is, or is to be,
applied as payment in full for such production when sold and delivered or is, or
is to be, applied as payment for a portion only of the purchase price

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thereof or of a percentage or share of such production; provided that inclusion
of the standard “take or pay” provision in any gas sales or purchase contract or
any other similar contract shall not, in and of itself, constitute such contract
as an Advance Payment Contract for the purposes hereof.

“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.

“Aggregate Applicable Percentage” means, with respect to each Lender at any
time, the sum of such Lender’s Credit Exposure and Unused Commitment at such
time divided by the sum of the Aggregate Credit Exposure and all Unused
Commitments at such time, unless the Aggregate Commitment has been terminated in
which case it shall be the aggregate amount of such Lender’s outstanding Loans,
LC Exposure and Swingline Exposure at such time divided by the aggregate
outstanding amount of all Loans, LC Exposure and Swingline Loans at such time.

“Aggregate Commitment” means the amount equal to the lesser of (i) the Maximum
Facility Amount and (ii) the Borrowing Base; as such Aggregate Commitment may be
reduced or increased pursuant to Section 2.02 and Article III.

“Aggregate Credit Exposure” means, as of any date of determination, the sum of
the Credit Exposure of all of the Lenders as of such date.

“Agreement” means this Second Amended and Restated Credit Agreement, dated as of
May 2, 2007 as it may be amended, supplemented or otherwise modified from time
to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, and (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1%.  Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.

“APC” means Anadarko Petroleum Corporation, a Delaware corporation, and its
successors and assigns.

“Appalachia Properties” means, at any time, the Mortgaged Properties owned by
North Coast, North Coast Eastern or any of their respective Subsidiaries and
located in Ohio, Pennsylvania, West Virginia or any other state specified by the
Borrower and acceptable to the Administrative Agent at such time.

“Applicable Percentage” means, with respect to any Lender at any time, the
percentage of the Aggregate Commitment represented by such Lender’s Commitment
at such time.  The initial amount of each Lender’s Applicable Percentage is as
set forth on Schedule 2.01.  If the Aggregate Commitment has terminated or
expired, the Applicable

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Percentages shall be determined based upon the Aggregate Commitment most
recently in effect, giving effect to any subsequent assignments.

“Applicable Rate” means, for any day, with respect to any Eurodollar Loan or ABR
Loan, or with respect to the Unused Commitment Fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
“Eurodollar Spread”, “ABR Spread” or “Unused Commitment Fee Rate”, as the case
may be, based upon the Borrowing Base Usage applicable on such date:

Borrowing Base
Usage

 

Eurodollar
Spread

 

ABR Spread

 

Unused
Commitment
Fee Rate

 

> 90%

 

175 b.p.

 

75 b.p.

 

37.5 b.p.

 

> 75% and < 90%

 

150 b.p.

 

50 b.p.

 

37.5 b.p.

 

> 50% and < 75%

 

125 b.p.

 

25 b.p.

 

30 b.p.

 

< 50%

 

100 b.p.

 

0 b.p.

 

25 b.p.

 

 

Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next change.

“Approved Counterparty” means, at any time and from time to time, (i) any Person
engaged in the business of writing Swap Agreements for commodity, interest rate
or currency risk that is acceptable to the Administrative Agent and has (or the
credit support provider of such Person has), at the time Borrower or any
Restricted Subsidiary enters into a Swap Agreement with such Person, a long term
senior unsecured debt credit rating of BBB+ or better from S&P or Baa1 or better
from Moody’s and (ii) any Lender Counterparty.

“Approved Fund” has the meaning assigned to such term in Section 11.04.

“Approved Investor” means (a) a BP Investor and (b) any Person other than the
Persons described in clause (a) of the definition of “Control Group” to whom
Equity Interests of the Borrower are transferred or assigned with the prior
written consent of the Majority Lenders, which consent shall not be unreasonably
withheld, conditioned or delayed.  For the avoidance of doubt, any assignment or
transfer of Equity Interests of the Borrower by any Person to any Person other
than a BP Investor or the Persons described in clause (a) of the definition of
“Control Group” is subject to the foregoing, including any transferee or
assignee of such Person.

“Approved Petroleum Engineer” means Lee Keeling & Associates or any other
reputable firm of independent petroleum engineers selected by the Borrower and
approved by the Administrative Agent and the Required Lenders which approval
shall not be unreasonably withheld.

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“Arranger” means J.P. Morgan Securities Inc. in its capacity as sole bookrunner
and lead arranger.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
the form of Exhibit A or any other form approved by the Administrative Agent.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Aggregate Commitment.

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

“Board of Directors” means (1) with respect to a corporation, the Board of
Directors of the corporation or any committee thereof duly authorized to act on
behalf of such board; (2) with respect to a partnership, the Board of Directors
of the general partner of the partnership; (3) with respect to a limited
liability company, the managing member or members or any controlling committee
of managing members thereof; and (4) with respect to any other Person, the board
or committee of such Person serving a similar function.

“Borrower” means EXCO Resources, Inc., a Texas corporation, and its successors
and permitted assigns.

“Borrower Materials” has the meaning assigned to such term in Section 6.01.

“Borrowing” means (a) Revolving 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 or (b) a Swingline Loan.

“Borrowing Base” means, at any time an amount equal to the amount determined in
accordance with Section 3.01, as the same may be redetermined, adjusted or
reduced from time to time pursuant to Section 3.02 and Section 3.03.

“Borrowing Base Deficiency” means, as of any date, the amount, if any, by which
Aggregate Credit Exposure on such date exceeds the Borrowing Base in effect on
such date; 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 secured by
cash in the manner contemplated by Section 2.07(j).

“Borrowing Base Properties” means all Oil and Gas Interests of the Borrower and
the Restricted Subsidiaries evaluated by the Lenders for purposes of
establishing the Borrowing Base.

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“Borrowing Base Usage” means, as of any date and for all purposes, the quotient,
expressed as a percentage, of (i) the Aggregate Credit Exposure as of such date,
divided by (ii) the Borrowing Base as of such date.

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.05.

“BP Investor” means, collectively, (a) BP EXCO Holdings LP, a Texas limited
partnership and any other investment fund managed by BP Capital Management LP,
and (b) Boone Pickens, any Affiliate of Boone Pickens, any spouse or lineal
descendant of Boone Pickens (whether natural or adopted), the estate of Boone
Pickens, and any trust solely for the benefit of Boone Pickens and/or his spouse
and/or lineal descendants

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York, New York or Dallas, Texas are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

“Capital Lease Obligations” of any Person means 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 the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Management Obligations” means, with respect to any Credit Party, any
obligations of such Credit Party owed to JPMorgan Chase Bank, N.A. (or any of
its affiliates) in respect of treasury management arrangements, depositary or
other cash management services.

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.16(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

“Change of Control” means (i) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the Effective Date) other
than the Control Group, of Equity Interests representing more than thirty
percent (30%) of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of Borrower; or (ii) occupation of a majority
of the seats (other than vacant seats) on the board of directors of

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Borrower by persons who were neither (1) nominated by the board of directors of
Borrower nor (2) appointed by directors so nominated; (iii) the acquisition of
direct or indirect Control of Borrower by any Person or group other than the
Control Group; (iv) the occurrence of a “Change of Control” as such term is
defined in the Indenture and (v) the occurrence of a “Change of Control” as such
term is defined in the Preferred Stock Documents.

“Charges” has the meaning assigned to such term in Section 11.13.

“Class” where used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans.

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

“Collateral” means all assets, whether now owned or hereafter acquired by any
Borrower or any other Credit Party, in which a Lien is granted or purported to
be granted to any Secured Party as security for any Obligation.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit and Swingline
Loans hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender’s Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.02, (b) reduced or increased
from time to time as a result of changes in the Borrowing Base pursuant to
Article III and (c) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 11.04.  The initial amount
of each Lender’s Commitment (which amount is such Lender’s Applicable Percentage
of the initial Aggregate Commitment) is set forth in Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable.

“Consolidated Current Assets” means, as of any date of determination, the total
of (i) the consolidated current assets of the Borrower and the Restricted
Subsidiaries determined in accordance with GAAP as of such date and calculated
on a combined basis, plus, all Unused Commitments as of such date, (ii) less any
non-cash assets required to be included in consolidated current assets of the
Borrower and the Restricted Subsidiaries as a result of the application of FASB
Statement 133 as of such date.

“Consolidated Current Liabilities” means, as of any date of determination, the
total of (i) consolidated current liabilities of the Borrower and the Restricted
Subsidiaries, as determined in accordance with GAAP as of such date, (ii) less
current maturities of the Loans, (iii) less any non-cash obligations required to
be included in consolidated current liabilities of the Borrower and the
Restricted Subsidiaries as a result of the application of FASB Statement 133 as
of such date.

“Consolidated Current Ratio” means, as of any date of determination, the ratio
of Consolidated Current Assets to Consolidated Current Liabilities as of such
date.

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“Consolidated EBITDAX” means, with respect to the Borrower and its Restricted
Subsidiaries for any period, Consolidated Net Income for such period; plus,
without duplication and to the extent deducted in the calculation of
Consolidated Net Income for such period, the sum of (a) income or franchise
Taxes paid or accrued; (b) Consolidated Interest Expense; (c) amortization,
depletion and depreciation expense; (d) any non-cash losses or charges on any
Swap Agreement resulting from the requirements of FASB Statement 133 for that
period; (e) oil and gas exploration expenses (including all drilling,
completion, geological and geophysical costs) for such period; (f) losses from
sales or other dispositions of assets (other than Hydrocarbons produced in the
ordinary course of business) and other extraordinary or non-recurring losses;
(g) workover expenses for such period; (h) cash payments made during such period
as a result of the early termination of any Swap Agreement (giving effect to any
netting agreements); and (i) other non-cash charges (excluding accruals for cash
expenses made in the ordinary course of business); minus, to the extent included
in the calculation of Consolidated Net Income for such period; (j) the sum of
(1) any non-cash gains on any Swap Agreements resulting from the requirements of
FASB Statement 133 for that period; (2) extraordinary or non-recurring gains;
and (3) gains from sales or other dispositions of assets (other than
Hydrocarbons produced in the ordinary course of business); provided that, with
respect to the determination of Borrower’s compliance with the leverage ratio
set forth in Section 7.11(b) for any period, Consolidated EBITDAX shall be
adjusted to give effect, on a pro forma basis, to any Acquisitions made during
such period as if such Acquisitions were made at the beginning of such period.

“Consolidated Funded Indebtedness” means, as of any date and without
duplication, Indebtedness of the Borrower and the Restricted Subsidiaries of the
type described in clauses (a), (b), (c), (d), (e), (f), (g) or (h) of the
definition of Indebtedness, minus Surplus Cash.

“Consolidated Interest Expense” means for any period, without duplication, the
aggregate of all interest paid or accrued by the Borrower and its Restricted
Subsidiaries, on a consolidated basis, in respect of Indebtedness of any such
Person, on a consolidated basis, including all interest, fees and costs payable
with respect to the obligations related to such Indebtedness (other than fees
and costs which may be capitalized as transaction costs in accordance with GAAP)
and the interest component of Capitalized Lease Obligations, all as determined
in accordance with GAAP. For the avoidance of doubt, dividends on Preferred
Stock shall not be included in Consolidated Interest Expense.

“Consolidated Net Income” means for any period, the consolidated net income (or
loss) of the Borrower and its Consolidated Subsidiaries, as applicable,
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Consolidated Subsidiary of the Borrower, or is merged into or
consolidated with the Borrower or any of its Consolidated Subsidiaries, as
applicable, (b) the income (or deficit) of any Person in which any other Person
(other than the Borrower or any of its Restricted Subsidiaries) has an Equity
Interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Restricted Subsidiaries during such
period and (c) the undistributed earnings of any Consolidated Subsidiary of the

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Borrower, to the extent that the declaration or payment of dividends or similar
distributions by such Consolidated Subsidiary is not at the time permitted by
the terms of any contractual obligation (other than under any Loan Document or
the Indenture) or by any law applicable to such Consolidated Subsidiary.

“Consolidated Subsidiaries” means, for any Person, any Subsidiary or other
entity the accounts of which would be consolidated with those of such Person in
its consolidated financial statements in accordance with GAAP.

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

“Control Group” means (a) Douglas H. Miller, Stephen F. Smith, any Affiliate
Controlled by any such Person and any spouse or lineal descendants (whether
natural or adopted) of any such Person and any trust solely for the benefit of
such Person and/or such Person’s spouse and/or lineal descendants and (b) any
Approved Investor.

“Counterpart Agreement” means a Counterpart Agreement substantially in the form
of Exhibit C delivered by a Guarantor pursuant to Section 6.13.

“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 and its
Swingline Exposure at such time.

“Credit Parties” means collectively, Borrower, and each Guarantor and each
individually, a “Credit Party”.

“Crude Oil” means all crude oil and condensate.

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

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans, participations in LC Disbursements or participations in Swingline
Loans required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.

“Disqualified Stock” means any Equity Interest (other than the Preferred Stock),
which, by its terms (or by the terms of any security into which it is
convertible or for

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which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (other than solely as a
result of a change of control or asset sale), in whole or in part, on or prior
to the Maturity Date.

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

“Domestic Subsidiary” means, with respect to any Person, a subsidiary of such
Person that is incorporated or formed under the laws of the United States of
America, any state thereof or the District of Columbia.

“Effective Date” means the date on which the conditions specified in Section
5.01 are satisfied (or waived in accordance with Section 11.02).

“Eligible Account” has the meaning assigned to such term in Section 6.15.

“Eligible Assignee” means any Person that qualifies as an assignee pursuant to
Section 11.04(b)(i); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

“Engineered Value” means, the value attributed to the Borrowing Base Properties
for purposes of the most recent Redetermination of the Borrowing Base pursuant
to Article III (or for purposes of determining the Initial Borrowing Base in the
event no such Redetermination has occurred), based upon the discounted present
value of the estimated net cash flow to be realized from the production of
Hydrocarbons from the Borrowing Base Properties as set forth in the Reserve
Report.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Credit Party directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

“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.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any Credit Party, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Credit Party or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by any Credit Party or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by any Credit Party or any of its ERISA Affiliates of any liability with respect
to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by any Credit Party or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from any Credit Party or any ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

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

“Event of Default” has the meaning assigned to such term in Article IX.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.20(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure to comply with Section 2.18(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or

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assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.18(a).

“Existing Swap Agreements” means, collectively, (i) any Swap Agreement entered
into between any Credit Party and any Lender Counterparty (including Lender
Counterparty under and as defined in the Original Credit Agreement) prior to the
Effective Date and in effect on the Effective Date and (ii) any of the Southern
Gas Hedges assigned to any Credit Party on the Effective Date and to which any
Lender Counterparty is a party.

“FASB” means Financial Accounting Standards Board.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which any Credit Party is located.  For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Gas Balancing Agreement” means any agreement or arrangement whereby the
Borrower or any Restricted Subsidiary, or any other party having an interest in
any Hydrocarbons to be produced from Oil and Gas Interests in which the Borrower
or any Restricted Subsidiary owns an interest, has a right to take more than its
proportionate share of production therefrom.

“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 properly exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (in this definition, the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment

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thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

“Guaranteed Liabilities” has the meaning assigned to such term in Section 8.01.

“Guarantor” means each Restricted Subsidiary that is a party hereto or hereafter
executes and delivers to the Administrative Agent and the Lenders, a Counterpart
Agreement pursuant to Section 6.13 or otherwise.

“Hazardous Materials”  means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hydrocarbons” means all Crude Oil and Natural Gas produced from or attributable
to the Oil and Gas Interests of the Credit Parties.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

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“Indemnitee” has the meaning assigned to such term in Section 11.03.

“Indenture” means that certain Indenture dated as of January 20, 2004, by and
among the Borrower, certain Subsidiaries of the Borrower and the Trustee, as in
effect on the date hereof and as amended, modified, supplemented or restated
from time to time thereafter as permitted under this Agreement.

“Information” has the meaning assigned to such term in Section 11.12.

“Initial Borrowing Base” has the meaning assigned to such term in Section 3.01.

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.09.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each calendar quarter, (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 and (c) with respect to any
Swingline Loan, the day that such Loan is required to be repaid.

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

“Interestholder Subsidiary” means any Subsidiary that owns or holds MLP
Interests or any other Equity Interests of the MLP.

“Issuing Bank” means JPMorgan Chase Bank, in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.07(i).  The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

“JPMorgan Chase Bank” and “JPMorgan Chase Bank, N.A.” means JPMorgan Chase Bank,
N.A. (successor by merger to Bank One, N.A. Illinois) and its successors.

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

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

“Lender Counterparty” means any Lender or any Affiliate of a Lender counterparty
to a Swap Agreement with any Credit Party.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.  Unless the context otherwise requires, the term “Lenders”
includes the Swingline Lender.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement
and, to the extent outstanding on the Effective Date, any letter of credit
issued under the Original Credit Agreement and any renewals thereof after the
Effective Date.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Moneyline Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period.  In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

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“Loan Documents” means this Agreement, any promissory notes executed in
connection herewith, Security Instruments, the Letters of Credit (and any
applications therefore and reimbursement agreements related thereto), the Fee
Letter and any other agreements executed in connection with this Agreement.

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

“Majority Lenders” means, at any time, Lenders having Credit Exposures and
Unused Commitments representing more than fifty percent (50%) of the sum of the
Aggregate Credit Exposure and all Unused Commitments at such time or, if the
Aggregate Commitment has been terminated, Lenders having Credit Exposures
representing more than fifty percent (50%) of the Aggregate Credit Exposure at
such time; provided that the Unused Commitment and the Credit Exposures held or
deemed held by any Defaulting Lender shall be excluded for purposes of making a
determination of the Majority Lenders.

“Material Adverse Effect” means a material adverse effect on (a) the assets or
properties, financial condition, businesses or operations of the Borrower and
the Restricted Subsidiaries taken as a whole, (b) the ability of any Credit
Party to carry out its business as of the date of this Agreement or as proposed
at the date of this Agreement to be conducted, (c) the ability of any Credit
Party to perform fully and on a timely basis its respective obligations under
any of the Loan Documents to which it is a party, or (d) the validity or
enforceability of any of the Loan Documents or the rights and remedies of the
Administrative Agent or the Lenders under this Agreement and the other Loan
Documents.

“Material Domestic Subsidiary” means any Domestic Subsidiary (other than the MLP
Subsidiaries) that owns or holds assets, properties or interests (including Oil
and Gas Interests but excluding Equity Interests in the MLP, whether owned
directly or indirectly) with an aggregate fair market value, on a consolidated
basis, greater than five percent (5%) of the aggregate fair market value of all
of the assets, properties and interests (including Oil and Gas Interests but
excluding Equity Interests in the MLP, whether owned directly or indirectly) of
the Borrower and the Restricted Subsidiaries, on a consolidated basis.

“Material Gas Imbalance” means, with respect to all Gas Balancing Agreements to
which Borrower or any Restricted Subsidiary is a party or by which any Oil and
Gas Interests owned by Borrower or a Restricted Subsidiary is bound, a net
overproduced gas imbalance to Borrower and the Restricted Subsidiaries, taken as
a whole, in excess of $10,000,000.

“Material Indebtedness” means Indebtedness under the Senior Notes and any other
Indebtedness (other than the Loans and Letters of Credit), or obligations in
respect of one or more Swap Agreements, of the Borrower or any one or more of
the Restricted Subsidiaries in an aggregate principal amount exceeding
$10,000,000.  For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the

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Borrower or any Guarantor in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Guarantor would be required to pay if such Swap Agreement were
terminated at such time.

“Material Sales Contract” means, as of any date of determination,  any agreement
for the sale of Hydrocarbons from the Borrowing Base Properties to which the
Borrower or any Restricted Subsidiary is a party if the aggregate volume of
Hydrocarbons sold pursuant to such agreement during the twelve months
immediately preceding such date equals or exceeds 10% of the aggregate volume of
Hydrocarbons sold by the Borrower and the Restricted Subsidiaries, on a
consolidated basis, from the Borrowing Base Properties during the twelve months
immediately preceding such date.

“Maturity Date” means March 30, 2012.

“Maximum Facility Amount” means $1,000,000,000.

“Maximum Liability” has the meaning assigned to such term in Section 8.10.

“Maximum Rate” has the meaning assigned to such term in Section 11.13.

“MLP” means EXCO Partners, LP, a Delaware limited partnership.

“MLP Agreements” means, collectively, (i) that certain Administrative Services
Agreement, dated as of October 2, 2006, by and among the Borrower, the MLP
General Partner and certain of the MLP Subsidiaries, (ii) that certain Omnibus
Agreement, dated as of October 2, 2006, by and among the Borrower and certain of
the MLP Subsidiaries, and (iii) the other agreements, certificates and
instruments executed and delivered in connection with the agreements described
in the foregoing clauses (i) and (ii), all as amended, supplemented or modified
from time to time as permitted by this Agreement.

“MLP General Partner” means EXCO GP Partners, LP, a Delaware limited partnership
and its successors and permitted assigns that are admitted to the MLP as general
partner of the MLP.

“MLP Interests” means the limited partnership interest in the MLP.

“MLP Public Offering” means a sale by the MLP of MLP Interests in an
underwritten (firm commitment) initial public offering registered under the
Securities Act of 1933, resulting in the listing of MLP Interests on a
nationally recognized stock exchange, including without limitation, the NASDAQ
National Market System or the New York Stock Exchange.

“MLP Rights” means the rights to purchase MLP Interests issued to Borrower by
the MLP in connection with the transfer of certain Subsidiaries and certain Oil
and Gas Interests to the MLP Subsidiaries on or about October 2, 2006.

“MLP Subsidiaries” means, collectively, the MLP and its Subsidiaries.

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“Moody’s” means Moody’s Investors Service, Inc.

“Mortgaged Properties” means the Oil and Gas Interests described in one or more
duly executed, delivered and filed Mortgages evidencing a Lien prior and
superior in right to any other Person in favor of the Administrative Agent for
the benefit of the Secured Parties and subject only to the Liens permitted
pursuant to Section 7.02.

“Mortgages”  means all mortgages, deeds of trust, amendments to mortgages,
security agreements, assignments of production, pledge agreements, collateral
mortgages, collateral chattel mortgages, collateral assignments, financing
statements and other documents, instruments and agreements evidencing, creating,
perfecting or otherwise establishing the Liens required by Section 6.09.  All
Mortgages shall be in form and substance satisfactory to Administrative Agent in
its sole discretion

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

“Natural Gas” means all natural gas, distillate or sulphur, natural gas liquids
and all products recovered in the processing of natural gas (other than
condensate) including, without limitation, natural gasoline, coalbed methane
gas, casinghead gas, iso-butane, normal butane, propane and ethane (including
such methane allowable in commercial ethane).

“Net Cash Proceeds” means, with respect to any sale, transfer, assignment or
disposition of any Borrowing Base Properties by the Borrower or any Restricted
Subsidiary, the excess, if any, of (a) the sum of cash and cash equivalents
received in connection with such sale, but only as and when so received, over
(b) the sum of (i) the principal amount of any Indebtedness that is secured by
such asset and that is required to be repaid in connection with the sale thereof
(other than the Loans), (ii) the out-of-pocket expenses incurred by the Borrower
or such Restricted Subsidiary in connection with such sale, (iii) all legal,
title and recording tax expense and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability under GAAP as a consequence of
such sale, (iv) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such sale,
(v) the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
other assets disposed of in such sale and retained by the Borrower or any
Restricted Subsidiary after such sale, (vi) cash payments made to satisfy
obligations resulting from early terminations of Swap Agreements in connection
with or as a result of any such sale or other disposition of Borrowing Base
Properties, and (vii) any portion of the purchase price from such sale placed in
escrow, whether as a reserve for adjustment of the purchase price, for
satisfaction of indemnities in respect of such sale or otherwise in connection
with such sale; provided however, that upon the termination of that escrow, Net
Cash Proceeds will be increased by any portion of funds in the escrow that are
released to the Borrower or any Restricted Subsidiary.

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“Net Working Capital” means, on any date of determination, the sum of (a)
Consolidated Current Assets as of such date (calculated without including Unused
Commitments as of such date) minus (b) Consolidated Current Liabilities as of
such date.

“Non-Consenting Lender” has the meaning assigned to such term in Section
2.20(c).

“Obligations” means any and all obligations of every nature, contingent or
otherwise, whether now existing or hereafter arising, of any Credit Party from
time to time owed to the Administrative Agent, the Issuing Bank, the Lenders or
any of them or any Lender Counterparty arising under or in connection with any
Loan Document or Swap Agreement (including, any and all Cash Management
Obligations and any and all obligations, contingent or otherwise, whether now
existing or hereafter arising, of any Credit Party under any Existing Swap
Agreement and any and all obligations, contingent or otherwise, whether now
existing or hereafter arising, of any Credit Party with respect to any
transactions under any Swap Agreement with any Person that was a Lender
Counterparty at the time such Credit Party entered into such transactions
regardless of whether such Person is no longer a Lender Counterparty), whether
for principal, interest, reimbursement of amounts drawn under any Letter of
Credit, payments for early termination of Swap Agreements, funding
indemnification amounts, fees, expenses, indemnification or otherwise.

“Off-Balance Sheet Liability” of a Person means (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (ii) any liability under any Sale and Leaseback Transaction which
is not a Capital Lease Obligation, (iii) any liability under any so-called
“synthetic lease” transaction entered into by such Person, (iv) any Material Gas
Imbalance, (v) any Advance Payment Contract, or (vi) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheets of such Person, but excluding from the foregoing clauses (iii) through
(vi) operating leases and usual and customary oil, gas and mineral leases.

“Oil and Gas Interest(s)” means: (a) direct and indirect interests in and rights
with respect to oil, gas, mineral and related properties and assets of any kind
and nature, direct or indirect, including, without limitation, working, royalty
and overriding royalty interests, mineral interests, leasehold interests,
production payments, operating rights, net profits interests, other non-working
interests, contractual interests, non-operating interests and rights in any
pooled, unitized or communitized acreage by virtue of such interest being a part
thereof; (b) interests in and rights with respect to Hydrocarbons other minerals
or revenues therefrom and contracts and agreements in connection therewith and
claims and rights thereto (including oil and gas leases, operating agreements,
unitization, communitization and pooling agreements and orders, division orders,
transfer orders, mineral deeds, royalty deeds, oil and gas sales, exchange and
processing contracts and agreements and, in each case, interests thereunder),
and surface interests, fee interests, reversionary interests, reservations and
concessions related to any of the foregoing; (c) easements, rights-of-way,
licenses, permits, leases, and other interests associated with, appurtenant to,
or necessary for the operation of any of the foregoing; (d) interests in oil,

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gas, water, disposal and injection wells, equipment and machinery (including
well equipment and machinery), oil and gas production, gathering, transmission,
compression, treating, processing and storage facilities (including tanks, tank
batteries, pipelines and gathering systems), pumps, water plants, electric
plants, gasoline and gas processing plants, refineries and other tangible or
intangible, movable or immovable, real or personal property and fixtures located
on, associated with, appurtenant to, or necessary for the operation of any of
the foregoing; and (e) all seismic, geological, geophysical and engineering
records, data, information, maps, licenses and interpretations.

“Organizational Documents” means (a) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (b) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (c) with respect to any general partnership, its partnership
agreement, as amended, and (d) with respect to any limited liability company,
its certificate of formation or articles of organization, as amended, and its
limited liability company agreement or operating agreement, as amended.

“Original Credit Agreement” means that certain Amended and Restated Credit
Agreement, dated as of March 17, 2006, among Borrower, certain Subsidiaries of
Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative
Agent, as amended, supplemented and otherwise modified from time to time prior
to the Effective Date.

“Original Loans” means the loans and other extensions of credit outstanding
under the Original Credit Agreement as of the Effective Date.

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

“Participant” has the meaning assigned to such term in Section 11.04.

“Payment Currency” has the meaning assigned to such term in Section 8.07.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Permitted Encumbrances” means:

(a)           Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 6.04;

(b)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
and other like Liens imposed by law, and contractual Liens granted to operators
and non-operators under oil and gas operating agreements, in each case, arising
in the ordinary course of business or incident to the exploration, development,
operation and

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maintenance of Oil and Gas Interests and securing obligations that are not
overdue by more than thirty (30) days or are being contested in compliance with
Section 6.04;

(c)           pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

(d)           deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

(e)           judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article IX;

(f)            easements, zoning restrictions, rights-of-way, servitudes,
permits, surface leases, and similar encumbrances on real property imposed by
law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of any
Credit Party;

(g)           royalties, overriding royalties, reversionary interests and
similar burdens with respect to the Oil and Gas Interests owned by the Borrower
or such Restricted Subsidiary, as the case may be, if the net cumulative effect
of such burdens does not operate to deprive the Borrower or any Restricted
Subsidiary of any material right in respect of its assets or properties (except
for rights customarily granted with respect to such interests);

(h)           Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Borrower or any
Restricted Subsidiary in the ordinary course of business covering the property
under the lease; and

(i)            preferential rights to purchase, and provisions requiring a third
party’s consent prior to assignment and similar restraints on alienation, in
each case, granted pursuant to an oil and gas operating agreement and arising in
the ordinary course of business or incident to the exploration, development,
operation and maintenance of Oil and Gas Interests; provided such right,
requirement or restraint does not material affect the value of such Oil and Gas
Interests;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness (other than contractual Liens described in the foregoing
clause (b) granted to operators and non-operators under oil and gas operating
agreements to the extent the obligations secured by such Liens constitute
Indebtedness).

“Permitted Investments” means:

(a)           U.S. Government Securities;

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(b)           investments in demand and time deposit accounts, certificates of
deposit and money market deposits maturing within one hundred eighty (180) days
of the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any State thereof or
any foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $50,000,000 (or the foreign currency equivalent thereof) and has
outstanding debt which is rated “A” (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act of 1933, as amended) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor;

(c)           investments in deposits available for withdrawal on demand with
any commercial bank that is organized under the laws of any country in which the
Borrower or any Restricted Subsidiary maintains an office or is engaged in the
oil and gas business; provided, however, that (i) all such deposits have been
made in such accounts in the ordinary course of business and (ii) such deposits
do not at any one time exceed $10,000,000 in the aggregate;

(d)           repurchase obligations with a term of not more than thirty (30)
days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b)
above;

(e)           investments in commercial paper, maturing not more than ninety
(90) days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Borrower) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of “P-1” (or higher) according to Moody’s or “A-l” (or higher) according to S&P;

(f)            investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by
Moody’s; and

(g)           investments in money market funds that invest substantially all
their assets in securities of the types described in clauses (a) through (f)
above

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

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

“Platform” has the meaning assigned to such term in Section 6.01.

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“Pledge Agreement” means a Pledge and Security Agreement in favor of the
Administrative Agent for the benefit of the Secured Parties covering, among
other things, the rights and interests of Borrower or any Restricted Subsidiary
in the Equity Interest of each Restricted Subsidiary and otherwise in form and
substance satisfactory to the Administrative Agent.

“Preferred Stock” means collectively, (i) the Series A-1 7.0% Cumulative
Convertible Perpetual Preferred Stock of the Borrower, par value $0.001 per
share, (ii) the Series A-2 7.0% Cumulative Convertible Perpetual Preferred Stock
of the Borrower, par value $0.001 per share, (iii) the Series B 7.0% Cumulative
Convertible Perpetual Preferred Stock of the Borrower, par value $0.001 per
share, (iv) the Series C 7.0% Cumulative Convertible Perpetual Preferred Stock
of the Borrower, par value $0.001 per share, (v) the Series A-1 Hybrid Preferred
Stock of the Borrower, par value $0.001 per share, and (vi) the Series A-2
Hybrid Preferred Stock of the Borrower, par value $0.001 per share.

“Preferred Stock Documents” means that certain Preferred Stock Purchase
Agreement, dated on or about March 29, 2007, by and among the Borrower and the
purchasers named therein, and the related Certificates of Designation described
therein filed on or before the Effective Date and any certificates and other
agreements (including side letter agreements) executed in connection with the
issuance of the Preferred Stock, as the same may be amended, modified,
supplemented or restated from time to time to the extent permitted under this
Agreement.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank 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. 
THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE JPMORGAN CHASE BANK N.A.’S
LOWEST RATE.

“Projections” means the Borrower’s forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements, all prepared on a basis
consistent with the historical financial statements described in Section 4.04,
the historical financial information provided pursuant to or in connection with
the Southern Gas Acquisition and after giving effect to the Transactions,
together with appropriate supporting details and a statement of underlying
assumptions, in each case in form and substance satisfactory to the Lenders and
for the period from the Effective Date through December 31, 2011.

“Public Lender” has the meaning assigned to such term in Section 6.01.

“Redetermination” means any Scheduled Redetermination or Special
Redetermination.

“Redetermination Date” means (a) with respect to any Scheduled Redetermination,
each April 1 and October 1 of each year, commencing October 1, 2007, and
(b) with respect to any Special Redetermination, the first day of the first
month which

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is not less than twenty (20) Business Days following the date of a request for a
Special Redetermination.

“Register” has the meaning assigned to such term in Section 11.04.

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

“Required Lenders” means, at any time, Lenders having Credit Exposures and
Unused Commitments representing at least sixty-six and two-thirds percent
(66-2/3%) (or if there are less than four Lenders, at least seventy-five percent
(75%)) of the sum of the Aggregate Credit Exposure and all Unused Commitments of
all Lenders at such time or, if the Aggregate Commitment has been terminated,
Lenders having Credit Exposures representing at least sixty-six and two-thirds
percent (66-2/3%) (or if there are less than four Lenders, at least
seventy-fiver percent (75%)) of the Aggregate Credit Exposure of all Lenders at
such time; provided that the Unused Commitment of and the Credit Exposures held
or deemed held by any Defaulting Lender shall be excluded for purposes of making
a determination of the Required Lenders.

“Reserve Report” means an unsuperseded engineering analysis of the Borrowing
Base Properties, in form and substance reasonably acceptable to the
Administrative Agent, prepared in accordance with customary and prudent
practices in the petroleum engineering industry.

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, principal accounting officer, treasurer or
assistant treasurer of a Credit Party.  Any document delivered hereunder that is
signed by a Responsible Officer of a Credit Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Credit Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Credit Party.

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

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

“Revolving Loan” means a Loan made pursuant to Section 2.05.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.

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“Sale and Leaseback Transaction” means any sale or other transfer of any
property by any Person with the intent to lease such property as lessee.

“Scheduled Redetermination” means any redetermination of the Borrowing Base
pursuant to Section 3.02.

“Secured Party” means the Administrative Agent, any Lender and any Lender
Counterparty and shall include any Lender Counterparty to the extent that any
Obligations owing to such Lender Counterparty arise under hedging transactions
entered into at the time such Person was a Lender or Lender Counterparty.

“Security Instruments” means collectively, all Guarantees of the Obligations
evidenced by the Loan Documents and all mortgages, security agreements, pledge
agreements, collateral assignments and other collateral documents covering the
Oil and Gas Interests of the Borrower and the Restricted Subsidiaries and the
Equity Interests of the Restricted Subsidiaries and other personal property,
equipment, oil and gas inventory and proceeds of the foregoing, all such
documents to be in form and substance reasonably satisfactory to the
Administrative Agent.

“Sellers” means, collectively, APC, Anadarko E&P Company LP, a Delaware limited
partnership, Howell Petroleum Corporation, a Delaware corporation, and
Kerr-McGee Oil & Gas Onshore LP, a Delaware limited partnership, and their
respective successors and assigns.

“Senior Note Documents” means the Senior Notes, the Indenture, the Senior Notes
Guaranty, collectively, or each of such documents singularly, and any documents
or instruments contemplated by or executed in connection with any of them.

“Senior Notes” means the 7 ¼% Senior Notes due 2011 of the Borrower issued
pursuant to the Indenture, as amended, modified or supplemented from time to
time in accordance with the terms hereof.

“Senior Notes Guaranty” means a supplemental indenture, in a form satisfactory
to the Agent, pursuant to which a Subsidiary guarantees the Borrower’s
obligations with respect to the Senior Notes on the terms provided for in the
Indenture.

“Southern Gas Acquisition” means the acquisition of certain assets of Sellers by
Borrower pursuant to the Southern Gas Purchase Agreement including the
assignment of the Southern Gas Hedges to one or more Credit Parties on terms and
conditions reasonably acceptable to the Administrative Agent.

“Southern Gas Hedges” means the hedging transactions set forth on Schedule 7.15
of the Southern Gas Purchase Agreement and otherwise on terms and conditions
reasonably acceptable to the Administrative Agent and in notional amounts
covering at least eighty percent (80%) of the forecasted production from proved
producing reserves included in the Oil and Gas Interests acquired in the
Southern Gas Acquisition (other than natural gas liquids) through December 31,
2009.

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“Southern Gas Purchase Agreement” means that certain Purchase and Sale Agreement
by and among Sellers, as Seller, and Borrower, as Purchaser, executed on
February 1, 2007.

“Southern Gas Purchase Documents” means the Southern Gas Purchase Agreement and
all other certificates and other documents and instruments now or hereafter
executed and delivered by, between or among any one or more of the Sellers and
Borrower pursuant to the Southern Gas Purchase Agreement or in connection with
the Southern Gas Acquisition.

“Special Redetermination” means any redetermination of the Borrowing Base made
pursuant to Section 3.03.

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

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than
fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent
(50%) of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. Unless the context otherwise clearly requires,
references herein to a “Subsidiary” refer to a Subsidiary of the Borrower.

“Surplus Cash” means the lesser of (i) cash and cash equivalents of the Borrower
and its Restricted Subsidiaries, on a consolidated basis, that constitute
Permitted Investments and (ii) the amount by which Net Working Capital exceeds
zero ($0.00).

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or

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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 the Credit Parties shall be a
Swap Agreement.

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.

“Swingline Lender” means JPMorgan Chase Bank, in its capacity as lender of
Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.06.

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

“Transactions” means (i) the execution, delivery and performance by the Credit
Parties of this Agreement and the Loan Documents, (ii) the borrowing of Loans,
(iii) the use of the proceeds thereof, and (iv) the issuance of Letters of
Credit hereunder, (v) the execution, delivery and performance of the Preferred
Stock Documents and the sale and issuance of the Preferred Stock, (vi) the
consummation of the Southern Gas Acquisition, and (vii) the assignment of the
Southern Gas Hedges to one or more Credit Parties on terms and conditions
reasonably satisfactory to the Administrative Agent.

“Trustee” means Wilmington Trust Company, in its capacity as trustee under the
Indenture and its permitted successors under the Indenture.

“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 Adjusted LIBO Rate or the Alternate Base Rate.

“Unrestricted Subsidiary” means (a) any Subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors of the Borrower in the manner provided below and (b) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Borrower may designate
any Subsidiary (including any newly acquired or newly formed Subsidiary) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries is
a Material Domestic Subsidiary, a Subsidiary owning Oil and Gas Interests
included in the Borrowing Base Properties or a “Restricted Subsidiary”, as such
term is defined in the Indenture.

“Unused Commitment” means, with respect to each Lender at any time, such
Lender’s Commitment at such time minus such Lender’s Credit Exposure (other than
such Lender’s Swingline Exposure) at such time.

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

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“U.S. Government Securities” means direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02.  CLASSIFICATION OF LOANS AND BORROWINGS.  FOR PURPOSES OF THIS
AGREEMENT, LOANS MAY BE CLASSIFIED AND REFERRED TO BY CLASS (E.G., A “REVOLVING
LOAN”) OR BY TYPE (E.G., A “EURODOLLAR LOAN”) OR BY CLASS AND TYPE (E.G., A
“EURODOLLAR REVOLVING LOAN”).  BORROWINGS ALSO MAY BE CLASSIFIED AND REFERRED TO
BY CLASS (E.G., A “REVOLVING BORROWING” OR AN “ABR BORROWING”) OR BY TYPE (E.G.,
A “EURODOLLAR BORROWING”) OR BY CLASS AND TYPE (E.G., A “EURODOLLAR REVOLVING
BORROWING”).

SECTION 1.03.  TERMS GENERALLY.  THE DEFINITIONS OF TERMS HEREIN SHALL APPLY
EQUALLY TO THE SINGULAR AND PLURAL FORMS OF THE TERMS DEFINED.  WHENEVER THE
CONTEXT MAY REQUIRE, ANY PRONOUN SHALL INCLUDE THE CORRESPONDING MASCULINE,
FEMININE AND NEUTER FORMS.  THE WORDS “INCLUDE”, “INCLUDES” AND “INCLUDING”
SHALL BE DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT LIMITATION”.  THE WORD
“WILL” SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND EFFECT AS THE WORD
“SHALL.”  UNLESS THE CONTEXT REQUIRES OTHERWISE (A) ANY DEFINITION OF OR
REFERENCE TO ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT HEREIN SHALL BE
CONSTRUED AS REFERRING TO SUCH AGREEMENT, INSTRUMENT OR OTHER DOCUMENT AS FROM
TIME TO TIME AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED (SUBJECT TO ANY
RESTRICTIONS ON SUCH AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS SET FORTH HEREIN),
(B) ANY REFERENCE HEREIN TO ANY PERSON SHALL BE CONSTRUED TO INCLUDE SUCH
PERSON’S SUCCESSORS AND ASSIGNS, (C) 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, (D) ALL
REFERENCES HEREIN TO ARTICLES, SECTIONS, EXHIBITS AND SCHEDULES SHALL BE
CONSTRUED TO REFER TO ARTICLES AND SECTIONS OF, AND EXHIBITS AND SCHEDULES TO,
THIS AGREEMENT AND (E) THE WORDS “ASSET” AND “PROPERTY” SHALL BE CONSTRUED TO
HAVE THE SAME MEANING AND EFFECT AND TO REFER TO ANY AND ALL TANGIBLE AND
INTANGIBLE ASSETS AND PROPERTIES, INCLUDING CASH, SECURITIES, ACCOUNTS AND
CONTRACT RIGHTS.

SECTION 1.04.  ACCOUNTING TERMS; GAAP.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, ALL TERMS OF AN ACCOUNTING OR FINANCIAL NATURE SHALL BE CONSTRUED IN
ACCORDANCE WITH GAAP, AS IN EFFECT FROM TIME TO TIME; PROVIDED THAT, IF THE
BORROWER NOTIFIES THE ADMINISTRATIVE AGENT THAT THE BORROWER REQUEST AN
AMENDMENT TO ANY PROVISION HEREOF TO ELIMINATE THE EFFECT OF ANY CHANGE
OCCURRING AFTER THE DATE HEREOF IN GAAP OR IN THE APPLICATION THEREOF ON THE
OPERATION OF SUCH PROVISION (OR IF THE ADMINISTRATIVE AGENT NOTIFIES THE
BORROWER THAT THE MAJORITY LENDERS REQUEST AN AMENDMENT TO ANY PROVISION HEREOF
FOR SUCH PURPOSE), REGARDLESS OF WHETHER ANY SUCH NOTICE IS GIVEN BEFORE OR
AFTER SUCH CHANGE IN GAAP OR IN THE APPLICATION THEREOF, THEN SUCH PROVISION
SHALL BE INTERPRETED ON THE BASIS OF GAAP AS IN EFFECT AND APPLIED IMMEDIATELY
BEFORE SUCH CHANGE SHALL HAVE BECOME EFFECTIVE UNTIL SUCH NOTICE SHALL HAVE BEEN
WITHDRAWN OR SUCH PROVISION AMENDED IN ACCORDANCE HEREWITH.

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SECTION 1.05.  OIL AND GAS DEFINITIONS.  FOR PURPOSES OF THIS AGREEMENT, THE
TERMS “PROVED [OR] PROVEN RESERVES,” “PROVED DEVELOPED RESERVES,” “PROVED [OR]
PROVEN UNDEVELOPED RESERVES,” “PROVED [OR] PROVEN DEVELOPED NONPRODUCING
RESERVES” AND “PROVED [OR] PROVEN DEVELOPED PRODUCING RESERVES,” HAVE THE
MEANING GIVEN SUCH TERMS FROM TIME TO TIME AND AT THE TIME IN QUESTION BY THE
SOCIETY OF PETROLEUM ENGINEERS OF THE AMERICAN INSTITUTE OF MINING ENGINEERS.

SECTION 1.06.  TIME OF DAY.  UNLESS OTHERWISE SPECIFIED, ALL REFERENCES TO TIMES
OF DAY SHALL BE REFERENCES TO CENTRAL TIME (DAYLIGHT OR STANDARD, AS
APPLICABLE).

ARTICLE II

THE CREDITS

SECTION 2.01.  COMMITMENTS.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
HEREIN, EACH LENDER THAT WAS A LENDER UNDER AND AS DEFINED IN THE ORIGINAL
CREDIT AGREEMENT AGREES TO CONTINUE THE ORIGINAL LOANS AND EACH LENDER AGREES TO
MAKE LOANS TO THE BORROWER FROM TIME TO TIME DURING THE AVAILABILITY PERIOD IN
AN AGGREGATE PRINCIPAL AMOUNT THAT WILL NOT RESULT IN (A) SUCH LENDER’S CREDIT
EXPOSURE EXCEEDING SUCH LENDER’S COMMITMENT OR (B) THE AGGREGATE CREDIT EXPOSURE
EXCEEDING THE AGGREGATE COMMITMENT.  WITHIN THE FOREGOING LIMITS AND SUBJECT TO
THE TERMS AND CONDITIONS SET FORTH HEREIN, THE BORROWER MAY BORROW, PREPAY AND
REBORROW LOANS.

SECTION 2.02.  TERMINATION AND REDUCTION OF THE AGGREGATE COMMITMENT.

(A)           UNLESS PREVIOUSLY TERMINATED, THE AGGREGATE COMMITMENT SHALL
TERMINATE ON THE MATURITY DATE.

(B)           THE BORROWER MAY AT ANY TIME TERMINATE, OR FROM TIME TO TIME
REDUCE, THE AGGREGATE COMMITMENT; PROVIDED THAT (I) EACH REDUCTION OF THE
AGGREGATE COMMITMENT SHALL BE IN AN AMOUNT THAT IS AN INTEGRAL MULTIPLE OF
$5,000,000 AND NOT LESS THAN $10,000,000 AND (II) THE BORROWER SHALL NOT
TERMINATE OR REDUCE THE AGGREGATE COMMITMENT IF, AFTER GIVING EFFECT TO ANY
CONCURRENT PREPAYMENT OF THE LOANS IN ACCORDANCE WITH SECTION 2.11 AND SECTION
2.12, THE AGGREGATE CREDIT EXPOSURE WOULD EXCEED THE AGGREGATE COMMITMENT.

(C)           THE BORROWER SHALL NOTIFY THE ADMINISTRATIVE AGENT OF ANY ELECTION
TO TERMINATE OR REDUCE THE AGGREGATE COMMITMENT UNDER PARAGRAPH (B) OF THIS
SECTION AT LEAST THREE BUSINESS DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH
TERMINATION OR REDUCTION, SPECIFYING SUCH ELECTION AND THE EFFECTIVE DATE
THEREOF.  PROMPTLY FOLLOWING RECEIPT OF ANY NOTICE, THE ADMINISTRATIVE AGENT
SHALL ADVISE THE LENDERS OF THE CONTENTS THEREOF.  EACH NOTICE DELIVERED BY THE
BORROWER PURSUANT TO THIS SECTION SHALL BE IRREVOCABLE; PROVIDED THAT A NOTICE
OF TERMINATION OF THE AGGREGATE COMMITMENT DELIVERED BY THE BORROWER MAY STATE
THAT SUCH NOTICE IS CONDITIONED UPON THE EFFECTIVENESS OF OTHER CREDIT
FACILITIES, 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 OF THE AGGREGATE COMMITMENT SHALL
BE PERMANENT.  EACH REDUCTION OF THE AGGREGATE COMMITMENT SHALL BE MADE RATABLY
AMONG THE LENDERS IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT.

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(D)           WITH RESPECT TO ANY SALE, TRANSFER OR DISPOSITION OF BORROWING
BASE PROPERTIES (OTHER THAN SALES, TRANSFERS OR DISPOSITIONS PERMITTED UNDER
SECTION 7.03(A)(VI)), THE BORROWING BASE SHALL BE AUTOMATICALLY REDUCED BY AN
AMOUNT EQUAL TO THE VALUE ASSIGNED TO SUCH BORROWING BASE PROPERTIES BY THE
ADMINISTRATIVE AGENT IN CONNECTION WITH THE MOST RECENT REDETERMINATION OF THE
BORROWING BASE PRECEDING THE DATE OF SUCH SALE (OR IN CONNECTION WITH THE
DETERMINATION OF THE INITIAL BORROWING BASE WITH RESPECT TO ANY SALE OCCURRING
PRIOR TO THE FIRST REDETERMINATION OF THE BORROWING BASE).

SECTION 2.03.  RESERVED.

SECTION 2.04.  LOANS AND BORROWINGS.

(A)           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 OF THE LENDERS ARE SEVERAL AND NO LENDER SHALL BE RESPONSIBLE FOR
ANY OTHER LENDER’S FAILURE TO MAKE LOANS AS REQUIRED.

(B)           SUBJECT TO SECTION 2.15, EACH REVOLVING BORROWING SHALL BE
COMPRISED ENTIRELY OF ABR LOANS OR EURODOLLAR LOANS AS THE BORROWER MAY REQUEST
IN ACCORDANCE HEREWITH.  EACH SWINGLINE LOAN SHALL BE AN ABR LOAN.  EACH LENDER
AT ITS OPTION MAY MAKE ANY EURODOLLAR LOAN BY CAUSING ANY DOMESTIC OR FOREIGN
BRANCH OR AFFILIATE OF SUCH LENDER TO MAKE SUCH LOAN; PROVIDED THAT ANY EXERCISE
OF SUCH OPTION SHALL NOT AFFECT THE OBLIGATION OF THE BORROWER TO REPAY SUCH
LOAN IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

(C)           AT THE COMMENCEMENT OF EACH INTEREST PERIOD FOR ANY EURODOLLAR
REVOLVING BORROWING, SUCH BORROWING SHALL BE IN AN AGGREGATE AMOUNT THAT IS AN
INTEGRAL MULTIPLE OF $1,000,000 AND NOT LESS THAN $1,000,000.  AT THE TIME THAT
EACH ABR REVOLVING BORROWING IS MADE, SUCH BORROWING SHALL BE IN AN AGGREGATE
AMOUNT THAT IS AN INTEGRAL MULTIPLE OF $1,000,000 AND NOT LESS THAN $1,000,000;
PROVIDED THAT AN ABR REVOLVING BORROWING MAY BE IN AN AGGREGATE AMOUNT THAT IS
EQUAL TO THE ENTIRE UNUSED BALANCE OF THE AGGREGATE COMMITMENT OR THAT IS
REQUIRED TO FINANCE THE REIMBURSEMENT OF AN LC DISBURSEMENT AS CONTEMPLATED BY
SECTION 2.07(E).  EACH SWINGLINE LOAN SHALL BE IN AN AMOUNT THAT IS NOT LESS
THAN $500,000.  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 FOUR (4)
EURODOLLAR REVOLVING BORROWINGS OUTSTANDING.

(D)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE
BORROWER SHALL NOT BE ENTITLED TO REQUEST, OR TO ELECT TO CONVERT OR CONTINUE,
ANY EURODOLLAR BORROWING IF THE INTEREST PERIOD REQUESTED WITH RESPECT THERETO
WOULD END AFTER THE MATURITY DATE.

SECTION 2.05.  REQUESTS FOR REVOLVING BORROWINGS.  TO REQUEST A REVOLVING
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.,
THREE BUSINESS DAYS BEFORE THE DATE OF THE PROPOSED EURODOLLAR BORROWING OR
(B) IN THE CASE OF AN ABR REVOLVING BORROWING, NOT LATER THAN 11:00 A.M., ONE
BUSINESS DAY BEFORE THE DATE OF THE PROPOSED BORROWING; PROVIDED THAT ANY SUCH
NOTICE OF AN ABR REVOLVING BORROWING TO FINANCE THE REIMBURSEMENT OF AN LC
DISBURSEMENT AS CONTEMPLATED BY SECTION 2.07(E) MAY BE GIVEN NOT LATER THAN
10:00 A.M., ON THE

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DATE OF THE PROPOSED BORROWING.  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 A FORM APPROVED BY THE
ADMINISTRATIVE AGENT AND SIGNED BY THE BORROWER.  EACH SUCH TELEPHONIC AND
WRITTEN BORROWING REQUEST SHALL SPECIFY THE FOLLOWING INFORMATION IN COMPLIANCE
WITH SECTION 2.04:

(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 REVOLVING 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 2.08.

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration.  Promptly following receipt of a Borrowing Request in accordance with
this Section, 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 2.06.  SWINGLINE LOANS.

(A)           SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN, THE
SWINGLINE LENDER AGREES TO MAKE SWINGLINE LOANS TO THE BORROWER FROM TIME TO
TIME DURING THE AVAILABILITY PERIOD, IN AN AGGREGATE PRINCIPAL AMOUNT AT ANY
TIME OUTSTANDING THAT WILL NOT RESULT IN (I) THE AGGREGATE PRINCIPAL AMOUNT OF
OUTSTANDING SWINGLINE LOANS EXCEEDING $10,000,000 OR (II) THE AGGREGATE CREDIT
EXPOSURE EXCEEDING THE AGGREGATE COMMITMENT, PROVIDED THAT THE SWINGLINE LENDER
SHALL NOT BE REQUIRED TO MAKE A SWINGLINE LOAN TO REFINANCE AN OUTSTANDING
SWINGLINE LOAN.  WITHIN THE FOREGOING LIMITS AND SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH HEREIN, THE BORROWER MAY BORROW, PREPAY AND REBORROW
SWINGLINE LOANS.

(B)           TO REQUEST A SWINGLINE LOAN, THE BORROWER SHALL NOTIFY THE
ADMINISTRATIVE AGENT OF SUCH REQUEST BY TELEPHONE (CONFIRMED BY TELECOPY), NOT
LATER THAN 11:00 A.M., ON THE DAY OF A PROPOSED SWINGLINE LOAN.  EACH SUCH
NOTICE SHALL BE IRREVOCABLE AND SHALL SPECIFY THE REQUESTED DATE (WHICH SHALL BE
A BUSINESS DAY) AND AMOUNT OF THE REQUESTED SWINGLINE LOAN.  THE ADMINISTRATIVE
AGENT WILL PROMPTLY ADVISE THE SWINGLINE LENDER OF ANY SUCH NOTICE RECEIVED FROM
THE BORROWER.  THE SWINGLINE LENDER SHALL MAKE EACH SWINGLINE LOAN AVAILABLE TO
THE BORROWER BY MEANS OF A CREDIT TO THE GENERAL DEPOSIT ACCOUNT OF THE BORROWER
WITH THE SWINGLINE LENDER (OR, IN THE CASE OF A SWINGLINE LOAN MADE TO FINANCE
THE REIMBURSEMENT OF AN LC DISBURSEMENT AS PROVIDED IN SECTION 2.07(E), BY
REMITTANCE TO THE ISSUING BANK) BY 3:00 P.M., ON THE REQUESTED DATE OF SUCH
SWINGLINE LOAN.

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(C)           THE SWINGLINE LENDER MAY BY WRITTEN NOTICE GIVEN TO THE
ADMINISTRATIVE AGENT NOT LATER THAN 10:00 A.M., ON ANY BUSINESS DAY REQUIRE THE
LENDERS TO ACQUIRE PARTICIPATIONS ON SUCH BUSINESS DAY IN ALL OR A PORTION OF
THE SWINGLINE LOANS OUTSTANDING.  SUCH NOTICE SHALL SPECIFY THE AGGREGATE AMOUNT
OF SWINGLINE LOANS IN WHICH LENDERS WILL PARTICIPATE.  PROMPTLY UPON RECEIPT OF
SUCH NOTICE, THE ADMINISTRATIVE AGENT WILL GIVE NOTICE THEREOF TO EACH LENDER,
SPECIFYING IN SUCH NOTICE SUCH LENDER’S APPLICABLE PERCENTAGE OF SUCH SWINGLINE
LOAN OR LOANS.  EACH LENDER HEREBY ABSOLUTELY AND UNCONDITIONALLY AGREES, UPON
RECEIPT OF NOTICE AS PROVIDED ABOVE, TO PAY TO THE ADMINISTRATIVE AGENT, FOR THE
ACCOUNT OF THE SWINGLINE LENDER, SUCH LENDER’S APPLICABLE PERCENTAGE OF SUCH
SWINGLINE LOAN OR LOANS.  EACH LENDER ACKNOWLEDGES AND AGREES THAT ITS
OBLIGATION TO ACQUIRE PARTICIPATIONS IN SWINGLINE LOANS PURSUANT TO THIS
PARAGRAPH IS ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE AFFECTED BY ANY
CIRCUMSTANCE WHATSOEVER, INCLUDING THE OCCURRENCE AND CONTINUANCE OF A DEFAULT
OR REDUCTION OR TERMINATION OF THE COMMITMENTS, AND THAT EACH SUCH PAYMENT SHALL
BE MADE WITHOUT ANY OFFSET, ABATEMENT, WITHHOLDING OR REDUCTION WHATSOEVER. 
EACH LENDER SHALL COMPLY WITH ITS OBLIGATION UNDER THIS PARAGRAPH BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS, IN THE SAME MANNER AS PROVIDED IN
SECTION 2.08 WITH RESPECT TO LOANS MADE BY SUCH LENDER (AND SECTION 2.08 SHALL
APPLY, MUTATIS MUTANDIS, TO THE PAYMENT OBLIGATIONS OF THE LENDERS), AND THE
ADMINISTRATIVE AGENT SHALL PROMPTLY PAY TO THE SWINGLINE LENDER THE AMOUNTS SO
RECEIVED BY IT FROM THE LENDERS.  THE ADMINISTRATIVE AGENT SHALL NOTIFY THE
BORROWER OF ANY PARTICIPATIONS IN ANY SWINGLINE LOAN ACQUIRED PURSUANT TO THIS
PARAGRAPH, AND THEREAFTER PAYMENTS IN RESPECT OF SUCH SWINGLINE LOAN SHALL BE
MADE TO THE ADMINISTRATIVE AGENT AND NOT TO THE SWINGLINE LENDER.  ANY AMOUNTS
RECEIVED BY THE SWINGLINE LENDER FROM THE BORROWER (OR OTHER PARTY ON BEHALF OF
THE BORROWER) IN RESPECT OF A SWINGLINE LOAN AFTER RECEIPT BY THE SWINGLINE
LENDER OF THE PROCEEDS OF A SALE OF PARTICIPATIONS THEREIN SHALL BE PROMPTLY
REMITTED TO THE ADMINISTRATIVE AGENT; ANY SUCH AMOUNTS RECEIVED BY THE
ADMINISTRATIVE AGENT SHALL BE PROMPTLY REMITTED BY THE ADMINISTRATIVE AGENT TO
THE LENDERS THAT SHALL HAVE MADE THEIR PAYMENTS PURSUANT TO THIS PARAGRAPH AND
TO THE SWINGLINE LENDER, AS THEIR INTERESTS MAY APPEAR; PROVIDED THAT ANY SUCH
PAYMENT SO REMITTED SHALL BE REPAID TO THE SWINGLINE LENDER OR TO THE
ADMINISTRATIVE AGENT, AS APPLICABLE, IF AND TO THE EXTENT SUCH PAYMENT IS
REQUIRED TO BE REFUNDED TO THE BORROWER FOR ANY REASON.  THE PURCHASE OF
PARTICIPATIONS IN A SWINGLINE LOAN PURSUANT TO THIS PARAGRAPH SHALL NOT RELIEVE
THE BORROWER OF ANY DEFAULT IN THE PAYMENT THEREOF.

SECTION 2.07.  LETTERS OF CREDIT.

(A)           GENERAL.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN,
THE BORROWER MAY REQUEST THE ISSUANCE OF LETTERS OF CREDIT FOR ITS OWN OR THE
ACCOUNT OF ANY RESTRICTED SUBSIDIARY IN A FORM REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT AND THE ISSUING BANK, AT ANY TIME AND FROM TIME TO TIME
DURING THE AVAILABILITY PERIOD.  IN 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 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 ISSUING

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BANK) TO THE ISSUING BANK AND THE ADMINISTRATIVE AGENT (REASONABLY IN ADVANCE OF
THE REQUESTED DATE OF ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION) A NOTICE
REQUESTING THE ISSUANCE OF A LETTER OF CREDIT, OR IDENTIFYING THE LETTER OF
CREDIT TO BE AMENDED, RENEWED OR EXTENDED, AND SPECIFYING THE DATE OF ISSUANCE,
AMENDMENT, RENEWAL OR EXTENSION (WHICH SHALL BE A BUSINESS DAY), THE DATE ON
WHICH SUCH LETTER OF CREDIT IS TO EXPIRE (WHICH SHALL COMPLY WITH PARAGRAPH (C)
OF THIS SECTION), THE AMOUNT OF SUCH LETTER OF CREDIT, 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.  IF REQUESTED BY THE
ISSUING BANK, THE BORROWER ALSO SHALL SUBMIT A LETTER OF CREDIT APPLICATION ON
THE ISSUING BANK’S STANDARD FORM IN CONNECTION WITH ANY REQUEST FOR A LETTER OF
CREDIT.  A LETTER OF CREDIT SHALL BE ISSUED, AMENDED, RENEWED OR EXTENDED ONLY
IF (AND UPON ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION OF EACH LETTER OF CREDIT
THE BORROWER SHALL BE DEEMED TO REPRESENT AND WARRANT THAT), AFTER GIVING EFFECT
TO SUCH ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION (I) THE LC EXPOSURE SHALL NOT
EXCEED $50,000,000 AND (II) THE AGGREGATE CREDIT EXPOSURE SHALL NOT EXCEED THE
AGGREGATE COMMITMENT.

(C)           EXPIRATION DATE.  EACH LETTER OF CREDIT SHALL EXPIRE AT OR PRIOR
TO THE CLOSE OF BUSINESS ON THE EARLIER OF (I) THE DATE ONE YEAR AFTER THE DATE
OF THE ISSUANCE OF SUCH LETTER OF CREDIT (OR, IN THE CASE OF ANY RENEWAL OR
EXTENSION THEREOF, ONE YEAR AFTER SUCH RENEWAL OR EXTENSION) AND (II) THE DATE
THAT IS FIVE (5) BUSINESS DAYS PRIOR TO THE MATURITY DATE.

(D)           PARTICIPATIONS.  BY THE ISSUANCE OF A LETTER OF CREDIT (OR AN
AMENDMENT TO A LETTER OF CREDIT INCREASING THE AMOUNT THEREOF) AND WITHOUT ANY
FURTHER ACTION ON THE PART OF THE ISSUING BANK OR THE LENDERS, THE ISSUING BANK
HEREBY GRANTS TO EACH LENDER, AND EACH LENDER HEREBY ACQUIRES FROM THE ISSUING
BANK, A PARTICIPATION IN SUCH LETTER OF CREDIT EQUAL TO SUCH LENDER’S APPLICABLE
PERCENTAGE OF THE AGGREGATE AMOUNT AVAILABLE TO BE DRAWN UNDER SUCH LETTER OF
CREDIT.  IN CONSIDERATION AND IN FURTHERANCE OF THE FOREGOING, EACH LENDER
HEREBY ABSOLUTELY AND UNCONDITIONALLY AGREES TO PAY TO THE ADMINISTRATIVE AGENT,
FOR THE ACCOUNT OF THE ISSUING BANK, SUCH LENDER’S APPLICABLE PERCENTAGE OF EACH
LC DISBURSEMENT MADE BY THE ISSUING BANK AND NOT REIMBURSED BY THE BORROWER ON
THE DATE DUE AS PROVIDED IN PARAGRAPH (E) OF THIS SECTION, 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 PARAGRAPH IN RESPECT OF LETTERS OF CREDIT IS
ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE AFFECTED BY ANY CIRCUMSTANCE
WHATSOEVER, INCLUDING ANY AMENDMENT, RENEWAL OR EXTENSION OF ANY LETTER OF
CREDIT OR THE OCCURRENCE AND CONTINUANCE OF A DEFAULT OR REDUCTION OR
TERMINATION OF THE AGGREGATE COMMITMENT, AND THAT EACH SUCH PAYMENT SHALL BE
MADE WITHOUT ANY OFFSET, ABATEMENT, WITHHOLDING OR REDUCTION WHATSOEVER.

(E)           REIMBURSEMENT.  IF THE ISSUING BANK SHALL MAKE ANY LC DISBURSEMENT
IN RESPECT OF A LETTER OF CREDIT, THE BORROWER SHALL REIMBURSE SUCH LC
DISBURSEMENT BY PAYING TO THE ADMINISTRATIVE AGENT AN AMOUNT EQUAL TO SUCH LC
DISBURSEMENT NOT LATER THAN 12:00 NOON 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. 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 ON (I)
THE BUSINESS DAY THAT THE BORROWER RECEIVES SUCH NOTICE, IF SUCH NOTICE IS
RECEIVED PRIOR TO 10:00 A.M. ON THE DAY OF RECEIPT, OR (II) 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
THE BORROWER MAY, SUBJECT TO THE CONDITIONS TO BORROWING SET FORTH HEREIN,
REQUEST IN ACCORDANCE

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WITH SECTION 2.05 THAT SUCH PAYMENT BE FINANCED WITH AN ABR REVOLVING BORROWING
OR SWINGLINE LOAN IN AN EQUIVALENT AMOUNT AND, TO THE EXTENT SO FINANCED, THE
BORROWER’S OBLIGATION TO MAKE SUCH PAYMENT SHALL BE DISCHARGED AND REPLACED BY
THE RESULTING ABR REVOLVING BORROWING OR SWINGLINE LOAN.  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 2.08 WITH RESPECT TO LOANS MADE BY SUCH
LENDER (AND SECTION 2.08 SHALL APPLY, MUTATIS MUTANDIS, TO THE PAYMENT
OBLIGATIONS OF THE LENDERS), AND THE ADMINISTRATIVE AGENT SHALL PROMPTLY PAY TO
THE ISSUING BANK THE AMOUNTS SO RECEIVED BY IT FROM THE LENDERS.  PROMPTLY
FOLLOWING RECEIPT BY THE ADMINISTRATIVE AGENT OF ANY PAYMENT FROM THE BORROWER
PURSUANT TO THIS PARAGRAPH, THE ADMINISTRATIVE AGENT SHALL DISTRIBUTE SUCH
PAYMENT TO THE ISSUING BANK OR, TO THE EXTENT THAT LENDERS HAVE MADE PAYMENTS
PURSUANT TO THIS PARAGRAPH TO REIMBURSE THE ISSUING BANK, THEN TO SUCH LENDERS
AND THE ISSUING BANK AS THEIR INTERESTS MAY APPEAR.  ANY PAYMENT MADE BY A
LENDER PURSUANT TO THIS PARAGRAPH TO REIMBURSE THE ISSUING BANK FOR ANY LC
DISBURSEMENT (OTHER THAN THE FUNDING OF ABR LOANS OR SWINGLINE 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 PARAGRAPH (E) OF THIS SECTION SHALL BE ABSOLUTE,
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PERFORMED STRICTLY IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER AND
IRRESPECTIVE OF (I) ANY LACK OF VALIDITY OR ENFORCEABILITY OF ANY LETTER OF
CREDIT OR THIS AGREEMENT, OR ANY TERM OR PROVISION THEREIN, (II) ANY DRAFT OR
OTHER DOCUMENT PRESENTED UNDER A LETTER OF CREDIT PROVING TO BE FORGED,
FRAUDULENT OR INVALID IN ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR
INACCURATE IN ANY RESPECT, (III) PAYMENT BY THE ISSUING BANK UNDER A LETTER OF
CREDIT AGAINST PRESENTATION OF A DRAFT OR OTHER DOCUMENT THAT DOES NOT COMPLY
WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (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, 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 CARE IN EACH SUCH

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DETERMINATION.  IN FURTHERANCE OF THE FOREGOING AND WITHOUT LIMITING THE
GENERALITY THEREOF, THE PARTIES AGREE THAT, WITH RESPECT TO DOCUMENTS PRESENTED
WHICH APPEAR ON THEIR FACE TO BE IN SUBSTANTIAL COMPLIANCE WITH THE TERMS OF A
LETTER OF CREDIT, THE ISSUING BANK MAY, IN ITS SOLE DISCRETION, EITHER ACCEPT
AND MAKE PAYMENT UPON SUCH DOCUMENTS WITHOUT RESPONSIBILITY FOR FURTHER
INVESTIGATION, REGARDLESS OF ANY NOTICE OR INFORMATION TO THE CONTRARY, OR
REFUSE TO ACCEPT AND MAKE PAYMENT UPON SUCH DOCUMENTS IF SUCH DOCUMENTS ARE NOT
IN STRICT COMPLIANCE WITH THE TERMS OF SUCH LETTER OF CREDIT.

(G)           DISBURSEMENT PROCEDURES.  THE ISSUING BANK SHALL, PROMPTLY
FOLLOWING ITS RECEIPT THEREOF, EXAMINE ALL DOCUMENTS PURPORTING TO REPRESENT A
DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT.  THE ISSUING BANK SHALL PROMPTLY
NOTIFY THE ADMINISTRATIVE AGENT AND THE BORROWER BY TELEPHONE (CONFIRMED BY
TELECOPY) OF SUCH DEMAND FOR PAYMENT AND WHETHER THE ISSUING BANK HAS MADE OR
WILL MAKE AN LC DISBURSEMENT THEREUNDER; PROVIDED THAT ANY FAILURE TO GIVE OR
DELAY IN GIVING SUCH NOTICE SHALL NOT RELIEVE THE BORROWER OF ITS OBLIGATION TO
REIMBURSE THE ISSUING BANK AND THE LENDERS WITH RESPECT TO ANY SUCH LC
DISBURSEMENT.

(H)           INTERIM INTEREST.  IF THE ISSUING BANK SHALL MAKE ANY LC
DISBURSEMENT, THEN, UNLESS THE BORROWER SHALL REIMBURSE SUCH LC DISBURSEMENT IN
FULL ON THE DATE SUCH LC DISBURSEMENT IS MADE, 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; PROVIDED THAT,
IF THE BORROWER FAILS TO REIMBURSE SUCH LC DISBURSEMENT WHEN DUE PURSUANT TO
PARAGRAPH (E) OF THIS SECTION, THEN SECTION 2.14(C) SHALL APPLY.  INTEREST
ACCRUED PURSUANT TO THIS PARAGRAPH SHALL BE FOR THE ACCOUNT OF THE ISSUING BANK,
EXCEPT THAT INTEREST ACCRUED ON AND AFTER THE DATE OF PAYMENT BY ANY LENDER
PURSUANT TO PARAGRAPH (E) OF THIS SECTION TO REIMBURSE THE ISSUING BANK SHALL BE
FOR THE ACCOUNT OF SUCH LENDER TO THE EXTENT OF SUCH PAYMENT.

(I)            REPLACEMENT OF THE ISSUING BANK.  THE ISSUING BANK MAY BE
REPLACED AT ANY TIME BY WRITTEN AGREEMENT AMONG THE BORROWER, THE ADMINISTRATIVE
AGENT, THE REPLACED ISSUING BANK AND THE SUCCESSOR ISSUING BANK.  THE
ADMINISTRATIVE AGENT SHALL NOTIFY THE LENDERS OF ANY SUCH REPLACEMENT OF THE
ISSUING BANK.  AT THE TIME ANY SUCH REPLACEMENT SHALL BECOME EFFECTIVE, THE
BORROWER SHALL PAY ALL UNPAID FEES ACCRUED FOR THE ACCOUNT OF THE REPLACED
ISSUING BANK PURSUANT TO SECTION 2.13(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 ISSUING BANK UNDER THIS AGREEMENT WITH RESPECT TO LETTERS
OF CREDIT TO BE ISSUED THEREAFTER AND (II) REFERENCES HEREIN TO THE TERM
“ISSUING BANK” SHALL BE DEEMED TO REFER TO 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.

(J)            CASH COLLATERALIZATION.  IF ANY EVENT OF DEFAULT SHALL OCCUR AND
BE CONTINUING, ON THE BUSINESS DAY THAT THE BORROWER RECEIVES NOTICE FROM THE
ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS (OR, IF THE MATURITY OF THE LOANS
HAS BEEN ACCELERATED, LENDERS WITH LC EXPOSURE REPRESENTING GREATER THAN
SIXTY-SIX AND TWO-THIRDS PERCENT (66-2/3%) OF THE TOTAL LC EXPOSURE) DEMANDING
THE DEPOSIT OF CASH COLLATERAL PURSUANT TO THIS PARAGRAPH, THE BORROWER

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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 THE LC EXPOSURE 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 DESCRIBED IN CLAUSE (H) OR (I) OF
ARTICLE IX.  SUCH DEPOSIT SHALL BE HELD BY THE ADMINISTRATIVE AGENT AS
COLLATERAL FOR THE PAYMENT AND PERFORMANCE OF THE OBLIGATIONS OF THE BORROWER
UNDER THIS AGREEMENT.  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 AND INTEREST
AT THE RATE PER ANNUM IN EFFECT FOR ACCOUNTS OF THE SAME TYPE MAINTAINED WITH
THE ADMINISTRATIVE AGENT AT SUCH TIME, 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 BEAR INTEREST.  INTEREST OR PROFITS,
IF ANY, ON SUCH INVESTMENTS SHALL ACCUMULATE IN SUCH ACCOUNT.  MONEYS IN SUCH
ACCOUNT SHALL BE APPLIED BY THE ADMINISTRATIVE AGENT TO REIMBURSE THE ISSUING
BANK FOR LC DISBURSEMENTS FOR WHICH IT HAS NOT BEEN REIMBURSED AND, TO THE
EXTENT NOT SO APPLIED, SHALL BE HELD FOR THE SATISFACTION OF THE REIMBURSEMENT
OBLIGATIONS OF THE BORROWER FOR THE LC EXPOSURE AT SUCH TIME OR, IF THE MATURITY
OF THE LOANS HAS BEEN ACCELERATED (BUT SUBJECT TO THE CONSENT OF LENDERS WITH LC
EXPOSURE REPRESENTING SIXTY-SIX AND TWO THIRDS PERCENT (66-2/3%) OR MORE OF THE
TOTAL LC EXPOSURE), BE APPLIED TO SATISFY OTHER OBLIGATIONS OF THE BORROWER
UNDER THIS AGREEMENT AND BORROWER HEREBY GRANTS A SECURITY INTEREST IN SUCH CASH
AND EACH DEPOSIT ACCOUNT INTO WHICH SUCH CASH IS DEPOSITED TO SECURE THE
OBLIGATIONS.  IF THE BORROWER IS REQUIRED TO PROVIDE AN AMOUNT OF CASH
COLLATERAL HEREUNDER AS A RESULT OF THE OCCURRENCE OF AN EVENT OF DEFAULT, SUCH
AMOUNT (TO THE EXTENT NOT APPLIED AS AFORESAID) SHALL BE RETURNED TO THE
BORROWER WITHIN THREE (3) BUSINESS DAYS AFTER ALL EVENTS OF DEFAULT HAVE BEEN
CURED OR WAIVED.

SECTION 2.08.  FUNDING OF BORROWINGS.

(A)           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 TO THE ACCOUNT OF THE ADMINISTRATIVE AGENT MOST RECENTLY DESIGNATED BY IT
FOR SUCH PURPOSE BY NOTICE TO THE LENDERS; PROVIDED THAT SWINGLINE LOANS SHALL
BE MADE AS PROVIDED IN SECTION 2.06.  THE ADMINISTRATIVE AGENT WILL MAKE SUCH
LOANS AVAILABLE TO THE BORROWER BY PROMPTLY CREDITING THE AMOUNTS SO RECEIVED,
IN LIKE FUNDS, TO AN ELIGIBLE ACCOUNT OF THE BORROWER DESIGNATED BY THE BORROWER
IN THE APPLICABLE BORROWING REQUEST; PROVIDED THAT ABR REVOLVING LOANS MADE TO
FINANCE THE REIMBURSEMENT OF AN LC DISBURSEMENT AS PROVIDED IN SECTION 2.07(E)
SHALL BE REMITTED BY THE ADMINISTRATIVE AGENT TO THE ISSUING BANK.

(B)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM A
LENDER PRIOR TO THE PROPOSED DATE OF ANY BORROWING THAT SUCH LENDER WILL NOT
MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT SUCH LENDER’S SHARE OF SUCH
BORROWING, THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH
SHARE AVAILABLE ON SUCH DATE IN ACCORDANCE WITH PARAGRAPH (A) OF THIS SECTION
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

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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 2.09.  INTEREST ELECTIONS.

(A)           EACH REVOLVING BORROWING INITIALLY SHALL BE OF THE TYPE SPECIFIED
IN THE APPLICABLE BORROWING REQUEST AND, IN THE CASE OF A EURODOLLAR REVOLVING
BORROWING, SHALL HAVE AN INITIAL INTEREST PERIOD AS SPECIFIED IN SUCH BORROWING
REQUEST; PROVIDED THAT ALL REVOLVING BORROWINGS ON THE EFFECTIVE DATE SHALL BE
ABR BORROWINGS.  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
REVOLVING BORROWING, MAY ELECT INTEREST PERIODS THEREFOR, ALL AS PROVIDED IN
THIS SECTION.  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 REVOLVING BORROWING.  THIS SECTION SHALL NOT APPLY TO SWINGLINE
BORROWINGS, WHICH MAY NOT BE CONVERTED OR CONTINUED.

(B)           TO MAKE AN ELECTION PURSUANT TO THIS SECTION, THE BORROWER SHALL
NOTIFY THE ADMINISTRATIVE AGENT OF SUCH ELECTION BY TELEPHONE BY THE TIME THAT A
BORROWING REQUEST WOULD BE REQUIRED UNDER SECTION 2.05 IF THE BORROWER WERE
REQUESTING A BORROWING OF THE TYPE RESULTING FROM SUCH ELECTION TO BE MADE ON
THE EFFECTIVE DATE OF SUCH ELECTION.  EACH SUCH TELEPHONIC INTEREST ELECTION
REQUEST SHALL BE IRREVOCABLE AND SHALL BE CONFIRMED PROMPTLY BY HAND DELIVERY OR
TELECOPY TO THE ADMINISTRATIVE AGENT OF A WRITTEN INTEREST ELECTION REQUEST IN A
FORM APPROVED BY THE ADMINISTRATIVE AGENT AND SIGNED BY THE BORROWER.

(C)           EACH TELEPHONIC AND WRITTEN INTEREST ELECTION REQUEST SHALL
SPECIFY THE FOLLOWING INFORMATION IN COMPLIANCE WITH SECTION 2.04:

(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 CLAUSES (III) AND (IV)
BELOW 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”.

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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)           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)           IF THE BORROWER FAILS TO DELIVER A TIMELY INTEREST ELECTION
REQUEST WITH RESPECT TO A EURODOLLAR REVOLVING BORROWING PRIOR TO THE END OF THE
INTEREST PERIOD APPLICABLE THERETO, THEN, UNLESS SUCH BORROWING IS REPAID AS
PROVIDED HEREIN, AT THE END OF SUCH INTEREST PERIOD SUCH BORROWING SHALL BE
CONVERTED TO AN ABR BORROWING.  NOTWITHSTANDING ANY CONTRARY PROVISION HEREOF,
IF AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING AND THE ADMINISTRATIVE
AGENT, AT THE REQUEST OF THE MAJORITY LENDERS, SO NOTIFIES THE BORROWER, THEN,
SO LONG AS AN EVENT OF DEFAULT IS CONTINUING (I) NO OUTSTANDING BORROWING MAY BE
CONVERTED TO OR CONTINUED AS A EURODOLLAR REVOLVING BORROWING AND (II) UNLESS
REPAID, EACH EURODOLLAR REVOLVING BORROWING SHALL BE CONVERTED TO AN ABR
BORROWING AT THE END OF THE INTEREST PERIOD APPLICABLE THERETO.

SECTION 2.10.  REPAYMENT OF LOANS; EVIDENCE OF DEBT.

(A)           THE BORROWER HEREBY UNCONDITIONALLY PROMISES TO PAY (I) TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER THE THEN UNPAID PRINCIPAL
AMOUNT OF EACH REVOLVING LOAN ON THE MATURITY DATE AND (II) TO THE SWINGLINE
LENDER THE THEN UNPAID PRINCIPAL AMOUNT OF EACH SWINGLINE LOAN ON THE EARLIER OF
THE MATURITY DATE AND THE FIRST DATE AFTER SUCH SWINGLINE LOAN IS MADE THAT IS
THE FIFTEENTH (15TH) OR LAST DAY OF ANY CALENDAR MONTH AND IS AT LEAST TWO (2)
BUSINESS DAYS AFTER SUCH SWINGLINE LOAN IS MADE; PROVIDED THAT EACH DATE THAT A
REVOLVING BORROWING IS MADE, THE BORROWER SHALL REPAY ALL SWINGLINE LOANS THEN
OUTSTANDING.

(B)           BORROWER AND EACH SURETY, ENDORSER, GUARANTOR AND OTHER PARTY EVER
LIABLE FOR PAYMENT OF ANY SUMS OF MONEY PAYABLE UNDER THIS AGREEMENT, JOINTLY
AND SEVERALLY WAIVE PRESENTMENT AND DEMAND FOR PAYMENT, NOTICE OF INTENTION TO
ACCELERATE THE MATURITY, PROTEST, NOTICE OF PROTEST AND NONPAYMENT, AS TO THE
PAYMENTS DUE UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND AS TO EACH AND
ALL INSTALLMENTS HEREUNDER AND THEREUNDER, AND AGREE THAT THEIR LIABILITY UNDER
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL NOT BE AFFECTED BY ANY RENEWAL
OR EXTENSION IN THE TIME OF PAYMENT HEREOF, OR IN ANY INDULGENCES, OR BY ANY
RELEASE OR CHANGE IN ANY SECURITY FOR THE PAYMENT OF THE OBLIGATIONS, AND HEREBY
CONSENT TO ANY AND ALL SUCH RENEWALS, EXTENSIONS, INDULGENCES, RELEASES OR
CHANGES.

(C)           EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE
AN ACCOUNT OR ACCOUNTS EVIDENCING THE INDEBTEDNESS OF THE BORROWER TO SUCH
LENDER RESULTING FROM EACH LOAN MADE BY SUCH LENDER, INCLUDING THE AMOUNTS OF
PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME TO TIME
HEREUNDER.

(D)           THE ADMINISTRATIVE AGENT SHALL MAINTAIN ACCOUNTS IN WHICH IT SHALL
RECORD (I) THE AMOUNT OF EACH LOAN MADE HEREUNDER, THE CLASS AND TYPE THEREOF
AND THE INTEREST PERIOD APPLICABLE THERETO, (II) THE AMOUNT OF ANY PRINCIPAL OR
INTEREST DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM THE BORROWER TO EACH
LENDER HEREUNDER AND (III) THE AMOUNT OF ANY SUM

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RECEIVED BY THE ADMINISTRATIVE AGENT HEREUNDER FOR THE ACCOUNT OF THE LENDERS
AND EACH LENDER’S SHARE THEREOF.

(E)           THE ENTRIES MADE IN THE ACCOUNTS MAINTAINED PURSUANT TO
PARAGRAPH (D) OR (E) OF THIS SECTION SHALL BE PRIMA FACIE EVIDENCE OF THE
EXISTENCE AND AMOUNTS OF THE OBLIGATIONS RECORDED THEREIN; PROVIDED THAT THE
FAILURE OF ANY LENDER OR THE ADMINISTRATIVE AGENT TO MAINTAIN SUCH ACCOUNTS OR
ANY ERROR THEREIN SHALL NOT IN ANY MANNER AFFECT THE OBLIGATION OF THE BORROWER
TO REPAY THE LOANS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

(F)            ANY LENDER OR PARTICIPANT MAY REQUEST THAT LOANS MADE BY IT BE
EVIDENCED BY A PROMISSORY NOTE.  IN SUCH EVENT, THE BORROWER SHALL PREPARE,
EXECUTE AND DELIVER TO SUCH LENDER OR PARTICIPANT A PROMISSORY NOTE PAYABLE TO
THE ORDER OF SUCH LENDER OR PARTICIPANT (OR, IF REQUESTED BY SUCH LENDER OR
PARTICIPANT, TO SUCH LENDER OR PARTICIPANT AND ITS REGISTERED ASSIGNS) AND IN
THE FORM ATTACHED HERETO AS EXHIBIT E.  THEREAFTER, THE LOANS EVIDENCED BY SUCH
PROMISSORY NOTE AND INTEREST THEREON SHALL AT ALL TIMES (INCLUDING AFTER
ASSIGNMENT PURSUANT TO SECTION 11.04) BE REPRESENTED BY ONE OR MORE PROMISSORY
NOTES IN SUCH FORM PAYABLE TO THE ORDER OF THE PAYEE NAMED THEREIN (OR, IF SUCH
PROMISSORY NOTE IS A REGISTERED NOTE, TO SUCH PAYEE AND ITS REGISTERED ASSIGNS).

SECTION 2.11.  OPTIONAL PREPAYMENT OF LOANS.

(A)           THE BORROWER SHALL HAVE THE RIGHT AT ANY TIME AND FROM TIME TO
TIME TO PREPAY ANY BORROWING IN WHOLE AND OR IN PART, SUBJECT TO PRIOR NOTICE IN
ACCORDANCE WITH PARAGRAPH (B) OF THIS SECTION; PROVIDED THAT ANY PREPAYMENT MADE
AT ANY TIME A BORROWING BASE DEFICIENCY EXISTS SHALL BE APPLIED RATABLY TO THE
PREPAYMENT OF REVOLVING BORROWINGS TO THE EXTENT REQUIRED TO ELIMINATE SUCH
BORROWING BASE DEFICIENCY.

(B)           THE BORROWER SHALL NOTIFY THE ADMINISTRATIVE AGENT (AND, IN THE
CASE OF PREPAYMENT OF A SWINGLINE LOAN, THE SWINGLINE LENDER) BY TELEPHONE
(CONFIRMED BY TELECOPY) OF ANY PREPAYMENT HEREUNDER (I) IN THE CASE OF
PREPAYMENT OF A EURODOLLAR BORROWING, NOT LATER THAN 11:00 A.M. THREE (3)
BUSINESS DAYS BEFORE THE DATE OF PREPAYMENT, (II) IN THE CASE OF PREPAYMENT OF
AN ABR BORROWING, NOT LATER THAN 11:00 A.M. ONE (1) BUSINESS DAY BEFORE THE DATE
OF PREPAYMENT OR (III) IN THE CASE OF PREPAYMENT OF A SWINGLINE LENDER, NOT
LATER THAN 12:00 NOON ON THE DATE OF PREPAYMENT.  EACH SUCH NOTICE SHALL BE
IRREVOCABLE AND SHALL SPECIFY THE PREPAYMENT DATE AND THE PRINCIPAL AMOUNT OF
EACH BORROWING OR PORTION THEREOF TO BE PREPAID; PROVIDED THAT, IF A NOTICE OF
PREPAYMENT IS GIVEN IN CONNECTION WITH A CONDITIONAL NOTICE OF TERMINATION OR
REDUCTION OF THE AGGREGATE COMMITMENT AS CONTEMPLATED BY SECTION 2.02, THEN SUCH
NOTICE OF PREPAYMENT MAY BE REVOKED IF SUCH NOTICE OF TERMINATION OR REDUCTION
IS REVOKED IN ACCORDANCE WITH SECTION 2.02.  PROMPTLY FOLLOWING RECEIPT OF ANY
SUCH NOTICE RELATING TO A REVOLVING 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 2.04.  EACH
PREPAYMENT OF A REVOLVING BORROWING SHALL BE APPLIED RATABLY TO THE REVOLVING
LOANS INCLUDED IN THE PREPAID BORROWING.  PREPAYMENTS SHALL BE ACCOMPANIED BY
ACCRUED INTEREST TO THE EXTENT REQUIRED BY SECTION 2.14.

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SECTION 2.12.  MANDATORY PREPAYMENT OF LOANS.

(A)           EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.12(B), IN THE EVENT A
BORROWING BASE DEFICIENCY EXISTS, THE BORROWER SHALL EITHER (A) WITHIN FIFTEEN
(15) DAYS AFTER WRITTEN NOTICE FROM THE ADMINISTRATIVE AGENT TO THE BORROWER OF
SUCH BORROWING BASE DEFICIENCY, BY INSTRUMENTS SATISFACTORY IN FORM AND
SUBSTANCE TO THE REQUIRED LENDERS, PROVIDE THE LENDERS WITH ADDITIONAL SECURITY
CONSISTING OF OIL AND GAS INTERESTS WITH VALUE AND QUALITY SATISFACTORY TO THE
REQUIRED LENDERS IN THEIR SOLE DISCRETION TO ELIMINATE SUCH BORROWING BASE
DEFICIENCY, OR PREPAY, WITHOUT PREMIUM OR PENALTY, THE PRINCIPAL AMOUNT OF THE
LOANS IN AN AMOUNT SUFFICIENT TO ELIMINATE SUCH BORROWING BASE DEFICIENCY (OR BY
A COMBINATION OF SUCH ADDITIONAL SECURITY AND SUCH PREPAYMENT ELIMINATE SUCH
BORROWING BASE DEFICIENCY), OR (B) WITHIN FIFTEEN (15) DAYS AFTER WRITTEN NOTICE
FROM THE ADMINISTRATIVE AGENT TO THE BORROWER OF SUCH BORROWING BASE DEFICIENCY,
ELECT TO PREPAY, SUBJECT TO THE PAYMENT OF ANY FUNDING INDEMNIFICATION AMOUNTS
REQUIRED BY SECTION 2.17 BUT WITHOUT PREMIUM OR PENALTY, THE PRINCIPAL AMOUNT OF
SUCH BORROWING BASE DEFICIENCY IN NOT MORE THAN SIX (6) EQUAL MONTHLY
INSTALLMENTS PLUS ACCRUED INTEREST THEREON WITH THE FIRST SUCH MONTHLY PAYMENT
BEING DUE UPON THE 30TH DAY AFTER THE BORROWER’S RECEIPT OF NOTICE OF SUCH
BORROWING BASE DEFICIENCY.  IN THE EVENT AGGREGATE CREDIT EXPOSURE EXCEEDS THE
AGGREGATE COMMITMENT AT ANY TIME, THE BORROWER SHALL, SUBJECT TO THE PAYMENT OF
ANY FUNDING INDEMNIFICATION AMOUNTS REQUIRED BY SECTION 2.17 BUT WITHOUT PREMIUM
OR PENALTY, IMMEDIATELY PREPAY THE PRINCIPAL AMOUNT OF THE LOANS IN AN AMOUNT
SUFFICIENT TO ELIMINATE SUCH EXCESS.

(B)           IF THE BORROWER OR ANY RESTRICTED SUBSIDIARY SELLS, TRANSFERS OR
OTHERWISE DISPOSES OF ANY BORROWING BASE PROPERTIES AT ANY TIME, THE BORROWER
SHALL PREPAY THE REVOLVING BORROWINGS TO THE EXTENT NECESSARY TO ELIMINATE ANY
BORROWING BASE DEFICIENCY THAT MAY EXIST OR THAT MAY HAVE OCCURRED AS A RESULT
OF SUCH SALE, TRANSFER OR OTHER DISPOSITION ON THE DATE IT OR ANY RESTRICTED
SUBSIDIARY RECEIVES THE NET CASH PROCEEDS FROM SUCH SALE, TRANSFER OR OTHER
DISPOSITION AND ANY NET CASH PROCEEDS IN EXCESS OF THE AMOUNT NECESSARY TO
ELIMINATE ANY SUCH BORROWING BASE DEFICIENCY SHALL BE USED WITHIN ONE HUNDRED
EIGHTY (180) DAYS AFTER SUCH DISPOSITION (I) TO ACQUIRE PROPERTY, PLANT AND
EQUIPMENT OR ANY BUSINESS ENTITY USED OR USEFUL IN CARRYING ON THE BUSINESS OF
THE BORROWER AND ITS RESTRICTED SUBSIDIARIES AND HAVING A FAIR MARKET VALUE AT
LEAST EQUAL TO THE FAIR MARKET VALUE OF THE PROPERTIES SOLD OR OTHERWISE
DISPOSED OF OR TO IMPROVE OR REPLACE ANY EXISTING PROPERTY OF THE BORROWER AND
ITS RESTRICTED SUBSIDIARIES USED OR USEFUL IN CARRYING ON THE BUSINESS OF THE
BORROWER AND ITS RESTRICTED SUBSIDIARIES OR (II) PREPAY THE LOANS IN ACCORDANCE
WITH THE INSTRUCTIONS OF THE BORROWER (UNLESS AN EVENT OF DEFAULT EXISTS IN
WHICH EVENT ANY AMOUNTS PREPAID SHALL BE APPLIED TO THE LOANS AT THE DISCRETION
OF THE ADMINISTRATIVE AGENT).

(C)           AMOUNTS APPLIED TO THE PREPAYMENT OF BORROWINGS PURSUANT TO THIS
SECTION SHALL BE FIRST APPLIED TO SWINGLINE BORROWINGS THEN OUTSTANDING AND UPON
PAYMENT IN FULL OF ALL OUTSTANDING SWINGLINE BORROWINGS, SECOND, RATABLY TO ABR
BORROWINGS THEN OUTSTANDING AND, UPON PAYMENT IN FULL OF ALL OUTSTANDING ABR
BORROWINGS, THIRD, TO EURODOLLAR BORROWINGS THEN OUTSTANDING, AND IF MORE THAN
ONE EURODOLLAR BORROWING IS THEN OUTSTANDING, TO EACH SUCH EURODOLLAR BORROWING
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, SUBJECT TO THE PAYMENT OF ANY FUNDING INDEMNIFICATION
AMOUNTS REQUIRED BY SECTION 2.17 BUT WITHOUT PENALTY OR

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PREMIUM. AMOUNTS APPLIED TO THE PAYMENT OF REVOLVING BORROWINGS PURSUANT TO THIS
SECTION MAY BE REBORROWED SUBJECT TO AND IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT.

SECTION 2.13.  FEES.

(A)           THE BORROWER AGREES TO PAY TO THE ADMINISTRATIVE AGENT, FOR THE
ACCOUNT OF EACH LENDER, AN UNUSED COMMITMENT FEE (THE “UNUSED COMMITMENT FEE”)
EQUIVALENT TO THE APPLICABLE RATE TIMES THE DAILY AVERAGE OF THE TOTAL UNUSED
COMMITMENTS.  SUCH UNUSED COMMITMENT FEE SHALL BE CALCULATED ON THE BASIS OF A
YEAR CONSISTING OF 360 DAYS.  THE UNUSED COMMITMENT FEE SHALL BE PAYABLE IN
ARREARS ON THE LAST DAY OF MARCH, JUNE, SEPTEMBER AND DECEMBER OF EACH YEAR,
COMMENCING WITH THE FIRST SUCH DATE TO OCCUR AFTER THE EFFECTIVE DATE, AND ON
THE MATURITY DATE FOR ANY PERIOD THEN ENDING FOR WHICH THE UNUSED COMMITMENT FEE
SHALL NOT HAVE BEEN THERETOFORE PAID.  IN THE EVENT THE AGGREGATE COMMITMENT
TERMINATES ON ANY DATE OTHER THAN THE LAST DAY OF MARCH, JUNE, SEPTEMBER OR
DECEMBER OF ANY YEAR, THE BORROWER AGREES TO PAY TO THE ADMINISTRATIVE AGENT,
FOR THE ACCOUNT OF EACH LENDER, ON THE DATE OF SUCH TERMINATION, THE TOTAL
UNUSED COMMITMENT FEE DUE FOR THE PERIOD FROM THE LAST DAY OF THE IMMEDIATELY
PRECEDING MARCH, JUNE, SEPTEMBER OR DECEMBER, AS THE CASE MAY BE, TO THE DATE
SUCH TERMINATION OCCURS.

(B)           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 RATE 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
EFFECTIVE DATE 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, AND (II) TO THE ISSUING BANK A FRONTING FEE, WHICH SHALL ACCRUE AT THE
RATE OR RATES PER ANNUM SEPARATELY AGREED UPON BETWEEN THE BORROWER AND THE
ISSUING BANK ON THE AVERAGE DAILY AMOUNT OF THE LC EXPOSURE (EXCLUDING ANY
PORTION THEREOF ATTRIBUTABLE TO UNREIMBURSED LC DISBURSEMENTS) DURING THE PERIOD
FROM AND INCLUDING THE EFFECTIVE DATE TO BUT EXCLUDING THE LATER OF THE DATE OF
TERMINATION OF THE AGGREGATE COMMITMENT AND THE DATE ON WHICH THERE CEASES TO BE
ANY LC EXPOSURE, AS WELL AS THE ISSUING BANK’S STANDARD FEES WITH RESPECT TO THE
ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION OF ANY LETTER OF CREDIT OR PROCESSING
OF DRAWINGS THEREUNDER.  PARTICIPATION FEES AND FRONTING FEES ACCRUED THROUGH
AND INCLUDING THE LAST DAY OF MARCH, JUNE, SEPTEMBER AND DECEMBER OF EACH YEAR
SHALL BE PAYABLE ON THE THIRD BUSINESS DAY FOLLOWING SUCH LAST DAY, COMMENCING
ON THE FIRST SUCH DATE TO OCCUR AFTER THE EFFECTIVE DATE; PROVIDED THAT ALL SUCH
FEES SHALL BE PAYABLE ON THE DATE ON WHICH THE AGGREGATE COMMITMENT TERMINATES
AND ANY SUCH FEES ACCRUING AFTER THE DATE ON WHICH THE AGGREGATE COMMITMENT
TERMINATES SHALL BE PAYABLE ON DEMAND.  ANY OTHER FEES PAYABLE TO THE ISSUING
BANK PURSUANT TO THIS PARAGRAPH SHALL BE PAYABLE WITHIN TEN (10) DAYS AFTER
DEMAND.  ALL PARTICIPATION FEES AND FRONTING FEES SHALL BE COMPUTED ON THE BASIS
OF A YEAR OF 360 DAYS AND SHALL BE PAYABLE FOR THE ACTUAL NUMBER OF DAYS ELAPSED
(INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY).

(C)           BORROWER AGREES TO PAY TO THE ADMINISTRATIVE AGENT, FOR ITS OWN
ACCOUNT, FEES PAYABLE IN THE AMOUNTS AND AT THE TIMES SEPARATELY AGREED UPON
BETWEEN THE BORROWER AND THE ADMINISTRATIVE AGENT.

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(D)           ALL FEES PAYABLE HEREUNDER SHALL BE PAID ON THE DATES DUE, IN
IMMEDIATELY AVAILABLE FUNDS, TO THE ADMINISTRATIVE AGENT (OR TO THE ISSUING
BANK, IN THE CASE OF FEES PAYABLE TO IT) FOR DISTRIBUTION, IN THE CASE OF UNUSED
COMMITMENT FEES AND PARTICIPATION FEES, TO THE LENDERS.  SUBJECT TO SECTION
11.13, FEES PAID SHALL NOT BE REFUNDABLE UNDER ANY CIRCUMSTANCES.

SECTION 2.14.  INTEREST.

(A)           THE LOANS COMPRISING EACH ABR BORROWING (INCLUDING EACH SWINGLINE
LOAN) SHALL BEAR INTEREST AT THE ALTERNATE BASE RATE PLUS THE APPLICABLE RATE.

(B)           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 RATE.

(C)           NOTWITHSTANDING THE FOREGOING, IF ANY PRINCIPAL OF OR INTEREST ON
ANY LOAN OR ANY FEE OR OTHER AMOUNT PAYABLE BY THE BORROWER HEREUNDER 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 (I) IN THE CASE OF OVERDUE PRINCIPAL OF ANY LOAN, TWO PERCENT
(2%) PLUS THE RATE OTHERWISE APPLICABLE TO SUCH LOAN AS PROVIDED IN THE
PRECEDING PARAGRAPHS OF THIS SECTION OR (II) IN THE CASE OF ANY OTHER AMOUNT,
TWO PERCENT (2%) PLUS THE RATE APPLICABLE TO ABR LOANS AS PROVIDED IN PARAGRAPH
(A) OF THIS SECTION.

(D)           ACCRUED INTEREST ON EACH LOAN SHALL BE PAYABLE IN ARREARS ON EACH
INTEREST PAYMENT DATE FOR SUCH LOAN AND UPON TERMINATION OF THE AGGREGATE
COMMITMENT AND ON THE MATURITY DATE; PROVIDED THAT (I) INTEREST ACCRUED PURSUANT
TO PARAGRAPH (C) OF THIS SECTION SHALL BE PAYABLE ON DEMAND, (II) IN THE EVENT
OF ANY REPAYMENT OR PREPAYMENT OF ANY LOAN (OTHER THAN A PREPAYMENT OF AN ABR
LOAN PRIOR TO THE END OF THE AVAILABILITY PERIOD AT A TIME WHEN NO BORROWING
BASE DEFICIENCY EXISTS), 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)           ALL INTEREST HEREUNDER SHALL BE COMPUTED ON THE BASIS OF A YEAR OF
360 DAYS, 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.

SECTION 2.15.  ALTERNATE RATE OF INTEREST.  IF PRIOR TO THE COMMENCEMENT OF ANY
INTEREST PERIOD FOR A EURODOLLAR BORROWING:

(A)           THE ADMINISTRATIVE AGENT DETERMINES (WHICH DETERMINATION SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR) THAT ADEQUATE AND REASONABLE MEANS DO NOT
EXIST FOR ASCERTAINING THE ADJUSTED LIBO RATE OR THE LIBO RATE, AS APPLICABLE,
FOR SUCH INTEREST PERIOD; OR

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(B)           THE ADMINISTRATIVE AGENT IS ADVISED BY THE MAJORITY LENDERS THAT
THE ADJUSTED LIBO RATE OR THE LIBO RATE, AS APPLICABLE, FOR SUCH INTEREST PERIOD
WILL NOT ADEQUATELY AND FAIRLY REFLECT THE COST TO SUCH LENDERS (OR LENDER) OF
MAKING OR MAINTAINING THEIR LOANS (OR ITS LOAN) INCLUDED IN SUCH BORROWING FOR
SUCH INTEREST PERIOD;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or 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 (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

SECTION 2.16.  INCREASED COSTS.

(A)           IF ANY CHANGE IN LAW SHALL:

(I)            IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE, SPECIAL DEPOSIT OR
SIMILAR REQUIREMENT AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF, OR
CREDIT EXTENDED BY, ANY LENDER (EXCEPT ANY SUCH RESERVE REQUIREMENT REFLECTED IN
THE ADJUSTED LIBO RATE) OR THE ISSUING BANK; OR

(II)           IMPOSE ON ANY LENDER OR THE ISSUING BANK OR THE LONDON INTERBANK
MARKET ANY OTHER CONDITION AFFECTING THIS AGREEMENT OR EURODOLLAR 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 of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

(B)           IF ANY LENDER OR THE ISSUING BANK DETERMINES THAT ANY CHANGE IN
LAW REGARDING CAPITAL REQUIREMENTS HAS OR WOULD HAVE THE EFFECT OF REDUCING THE
RATE OF RETURN ON SUCH LENDER’S OR THE ISSUING BANK’S CAPITAL OR ON THE CAPITAL
OF SUCH LENDER’S OR THE ISSUING BANK’S HOLDING COMPANY, IF ANY, AS A CONSEQUENCE
OF THIS AGREEMENT OR THE LOANS MADE BY, OR PARTICIPATIONS IN LETTERS OF CREDIT
HELD BY, SUCH LENDER, OR THE LETTERS OF CREDIT ISSUED BY THE ISSUING BANK, TO A
LEVEL BELOW THAT WHICH SUCH LENDER OR THE ISSUING BANK OR SUCH LENDER’S OR THE
ISSUING BANK’S HOLDING COMPANY COULD HAVE ACHIEVED BUT FOR SUCH CHANGE IN LAW
(TAKING INTO CONSIDERATION SUCH LENDER’S OR THE ISSUING BANK’S POLICIES AND THE
POLICIES OF SUCH LENDER’S OR THE ISSUING BANK’S HOLDING COMPANY WITH RESPECT TO
CAPITAL ADEQUACY), THEN FROM TIME TO TIME THE BORROWER WILL PAY TO SUCH LENDER
OR THE ISSUING BANK, AS THE CASE MAY BE, SUCH ADDITIONAL AMOUNT OR

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AMOUNTS AS WILL COMPENSATE SUCH LENDER OR THE ISSUING BANK OR SUCH LENDER’S OR
THE ISSUING BANK’S HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

(C)           A CERTIFICATE OF A LENDER OR THE ISSUING BANK SETTING FORTH (I)
THE AMOUNT OR AMOUNTS REASONABLY NECESSARY TO COMPENSATE SUCH LENDER OR THE
ISSUING BANK OR ITS HOLDING COMPANY, AS THE CASE MAY BE, AS SPECIFIED IN
PARAGRAPH (A) OR (B) OF THIS SECTION, (II)  THE FACTUAL BASIS FOR SUCH
COMPENSATION AND (III) THE MANNER IN WHICH SUCH AMOUNT OR AMOUNTS WERE
CALCULATED SHALL BE DELIVERED TO THE BORROWER.  SUCH CERTIFICATE SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR.  THE BORROWER SHALL PAY SUCH LENDER OR THE
ISSUING BANK, AS THE CASE MAY BE, THE AMOUNT SHOWN AS DUE ON ANY SUCH
CERTIFICATE WITHIN 10 DAYS AFTER RECEIPT THEREOF.

(D)           FAILURE OR DELAY ON THE PART OF ANY LENDER OR THE ISSUING BANK TO
DEMAND COMPENSATION PURSUANT TO THIS SECTION SHALL NOT CONSTITUTE A WAIVER OF
SUCH LENDER’S OR THE ISSUING BANK’S RIGHT TO DEMAND SUCH COMPENSATION; PROVIDED
THAT THE BORROWER SHALL NOT BE REQUIRED TO COMPENSATE A LENDER OR THE ISSUING
BANK PURSUANT TO THIS SECTION FOR ANY INCREASED COSTS OR REDUCTIONS INCURRED
MORE THAN ONE HUNDRED EIGHTY (180) DAYS PRIOR TO THE DATE THAT SUCH LENDER OR
THE ISSUING BANK, AS THE CASE MAY BE, NOTIFIES THE BORROWER OF THE CHANGE IN LAW
GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS AND OF SUCH LENDER’S OR THE
ISSUING BANK’S INTENTION TO CLAIM COMPENSATION THEREFOR; PROVIDED FURTHER THAT,
IF THE CHANGE IN LAW GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS IS
RETROACTIVE, THEN THE 180-DAY PERIOD REFERRED TO ABOVE SHALL BE EXTENDED TO
INCLUDE THE PERIOD OF RETROACTIVE EFFECT THEREOF.

SECTION 2.17.  BREAK FUNDING PAYMENTS.  IN THE EVENT OF (A) THE PAYMENT OF ANY
PRINCIPAL OF ANY EURODOLLAR LOAN OTHER THAN ON THE LAST DAY OF AN INTEREST
PERIOD APPLICABLE THERETO (INCLUDING AS A RESULT OF AN EVENT OF DEFAULT), (B)
THE CONVERSION OF ANY EURODOLLAR LOAN 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 (REGARDLESS OF WHETHER SUCH NOTICE MAY BE REVOKED UNDER SECTION
2.11(B) AND IS REVOKED IN ACCORDANCE THEREWITH), (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 2.20, THEN,
IN ANY SUCH EVENT, THE BORROWER SHALL COMPENSATE EACH LENDER FOR THE LOSS, COST
AND EXPENSE ATTRIBUTABLE TO SUCH EVENT.  IN THE CASE OF A EURODOLLAR LOAN, SUCH
LOSS, COST OR EXPENSE TO ANY LENDER SHALL BE DEEMED TO INCLUDE AN AMOUNT
DETERMINED BY SUCH LENDER TO BE THE EXCESS, IF ANY, OF (I) THE AMOUNT OF
INTEREST WHICH WOULD HAVE ACCRUED ON THE PRINCIPAL AMOUNT OF SUCH LOAN HAD SUCH
EVENT NOT OCCURRED, AT THE ADJUSTED LIBO RATE THAT WOULD HAVE BEEN APPLICABLE TO
SUCH LOAN, FOR THE PERIOD FROM THE DATE OF SUCH EVENT TO THE LAST DAY OF THE
THEN CURRENT INTEREST PERIOD THEREFOR (OR, IN THE CASE OF A FAILURE TO BORROW,
CONVERT OR CONTINUE, FOR THE PERIOD THAT WOULD HAVE BEEN THE INTEREST PERIOD FOR
SUCH LOAN), OVER (II) THE AMOUNT OF INTEREST WHICH WOULD ACCRUE ON SUCH
PRINCIPAL AMOUNT FOR SUCH PERIOD AT THE INTEREST RATE WHICH SUCH LENDER WOULD
BID WERE IT TO BID, AT THE COMMENCEMENT OF SUCH PERIOD, FOR DOLLAR DEPOSITS OF A
COMPARABLE AMOUNT AND PERIOD FROM OTHER BANKS IN THE EURODOLLAR MARKET.  A
CERTIFICATE OF ANY LENDER SETTING FORTH ANY AMOUNT OR AMOUNTS THAT SUCH LENDER
IS ENTITLED TO RECEIVE PURSUANT TO THIS SECTION 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 TEN (10) DAYS
AFTER RECEIPT THEREOF.

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SECTION 2.18.  TAXES.

(A)           ANY AND ALL PAYMENTS BY OR ON ACCOUNT OF ANY OBLIGATION OF THE
BORROWER HEREUNDER SHALL BE MADE FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR ANY
INDEMNIFIED TAXES OR OTHER TAXES; PROVIDED THAT IF THE BORROWER SHALL BE
REQUIRED TO DEDUCT ANY INDEMNIFIED TAXES OR OTHER TAXES FROM SUCH PAYMENTS, THEN
(I) THE SUM PAYABLE SHALL BE INCREASED AS NECESSARY SO THAT AFTER MAKING ALL
REQUIRED DEDUCTIONS (INCLUDING DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE
UNDER THIS SECTION) THE ADMINISTRATIVE AGENT, LENDER OR ISSUING BANK (AS THE
CASE MAY BE) RECEIVES AN AMOUNT EQUAL TO THE SUM IT WOULD HAVE RECEIVED HAD NO
SUCH DEDUCTIONS BEEN MADE, (II) THE BORROWER SHALL MAKE SUCH DEDUCTIONS AND
(III) THE BORROWER SHALL PAY THE FULL AMOUNT DEDUCTED TO THE RELEVANT
GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

(B)           IN ADDITION, THE BORROWER SHALL PAY ANY OTHER TAXES TO THE
RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

(C)           THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, EACH LENDER
AND THE ISSUING BANK, WITHIN 10 DAYS AFTER WRITTEN DEMAND THEREFOR, FOR THE FULL
AMOUNT OF ANY INDEMNIFIED TAXES OR OTHER TAXES PAID BY THE ADMINISTRATIVE AGENT,
SUCH LENDER OR THE ISSUING BANK, AS THE CASE MAY BE, ON OR WITH RESPECT TO ANY
PAYMENT BY OR ON ACCOUNT OF ANY OBLIGATION OF THE BORROWER HEREUNDER (INCLUDING
INDEMNIFIED TAXES OR OTHER TAXES IMPOSED OR ASSERTED ON OR ATTRIBUTABLE TO
AMOUNTS PAYABLE UNDER THIS SECTION) AND ANY PENALTIES, INTEREST AND REASONABLE
EXPENSES ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH
INDEMNIFIED TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY IMPOSED OR ASSERTED
BY THE RELEVANT GOVERNMENTAL AUTHORITY.  A CERTIFICATE DELIVERED TO THE BORROWER
BY A LENDER OR THE ISSUING BANK, OR BY THE ADMINISTRATIVE AGENT ON ITS OWN
BEHALF OR ON BEHALF OF A LENDER OR THE ISSUING BANK, SETTING FORTH (I) THE
AMOUNT OF SUCH PAYMENT OR LIABILITY REASONABLY NECESSARY TO COMPENSATE THE
ADMINISTRATIVE AGENT, SUCH LENDER OR THE ISSUING BANK, AS THE CASE MAY BE, (II)
THE FACTUAL BASIS FOR SUCH COMPENSATION AND (III) THE MANNER IN WHICH SUCH
AMOUNT OR AMOUNTS WERE CALCULATED, SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

(D)           AS SOON AS PRACTICABLE AFTER ANY PAYMENT OF INDEMNIFIED TAXES OR
OTHER TAXES BY THE BORROWER TO A GOVERNMENTAL AUTHORITY, THE BORROWER SHALL
DELIVER TO THE ADMINISTRATIVE AGENT THE ORIGINAL OR A CERTIFIED COPY OF A
RECEIPT ISSUED BY SUCH GOVERNMENTAL AUTHORITY EVIDENCING SUCH PAYMENT, A COPY OF
THE RETURN REPORTING SUCH PAYMENT OR OTHER EVIDENCE OF SUCH PAYMENT REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT.

(E)           ANY FOREIGN LENDER THAT IS ENTITLED TO AN EXEMPTION FROM OR
REDUCTION OF WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION IN WHICH THE
BORROWER IS LOCATED, OR ANY TREATY TO WHICH SUCH JURISDICTION IS A PARTY, WITH
RESPECT TO PAYMENTS UNDER THIS AGREEMENT SHALL DELIVER TO THE BORROWER (WITH A
COPY TO THE ADMINISTRATIVE AGENT), AT THE TIME OR TIMES PRESCRIBED BY APPLICABLE
LAW, SUCH PROPERLY COMPLETED AND EXECUTED DOCUMENTATION PRESCRIBED BY APPLICABLE
LAW OR REASONABLY REQUESTED BY THE BORROWER AS WILL PERMIT SUCH PAYMENTS TO BE
MADE WITHOUT WITHHOLDING OR AT A REDUCED RATE.

(F)            IF THE ADMINISTRATIVE AGENT OR A LENDER DETERMINES, IN ITS SOLE
DISCRETION, THAT IT HAS RECEIVED A REFUND OF ANY TAXES OR OTHER TAXES AS TO
WHICH IT HAS BEEN INDEMNIFIED BY THE BORROWER OR WITH RESPECT TO WHICH THE
BORROWER HAVE PAID ADDITIONAL AMOUNTS PURSUANT TO THIS

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SECTION 2.18, IT SHALL PAY OVER SUCH REFUND TO THE BORROWER (BUT ONLY TO THE
EXTENT OF INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS PAID, BY THE BORROWER
UNDER THIS SECTION 2.18 WITH RESPECT TO THE TAXES OR OTHER TAXES GIVING RISE TO
SUCH REFUND), NET OF ALL OUT-OF-POCKET EXPENSES OF THE ADMINISTRATIVE AGENT OR
SUCH LENDER AND WITHOUT INTEREST (OTHER THAN ANY INTEREST PAID BY THE RELEVANT
GOVERNMENTAL AUTHORITY WITH RESPECT TO SUCH REFUND); PROVIDED, THAT THE
BORROWER, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT, THE SWINGLINE LENDER OR
SUCH LENDER, AGREES TO REPAY THE AMOUNT PAID OVER TO THE BORROWER (PLUS ANY
PENALTIES, INTEREST OR OTHER CHARGES IMPOSED BY THE RELEVANT GOVERNMENTAL
AUTHORITY) TO THE ADMINISTRATIVE AGENT OR SUCH LENDER IN THE EVENT THE
ADMINISTRATIVE AGENT OR SUCH LENDER IS REQUIRED TO REPAY SUCH REFUND TO SUCH
GOVERNMENTAL AUTHORITY. THIS SECTION SHALL NOT BE CONSTRUED TO REQUIRE THE
ADMINISTRATIVE AGENT OR ANY LENDER TO MAKE AVAILABLE ITS TAX RETURNS (OR ANY
OTHER INFORMATION RELATING TO ITS TAXES WHICH IT DEEMS CONFIDENTIAL) TO THE
BORROWER OR ANY OTHER PERSON.

SECTION 2.19.  PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.

(A)           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 2.16, SECTION 2.17 OR SECTION
2.18, OR OTHERWISE) PRIOR TO 12:00 NOON ON THE DATE WHEN DUE, IN IMMEDIATELY
AVAILABLE FUNDS, WITHOUT SET-OFF OR COUNTERCLAIM.  ANY AMOUNTS RECEIVED AFTER
SUCH TIME ON ANY DATE MAY, IN THE DISCRETION OF THE ADMINISTRATIVE AGENT, BE
DEEMED TO HAVE BEEN RECEIVED ON THE NEXT SUCCEEDING BUSINESS DAY FOR PURPOSES OF
CALCULATING INTEREST THEREON.  ALL SUCH PAYMENTS SHALL BE MADE TO THE
ADMINISTRATIVE AGENT AT ITS OFFICES AT JPMORGAN LOAN SERVICES, 21 SOUTH CLARK
ST., 19TH FLOOR, CHICAGO, ILLINOIS 60603-2003, EXCEPT PAYMENTS TO BE MADE
DIRECTLY TO THE ISSUING BANK OR SWINGLINE LENDER AS EXPRESSLY PROVIDED HEREIN
AND EXCEPT THAT PAYMENTS PURSUANT TO SECTION 2.16, SECTION 2.17, SECTION 2.18
AND SECTION 11.03 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)           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, FEES AND OTHER OBLIGATIONS 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; PROVIDED
THAT IN THE EVENT SUCH FUNDS ARE RECEIVED BY AND AVAILABLE TO THE ADMINISTRATIVE
AGENT AS A RESULT OF THE EXERCISE OF ANY RIGHTS AND REMEDIES WITH RESPECT TO ANY
COLLATERAL UNDER THE SECURITY INSTRUMENTS, THE PARTIES ENTITLED TO A RATABLE
SHARE OF SUCH FUNDS PURSUANT TO THE FOREGOING CLAUSE (II) AND THE DETERMINATION
OF EACH PARTIES’ RATABLE SHARE SHALL INCLUDE, ON A PARI PASSU BASIS, THE LENDER
COUNTERPARTIES AND THE ACTUAL AGGREGATE AMOUNTS THEN DUE AND OWING TO EACH
LENDER COUNTERPARTY BY THE BORROWER OR

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ANY GUARANTOR AS A RESULT OF THE EARLY TERMINATION OF ANY TRANSACTIONS UNDER ANY
SWAP AGREEMENTS INCLUDED IN THE OBLIGATIONS (AFTER GIVING EFFECT TO ANY NETTING
AGREEMENTS).

(C)           IF ANY LENDER SHALL, BY EXERCISING ANY RIGHT OF SET-OFF OR
COUNTERCLAIM OR OTHERWISE (INCLUDING ANY RIGHT OF SET-OFF EXERCISED WITH RESPECT
TO A SWAP AGREEMENT), OBTAIN PAYMENT IN RESPECT OF ANY PRINCIPAL OF OR INTEREST
ON ANY OF ITS LOANS, PARTICIPATIONS IN LC DISBURSEMENTS OR SWINGLINE LOANS
RESULTING IN SUCH LENDER RECEIVING PAYMENT OF A GREATER PROPORTION OF THE
AGGREGATE AMOUNT OF ITS LOANS AND PARTICIPATIONS IN LC DISBURSEMENTS OR
SWINGLINE LOANS 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 AND SWINGLINE LOANS 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 AND SWINGLINE
LOANS; 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 PARAGRAPH 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 PARAGRAPH 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.

(D)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE FROM
THE BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF THE LENDERS OR THE ISSUING BANK HEREUNDER THAT THE
BORROWER WILL NOT MAKE SUCH PAYMENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT
THE BORROWER HAS MADE SUCH PAYMENT ON SUCH DATE IN ACCORDANCE HEREWITH AND MAY,
IN RELIANCE UPON SUCH ASSUMPTION, DISTRIBUTE TO THE LENDERS OR THE ISSUING BANK,
AS THE CASE MAY BE, THE AMOUNT DUE.  IN SUCH EVENT, IF THE BORROWER HAVE NOT IN
FACT MADE SUCH PAYMENT, THEN EACH OF THE LENDERS OR THE ISSUING BANK, AS THE
CASE MAY BE, SEVERALLY AGREES TO REPAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON
DEMAND THE AMOUNT SO DISTRIBUTED TO SUCH LENDER OR ISSUING BANK WITH INTEREST
THEREON, FOR EACH DAY FROM AND INCLUDING THE DATE SUCH AMOUNT IS DISTRIBUTED TO
IT TO BUT EXCLUDING THE DATE OF PAYMENT TO THE ADMINISTRATIVE AGENT, AT THE
GREATER OF THE FEDERAL FUNDS EFFECTIVE RATE AND A RATE DETERMINED BY THE
ADMINISTRATIVE AGENT IN ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK
COMPENSATION.

(E)           IF ANY LENDER SHALL FAIL TO MAKE ANY PAYMENT REQUIRED TO BE MADE
BY IT PURSUANT TO SECTION 2.07(D) OR SECTION 2.07(E), SECTION 2.08(B), SECTION
2.19(D) OR SECTION 11.03(C), 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.

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SECTION 2.20.  MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

(A)           IF ANY LENDER REQUESTS COMPENSATION UNDER SECTION 2.16, OR IF THE
BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY
GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO SECTION 2.18,
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 2.16 OR SECTION 2.18, AS THE CASE
MAY BE, IN THE FUTURE AND (II) WOULD NOT SUBJECT SUCH LENDER TO ANY UNREIMBURSED
COST OR EXPENSE AND WOULD NOT OTHERWISE BE DISADVANTAGEOUS TO SUCH LENDER.  THE
BORROWER HEREBY AGREES TO PAY ALL REASONABLE COSTS AND EXPENSES INCURRED BY ANY
LENDER IN CONNECTION WITH ANY SUCH DESIGNATION OR ASSIGNMENT.

(B)           IF ANY LENDER REQUESTS COMPENSATION UNDER SECTION 2.16, OR IF THE
BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY
GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO SECTION 2.18,
OR IF ANY LENDER DEFAULTS IN ITS OBLIGATION TO FUND LOANS HEREUNDER, 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 11.04), 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 (AND
IF A COMMITMENT IS BEING ASSIGNED, THE ISSUING BANK), 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, PARTICIPATIONS IN LC
DISBURSEMENTS AND SWINGLINE LOANS, ACCRUED INTEREST THEREON, ACCRUED FEES AND
ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER, FROM THE ASSIGNEE (TO THE EXTENT OF
SUCH OUTSTANDING PRINCIPAL AND ACCRUED INTEREST AND FEES) OR THE BORROWER (IN
THE CASE OF ALL OTHER AMOUNTS) AND (III) IN THE CASE OF ANY SUCH ASSIGNMENT
RESULTING FROM A CLAIM FOR COMPENSATION UNDER SECTION 2.16 OR PAYMENTS REQUIRED
TO BE MADE PURSUANT TO SECTION 2.18, 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.

(C)           IF IN CONNECTION WITH ANY PROPOSED AMENDMENT, MODIFICATION,
TERMINATION, WAIVER OR CONSENT WITH RESPECT TO ANY OF THE PROVISIONS OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AS CONTEMPLATED BY SECTION 11.02, THE
CONSENT OF MAJORITY LENDERS OR REQUIRED LENDERS, AS THE CASE MAY BE, SHALL HAVE
BEEN OBTAINED BUT THE CONSENT OF ONE OR MORE OF SUCH OTHER LENDERS (EACH A
“NON-CONSENTING LENDER”) WHOSE CONSENT IS REQUIRED HAS NOT BEEN OBTAINED OR IF
LENDER IS A DEFAULTING LENDER; THEN, THE BORROWER MAY ELECT TO REPLACE SUCH
NON-CONSENTING LENDER OR DEFAULTING LENDER, AS THE CASE MAY BE, AS A LENDER
PARTY TO THIS AGREEMENT IN ACCORDANCE WITH AND SUBJECT TO THE RESTRICTIONS
CONTAINED IN, AND CONSENTS REQUIRED BY SECTION 11.04; PROVIDED THAT (I) THE
BORROWER SHALL HAVE RECEIVED THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE
AGENT (AND IF A COMMITMENT IS BEING ASSIGNED, THE ISSUING BANK), 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, FROM THE ASSIGNEE (TO THE EXTENT OF SUCH

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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 2.16 OR PAYMENTS REQUIRED
TO BE MADE PURSUANT TO SECTION 2.18, 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 OR, IN THE CASE OF A DEFAULTING
LENDER, SUCH LENDER IS NO LONGER A DEFAULTING LENDER.

ARTICLE III

BORROWING BASE

SECTION 3.01.  RESERVE REPORT; PROPOSED BORROWING BASE.  DURING THE PERIOD FROM
THE EFFECTIVE DATE UNTIL THE FIRST REDETERMINATION AFTER THE EFFECTIVE DATE, THE
BORROWING BASE SHALL BE $1,000,000,000 (THE “INITIAL BORROWING BASE”).  AS SOON
AS AVAILABLE AND IN ANY EVENT BY MARCH 1 AND SEPTEMBER 1 OF EACH YEAR, BEGINNING
SEPTEMBER 1, 2007, THE BORROWER SHALL DELIVER TO THE ADMINISTRATIVE AGENT AND
EACH LENDER A RESERVE REPORT, PREPARED AS OF THE IMMEDIATELY PRECEDING DECEMBER
31 AND JUNE 30, RESPECTIVELY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ADMINISTRATIVE AGENT AND PREPARED BY AN APPROVED PETROLEUM ENGINEER (OR, IN
THE CASE OF THE RESERVE REPORT DUE ON SEPTEMBER 1 OF EACH YEAR, BY PETROLEUM
ENGINEERS EMPLOYED BY THE BORROWER), SAID RESERVE REPORT TO UTILIZE ECONOMIC AND
PRICING PARAMETERS ESTABLISHED FROM TIME TO TIME BY THE ADMINISTRATIVE AGENT,
TOGETHER WITH SUCH OTHER INFORMATION, REPORTS AND DATA CONCERNING THE VALUE OF
THE BORROWING BASE PROPERTIES AS THE ADMINISTRATIVE AGENT SHALL DEEM REASONABLY
NECESSARY TO DETERMINE THE VALUE OF SUCH BORROWING BASE PROPERTIES. 
SIMULTANEOUSLY WITH THE DELIVERY TO THE ADMINISTRATIVE AGENT AND THE LENDERS OF
EACH RESERVE REPORT, THE BORROWER SHALL SUBMIT TO THE ADMINISTRATIVE AGENT AND
EACH LENDER THE BORROWER’S REQUESTED AMOUNT OF THE BORROWING BASE AS OF THE NEXT
REDETERMINATION DATE.  PROMPTLY AFTER THE RECEIPT BY THE ADMINISTRATIVE AGENT OF
SUCH RESERVE REPORT AND BORROWER’S REQUESTED AMOUNT FOR THE BORROWING BASE, THE
ADMINISTRATIVE AGENT SHALL SUBMIT TO THE LENDERS A RECOMMENDED AMOUNT OF THE
BORROWING BASE TO BECOME EFFECTIVE FOR THE PERIOD COMMENCING ON THE NEXT
REDETERMINATION DATE.

SECTION 3.02.  SCHEDULED REDETERMINATIONS OF THE BORROWING BASE; PROCEDURES AND
STANDARDS.  BASED IN PART ON THE RESERVE REPORTS MADE AVAILABLE TO THE
ADMINISTRATIVE AGENT AND THE LENDERS PURSUANT TO SECTION 3.01, THE LENDERS SHALL
REDETERMINE THE BORROWING BASE ON OR PRIOR TO THE NEXT REDETERMINATION DATE (OR
SUCH DATE PROMPTLY THEREAFTER AS REASONABLY POSSIBLE BASED ON THE ENGINEERING
AND OTHER INFORMATION AVAILABLE TO THE LENDERS).  ANY BORROWING BASE WHICH
BECOMES EFFECTIVE AS A RESULT OF ANY REDETERMINATION SHALL BE SUBJECT TO THE
FOLLOWING RESTRICTIONS: (A) SUCH BORROWING BASE SHALL NOT EXCEED THE MAXIMUM
FACILITY AMOUNT, (B) TO THE EXTENT SUCH BORROWING BASE REPRESENTS AN INCREASE IN
THE BORROWING BASE IN EFFECT PRIOR TO SUCH REDETERMINATION, SUCH BORROWING BASE
MUST BE APPROVED BY ALL LENDERS, AND (C) TO THE EXTENT SUCH BORROWING BASE
REPRESENTS A DECREASE IN THE BORROWING BASE IN EFFECT PRIOR TO SUCH
REDETERMINATION OR A REAFFIRMATION OF SUCH PRIOR BORROWING BASE, SUCH BORROWING
BASE MUST BE APPROVED BY THE ADMINISTRATIVE AGENT AND REQUIRED LENDERS.  IF A
REDETERMINED BORROWING BASE IS NOT APPROVED BY THE ADMINISTRATIVE AGENT AND
REQUIRED LENDERS WITHIN TWENTY (20) DAYS AFTER THE SUBMISSION TO THE LENDERS BY
THE ADMINISTRATIVE AGENT OF ITS RECOMMENDED BORROWING BASE

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PURSUANT TO SECTION 3.01, OR BY ALL LENDERS WITHIN SUCH TWENTY (20) DAY PERIOD
IN THE CASE OF ANY INCREASE IN THE BORROWING BASE, THE ADMINISTRATIVE AGENT
SHALL NOTIFY EACH LENDER THAT THE RECOMMENDED BORROWING BASE, AS THE CASE MAY
BE, HAS NOT BEEN APPROVED AND REQUEST THAT EACH LENDER SUBMIT TO THE
ADMINISTRATIVE AGENT WITHIN TEN (10) DAYS THEREAFTER ITS PROPOSED BORROWING
BASE.  PROMPTLY FOLLOWING THE 10TH DAY AFTER THE ADMINISTRATIVE AGENT’S REQUEST
FOR EACH LENDER’S PROPOSED BORROWING BASE, THE ADMINISTRATIVE AGENT SHALL
DETERMINE THE BORROWING BASE FOR SUCH REDETERMINATION BY CALCULATING THE HIGHEST
BORROWING BASE THEN ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND A NUMBER OF
LENDERS SUFFICIENT TO CONSTITUTE REQUIRED LENDERS (OR ALL LENDERS IN THE CASE OF
AN INCREASE IN THE BORROWING BASE).  EACH REDETERMINATION SHALL BE MADE BY THE
LENDERS IN THEIR SOLE DISCRETION, BUT BASED ON THE ADMINISTRATIVE AGENT’S AND
SUCH LENDER’S USUAL AND CUSTOMARY PROCEDURES FOR EVALUATING OIL AND GAS
INTERESTS AS SUCH EXIST AT THE TIME OF SUCH REDETERMINATION, AND INCLUDING
ADJUSTMENTS TO REFLECT THE EFFECT OF ANY SWAP AGREEMENTS OF THE BORROWER AND THE
RESTRICTED SUBSIDIARIES AS SUCH EXIST AT THE TIME OF SUCH REDETERMINATION.  THE
BORROWER ACKNOWLEDGES AND AGREES THAT EACH REDETERMINATION SHALL BE BASED UPON
THE LOAN COLLATERAL VALUE WHICH THE ADMINISTRATIVE AGENT AND EACH LENDER IN ITS
SOLE DISCRETION (USING SUCH METHODOLOGY, ASSUMPTIONS AND DISCOUNT RATES AS THE
ADMINISTRATIVE AGENT AND SUCH LENDER CUSTOMARILY USES IN ASSIGNING COLLATERAL
VALUE TO OIL AND GAS INTERESTS) ASSIGNS TO THE BORROWING BASE PROPERTIES AT THE
TIME IN QUESTION AND BASED UPON SUCH OTHER CREDIT FACTORS CONSISTENTLY APPLIED
(INCLUDING, WITHOUT LIMITATION, THE ASSETS, LIABILITIES, CASH FLOW, BUSINESS,
PROPERTIES, PROSPECTS, MANAGEMENT AND OWNERSHIP OF THE CREDIT PARTIES) AS THE
ADMINISTRATIVE AGENT AND SUCH LENDER CUSTOMARILY CONSIDERS IN EVALUATING SIMILAR
OIL AND GAS CREDITS.  IT IS EXPRESSLY UNDERSTOOD THAT THE ADMINISTRATIVE AGENT
AND LENDERS HAVE NO OBLIGATION TO DESIGNATE THE BORROWING BASE AT ANY PARTICULAR
AMOUNTS, EXCEPT IN THE EXERCISE OF THEIR DISCRETION, WHETHER IN RELATION TO THE
AGGREGATE COMMITMENT OR OTHERWISE.  IF THE BORROWER DOES NOT FURNISH ALL
INFORMATION, REPORTS AND DATA REQUIRED TO BE DELIVERED BY ANY DATE SPECIFIED IN
THIS ARTICLE III, UNLESS SUCH FAILURE IS NOT THE FAULT OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND LENDERS MAY NONETHELESS DESIGNATE THE BORROWING BASE AT
ANY AMOUNTS WHICH THE ADMINISTRATIVE AGENT AND ALL LENDERS OR REQUIRED LENDERS,
AS THE CASE MAY BE, IN THEIR REASONABLE DISCRETION DETERMINE AND MAY REDESIGNATE
THE BORROWING BASE FROM TIME TO TIME THEREAFTER UNTIL THE ADMINISTRATIVE AGENT
AND THE LENDERS RECEIVE ALL SUCH INFORMATION, REPORTS AND DATA, WHEREUPON THE
ADMINISTRATIVE AGENT AND ALL LENDERS OR REQUIRED LENDERS, AS THE CASE MAY BE,
SHALL DESIGNATE A NEW BORROWING BASE, AS DESCRIBED ABOVE.

SECTION 3.03.  SPECIAL REDETERMINATIONS.  IN ADDITION TO SCHEDULED
REDETERMINATIONS, THE BORROWER SHALL BE PERMITTED TO REQUEST A SPECIAL
REDETERMINATION OF THE BORROWING BASE ONCE BETWEEN EACH SCHEDULED
REDETERMINATION AND THE REQUIRED LENDERS SHALL BE PERMITTED TO REQUEST A SPECIAL
REDETERMINATION AT ANY TIME.  ANY REQUEST BY BORROWER PURSUANT TO THIS SECTION
3.03 SHALL BE SUBMITTED TO THE ADMINISTRATIVE AGENT AND EACH LENDER AND AT THE
TIME OF SUCH REQUEST (OR WITHIN TWENTY (20) DAYS THEREAFTER IN THE CASE OF THE
RESERVE REPORT) BORROWER SHALL (1) DELIVER TO THE ADMINISTRATIVE AGENT AND EACH
LENDER A RESERVE REPORT PREPARED AS OF A DATE PRIOR TO THE DATE OF SUCH REQUEST
THAT IS REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND SUCH OTHER
INFORMATION WHICH THE ADMINISTRATIVE AGENT SHALL REASONABLY REQUEST, AND (2)
NOTIFY THE ADMINISTRATIVE AGENT AND EACH LENDER OF THE BORROWING BASE REQUESTED
BY BORROWER IN CONNECTION WITH SUCH SPECIAL REDETERMINATION.  ANY REQUEST BY
REQUIRED LENDERS FOR A SPECIAL REDETERMINATION PURSUANT TO THIS SECTION 3.03
SHALL BE SUBMITTED TO THE ADMINISTRATIVE AGENT AND THE BORROWER. ANY SPECIAL
REDETERMINATION SHALL BE MADE BY THE ADMINISTRATIVE AGENT AND LENDERS IN
ACCORDANCE WITH THE PROCEDURES AND STANDARDS SET FORTH IN SECTION 3.02; PROVIDED
THAT

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NO RESERVE REPORT IS REQUIRED TO BE DELIVERED TO THE ADMINISTRATIVE AGENT OR THE
LENDERS IN CONNECTION WITH ANY SPECIAL REDETERMINATION REQUESTED BY THE REQUIRED
LENDERS PURSUANT TO THIS SECTION 3.03.

SECTION 3.04.  NOTICE OF REDETERMINATION.  PROMPTLY FOLLOWING ANY
REDETERMINATION OF THE BORROWING BASE, THE ADMINISTRATIVE AGENT SHALL NOTIFY THE
BORROWER OF THE AMOUNT OF THE REDETERMINED BORROWING BASE, WHICH BORROWING BASE
SHALL BE EFFECTIVE AS OF THE DATE SPECIFIED IN SUCH NOTICE, AND SUCH BORROWING
BASE SHALL REMAIN IN EFFECT FOR ALL PURPOSES OF THIS AGREEMENT UNTIL THE NEXT
REDETERMINATION.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each Credit Party represents and warrants to the Lenders that (it being
understood and agreed that with respect to the Effective Date such
representations and warranties are deemed to be made concurrently with and after
giving effect to the consummation of the Transactions):

SECTION 4.01.  ORGANIZATION; POWERS.  EACH CREDIT PARTY IS DULY ORGANIZED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
ORGANIZATION, HAS ALL REQUISITE POWER AND AUTHORITY TO CARRY ON ITS BUSINESS AS
NOW CONDUCTED AND, EXCEPT WHERE THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE
AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT, IS QUALIFIED TO DO BUSINESS IN, AND IS IN GOOD STANDING IN, EVERY
JURISDICTION WHERE SUCH QUALIFICATION IS REQUIRED.

SECTION 4.02.  AUTHORIZATION; ENFORCEABILITY.  THE TRANSACTIONS ARE WITHIN EACH
CREDIT PARTY’S CORPORATE, LIMITED LIABILITY COMPANY OR PARTNERSHIP POWERS AND
HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE, LIMITED LIABILITY COMPANY
OR PARTNERSHIP AND, IF REQUIRED, STOCKHOLDER ACTION.  THIS AGREEMENT HAS BEEN
DULY EXECUTED AND DELIVERED BY EACH CREDIT PARTY AND CONSTITUTES A LEGAL, VALID
AND BINDING OBLIGATION OF EACH CREDIT PARTY, 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 4.03.  GOVERNMENTAL 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, EXCEPT SUCH AS HAVE BEEN OBTAINED
OR MADE AND ARE IN FULL FORCE AND EFFECT AND, AFTER THE EFFECTIVE DATE, THE
FILING OF THIS AGREEMENT AND RELATED LOAN DOCUMENTS BY THE BORROWER WITH, AND
OTHER REQUIRED DISCLOSURES REQUIRED BY, THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
(B) WILL NOT VIOLATE ANY APPLICABLE LAW OR REGULATION OR THE CHARTER, BY-LAWS OR
OTHER ORGANIZATIONAL DOCUMENTS OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR
ANY ORDER OF ANY GOVERNMENTAL AUTHORITY, (C) WILL NOT VIOLATE OR RESULT IN A
DEFAULT UNDER ANY INDENTURE, AGREEMENT OR OTHER INSTRUMENT EVIDENCING MATERIAL
INDEBTEDNESS OR A MATERIAL SALES CONTRACT BINDING UPON THE BORROWER OR ANY
RESTRICTED SUBSIDIARY OR ANY OF THEIR RESPECTIVE ASSETS, OR GIVE RISE TO A RIGHT
THEREUNDER TO REQUIRE ANY PAYMENT TO BE MADE BY THE BORROWER OR ANY RESTRICTED
SUBSIDIARY, AND

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(D) WILL NOT RESULT IN THE CREATION OR IMPOSITION OF ANY LIEN ON ANY ASSET OF
THE BORROWER OR ANY RESTRICTED SUBSIDIARY NOT OTHERWISE PERMITTED UNDER SECTION
7.02.

SECTION 4.04.  FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.

(A)           THE BORROWER HAS HERETOFORE FURNISHED TO THE LENDERS THE
CONSOLIDATED BALANCE SHEET AND RELATED STATEMENTS OF INCOME AND CASH FLOWS OF
THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES (I) AS OF AND FOR EACH OF THE
FISCAL YEARS ENDED DECEMBER 31, 2005, REPORTED ON BY PRICEWATERHOUSECOOPERS LLP,
AND DECEMBER 31, 2006, REPORTED ON BY KPMG LLP, INDEPENDENT PUBLIC ACCOUNTANTS,
AND (II) AS OF AND FOR THE FISCAL QUARTER AND PORTION OF THE FISCAL YEAR ENDED
MARCH 31, 2007, SETTING FORTH IN COMPARATIVE FORM THE FIGURES FOR THE
CORRESPONDING PERIOD OF (OR, IN THE CASE OF THE BALANCE SHEET, AS OF THE END OF)
THE PREVIOUS FISCAL YEAR, ALL CERTIFIED BY A RESPONSIBLE OFFICER.  SUCH
FINANCIAL STATEMENTS PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL
POSITION AND RESULTS OF OPERATIONS AND CASH FLOWS OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES AS OF SUCH DATES AND FOR SUCH PERIODS IN ACCORDANCE
WITH GAAP, SUBJECT TO YEAR-END AUDIT ADJUSTMENTS AND THE ABSENCES OF FOOTNOTES,
IN THE CASE OF THE STATEMENTS REFERRED TO IN CLAUSE (II).

(B)           SINCE DECEMBER 31, 2006, THERE HAS BEEN NO MATERIAL ADVERSE CHANGE
IN THE BUSINESS, ASSETS, OPERATIONS, PROSPECTS OR CONDITION, FINANCIAL OR
OTHERWISE, OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES, TAKEN AS A WHOLE (IT
BEING UNDERSTOOD THAT NONE OF (I) THE ISSUANCE OF THE PREFERRED STOCK, (II) THE
SOUTHERN GAS ACQUISITION, NOR (III) CHANGES IN COMMODITY PRICES FOR HYDROCARBONS
AFFECTING THE OIL AND GAS INDUSTRY AS A WHOLE DOES NOT CONSTITUTE A MATERIAL
ADVERSE CHANGE).

SECTION 4.05.  PROPERTIES.

(A)           EXCEPT AS OTHERWISE PROVIDED IN SECTION 4.15 WITH RESPECT TO OIL
AND GAS INTERESTS, THE BORROWER AND EACH RESTRICTED SUBSIDIARY HAS GOOD TITLE
TO, OR VALID LEASEHOLD INTERESTS IN, ALL SUCH REAL AND PERSONAL PROPERTY
MATERIAL TO ITS BUSINESS, EXCEPT FOR MINOR DEFECTS IN TITLE THAT DO NOT
INTERFERE WITH ITS ABILITY TO CONDUCT ITS BUSINESS AS CURRENTLY CONDUCTED OR TO
UTILIZE SUCH PROPERTIES FOR THEIR INTENDED PURPOSES.

(B)           THE BORROWER AND EACH RESTRICTED SUBSIDIARY OWNS, OR IS LICENSED
TO USE, ALL TRADEMARKS, TRADENAMES, COPYRIGHTS, PATENTS AND OTHER INTELLECTUAL
PROPERTY MATERIAL TO ITS BUSINESS, AND THE USE THEREOF BY THE BORROWER AND SUCH
RESTRICTED SUBSIDIARIES, AS THE CASE MAY BE, DOES NOT INFRINGE UPON THE RIGHTS
OF ANY OTHER PERSON, EXCEPT FOR ANY SUCH INFRINGEMENTS THAT, INDIVIDUALLY OR IN
THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT.

SECTION 4.06.  LITIGATION AND ENVIRONMENTAL MATTERS.

(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 AGAINST OR AFFECTING THE BORROWER OR ANY
RESTRICTED SUBSIDIARY, (I) AS TO WHICH THERE IS A REASONABLE POSSIBILITY OF AN
ADVERSE DETERMINATION AND THAT, IF ADVERSELY DETERMINED, COULD REASONABLY BE
EXPECTED, INDIVIDUALLY OR IN THE AGGREGATE, TO RESULT IN A MATERIAL ADVERSE
EFFECT (OTHER THAN THE DISCLOSED MATTERS) OR (II) THAT INVOLVE THIS AGREEMENT OR
THE TRANSACTIONS.

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(B)           EXCEPT FOR THE DISCLOSED MATTERS AND EXCEPT WITH RESPECT TO ANY
OTHER MATTERS THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, NEITHER THE BORROWER NOR ANY
RESTRICTED SUBSIDIARY TO THE BORROWER’S KNOWLEDGE (I) HAS FAILED TO COMPLY WITH
ANY ENVIRONMENTAL LAW OR TO OBTAIN, MAINTAIN OR COMPLY WITH ANY PERMIT, LICENSE
OR OTHER APPROVAL REQUIRED UNDER ANY ENVIRONMENTAL LAW, (II) HAS BECOME SUBJECT
TO ANY ENVIRONMENTAL LIABILITY, (III) HAS RECEIVED NOTICE OF ANY CLAIM WITH
RESPECT TO ANY ENVIRONMENTAL LIABILITY OR (IV) KNOWS OF ANY BASIS FOR ANY
ENVIRONMENTAL LIABILITY.

(C)           SINCE THE DATE OF THIS AGREEMENT, THERE HAS BEEN NO CHANGE IN THE
STATUS OF THE DISCLOSED MATTERS THAT, INDIVIDUALLY OR IN THE AGGREGATE, HAS
RESULTED IN, OR MATERIALLY INCREASED THE LIKELIHOOD OF, A MATERIAL ADVERSE
EFFECT.

SECTION 4.07.  COMPLIANCE WITH LAWS AND AGREEMENTS.  THE BORROWER AND EACH
RESTRICTED SUBSIDIARY IS IN COMPLIANCE WITH ALL LAWS, REGULATIONS AND ORDERS OF
ANY GOVERNMENTAL AUTHORITY APPLICABLE TO IT OR ITS PROPERTY AND ALL INDENTURES,
AGREEMENTS AND OTHER INSTRUMENTS BINDING UPON IT OR ITS PROPERTY, EXCEPT WHERE
THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.  NO DEFAULT HAS OCCURRED AND IS
CONTINUING.

SECTION 4.08.  INVESTMENT COMPANY STATUS.  NEITHER THE BORROWER NOR ANY
RESTRICTED SUBSIDIARY IS AN “INVESTMENT COMPANY” AS DEFINED IN, OR SUBJECT TO
REGULATION UNDER, THE INVESTMENT COMPANY ACT OF 1940.

SECTION 4.09.  TAXES.  THE BORROWER AND EACH RESTRICTED SUBSIDIARY HAS TIMELY
FILED OR CAUSED TO BE FILED ALL TAX RETURNS AND REPORTS REQUIRED TO HAVE BEEN
FILED AND HAS PAID OR CAUSED TO BE PAID ALL TAXES REQUIRED TO HAVE BEEN PAID BY
IT, EXCEPT (A) TAXES THAT ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS AND FOR WHICH THE BORROWER OR SUCH RESTRICTED SUBSIDIARY, AS
APPLICABLE, HAS SET ASIDE ON ITS BOOKS ADEQUATE RESERVES OR (B) TO THE EXTENT
THAT THE FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.

SECTION 4.10.  ERISA.  NO ERISA EVENT HAS OCCURRED OR IS REASONABLY EXPECTED TO
OCCUR THAT, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH ERISA EVENTS FOR WHICH
LIABILITY IS REASONABLY EXPECTED TO OCCUR, COULD REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT.  THE PRESENT VALUE OF ALL ACCUMULATED
BENEFIT OBLIGATIONS UNDER EACH PLAN (BASED ON THE ASSUMPTIONS USED FOR PURPOSES
OF FASB STATEMENT 87) DID NOT, AS OF THE DATE OF THE MOST RECENT FINANCIAL
STATEMENTS REFLECTING SUCH AMOUNTS, EXCEED BY MORE THAN $5,000,000 THE FAIR
MARKET VALUE OF THE ASSETS OF SUCH PLAN, AND THE PRESENT VALUE OF ALL
ACCUMULATED BENEFIT OBLIGATIONS OF ALL UNDERFUNDED PLANS (BASED ON THE
ASSUMPTIONS USED FOR PURPOSES OF FASB STATEMENT 87) DID NOT, AS OF THE DATE OF
THE MOST RECENT FINANCIAL STATEMENTS REFLECTING SUCH AMOUNTS, EXCEED BY MORE
THAN $5,000,000 THE FAIR MARKET VALUE OF THE ASSETS OF ALL SUCH UNDERFUNDED
PLANS.

SECTION 4.11.  DISCLOSURE.  THE BORROWER HAS DISCLOSED TO THE LENDERS ALL
AGREEMENTS, INSTRUMENTS AND CORPORATE OR OTHER RESTRICTIONS TO WHICH IT OR ANY
RESTRICTED SUBSIDIARY IS SUBJECT, AND ALL OTHER MATTERS KNOWN TO IT, THAT,
INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO RESULT IN A
MATERIAL ADVERSE EFFECT.  NONE OF THE OTHER REPORTS, FINANCIAL STATEMENTS,
CERTIFICATES OR OTHER INFORMATION FURNISHED BY OR ON BEHALF OF THE BORROWER OR
ANY RESTRICTED SUBSIDIARY TO THE ADMINISTRATIVE AGENT OR ANY LENDER IN
CONNECTION WITH THE NEGOTIATION OF THIS

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AGREEMENT OR DELIVERED HEREUNDER (AS MODIFIED OR SUPPLEMENTED BY OTHER
INFORMATION SO FURNISHED) CONTAINS ANY MATERIAL MISSTATEMENT OF FACT OR OMITS TO
STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING; PROVIDED THAT,
WITH RESPECT TO THE PROJECTIONS, THE BORROWER REPRESENTS ONLY THAT SUCH
INFORMATION WAS PREPARED IN GOOD FAITH BASED ON ASSUMPTIONS BELIEVED TO BE
REASONABLE AT THE TIME.

SECTION 4.12.  LABOR MATTERS.  THERE ARE NO STRIKES, LOCKOUTS OR SLOWDOWNS
AGAINST THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES PENDING OR, TO THE
KNOWLEDGE OF THE BORROWER, THREATENED THAT COULD REASONABLY BE EXPECTED TO HAVE
A MATERIAL ADVERSE EFFECT.  THE HOURS WORKED BY AND PAYMENTS MADE TO EMPLOYEES
OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES HAVE NOT BEEN IN VIOLATION OF
THE FAIR LABOR STANDARDS ACT OR ANY OTHER LAW DEALING WITH SUCH MATTERS TO THE
EXTENT THAT SUCH VIOLATION COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

SECTION 4.13.  CAPITALIZATION AND CREDIT PARTY INFORMATION.  SCHEDULE 4.13
LISTS, AS OF THE EFFECTIVE DATE (A) EACH SUBSIDIARY THAT IS AN UNRESTRICTED
SUBSIDIARY, (B) FOR THE BORROWER, ITS FULL LEGAL NAME, ITS JURISDICTION OF
ORGANIZATION AND ITS FEDERAL TAX IDENTIFICATION NUMBER, AND (C) FOR EACH
RESTRICTED SUBSIDIARY ITS FULL LEGAL NAME, ITS JURISDICTION OF ORGANIZATION, ITS
FEDERAL TAX IDENTIFICATION NUMBER, THE NUMBER OF SHARES OF CAPITAL STOCK OR
OTHER EQUITY INTERESTS OUTSTANDING AND THE OWNER(S) OF SUCH EQUITY INTERESTS.

SECTION 4.14.  MARGIN STOCK.  NEITHER THE BORROWER NOR ANY RESTRICTED SUBSIDIARY
IS ENGAGED PRINCIPALLY, OR AS ONE OF ITS IMPORTANT ACTIVITIES, IN THE BUSINESS
OF EXTENDING CREDIT FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN STOCK
(WITHIN THE MEANING OF REGULATION U ISSUED BY THE BOARD), AND NO PART OF THE
PROCEEDS OF ANY LOAN WILL BE USED TO PURCHASE OR CARRY ANY MARGIN STOCK OR TO
EXTEND CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN STOCK.

SECTION 4.15.  OIL AND GAS INTERESTS.  EACH CREDIT PARTY HAS GOOD AND DEFENSIBLE
TITLE TO ALL PROVED RESERVES INCLUDED IN THE OIL AND GAS INTERESTS (FOR PURPOSES
OF THIS SECTION 4.15, “PROVED OIL AND GAS INTERESTS”) DESCRIBED IN THE MOST
RECENT RESERVE REPORT PROVIDED TO THE ADMINISTRATIVE AGENT, FREE AND CLEAR OF
ALL LIENS EXCEPT LIENS PERMITTED PURSUANT TO SECTION 7.02.  ALL SUCH PROVED OIL
AND GAS INTERESTS ARE VALID, SUBSISTING, AND IN FULL FORCE AND EFFECT, AND ALL
RENTALS, ROYALTIES, AND OTHER AMOUNTS DUE AND PAYABLE IN RESPECT THEREOF HAVE
BEEN DULY PAID.  WITHOUT REGARD TO ANY CONSENT OR NON-CONSENT PROVISIONS OF ANY
JOINT OPERATING AGREEMENT COVERING ANY CREDIT PARTY’S PROVED OIL AND GAS
INTERESTS, SUCH CREDIT PARTY’S SHARE OF (A) THE COSTS FOR EACH PROVED OIL AND
GAS INTEREST DESCRIBED IN THE RESERVE REPORT IS NOT MATERIALLY GREATER THAN THE
DECIMAL FRACTION SET FORTH IN THE RESERVE REPORT, BEFORE AND AFTER PAYOUT, AS
THE CASE MAY BE, AND DESCRIBED THEREIN BY THE RESPECTIVE DESIGNATIONS “WORKING
INTERESTS,” “WI,” “GROSS WORKING INTEREST,” “GWI,” OR SIMILAR TERMS (EXCEPT IN
SUCH CASES WHERE THERE IS A CORRESPONDING INCREASE IN THE NET REVENUE INTEREST),
AND (B) PRODUCTION FROM, ALLOCATED TO, OR ATTRIBUTED TO EACH SUCH PROVED OIL AND
GAS INTEREST IS NOT MATERIALLY LESS THAN THE DECIMAL FRACTION SET FORTH IN THE
RESERVE REPORT, BEFORE AND AFTER PAYOUT, AS THE CASE MAY BE, AND DESCRIBED
THEREIN BY THE DESIGNATIONS “NET REVENUE INTEREST,” “NRI,” OR SIMILAR TERMS. 
EACH WELL DRILLED IN RESPECT OF PROVED PRODUCING OIL AND GAS INTERESTS DESCRIBED
IN THE RESERVE REPORT (1) IS CAPABLE OF, AND IS PRESENTLY, EITHER PRODUCING
HYDROCARBONS IN COMMERCIALLY PROFITABLE QUANTITIES OR IN THE PROCESS OF BEING
WORKED OVER OR ENHANCED, AND THE CREDIT PARTY THAT OWNS

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SUCH PROVED PRODUCING OIL AND GAS INTERESTS IS CURRENTLY RECEIVING PAYMENTS FOR
ITS SHARE OF PRODUCTION, WITH NO FUNDS IN RESPECT OF ANY THEREOF BEING PRESENTLY
HELD IN SUSPENSE, OTHER THAN ANY SUCH FUNDS BEING HELD IN SUSPENSE PENDING
DELIVERY OF APPROPRIATE DIVISION ORDERS, AND (2) HAS BEEN DRILLED, BOTTOMED,
COMPLETED, AND OPERATED IN COMPLIANCE WITH ALL APPLICABLE LAWS, IN THE CASE OF
CLAUSES (1) AND (2), EXCEPT WHERE ANY FAILURE TO SATISFY CLAUSE (1) OR TO COMPLY
WITH CLAUSE (2) WOULD NOT HAVE A MATERIAL ADVERSE EFFECT, AND NO SUCH WELL WHICH
IS CURRENTLY PRODUCING HYDROCARBONS IS SUBJECT TO ANY PENALTY IN PRODUCTION BY
REASON OF SUCH WELL HAVING PRODUCED IN EXCESS OF ITS ALLOWABLE PRODUCTION.

SECTION 4.16.  INSURANCE.  THE CERTIFICATE SIGNED BY THE RESPONSIBLE OFFICER
THAT ATTESTS TO THE EXISTENCE AND ADEQUACY OF, AND SUMMARIZES, THE PROPERTY AND
CASUALTY INSURANCE PROGRAM MAINTAINED BY THE CREDIT PARTIES THAT HAS BEEN
FURNISHED BY THE BORROWER TO THE ADMINISTRATIVE AGENT AND THE LENDERS AS OF THE
EFFECTIVE DATE, IS COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS AS OF THE
EFFECTIVE DATE AND DEMONSTRATES THE BORROWER’S AND THE RESTRICTED SUBSIDIARIES’
COMPLIANCE WITH SECTION 6.05.

SECTION 4.17.  SOLVENCY.

(A)           IMMEDIATELY AFTER THE CONSUMMATION OF THE TRANSACTIONS AND
IMMEDIATELY FOLLOWING THE MAKING OF THE INITIAL BORROWING MADE ON THE EFFECTIVE
DATE AND AFTER GIVING EFFECT TO THE APPLICATION OF THE PROCEEDS THEREOF, (1) THE
FAIR VALUE OF THE ASSETS OF THE CREDIT PARTIES ON A CONSOLIDATED BASIS, AT A
FAIR VALUATION, WILL EXCEED THE DEBTS AND LIABILITIES, SUBORDINATED, CONTINGENT
OR OTHERWISE, OF THE CREDIT PARTIES ON A CONSOLIDATED BASIS; (2) THE PRESENT
FAIR SALEABLE VALUE OF THE REAL AND PERSONAL PROPERTY OF THE CREDIT PARTIES ON A
CONSOLIDATED BASIS WILL BE GREATER THAN THE AMOUNT THAT WILL BE REQUIRED TO PAY
THE PROBABLE LIABILITY OF THE CREDIT PARTIES ON A CONSOLIDATED BASIS ON THEIR
DEBTS AND OTHER LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH
DEBTS AND OTHER LIABILITIES BECOME ABSOLUTE AND MATURED; (3) THE CREDIT PARTIES
ON A CONSOLIDATED BASIS WILL BE ABLE TO PAY THEIR DEBTS AND LIABILITIES,
SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND LIABILITIES BECOME
ABSOLUTE AND MATURED; AND (4) THE CREDIT PARTIES ON A CONSOLIDATED BASIS WILL
NOT HAVE UNREASONABLY SMALL CAPITAL WITH WHICH TO CONDUCT THE BUSINESSES IN
WHICH THEY ARE ENGAGED AS SUCH BUSINESSES ARE NOW CONDUCTED AND ARE PROPOSED TO
BE CONDUCTED AFTER THE DATE HEREOF.

(B)           THE CREDIT PARTIES DO NOT INTEND TO, AND DO NOT BELIEVE THAT THEY
WILL, INCUR DEBTS BEYOND THEIR ABILITY TO PAY SUCH DEBTS AS THEY MATURE, TAKING
INTO ACCOUNT THE TIMING OF AND AMOUNTS OF CASH TO BE RECEIVED BY IT AND THE
TIMING OF THE AMOUNTS OF CASH TO BE PAYABLE ON OR IN RESPECT OF ITS
INDEBTEDNESS.

SECTION 4.18.  DEPOSIT ACCOUNTS.  EXCEPT AS SET FORTH ON SCHEDULE 4.18 AND OTHER
DEPOSIT ACCOUNTS MAINTAINED AT FINANCIAL INSTITUTIONS OTHER THAN THE
ADMINISTRATIVE AGENT (THE AGGREGATE BALANCE OF WHICH DOES NOT EXCEED $250,000 AT
ANY TIME FOR ALL SUCH OTHER DEPOSIT ACCOUNTS TAKEN AS A WHOLE), NO CREDIT PARTY
HAS ANY DEPOSIT OR INVESTMENT ACCOUNTS AND NO AFFILIATE OF ANY CREDIT PARTY HAS
ANY DEPOSIT OR INVESTMENT ACCOUNT INTO WHICH PROCEEDS OF HYDROCARBON PRODUCTION
FROM THE OIL AND GAS INTERESTS INCLUDED IN THE BORROWING BASE PROPERTIES ARE
DEPOSITED.  ALL PROCEEDS OF HYDROCARBON PRODUCTION FROM THE OIL AND GAS
INTERESTS INCLUDED IN THE BORROWING BASE PROPERTIES AND ALL DISTRIBUTIONS AND
DIVIDENDS ON ANY EQUITY INTERESTS OWNED

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BY ANY CREDIT PARTY ARE DEPOSITED AND MAINTAINED, FROM THE DATE OF RECEIPT BY
ANY CREDIT PARTY, IN AN ELIGIBLE ACCOUNT.

ARTICLE V

CONDITIONS

SECTION 5.01.  EFFECTIVE DATE.  THE OBLIGATIONS OF THE LENDERS AND THE LENDER
COUNTERPARTIES TO CONTINUE THE ORIGINAL LOANS AND THE EXISTING SWAP AGREEMENTS
AND 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 11.02):

(A)           THE ADMINISTRATIVE AGENT (OR ITS COUNSEL) SHALL HAVE RECEIVED FROM
EACH PARTY HERETO EITHER (I) A COUNTERPART OF THIS AGREEMENT SIGNED ON BEHALF OF
SUCH PARTY OR (II) WRITTEN EVIDENCE SATISFACTORY TO THE ADMINISTRATIVE AGENT
(WHICH MAY INCLUDE TELECOPY TRANSMISSION OF A SIGNED SIGNATURE PAGE OF THIS
AGREEMENT) THAT SUCH PARTY HAS SIGNED A COUNTERPART OF THIS AGREEMENT.

(B)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A FAVORABLE WRITTEN
OPINION (ADDRESSED TO THE ADMINISTRATIVE AGENT AND THE LENDERS AND DATED THE
EFFECTIVE DATE) OF HAYNES AND BOONE, L.L.P., COUNSEL FOR THE CREDIT PARTIES,
SUBSTANTIALLY IN THE FORM OF EXHIBIT B, AND COVERING SUCH OTHER MATTERS RELATING
TO THE CREDIT PARTIES, AND THIS AGREEMENT AS THE MAJORITY LENDERS SHALL
REASONABLY REQUEST AND (II) IF AGREED BY OPINING COUNSEL, OPINIONS DELIVERED IN
CONNECTION WITH THE SOUTHERN GAS PURCHASE AGREEMENT, IF ANY, ADDRESSED TO THE
LENDERS OR ACCOMPANIED BY RELIANCE LETTERS IN FAVOR OF THE LENDERS STATING THAT
THE LENDERS MAY RELY ON SUCH OPINIONS AS THOUGH THEY WERE ADDRESSED TO THEM. 
THE CREDIT PARTIES HEREBY REQUEST SUCH COUNSEL TO DELIVER SUCH OPINION.

(C)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH DOCUMENTS AND
CERTIFICATES AS THE ADMINISTRATIVE AGENT OR ITS COUNSEL MAY REASONABLY REQUEST
RELATING TO THE ORGANIZATION, EXISTENCE AND GOOD STANDING OF EACH CREDIT PARTY,
THE AUTHORIZATION OF THE TRANSACTIONS AND ANY OTHER LEGAL MATTERS RELATING TO
THE CREDIT PARTIES, THIS AGREEMENT OR THE TRANSACTIONS, ALL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT AND ITS COUNSEL.

(D)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE, DATED
THE EFFECTIVE DATE AND SIGNED BY A RESPONSIBLE OFFICER OF THE BORROWER,
CONFIRMING THAT THE CREDIT PARTIES HAVE (I) COMPLIED WITH THE CONDITIONS SET
FORTH IN PARAGRAPHS (A) AND (B) OF SECTION 5.02, (II) COMPLIED WITH THE
COVENANTS SET FORTH IN SECTION 6.05 (AND DEMONSTRATING SUCH COMPLIANCE BY THE
ATTACHMENT OF AN INSURANCE SUMMARY AND INSURANCE CERTIFICATES EVIDENCING THE
COVERAGE DESCRIBED IN SUCH SUMMARY) (III) COMPLIED WITH THE REQUIREMENTS OF
SECTION 6.09 AND SECTION 6.10, AND (IV) SIMULTANEOUSLY WITH THE INITIAL
BORROWING UNDER THIS AGREEMENT AND IN ACCORDANCE WITH APPLICABLE LAW,
CONSUMMATED (OR CAUSED ONE OR MORE OF THE RESTRICTED SUBSIDIARIES TO CONSUMMATE)
THE SOUTHERN GAS ACQUISITION WITHOUT WAIVER OR AMENDMENT OF ANY MATERIAL TERM OR
CONDITION OF THE SOUTHERN GAS PURCHASE AGREEMENT (NOT OTHERWISE CONSENTED TO BY
THE ADMINISTRATIVE AGENT).

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(E)           THE ADMINISTRATIVE AGENT, THE LENDERS AND THE ARRANGER SHALL HAVE
RECEIVED ALL FEES AND OTHER AMOUNTS DUE AND PAYABLE ON OR PRIOR TO THE EFFECTIVE
DATE, AND, TO THE EXTENT INVOICED, REIMBURSEMENT OR PAYMENT OF ALL OUT-OF-POCKET
EXPENSES REQUIRED TO BE REIMBURSED OR PAID BY THE BORROWER HEREUNDER, INCLUDING
ALL FEES, EXPENSES AND DISBURSEMENTS OF COUNSEL FOR THE ADMINISTRATIVE AGENT TO
THE EXTENT INVOICED ON OR PRIOR TO THE EFFECTIVE DATE, TOGETHER WITH SUCH
ADDITIONAL AMOUNTS AS SHALL CONSTITUTE SUCH COUNSEL’S REASONABLE ESTIMATE OF
EXPENSES AND DISBURSEMENTS TO BE INCURRED BY SUCH COUNSEL IN CONNECTION WITH THE
RECORDING AND FILING OF MORTGAGES AND FINANCING STATEMENTS; PROVIDED, THAT, SUCH
ESTIMATE SHALL NOT THEREAFTER PRECLUDE FURTHER SETTLING OF ACCOUNTS BETWEEN THE
BORROWER AND THE ADMINISTRATIVE AGENT.

(F)            THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE MORTGAGES (AND
AMENDMENTS OF MORTGAGES PREVIOUSLY FILED IN CONNECTION WITH THE ORIGINAL CREDIT
AGREEMENT) TO BE EXECUTED ON THE EFFECTIVE DATE PURSUANT TO SECTION 6.09 OF THIS
AGREEMENT, DULY EXECUTED AND DELIVERED BY THE APPROPRIATE CREDIT PARTY, TOGETHER
WITH SUCH OTHER ASSIGNMENTS, CONVEYANCES, AMENDMENTS, AGREEMENTS AND OTHER
WRITINGS, INCLUDING, WITHOUT LIMITATION, UCC-1 FINANCING STATEMENTS, TAX
AFFIDAVITS AND APPLICABLE DEPARTMENT OF REVENUE DOCUMENTATION, CREATING LIENS
PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER PERSON, SUBJECT TO PERMITTED
ENCUMBRANCES, IN OIL AND GAS INTERESTS HAVING AN ENGINEERED VALUE EQUAL TO OR
GREATER THAN THE ENGINEERED VALUE REQUIRED UNDER SECTION 6.09.

(G)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED TITLE INFORMATION
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT WITH RESPECT TO THE
MORTGAGED PROPERTIES, OR THE PORTION THEREOF, REQUIRED BY SECTION 6.10 ON THE
EFFECTIVE DATE.

(H)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE PLEDGE AGREEMENT
(OR AN AMENDMENT OF THE PLEDGE AGREEMENT UNDER AND AS DEFINED IN THE ORIGINAL
CREDIT AGREEMENT) TO BE EXECUTED ON THE EFFECTIVE DATE PURSUANT TO SECTION 6.14
OF THIS AGREEMENT, DULY EXECUTED AND DELIVERED BY THE APPROPRIATE CREDIT PARTY,
TOGETHER WITH SUCH OTHER ASSIGNMENTS, CONVEYANCES, AMENDMENTS, AGREEMENTS AND
OTHER WRITINGS, INCLUDING, WITHOUT LIMITATION, UCC-1 FINANCING STATEMENTS AND
CONTROL AGREEMENTS, CREATING LIENS PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER
PERSON, SUBJECT TO THE LIENS PERMITTED UNDER SECTION 7.02, IN ALL EQUITY
INTERESTS OF EACH RESTRICTED SUBSIDIARY NOW OR HEREAFTER OWNED BY BORROWER OR
ANY RESTRICTED SUBSIDIARY.

(I)            ON OR PRIOR TO THE EFFECTIVE DATE, THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED A BORROWING REQUEST ACCEPTABLE TO THE ADMINISTRATIVE AGENT SETTING
FORTH THE LOANS REQUESTED BY THE BORROWER ON THE EFFECTIVE DATE, THE TYPE AND
AMOUNT OF EACH LOAN AND THE ACCOUNTS TO WHICH SUCH LOANS ARE TO BE FUNDED;
PROVIDED THAT ALL BORROWINGS ON THE EFFECTIVE DATE SHALL BE ABR BORROWINGS.

(J)            IF THE INITIAL BORROWING INCLUDES THE ISSUANCE OF A LETTER OF
CREDIT, THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A WRITTEN REQUEST IN
ACCORDANCE WITH SECTION 2.07 OF THIS AGREEMENT.

(K)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH FINANCING
STATEMENTS (INCLUDING, WITHOUT LIMITATION, THE FINANCING STATEMENTS REFERENCED
IN SUBCLAUSE (F) AND (H) ABOVE) AS ADMINISTRATIVE AGENT SHALL SPECIFY TO FULLY
EVIDENCE AND PERFECT ALL LIENS CONTEMPLATED BY THE LOAN DOCUMENTS, ALL OF WHICH
SHALL BE FILED OF RECORD IN SUCH JURISDICTIONS AS THE ADMINISTRATIVE AGENT SHALL
REQUIRE IN ITS SOLE DISCRETION.

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(L)            THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED REASONABLY
SATISFACTORY EVIDENCE THAT AFTER GIVING EFFECT TO THE TRANSACTIONS, AGGREGATE
CREDIT EXPOSURE ON THE EFFECTIVE DATE SHALL NOT EXCEED $760,000,000.

(M)          THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A SOLVENCY CERTIFICATE
IN THE FORM ATTACHED HERETO AS EXHIBIT D, DATED THE EFFECTIVE DATE, AND SIGNED
BY A RESPONSIBLE OFFICER OF THE BORROWER.

(N)           THE LENDERS SHALL HAVE RECEIVED FROM THE BORROWER (I) A PRO FORMA
CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES AS
OF THE EFFECTIVE DATE, AND REFLECTING THE CONSUMMATION OF THE TRANSACTIONS, THE
RELATED FINANCINGS AND OTHER TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS TO
OCCUR ON OR PRIOR TO THE EFFECTIVE DATE, WHICH PRO FORMA BALANCE SHEET SHALL BE
PREPARED CONSISTENT IN ALL RESPECTS WITH THE INFORMATION PREVIOUSLY PROVIDED BY
THE BORROWER TO THE ADMINISTRATIVE AGENT AND THE LENDERS AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT, (II) A PRO FORMA STATEMENT
OF OPERATIONS OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES FOR THE TWELVE
MONTH PERIOD ENDING AS OF THE DATE OF THE PRO FORMA BALANCE SHEET DESCRIBED IN
THE IMMEDIATELY PRECEDING CLAUSE (I), AND (III) THE PROJECTIONS.

(O)           EACH CREDIT PARTY SHALL HAVE OBTAINED ALL APPROVALS REQUIRED FROM
ANY GOVERNMENTAL AUTHORITY AND ALL CONSENTS OF OTHER PERSONS, IN EACH CASE THAT
ARE NECESSARY OR ADVISABLE IN CONNECTION WITH THE TRANSACTIONS AND EACH OF THE
FOREGOING SHALL BE IN FULL FORCE AND EFFECT AND IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT.  ALL APPLICABLE WAITING PERIODS SHALL
HAVE EXPIRED WITHOUT ANY ACTION BEING TAKEN OR THREATENED BY ANY COMPETENT
AUTHORITY WHICH WOULD RESTRAIN, PREVENT OR OTHERWISE IMPOSE ADVERSE CONDITIONS
ON THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, THE PREFERRED STOCK
DOCUMENTS, THE SOUTHERN GAS PURCHASE DOCUMENTS OR THE FINANCING THEREOF AND NO
ACTION, REQUEST FOR STAY, PETITION FOR REVIEW OR REHEARING, RECONSIDERATION, OR
APPEAL WITH RESPECT TO ANY OF THE FOREGOING SHALL BE PENDING, AND THE TIME FOR
ANY APPLICABLE AGENCY TO TAKE ACTION TO SET ASIDE ITS CONSENT ON ITS OWN MOTION
SHALL HAVE EXPIRED.

(P)           THERE SHALL NOT EXIST ANY ACTION, SUIT, INVESTIGATION, LITIGATION
OR PROCEEDING OR OTHER LEGAL OR REGULATORY DEVELOPMENTS, PENDING OR THREATENED
IN ANY COURT OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY THAT, IN THE
REASONABLE OPINION OF ADMINISTRATIVE AGENT, SINGLY OR IN THE AGGREGATE,
MATERIALLY IMPAIRS THE TRANSACTIONS, THE FINANCING THEREOF OR ANY OF THE OTHER
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, THE PREFERRED STOCK DOCUMENTS
OR THE SOUTHERN GAS PURCHASE DOCUMENTS OR THAT COULD HAVE A MATERIAL ADVERSE
EFFECT.

(Q)           ALL PARTNERSHIP, CORPORATE AND OTHER PROCEEDINGS TAKEN OR TO BE
TAKEN IN CONNECTION WITH THE TRANSACTIONS AND ALL DOCUMENTS INCIDENTAL THERETO
SHALL BE REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO ADMINISTRATIVE AGENT
AND ITS COUNSEL, AND ADMINISTRATIVE AGENT AND SUCH COUNSEL SHALL HAVE RECEIVED
ALL SUCH COUNTERPART ORIGINALS OR CERTIFIED COPIES OF SUCH DOCUMENTS AS
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

(R)            THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED REASONABLY
SATISFACTORY EVIDENCE THAT THE SOUTHERN GAS HEDGES ASSIGNED TO ONE OR MORE OF
THE CREDIT PARTIES ON THE EFFECTIVE DATE ARE IN NOTIONAL AMOUNTS COVERING AT
LEAST EIGHTY PERCENT (80%) OF THE FORECASTED PRODUCTION FROM

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PROVED PRODUCING RESERVES, INCLUDED IN THE SOUTHERN GAS ASSETS (OTHER THAN
NATURAL GAS LIQUIDS) THROUGH DECEMBER 31, 2009.

(S)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED REASONABLY
SATISFACTORY EVIDENCE THAT THE BORROWER HAS RECEIVED AT LEAST $2,000,000,000 AS
GROSS CASH PROCEEDS FROM THE ISSUANCE OF THE PREFERRED STOCK PURSUANT TO THE
PREFERRED STOCK DOCUMENTS AND OTHERWISE ON TERMS AND CONDITIONS REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THAT AFTER GIVING EFFECT TO ANY
PERMITTED CONTRIBUTIONS TO OR INVESTMENTS IN THE MLP SUBSIDIARIES ON OR AFTER
THE DATE SUCH PREFERRED STOCK WAS ISSUED, THE BORROWER RETAINED NOT LESS THAN
$330,000,000 OF SUCH PROCEEDS MINUS ALL TAXES AND CUSTOMARY FEES AND (INCLUDING
LEGAL FEES, ACCOUNTING FEES AND ADVISORY FEES), COMMISSIONS, DISCOUNTS, COSTS
AND OTHER EXPENSES INCURRED IN CONNECTION THEREWITH.

(T)            THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL HAVE RECEIVED THE
AUDITED FINANCIAL STATEMENTS DESCRIBED IN SECTION 4.04(A).

(U)           THE BORROWER SHALL HAVE DELIVERED TO THE ADMINISTRATIVE AGENT A
DESCRIPTION OF THE SOURCES AND USES OF FUNDING FOR THE TRANSACTIONS THAT IS
CONSISTENT WITH THE TERMS OF THE LOAN DOCUMENTS, THE PREFERRED STOCK DOCUMENTS
AND THE SOUTHERN GAS PURCHASE DOCUMENTS AND OTHERWISE SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND THE ARRANGER AND THE CAPITALIZATION, STRUCTURE AND
EQUITY OWNERSHIP OF THE BORROWER AFTER THE TRANSACTIONS SHALL BE SATISFACTORY TO
THE LENDERS IN ALL RESPECTS.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. 
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 11.02) at or prior to 3:00 p.m. on May 31, 2007 (and, in the
event such conditions are not so satisfied or waived, the Aggregate Commitment
shall terminate at such time).

SECTION 5.02.  EACH CREDIT EVENT.  THE OBLIGATION OF EACH LENDER TO MAKE A LOAN
ON THE OCCASION OF ANY BORROWING, AND OF THE ISSUING BANK TO ISSUE, AMEND, RENEW
OR EXTEND ANY LETTER OF CREDIT, IS SUBJECT TO THE SATISFACTION OF THE FOLLOWING
CONDITIONS:

(A)           THE REPRESENTATIONS AND WARRANTIES OF EACH CREDIT PARTY SET FORTH
IN THE LOAN DOCUMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND
AS OF THE DATE OF SUCH BORROWING OR THE DATE OF ISSUANCE, AMENDMENT, RENEWAL OR
EXTENSION OF SUCH LETTER OF CREDIT, AS APPLICABLE EXCEPT TO THE EXTENT THAT SUCH
REPRESENTATIONS AND WARRANTIES SPECIFICALLY REFER TO AN EARLIER DATE, IN WHICH
CASE THEY SHALL BE TRUE AND CORRECT AS OF SUCH EARLIER DATE.

(B)           AT THE TIME OF AND IMMEDIATELY AFTER GIVING EFFECT TO SUCH
BORROWING OR THE ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION OF SUCH LETTER OF
CREDIT, AS APPLICABLE, NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING.

(C)           AT THE TIME OF AND IMMEDIATELY AFTER GIVING EFFECT TO SUCH
BORROWING OR THE ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION OF SUCH LETTER OF
CREDIT, AS APPLICABLE, NO BORROWING BASE DEFICIENCY EXISTS OR WOULD BE CAUSED
THEREBY.

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Each Borrowing and each issuance, amendment, renewal or extension of a 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 paragraphs (a), (b)
and (c) of this Section.

ARTICLE VI

AFFIRMATIVE COVENANTS

Until the Aggregate Commitment has expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each Credit Party covenants and agrees
with the Lenders that:

SECTION 6.01.  FINANCIAL STATEMENTS; OTHER INFORMATION.  THE BORROWER WILL
FURNISH TO THE ADMINISTRATIVE AGENT AND EACH LENDER:

(A)           WITHIN NINETY (90) DAYS AFTER THE END OF EACH FISCAL YEAR OF THE
BORROWER, THE AUDITED CONSOLIDATED (AND UNAUDITED CONSOLIDATING) BALANCE SHEET
AND RELATED CONSOLIDATED (AND WITH RESPECT TO STATEMENTS OF OPERATIONS,
CONSOLIDATING) STATEMENTS OF OPERATIONS, STOCKHOLDERS’ EQUITY AND CASH FLOWS OF
THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES AS OF THE END OF AND FOR SUCH
YEAR, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES FOR THE
PREVIOUS FISCAL YEAR, ALL REPORTED ON BY A FIRM OF INDEPENDENT PUBLIC
ACCOUNTANTS REASONABLY ACCEPTABLE TO 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
AND CONSOLIDATING 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 AND CONSOLIDATING BASIS IN
ACCORDANCE WITH GAAP CONSISTENTLY APPLIED;

(B)           WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH FISCAL QUARTER
OF THE BORROWER, THE CONSOLIDATED (AND UNAUDITED CONSOLIDATING) BALANCE SHEET
AND RELATED CONSOLIDATED (AND WITH RESPECT TO STATEMENTS OF OPERATIONS,
CONSOLIDATING) STATEMENTS OF OPERATIONS AND CASH FLOWS OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES AS OF THE END OF AND FOR SUCH FISCAL QUARTER AND THE
THEN ELAPSED PORTION OF THE FISCAL YEAR, SETTING FORTH IN EACH CASE IN
COMPARATIVE FORM THE FIGURES FOR THE CORRESPONDING PERIOD OR PERIODS OF (OR, IN
THE CASE OF THE BALANCE SHEET, AS OF THE END OF) THE PREVIOUS FISCAL YEAR, ALL
CERTIFIED BY A RESPONSIBLE OFFICER AS PRESENTING FAIRLY IN ALL MATERIAL RESPECTS
THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES ON A CONSOLIDATED AND CONSOLIDATING BASIS IN
ACCORDANCE WITH GAAP CONSISTENTLY APPLIED, SUBJECT TO NORMAL YEAR-END AUDIT
ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES;

(C)           CONCURRENTLY WITH ANY DELIVERY OF FINANCIAL STATEMENTS UNDER
CLAUSE (A) OR (B) ABOVE, A CERTIFICATE IN A FORM REASONABLY ACCEPTABLE TO
ADMINISTRATIVE AGENT SIGNED BY A RESPONSIBLE OFFICER OF THE BORROWER
(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, AND (II) SETTING FORTH REASONABLY DETAILED
CALCULATIONS DEMONSTRATING COMPLIANCE WITH SECTION 7.11;

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(D)           PROMPTLY AFTER THE SAME BECOME PUBLICLY AVAILABLE, COPIES OF ALL
PERIODIC AND OTHER REPORTS, PROXY STATEMENTS AND OTHER MATERIALS FILED BY THE
BORROWER OR ANY SUBSIDIARY WITH THE SECURITIES AND EXCHANGE COMMISSION, OR ANY
GOVERNMENTAL AUTHORITY SUCCEEDING TO ANY OR ALL OF THE FUNCTIONS OF SAID
COMMISSION, OR WITH ANY NATIONAL SECURITIES EXCHANGE, OR DISTRIBUTED BY THE
BORROWER TO ITS SHAREHOLDERS GENERALLY, AS THE CASE MAY BE;

(E)           AS SOON AS AVAILABLE, AND IN ANY EVENT NO LATER THAN MARCH 1 AND
SEPTEMBER 1 OF EACH YEAR, THE RESERVE REPORTS REQUIRED ON SUCH DATES PURSUANT TO
SECTION 3.01 TOGETHER WITH A CERTIFICATE IN A FORM REASONABLY ACCEPTABLE TO
ADMINISTRATIVE AGENT SIGNED BY A RESPONSIBLE OFFICER OF THE BORROWER 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;

(F)            TOGETHER WITH THE RESERVE REPORTS REQUIRED UNDER CLAUSE (E)
ABOVE, (I) A REPORT, IN REASONABLE DETAIL, SETTING FORTH THE SWAP AGREEMENTS
THEN IN EFFECT, THE NOTIONAL VOLUMES OF AND PRICES FOR, ON A MONTHLY BASIS AND
IN THE AGGREGATE, THE CRUDE OIL AND NATURAL GAS FOR EACH SUCH SWAP AGREEMENT AND
THE TERM OF EACH SUCH SWAP AGREEMENT; (II) A TRUE AND CORRECT SCHEDULE OF THE
MORTGAGED PROPERTIES, (III) THE PERCENTAGE OF THE ENGINEERED VALUE OF THE
BORROWING BASE THAT THE MORTGAGED PROPERTIES REPRESENTS AND (IV) A DESCRIPTION
OF THE ADDITIONAL OIL AND GAS INTERESTS, IF ANY, TO BE MORTGAGED BY THE CREDIT
PARTIES TO COMPLY WITH SECTION 6.09 AND THE ENGINEERED VALUE THEREOF;

(G)           IF REQUESTED BY MAJORITY LENDERS AND WITHIN THIRTY (30) DAYS OF
SUCH REQUEST, A MONTHLY REPORT, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT, INDICATING THE NEXT PRECEDING MONTH’S SALES VOLUMES, SALES
REVENUES, PRODUCTION TAXES, OPERATING EXPENSES AND NET OPERATING INCOME FROM THE
BORROWING BASE PROPERTIES, WITH DETAIL, CALCULATIONS AND WORKSHEETS, ALL IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT; AND

(H)           PROMPTLY FOLLOWING ANY REQUEST THEREFOR, SUCH OTHER INFORMATION
REGARDING THE OPERATIONS, BUSINESS AFFAIRS AND FINANCIAL CONDITION OF ANY CREDIT
PARTY, OR COMPLIANCE WITH THE TERMS OF THIS AGREEMENT, AS THE ADMINISTRATIVE
AGENT OR ANY LENDER MAY REASONABLY REQUEST.

Documents required to be delivered pursuant to Section 6.01(a) or Section
6.01(b) or Section 6.01(d) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date (i) on which the Borrower
posts such documents, or provides a link thereto on the Borrower’s website on
the Internet at the website address identified in Section 11.01 on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents.  Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.01(c) to the Administrative Agent.

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Except for such Compliance Certificates, the Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders and the Issuing Bank materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and (b) certain
of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to the Borrower or its
securities) (each, a “Public Lender”).  The Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent, the Arrangers, the Issuing Bank and the
Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) the Administrative Agent and the
Arrangers shall be entitled to treat Borrower’s Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Investor.”

SECTION 6.02.  NOTICES OF MATERIAL EVENTS.  THE BORROWER WILL FURNISH TO THE
ADMINISTRATIVE AGENT AND EACH LENDER PROMPT WRITTEN NOTICE OF THE FOLLOWING:

(A)           THE OCCURRENCE OF ANY DEFAULT;

(B)           THE FILING OR COMMENCEMENT OF ANY ACTION, SUIT OR PROCEEDING BY OR
BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY AGAINST OR AFFECTING ANY CREDIT
PARTY OR ANY AFFILIATE THEREOF THAT, IF ADVERSELY DETERMINED, COULD REASONABLY
BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT;

(C)           THE OCCURRENCE OF ANY ERISA EVENT THAT, ALONE OR TOGETHER WITH ANY
OTHER ERISA EVENTS THAT HAVE OCCURRED, COULD REASONABLY BE EXPECTED TO RESULT IN
LIABILITY OF THE BORROWER AND THE RESTRICTED SUBSIDIARIES IN AN AGGREGATE AMOUNT
EXCEEDING $5,000,000;

(D)           ANY WRITTEN NOTICE OR WRITTEN CLAIM TO THE EFFECT THAT ANY CREDIT
PARTY IS OR MAY BE LIABLE TO ANY PERSON AS A RESULT OF THE RELEASE BY ANY CREDIT
PARTY, OR ANY OTHER PERSON OF ANY HAZARDOUS MATERIALS INTO THE ENVIRONMENT,
WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

(E)           ANY WRITTEN NOTICE ALLEGING ANY VIOLATION OF ANY ENVIRONMENTAL LAW
BY ANY CREDIT PARTY, WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT;

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(F)            THE OCCURRENCE OF ANY MATERIAL BREACH OR DEFAULT UNDER, OR
REPUDIATION OR TERMINATION OF, ANY MATERIAL SALES CONTRACT THAT RESULTS IN, OR
COULD REASONABLY BE EXPECTED TO RESULT IN, A MATERIAL ADVERSE EFFECT;

(G)           THE OCCURRENCE OF ANY MATERIAL BREACH OR DEFAULT UNDER A
REPUDIATION OR TERMINATION OF, ANY MLP AGREEMENT;

(H)           THE RECEIPT BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY OF ANY
MANAGEMENT LETTER OR COMPARABLE ANALYSIS PREPARED BY THE AUDITORS FOR THE
BORROWER OR ANY SUCH RESTRICTED SUBSIDIARY; AND

(I)            ANY OTHER DEVELOPMENT THAT RESULTS IN, OR COULD REASONABLY BE
EXPECTED TO RESULT IN, A MATERIAL ADVERSE EFFECT.

Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer or other executive officer of the Borrower 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 6.03.  EXISTENCE; CONDUCT OF BUSINESS.  THE BORROWER WILL, AND WILL
CAUSE EACH RESTRICTED SUBSIDIARY TO, DO OR CAUSE TO BE DONE ALL THINGS NECESSARY
TO PRESERVE, RENEW AND KEEP IN FULL FORCE AND EFFECT ITS LEGAL EXISTENCE AND THE
RIGHTS, LICENSES, PERMITS, PRIVILEGES AND FRANCHISES MATERIAL TO THE CONDUCT OF
ITS BUSINESS; PROVIDED THAT THE FOREGOING SHALL NOT PROHIBIT ANY MERGER,
CONSOLIDATION, LIQUIDATION OR DISSOLUTION PERMITTED UNDER SECTION 7.03.

SECTION 6.04.  PAYMENT OF OBLIGATIONS.  THE BORROWER WILL, AND WILL CAUSE EACH
RESTRICTED SUBSIDIARY TO, PAY ITS OBLIGATIONS, INCLUDING TAX LIABILITIES, THAT,
IF NOT PAID, COULD RESULT IN A MATERIAL ADVERSE EFFECT BEFORE THE SAME SHALL
BECOME DELINQUENT OR IN DEFAULT, EXCEPT WHERE (A) THE VALIDITY OR AMOUNT THEREOF
IS BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS, (B) THE BORROWER OR
SUCH RESTRICTED SUBSIDIARY HAS SET ASIDE ON ITS BOOKS ADEQUATE RESERVES WITH
RESPECT THERETO IN ACCORDANCE WITH GAAP AND (C) THE FAILURE TO MAKE PAYMENT
PENDING SUCH CONTEST COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT.

SECTION 6.05.  MAINTENANCE OF PROPERTIES; INSURANCE.  THE BORROWER WILL, AND
WILL CAUSE EACH RESTRICTED SUBSIDIARY AND USE COMMERCIALLY REASONABLE EFFORTS TO
CAUSE EACH OPERATOR OF BORROWING BASE PROPERTIES TO, (A) KEEP AND MAINTAIN ALL
PROPERTY MATERIAL TO THE CONDUCT OF ITS BUSINESS IN GOOD WORKING ORDER AND
CONDITION, ORDINARY WEAR AND TEAR EXCEPTED, AND (B) MAINTAIN, WITH FINANCIALLY
SOUND AND REPUTABLE INSURANCE COMPANIES, INSURANCE IN SUCH AMOUNTS AND AGAINST
SUCH RISKS AS ARE CUSTOMARILY MAINTAINED BY COMPANIES ENGAGED IN THE SAME OR
SIMILAR BUSINESSES OPERATING IN THE SAME OR SIMILAR LOCATIONS.  ON OR PRIOR TO
THE EFFECTIVE DATE AND THEREAFTER, UPON REQUEST OF THE ADMINISTRATIVE AGENT, THE
BORROWER WILL FURNISH OR CAUSE TO BE FURNISHED TO THE ADMINISTRATIVE AGENT FROM
TIME TO TIME A SUMMARY OF THE RESPECTIVE INSURANCE COVERAGE OF THE BORROWER AND
ITS RESTRICTED SUBSIDIARIES IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT, AND, IF REQUESTED, WILL FURNISH THE ADMINISTRATIVE AGENT
COPIES OF THE APPLICABLE POLICIES.  UPON DEMAND BY ADMINISTRATIVE AGENT, THE
BORROWER WILL CAUSE ANY INSURANCE POLICIES COVERING ANY SUCH PROPERTY TO BE
ENDORSED (A) TO PROVIDE THAT SUCH POLICIES MAY NOT BE CANCELLED, REDUCED OR
AFFECTED IN ANY MANNER FOR ANY

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REASON WITHOUT FIFTEEN (15) DAYS PRIOR NOTICE TO ADMINISTRATIVE AGENT, AND (B)
TO PROVIDE FOR SUCH OTHER MATTERS AS THE LENDERS MAY REASONABLY REQUIRE.

SECTION 6.06.  BOOKS AND RECORDS; INSPECTION RIGHTS.  THE BORROWER WILL, AND
WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, KEEP PROPER BOOKS OF RECORD AND
ACCOUNT IN WHICH FULL, TRUE AND CORRECT ENTRIES ARE MADE OF ALL DEALINGS AND
TRANSACTIONS IN RELATION TO ITS BUSINESS AND ACTIVITIES.  THE BORROWER WILL, AND
WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, PERMIT ANY REPRESENTATIVES DESIGNATED
BY THE ADMINISTRATIVE AGENT OR ANY LENDER, UPON REASONABLE PRIOR NOTICE, TO
VISIT AND INSPECT ITS PROPERTIES, TO EXAMINE AND MAKE EXTRACTS FROM ITS BOOKS
AND RECORDS, AND TO DISCUSS ITS AFFAIRS, FINANCES AND CONDITION WITH ITS
OFFICERS AND, PROVIDED AN OFFICER OF THE BORROWER HAS THE REASONABLE OPPORTUNITY
TO PARTICIPATE, ITS INDEPENDENT ACCOUNTANTS, ALL AT SUCH REASONABLE TIMES AND AS
OFTEN AS REASONABLY REQUESTED.

SECTION 6.07.  COMPLIANCE WITH LAWS.  THE BORROWER WILL, AND WILL CAUSE EACH
RESTRICTED SUBSIDIARY TO, COMPLY WITH ALL LAWS, RULES, REGULATIONS AND ORDERS OF
ANY GOVERNMENTAL AUTHORITY APPLICABLE TO IT OR ITS PROPERTY, EXCEPT WHERE THE
FAILURE TO DO SO, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

SECTION 6.08.  USE OF PROCEEDS AND LETTERS OF CREDIT.  THE PROCEEDS OF THE LOANS
WILL BE USED ONLY TO (A) FINANCE THE SOUTHERN GAS ACQUISITION, (B) REPAY AMOUNTS
OUTSTANDING UNDER THE ORIGINAL CREDIT AGREEMENT, (C) PAY THE FEES, EXPENSES AND
TRANSACTION COSTS OF THE TRANSACTIONS, (D) SATISFY REIMBURSEMENT OBLIGATIONS
WITH RESPECT TO LETTERS OF CREDIT, (E) MAKE RESTRICTED PAYMENTS PERMITTED UNDER
SECTION 7.06, AND (F) FINANCE THE WORKING CAPITAL NEEDS OF THE BORROWER,
INCLUDING CAPITAL EXPENDITURES, AND FOR GENERAL CORPORATE PURPOSES OF THE
BORROWER AND THE GUARANTORS, IN THE ORDINARY COURSE OF BUSINESS, INCLUDING THE
EXPLORATION, ACQUISITION AND DEVELOPMENT OF OIL AND GAS INTERESTS.  NO PART OF
THE PROCEEDS OF ANY LOAN WILL BE USED, WHETHER DIRECTLY OR INDIRECTLY, TO
PURCHASE OR CARRY ANY MARGIN STOCK (AS DEFINED IN REGULATION U ISSUED BY THE
BOARD).  LETTERS OF CREDIT WILL BE ISSUED ONLY TO SUPPORT GENERAL CORPORATE
PURPOSES OF THE BORROWER AND THE RESTRICTED SUBSIDIARIES.

SECTION 6.09.  MORTGAGES.  EACH BORROWER WILL, AND WILL CAUSE EACH GUARANTOR TO,
EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED
PARTIES, MORTGAGES IN FORM AND SUBSTANCE ACCEPTABLE TO THE ADMINISTRATIVE AGENT
TOGETHER WITH SUCH OTHER ASSIGNMENTS, CONVEYANCES, AMENDMENTS, AGREEMENTS AND
OTHER WRITINGS, INCLUDING, WITHOUT LIMITATION, UCC-1 FINANCING STATEMENTS (EACH
DULY AUTHORIZED AND EXECUTED, AS APPLICABLE) AS THE ADMINISTRATIVE AGENT SHALL
DEEM NECESSARY OR APPROPRIATE TO GRANT, EVIDENCE, PERFECT AND MAINTAIN LIENS IN
NOT LESS THAN EIGHTY PERCENT (80%) OF THE ENGINEERED VALUE OF THE BORROWING BASE
PROPERTIES.

SECTION 6.10.  TITLE DATA.  THE BORROWER WILL, AND WILL CAUSE EACH GUARANTOR TO,
DELIVER TO THE ADMINISTRATIVE AGENT SUCH OPINIONS OF COUNSEL OR OTHER EVIDENCE
OF TITLE AS THE ADMINISTRATIVE AGENT SHALL DEEM REASONABLY NECESSARY OR
APPROPRIATE TO VERIFY (A) AT ALL TIMES FROM AND AFTER THE EFFECTIVE DATE, NOT
LESS THAN (I) NINETY PERCENT (90%) OF THE ENGINEERED VALUE OF THE MORTGAGED
PROPERTIES OF THE BORROWER AND THE GUARANTORS TAKEN AS A WHOLE (OTHER THAN
MORTGAGED PROPERTIES THAT ARE APPALACHIA PROPERTIES) AND (II) FORTY-FIVE PERCENT
(45%) OF THE ENGINEERED VALUE OF THE MORTGAGED PROPERTIES THAT ARE APPALACHIA
PROPERTIES, AND (B) THE

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VALIDITY, PERFECTION AND PRIORITY OF THE LIENS CREATED BY SUCH MORTGAGES AND
SUCH OTHER MATTERS REGARDING SUCH MORTGAGES AS ADMINISTRATIVE AGENT SHALL
REASONABLY REQUEST.

SECTION 6.11.  SWAP AGREEMENTS.  THE BORROWER WILL, AND WILL CAUSE EACH
RESTRICTED SUBSIDIARY TO, MAINTAIN THE EXISTING SWAP AGREEMENTS AND NONE OF THE
EXISTING SWAP AGREEMENTS MAY BE AMENDED, MODIFIED OR CANCELLED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE MAJORITY LENDERS.  UPON THE REQUEST OF THE MAJORITY
LENDERS, THE BORROWER AND EACH RESTRICTED SUBSIDIARY SHALL USE THEIR
COMMERCIALLY REASONABLE EFFORTS TO CAUSE EACH SWAP AGREEMENT TO WHICH THE
BORROWER OR ANY RESTRICTED SUBSIDIARY IS A PARTY TO (A) BE COLLATERALLY ASSIGNED
TO THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES AND (B) UPON
THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT UNDER SUCH AGREEMENT OR
CONTRACT, (I) TO PERMIT THE LENDERS TO CURE SUCH DEFAULT OR EVENT OF DEFAULT AND
ASSUME THE OBLIGATIONS OF SUCH CREDIT PARTY UNDER SUCH AGREEMENT OR CONTRACT AND
(II) TO PROHIBIT THE TERMINATION OF SUCH AGREEMENT OR CONTRACT BY THE
COUNTERPARTY THERETO IF THE LENDERS ASSUME THE OBLIGATIONS OF SUCH CREDIT PARTY
UNDER SUCH AGREEMENT OR CONTRACT AND THE LENDERS TAKE THE ACTIONS REQUIRED UNDER
THE FOREGOING CLAUSE (I).  UPON THE REQUEST OF THE ADMINISTRATIVE AGENT, THE
BORROWER SHALL, WITHIN THIRTY (30) DAYS OF SUCH REQUEST, PROVIDE TO THE
ADMINISTRATIVE AGENT AND EACH LENDER COPIES OF ALL AGREEMENTS, DOCUMENTS AND
INSTRUMENTS EVIDENCING THE SWAP AGREEMENTS NOT PREVIOUSLY DELIVERED TO THE
ADMINISTRATIVE AGENT AND LENDERS, CERTIFIED AS TRUE AND CORRECT BY A RESPONSIBLE
OFFICER OF THE BORROWER, AND SUCH OTHER INFORMATION REGARDING SUCH SWAP
AGREEMENTS AS THE ADMINISTRATIVE AGENT AND LENDERS MAY REASONABLY REQUEST.

SECTION 6.12.  OPERATION OF OIL AND GAS INTERESTS.

(A)           EACH BORROWER WILL, AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO,
MAINTAIN, DEVELOP AND OPERATE ITS OIL AND GAS INTERESTS IN A GOOD AND
WORKMANLIKE MANNER, AND OBSERVE AND COMPLY WITH ALL OF THE TERMS AND PROVISIONS,
EXPRESS OR IMPLIED, OF ALL OIL AND GAS LEASES RELATING TO SUCH OIL AND GAS
INTERESTS SO LONG AS SUCH OIL AND GAS INTERESTS ARE CAPABLE OF PRODUCING
HYDROCARBONS AND ACCOMPANYING ELEMENTS IN PAYING QUANTITIES, EXCEPT WHERE SUCH
FAILURE TO COMPLY COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.

(B)           BORROWER WILL, AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO,
COMPLY IN ALL RESPECTS WITH ALL CONTRACTS AND AGREEMENTS APPLICABLE TO OR
RELATING TO ITS OIL AND GAS INTERESTS OR THE PRODUCTION AND SALE OF HYDROCARBONS
AND ACCOMPANYING ELEMENTS THEREFROM, EXCEPT TO THE EXTENT A FAILURE TO SO COMPLY
COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

SECTION 6.13.  RESTRICTED SUBSIDIARIES.  IN THE EVENT ANY PERSON IS OR BECOMES A
RESTRICTED SUBSIDIARY, BORROWER WILL (A) PROMPTLY TAKE ALL ACTION NECESSARY TO
COMPLY WITH SECTION 6.14, (B) PROMPTLY TAKE ALL SUCH ACTION AND EXECUTE AND
DELIVER, OR CAUSE TO BE EXECUTED AND DELIVERED, TO THE ADMINISTRATIVE AGENT ALL
SUCH DOCUMENTS, OPINIONS, INSTRUMENTS, AGREEMENTS, AND CERTIFICATES SIMILAR TO
THOSE DESCRIBED IN SECTION 5.01(B) AND SECTION 5.01(C) THAT THE ADMINISTRATIVE
AGENT MAY REQUEST, AND (C) PROMPTLY CAUSE SUCH RESTRICTED SUBSIDIARY TO (I)
BECOME A PARTY TO THIS AGREEMENT AND GUARANTEE THE OBLIGATIONS BY EXECUTING AND
DELIVERING TO THE ADMINISTRATIVE AGENT A COUNTERPART AGREEMENT IN THE FORM OF
EXHIBIT C, AND (II) TO THE EXTENT REQUIRED TO COMPLY WITH SECTION 6.09 OR AS
REQUESTED BY THE ADMINISTRATIVE AGENT, EXECUTE AND DELIVER MORTGAGES AND OTHER
SECURITY INSTRUMENTS CREATING LIENS PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER

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PERSON, SUBJECT TO PERMITTED ENCUMBRANCES, IN SUCH RESTRICTED SUBSIDIARY’S OIL
AND GAS INTERESTS AND OTHER ASSETS.  UPON DELIVERY OF ANY SUCH COUNTERPART
AGREEMENT TO THE ADMINISTRATIVE AGENT, NOTICE OF WHICH IS HEREBY WAIVED BY EACH
CREDIT PARTY, SUCH RESTRICTED SUBSIDIARY SHALL BE A GUARANTOR AND SHALL BE AS
FULLY A PARTY HERETO AS IF SUCH RESTRICTED SUBSIDIARY WERE AN ORIGINAL SIGNATORY
HERETO.  EACH CREDIT PARTY EXPRESSLY AGREES THAT ITS OBLIGATIONS ARISING
HEREUNDER SHALL NOT BE AFFECTED OR DIMINISHED BY THE ADDITION OR RELEASE OF ANY
OTHER CREDIT PARTY HEREUNDER.  THIS AGREEMENT SHALL BE FULLY EFFECTIVE AS TO ANY
CREDIT PARTY THAT IS OR BECOMES A PARTY HERETO REGARDLESS OF WHETHER ANY OTHER
PERSON BECOMES OR FAILS TO BECOME OR CEASES TO BE A CREDIT PARTY HEREUNDER. 
WITH RESPECT TO EACH SUCH RESTRICTED SUBSIDIARY, THE BORROWER SHALL PROMPTLY
SEND TO THE ADMINISTRATIVE AGENT WRITTEN NOTICE SETTING FORTH WITH RESPECT TO
SUCH PERSON THE DATE ON WHICH SUCH PERSON BECAME A RESTRICTED SUBSIDIARY OF THE
BORROWER, AND SUPPLEMENT THE DATA REQUIRED TO BE SET FORTH IN THE SCHEDULES TO
THIS AGREEMENT AS A RESULT OF THE ACQUISITION OR CREATION OF SUCH RESTRICTED
SUBSIDIARY; PROVIDED THAT SUCH SUPPLEMENTAL DATA MUST BE REASONABLY ACCEPTABLE
TO THE ADMINISTRATIVE AGENT AND MAJORITY LENDERS.

SECTION 6.14.  PLEDGED EQUITY INTERESTS.  ON THE DATE HEREOF AND AT THE TIME
HEREAFTER THAT ANY RESTRICTED SUBSIDIARY OF THE BORROWER IS CREATED OR ACQUIRED
OR ANY UNRESTRICTED SUBSIDIARY BECOMES A RESTRICTED SUBSIDIARY, THE BORROWER AND
THE SUBSIDIARIES (AS APPLICABLE) SHALL EXECUTE AND DELIVER TO THE ADMINISTRATIVE
AGENT FOR THE BENEFIT OF THE SECURED PARTIES, A PLEDGE AGREEMENT, IN FORM AND
SUBSTANCE ACCEPTABLE TO THE ADMINISTRATIVE AGENT, FROM THE BORROWER AND/OR THE
SUBSIDIARIES (AS APPLICABLE) COVERING ALL EQUITY INTERESTS OWNED BY THE BORROWER
OR SUCH RESTRICTED SUBSIDIARIES IN SUCH RESTRICTED SUBSIDIARIES, TOGETHER WITH
ALL CERTIFICATES (OR OTHER EVIDENCE ACCEPTABLE TO ADMINISTRATIVE AGENT)
EVIDENCING THE ISSUED AND OUTSTANDING EQUITY INTERESTS OF EACH SUCH RESTRICTED
SUBSIDIARY OF EVERY CLASS OWNED BY SUCH CREDIT PARTY (AS APPLICABLE) WHICH, IF
CERTIFICATED, SHALL BE DULY ENDORSED OR ACCOMPANIED BY STOCK POWERS EXECUTED IN
BLANK (AS APPLICABLE), AS ADMINISTRATIVE AGENT SHALL DEEM NECESSARY OR
APPROPRIATE TO GRANT, EVIDENCE AND PERFECT A SECURITY INTEREST IN THE ISSUED AND
OUTSTANDING EQUITY INTERESTS OWNED BY BORROWER OR ANY RESTRICTED SUBSIDIARY IN
EACH RESTRICTED SUBSIDIARY PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER PERSON.

SECTION 6.15.  PRODUCTION PROCEEDS AND BANK ACCOUNTS.  SUBJECT TO THE TERMS AND
CONDITIONS OF THE MORTGAGES, EACH CREDIT PARTY SHALL CAUSE ALL PRODUCTION
PROCEEDS AND REVENUES ATTRIBUTABLE TO THE OIL AND GAS INTERESTS OF SUCH CREDIT
PARTY TO BE PAID AND DEPOSITED INTO DEPOSIT ACCOUNTS OF SUCH CREDIT PARTY
MAINTAINED WITH THE ADMINISTRATIVE AGENT OR WITH OTHER FINANCIAL INSTITUTIONS
ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND, AT THE REQUEST OF THE ADMINISTRATIVE
AGENT, CAUSE ALL SUCH DEPOSIT ACCOUNTS AT SUCH OTHER FINANCIAL INSTITUTIONS TO
BE SUBJECT TO A CONTROL AGREEMENT IN FAVOR OF THE ADMINISTRATIVE AGENT FOR THE
BENEFIT OF THE SECURED PARTIES, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT (AN “ELIGIBLE ACCOUNT”).

ARTICLE VII

NEGATIVE COVENANTS

Until the Aggregate Commitment has expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, each Credit Party covenants and agrees with the
Lenders that:

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SECTION 7.01.  INDEBTEDNESS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF
ITS RESTRICTED SUBSIDIARIES TO, CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY
INDEBTEDNESS, EXCEPT:

(A)           THE OBLIGATIONS;

(B)           INDEBTEDNESS EXISTING ON THE DATE HEREOF AND SET FORTH IN
SCHEDULE 7.01 AND EXTENSIONS, RENEWALS AND REPLACEMENTS OF ANY SUCH INDEBTEDNESS
THAT DO NOT INCREASE THE OUTSTANDING PRINCIPAL AMOUNT THEREOF;

(C)           INDEBTEDNESS OF THE BORROWER TO ANY GUARANTOR AND OF ANY GUARANTOR
TO THE BORROWER OR ANY OTHER GUARANTOR; PROVIDED, THAT (I) ALL SUCH INDEBTEDNESS
SHALL BE UNSECURED AND SUBORDINATED IN RIGHT OF PAYMENT TO THE PAYMENT IN FULL
OF ALL OF THE OBLIGATIONS AS PROVIDED IN SECTION 8.06 AND (II) ALL SUCH
INDEBTEDNESS IS EVIDENCED BY PROMISSORY NOTES IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT, AND SUCH PROMISSORY NOTES ARE SUBJECT
TO A SECURITY INTEREST IN FAVOR OF THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF
THE SECURED PARTIES ON TERMS AND CONDITIONS REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT PRIOR AND SUPERIOR IN RIGHT TO ANY OTHER PERSON;

(D)           GUARANTEES OF THE OBLIGATIONS;

(E)           INDEBTEDNESS OF THE BORROWER AND THE RESTRICTED SUBSIDIARIES
INCURRED TO FINANCE THE ACQUISITION, CONSTRUCTION OR IMPROVEMENT OF ANY FIXED OR
CAPITAL ASSETS, INCLUDING CAPITAL LEASE OBLIGATIONS AND ANY INDEBTEDNESS ASSUMED
IN CONNECTION WITH THE ACQUISITION OF ANY SUCH ASSETS OR SECURED BY A LIEN ON
ANY SUCH ASSETS PRIOR TO THE ACQUISITION THEREOF, AND EXTENSIONS, RENEWALS AND
REPLACEMENTS OF ANY SUCH INDEBTEDNESS THAT DO NOT INCREASE THE OUTSTANDING
PRINCIPAL AMOUNT THEREOF; PROVIDED THAT (I) SUCH INDEBTEDNESS IS INCURRED PRIOR
TO OR WITHIN 90 DAYS AFTER SUCH ACQUISITION OR THE COMPLETION OF SUCH
CONSTRUCTION OR IMPROVEMENT AND (II) THE AGGREGATE PRINCIPAL AMOUNT OF
INDEBTEDNESS PERMITTED BY THIS CLAUSE (E) SHALL NOT EXCEED $10,000,000 AT ANY
TIME OUTSTANDING;

(F)            INDEBTEDNESS INCURRED OR DEPOSITS MADE BY THE BORROWER AND ANY
RESTRICTED SUBSIDIARY (I) UNDER WORKER’S COMPENSATION LAWS, UNEMPLOYMENT
INSURANCE LAWS OR SIMILAR LEGISLATION, OR (II) IN CONNECTION WITH BIDS, TENDERS,
CONTRACTS (OTHER THAN FOR THE PAYMENT OF INDEBTEDNESS) OR LEASES TO WHICH SUCH
CREDIT PARTY IS A PARTY, (III) TO SECURE PUBLIC OR STATUTORY OBLIGATIONS OF SUCH
CREDIT PARTY, AND (IV) OF CASH OR U.S. GOVERNMENT SECURITIES MADE TO SECURE THE
PERFORMANCE OF STATUTORY OBLIGATIONS, SURETY, STAY, CUSTOMS AND APPEAL BONDS TO
WHICH SUCH CREDIT PARTY IS A PARTY IN CONNECTION WITH THE OPERATION OF THE OIL
AND GAS INTERESTS, IN EACH CASE IN THE ORDINARY COURSE OF BUSINESS;

(G)           INDEBTEDNESS OF ANY BORROWER OR ANY RESTRICTED SUBSIDIARY UNDER
SWAP AGREEMENTS TO THE EXTENT PERMITTED UNDER SECTION 7.05;

(H)           INDEBTEDNESS UNDER THE SENIOR NOTES IN AN AGGREGATE PRINCIPAL
AMOUNT NOT EXCEEDING $450,000,000 AT ANY TIME OUTSTANDING; AND

(I)            OTHER UNSECURED INDEBTEDNESS OF THE CREDIT PARTIES IN AN
AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING $25,000,000 AT ANY TIME OUTSTANDING.

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SECTION 7.02.  LIENS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS
RESTRICTED SUBSIDIARIES TO, CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY LIEN ON
ANY PROPERTY OR ASSET NOW OWNED OR HEREAFTER ACQUIRED BY IT, OR ASSIGN OR SELL
ANY INCOME OR REVENUES (INCLUDING ACCOUNTS RECEIVABLE) OR RIGHTS IN RESPECT OF
ANY THEREOF, EXCEPT:

(A)           ANY LIEN CREATED PURSUANT TO THIS AGREEMENT OR THE SECURITY
INSTRUMENTS;

(B)           PERMITTED ENCUMBRANCES;

(C)           ANY LIEN ON ANY PROPERTY OR ASSET OF THE BORROWER OR ANY
RESTRICTED SUBSIDIARY EXISTING ON THE DATE HEREOF AND SET FORTH IN
SCHEDULE 7.02; PROVIDED THAT (I) SUCH LIEN SHALL NOT APPLY TO ANY OTHER PROPERTY
OR ASSET OF THE BORROWER OR ANY OTHER RESTRICTED SUBSIDIARY AND (II) SUCH LIEN
SHALL SECURE ONLY THOSE OBLIGATIONS WHICH IT SECURES ON THE DATE HEREOF AND
EXTENSIONS, RENEWALS AND REPLACEMENTS THEREOF THAT DO NOT INCREASE THE
OUTSTANDING PRINCIPAL AMOUNT THEREOF;

(D)           ANY LIEN EXISTING ON ANY PROPERTY OR ASSET PRIOR TO THE
ACQUISITION THEREOF BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR EXISTING ON
ANY PROPERTY OR ASSET OF ANY PERSON THAT BECOMES A RESTRICTED SUBSIDIARY AFTER
THE DATE HEREOF PRIOR TO THE TIME SUCH PERSON BECOMES A RESTRICTED SUBSIDIARY;
PROVIDED THAT (I) SUCH LIEN SECURES INDEBTEDNESS PERMITTED BY SECTION 7.01(E),
(II) SUCH LIEN IS NOT CREATED IN CONTEMPLATION OF OR IN CONNECTION WITH SUCH
ACQUISITION OR SUCH PERSON BECOMING A RESTRICTED SUBSIDIARY, AS THE CASE MAY BE,
(III) SUCH LIEN SHALL NOT APPLY TO ANY OTHER PROPERTY OR ASSETS OF THE BORROWER
OR ANY OTHER RESTRICTED SUBSIDIARY AND (IV) SUCH LIEN SHALL SECURE ONLY THOSE
OBLIGATIONS WHICH IT SECURES ON THE DATE OF SUCH ACQUISITION OR THE DATE SUCH
PERSON BECOMES A RESTRICTED SUBSIDIARY, AS THE CASE MAY BE AND EXTENSIONS,
RENEWALS AND REPLACEMENTS THEREOF THAT DO NOT INCREASE THE OUTSTANDING PRINCIPAL
AMOUNT THEREOF; AND

(E)           LIENS ON FIXED OR CAPITAL ASSETS ACQUIRED, CONSTRUCTED OR IMPROVED
BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY; PROVIDED THAT (I) SUCH LIENS,
SECURE INDEBTEDNESS PERMITTED BY SECTION 7.01, (II) SUCH SECURITY INTERESTS AND
THE INDEBTEDNESS SECURED THEREBY ARE INCURRED PRIOR TO OR WITHIN NINETY
(90) DAYS AFTER SUCH ACQUISITION OR THE COMPLETION OF SUCH CONSTRUCTION OR
IMPROVEMENT, (III) THE INDEBTEDNESS SECURED THEREBY DOES NOT EXCEED THE COST OF
ACQUIRING, CONSTRUCTING OR IMPROVING SUCH FIXED OR CAPITAL ASSETS AND (IV) SUCH
SECURITY INTERESTS SHALL NOT APPLY TO ANY OTHER PROPERTY OR ASSETS OF THE
BORROWER OR ANY OTHER RESTRICTED SUBSIDIARIES.

SECTION 7.03.  FUNDAMENTAL CHANGES.

(A)           THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, MERGE INTO 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 (IN ONE TRANSACTION OR IN A SERIES OF TRANSACTIONS) ALL OR
ANY SUBSTANTIAL PART OF ITS ASSETS, OR ANY OF ITS BORROWING BASE PROPERTIES OR
ANY OF THE EQUITY INTERESTS OF ANY RESTRICTED SUBSIDIARY (IN EACH CASE, WHETHER
NOW OWNED OR HEREAFTER ACQUIRED), OR LIQUIDATE OR DISSOLVE, EXCEPT THAT, THE
BORROWER OR ANY RESTRICTED SUBSIDIARY MAY SELL HYDROCARBONS PRODUCED FROM ITS
OIL AND GAS INTERESTS IN THE ORDINARY COURSE OF BUSINESS, AND IF AT THE TIME
THEREOF AND IMMEDIATELY AFTER GIVING EFFECT THERETO NO DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, (I) ANY RESTRICTED SUBSIDIARY MAY MERGE INTO THE
BORROWER IN A TRANSACTION IN WHICH THE BORROWER IS THE SURVIVING ENTITY,
(II) ANY RESTRICTED SUBSIDIARY MAY

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MERGE INTO ANY OTHER RESTRICTED SUBSIDIARY IN A TRANSACTION IN WHICH THE
SURVIVING ENTITY IS A RESTRICTED SUBSIDIARY, (III) ANY RESTRICTED SUBSIDIARY MAY
SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE OF ITS ASSETS TO THE BORROWER OR TO
ANOTHER RESTRICTED SUBSIDIARY, (IV) ANY RESTRICTED SUBSIDIARY MAY LIQUIDATE OR
DISSOLVE IF THE BORROWER DETERMINES IN GOOD FAITH THAT SUCH LIQUIDATION OR
DISSOLUTION IS IN THE BEST INTERESTS OF THE BORROWER AND IS NOT MATERIALLY
DISADVANTAGEOUS TO THE LENDERS, (V) THE BORROWER OR ANY RESTRICTED SUBSIDIARY
MAY SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE OF EQUIPMENT AND RELATED ITEMS IN
THE ORDINARY COURSE OF BUSINESS, THAT ARE OBSOLETE OR NO LONGER NECESSARY IN THE
BUSINESS OF THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES OR THAT IS BEING
REPLACED BY EQUIPMENT OF COMPARABLE VALUE AND UTILITY, (VI) SUBJECT TO SECTION
2.12(B), THE BORROWER OR ANY RESTRICTED SUBSIDIARY MAY SELL, TRANSFER, LEASE,
EXCHANGE, ABANDON OR OTHERWISE DISPOSE OF BORROWING BASE PROPERTIES WITH A VALUE
NOT EXCEEDING, IN THE AGGREGATE FOR THE BORROWER AND ITS RESTRICTED SUBSIDIARIES
TAKEN AS A WHOLE, FIVE PERCENT (5%) OF THE BORROWING BASE BETWEEN SCHEDULED
REDETERMINATIONS AND (VII) WITH THE PRIOR WRITTEN CONSENT OF REQUIRED LENDERS
AND SUBJECT TO SECTION 2.02(D) AND SECTION 2.12(B), THE BORROWER OR ANY
RESTRICTED SUBSIDIARY MAY SELL, TRANSFER, LEASE, EXCHANGE, ABANDON OR OTHERWISE
DISPOSE OF BORROWING BASE PROPERTIES NOT OTHERWISE PERMITTED PURSUANT TO THE
FOREGOING CLAUSE (VI). FOR PURPOSES OF THE FOREGOING CLAUSE (VI), THE VALUE OF
ANY OIL AND GAS INTERESTS INCLUDED IN THE BORROWING BASE PROPERTIES SHALL BE THE
ENGINEERED VALUE OF SUCH OIL AND GAS INTERESTS AND THE VALUE OF ALL OTHER OIL
AND GAS INTERESTS SHALL BE THE VALUE WHICH WOULD BE ASSIGNED TO SUCH OIL AND GAS
INTERESTS USING THE SAME METHODOLOGY, ASSUMPTIONS AND DISCOUNT RATES USED TO
DETERMINE THE ENGINEERED VALUE OF THE BORROWING BASE PROPERTIES AS OF THE MOST
RECENT REDETERMINATION.  IN ADDITION, FOR PURPOSES OF DETERMINING COMPLIANCE
WITH CLAUSE (VI) OF THIS SECTION WITH RESPECT TO ANY EXCHANGE OF OIL AND GAS
INTERESTS, THE VALUE OF SUCH EXCHANGE SHALL BE THE NET REDUCTION, IF ANY, IN
ENGINEERED VALUE REALIZED OR RESULTING FROM SUCH EXCHANGE.

(B)           THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, ENGAGE TO ANY MATERIAL EXTENT IN ANY BUSINESS OTHER THAN
BUSINESSES OF THE TYPE CONDUCTED BY THE BORROWER AND ITS RESTRICTED SUBSIDIARIES
ON THE DATE OF EXECUTION OF THIS AGREEMENT AND AFTER GIVING EFFECT TO THE
TRANSACTIONS AND BUSINESSES REASONABLY RELATED THERETO.

SECTION 7.04.  INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.  THE
BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO,
PURCHASE, HOLD OR ACQUIRE (INCLUDING PURSUANT TO ANY MERGER WITH ANY PERSON THAT
WAS NOT A WHOLLY OWNED RESTRICTED SUBSIDIARY PRIOR TO SUCH MERGER) ANY CAPITAL
STOCK, EVIDENCES OF INDEBTEDNESS OR OTHER SECURITIES (INCLUDING ANY OPTION,
WARRANT OR OTHER RIGHT TO ACQUIRE ANY OF THE FOREGOING) OF, MAKE OR PERMIT TO
EXIST ANY LOANS OR ADVANCES TO, GUARANTEE ANY INDEBTEDNESS OF, OR MAKE OR PERMIT
TO EXIST ANY INVESTMENT OR ANY OTHER INTEREST IN, ANY OTHER PERSON, OR PURCHASE
OR OTHERWISE ACQUIRE (IN ONE TRANSACTION OR A SERIES OF TRANSACTIONS) ANY ASSETS
OF ANY OTHER PERSON CONSTITUTING A BUSINESS UNIT, EXCEPT:

(A)           PERMITTED INVESTMENTS;

(B)           INVESTMENTS BY THE BORROWER IN THE EQUITY INTERESTS OF ANY
RESTRICTED SUBSIDIARY;

(C)           INVESTMENTS BY THE BORROWER OR GUARANTOR CONSISTING OF
INTERCOMPANY INDEBTEDNESS PERMITTED UNDER SECTION 7.01(C) 

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(D)           GUARANTEES CONSTITUTING INDEBTEDNESS PERMITTED BY SECTION 7.01;

(E)           INVESTMENTS BY THE BORROWER AND ITS RESTRICTED SUBSIDIARIES THAT
ARE (1) CUSTOMARY IN THE OIL AND GAS BUSINESS, (2) MADE IN THE ORDINARY COURSE
OF THE BORROWER’S OR SUCH RESTRICTED SUBSIDIARY’S BUSINESS, AND (3) MADE IN THE
FORM OF, OR PURSUANT TO, OIL, GAS AND MINERAL LEASES, OPERATING AGREEMENTS,
FARM-IN AGREEMENTS, FARM-OUT AGREEMENTS, DEVELOPMENT AGREEMENTS, UNITIZATION
AGREEMENTS, JOINT BIDDING AGREEMENTS, SERVICES CONTRACTS AND OTHER SIMILAR
AGREEMENTS THAT A REASONABLE AND PRUDENT OIL AND GAS INDUSTRY OWNER OR OPERATOR
WOULD FIND ACCEPTABLE;

(F)            INVESTMENTS CONSISTING OF SWAP AGREEMENTS TO THE EXTENT PERMITTED
UNDER SECTION 7.05; AND

(G)           OTHER INVESTMENTS BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES;
PROVIDED THAT, ON THE DATE ANY SUCH OTHER INVESTMENT IS MADE, THE AMOUNT OF SUCH
INVESTMENT, TOGETHER WITH ALL OTHER INVESTMENTS MADE PURSUANT TO THIS CLAUSE (G)
OF SECTION 7.04 (IN EACH CASE DETERMINED BASED ON THE COST OF SUCH INVESTMENT)
SINCE THE EFFECTIVE DATE, DOES NOT EXCEED IN THE AGGREGATE, $10,000,000.

SECTION 7.05.  SWAP AGREEMENTS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY
OF ITS RESTRICTED SUBSIDIARIES TO, ENTER INTO OR MAINTAIN ANY SWAP AGREEMENT,
EXCEPT THE EXISTING SWAP AGREEMENTS, AND SWAP AGREEMENTS ENTERED INTO IN THE
ORDINARY COURSE OF BUSINESS WITH APPROVED COUNTERPARTIES AND NOT FOR SPECULATIVE
PURPOSES TO (A) HEDGE OR MITIGATE CRUDE OIL AND NATURAL GAS PRICE RISKS TO WHICH
THE BORROWER OR ANY RESTRICTED SUBSIDIARY HAS ACTUAL EXPOSURE, AND (B)
EFFECTIVELY CAP, COLLAR OR EXCHANGE INTEREST RATES (FROM FIXED TO FLOATING
RATES, FROM ONE FLOATING RATE TO ANOTHER FLOATING RATE OR OTHERWISE) WITH
RESPECT TO ANY INTEREST-BEARING LIABILITY OR INVESTMENT OF ANY CREDIT PARTY;
PROVIDED THAT SUCH SWAP AGREEMENTS (AT THE TIME EACH TRANSACTION UNDER SUCH SWAP
AGREEMENT IS ENTERED INTO) WOULD NOT CAUSE THE AGGREGATE NOTIONAL AMOUNT OF
HYDROCARBONS UNDER ALL SWAP AGREEMENTS THEN IN EFFECT (INCLUDING THE EXISTING
SWAP AGREEMENTS) TO EXCEED AT ANY TIME (I) EIGHTY PERCENT (80%) OF THE
“FORECASTED PRODUCTION FROM TOTAL PROVED RESERVES” (AS DEFINED BELOW) OF THE
BORROWER AND THE RESTRICTED SUBSIDIARIES FOR EACH OF THE FIRST TWO YEARS OF THE
FORTHCOMING FIVE YEAR PERIOD AND (II) SEVENTY PERCENT (70%) OF THE FORECASTED
PRODUCTION FROM TOTAL PROVED RESERVES OF THE BORROWER AND THE RESTRICTED
SUBSIDIARIES FOR EACH OF THE THIRD, FOURTH AND FIFTH YEARS OF THE FORTHCOMING
FIVE YEAR PERIOD.  AS USED IN THIS SECTION, “FORECASTED PRODUCTION FROM TOTAL
PROVED RESERVES” MEANS THE FORECASTED PRODUCTION OF CRUDE OIL AND NATURAL GAS AS
REFLECTED IN THE MOST RECENT RESERVE REPORT DELIVERED TO THE ADMINISTRATIVE
AGENT PURSUANT TO SECTION 6.01, AFTER GIVING EFFECT TO ANY PRO FORMA ADJUSTMENTS
FOR THE CONSUMMATION OF ANY ACQUISITIONS OR DISPOSITIONS SINCE THE EFFECTIVE
DATE OF SUCH RESERVE REPORT.  ONCE THE BORROWER OR ANY RESTRICTED SUBSIDIARIES
ENTERS INTO A SWAP AGREEMENT OR ANY HEDGE TRANSACTION PURSUANT TO ANY SWAP
AGREEMENT, THE TERMS AND CONDITIONS OF SUCH SWAP AGREEMENT AND SUCH HEDGE
TRANSACTION MAY NOT BE AMENDED OR MODIFIED, NOR MAY SUCH SWAP AGREEMENT OR HEDGE
TRANSACTION BE CANCELLED WITHOUT THE PRIOR WRITTEN CONSENT OF MAJORITY LENDERS. 
EACH CREDIT PARTY AND EACH LENDER AGREES AND ACKNOWLEDGES THAT (I) THE EXISTING
SWAP AGREEMENTS ARE SWAP AGREEMENTS PERMITTED UNDER THIS SECTION 7.05, (II) AS
OF THE EFFECTIVE DATE, THE COUNTERPARTY TO EACH EXISTING SWAP AGREEMENT IS A
LENDER COUNTERPARTY, AND (III) THE OBLIGATIONS OF THE CREDIT PARTIES UNDER THE
EXISTING SWAP AGREEMENTS ARE INCLUDED IN THE DEFINED TERM “OBLIGATIONS” AND SUCH
OBLIGATIONS ARE ENTITLED TO THE BENEFITS OF, AND ARE SECURED BY THE LIENS
GRANTED UNDER, THE SECURITY INSTRUMENTS.

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SECTION 7.06.  RESTRICTED PAYMENTS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT
ANY OF ITS RESTRICTED SUBSIDIARIES TO, DECLARE OR MAKE, OR AGREE TO PAY OR MAKE,
DIRECTLY OR INDIRECTLY, ANY RESTRICTED PAYMENT, EXCEPT THAT (A) THE BORROWER MAY
DECLARE AND MAKE RESTRICTED PAYMENTS WITH RESPECT TO ITS EQUITY INTERESTS
PAYABLE SOLELY IN ITS EQUITY INTERESTS (OTHER THAN DISQUALIFIED STOCK), (B) THE
BORROWER MAY MAKE RESTRICTED PAYMENTS PURSUANT TO AND IN ACCORDANCE WITH STOCK
OPTION PLANS OR OTHER BENEFIT PLANS FOR MANAGEMENT OR EMPLOYEES OF THE BORROWER
AND ITS RESTRICTED SUBSIDIARIES IN AN AGGREGATE AMOUNT NOT TO EXCEED $2,000,000
IN ANY FISCAL YEAR, (C) SO LONG AS NO DEFAULT HAS OCCURRED AND IS CONTINUING,
THE BORROWER MAY DECLARE AND MAKE DISTRIBUTIONS OF THE MLP RIGHTS, (D) ANY
RESTRICTED SUBSIDIARY MAY MAKE RESTRICTED PAYMENTS TO THE BORROWER OR ANY
GUARANTOR; PROVIDED THAT NO DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD
RESULT FROM THE MAKING OF SUCH RESTRICTED PAYMENT, (E) THE BORROWER MAY DECLARE
AND PAY DIVIDENDS WITH RESPECT TO ITS PREFERRED STOCK IN ADDITIONAL SHARES OF
PREFERRED STOCK, AND (F) THE BORROWER MAY PAY CASH DIVIDENDS ON THE PREFERRED
STOCK; PROVIDED THAT ON THE DATE OF ANY SUCH PAYMENT, (I) NO DEFAULT HAS
OCCURRED AND IS CONTINUING OR WOULD RESULT FROM SUCH PAYMENT, (II) THE AMOUNT OF
SUCH CASH DIVIDENDS IN ANY FISCAL YEAR SHALL NOT EXCEED THE LESSER OF (X)
$200,000,000 AND (Y) THE AMOUNT OF CASH DIVIDENDS ACCRUED ON THE PREFERRED STOCK
IN SUCH FISCAL YEAR, AND (III) AFTER GIVING EFFECT TO SUCH RESTRICTED PAYMENT,
THE AGGREGATE COMMITMENT EXCEEDS AGGREGATE CREDIT EXPOSURE BY AN AMOUNT EQUAL TO
OR GREATER THAN TEN PERCENT (10%) OF THE BORROWING BASE.

SECTION 7.07.  TRANSACTIONS WITH AFFILIATES.  THE BORROWER WILL NOT, NOR WILL IT
PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, SELL, LEASE OR OTHERWISE TRANSFER
ANY PROPERTY OR ASSETS TO, OR PURCHASE, LEASE OR OTHERWISE ACQUIRE ANY PROPERTY
OR ASSETS FROM, OR OTHERWISE ENGAGE IN ANY OTHER TRANSACTIONS WITH, ANY OF ITS
AFFILIATES, EXCEPT (A) IN THE ORDINARY COURSE OF BUSINESS AT PRICES AND ON TERMS
AND CONDITIONS NOT LESS FAVORABLE TO THE BORROWER OR SUCH RESTRICTED SUBSIDIARY
THAN COULD BE OBTAINED ON AN ARM’S-LENGTH BASIS FROM UNRELATED THIRD PARTIES,
(B) TRANSACTIONS BETWEEN OR AMONG THE BORROWER AND ITS RESTRICTED SUBSIDIARIES
NOT INVOLVING ANY OTHER AFFILIATE, (C) TRANSACTIONS DESCRIBED ON SCHEDULE 7.07,
(D) ANY RESTRICTED PAYMENT PERMITTED BY SECTION 7.06, (E) THE INVESTMENTS
PERMITTED UNDER SECTION 7.04 AND (F) THE TRANSACTIONS CONTEMPLATED BY THE MLP
AGREEMENTS.

SECTION 7.08.  RESTRICTIVE AGREEMENTS.  THE BORROWER WILL NOT, NOR WILL IT
PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, ENTER
INTO, INCUR OR PERMIT TO EXIST ANY AGREEMENT OR OTHER ARRANGEMENT THAT
PROHIBITS, RESTRICTS OR IMPOSES ANY CONDITION UPON (A) THE ABILITY OF THE
BORROWER OR ANY RESTRICTED SUBSIDIARY TO CREATE, INCUR OR PERMIT TO EXIST ANY
LIEN UPON ANY OF ITS PROPERTY OR ASSETS, OR (B) THE ABILITY OF ANY RESTRICTED
SUBSIDIARY TO PAY DIVIDENDS OR OTHER DISTRIBUTIONS WITH RESPECT TO ANY OF ITS
EQUITY INTERESTS OR TO MAKE OR REPAY LOANS OR ADVANCES TO THE BORROWER OR ANY
RESTRICTED SUBSIDIARY OR TO GUARANTEE INDEBTEDNESS OF THE BORROWER OR ANY
RESTRICTED SUBSIDIARY; PROVIDED THAT (I) THE FOREGOING SHALL NOT APPLY TO
RESTRICTIONS AND CONDITIONS IMPOSED BY LAW OR BY THIS AGREEMENT, (II) THE
FOREGOING SHALL NOT APPLY TO RESTRICTIONS AND CONDITIONS SET FORTH IN THE
INDENTURE, (III) THE FOREGOING SHALL NOT APPLY TO RESTRICTIONS AND CONDITIONS
EXISTING ON THE DATE HEREOF IDENTIFIED ON SCHEDULE 7.08 (BUT SHALL APPLY TO ANY
EXTENSION OR RENEWAL OF, OR ANY AMENDMENT OR MODIFICATION EXPANDING THE SCOPE
OF, ANY SUCH RESTRICTION OR CONDITION), (IV) CLAUSE (A) OF THE FOREGOING SHALL
NOT APPLY TO RESTRICTIONS OR CONDITIONS IMPOSED BY ANY AGREEMENT RELATING TO
SECURED INDEBTEDNESS PERMITTED BY THIS AGREEMENT IF SUCH RESTRICTIONS OR
CONDITIONS APPLY ONLY TO THE PROPERTY OR ASSETS SECURING SUCH

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INDEBTEDNESS AND (V) CLAUSE (A) OF THE FOREGOING SHALL NOT APPLY TO CUSTOMARY
PROVISIONS IN LEASES AND OTHER CONTRACTS RESTRICTING THE ASSIGNMENT THEREOF.

SECTION 7.09.  DISQUALIFIED STOCK AND FISCAL YEAR.  EXCEPT FOR THE PREFERRED
STOCK, THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, ISSUE ANY DISQUALIFIED STOCK NOR WILL IT CHANGE ITS FISCAL
YEAR.

SECTION 7.10.  AMENDMENTS OF ORGANIZATIONAL DOCUMENTS; CERTAIN AGREEMENTS AND
SENIOR NOTES.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, ENTER INTO OR PERMIT ANY MATERIAL MODIFICATION OR AMENDMENT OF,
OR WAIVE ANY MATERIAL RIGHT OR OBLIGATION OF ANY PERSON UNDER ITS ORGANIZATIONAL
DOCUMENTS, OR THE MLP AGREEMENTS.  THE BORROWER WILL NOT ENTER INTO OR PERMIT
ANY MODIFICATION OR AMENDMENT OF, OR WAIVE ANY RIGHT OR OBLIGATION OF ANY PERSON
UNDER THE PREFERRED STOCK DOCUMENTS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT
ANY OF ITS RESTRICTED SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, PREPAY, REDEEM,
DEFEASE, OR PURCHASE IN ANY MANNER ANY SENIOR NOTES, EXCEPT THAT THE BORROWER
MAY PREPAY, REDEEM, DEFEASE OR PURCHASE SENIOR NOTES, SO LONG AS (I) NO DEFAULT
HAS OCCURRED AND IS CONTINUING OR WOULD RESULT FROM SUCH PREPAYMENT, REDEMPTION,
DEFEASANCE OR PURCHASE, (II) AFTER GIVING EFFECT TO ANY SUCH PREPAYMENT,
REDEMPTION, DEFEASANCE OR PURCHASE, THE AGGREGATE COMMITMENT EXCEEDS AGGREGATE
CREDIT EXPOSURE BY AN AMOUNT EQUAL TO OR GREATER THAN TEN PERCENT (10%) OF THE
BORROWING BASE.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, ENTER INTO OR PERMIT ANY MODIFICATION OR AMENDMENT OF THE
SENIOR NOTE DOCUMENTS THE EFFECT OF WHICH IS TO (A) INCREASE THE MAXIMUM
PRINCIPAL AMOUNT OF THE SENIOR NOTES OR THE RATE OF INTEREST ON ANY OF THE
SENIOR NOTES (OTHER THAN AS A RESULT OF THE IMPOSITION OF A DEFAULT RATE OF
INTEREST IN ACCORDANCE WITH THE TERMS OF THE SENIOR NOTE DOCUMENTS), (B) CHANGE
OR ADD ANY EVENT OF DEFAULT OR ANY COVENANT WITH RESPECT TO THE SENIOR NOTE
DOCUMENTS IF THE EFFECT OF SUCH CHANGE OR ADDITION IS TO CAUSE ANY ONE OR MORE
OF THE SENIOR NOTE DOCUMENTS TO BE MORE RESTRICTIVE ON THE BORROWER OR ANY OF
ITS SUBSIDIARIES THAN SUCH SENIOR NOTE DOCUMENTS WERE PRIOR TO SUCH CHANGE OR
ADDITION, (C) CHANGE THE DATES UPON WHICH PAYMENTS OF PRINCIPAL OR INTEREST ON
THE SENIOR NOTES ARE DUE, (D) CHANGE ANY REDEMPTION OR PREPAYMENT PROVISIONS OF
THE SENIOR NOTES, (E) ALTER THE SUBORDINATION PROVISIONS, IF ANY, WITH RESPECT
TO ANY OF THE SENIOR NOTE DOCUMENTS, (F) CHANGE ANY OF SECTIONS 4.07(A), 10.06,
10.07 OR 12.03 OF THE INDENTURE OR THE PENULTIMATE PARAGRAPHS OF EACH OF
SECTIONS 9.01 OR 9.02 OF THE INDENTURE, (G) GRANT ANY LIENS IN ANY ASSETS OF THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR (H) PERMIT ANY SUBSIDIARY TO GUARANTEE
THE SENIOR NOTES UNLESS SUCH SUBSIDIARY IS (OR CONCURRENTLY WITH ANY SUCH
GUARANTEE BECOMES) A GUARANTOR.

SECTION 7.11.  FINANCIAL COVENANTS.

(A)           CONSOLIDATED CURRENT RATIO.  THE BORROWER WILL NOT PERMIT THE
CONSOLIDATED CURRENT RATIO AS OF THE END OF ANY FISCAL QUARTER ENDING ON OR
AFTER SEPTEMBER 30, 2007 TO BE LESS THAN 1.00 TO 1.00.

(B)           LEVERAGE RATIO.

(I)            THE BORROWER WILL NOT PERMIT THE RATIO, DETERMINED AS OF THE END
OF THE FISCAL QUARTER ENDING SEPTEMBER 30, 2007, OF (A) CONSOLIDATED FUNDED
INDEBTEDNESS AS OF THE END OF SUCH FISCAL QUARTER, TO (B) CONSOLIDATED EBITDAX
FOR SUCH FISCAL QUARTER MULTIPLIED BY FOUR (4) TO BE GREATER THAN 3.50 TO 1.00.

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(II)           THE BORROWER WILL NOT PERMIT THE RATIO, DETERMINED AS OF THE END
OF ANY FISCAL QUARTER ENDING AFTER SEPTEMBER 30, 2007 AND ON OR BEFORE MARCH 31,
2008, OF (A) CONSOLIDATED FUNDED INDEBTEDNESS AS OF THE END OF SUCH FISCAL
QUARTER, TO (B) CONSOLIDATED EBITDAX FOR THE PERIOD FROM JULY 1, 2007 TO THE END
OF SUCH FISCAL QUARTER MULTIPLIED BY A FRACTION, THE NUMERATOR OF WHICH IS FOUR
(4) AND THE DENOMINATOR OF WHICH IS THE NUMBER OF FISCAL QUARTERS ENDED SINCE
JULY 1, 2007, INCLUDING THE THEN ENDING FISCAL QUARTER, TO BE GREATER THAN 3.50
TO 1.00.

(III)          THE BORROWER WILL NOT PERMIT THE RATIO, DETERMINED AS OF THE END
OF THE FISCAL QUARTER ENDING ON OR AFTER JUNE 30, 2008, OF (A) CONSOLIDATED
FUNDED INDEBTEDNESS AS OF THE END OF SUCH FISCAL QUARTER TO (B) CONSOLIDATED
EBITDAX FOR THE TRAILING FOUR FISCAL QUARTER PERIOD ENDING ON SUCH DATE, TO BE
GREATER THAN 3.50 TO 1.00.

(C)           INTEREST COVERAGE RATIO.

(I)            THE BORROWER WILL NOT PERMIT THE RATIO, DETERMINED AS OF
SEPTEMBER 30, 2007, OF (A) CONSOLIDATED EBITDAX FOR SUCH FISCAL QUARTER
MULTIPLIED BY FOUR (4) TO (B) CONSOLIDATED INTEREST EXPENSE FOR SUCH FISCAL
QUARTER MULTIPLIED BY FOUR (4) TO BE LESS THAN 2.50 TO 1.00.

(II)           THE BORROWER WILL NOT PERMIT THE RATIO, DETERMINED AS OF THE END
OF ANY FISCAL QUARTER ENDING AFTER SEPTEMBER 30, 2007 AND ON OR BEFORE MARCH 31,
2008, OF (A) CONSOLIDATED EBITDAX FOR THE PERIOD FROM JULY 1, 2007 TO THE END OF
SUCH FISCAL QUARTER MULTIPLIED BY A FRACTION, THE NUMERATOR OF WHICH IS FOUR (4)
AND THE DENOMINATOR OF WHICH IS THE NUMBER OF FISCAL QUARTERS ENDED SINCE
JULY 1, 2007, INCLUDING THE THEN ENDING FISCAL QUARTER, TO (B) CONSOLIDATED
INTEREST EXPENSE FOR THE PERIOD FROM JULY 1, 2007 TO THE END OF SUCH FISCAL
QUARTER MULTIPLIED BY A FRACTION, THE NUMERATOR OF WHICH IS FOUR (4) AND THE
DENOMINATOR OF WHICH IS THE NUMBER OF FISCAL QUARTERS ENDED SINCE JULY 1, 2007,
INCLUDING THE THEN ENDING FISCAL QUARTER, TO BE LESS THAN 2.50 TO 1.00.

(III)          THE BORROWER WILL NOT PERMIT THE RATIO, DETERMINED AS OF THE END
OF THE FISCAL QUARTER ENDING ON OR AFTER JUNE 30, 2008, OF (A) CONSOLIDATED
EBITDAX FOR THE TRAILING FOUR FISCAL QUARTER PERIOD ENDING ON SUCH DATE, TO (B)
CONSOLIDATED INTEREST EXPENSE FOR SUCH FOUR FISCAL QUARTER PERIOD TO BE LESS
THAN 2.50 TO 1.00.

SECTION 7.12.  SALE AND LEASEBACK TRANSACTIONS AND OTHER OFF-BALANCE SHEET
LIABILITIES.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY RESTRICTED
SUBSIDIARY TO, ENTER INTO OR SUFFER TO EXIST ANY (I) SALE AND LEASEBACK
TRANSACTION OR (II) ANY OTHER TRANSACTION PURSUANT TO WHICH IT INCURS OR HAS
INCURRED OFF-BALANCE SHEET LIABILITIES, EXCEPT FOR SWAP AGREEMENTS PERMITTED
UNDER THE TERMS OF SECTION 7.05 AND ADVANCE PAYMENT CONTRACTS; PROVIDED, THAT
THE AGGREGATE AMOUNT OF ALL ADVANCE PAYMENTS RECEIVED BY ANY CREDIT PARTY THAT
HAVE NOT BEEN SATISFIED BY DELIVERY OF PRODUCTION AT ANY TIME DOES NOT EXCEED,
IN THE AGGREGATE $5,000,000.

SECTION 7.13.  INTERESTHOLDER SUBSIDIARIES.  AT ALL TIMES PRIOR TO THE
CONSUMMATION OF THE MLP PUBLIC OFFERING, THE BORROWER WILL NOT, NOR WILL IT
PERMIT ANY INTERESTHOLDER SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, ENTER INTO,
INCUR OR PERMIT TO EXIST ANY AGREEMENT OR OTHER ARRANGEMENT THAT PROHIBITS,
RESTRICTS OR IMPOSES ANY CONDITION UPON (A) THE ABILITY OF THE BORROWER OR ANY

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INTERESTHOLDER SUBSIDIARY TO CREATE, INCUR OR PERMIT TO EXIST ANY LIEN UPON ANY
OF ITS PROPERTY OR ASSETS, OR (B) THE ABILITY OF ANY INTERESTHOLDER SUBSIDIARY
TO PAY DIVIDENDS OR OTHER DISTRIBUTIONS WITH RESPECT TO ANY OF ITS EQUITY
INTERESTS OR TO MAKE OR REPAY LOANS OR ADVANCES TO THE BORROWER, ANY RESTRICTED
SUBSIDIARY OR ANY INTERESTHOLDER SUBSIDIARY OR TO GUARANTEE INDEBTEDNESS OF THE
BORROWER, ANY RESTRICTED SUBSIDIARY OR ANY INTERESTHOLDER SUBSIDIARY; PROVIDED
THAT THE FOREGOING SHALL NOT APPLY TO RESTRICTIONS AND CONDITIONS IMPOSED BY
LAW, THE INDENTURE OR BY THIS AGREEMENT.  AT ALL TIMES PRIOR TO THE CONSUMMATION
OF THE MLP PUBLIC OFFERING,  THE BORROWER WILL NOT PERMIT ANY INTERESTHOLDER
SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, (I) CREATE, INCUR, ASSUME OR PERMIT TO
EXIST ANY INDEBTEDNESS OR (II) CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY LIEN
ON ANY PROPERTY OR ASSET NOW OWNED OR HEREAFTER ACQUIRED BY ANY INTERESTHOLDER
SUBSIDIARY, OR ASSIGN OR SELL ANY INCOME OR REVENUES (INCLUDING ACCOUNTS
RECEIVABLE) OR RIGHTS IN RESPECT OF ANY THEREOF.  AT ALL TIMES PRIOR TO THE
CONSUMMATION OF THE MLP PUBLIC OFFERING, THE INTERESTHOLDER SUBSIDIARIES SHALL
OWN AND HOLD 100% OF THE ISSUED AND OUTSTANDING EQUITY INTERESTS OF THE MLP.

ARTICLE VIII

GUARANTEE OF OBLIGATIONS

SECTION 8.01.  GUARANTEE OF PAYMENT.  EACH GUARANTOR UNCONDITIONALLY AND
IRREVOCABLY GUARANTEES TO THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE
SECURED PARTIES, THE PUNCTUAL PAYMENT OF ALL OBLIGATIONS NOW OR WHICH MAY IN THE
FUTURE BE OWING BY THE BORROWER UNDER THE LOAN DOCUMENTS AND ALL OBLIGATIONS
WHICH MAY NOW OR WHICH MAY IN THE FUTURE BE OWING BY THE BORROWER OR ANY OTHER
GUARANTOR TO ANY SECURED PARTY UNDER ANY SWAP AGREEMENT (THE “GUARANTEED
LIABILITIES”).  THIS GUARANTEE IS A GUARANTY OF PAYMENT AND NOT OF COLLECTION
ONLY.  THE ADMINISTRATIVE AGENT SHALL NOT BE REQUIRED TO EXHAUST ANY RIGHT OR
REMEDY OR TAKE ANY ACTION AGAINST THE BORROWER OR ANY OTHER PERSON OR ANY
COLLATERAL.  THE GUARANTEED LIABILITIES INCLUDE INTEREST ACCRUING AFTER THE
COMMENCEMENT OF A PROCEEDING UNDER BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS OF ANY
JURISDICTION AT THE RATE OR RATES PROVIDED IN THE LOAN DOCUMENTS, OR THE SWAP
AGREEMENTS BETWEEN ANY CREDIT PARTY AND ANY SECURED PARTY, AS THE CASE MAY BE,
REGARDLESS OF WHETHER SUCH INTEREST IS AN ALLOWED CLAIM.  EACH GUARANTOR AGREES
THAT, AS BETWEEN THE GUARANTOR AND THE ADMINISTRATIVE AGENT, THE GUARANTEED
LIABILITIES MAY BE DECLARED TO BE DUE AND PAYABLE FOR THE PURPOSES OF THIS
GUARANTEE NOTWITHSTANDING ANY STAY, INJUNCTION OR OTHER PROHIBITION WHICH MAY
PREVENT, DELAY OR VITIATE ANY DECLARATION AS REGARDS THE BORROWER OR ANY OTHER
GUARANTOR AND THAT IN THE EVENT OF A DECLARATION OR ATTEMPTED DECLARATION, THE
GUARANTEED LIABILITIES SHALL IMMEDIATELY BECOME DUE AND PAYABLE BY EACH
GUARANTOR FOR THE PURPOSES OF THIS GUARANTEE.

SECTION 8.02.  GUARANTEE ABSOLUTE.  EACH GUARANTOR GUARANTEES THAT THE
GUARANTEED LIABILITIES SHALL BE PAID STRICTLY IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT AND THE SWAP AGREEMENTS TO WHICH ANY SECURED PARTY IS A PARTY. 
THE LIABILITY OF EACH GUARANTOR HEREUNDER IS ABSOLUTE AND UNCONDITIONAL
IRRESPECTIVE OF:  (A) ANY CHANGE IN THE TIME, MANNER OR PLACE OF PAYMENT OF, OR
IN ANY OTHER TERM OF, ALL OR ANY OF THE LOAN DOCUMENTS OR THE GUARANTEED
LIABILITIES, OR ANY OTHER AMENDMENT OR WAIVER OF OR ANY CONSENT TO DEPARTURE
FROM ANY OF THE TERMS OF ANY LOAN DOCUMENT OR GUARANTEED LIABILITY, INCLUDING
ANY INCREASE OR DECREASE IN THE RATE OF INTEREST THEREON; (B) ANY RELEASE OR
AMENDMENT OR WAIVER OF, OR CONSENT TO DEPARTURE FROM, ANY OTHER GUARANTY OR
SUPPORT DOCUMENT, OR ANY EXCHANGE, RELEASE OR NON-PERFECTION OF ANY COLLATERAL,
FOR ALL OR ANY OF THE LOAN DOCUMENTS OR GUARANTEED LIABILITIES; (C) ANY PRESENT
OR

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FUTURE LAW, REGULATION OR ORDER OF ANY JURISDICTION (WHETHER OF RIGHT OR IN
FACT) OR OF ANY AGENCY THEREOF PURPORTING TO REDUCE, AMEND, RESTRUCTURE OR
OTHERWISE AFFECT ANY TERM OF ANY LOAN DOCUMENT OR GUARANTEED LIABILITY; (D)
WITHOUT BEING LIMITED BY THE FOREGOING, ANY LACK OF VALIDITY OR ENFORCEABILITY
OF ANY LOAN DOCUMENT OR GUARANTEED LIABILITY; AND (E) ANY OTHER SETOFF, DEFENSE
OR COUNTERCLAIM WHATSOEVER (IN ANY CASE, WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY) WITH RESPECT TO THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY WHICH MIGHT CONSTITUTE A LEGAL OR EQUITABLE DEFENSE
AVAILABLE TO, OR DISCHARGE OF, THE BORROWER OR A GUARANTOR.

SECTION 8.03.  GUARANTEE IRREVOCABLE.  THIS GUARANTEE IS A CONTINUING GUARANTY
OF THE PAYMENT OF ALL GUARANTEED LIABILITIES NOW OR HEREAFTER EXISTING UNDER
THIS AGREEMENT AND SUCH SWAP AGREEMENTS TO WHICH ANY SECURED PARTY IS A PARTY
AND SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL PAYMENT IN FULL OF ALL
GUARANTEED LIABILITIES AND OTHER AMOUNTS PAYABLE HEREUNDER AND UNTIL THIS
AGREEMENT AND THE SWAP AGREEMENTS ARE NO LONGER IN EFFECT OR, IF EARLIER, WHEN
THE GUARANTOR HAS GIVEN THE ADMINISTRATIVE AGENT WRITTEN NOTICE THAT THIS
GUARANTEE HAS BEEN REVOKED; PROVIDED THAT ANY NOTICE UNDER THIS SECTION SHALL
NOT RELEASE THE REVOKING GUARANTOR FROM ANY GUARANTEED LIABILITY, ABSOLUTE OR
CONTINGENT, EXISTING PRIOR TO THE ADMINISTRATIVE AGENT’S ACTUAL RECEIPT OF THE
NOTICE AT ITS BRANCHES OR DEPARTMENTS RESPONSIBLE FOR THIS AGREEMENT AND SUCH
SWAP AGREEMENTS AND REASONABLE OPPORTUNITY TO ACT UPON SUCH NOTICE.

SECTION 8.04.  REINSTATEMENT.  THIS GUARANTEE SHALL CONTINUE TO BE EFFECTIVE OR
BE REINSTATED, AS THE CASE MAY BE, IF AT ANY TIME ANY PAYMENT OF ANY OF THE
GUARANTEED LIABILITIES IS RESCINDED OR MUST OTHERWISE BE RETURNED BY ANY SECURED
PARTY ON THE INSOLVENCY, BANKRUPTCY OR REORGANIZATION OF THE BORROWER, OR ANY
OTHER CREDIT PARTY, OR OTHERWISE, ALL AS THOUGH THE PAYMENT HAD NOT BEEN MADE.

SECTION 8.05.  SUBROGATION.  NO GUARANTOR SHALL EXERCISE ANY RIGHTS WHICH IT MAY
ACQUIRE BY WAY OF SUBROGATION, BY ANY PAYMENT MADE UNDER THIS GUARANTEE OR
OTHERWISE, UNTIL ALL THE GUARANTEED LIABILITIES HAVE BEEN PAID IN FULL AND THIS
AGREEMENT AND THE SWAP AGREEMENTS TO WHICH ANY LENDER COUNTERPARTY IS A PARTY
ARE NO LONGER IN EFFECT.  IF ANY AMOUNT IS PAID TO THE GUARANTOR ON ACCOUNT OF
SUBROGATION RIGHTS UNDER THIS GUARANTEE AT ANY TIME WHEN ALL THE GUARANTEED
LIABILITIES HAVE NOT BEEN PAID IN FULL, THE AMOUNT SHALL BE HELD IN TRUST FOR
THE BENEFIT OF THE LENDERS AND THE LENDER COUNTERPARTIES AND SHALL BE PROMPTLY
PAID TO THE ADMINISTRATIVE AGENT TO BE CREDITED AND APPLIED TO THE GUARANTEED
LIABILITIES, WHETHER MATURED OR UNMATURED OR ABSOLUTE OR CONTINGENT, IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND SUCH SWAP AGREEMENTS.  IF ANY
GUARANTOR MAKES PAYMENT TO THE ADMINISTRATIVE AGENT, LENDERS, OR ANY LENDER
COUNTERPARTIES OF ALL OR ANY PART OF THE GUARANTEED LIABILITIES AND ALL THE
GUARANTEED LIABILITIES ARE PAID IN FULL AND THIS AGREEMENT AND SUCH SWAP
AGREEMENTS ARE NO LONGER IN EFFECT, THE ADMINISTRATIVE AGENT, LENDERS AND LENDER
COUNTERPARTIES SHALL, AT SUCH GUARANTOR’S REQUEST, EXECUTE AND DELIVER TO SUCH
GUARANTOR APPROPRIATE DOCUMENTS, WITHOUT RECOURSE AND WITHOUT REPRESENTATION OR
WARRANTY, NECESSARY TO EVIDENCE THE TRANSFER BY SUBROGATION TO SUCH GUARANTOR OF
AN INTEREST IN THE GUARANTEED LIABILITIES RESULTING FROM THE PAYMENT.

SECTION 8.06.  SUBORDINATION.  WITHOUT LIMITING THE RIGHTS OF THE ADMINISTRATIVE
AGENT, THE LENDERS AND THE LENDER COUNTERPARTIES UNDER ANY OTHER AGREEMENT, ANY
LIABILITIES OWED BY THE BORROWER TO ANY GUARANTOR IN CONNECTION WITH ANY
EXTENSION OF CREDIT OR FINANCIAL ACCOMMODATION BY ANY GUARANTOR TO OR FOR THE
ACCOUNT OF THE BORROWER, INCLUDING BUT NOT

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LIMITED TO INTEREST ACCRUING AT THE AGREED CONTRACT RATE AFTER THE COMMENCEMENT
OF A BANKRUPTCY OR SIMILAR PROCEEDING, ARE HEREBY SUBORDINATED TO THE GUARANTEED
LIABILITIES, AND SUCH LIABILITIES OF THE BORROWER TO SUCH GUARANTOR, IF THE
ADMINISTRATIVE AGENT SO REQUESTS, SHALL BE COLLECTED, ENFORCED AND RECEIVED BY
ANY GUARANTOR AS TRUSTEE FOR THE ADMINISTRATIVE AGENT AND SHALL BE PAID OVER TO
THE ADMINISTRATIVE AGENT ON ACCOUNT OF THE GUARANTEED LIABILITIES BUT WITHOUT
REDUCING OR AFFECTING IN ANY MANNER THE LIABILITY OF THE GUARANTOR UNDER THE
OTHER PROVISIONS OF THIS GUARANTEE.

SECTION 8.07.  PAYMENTS GENERALLY.  ALL PAYMENTS BY THE GUARANTORS SHALL BE MADE
IN THE MANNER, AT THE PLACE AND IN THE CURRENCY (THE “PAYMENT CURRENCY”)
REQUIRED BY THE LOAN DOCUMENTS AND THE SWAP AGREEMENT TO WHICH ANY LENDER
COUNTERPARTY IS A PARTY, AS THE CASE MAY BE; PROVIDED, HOWEVER, THAT (IF THE
PAYMENT CURRENCY IS OTHER THAN DOLLARS) ANY GUARANTOR MAY, AT ITS OPTION (OR, IF
FOR ANY REASON WHATSOEVER ANY GUARANTOR IS UNABLE TO EFFECT PAYMENTS IN THE
FOREGOING MANNER, SUCH GUARANTOR SHALL BE OBLIGATED TO) PAY TO THE
ADMINISTRATIVE AGENT AT ITS PRINCIPAL OFFICE THE EQUIVALENT AMOUNT IN DOLLARS
COMPUTED AT THE SELLING RATE OF THE ADMINISTRATIVE AGENT OR A SELLING RATE
CHOSEN BY THE ADMINISTRATIVE AGENT, MOST RECENTLY IN EFFECT ON OR PRIOR TO THE
DATE THE GUARANTEED LIABILITY BECOMES DUE, FOR CABLE TRANSFERS OF THE PAYMENT
CURRENCY TO THE PLACE WHERE THE GUARANTEED LIABILITY IS PAYABLE.  IN ANY CASE IN
WHICH ANY GUARANTOR MAKES OR IS OBLIGATED TO MAKE PAYMENT IN DOLLARS, THE
GUARANTOR SHALL HOLD THE ADMINISTRATIVE AGENT, THE LENDERS AND THE LENDER
COUNTERPARTIES HARMLESS FROM ANY LOSS INCURRED BY THE ADMINISTRATIVE AGENT, ANY
LENDER OR ANY LENDER COUNTERPARTY ARISING FROM ANY CHANGE IN THE VALUE OF
DOLLARS IN RELATION TO THE PAYMENT CURRENCY BETWEEN THE DATE THE GUARANTEED
LIABILITY BECOMES DUE AND THE DATE THE ADMINISTRATIVE AGENT, SUCH LENDER OR SUCH
LENDER COUNTERPARTY IS ACTUALLY ABLE, FOLLOWING THE CONVERSION OF THE DOLLARS
PAID BY SUCH GUARANTOR INTO THE PAYMENT CURRENCY AND REMITTANCE OF SUCH PAYMENT
CURRENCY TO THE PLACE WHERE SUCH GUARANTEED LIABILITY IS PAYABLE, TO APPLY SUCH
PAYMENT CURRENCY TO SUCH GUARANTEED LIABILITY.

SECTION 8.08.  SETOFF.  EACH GUARANTOR AGREES THAT, IN ADDITION TO (AND WITHOUT
LIMITATION OF) ANY RIGHT OF SETOFF, BANKER’S LIEN OR COUNTERCLAIM THE
ADMINISTRATIVE AGENT, ANY LENDER OR ANY LENDER COUNTERPARTY MAY OTHERWISE HAVE,
THE ADMINISTRATIVE AGENT, SUCH LENDER OR SUCH LENDER COUNTERPARTY SHALL BE
ENTITLED, AT ITS OPTION, TO OFFSET BALANCES (GENERAL OR SPECIAL, TIME OR DEMAND,
PROVISIONAL OR FINAL) HELD BY IT FOR THE ACCOUNT OF ANY GUARANTOR AT ANY OFFICE
OF THE ADMINISTRATIVE AGENT, SUCH LENDER OR SUCH LENDER COUNTERPARTY, IN DOLLARS
OR IN ANY OTHER CURRENCY, AGAINST ANY AMOUNT PAYABLE BY SUCH GUARANTOR UNDER
THIS GUARANTEE WHICH IS NOT PAID WHEN DUE (REGARDLESS OF WHETHER SUCH BALANCES
ARE THEN DUE TO SUCH GUARANTOR), IN WHICH CASE IT SHALL PROMPTLY NOTIFY SUCH
GUARANTOR THEREOF; PROVIDED THAT THE FAILURE OF THE ADMINISTRATIVE AGENT, SUCH
LENDER, OR SUCH LENDER COUNTERPARTY TO GIVE SUCH NOTICE SHALL NOT AFFECT THE
VALIDITY THEREOF.

SECTION 8.09.  FORMALITIES.  EACH GUARANTOR WAIVES PRESENTMENT, NOTICE OF
DISHONOR, PROTEST, NOTICE OF ACCEPTANCE OF THIS GUARANTEE OR INCURRENCE OF ANY
GUARANTEED LIABILITY AND ANY OTHER FORMALITY WITH RESPECT TO ANY OF THE
GUARANTEED LIABILITIES OR THIS GUARANTEE.

SECTION 8.10.  LIMITATIONS ON GUARANTEE.  THE PROVISIONS OF THE GUARANTEE UNDER
THIS ARTICLE VIII ARE SEVERABLE, AND IN ANY ACTION OR PROCEEDING INVOLVING ANY
STATE CORPORATE LAW, OR ANY STATE, FEDERAL OR FOREIGN BANKRUPTCY, INSOLVENCY,
REORGANIZATION OR OTHER LAW AFFECTING THE

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RIGHTS OF CREDITORS GENERALLY, IF THE OBLIGATIONS OF ANY GUARANTOR UNDER THIS
GUARANTEE WOULD OTHERWISE BE HELD OR DETERMINED TO BE AVOIDABLE, INVALID OR
UNENFORCEABLE ON ACCOUNT OF THE AMOUNT OF SUCH GUARANTOR’S LIABILITY UNDER THIS
GUARANTEE, THEN, NOTWITHSTANDING ANY OTHER PROVISION OF THIS GUARANTEE TO THE
CONTRARY, THE AMOUNT OF SUCH LIABILITY SHALL, WITHOUT ANY FURTHER ACTION BY THE
GUARANTORS, THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY LENDER COUNTERPARTY, BE
AUTOMATICALLY LIMITED AND REDUCED TO THE HIGHEST AMOUNT THAT IS VALID AND
ENFORCEABLE AS DETERMINED IN SUCH ACTION OR PROCEEDING (SUCH HIGHEST AMOUNT
DETERMINED HEREUNDER BEING THE RELEVANT GUARANTOR’S “MAXIMUM LIABILITY”). THIS
SECTION 8.10, WITH RESPECT TO THE MAXIMUM LIABILITY OF THE GUARANTORS, IS
INTENDED SOLELY TO PRESERVE THE RIGHTS OF THE ADMINISTRATIVE AGENT, LENDERS AND
LENDER COUNTERPARTIES HEREUNDER TO THE MAXIMUM EXTENT NOT SUBJECT TO AVOIDANCE
UNDER APPLICABLE LAW, AND NO GUARANTOR NOR ANY OTHER PERSON SHALL HAVE ANY RIGHT
OR CLAIM UNDER THIS SECTION 8.10 WITH RESPECT TO THE MAXIMUM LIABILITY, EXCEPT
TO THE EXTENT NECESSARY SO THAT NONE OF THE OBLIGATIONS OF ANY GUARANTOR
HEREUNDER SHALL BE RENDERED VOIDABLE UNDER APPLICABLE LAW.

ARTICLE IX

EVENTS OF DEFAULT

If any of the following events (“Events of Default”) shall occur:

(A)           THE BORROWER SHALL FAIL TO PAY ANY PRINCIPAL OF ANY LOAN
(INCLUDING ANY PAYMENTS REQUIRED UNDER SECTION 2.12) 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 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 CLAUSE (A) OF THIS
ARTICLE) PAYABLE UNDER THIS AGREEMENT, WHEN AND AS THE SAME SHALL BECOME DUE AND
PAYABLE, AND SUCH FAILURE SHALL CONTINUE UNREMEDIED FOR A PERIOD OF THREE DAYS;

(C)           ANY REPRESENTATION OR WARRANTY MADE OR DEEMED MADE BY OR ON BEHALF
OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY IN OR IN CONNECTION WITH THIS
AGREEMENT OR ANY AMENDMENT OR MODIFICATION HEREOF OR WAIVER HEREUNDER, OR IN ANY
REPORT, CERTIFICATE, FINANCIAL STATEMENT OR OTHER DOCUMENT FURNISHED PURSUANT TO
OR IN CONNECTION WITH THIS AGREEMENT OR ANY AMENDMENT OR MODIFICATION HEREOF OR
WAIVER HEREUNDER OR IN ANY LOAN DOCUMENT FURNISHED PURSUANT TO OR IN CONNECTION
WITH THIS AGREEMENT OR ANY AMENDMENT OR MODIFICATION THEREOF OR WAIVER
HEREUNDER, SHALL PROVE TO HAVE BEEN INCORRECT IN ANY MATERIAL RESPECT WHEN MADE
OR DEEMED MADE;

(D)           THE BORROWER OR ANY RESTRICTED SUBSIDIARY SHALL FAIL TO OBSERVE OR
PERFORM ANY COVENANT, CONDITION OR AGREEMENT CONTAINED IN SECTION 2.12, SECTION
6.01, SECTION 6.02, SECTION 6.03 (WITH RESPECT TO THE BORROWER OR ANY RESTRICTED
SUBSIDIARY’S EXISTENCE), SECTION 6.05 (WITH RESPECT TO INSURANCE), SECTION 6.08,
OR IN ARTICLE VII;

(E)           THE BORROWER OR ANY RESTRICTED SUBSIDIARY SHALL FAIL TO OBSERVE OR
PERFORM ANY COVENANT, CONDITION OR AGREEMENT CONTAINED IN THIS AGREEMENT (OTHER
THAN THOSE SPECIFIED IN

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CLAUSE (A), (B) OR (D) OF THIS ARTICLE) OR ANY LOAN DOCUMENT, AND SUCH FAILURE
SHALL CONTINUE UNREMEDIED FOR A PERIOD OF THIRTY (30) DAYS AFTER NOTICE THEREOF
FROM THE ADMINISTRATIVE AGENT TO THE BORROWER (WHICH NOTICE WILL BE GIVEN AT THE
REQUEST OF ANY LENDER);

(F)            THE BORROWER OR ANY RESTRICTED SUBSIDIARY SHALL FAIL TO MAKE ANY
PAYMENT (WHETHER OF PRINCIPAL OR INTEREST AND REGARDLESS OF AMOUNT) IN RESPECT
OF ANY MATERIAL INDEBTEDNESS, WHEN AND AS THE SAME SHALL BECOME DUE AND PAYABLE;

(G)           ANY EVENT OR CONDITION OCCURS THAT RESULTS IN ANY MATERIAL
INDEBTEDNESS BECOMING DUE PRIOR TO ITS SCHEDULED MATURITY OR THAT ENABLES OR
PERMITS THE HOLDER OR HOLDERS OF ANY MATERIAL INDEBTEDNESS OR ANY TRUSTEE OR
AGENT ON ITS OR THEIR BEHALF TO CAUSE ANY MATERIAL INDEBTEDNESS TO BECOME DUE,
OR TO REQUIRE THE PREPAYMENT, REPURCHASE, REDEMPTION OR DEFEASANCE THEREOF,
PRIOR TO ITS SCHEDULED MATURITY; PROVIDED THAT THIS CLAUSE (G) SHALL NOT APPLY
TO SECURED INDEBTEDNESS THAT BECOMES DUE AS A RESULT OF THE VOLUNTARY SALE OR
TRANSFER OF THE PROPERTY OR ASSETS SECURING SUCH INDEBTEDNESS;

(H)           AN INVOLUNTARY PROCEEDING SHALL BE COMMENCED OR AN INVOLUNTARY
PETITION SHALL BE FILED SEEKING (I) LIQUIDATION, REORGANIZATION OR OTHER RELIEF
IN RESPECT OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR ITS DEBTS, OR OF A
SUBSTANTIAL PART OF ITS ASSETS, UNDER ANY FEDERAL, STATE OR FOREIGN BANKRUPTCY,
INSOLVENCY, RECEIVERSHIP OR SIMILAR LAW NOW OR HEREAFTER IN EFFECT OR (II) THE
APPOINTMENT OF A RECEIVER, TRUSTEE, CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR
SIMILAR OFFICIAL FOR THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR FOR A
SUBSTANTIAL PART OF ITS ASSETS, AND, IN ANY SUCH CASE, SUCH PROCEEDING OR
PETITION SHALL CONTINUE UNDISMISSED FOR SIXTY (60) DAYS OR AN ORDER OR DECREE
APPROVING OR ORDERING ANY OF THE FOREGOING SHALL BE ENTERED;

(I)            THE BORROWER OR ANY RESTRICTED SUBSIDIARY SHALL (I) VOLUNTARILY
COMMENCE ANY PROCEEDING OR FILE ANY PETITION SEEKING LIQUIDATION, REORGANIZATION
OR OTHER RELIEF UNDER ANY FEDERAL, STATE OR FOREIGN BANKRUPTCY, INSOLVENCY,
RECEIVERSHIP OR SIMILAR LAW NOW OR HEREAFTER IN EFFECT, (II) CONSENT TO THE
INSTITUTION OF, OR FAIL TO CONTEST IN A TIMELY AND APPROPRIATE MANNER, ANY
PROCEEDING OR PETITION DESCRIBED IN CLAUSE (H) OF THIS ARTICLE, (III) APPLY FOR
OR CONSENT TO THE APPOINTMENT OF A RECEIVER, TRUSTEE, CUSTODIAN, SEQUESTRATOR,
CONSERVATOR OR SIMILAR OFFICIAL FOR THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR
FOR A SUBSTANTIAL PART OF ITS ASSETS, (IV) FILE AN ANSWER ADMITTING THE MATERIAL
ALLEGATIONS OF A PETITION FILED AGAINST IT IN ANY SUCH PROCEEDING, (V) MAKE A
GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR (VI) TAKE ANY ACTION FOR THE
PURPOSE OF EFFECTING ANY OF THE FOREGOING;

(J)            THE BORROWER OR ANY RESTRICTED SUBSIDIARY SHALL BECOME UNABLE,
ADMIT IN WRITING ITS INABILITY OR FAIL GENERALLY TO PAY ITS DEBTS AS THEY BECOME
DUE;

(K)           ONE OR MORE JUDGMENTS FOR THE PAYMENT OF MONEY IN AN AGGREGATE
AMOUNT IN EXCESS OF $5,000,000 SHALL BE RENDERED AGAINST THE BORROWER OR ANY
RESTRICTED SUBSIDIARY OR ANY COMBINATION THEREOF AND THE SAME SHALL REMAIN
UNDISCHARGED FOR A PERIOD OF THIRTY (30) CONSECUTIVE DAYS DURING WHICH EXECUTION
SHALL NOT BE EFFECTIVELY STAYED, OR ANY ACTION SHALL BE LEGALLY TAKEN BY A
JUDGMENT CREDITOR TO ATTACH OR LEVY UPON ANY ASSETS OF THE BORROWER OR ANY
RESTRICTED SUBSIDIARY TO ENFORCE ANY SUCH JUDGMENT;

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(L)            AN ERISA EVENT SHALL HAVE OCCURRED THAT, IN THE OPINION OF THE
MAJORITY LENDERS, WHEN TAKEN TOGETHER WITH ALL OTHER ERISA EVENTS THAT HAVE
OCCURRED, COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT;

(M)          THE DELIVERY BY ANY GUARANTOR TO THE ADMINISTRATIVE AGENT OF
WRITTEN NOTICE THAT ITS GUARANTEE UNDER ARTICLE VIII HAS BEEN REVOKED OR IS
OTHERWISE DECLARED INVALID OR UNENFORCEABLE;

(N)           A CHANGE OF CONTROL SHALL OCCUR;

then, and in every such event (other than an event with respect to the Borrower
or any Restricted Subsidiary described in clause (h) or (i) of this Article),
and at any time thereafter during the continuance of such event, 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 Aggregate Commitment, and thereupon
the Aggregate Commitment shall terminate immediately, and (ii) declare the Loans
then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the
Aggregate Commitment shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, 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.

ARTICLE X

THE ADMINISTRATIVE AGENT

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.

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 any Credit Party or other Affiliate thereof as if
it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein.  Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any

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discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Majority Lenders or the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 11.02), 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 any Credit Party 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 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 Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 11.02) or in the
absence of its own gross negligence or willful misconduct.  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 the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article V or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.  None of the
Syndication Agents, Documentation Agents or Managing Agents shall have any
responsibility or liabilities as an agent hereunder.

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.  The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may 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
paragraphs 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.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such
resignation, the Majority Lenders shall have the right, in consultation with the
Borrower, to appoint a successor.  If no successor

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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, appoint a successor Administrative Agent
which shall be a bank with an office in Chicago, Illinois or New York, New York,
or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 11.03 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.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01.  NOTICES.

(A)           EXCEPT IN THE CASE OF NOTICES AND OTHER COMMUNICATIONS EXPRESSLY
PERMITTED TO BE GIVEN BY TELEPHONE (AND SUBJECT TO PARAGRAPH (B) BELOW), ALL
NOTICES AND OTHER COMMUNICATIONS PROVIDED FOR HEREIN SHALL BE IN WRITING AND
SHALL BE DELIVERED BY HAND OR OVERNIGHT COURIER SERVICE, MAILED BY CERTIFIED OR
REGISTERED MAIL OR SENT BY TELECOPY, AS FOLLOWS:

(I)            IF TO THE BORROWER, TO EXCO RESOURCES, INC., 12377 MERIT DRIVE,
SUITE 1700, DALLAS, TEXAS 75251, ATTENTION:  DOUGLAS H. MILLER, CHIEF EXECUTIVE
OFFICER AND ATTENTION:  J. DOUGLAS RAMSEY, CHIEF FINANCIAL OFFICER, TELECOPY NO.
(214) 368-2087.  FOR PURPOSES OF DELIVERING THE DOCUMENTS PURSUANT TO SECTION
6.01(A), SECTION 6.01(B) AND SECTION 6.01(D), THE WEBSITE ADDRESS IS
WWW.EXCORESOURCES.COM;

(II)           IF TO THE ADMINISTRATIVE AGENT OR ISSUING BANK, TO JPMORGAN CHASE
BANK, N.A., JPMORGAN LOAN SERVICES, 21 SOUTH CLARK ST., 19TH FLOOR, CHICAGO,
ILLINOIS 60603-2003, TELECOPY NO.: (312) 385-7096, ATTENTION: CLAUDIA KECH, WITH
A COPY TO JPMORGAN CHASE BANK, N.A., 1717 MAIN STREET, TX1-2448, DALLAS, TEXAS
75201, TELECOPY NO. (214) 290-2332, ATTENTION:  WM. MARK CRANMER, SENIOR VICE
PRESIDENT;

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(III)          IF TO THE SWINGLINE LENDER, JPMORGAN CHASE BANK, N.A., JPMORGAN
LOAN SERVICES, 21 SOUTH CLARK ST., 19TH FLOOR, CHICAGO, ILLINOIS 60603-2003,
TELECOPY NO.: (312) 385-7096, ATTENTION:  CLAUDIA KECH, WITH A COPY TO JPMORGAN
CHASE BANK, N.A., 1717 MAIN STREET, MAIL CODE TX1-2448, DALLAS, TEXAS 75201,
TELECOPY NO. (214) 290-2332, ATTENTION:  WM. MARK CRANMER, SENIOR VICE
PRESIDENT; AND

(IV)          IF TO ANY OTHER LENDER, TO IT AT ITS ADDRESS (OR TELECOPY 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 UNLESS OTHERWISE AGREED BY THE
ADMINISTRATIVE AGENT AND THE APPLICABLE LENDER.  THE ADMINISTRATIVE AGENT OR THE
BORROWER MAY, IN THEIR 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 TELECOPY NUMBER FOR
NOTICES AND OTHER COMMUNICATIONS HEREUNDER BY NOTICE TO THE OTHER PARTIES
HERETO.  ALL NOTICES AND OTHER COMMUNICATIONS GIVEN TO ANY PARTY HERETO IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
GIVEN ON THE DATE OF RECEIPT.

SECTION 11.02.  WAIVERS; AMENDMENTS.

(A)           NO FAILURE OR DELAY BY THE ADMINISTRATIVE AGENT, THE ISSUING BANK
OR ANY LENDER IN EXERCISING ANY RIGHT OR POWER HEREUNDER SHALL OPERATE AS A
WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT OR
POWER, OR ANY ABANDONMENT OR DISCONTINUANCE OF STEPS TO ENFORCE SUCH A RIGHT OR
POWER, PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY
OTHER RIGHT OR POWER.  THE RIGHTS AND REMEDIES OF THE ADMINISTRATIVE AGENT, THE
ISSUING BANK AND THE LENDERS HEREUNDER ARE CUMULATIVE AND ARE NOT EXCLUSIVE OF
ANY RIGHTS OR REMEDIES THAT THEY WOULD OTHERWISE HAVE.  NO WAIVER OF ANY
PROVISION OF THIS AGREEMENT OR CONSENT TO ANY DEPARTURE BY THE BORROWER
THEREFROM SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE PERMITTED BY
PARAGRAPH (B) OF THIS SECTION, AND THEN SUCH WAIVER OR CONSENT SHALL BE
EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE PURPOSE FOR WHICH GIVEN. 
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE MAKING OF A LOAN OR
ISSUANCE OF A LETTER OF CREDIT SHALL NOT BE CONSTRUED AS A WAIVER OF ANY
DEFAULT, REGARDLESS OF WHETHER THE ADMINISTRATIVE AGENT, ANY LENDER OR THE
ISSUING BANK MAY HAVE HAD NOTICE OR KNOWLEDGE OF SUCH DEFAULT AT THE TIME.

(B)           NEITHER THIS AGREEMENT NOR ANY PROVISION HEREOF MAY BE WAIVED,
AMENDED OR MODIFIED EXCEPT PURSUANT TO AN AGREEMENT OR AGREEMENTS IN WRITING
ENTERED INTO BY THE CREDIT PARTIES AND THE MAJORITY LENDERS OR BY THE CREDIT
PARTIES AND THE ADMINISTRATIVE AGENT WITH THE CONSENT OF THE MAJORITY LENDERS;
PROVIDED THAT NO SUCH AGREEMENT SHALL (1) INCREASE THE BORROWING BASE WITHOUT
THE WRITTEN CONSENT OF EACH LENDER, (2) INCREASE THE COMMITMENT OF ANY LENDER
WITHOUT THE WRITTEN CONSENT OF SUCH LENDER, (3) REDUCE THE PRINCIPAL AMOUNT OF
ANY LOAN OR LC DISBURSEMENT OR REDUCE THE RATE OF INTEREST THEREON, OR REDUCE
ANY FEES PAYABLE HEREUNDER, WITHOUT THE WRITTEN CONSENT OF EACH LENDER AFFECTED
THEREBY, (4) POSTPONE THE SCHEDULED DATE OF

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PAYMENT OF THE PRINCIPAL AMOUNT OF ANY LOAN OR LC DISBURSEMENT, OR ANY INTEREST
THEREON, OR ANY FEES PAYABLE HEREUNDER, OR REDUCE THE AMOUNT OF, WAIVE OR EXCUSE
ANY SUCH PAYMENT, OR POSTPONE THE SCHEDULED DATE OF EXPIRATION OF THE AGGREGATE
COMMITMENT, WITHOUT THE WRITTEN CONSENT OF EACH LENDER AFFECTED THEREBY, (5)
CHANGE SECTION 2.19(B) OR SECTION 2.19(C) IN A MANNER THAT WOULD ALTER THE PRO
RATA SHARING OF PAYMENTS REQUIRED THEREBY, WITHOUT THE WRITTEN CONSENT OF EACH
LENDER, (6) EXCEPT IN CONNECTION WITH ANY SALES, TRANSFERS, LEASES OR OTHER
DISPOSITIONS PERMITTED IN SECTION 7.03, RELEASE ANY CREDIT PARTY FROM ITS
OBLIGATIONS UNDER THE LOAN DOCUMENTS OR RELEASE ANY OF THE COLLATERAL WITHOUT
THE WRITTEN CONSENT OF EACH LENDER, OR (7) CHANGE ANY OF THE PROVISIONS OF THIS
SECTION OR THE DEFINITION 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 MAKE ANY DETERMINATION OR
GRANT ANY CONSENT HEREUNDER, WITHOUT THE WRITTEN CONSENT OF EACH LENDER;
PROVIDED FURTHER THAT NO SUCH AGREEMENT SHALL AMEND, MODIFY OR OTHERWISE AFFECT
THE RIGHTS OR DUTIES OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE
SWINGLINE LENDER HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE SWINGLINE LENDER, AS THE CASE MAY
BE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NO DEFAULTING LENDER SHALL
HAVE ANY RIGHT TO APPROVE OR DISAPPROVE ANY AMENDMENT, WAIVER OR CONSENT
HEREUNDER, EXCEPT THAT THE COMMITMENT OF SUCH LENDER MAY NOT BE INCREASED OR
EXTENDED WITHOUT THE CONSENT OF SUCH LENDER.

SECTION 11.03.  EXPENSES; INDEMNITY; DAMAGE WAIVER.

(A)           THE BORROWER SHALL PAY (I) ALL REASONABLE OUT-OF-POCKET EXPENSES
INCURRED BY THE ADMINISTRATIVE AGENT AND ITS AFFILIATES, INCLUDING THE
REASONABLE FEES, CHARGES AND DISBURSEMENTS OF COUNSEL FOR THE ADMINISTRATIVE
AGENT, IN CONNECTION WITH THE SYNDICATION OF THE CREDIT FACILITIES PROVIDED FOR
HEREIN, THE PREPARATION AND ADMINISTRATION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS OR ANY AMENDMENTS, MODIFICATIONS OR WAIVERS OF THE PROVISIONS HEREOF
(WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY SHALL BE
CONSUMMATED), (II) ALL REASONABLE OUT-OF-POCKET EXPENSES INCURRED BY THE ISSUING
BANK IN CONNECTION WITH THE ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION OF ANY
LETTER OF CREDIT OR ANY DEMAND FOR PAYMENT THEREUNDER AND (III) 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 THE LOAN DOCUMENTS,
INCLUDING ITS RIGHTS UNDER THIS SECTION, 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 CREDIT PARTIES SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE
ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING
PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH
INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS
OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (I) THE
EXECUTION OR DELIVERY OF THIS

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AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE PERFORMANCE BY
THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THE CONSUMMATION
OF THE TRANSACTIONS OR ANY OTHER TRANSACTIONS CONTEMPLATED HEREBY, (II) ANY LOAN
OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL
BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF
THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY
WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) ANY ACTUAL OR ALLEGED PRESENCE
OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY
THE BORROWER OR ANY SUBSIDIARY, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY
WAY TO THE BORROWER OR ANY SUBSIDIARY, OR (IV) ANY ACTUAL OR PROSPECTIVE CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER
ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO
ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

(C)           TO THE EXTENT THAT ANY CREDIT PARTY FAILS TO PAY ANY AMOUNT
REQUIRED TO BE PAID BY IT TO THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE
SWINGLINE LENDER UNDER PARAGRAPH (A) OR (B) OF THIS SECTION, EACH LENDER
SEVERALLY AGREES TO PAY TO THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE
SWINGLINE LENDER, AS THE CASE MAY BE, SUCH LENDER’S APPLICABLE PERCENTAGE OF
SUCH UNPAID AMOUNT WITH RESPECT TO THE AMOUNTS TO BE PAID TO THE ISSUING BANK OR
THE SWINGLINE LENDER AND SUCH LENDER’S AGGREGATE APPLICABLE PERCENTAGE OF SUCH
UNPAID AMOUNT WITH RESPECT TO AMOUNTS TO BE PAID TO THE ADMINISTRATIVE AGENT (IN
EACH CASE, 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 ISSUING BANK OR THE SWINGLINE LENDER IN ITS CAPACITY
AS SUCH.

(D)           TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE CREDIT
PARTIES SHALL NOT ASSERT, AND HEREBY WAIVE, ANY CLAIM AGAINST ANY INDEMNITEE, ON
ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE
DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION
WITH, OR AS A RESULT OF, THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY, THE TRANSACTIONS, ANY LOAN OR LETTER OF CREDIT OR THE USE
OF THE PROCEEDS THEREOF.

(E)           ALL AMOUNTS DUE UNDER THIS SECTION SHALL BE PAYABLE NOT LATER THAN
10 DAYS AFTER WRITTEN DEMAND THEREFOR.

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SECTION 11.04.  SUCCESSORS AND ASSIGNS.

(A)           THE PROVISIONS OF THIS AGREEMENT SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS
PERMITTED HEREBY (INCLUDING ANY AFFILIATE OF THE ISSUING BANK THAT ISSUES ANY
LETTER OF CREDIT), EXCEPT THAT (I) NO CREDIT PARTY MAY ASSIGN OR OTHERWISE
TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN
CONSENT OF EACH LENDER (AND ANY ATTEMPTED ASSIGNMENT OR TRANSFER BY SUCH CREDIT
PARTY 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.  NOTHING IN THIS AGREEMENT, EXPRESSED OR IMPLIED, SHALL BE
CONSTRUED TO CONFER UPON ANY PERSON (OTHER THAN THE PARTIES HERETO, THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY (INCLUDING ANY AFFILIATE OF
THE ISSUING BANK THAT ISSUES ANY LETTER OF CREDIT), PARTICIPANTS (TO THE EXTENT
PROVIDED IN PARAGRAPH (C) OF THIS SECTION) AND, TO THE EXTENT EXPRESSLY
CONTEMPLATED HEREBY, THE RELATED PARTIES OF EACH OF THE ADMINISTRATIVE AGENT,
THE ISSUING BANK AND THE LENDERS) ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM
UNDER OR BY REASON OF THIS AGREEMENT.

(B)

(I)            SUBJECT TO THE CONDITIONS SET FORTH IN PARAGRAPH (B)(II) BELOW,
ANY LENDER MAY ASSIGN TO ONE OR MORE ASSIGNEES ALL OR A PORTION OF ITS RIGHTS
AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS
COMMITMENT AND THE LOANS AT THE TIME OWING TO IT) WITH THE PRIOR WRITTEN CONSENT
(SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD) 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, A FEDERAL
RESERVE BANK, AN APPROVED FUND OR, IF AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, ANY OTHER ASSIGNEE;

(B)           THE ADMINISTRATIVE AGENT;

(C)           THE ISSUING BANK; AND

(D)          THE SWINGLINE LENDER.

(II)           ASSIGNMENTS SHALL BE SUBJECT TO THE FOLLOWING ADDITIONAL
CONDITIONS:

(A)          EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A
LENDER, 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, 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 IN
RESPECT OF SUCH LENDER’S COMMITMENT AND SUCH LENDER’S LOANS 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

(D)          THE ASSIGNEE, IF IT SHALL NOT BE A LENDER, SHALL DELIVER TO THE
ADMINISTRATIVE AGENT AN ADMINISTRATIVE QUESTIONNAIRE.

For the purposes of this Section 11.04(b), the term “Approved Fund” has the
following meaning:

“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.

(III)          SUBJECT TO ACCEPTANCE AND RECORDING THEREOF PURSUANT TO
PARAGRAPH (B)(IV) OF THIS SECTION, 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 2.16, SECTION 2.17, SECTION 2.18 AND SECTION 11.03).  ANY
ASSIGNMENT OR TRANSFER BY A LENDER OF RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT
THAT DOES NOT COMPLY WITH THIS SECTION 11.04 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 PARAGRAPH (C) OF THIS SECTION EXCEPT THAT ANY
ATTEMPTED ASSIGNMENT OR TRANSFER BY ANY LENDER THAT DOES NOT COMPLY WITH CLAUSE
(C) OF SECTION 11.04(B)(II) SHALL BE NULL AND VOID.

(IV)          THE ADMINISTRATIVE AGENT, ACTING FOR THIS PURPOSE AS AN AGENT OF
THE BORROWER, SHALL MAINTAIN AT ONE OF ITS OFFICES A COPY OF EACH ASSIGNMENT AND
ASSUMPTION DELIVERED TO IT AND A REGISTER FOR THE RECORDATION OF THE NAMES AND
ADDRESSES OF THE LENDERS, AND THE COMMITMENT AND APPLICABLE PERCENTAGE OF, AND
PRINCIPAL AMOUNT OF THE LOANS AND LC DISBURSEMENTS OWING TO, EACH LENDER
PURSUANT TO THE TERMS HEREOF FROM TIME TO TIME (THE “REGISTER”).  THE ENTRIES IN
THE REGISTER SHALL BE CONCLUSIVE, AND THE CREDIT PARTIES, THE ADMINISTRATIVE
AGENT, THE ISSUING BANK AND THE LENDERS MAY TREAT EACH PERSON WHOSE NAME IS
RECORDED IN THE REGISTER PURSUANT TO THE TERMS HEREOF AS A LENDER HEREUNDER FOR
ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE
REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE CREDIT PARTIES, THE ISSUING

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BANK AND ANY LENDER, AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON
REASONABLE PRIOR NOTICE.

(V)           UPON ITS RECEIPT OF A DULY COMPLETED ASSIGNMENT AND ASSUMPTION
EXECUTED BY AN ASSIGNING LENDER AND AN ASSIGNEE, THE ASSIGNEE’S COMPLETED
ADMINISTRATIVE QUESTIONNAIRE (UNLESS THE ASSIGNEE SHALL ALREADY BE A LENDER
HEREUNDER), THE PROCESSING AND RECORDATION FEE REFERRED TO IN PARAGRAPH (B) OF
THIS SECTION ANY WRITTEN CONSENT TO SUCH ASSIGNMENT REQUIRED BY PARAGRAPH (B) OF
THIS SECTION, THE ADMINISTRATIVE AGENT SHALL ACCEPT SUCH ASSIGNMENT AND
ASSUMPTION AND RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER;
PROVIDED THAT IF EITHER THE ASSIGNING LENDER OR THE ASSIGNEE SHALL HAVE FAILED
TO MAKE ANY PAYMENT REQUIRED TO BE MADE BY IT PURSUANT TO SECTION 2.07(D) OR
SECTION 2.07(E), SECTION 2.08, SECTION 2.19(D) OR SECTION 11.03(C), THE
ADMINISTRATIVE AGENT SHALL HAVE NO OBLIGATION TO ACCEPT SUCH ASSIGNMENT AND
ASSUMPTION AND RECORD THE INFORMATION THEREIN IN THE REGISTER UNLESS AND UNTIL
SUCH PAYMENT SHALL HAVE BEEN MADE IN FULL, TOGETHER WITH ALL ACCRUED INTEREST
THEREON.  NO ASSIGNMENT SHALL BE EFFECTIVE FOR PURPOSES OF THIS AGREEMENT UNLESS
IT HAS BEEN RECORDED IN THE REGISTER AS PROVIDED IN THIS PARAGRAPH.

(C)

(I)            ANY LENDER MAY, WITHOUT THE CONSENT OF THE BORROWER, THE
ADMINISTRATIVE AGENT OR THE ISSUING BANK, SELL PARTICIPATIONS TO ONE OR MORE
BANKS OR OTHER ENTITIES (A “PARTICIPANT”) IN ALL OR A PORTION OF SUCH LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS
COMMITMENT AND THE LOANS OWING TO IT); PROVIDED THAT (A) SUCH LENDER’S
OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN UNCHANGED, (B) SUCH LENDER SHALL
REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE PERFORMANCE OF
SUCH OBLIGATIONS AND (C) THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING
BANK AND THE OTHER LENDERS SHALL CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH
LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT.  ANY AGREEMENT OR INSTRUMENT PURSUANT TO WHICH A LENDER SELLS SUCH A
PARTICIPATION SHALL PROVIDE THAT SUCH LENDER SHALL RETAIN THE SOLE RIGHT TO
ENFORCE THIS AGREEMENT AND TO APPROVE ANY AMENDMENT, MODIFICATION OR WAIVER OF
ANY PROVISION OF THIS AGREEMENT; PROVIDED THAT SUCH AGREEMENT OR INSTRUMENT MAY
PROVIDE THAT SUCH LENDER WILL NOT, WITHOUT THE CONSENT OF THE PARTICIPANT, AGREE
TO ANY AMENDMENT, MODIFICATION OR WAIVER DESCRIBED IN THE FIRST PROVISO TO
SECTION 11.02(B) THAT AFFECTS SUCH PARTICIPANT.  SUBJECT TO PARAGRAPH (C)(II) OF
THIS SECTION, THE BORROWER AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE
BENEFITS OF SECTION 2.16, SECTION 2.17 AND SECTION 2.18 TO THE SAME EXTENT AS IF
IT WERE A LENDER AND HAD ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO
PARAGRAPH (B) OF THIS SECTION.  TO THE EXTENT PERMITTED BY LAW, EACH PARTICIPANT
ALSO SHALL BE ENTITLED TO THE BENEFITS OF SECTION 11.08 AS THOUGH IT WERE A
LENDER, PROVIDED SUCH PARTICIPANT AGREES TO BE SUBJECT TO SECTION 2.19(C) AS
THOUGH IT WERE A LENDER.

(II)           A PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER
PAYMENT UNDER SECTION 2.16 OR SECTION 2.18 THAN THE APPLICABLE LENDER WOULD HAVE
BEEN ENTITLED TO RECEIVE WITH RESPECT TO THE PARTICIPATION SOLD TO SUCH
PARTICIPANT, UNLESS THE SALE OF THE PARTICIPATION TO SUCH PARTICIPANT IS MADE
WITH THE PRIOR WRITTEN CONSENT OF THE BORROWER.  A PARTICIPANT THAT WOULD BE A
FOREIGN LENDER IF IT WERE A LENDER SHALL NOT BE ENTITLED TO

86

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THE BENEFITS OF SECTION 2.18 UNLESS THE BORROWER IS NOTIFIED OF THE
PARTICIPATION SOLD TO SUCH PARTICIPANT AND SUCH PARTICIPANT AGREES, FOR THE
BENEFIT OF THE BORROWER, TO COMPLY WITH SECTION 2.18(E) AS THOUGH IT WERE A
LENDER.

(D)           ANY LENDER MAY AT ANY TIME PLEDGE OR ASSIGN A SECURITY INTEREST IN
ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT TO SECURE OBLIGATIONS OF
SUCH LENDER, INCLUDING WITHOUT LIMITATION ANY PLEDGE OR ASSIGNMENT TO SECURE
OBLIGATIONS TO A FEDERAL RESERVE BANK, AND THIS SECTION SHALL NOT APPLY TO ANY
SUCH PLEDGE OR ASSIGNMENT OF A SECURITY INTEREST; PROVIDED THAT NO SUCH PLEDGE
OR ASSIGNMENT OF A SECURITY INTEREST SHALL RELEASE A LENDER FROM ANY OF ITS
OBLIGATIONS HEREUNDER OR SUBSTITUTE ANY SUCH PLEDGEE OR ASSIGNEE FOR SUCH LENDER
AS A PARTY HERETO.

SECTION 11.05.  SURVIVAL.  ALL COVENANTS, AGREEMENTS, REPRESENTATIONS AND
WARRANTIES MADE BY THE CREDIT PARTIES HEREIN AND IN THE CERTIFICATES OR OTHER
INSTRUMENTS DELIVERED IN CONNECTION WITH OR PURSUANT TO THIS AGREEMENT SHALL BE
CONSIDERED TO HAVE BEEN RELIED UPON BY THE OTHER PARTIES HERETO AND SHALL
SURVIVE THE EXECUTION AND DELIVERY OF THIS AGREEMENT 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, THE ISSUING BANK OR ANY LENDER MAY HAVE HAD NOTICE OR
KNOWLEDGE OF ANY DEFAULT OR INCORRECT REPRESENTATION OR WARRANTY AT THE TIME ANY
CREDIT IS EXTENDED HEREUNDER, AND SHALL CONTINUE IN FULL FORCE AND EFFECT AS
LONG AS THE PRINCIPAL OF OR ANY ACCRUED INTEREST ON ANY LOAN OR ANY FEE OR ANY
OTHER AMOUNT PAYABLE UNDER THIS AGREEMENT IS OUTSTANDING AND UNPAID OR ANY
LETTER OF CREDIT IS OUTSTANDING AND SO LONG AS THE AGGREGATE COMMITMENT HAS NOT
EXPIRED OR TERMINATED.  THE PROVISIONS OF SECTION 2.16, SECTION 2.17, SECTION
2.18 AND SECTION 11.03 AND ARTICLE X 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 AGGREGATE COMMITMENT OR THE TERMINATION OF THIS AGREEMENT OR ANY
PROVISION HEREOF.

SECTION 11.06.  COUNTERPARTS; INTEGRATION; EFFECTIVENESS.  THIS AGREEMENT MAY BE
EXECUTED IN COUNTERPARTS (AND BY DIFFERENT PARTIES HERETO ON DIFFERENT
COUNTERPARTS), EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL, BUT ALL OF WHICH WHEN
TAKEN TOGETHER SHALL CONSTITUTE A SINGLE CONTRACT.  THIS AGREEMENT 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 SUPERSEDE ANY AND ALL PREVIOUS AGREEMENTS AND UNDERSTANDINGS,
ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.  THIS WRITTEN CREDIT AND
GUARANTY AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  EXCEPT AS PROVIDED IN SECTION
5.01, 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 SHALL BE EFFECTIVE AS DELIVERY OF A MANUALLY EXECUTED COUNTERPART OF
THIS AGREEMENT.

87

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SECTION 11.07.  SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT HELD TO BE
INVALID, ILLEGAL OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH
JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY, ILLEGALITY OR
UNENFORCEABILITY WITHOUT AFFECTING THE VALIDITY, LEGALITY AND ENFORCEABILITY OF
THE REMAINING PROVISIONS HEREOF; AND THE INVALIDITY OF A PARTICULAR PROVISION IN
A PARTICULAR JURISDICTION SHALL NOT INVALIDATE SUCH PROVISION IN ANY OTHER
JURISDICTION.

SECTION 11.08.  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 AT ANY TIME OWING
BY SUCH LENDER OR AFFILIATE TO OR FOR THE CREDIT OR THE ACCOUNT OF THE BORROWER
AGAINST ANY OF AND ALL THE OBLIGATIONS OF ANY CREDIT PARTY NOW OR HEREAFTER
EXISTING UNDER THIS AGREEMENT HELD BY SUCH LENDER, IRRESPECTIVE OF WHETHER OR
NOT SUCH LENDER SHALL HAVE MADE ANY DEMAND UNDER THIS AGREEMENT AND ALTHOUGH
SUCH OBLIGATIONS MAY BE UNMATURED.  THE RIGHTS OF EACH LENDER UNDER THIS SECTION
AND SECTION 8.08 ARE IN ADDITION TO OTHER RIGHTS AND REMEDIES (INCLUDING OTHER
RIGHTS OF SETOFF) WHICH SUCH LENDER MAY HAVE.

SECTION 11.09.  GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

(A)           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.

(B)           EACH CREDIT PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR,
TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(C)           EACH CREDIT PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY

88

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IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

(D)           EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.01.  NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.

SECTION 11.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 11.11.  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 11.12.  CONFIDENTIALITY.  EACH OF THE ADMINISTRATIVE AGENT, THE ISSUING
BANK AND THE LENDERS AGREES TO MAINTAIN THE CONFIDENTIALITY OF THE INFORMATION
(AS DEFINED BELOW), EXCEPT THAT INFORMATION MAY BE DISCLOSED (A) TO ITS AND ITS
AFFILIATES’ DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, INCLUDING ACCOUNTANTS,
LEGAL COUNSEL AND OTHER ADVISORS (IT BEING UNDERSTOOD THAT THE PERSONS TO WHOM
SUCH DISCLOSURE IS MADE WILL BE INFORMED OF THE CONFIDENTIAL NATURE OF SUCH
INFORMATION AND INSTRUCTED TO KEEP SUCH INFORMATION CONFIDENTIAL), (B) TO THE
EXTENT REQUESTED BY ANY REGULATORY AUTHORITY OR ANY SELF-REGULATORY AUTHORITY OR
AGENCY POSSESSING INVESTIGATIVE POWERS AND THE ABILITY TO SANCTION MEMBERS FOR
NON-COMPLIANCE, (C) TO THE EXTENT REQUIRED BY APPLICABLE LAWS OR REGULATIONS OR
BY ANY SUBPOENA OR SIMILAR LEGAL PROCESS, (D) TO ANY OTHER PARTY TO THIS
AGREEMENT, (E) IN CONNECTION WITH THE EXERCISE OF ANY REMEDIES HEREUNDER OR ANY
SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT OF
RIGHTS HEREUNDER, (F) SUBJECT TO AN AGREEMENT CONTAINING PROVISIONS
SUBSTANTIALLY THE SAME AS, OR OTHERWISE CONSISTENT WITH, THOSE OF THIS SECTION,
TO (I) ANY ASSIGNEE OF OR PARTICIPANT IN, OR ANY PROSPECTIVE ASSIGNEE OF OR
PARTICIPANT IN, ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR
(II) ANY ACTUAL OR PROSPECTIVE COUNTERPARTY (OR ITS ADVISORS) TO ANY SWAP OR
DERIVATIVE TRANSACTION RELATING TO THE CREDIT PARTIES AND THEIR OBLIGATIONS, (G)
WITH THE CONSENT OF THE BORROWER OR (H) TO THE EXTENT SUCH INFORMATION
(I) BECOMES PUBLICLY AVAILABLE OTHER THAN AS A RESULT OF A BREACH OF THIS
SECTION OR (II) BECOMES AVAILABLE TO THE ADMINISTRATIVE AGENT, THE ISSUING BANK
OR ANY LENDER ON A NONCONFIDENTIAL BASIS FROM A SOURCE OTHER THAN A CREDIT
PARTY.  FOR THE PURPOSES OF THIS SECTION, “INFORMATION” MEANS ALL INFORMATION
RECEIVED FROM ANY CREDIT PARTY RELATING TO ANY CREDIT PARTY OR ITS BUSINESS,
OTHER THAN ANY SUCH INFORMATION THAT IS AVAILABLE TO THE ADMINISTRATIVE AGENT,
THE

89

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ISSUING BANK OR ANY LENDER ON A NONCONFIDENTIAL BASIS PRIOR TO DISCLOSURE BY ANY
CREDIT PARTY; PROVIDED THAT, IN THE CASE OF INFORMATION RECEIVED FROM ANY CREDIT
PARTY 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 SHALL BE CONSIDERED
TO HAVE COMPLIED WITH ITS OBLIGATION TO DO SO IF SUCH PERSON HAS EXERCISED THE
SAME DEGREE OF CARE TO MAINTAIN THE CONFIDENTIALITY OF SUCH INFORMATION AS SUCH
PERSON WOULD ACCORD TO ITS OWN CONFIDENTIAL INFORMATION.

SECTION 11.13.  INTEREST RATE LIMITATION.  NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, IF AT ANY TIME THE INTEREST RATE APPLICABLE TO ANY LOAN, TOGETHER
WITH ALL FEES, CHARGES AND OTHER AMOUNTS WHICH ARE TREATED AS INTEREST ON SUCH
LOAN UNDER APPLICABLE LAW (COLLECTIVELY THE “CHARGES”), SHALL EXCEED THE MAXIMUM
LAWFUL RATE (THE “MAXIMUM RATE”) WHICH MAY BE CONTRACTED FOR, CHARGED, TAKEN,
RECEIVED OR RESERVED BY THE LENDER HOLDING SUCH LOAN IN ACCORDANCE WITH
APPLICABLE LAW, THE RATE OF INTEREST PAYABLE IN RESPECT OF SUCH LOAN HEREUNDER,
TOGETHER WITH ALL CHARGES PAYABLE IN RESPECT THEREOF, SHALL BE LIMITED TO THE
MAXIMUM RATE AND, TO THE EXTENT LAWFUL, THE INTEREST AND CHARGES THAT WOULD HAVE
BEEN PAYABLE IN RESPECT OF SUCH LOAN BUT WERE NOT PAYABLE AS A RESULT OF THE
OPERATION OF THIS SECTION SHALL BE CUMULATED AND THE INTEREST AND CHARGES
PAYABLE TO SUCH LENDER IN RESPECT OF OTHER LOANS OR PERIODS SHALL BE INCREASED
(BUT NOT ABOVE THE MAXIMUM RATE THEREFOR) UNTIL SUCH CUMULATED AMOUNT, TOGETHER
WITH INTEREST THEREON AT THE FEDERAL FUNDS EFFECTIVE RATE TO THE DATE OF
REPAYMENT, SHALL HAVE BEEN RECEIVED BY SUCH LENDER.  CHAPTER 346 OF THE TEXAS
FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT ACCOUNTS (FORMERLY TEX.
REV. CIV. STAT. ANN. ART. 5069, CH. 15)) SHALL NOT APPLY TO THIS AGREEMENT OR TO
ANY LOAN, NOR SHALL THIS AGREEMENT OR ANY LOAN BE GOVERNED BY OR BE SUBJECT TO
THE PROVISIONS OF SUCH CHAPTER 346 IN ANY MANNER WHATSOEVER.

SECTION 11.14.  USA PATRIOT ACT.  EACH LENDER THAT IS SUBJECT TO THE
REQUIREMENTS OF THE USA PATRIOT ACT (TITLE III OF PUB. L. 107-56 (SIGNED INTO
LAW OCTOBER 26, 2001)) (THE “ACT”) HEREBY NOTIFIES EACH CREDIT PARTY THAT
PURSUANT TO THE REQUIREMENTS OF THE ACT, IT IS REQUIRED TO OBTAIN, VERIFY AND
RECORD INFORMATION THAT IDENTIFIES EACH CREDIT PARTY, WHICH INFORMATION INCLUDES
THE NAME AND ADDRESS OF EACH CREDIT PARTY AND OTHER INFORMATION THAT WILL ALLOW
SUCH LENDER TO IDENTIFY EACH CREDIT PARTY IN ACCORDANCE WITH THE ACT.  THE
BORROWER SHALL, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT OR ANY LENDER,
PROVIDE ALL DOCUMENTATION AND OTHER INFORMATION THAT THE ADMINISTRATIVE AGENT OR
SUCH LENDER REASONABLY REQUIRES TO COMPLY WITH ITS ONGOING OBLIGATIONS UNDER
APPLICABLE “KNOW YOUR CUSTOMER” AND ANTI-MONEY LAUNDERING RULES AND REGULATIONS,
INCLUDING THE ACT.

SECTION 11.15.  ORIGINAL CREDIT AGREEMENT.  UPON THE EFFECTIVE DATE, THIS
AGREEMENT SHALL SUPERSEDE AND REPLACE IN ITS ENTIRETY THE ORIGINAL CREDIT
AGREEMENT; PROVIDED, HOWEVER, THAT (A) ALL LOANS, LETTERS OF CREDIT, AND OTHER
INDEBTEDNESS, OBLIGATIONS AND LIABILITIES OUTSTANDING UNDER THE ORIGINAL CREDIT
AGREEMENT ON SUCH DATE SHALL CONTINUE TO CONSTITUTE LOANS, LETTERS OF CREDIT AND
OTHER INDEBTEDNESS, OBLIGATIONS AND LIABILITIES UNDER THIS AGREEMENT, (B) THE
EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS HEREUNDER
SHALL NOT CONSTITUTE A NOVATION, REFINANCING OR ANY OTHER FUNDAMENTAL CHANGE IN
THE RELATIONSHIP AMONG THE PARTIES AND (C) THE LOANS, LETTERS OF CREDIT, AND
OTHER INDEBTEDNESS, OBLIGATIONS AND LIABILITIES OUTSTANDING HEREUNDER, TO THE
EXTENT OUTSTANDING UNDER THE ORIGINAL CREDIT AGREEMENT IMMEDIATELY PRIOR TO THE
DATE HEREOF, SHALL CONSTITUTE THE SAME LOANS, LETTERS OF CREDIT, AND OTHER
INDEBTEDNESS, OBLIGATIONS AND LIABILITIES AS WERE OUTSTANDING UNDER THE ORIGINAL
CREDIT AGREEMENT.

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SECTION 11.16.  REAFFIRMATION AND GRANT OF SECURITY INTEREST.  EACH CREDIT PARTY
HEREBY (I) CONFIRMS THAT EACH SECURITY INSTRUMENT (AS DEFINED IN THE ORIGINAL
CREDIT AGREEMENT) TO WHICH IT IS A PARTY OR IS OTHERWISE BOUND AND ALL
COLLATERAL ENCUMBERED THEREBY, WILL CONTINUE TO GUARANTEE OR SECURE, AS THE CASE
MAY BE, TO THE FULLEST EXTENT POSSIBLE IN ACCORDANCE WITH THE LOAN DOCUMENTS,
THE PAYMENT AND PERFORMANCE OF ALL OBLIGATIONS AND GUARANTEED LIABILITIES UNDER
THIS AGREEMENT AND THE SECURED OBLIGATIONS (AS SUCH TERM IS DEFINED IN THE
SECURITY INSTRUMENTS) UNDER THE SECURITY INSTRUMENTS, AS THE CASE MAY BE,
INCLUDING WITHOUT LIMITATION THE PAYMENT AND PERFORMANCE OF ALL SUCH OBLIGATIONS
AND GUARANTEED LIABILITIES UNDER THIS AGREEMENT AND THE SECURED OBLIGATIONS
UNDER THE SECURITY INSTRUMENTS, AND (II) REAFFIRMS ITS GRANT TO THE
ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SECURED PARTIES OF A CONTINUING LIEN
ON AND SECURITY INTEREST IN AND TO SUCH CREDIT PARTY’S RIGHT, TITLE AND INTEREST
IN, TO AND UNDER ALL COLLATERAL AS COLLATERAL SECURITY FOR THE PROMPT PAYMENT
AND PERFORMANCE IN FULL WHEN DUE OF THE OBLIGATIONS AND GUARANTEED LIABILITIES
UNDER THIS AGREEMENT AND THE SECURED OBLIGATIONS UNDER THE SECURITY INSTRUMENTS
(WHETHER AT STATED MATURITY, BY ACCELERATION OR OTHERWISE) IN ACCORDANCE WITH
THE TERMS THEREOF.

SECTION 11.17.  REALLOCATION OF AGGREGATE COMMITMENT.  THE LENDERS (AS DEFINED
IN THE ORIGINAL CREDIT AGREEMENT) HAVE AGREED AMONG THEMSELVES TO REALLOCATE THE
AGGREGATE COMMITMENT (AS DEFINED IN THE ORIGINAL CREDIT AGREEMENT) AS
CONTEMPLATED BY THIS AGREEMENT AND TO ADJUST THEIR INTERESTS IN THE AGGREGATE
COMMITMENT AND THE REVOLVING LOANS (AS DEFINED IN THE ORIGINAL CREDIT AGREEMENT)
ACCORDINGLY.  ON THE EFFECTIVE DATE AND AFTER GIVING EFFECT TO SUCH REALLOCATION
AND ADJUSTMENT OF SUCH COMMITMENT AND SUCH LOANS, THE LENDERS SHALL OWN THE
APPLICABLE PERCENTAGES SET FORTH ON SCHEDULE 2.01.  THE OUTSTANDING REVOLVING
LOANS (AS DEFINED IN THE ORIGINAL CREDIT AGREEMENT) AND THE FUNDS DELIVERED TO
THE ADMINISTRATIVE AGENT ON THE EFFECTIVE DATE BY THE LENDERS SHALL BE ALLOCATED
SUCH THAT AFTER GIVING EFFECT TO SUCH ALLOCATION EACH OF THE LENDERS SHALL OWN
THE APPLICABLE PERCENTAGES OF THE AGGREGATE COMMITMENT AND THE COMMITMENTS SET
FORTH ON SCHEDULE 2.01 AND SUCH LENDERS SHALL OWN THE LOANS CONSISTENT WITH THE
APPLICABLE PERCENTAGES SET FORTH ON SCHEDULE 2.01.  THE BORROWER SHALL PAY ANY
FUNDING INDEMNIFICATION AMOUNTS REQUIRED BY SECTION 2.17 OF THE ORIGINAL CREDIT
AGREEMENT IN THE EVENT THE PAYMENT OF ANY PRINCIPAL OF ANY EURODOLLAR LOAN OR
THE CONVERSION OF ANY EURODOLLAR LOAN OTHER THAN ON THE LAST DAY OF AN INTEREST
PERIOD APPLICABLE THERETO IS REQUIRED IN CONNECTION WITH THE REALLOCATION
CONTEMPLATED BY THIS SECTION 11.17.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

BORROWER:

 

 

 

EXCO RESOURCES, INC.

 

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

 

Name:

J. Douglas Ramsey, Ph.D.

 

 

Title:

Vice President and Chief Financial
Officer

 

 

 

 

 

GUARANTORS:

 

 

 

EXCO OPERATING, LP

 

 

 

By:

EXCO Investment II, LLC,

 

 

its sole general partner

 

 

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

 

 

Name:

J. Douglas Ramsey, Ph.D.

 

 

 

Title:

Vice President and Chief
Financial Officer

 

 

 

 

 

NORTH COAST ENERGY, INC.

 

NORTH COAST ENERGY EASTERN, INC.

 

PINESTONE RESOURCES, LLC

 

POWER GAS MARKETING &

 

TRANSMISSION, INC.

 

 

 

By:

/s/ J. Douglas Ramsey

 

 

Name:

J. Douglas Ramsey, Ph.D.

 

 

Title:

Vice President and Chief Financial

 

 

 

Officer of the Credit Parties listed
above

 

SIGNATURE PAGE

 

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

 

EXCO INVESTMENT I, LLC

 

 

 

By:

EXCO Resources, Inc.,

 

 

its sole member

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

 

 

Name:

J. Douglas Ramsey, Ph.D.

 

 

 

Title:

Vice President and Chief
Financial Officer

 

 

 

 

 

EXCO INVESTMENT II, LLC

 

 

 

By:

EXCO Resources, Inc.,

 

 

its sole member

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

 

 

Name:

J. Douglas Ramsey, Ph.D.

 

 

 

Title:

Vice President and Chief

 

 

 

 

Financial Officer

 

SIGNATURE PAGE

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

 

JPMORGAN CHASE BANK, N.A., as a Lender
and as Administrative Agent,

 

 

 

 

 

By:

/s/ Wm. Mark Cranmer

 

 

Name:

Wm. Mark Cranmer

 

 

Title:

Senior Vice President

 

SIGNATURE PAGE

 

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

 

BNP PARIBAS

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Betsy Jocher

/s/ Polly Schott

 

Name:

Betsy Jocher

Polly Schott

 

Title:

Director

Vice President

 

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

 

Citibank, N.A.

 

 

as a Lender and Syndication Agent

 

 

 

 

 

 

 

 

 

 

By:

/s/ Angela McCracken

 

Name:

Angela McCracken

 

Title:

Vice President

 

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

 

Fortis Capital Corp.

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michele Jones

 

Name:

Michele Jones

 

 

Title:

Senior Vice President

 

 

 

 

 

 

 

 

 

 

By:

/s/ Darrell Holley

 

Name:

Darrell Holley

 

 

Title:

Managing Director

 

 

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

 

Scotiabanc Inc.

 

 

as a Lender

 

 

 

 

 

 

 

 

By:

/s/ William E. Zarrett

 

Name:

William E. Zarrett

 

 

Title:

Managing Director

 

 

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

 

Bank of America

 

 

as a Lender

 

 

 

 

 

 

 

 

By:

/s/ Jeffrey H. Rathkamp

 

Name:

Jeffrey H. Rathkamp

 

 

Title:

Managing Director

 

 

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

 

KeyBank NA

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Thomas Rajan

 

Name:

Thomas Rajan

 

 

Title:

Senior Vice President

 

 

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

 

CREDIT SUISSE, CAYMAN ISLANDS

 

BRANCH,

 

 

as a Lender

 

 

 

 

 

 

 

 

By:

/s/ Vanessa Gomez

 

Name:

Vanessa Gomez

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Shaheen Malik

 

 

 

Shaheen Malik

 

 

 

Associate

 

 

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

 

The Royal Bank of Scotland plc

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Scott L. Joyce

 

Name:

Scott L. Joyce

 

 

Title:

Vice President

 

 

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

 

BANK OF SCOTLAND

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Karen Weich

 

Name:

Karen Weich

 

 

Title:

Vice President

 

 

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

 

BMO Capital Markets Financing, Inc.

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ James V. Ducote

 

Name:

James V. Ducote

 

 

Title:

Director

 

 

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

 

CALYON NEW YORK BRANCH

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michael D. Willis

 

Name:

Michael D. Willis

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

 

By:

/s/ Tom Byargeon

 

Name:

Tom Byargeon

 

 

Title:

Managing Director

 

 

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

 

Royal Bank of Canada

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Don J. McKinnerney

 

Name:

Don J. McKinnerney

 

 

Title:

Authorized Signatory

 

 

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

 

SOCIETE GENERALE,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Christian Nelly

 

Name:

Christian Nelly

 

 

Title:

Vice President

 

 

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

 

Sumitomo Mitsui Banking Corporation

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ William M. Ginn

 

Name:

William M. Ginn

 

 

Title:

General Manager

 

 

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

 

TORONTO DOMINION (TEXAS) LLC

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jackie Barrett

 

Name:

Jackie Barrett

 

 

Title:

Authorized Signatory

 

 

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

 

Wells Fargo Bank, N.A.

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jason Hicks

 

Name:

Jason Hicks

 

 

Title:

Portfolio Manager

 

 

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

 

Allied Irish Banks, p.l.c.

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ David O’Driscoll

 

Name:

David O’Driscoll

 

 

Title:

Assistant Vice President

 

 

 

 

 

 

 

 

 

 

By:

/s/ Aidan Lanigan

 

Name:

Aidan Lanigan

 

 

Title:

Vice President

 

 

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

 

COMERICA BANK

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Peter L. Sefzik

 

Name:

Peter L. Sefzik

 

 

Title:

Vice President

 

 

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

 

WESTLB AG, New York Branch

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Paul Vastola

 

Name:

Paul Vastola

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

 

By:

/s/ Thomas D. Murray

 

Name:

Thomas D. Murray

 

 

Title:

Managing Director

 

 

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

 

Natixis,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Donovan C. Broussard

 

 

Donovan C. Broussard

 

 

Managing Director

 

 

 

 

 

 

 

By:

/s/ Renaud d’Herbes

 

 

Renaud d’Herbes

 

 

Senior Managing Director

 

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

 

DEUTSCHE BANK TRUST COMPANY

 

AMERICAS

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Evelyn Thierry

 

Name:

Evelyn Thierry

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

By:

/s/ Marguerite Sutton

 

Name:

Marguerite Sutton

 

 

Title:

Director

 

 

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

 

SUNTRUST BANK

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Sean Roche

 

Name:

Sean Roche

 

 

Title:

Vice President

 

 

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

 

UNION BANK OF CALIFORNIA, N.A.,

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jarrod Bourgeois

 

Name:

Jarrod Bourgeois

 

 

Title:

Vice President

 

 

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

 

WACHOVIA BANK, NATIONAL

 

 

ASSOCIATION,

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Chris Hewitt

 

Name:

Chris Hewitt

 

 

Title:

Vice President

 

 

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

 

LEHMAN BROTHERS COMMERCIAL BANK

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Brian McNany

 

Name:

Brian McNany

 

 

Title:

Authorized Signatory

 

 

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

 

UBS Loan Finance LLC

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mary E. Evans

 

Name:

Mary E. Evans

 

 

Title:

Associate Director

 

 

 

 

 

 

 

 

 

 

By:

/s/ Irja R. Otsa

 

Name:

Irja R. Otsa

 

 

Title:

Associate Director

 

 

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

 

U.S. Bank National Association

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Daria Mahoney

 

Name:

Daria Mahoney

 

 

Title:

Vice President

 

 

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

 

BARCLAYS BANK PLC

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Nicholas Bell

 

Name:

Nicholas Bell

 

 

Title:

Director

 

 

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

 

DZ BANK AG DEUTSCHE ZENTRAL-

 

GENOSSENSCHAFTSBANK, FRANKFURT AM

 

MAIN, NEW YORK BRANCH, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Richard L. Hagemann

 

Name:

Richard L. Hagemann

 

 

Title:

First Vice President

 

 

 

 

 

 

 

 

 

 

By:

/s/ Judson Horn

 

Name:

Judson Horn

 

 

Title:

Assistant Treasurer

 

 

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

 

GOLDMAN SACHS CREDIT PARTNERS, L.P.

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Mark Walton

 

Name:

Mark Walton

 

 

Title:

Authorized Signatory

 

 

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

 

MORGAN STANLEY SENIOR FUNDING,

 

INC.

 

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Daniel Twenge

 

Name:

Daniel Twenge

 

 

Title:

Vice President

 

 

 

Morgan Stanley Senior Funding Inc.

 

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

 

STERLING BANK

 

 

as a Lender

 

 

 

 

 

 

 

 

 

 

By:

/s/ Ryan K. Michael

 

Name:

Ryan K. Michael

 

 

Title:

Assistant Vice President

 

 

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

ASSIGNMENT AND ASSUMPTION

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

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit, guarantees and swingline
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”).  Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

1.

 

 

 

Assignor:

 

 

 

 

 

2.

 

Assignee:

 

 

 

 

 

 

[and is an Affiliate/Approved Fund of [identify Lender]]

 

 

 

 

 

3.

 

Borrower(s):

 

 

 

 

 

 

 

 

 

 

 

 

4.

 

Administrative Agent:

 

JPMorgan Chase Bank, N.A. (as the administrative agent under the Credit
Agreement)

 

 

 

 

 

5.

 

Credit Agreement:

 

Second Amended and Restated Credit Agreement dated as of                     ,
2006 among EXCO Resources, Inc., as Borrower, Certain Subsidiaries of Borrower,
as Guarantors, the Lenders parties thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent

 

1

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

 

 

6.

 

Assigned Interest:

 

 

 

Facility Assigned

 

Aggregate
Commitment/Loans
for all Lenders

 

Amount of
Commitment/Loans
Assigned

 

Applicable
Percentage of
Commitment/Loans

 

Commitment

 

$

 

$

 

 

%

 

 

$

 

$

 

 

%

  

 

$

 

$

 

 

%

 

Effective Date:                                      , 20   

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

ASSIGNOR

 

 

 

[NAME OF ASSIGNOR]

 

 

 

 

 

By:

 

 

 

 

 Title:

 

 

 

 

 

ASSIGNEE

 

 

 

[NAME OF ASSIGNEE]

 

 

 

 

 

By:

 

 

 

 

 Title:

 

2

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

 

[Consented to and] Accepted:

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

By:

 

 

 

 Title:

 

 

[Consented to:]

 

EXCO RESOURCES, INC.

 

By:

 

 

 

 Name:

 

 

 Title:

 

 

3

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

Second Amended and Restated Credit Agreement dated
[                                ], 2006 among EXCO Resources, Inc., as
Borrower, Certain Subsidiaries of Borrower, as Guarantors, the Lenders party
thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1.                                       Representations and Warranties.

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

1.2.                              Assignee.  The Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the
Credit Agreement that are required to be satisfied by it in order to acquire the
Assigned Interest and become a Lender, (iii) from and after the Effective Date,
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment
and Assumption is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Assignee;
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

1

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

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

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

2

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

OPINION OF COUNSEL FOR THE BORROWER

[Form consistent with opinion delivered in connection with EPOP credit facility]

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

COUNTERPART AGREEMENT

This COUNTERPART AGREEMENT, dated [                           ] (this
“Counterpart Agreement”) is delivered pursuant to that certain Second Amended
and Restated Credit Agreement, dated as of
[                                     ], 2007 (as it may be amended,
supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among EXCO RESOURCES, INC., as Borrower, CERTAIN SUBSIDIARIES OF
BORROWER, as Guarantors, the LENDERS party thereto,  and JPMORGAN CHASE BANK,
N.A. (successor by merger to Bank One, N.A. (Illinois)), as Administrative Agent
(the “Administrative Agent”).

Section 1.  Pursuant to Section 6.13 of the Credit Agreement, the undersigned
hereby:

(a)  agrees that this Counterpart Agreement may be attached to the Credit
Agreement and that by the execution and delivery hereof, the undersigned becomes
a Guarantor under the Credit Agreement and agrees to be bound by all of the
terms thereof;

(b)  represents and warrants that each of the representations and warranties set
forth in the Credit Agreement and each other Loan Document and applicable to the
undersigned is true and correct both before and after giving effect to this
Counterpart Agreement, except to the extent that any such representation and
warranty relates solely to any earlier date, in which case such representation
and warranty is true and correct as of such earlier date;

(c)  no event has occurred or is continuing as of the date hereof, or will
result from the transactions contemplated hereby on the date hereof, that would
constitute an Event of Default or a Default;

(d)  agrees to irrevocably and unconditionally guaranty the due and punctual
payment in full of all Obligations when the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a))
and in accordance with Section 8 of the Credit Agreement;

(e)  the undersigned hereby (i) agrees that this counterpart may also be
attached to the Pledge Agreement, (ii) agrees that the undersigned will comply
with all the terms and conditions of the Pledge Agreement as if it were an
original signatory thereto, (iii) grants to Secured Party (as such term is
defined in the Pledge Agreement) a security interest in all of the undersigned’s
right, title and interest in and to all “Collateral” (as such term is defined in
the Pledge Agreement) of the undersigned, in each case whether now or hereafter
existing or in which the undersigned now has or hereafter acquires an interest
and wherever the same may be located and (iv) delivers to Agent supplements to
all schedules attached to the Pledge Agreement.  All such Collateral shall be
deemed to be part of the “Collateral” and hereafter subject to each of the terms
and conditions of the Pledge Agreement.

1

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

Section 2.  The undersigned agrees from time to time, upon request of
Administrative Agent, to take such additional actions and to execute and deliver
such additional documents and instruments as Administrative Agent may request to
effect the transactions contemplated by, and to carry out the intent of, this
Agreement.  Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought.  Any notice or other communication herein
required or permitted to be given shall be given pursuant to Section 11.01 of
the Credit Agreement, and for all purposes thereof, the notice address of the
undersigned shall be the address as set forth on the signature page hereof.  In
case any provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES THEREOF.

2

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

IN WITNESS WHEREOF, the undersigned has caused this Counterpart Agreement to be
duly executed and delivered by its duly authorized officer as of the date above
first written.

[NAME OF SUBSIDIARY]

 

 

 

 

 

By:

 

 

 

 

 Name:

 

 

 Title:

 

 

Address for Notices:

 

 

 

 

 

 

 

 

 

 

 

Attention:

 

 

Telecopier:

 

 

 

with a copy to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attention:

 

 

Telecopier:

 

 

 

ACKNOWLEDGED AND ACCEPTED,
as of the date above first written:

 

 

 

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

 

 

 

By:

 

 

 

 Name:

 

 

 Title:

 

 

3

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

CERTIFICATE REGARDING SOLVENCY

The undersigned, as Chief Financial Officer of EXCO Resources, Inc., a Texas
corporation (the “Borrower”), hereby gives this Certificate Regarding Solvency
to induce JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders
(defined below) (the “Administrative Agent”) to consummate certain financial
accommodations pursuant to the terms and conditions of that certain Second
Amended and Restated Credit Agreement dated the date hereof (the “Credit
Agreement”) among the Borrower, the lenders signatory thereto (“Lenders”), and
Agent.  Capitalized terms used in this certificate are defined in the Credit
Agreement, unless otherwise stated.

The undersigned hereby certifies to the Administrative Agent that:

1.             The undersigned is familiar with the business and financial
affairs of the Borrower, including, without limitation, the Transactions and the
matters hereinafter described.

2.             The undersigned has reviewed the pro-forma balance sheet of the
Borrower, as of the date thereof and after giving effect to the Transactions
(the “Pro-Forma Balance Sheet”), the pro-forma operating statement, as of the
date thereof (the “Pro-Forma Operating Statement” and the Projections, all of
which are attached hereto as Exhibit “A” and Exhibit “B”, and Exhibit “C”,
respectively, and incorporated herein by reference for all purposes.  The
undersigned is familiar with the process through which the Pro-Forma Balance
Sheet, the Pro-Forma Operating Statement and the Projections were generated.

3.             The Pro-Forma Balance Sheet fairly presents in all material
respects the financial position of the Borrower as of the date thereof after
giving effect to the Transactions.  The Pro Forma Operating Statement fairly
presents in all material respects the estimated operating income and expenses of
the Borrower and its Subsidiaries for the period covered thereby.  The
Projections are reasonable projections of the balance sheet, income statement
and source and application of funds for the periods covered thereby, based upon
the assumptions set forth therein.  The Borrower believes that such assumptions
set forth therein are reasonable in light of current business conditions
existing at the time of preparation thereof.  The Projections and the Pro-Forma
Operating Statement represent the Borrower’s good faith estimate as of the date
thereof of the Borrower’s future financial performance, it being recognized by
the Administrative Agent that such financial information as it relates to future
events is not to be viewed as fact and that actual results during the period or
periods covered thereby may differ from the projected results set forth therein.

4.             Immediately following the consummation of, and after giving
effect to, the Transactions contemplated by the Loan Documents, the Preferred
Stock Documents and the Southern Gas Purchase Documents and the application of
the proceeds from the fundings being made on the Effective Date, the Borrower is
solvent.

5.             The Borrower does not intend to incur, or believe it will incur,
debts beyond its ability to pay as they mature.

1

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

 

 

DATED: [                 ], 2006

 

 

 

EXCO RESOURCES, INC.,

 

a Texas corporation

 

 

 

By:

 

 

 

 

 J. Douglas Ramsey

 

 

 Chief Financial Officer

 

2

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

EXHIBIT “A”
Pro-Forma Balance Sheet

(see attached)

3

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

EXHIBIT “B”
Pro-Forma Operating Statement

(see attached)

4

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

EXHIBIT “C”
Projections

(see attached)

5

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

NOTE

New York, New York

                      ,         

 

FOR VALUE RECEIVED, the undersigned EXCO RESOURCES, INC., a Texas corporation
(“Borrower”) hereby unconditionally promises to pay to the order of
                                          (the “Lender”) the principal amount of
the Loans advanced by Lender and outstanding at any time or from time to time
pursuant to the Credit Agreement (as hereinafter defined) in lawful money of the
United States of America together with interest from the date hereof until paid
at the rates specified in the Credit Agreement (as hereinafter defined).  All
payments of principal and interest due hereunder are payable at the offices of
at the offices of Administrative Agent under the Credit Agreement, JPMorgan Loan
Services, 21 South Clark St., 19th Floor, Chicago, Illinois 60603-2003,
Attention: Claudia Kech, Facsimile:  (312) 385-7096, claudia.kech@jpmchase.com,
with a copy to JPMorgan Chase Bank, N.A., Mail Code TX1-2448, 1717 Main Street,
Dallas, Texas 75201, Attention: Wm. Mark Cranmer, Senior Vice President,
Facsimile: (214) 290-2332, mark.cranmer@chase.com, or at such other place, as
from time to time may be designated by Administrative Agent in accordance with
the Credit Agreement .

The principal and all accrued interest on this Note shall be due and payable in
accordance with the terms and provisions of the Credit Agreement.

This Note is executed pursuant to that certain Second Amended and Restated
Credit Agreement dated [                 ], 2007 between Borrower, certain
Subsidiaries of the Borrower, as Guarantors, the Administrative Agent and
Lenders (as amended, modified, supplemented or restated from time to time, the
“Credit Agreement”), and is one of the Notes referred to therein.  Reference is
made to the Credit Agreement and the Loan Documents (as that term is defined in
the Credit Agreement) for a statement of prepayment rights and obligations of
Borrower, for a statement of the terms and conditions under which the due date
of this Note may be accelerated and for statements regarding other matters
affecting this Note (including without limitation the obligations of the holder
hereof to advance funds hereunder, principal and interest payment due dates,
voluntary and mandatory prepayments, exercise of rights and remedies, payment of
attorneys’ fees, court costs and other costs of collection and certain waivers
by Borrower and others now or hereafter obligated for payment of any sums due
hereunder).  Upon the occurrence of an Event of Default (as that term is defined
in the Credit Agreement and Loan Documents) the Administrative Agent may declare
forthwith to be entirely and immediately due and payable the principal balance
hereof and the interest accrued hereon, and the Lender shall have all rights and
remedies of the Lender under the Credit Agreement and Loan Documents.  This Note
may be prepaid in accordance with the terms and provisions of the Credit
Agreement.

Regardless of any provision contained in this Note, the holder hereof shall
never be entitled to receive, collect or apply, as interest on this Note, any
amount in excess of the Maximum Rate (as such term is defined in the Credit
Agreement), and, if the holder hereof ever receives, collects, or applies as
interest, any such amount which would be excessive interest, it shall be deemed
a partial prepayment of principal and treated hereunder as such; and, if the
indebtedness evidenced hereby is paid in full, any remaining excess shall
forthwith be paid to Borrower.  In determining whether or not the interest paid
or payable, under any specific

1

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

contingency, exceeds the Maximum Rate, Borrower and the holder hereof shall, to
the maximum extent permitted under applicable law (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) spread the
total amount of interest throughout the entire contemplated term of the
obligations evidenced by this Note and/or referred to in the Credit Agreement so
that the interest rate is uniform throughout the entire term of this Note;
provided that, if this Note is paid and performed in full prior to the end of
the full contemplated term thereof; and if the interest received for the actual
period of existence thereof exceeds the Maximum Rate, the holder hereof shall
refund to Borrower the amount of such excess or credit the amount of such excess
against the indebtedness evidenced hereby, and, in such event, the holder hereof
shall not be subject to any penalties provided by any laws for contracting for,
charging, taking, reserving or receiving interest in excess of the Maximum Rate.

If any payment of principal or interest on this Note shall become due on a day
other than a Business Day (as such term is defined in the Credit Agreement),
such payment shall be made on the next succeeding Business Day and such
extension of time shall in such case be included in computing interest in
connection with such payment.

If this Note is placed in the hands of an attorney for collection, or if it is
collected through any legal proceeding at law or in equity or in bankruptcy,
receivership or other court proceedings, Borrower agrees to pay all costs of
collection, including, but not limited to, court costs and reasonable attorneys’
fees.

Borrower and each surety, endorser, guarantor and other party ever liable for
payment of any sums of money payable on this Note, jointly and severally waive
presentment and demand for payment, notice of intention to accelerate the
maturity, protest, notice of protest and nonpayment, as to this Note and as to
each and all installments hereof, and agree that their liability under this Note
shall not be affected by any renewal or extension in the time of payment hereof,
or in any indulgences, or by any release or change in any security for the
payment of this Note, and hereby consent to any and all such renewals,
extensions, indulgences, releases or changes.

This Note shall be governed by and construed in accordance with the applicable
laws of the United States of America and the laws of the State of New York.

THIS WRITTEN NOTE, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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BORROWER:

 

 

 

EXCO RESOURCES, INC.,

 

a Texas corporation

 

 

 

 

 

By:

 

 

 

 

 Name:

 

 

 Title:

 

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